Obama, McCain and FNMA Reform

The Wall Street News today seems to be immediately helping Obama in the polls, or at least ripping into McCain's support with independents. But it also shows that the McCain campaign was extremely smart in staking out "reform", as opposed to "experience" as the hallmark of their campaign, or this news would have been much worse.

Ed Morrisey at Hot Air reports on McCain's attempt to reform Fannie Mae and Freddie Mac way back in 2005. Here's what McCain said:

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

Great! The Office of Federal Housing Enterprise Oversight saw a problem, McCain moved to fix it. So what happened then?

It never made it out of committee. Chris Dodd, then the ranking member of the Banking Committee and now its chair, was in the middle of receiving preferential loan treatment from Countrywide Mortgage, one of the companies gaming the system in the credit crisis. Meanwhile, Barack Obama took hundreds of thousands of dollars from the lobbyists McCain mentions in this speech, making him the #2 recipient of Fannie/Freddie money.

Surprise, surprise Obama wasn't exactly a big help to McCain in the FNMA reform area. In fact quite the opposite.

And quite prescient as well considering that Obama moves ahead in the polls when the stock market crashes. Perhaps he was thinking to himself, yes I could help reform FNMA, but then I would deprive myself of all this campaign cash from FNMA, a talking point in my presidential election and a small bump in the polls when I'll need it most!

Or maybe he was just way too busy working on that amendment to the Lugar bill. Because that sure seems important now.