Just a short rant:
I have now listened to several McCain supporters go on about how McCain was cleared of charges in the Keating 5 scandal, that he is not guilty of wrongdoing, that Obama is guilty of dirty, irrelevant smear tactics, etc. They say that the S&L scandal is old news, and that Obama is digging up ghosts. The problem is that they've missed entirely the point that our current banking crisis is why the Keating 5 scandal is relevant today.
The Keating 5 scandal was primarily about campaign financing, but there is an important second lesson there: the S&L failures were early evidence that the Reagan-era banking deregulation efforts were doomed to disaster. John McCain absorbed the lessons about needed campaign finance reform, but he missed the boat on the economic lessons it had to offer. In spite of the Keating 5 scandal, his policies toward business and the economy remained unaffected.
McCain has always been an supply-sider. He is a Reagonomics guy, so his deregulation and tax policies have always favored the rich. This is in spite of the fact that the early part of his political career was scarred by the S&L failures. He didn't act on the fact that lack of regulation threw a wrench into the works. He is either unable to understand the consequences of deregulation, or doesn't care; either way it makes him a lousy candidate for president. Especially in light of the banking crisis we face today.
Why is the Keating 5 scandal relevent to this election? It demonstrates unequivocally that McCain doesn't understand basic economic relationships, even after they nearly end his career. McCain's reform efforts are limited in a telling way. That McCain was a bad boy twenty years ago doesn't matter at all. What matters is that John McCain is slow to understand that Reaganomics doesn't work.
McCain continues to take advice from Phil Gramm -- one of the most successful and rabid banking deregulators in our country. If you canvass, phone bank, or just talk to folks about Obama, please read up on The Glass-Steagall Act of 1933, and the Gramm-Leach-Bliley Act. I am no expert, but it always seemed to me that there was a circular reasoning in the GLBA. Gramm thought that because the banks had been stable for sixty years, and because of FDIC insurance, the banks must be fundamentally different than they were in 1933. They should be able to take on higher-risk investments, and be allowed to create exotic lending products. So, the GLBA removed regulations in the GSA that prohibit activities that made the FDIC necessary in the first place. Whether my opinion about this bill is correct or not, though, make no mistake: a Federal bailout was implicit in the GLBA.
If you read nothing else about the GSA or the GLBA, make sure that you look at the Senate roll call for the Gramm-Leach-Bliley Act. If anyone tells you that our current economic crisis isn't an effect of Republican reform, you can tell them otherwise.
End rant. I feel better now. Thanks.