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Update: Silver lining moment. While I take issue with John McCain for not squarely hitting Democrats in the jaw for their involvement in the mortgage meltdown we can credit him for trying to reel in Freddie Mac and Fannie Mae as far back as 2005.

The Democrats are lying big time trying to tie the mortgage meltdown to John McCain. In reality he tried to reign Freddie Mac and Fannie Mae in while Democrats were blocking regulation.They must really think you, I and everyone else out there are stupid.

Thankfully the congressional record tells the truth and exposes the Democrats once again for the fools that they are.

The following is from the floor record in 2005 when McCain was arguing for the Federal Housing Enterprise Regulatory Reform Act of 2005.

Sen. John McCain [R-AZ]: Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac—known as Government-sponsored entities or GSEs—and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.

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.

I urge my colleagues to support swift action on this GSE reform legislation.

So now you know. When Democrats say McCain opposed regulatory reform they are playing you for a fool.

We also know this. Democrats are into it up to their necks on this scandal.

Clinton is the first culprit riding a Carter era law:

The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but “predatory.”

Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the ’90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.

And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America.

As soon as Clinton crony Franklin Delano Raines took the helm in 1999 at Fannie Mae, for example, he used it as his personal piggy bank, looting it for a total of almost $100 million in compensation by the time he left in early 2005 under an ethical cloud.

But that is just the tip of the scandal:

OpenSecrets.org notes that Democrats are the top recipients of campaign contributions from the two failed mortgage lenders with Barack Obama the number 2 recipient right behind Chris Dodd (d) - Fannie Mae and Freddie Mac Invest in Democrats

Current members of Congress have received a total of $4.8 million from Fannie Mae and Freddie Mac, with Democrats collecting 57 percent of that. This week we also wrote about how much money lawmakers had invested of their own money in the companies last year–a total of up to $1.7 million.

All Recipients of Fannie Mae and Freddie Mac Campaign Contributions, 1989-2008

Name	Office	State	Party	Grand Total	Total from PACs	Total from Individuals
Dodd, Christopher J	S	CT	D	$165,400	$48,500	$116,900
Obama, Barack	S	IL	D	$126,349	$6,000	$120,349
Kerry, John	S	MA	D	$111,000	$2,000	$109,000

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So this is my problem with John McCain. Rather than call for a prosecutor John McCain is calling for a 9/11 like commission. Quick, someone remind me what the 9/11 commission did besides point the finger at Bush? Anyone?

Sept. 16 (Bloomberg) — Republican presidential nominee John McCain called for a commission to study the crisis in U.S. financial markets like the one that investigated the Sept. 11 attacks and said the government shouldn’t rescue insurer American International Group Inc.

“We need to set up a 9/11 Commission in order to get to the bottom of this and get it fixed and act to clean up this corruption,” McCain said in an interview on CBS’s “Early Show.”

Congress created this mess and Congress will ride to the rescue (but not really unless you think passing the buck is some sort of rescue), taking advantage of the American taxpayer while all the time covering their own asses.

At least he said taxpayers should not be on the hook for AIG (laughter).

Here’s the clue:

Financial disclosure reports suggest that some members of Congress may have a stake in AIG’s future. Twenty-seven lawmakers or their spouses owned stock in the company last year, according to the Center for Responsive Politics.

Representative Robin Hayes, a North Carolina Republican, led the way with between $1.8 million and $6.6 million of stock. Senator John Kerry, a Massachusetts Democrat, was the only other lawmaker with at least $1 million, reporting holdings valued at from $1.5 million to $2.1 million. House Speaker Nancy Pelosi, a California Democrat, reported owning between $250,000 and $500,000.

This is irritating beyond belief. There isn’t a jail cell big enough to hold everybody responsible for this.

See Malkin for an explanation of the shell game.

Also: Mother of all bailouts

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