OK

It comes as no surprise that the Associated Press fact check of the debate contains a glaring distortion and omission that naturally favors John McCain. And infuriatingly, it is directly related to the current financial meltdown.

OBAMA: "We're also going to have to look at, how is it that we shredded so many regulations? We did not set up a 21st-century regulatory framework to deal with these problems. And that in part has to do with an economic philosophy that says that regulation is always bad."

THE FACTS: Some of the abuses that occurred stemmed from the 1999 repeal of a Depression-era law that separated banks from brokerages. In legislation supported by former President Clinton and Robert Rubin, now a top Obama adviser and treasury secretary in the Clinton administration, this separation was ended — allowing banks and insurance companies to sell securities.

But while regular banks were strictly regulated by the government, Wall Street banks and other non-bank institutions — many of the same institutions whose abuses led to the current crisis — were allowed to operate with less regulation.

So, what's missing? Just the fact that the legislation in question, the Gramm-Leach-Bliley Act, was sponsored and pushed through by Phil Gramm, who was John McCain's chief economic advisor until he announced that America was a "nation of whiners," and that John McCain supported and voted for the bill. The Associated Press failed to identify the name of the bill, the man behind it and the fact that he authored candidate McCain's economic policy. And even more dishonest is the cheap attempt to tie the bill to Democrats, not bothering to mention that the Gramm-Leach-Bliley Act passed with 100% Republican support.

The Associated Press is an embarrassment to journalism.

Originally posted to Daily Kos on Sat Sep 27, 2008 at 08:00 AM PDT.

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