Why McCain Goes Easy on Fannie and the CRA (Pull-Your-Hair-Out Alert)

Here is the big question of the moment that many GOPers are asking: Why is John McCain not tearing into Barack Obama and the Dems on the huge role of Fannie Mae and Freddie Mac and the Community Reinvestment Act in the financial crisis on Wall Street? In fact, the biggest criticism by conservatives of Sarah Palin's debate performance last night was that she had the opportunity to talk about Fannie/Freddie and the CRA but instead criticized the role of "predatory lenders."

Here is what Team McCain is telling me: Expect McCain to make the case on television, but don't look for him to turn to Obama in the next debate, point his finger, and say something like this (courtesy of the Ace of Spades HQ blog):

"I stayed away from making these partisan attacks, even though you lied ridiculously about me and your own attempts at 'reform.' I held back, because partisan attacks—even truthful ones—would harm our country and reduce the chances of getting a vital bill passed. Well, the bill is now passed. I put country first. You didn't, and you lied on top of that. And now—only now that this crisis has been dealt with, to the extent we can—I'm going to give you a bit of straight-talk about Fannie, Freddie, my attempts to reform it, and your attempts to block reform on behalf of your big donors and friends in ACORN."

Why not? 1) It is a complicated argument, and McCain is not good at making complicated arguments, not even about earmarks. (Note, additionally, his lack of defense of the war in Iraq during his debate with Obama. Amazing.)

2) There is a racial component to criticism of the Community Reinvestment Act that can make it sound like you are scapegoating minorities for Wall Street's problems.

3) The campaign believes McCain's time is better spent talking about taxes and energy and healthcare. Really.

There is a newish TV ad about Fannie and Freddie. You tell me if it makes the point conservatives desperately want McCain to make. I don't think it explicitly or aggressively connects the dots the way activists crave. Here is the transcript:

The Post says: McCain "pushed for stronger regulation"..."while Mr. Obama was notably silent."

PRESIDENT BILL CLINTON: "I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac."

My bottom line: The McCain campaign is underestimating how absolutely furious conservatives are that free markets, and by extension Reaganomics and the last 25 years of American economic policy, are getting the blame for the housing and credit crisis. A real morale killer, they tell me. Over and over. Every day.

Whoever writes, The Making of the President 2008, perhaps Bob Woodward, the inflection point in the campaign will be identified as the financial crisis and how John McCain mishandled it. It will be compared to John F. Kennedy's telephone call to Martin Luther King in jail and the television debates of 1960, as a tipping point.

An honest analysts would also consider how it was simply unnecessary for Barak Obama to take any risks in the crisis because he was protected by the media.

The study must explain why McCain inexplicably shrank from exposing the tentacles of corruption which embraced Obama and his Democratic gang extending all the way back through Acorn to Fannie Mae. The writer should note that, because the media stonewalled any attacks on the Obama myth, no exposure of the Democrats' corruption could break through unless McCain himself made the case personally and forcefully. The book will detail how McCain persisted in his detachment even as the polls made clear the inevitability of his defeat.

Up until about two weeks ago The McCain campaign had been running much more effectively than I think anyone thought they would. They had pulled even with or ahead of Hussein in most polls and the addition of Governor Palin had cemented the base and generated real enthusiasm for the ticket. Then came this economic mess and it is obvious the campaign had not anticipated anything like it and had no plan for handling it. So they winged it and and did poorly in the process. The result is Hussein up by 6-8 points in most polls as of yesterday.

But the timing is off for Hussein. The House just passed the “bailout” and markets are moving up. Dimrats profit from chaos as the leftist propaganda media will invariably spin any calamity as the GOP’s fault in general and McCain’s fault in particular. But they may be getting enough of a fix in to stave off further violent swings in the markets for the next few weeks. Note that dimrats actually take a big risk with their congressional and senate races when they play these games. If they get people too angry the attitude becomes one of “throw the bums out” regardless of party and this hurts them in the House. So they have to come up with something that will stabilize things in the period just prior to the election while painting themselves as saviors and the GOP as the villains.

But stability favors McCain because stability gives the electorate the time to more closely examine Hussein. And the more familiar they become with him the less they like him as shown in the primary races with Hillary! and in the 60 days prior to the economic “crisis”. Add to this that if economic news starts to recede news from abroad starts to filter in and if anything happens that shifts attention overseas this favors McCain.

Then there is the Palin phenomenon. The conventional wisdom is that the VP nominee isn’t much of a factor in the presidential race. But this year I do not think this applies. I think that Governor Palin has been and will be a major factor in this race. The dimrats certainly think so otherwise why all this sturm und drang about her? Note that with one 90 minute appearance last night the economic news is suddenly rather muted while all anyone seems to be able to talk about is Palin. She was at the center of the race from the announcement of her candidacy until the “crisis” grabbed all the headlines. As the “crisis” recedes she is again in the headlines. I don’t think this will fade as much as others because the right is enamored of her and wants more and more exposure of her and the left is terrified of her and, by their unending invective and frothing derangement, will provide even more exposure which sane people see as more an endorsement than a liability. Plus the derangement on the left tends to stain Hussein and the dimrats in general and is a net negative for them in my estimation.

Finally, I think that McCain being as close as he is in the polls after all the chaos and unrelenting attacks by the leftist propaganda media is bad news for Hussein. Hussein should be up by a dozen points at least. Instead the polls have held pretty steady for the past few days. It is hard to imagine a less favorable period for McCain than the last two weeks and yet he is still in the race. And we don’t know yet, really, what effect Palin’s performance last night will have but whatever it is it won’t be negative.

So, in my usual long-winded way I am saying that I think the McCain campaign will get back on stride; that they had been doing rather well before the “crisis” and that they will likely go back to doing rather well after; that Palin is more important than the conventional wisdom thinks; and that Hussein is - in the final analysis - not that attractive to anyone outside the far left of the dimrat party and that he will sink as more people pay closer attention to him.

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