Is Keating Economics as Serious as it Sounds?

Keating 5 Comic

The presidential campaign has digressed into full-forced smear mode. After GOP vice presidential candidate Sarah Palin cited Democratic presidential candidate Barack Obama’s connections with former Weather Underground militant William Ayers as proof that he “pals around” with terrorists, the Obama campaign dug into McCain’s long political history to find what people see as an even more valuable smear gem.

From the Wall Street Journal:

The Obama campaign (has emailed) its supporters a link to a new Website called that features a 13-minute documentary on the savings-and-loan scandal. The Keating Economics Website also includes a timeline and newspaper articles explaining in detail the nearly twenty-year old scandal.

The Web ad shows footage of the senate trials of the five senators, including McCain, all of whom were accused of improperly aiding Charles Keating, chairman of the failed Lincoln Savings and Loan Association and a political donor who went to prison for fraud that led to the bank’s collapse.

The failure of California-based Lincoln Savings led to more than 20,000 mostly elderly investors losing their life savings and at the time was one of the largest financial failures in history. In 1991 the Senate Ethics Committee cleared McCain of acting improperly but said he exercised “poor judgment.”

The campaign says that McCain’s involvement in the Savings and Loan crisis directly impacts the current economic problems and is indicative of a mindset of deregulation and lack of oversight that led to the financial industry meltdown.

I’m not a fan of the Keating or the Bill Ayers smear. I’m not voting for McCain, but in this case, I think that his involvement in the Keating scandal–which involved four democrats and McCain–was more of a painful lesson than an indication of his ongoing poor judgment.

Wikipedia sums up the Keating scandal in two sentences:

The core allegation of the Keating Five affair is that Keating had made contributions of about $1.3 million to various U.S. Senators, and he called on those Senators to help him resist regulators. The regulators backed off, to later disastrous consequences.

This isn’t exactly unprecedented behavior for politicians. McCain and the others allowed themselves to be bribed. A dumb move, yes, but it happened nearly 20 years ago. It was almost political suicide for the old man. You’d think he learned his lesson.

I’m voting for Obama because I’m convinced he’ll do a better job running the country. But that doesn’t mean McCain is an archangel of political corruption. I hope the two parties start talking about real solutions during tomorrow’s debate, rather than focusing on half-baked smears.

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  • Its simple really. Al Gore showed us what being Mr. Nice guy gets you…Your But Kicked! McCain can’t tell me he is for change and wants to clean up Washington when he has been on the dole himself.

    Think about it, is it a coincidence that the main road around the D.C. area (I495) is a circle?

  • Knute

    Democrats have gotten crucified for not responding to Republican “swiftboat” attacks in the past, and allowing Rovian intrigue to show them as having no teeth. Now the recent “terrorist” smears advanced by McCain’s proxy, Sarah Palin, in an obvious bid to turn the discussion away from the failing economy, has forced the Obama campaign’s hand.

    I’m a moderate, down-the-line centrist who’s voted both sides, but am sickened by the amoral tactics of the far right over the past eight years. I say give’em both barrels … we may need to reach a point where this bloodsport is so toxic to either side that neither will engage in it any more. Sad, really sad…

  • Mark

    I am stunned that anyone who writes a business based blog would support Obabma for President. Not only does he have no experience that would qualify him for the office, but the more his associations are exposed and explored the more he looks like what he is…..the most liberal, populist Senator in Washington who cut his career by and through associations in arguably the most corrupt political location in the country. Does it strike you as odd the NO ONE has come forward and stated that they have know him for years, worked with him shoulder to shoulder in ANY capacity, and he was an incredible executive, assistant, organizer, or even attendee?
    Moving past his lack of character, PLEASE as a business person look at the devastation his proposed policy plans would turn loose on all of us trying to build business and careers in the greatest country on earth. Have you analyzed the root of the incredible financial situation we find ourselves in as a country? It was created and nurtured by the Democrats and socialist policy beginning with Carter, accelerated by Clinton. The Republican Party is not blameless in this, but all of the prominent Democrats since Carter are front in center in this disaster. I would hate to think of the larger disaster that Obabma and his policies could create.

  • Kool-Aid Ohh Yeah!

  • nick

    You’re voting for Obama? I would have never guessed.

  • You don’t have to guess, it’s on my about me page! :)