Keating Economics

Great job by the economy campaign. Their documentary on the Keating-McCain savings and loan scandal is insightful and informative. Most importantly, it’s accessible and succeeds at tying McCain’s actions on behalf of his friend and political contributor Charles Keating to McCain’s current failed approaches to the subprime mortgage crisis and economic troubles. I’m not sure how aware people are of McCain’s guilt in connection to the S&L scandal, but this should go a long way to increasing that awareness.

Watch the video then pass it along…

Also, Billmon’s take on the Keating-McCain scandal is instructive:

But I was around, and following congressional politics rather closely (by which I mean professionally) when McCain first popped up on the political radar screen in 1986 during the so-called Keating Five scandal. In exchange for various regulatory favors, Keating, a wealthy and politically, um, generous, S&L executive, turned himself into the special friend of a bipartisan group of sleazebag Senators, with five in particular, including McCain, reaping most of the benefits. By modern standards (i.e. Jack Abramoff’s and Ted Steven’s standards) it was actually pretty tame stuff, but it was considered a big deal at the time.)

In a sense, the scandal marked the birth of the McCain “brand,” because unlike the other four of the Five, he stood up in the Senate and more or less admitted he was guilty (not nearly as guilty as the others, he hastened to point out – but still, he felt bad about what he had done.) This went over really big with the media (“Senator admits guilt” outranking even man bites dog on the news-o-meter.)

Now, if you go back and look, you’ll see that if Keating didn’t comp McCain as generously and vigorously as he did the other four, it was probably because McCain was a very junior senator at the time, with relatively little influence to peddle. But it wasn’t because Honest John was shy about accepting the favors that were offered him. If John McCain had a problem with the way lobbying (i.e. legalized prostitution) was being done in Washington, you definitely won’t find it in the record of the Keating investigation. McCain’s fit of Puritan self-righteousness (or political calculation, depending on your view) came after the fact, once he’d already been caught. And yet, from that single Senate speech sprang the shoot that eventually grew into the sturdy tree of John McCain’s media image.

You have to admit it was a neat trick: Happily accepting the naughty goodies while they were being handed out, but then winning brownie points for admitting he took them – after the world had already found out he took them. But that’s precisely what McCain did. He’s never looked back since.

The lesson he learned, I think, is that pseudo-candor (truthiness) usually trumps the genuine article (McCain was way ahead of his time on this) And so he hasn’t hesitated to flip and flop shamelessly if (and these are the key points) it is in his interest and he thinks he can get away with it.

Now the Obama campaign is calling him on it. I think a full-scale reversal of public, documented history by the McCain campaign today will also lead the media to call McCain on it, too, especially as Obama turns up the heat on McCain on this issue.

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