How McCain blew the economic meltdown issue.

Posted by Deuce Geary on November 7th, 2008

There were lots of things that made me tear my hair out over the McCain campaign. His refusal to make an issue of Jeremiah Wright, and even criticizing others for doing so, was the biggest. Second was not looking closely enough at the Ayers issue to put the lie to Obama’s claim that their relationship was distant.

Until the economic meltdown, which vaulted to #1 in invoking hair-pulling frustration. Initially, I was agnostic on McCain’s decision to suspend his campaign to return to Washington for this crisis. (These actions proved to be key in making independent voters see him as knee-jerk and panicky.)

My agnosticism turned to disgust when, in the ensuing days, I learned that McCain had a very simple case to make that would have been far more effective: It wasn’t deregulation that caused the problem, it was regulation that distorted market incentives, thus encouraging risky loans. Those loans extended well beyond the lower economic classes they were intended for when Fannie Mae and Freddie Mac provided a market for such loans, allowing the lenders to make them risk-free (and sticking some other sap down the line with the paper). Of course lenders made bad loans under those circumstances.

To make McCain’s failure worse, he had all the evidence he needed to make the case that Democrats foiled the reform of Fannie Mae and Freddie Mac that McCain wanted. Not just a bunch of esoteric documents, but videos of congressman after congressman— including Barney Frank, who ridiculously positioned himself as a savior during the recent meltdown — ridiculously insisting that Fannie and Freddie were fine. They insisted that tightening credit would hurt the poor and minorities the most, so they balked at reform. All Republicans got for proposing reform was to be called racists for doing so.

Dave in Texas sums it up nicely at Ace’s:

A key opportunity was squandered in the financial crisis, Armey calls J-Mac’s reaction “visceral and insecure”, choosing to ’suspend’ his campaign and promising to bring an end to Wall Street greed.
Dude. Dude. You were handed this mess on a silver platter, with the sound bites, video clips and personal history of having taken two full shots at intervening in the shit within the past 4 years, and this was your play?
Visceral indeed. John and his gut reactions.

Yeah, it was a gut reaction, but McCain could have realized his mistake and made his case, but he didn’t, and I’m afraid it was once again for fear of being labeled a racist.

This crap with being afraid of being labeled a racist has got to stop now. No one’s ever going to see the logical fallacy of that charge if we keep caving in to it.