I’m not so sure I agree that the administration was trying to do the right thing, given their opposition or apathy toward early bills/concerns of congressmen like Michael G. Oxley (R-Ohio) and Richard Baker (R-La.), but they definitely were more interested in late 2004 and 2005.

Of course, it is more complicated than it appears, as there were honest concerns about maintaining housing affordability, but the warning signs were there and the Dems allowed partisan hatred of Bush to blind them to it. (I think you if you look back, you will note that many regarded — or at least said they did– the Bush plan not as an attempt to increase oversight by the administration, but to remove oversight by the congress).

Given Bush’s reputation as a deregulator, I’m not certain that this was an unreasonable assumption. Instead of rejecting Bush out of hand, though, they ought to have heeded the warnings and stepped up oversight.

That was not done, to the everlasting (I hope) shame of those who didn’t see the train wreck that was coming.

“You know,” said McCain, “there’s been tremendous turmoil in our financial markets and Wall Street and it is — people are frightened by these events. Our economy, I think, still the fundamentals of our economy are strong….

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

What was the democrats’ response to this proposal?

Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.

Go to HotAir to read about how the foundations of this crisis lie within the Community Redevelopment Act under the Clinton administration, which was intended to give leverage to low income and minority families so that they could get home loans.

I would love to see CNN, or the New York times for that matter, interview Barney Frank and simply read his quote back to him, or do a story on this failed legislation that they reported on in 2003. Will they? Of course not, because we are in an election year and the media want the Democrats to win, so its just another story down the memory hole. Sort of like the Oil-for-Food scandal in 2004.

McCain is unversed. We know this. he has admitted it before. But economists don’t have any answer except “ride out the recalibration of real estate.” So I’m not that troubled by an answer which skips policy and encourages folks to remain calm. But yup, it’s a dodge.

Nothing either candidate has said suggests to me that they have any bright ideas. Finger-pointing, while satisfying, isn’t going to do anything to improve current circumstance. Likely some new regulations will be proposed to try to prevent the formation of another speculative bubble fueled by easy credit. But even if the perfect new regulations can be found, they won’t help us today.

“I know how to get bin Laden.”

“I know how to fix Wall Street.”

Thanks for holding out on us, Senator.

McCain:
What McCain should have said is, “Yes. I believe in Capitalism and the ideals of Capitalism are the fundamentals of our economy. However, I also believe that we need to be vigilant in protecting our economy from irresponsible business practices. And may I say to Senator Obama that if he does not support Capitalism, he may be running for president of the wrong country.” He could have thrown something in about the workers being part of the economy but it was stupid to make that the whole argument.

Obama:
If Obama does not want to be known as a celebrity, an elitist, or money-hungry; he should not be participating in a Barbara Steisand led fundraiser just days after his campaign announced a $66 million dollar month.