If you aren’t concerned about the massive bailout of Freddy Mac and Fannie Mae by the US taxpayers, you should be.

For those of you keeping track, we’re not really bailing out US homeowners; we’re bailing out the bondholders of Freddy mac and Fannie Mae. The predominant bondholder? The central banks of Asian nations. How are we financing this bailout? Using US Government Treasury bonds. Who is buying those? The central banks of Asian nations. For now, at least.

If confidence in US Treasury Bonds falters, we’re all doomed. This is not an exaggeration.

The next president, who in turn will set the regulatory environment, really matters. The best, perhaps the only way, to restore investor confidence in US and global financial institutions is through tight regulation. To be blunt: investors are correct. The Fannie Mae and Freddy Mac bonds were far crappier than they were told. Until everyone in convinced things are worth their claimed worth, things are only going to get worse. We need a president who can take on the financial industries, who is above corruption on this issue above all others.

McCain’s record is terrible. What follows is a cartoon depicting his involvement in the Keating Five scandal–the last big collapse of US financial institutions, that cost taxpayers over $200 billion (in today’s dollars.)

(Here’s a PDF version of this comic, if you want to print it out.)

(Updated: I’ve made some small corrections for grammar and the such. If you find this cartoon maddeningly crappy as a cartoon, might I suggest my text version of this same history?)

This entry was posted on Monday, September 8th, 2008 at 2:36 pm.
Categories: Featured Articles, Money, Politics.

9 Comments ... Leave a Comment or Ping

  1. no imageMr. Poe (Check me out!)

    That was stunning.

    Rate this:
    		3.8 (2 people)

    Sep 8th, 2008

  2. Jonathan Golob

    Thanks Mr. Poe.

    Sep 8th, 2008

  3. no imageBen (Check me out!)

    Your missing the part where FDR made these nationalized corps to TRY and help out the economy. damn that whole government intervention sure helps every thing. We should nationalize every thing.
    http://mises.org/story/3045

    Sep 9th, 2008

  4. no imageWilliam Black (Check me out!)

    If readers want more details they can read “Inside Job” (2d ed) which has the full text of my notes of the Keating Five meeting, or my book “The Best Way to Rob a Bank is to Own One” (U.Texas Press 2005) or a shorter piece I wrote recently: http://www.ourfuture.org/progressive-opinion/keating-five-legacy

    One important addition, Keating used Senator McCain to lobby the Reagan administration successfully to appoint not only Lee Henkel (who then served as Keating’s “mole” on the FHLBB until I blew the whistle on him), but also another individual chosen by Keating. The FHLBB was run by three presidential appointees, so this would have given Keating majority control over the agency regulating S&Ls. The Reagan administration was set to make these recess appointments over the objections of the White House director of personnel, who opposed the appointments because when he called Arizona Republicans to vet the proposed appointments he learned that Keating “had a reputation for buying politicians.” Fortunately, Senator Dole opposed the other individual’s appointment for random political reasons. Consider how close the nation came to suffering not “merely” a “debacle” but one of largest political and financial scandals in its history. Yes, Chairman Wall was a disaster — and he was chosen because he was known to favor accomodating politicians — but If Keating had gotten control over the agency the results would have been catastrophic.

    I would also stress the bi-partisan nature of the political interference. Four of the Keating Five were Democrats and Keating’s ultimate act of intimidation that led FHLBB Chairman Wall to cave in to him was combining the political pressure of (then) Speaker Wright (D. Tex) with the Keating Five.

    Best,
    Bill Black

    Rate this:
    		2.9 (2 people)

    Sep 9th, 2008

  5. no imageBen (Check me out!)

    Great propaganda, it would have been just as easy to smear liberals too…starting with FDR…Jimmy Carter and the Community Reinvestment Act…ACORN and Obama shaking down Citicorp…maybe you can add them to your next effort…keep up the good work.

    Sep 9th, 2008

  6. no imageKim (Check me out!)

    So are we going to have sanctimonious McPalin win ?

    Rate this:
    		3.2

    Sep 10th, 2008

  7. no imageTruthiness not good enough (Check me out!)

    Hey Ben: Google sez, ‘No results found for “acorn shaking down citicorp”.’

    Did today’s packet of right wing talking points come with any source citations?

    Rate this:
    		2.8 (1 person)

    Sep 10th, 2008

  8. no imageCox (Check me out!)

    Normally I don’t post on websites such as this, but: BRAVO!!! I’m glad to see I’m not the only one who does his homework.

    Rate this:
    		2.5

    Sep 17th, 2008

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