No attack should go unchallenged, and no statement should be allowed without a fact check. Just as the reintroduction of Bill Ayers into the campaign needs a multi front counter, McCain can not be allowed to portray a history of 'good government' or 'attempted to avert this disaster' without thorough examination of the facts behind those claims.
McCain and his surrogates have been allowed to run around declaring that he tried to reign in Fannie and Freddie in the years 2003-2005. Our response has been quite lame, merely declaring McCain's 'Johnnie come lately' status in his sponsorship of a couple of bills during that time.
We need to both examine the history behind and the content of bills which McCain portrays as an attempt at regulation. Doing so reveals what most of us would conclude intuitively after so many years of Republican rule, and forms a much more effective counter to McCain's bogus claims. Like many of these issues, there's a long and complicated history here that would need to be reduced to sound bites to be an effective counter, but we definitely need to get the facts straight about what the Republicans have wanted to do with Fannie and Freddie over the years.
The Republicans have been seeking to privatize Fannie, Freddie and all other GSE's since the late 80's at the earliest. This movement never gathered much headway, primarily for two reasons. First, Lyndon Johnson privatized Fannie and Freddie long ago in order to pay for the escalation of the Vietnam War, so they were barking up the wrong tree. Second, Fannie and Freddie gave away too many dollars to elected officials and their officers were way too politically connected.
In reality, the ultimate goal was not 'privatization' in the sense that Fannie and Freddie were 'socialist' institutions that the right wanted to be subject to market forces and 'incentives that only the private sector ensures.' In reality, the right wanted Fannie and Freddie to be dissolved and their business given to their cronies on Wall Street.
Having failed in this game to break up Fannie and Freddie, the Republicans did what they often do. They found an end around. The end around was the now infamous Gramm Leach Bliley Act. Not only did this piece of legislation allow consolidation of various financial functions under one corporate entity, it allowed those new entities to perform functions that were previously performed almost exclusively by Fannie in Freddie. In particular, it allowed non Government Sponsored Enterprises to deal in mortgage backed securities. Furthermore, as long as these operations were performed by sham subsidiaries, these dealings could be performed without any government oversite whatsoever.
Fannie and Freddie could not operate without oversite. They were still regulated. Furthermore, they continued to control a vast majority of the mortgage back securities market. So the war against Fannnie and Freddie continued in earnest as it still represented a large portion of a segment of our economy that could not be plundered to the benefit of the same cast of characters the Republicans have sought to enrich for the past three decades.
However, the political will to break up Fannie and Freddie and give it away was still not present. However, we were now in the era of Bush II, and a new end around was plotted. Since the political will to break up Fannie and Freddie through act of Congress was still lacking, the Republicans idea was to push for relinquishing all responsibility for Fannie and Freddie into the hands of someone who would do their bidding.
That is exactly what the legislation McCain keeps touting around was designed to do. There was all sorts of language in the bill about the power to regulate their activities, but what Hagel's (shamefully) bills were designed to do was give complete and total control of Fannie and Freddie to a new 'czar' within the Treasury Department. In other words, one political appointee would have complete and total discretion to do whatever s/he wanted to do with Fannie and Freddie, with zero oversite or control in the hands of Congress.
McCain's claim to attempt regulation of Fannie and Freddie was nothing of the sort. Absolutely nothing in the bill ensured more oversite or designed additional oversite or regulatory techniques. It merely shifted the regulators to a different department of the cabinet and consolidated all regulatory powers into the hands of one person who could do whatever they saw fit to do. That is not regulation. That is the Bush philosophy of fox in henhouse government.
Edit:
Here are a few links regarding my ramblings...
First, Republican attitudes toward Fannie and Freddie in the 90's
Heritage
Cato
IPI
Discussions of impact of GLBA here
Treasury Dept
Hagel's original bill
Which has not really changed