Out of bounds! Obama misstates McCain's position on regulation

McClatchy NewspapersSeptember 19, 2008 

Throw the flag on: Barack Obama.

Call: Offside.

What happened: Obama tried this week to tie rival John McCain to the financial crisis on Wall Street.

""He has consistently opposed the sorts of commonsense regulations that might have lessened the current crisis," Obama said.

"When I was warning about the danger ahead on Wall Street months ago because of the lack of oversight, Senator McCain was telling The Wall Street Journal, and I quote: 'I'm always for less regulation.' "

Why that's wrong: First, while McCain is generally an anti-regulation conservative, he's supported some tougher federal regulations.

In 2002, for example, he pushed for tougher corporate-accounting standards after the scandals at Enron and other corporations. "I have long opposed unnecessary regulation of business activity, mindful that the heavy hand of government can discourage innovation. But in the current climate, only a restoration of the system of checks and balances that once protected the American investor, and that has seriously deteriorated over the past 10 years, can restore the confidence that makes financial markets work," McCain said.

In 2006, he called for tighter regulation of Fannie Mae and Freddie Mac, the two federally chartered, privately run mortgage giants that the government now has taken over. "If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole," McCain said.

Second, Obama omitted the rest of McCain's March interview in The Wall Street Journal, particularly the part in which he called for government oversight in the sub-prime mortgage mess. Citing one part of a quote and leaving out the second half is deliberately misleading.

Here's the full quote:

"I'm always for less regulation. But I am aware of the view that there is a need for government oversight. I think we found this in the sub-prime lending crisis, that there are people that game the system, and if not outright broke the law, they certainly engaged in unethical conduct which made this problem worse. So I do believe that there is role for oversight.

"As far as a need for additional regulations are concerned, I think that depends on the legislative agenda and what the Congress does to some degree, but I am fundamentally a deregulator. I'd like to see a lot of the unnecessary government regulations eliminated, not just a moratorium."

Penalty: Five yards and an automatic first down.

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