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A Special Prosecutor for the Mortage Mess

Submitted by Patrick Ruffini on Sat, 10/11/2008 - 22:32
in

My friend Tim Griffin has a suggestion for McCain to shake things up at the final debate: propose a special prosecutor to investigate Fannie, Freddie, Lehman, AIG, and ACORN:

He should propose the appointment of a Special Prosecutor--a career prosecutor with experience prosecuting financial crimes--to look into the mortgage mess. It is the right thing to do. And promise that if one is not appointed by the current attorney general, he will appoint one on Inauguration Day.

Specifically, the Special Prosecutor would look into the housing mess, including:

--The collapse of Lehman Brothers, AIG, etc.

--The role of former Fannie Mae chief Franklin Raines in the collapse of Fannie Mae.

--Sen. Chris Dodd's (D-CT) and Sen. Kent Conrad's (D-ND) sweetheart mortgages from Countrywide that appear to have been given to them specifically because they are U.S. Senators and other "VIP" loans.

--The housing related funding ACORN received from the federal government and its use. The Special Prosecutor could work together with the federal prosecutor prosecuting ACORN under the RICO law as a criminal enterprise if that in fact occurs as some have suggested.

Some of these issues are currently being looked at by federal law enforcement but not comprehensively and collectively. Even if the primary task of looking into these matters is left to the appropriate U.S. attorneys, the Special Prosecutor could coordinate the efforts.

If McCain were to make such a proposal, it would demonstrate that he is a man of action, not just words.

On the one hand, McCain really, really, really needs to shake things up. On the other, I'm not sure injecting new proposals into the mix is going to help with the perception that McCain is grasping and unsteady in the midst of the current crisis. And McCain is in a Catch-22, largely of the media's making, in which if he acts it's a ploy, and if he doesn't, he's doing nothing as the Titanic sinks.

As I've written before, I think McCain's central mistake has been in acting Senatorial and not Presidential throughout all this. His proposal to buy up bad mortgages did not move the ball forward. To conservatives like me, it sounded like more socialism and not letting the housing market find its level. But more to the point, to everyone else, it sounded an awful lot like what Congress just passed. Most voters don't know the difference between a mortgage and a securitized mortgage.

I'm not ultimately sure McCain can get out of this because of the scarlet "R" he must bear, but I really would have liked to have seen McCain's maverick, crusading instincts take a back seat on this one. McCain needed to act steady and resolute like a President, talking about the economic equivalent of blood, sweat, toil, and tears in the short run, but exuding confidence that short-term sacrifice would build a foundation for long-term prosperity (it's this piece that Obama misses). He needed to surround himself with advisors with impeccable economic credentials -- and not just campaign hacks. I would have done a very long meeting and public photo op with Alan Greenspan, Gary Becker, and other Nobel Prize winning economists. Voters get that McCain lacks direct economic experience -- a fact that's hurting him -- but they expect such candidates to man up with good advisers (this is what Bush did on foreign policy in 2000, and he saw an improbably uptick in the polls when the Middle East blew up in September). To my recollection, McCain has not shown the country he is getting independent advice from the nation's most respected economists. He sort of looks like he's winging it.

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How is this not a productive avenue?

Submitted by Ironman on Sun, 10/12/2008 - 06:01.

The voters are angry, and this would create a constructive vehicle to address the anger.

One problem McCain has is that if his economic agenda suggests throwing money at the problem the voters clearly understand the other party is even more eager to go down that road. 

Now I have an out-of-the-box idea. Should McCain propose going to some form of the Gold Standard?

Now, I have no brief for Ron Paul and even less for many of his fringe supporters. But if these are indeed the worst economic times in decades, isn't some form of dramatic break from the recent past required?

I think the public understands at a gut level that too much money was washing around looking for a place to be lent. A new policy intended to prevent such future speculative bubbles might seem quite timely. And this goes to where the puck is headed--whether the emergency response to the present market freeze-up unleashes Carter era inflation.

Now, I can think of good economic reasons not to suggest this. But right now it seems the McCain camp is choosing what non-economic issue to raise when they simply can't get around the only issue that matters right now (on that point, the ACORN attack ought to be retooled to suggest Obama is going to sic "community organizers" on a business community in dire straits" ) 

More tactics for strategy free McCain campaign

Submitted by johnson springs on Sun, 10/12/2008 - 09:16.

McCain should choose to lead here rather than continuing to make ever more transparent political gestures.

I realize it is very late in the game and we're essentially reaching for whatever straw we think may save us from plummeting off the cliff, but the McCain campaign now reads as flailing and this suggestion feeds into it, IMO.

Obama's response will be that solutions not investigations are required now. He has been very effective in calling the crisis an indictment of the GOP economic policy and anti-regulation agenda. He will continue to point to McCain's actual economic brain trust which includes Phil "we've become a country of whiners" Gramm.

There will be a steep price to pay indeed should the GOP stick to this ridiculous ACORN, Fannie/Freddie line. We risk drifting into irrelevance on the crisis. It is very easy to refute the CRA, pressure groups, GSE argument. In addition, the liklihood of out and out fraud at Lehman (Paulson rues to the day he let them fail) and AIG is remote.

The American people will harshly punish anyone perceived as playing politics with or simply being a distraction from restoring their financial security.

Re: More tactics for strategy free McCain campaign

Submitted by gs on Sun, 10/12/2008 - 13:21.

While the storm threatens to drive the ship onto the rocks, what we need is ...drumroll...investigations!!  A special prosecutor!  That...hadn't occurred to me.  Can we get Ken Starr back?  (H/T: erik kubec)

The American people will harshly punish anyone perceived as playing politics with or simply being a distraction from restoring their financial security.

Both poltiical parties are at fault (e.g. Frank, Gramm), but the Democrats are doing a successful con job of transferring their share of responsibility to the GOP. 

In part, the con is viable because the Republicans were spineless about calling out Democratic malfeasance back in the day.  In part, it is viable because the GOP refused to get a clue after losing Congress in 2006.  In fact, they gave the voters the one-finger salute by restoring Trent Lott to the Senate leadership.

Like they went ahead with the Clinton impeachment despite losing seats in the 1998 midterm election.

I'm not sure it's possible to get this party's attention without destroying it.

I proposed this to a McC staffer

Submitted by elHombrePrimero on Sun, 10/12/2008 - 14:46.

On September 19th, I proposed to one of McCain's campaign staffers that McC should demand that the the Administration and the commitees of  Congress be purged of "suspects" rather than leaving them in charge of formulating and administering a cure for the economic disaster they helped create.

I also recommended that he call for immediate investigation and prosecution of those who had criminally breached the public trust and gutted or permitted the gutting of Fannie and Freddie -- including scrutinizing the impact of campaign contributions.

But why would they want to go outside McCain's 4 or 5 basic talking points just to win an election? Unbelievable!

The advantage for McCain...

Submitted by Darvin Dowdy on Mon, 10/13/2008 - 07:48.

...would be that he wouldn't have to waste a lot of time talking about the bail out during the precious few days he has left in the campaign.  If asked he could simply reply that he was in favor of a special prosecutor being appointed and really, what  else can be said?  It would also help McCain's relationship w/the Base, most of whom did not support the bail out. Help patch things up a bit.  Because the Base wants the culprits to be singled out and punished.  On to the next issue.   Additionally, it would immediately put the dem's on the defensive as these cockroaches don't want the light to shine on their shenanigans.  They'd have to come out against a special prosecutor which would reveal their own guilt.

Yea, I think its the right stance for the McCain/Palin campaign to take.  DD