McCain as the real reformer in this race — the case he needs to make

Barack Obama seems to be making small strides against John McCain. The Gallup tracking poll has Obama ahead 47-45, his first “lead” (I add quotation marks because this is surely within the margin of error) since September 5. The Rasmussen tracking poll still has McCain “up,” 48-47, but this is “down” from the three point advantage McCain enjoyed a few days ago.

If Obama is gaining, it’s not difficult to understand why. First, as the afterglow of the highly successful Republican convention wears off, some voters are probably remembering why they favored Obama not long ago. Second, Obama has been hammering McCain with negative ads. In the Northern Virginia market, I’ve seen several different Obama attack ads in the past few days and nothing from McCain.

McCain has one huge potential talking point that I’d like to see him push. It was made by Peter Wallison of the American Enterprise Institute, an expert of Fannie Mae and Freddy Mac. Here, via David Frum, is what Wallison said earlier this summer:

For a decade reformers have tried to persuade Congress that they were allowing a serious risk to the government’s credit to develop in Fannie Mae and Freddie Mac, but few lawmakers would take action.

One of the reasons for this was the extraordinary power of Fannie and Freddie. They not only spent close to $150 million in lobbying over the last decade, but they also got their constituents—the securities industry, the homebuilders and the realtors—all powerful industries that depend on Fannie and Freddie’s largesse—to support their sole legislative objective: the defeat of any attempt to control their growth. Congress, as usual knuckled under to the special interest.

However, a very small number of lawmakers saw this problem for what it was, and were willing to stand up to the power of Fannie and Freddie—and I am proud to say that John McCain was one of them. In 2005, he joined a small group of Republican Senators to cosponsor the Federal Housing Enterprise Regulatory Reform Act, the strongest legislation introduced up to that time to control Fannie and Freddie. In a statement, he noted that “For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac…and the sheer magnitude of these companies and the role they play in the housing market…If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie and Freddie pose to the housing market, the overall financial system, and the economy as a whole.”

These were prophetic words, given what we know now, but they did not spring from a sudden conversion in that year. Three years earlier, McCain had introduced legislation—co-sponsored with the House Democratic leader Dick Gephardt—to create a Corporate Subsidy Reform Commission. The purpose of this group was to eliminate what McCain called “corporate welfare”. . . .

In other words, as far back as 2002, John McCain realized that underlying what would ultimately become the Fannie and Freddie crisis was the willingness of Congress to provide financial support to private corporations. And he was willing to take on powerful interests to stop this process. If his bill had resulted in action at that time, the unprecedented steps that the Secretary of the Treasury and Congress had to take in the last two weeks would not have been necessary.

Frum adds:

By contrast, Barack Obama was accepting Fannie’s political contributions – and inviting its former CEO to head his vice presidential selection contrast. On the surge and the mortgage crisis, John McCain was both prescient and brave, while Barack Obama was opportunistic and wrong.

By making this point, McCain can transcend the generalities being hurled back and forth and demonstrate in concrete and timely terms that he, and not Obama, would be the author of change we can believe in.

UPDATE: NRO’s Corner offers language for the ad. After Obama’s more generic attack on McCain for being advised by lobbyists, I don’t see how the McCain campaign can pass up this shot.

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