Out of Bounds! McCain distorts Obama's words on subprime loans

McClatchy NewspapersOctober 6, 2008 

Throw the flag against: The McCain-Palin campaign.

Call: Clipping.

What happened: In remarks Monday in New Mexico about the economic crisis, Republican John McCain said that "as recently as September of last year" Democrat Barack Obama said that subprime loans had been "'a good idea.' Well, Senator Obama, that 'good idea' has now plunged this country into the worst financial crisis since the Great Depression."

Why that's wrong: Obama did say in a September 2007 speech that "subprime lending started off as a good idea — helping Americans buy homes who couldn't previously afford to." But in the same speech he said that the subprime market was corrupted by lenders and brokers who lowered their standards to see how much money they could make, by appraisers who inflated their estimates, and by some borrowers who claimed false income to qualify for loans.

The overall theme of the speech involved a call by Obama to repair public trust in the markets and increase transparency, honesty and oversight in the lending industry and more oversight of ratings agencies.

"From CEOs to shareholders, from financiers to factory workers, we all have a stake in each other's success," he said. "When the public trust is abused badly enough, it can bring financial markets to their knees."

McCain is trying to paint Obama as out of touch on the economy to offset Obama's criticisms of McCain for being a longtime advocate of deregulation. But McCain's criticism in this case ignored the context and essence of Obama's remarks.

Penalty: Knock McCain's credibility back 15 yards for distorting his opponent's words.

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