In recent weeks, Barack Obama has been revealed as an old-fashioned sort of politician: less than honest, pandering to every special interest in sight, obsessed with fundraising and his own political prospects to the exclusion of nearly everything else. So it’s worth noting that there really is an iconoclast running for President. Only it isn’t Barack Obama, it’s John McCain.
McCain’s op-ed last week on Fannie Mae and Freddie Mac is a case in point. McCain denounced these outdated institutions as examples of “crony capitalism:”
Fannie and Freddie are the poster children for a lack of transparency and accountability. Fannie Mae employees deliberately manipulated financial reports to trigger bonuses for senior executives. Freddie Mac manipulated its earnings by $5-billion. They’ve misled us about their accounting, and now they are endangering financial markets. More than two years ago, I said: “If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose.” Fannie and Freddie’s lobbyists succeeded; Congress failed to act. They’ve stayed in business, grown, and profited mightily by showering money on lobbyists and favors on the Washington establishment. Now the bill has come due.
McCain acknowledges that these institutions are currently too big to be allowed to fail, but he says they should be banned from lobbying and put on the road to ultimate extinction:
If elected, I’ll continue my crusade for the right reform of the institutions: making them go away. I will get real regulation that limits their ability to borrow, shrinks their size until they are no longer a threat to our economy, and privatizes and eliminates their links to the government.
The Democratic Party has long had a cozy relationship with Fannie Mae and Freddie Mac. Now that the chickens are coming home to roost, they take no responsibility, instead pursuing a policy of business as usual.
I disagree with McCain about the role of lobbyists, both generally and in this instance. Parties whose interests are at stake in legislation and regulation need spokesmen, just as parties do in litigation. Just as judges benefit from lawyers’ briefing the law and arguing the facts of the cases that come before them, legislators benefit from lobbyists who educate them about the effects of legislation on parties with competing interests. Lobbyists, in general, are a good thing, not a bad thing. It is up to legislators and regulators to sort out the arguments of lobbyists and do the right thing in the public interest, just as it is up to judges to sort out the conflicting arguments of the lawyers who appear before them.
More importantly, though, McCain is right that reducing the size, power and number of governmental and quasi-governmental agencies will benefit the public. The reason why businesses need lobbyists is that at every turn, government threatens to confiscate their property, impose unreasonable costs, and interfere with their ability to serve the public. The problem isn’t the lobbyists, it is the ever-expanding intrusion of government into the economy.
As a reformist, McCain has often made life uncomfortable for his fellow Senators and Congressmen. I don’t always agree with the reforms he advocates; McCain-Feingold is an obvious case in point. But if voters are looking for real change and want to elect a President who stands in opposition to the Washington establishment, they should vote for John McCain, not Barack Obama.
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