The Corner

McCain Did Anticipate Problems with Fannie and Freddie

ABC’s Jake Tapper:

“Two years ago, I warned that the oversight of Fannie and Freddie was terrible, that we were facing a crisis because of it, or certainly serious problems,” Sen. John McCain, R-Ariz., told CBS this morning. “The influence that Fannie and Freddie had in the inside the Beltway, old boy network, which led to this kind of corruption is unacceptable and I warned about it a couple of years ago.”

How does this claim of foresight square with this interview that McCain gave to the Keene (NH) Sentinel, discussing the subprime mortgage crisis, in December 2007? 

Tapper goes on to quote McCain saying of the broader subprime/liquidity crises that occurred at in the last few months of 2007, “So, I’d like to tell you that I did anticipate it, but I have to give you straight talk, I did not.”

A couple points — in the quote above McCain is clearly referring to Fannie and Freddie explicitly. While they’re arguably the lynchpin of the current financial crises, anticipating problems with Fannie and Freddie is hardly the same as foreseeing the overall extent subprime crises. 

And if Tapper googled a little harder he would see that McCain’s not making a “claim” — he really did anticpate the problems with GSEs and see them as a systemic financial problem. He even sponsored legislation to deal with it:

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole. 

McCain deserves credit for being on the right side of this. Meanwhile, Obama in just four years in the Senate raked more contributions from Fannie and Freddie than any other Senator in the last 19 years — save Dodd, who’s pretty demonstrably in the pocket of Big Mortgage. McCain should pummel Obama with this. He’s right on Fannie/Freddie where Obama has done nothing but take their money look the other way. 

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