Tuesday, September 30, 2008
Zero confidence in McCain
Editorial commentary
Recent contributions
- Can we be a two-trolley town?
- Striving for civility
- School funding no fantasy
- Pesticide board's work will continue through merger
- Commentary archive
From the RoundTable blog
Read the latest entries
G.V. Gibbs
Gibbs is an emeritus distinguished professor in the departments of Geosciences, Material Science and Engineering and Mathematics at Virginia Tech.
Remember the Keating Five scandal of the late 1980s involving the five United States senators Dennis DeConcini, John Glenn, Donald Riegle, Alan Cranston and John McCain who were accused of improperly aiding Charles H. Keating, chairman of the failed Lincoln Savings and Loan Association, which was the target of an investigation by the Federal Home Loan Bank Board.
The failure of Lincoln Savings and Loan Association played a catalytic role in the financial crisis that ensued. The cost of the bailout of the crisis totaled more the $160 billion, of which more than 75 percent was directly paid by the taxpayers. The Keating Five Scandal was generated by illegal activities of one particular S&L; the Lincoln S&L Association of Irving, Calif., was under the management of Keating.
To make a long story short, the Keating Five took financial contributions from Keating and co-sponsored a resolution to delay new regulations designed to curb risky investments by thrifts such as the Lincoln S&L. McCain was the closest socially of the five senators with Keating, who made $112,000 contributions to McCain's campaign along with nine vacation trips for McCain's family and their baby sitter at Keating's expense, three to Keating's opulent retreat Cat Cay in the Bahamas.
In the investigation of Keating's freewheeling American Continental Corp. that dragged through the later 1980s, McCain dodged the hardest blows. When the story broke, McCain responded to an Arizona Republic newspaper reporter asking about the business relationship between his second wife and Keating by shouting: "You're a liar. That's the spouse's involvement, you idiot. You do understand English, don't you?" He also belittled reporters when they asked about his wife's and her dad's close ties to Keating. McCain responded: "It's up to you to find that out, kids." Later McCain would write, "I was in a hell of a mess." Later in his 2002 book, he confessed to "ridiculously immature behavior" and added that the Republic reporter's "persistence in questioning me about the matter provoked me to rage."
Lincoln S&L was the most expensive failure in the history of the national S&L, costing taxpayers more than $2 billion with its final bailout. But this is small potatoes compared with McCain's deregulatory mind-set during his 26 years in Senate, where under Phil Gramm's tutelage, he helped contribute to the much greater bailout that we are facing today.
Given McCain's long-held mind-set of deregulation of financial markets and his close ties and financial dealings with the likes of Keating, McCain's call for scrutiny of Treasury Secretary Henry Paulson's bailout plan is not reassuring. McCain as a president would be like putting the fox in the financial market chicken house.
Moreover, the fact that a reporter's persistent questions provoked rage in McCain does not bode well. As a president, he may well be expected to be cool and collected rather enraged when compromising with members of the U.S Senate and House or the likes and surrogates of Kim Jong II of North Korea, Ahmadinejad of Iran or Hugo Chevez of Venezuela.
Given Harry Truman's aphorism "If you can't stand the heat, get out of the kitchen," I am not convinced that McCain will respond well to the heat of the White House kitchen.
Finally, William Black, then deputy director of the Federal Savings and Loans Insurance Corp. investigating the Keating Five and Keating's "direct investment" rules, said that "McCain was the weirdest. They were all different in their own way. McCain was always Hamlet ... wringing his hands about what to do."
Not the kind of man I want as president in the White House, wringing his hands about what to do in the case of another Katrina or an impending nuclear strike
