A Letter to John McCain

Dear Senator McCain,

I've long believed you to be a man of intelligence and principle, a standout in an otherwise broken political system. That ended yesterday when you used SEC Chairman Christopher Cox, a reformer, as a political punch line.

"The chairman of the SEC serves at the appointment of the president and has betrayed the public's trust," you said at a rally in Iowa. "If I were president today, I would fire him."

At issue, you say, is Cox's removal of the uptick rule, which was put in place after the Great Depression to prevent a continuous stream of short sales. Instead, traders would wait for an "uptick" in price before placing a new short sale.  

Cox argues that the rule is meaningless now that millions of shares trade hands each second. He's right. Reinstating the uptick rule might, at best, keep a spiraling stock from losing a point or two in a given day.

But it wouldn't have kept Lehman Brothers from going bust. There were no Sith Lords behind Merrill Lynch's sale to Bank of America. No amount of upticking could have kept these firms ticking any longer.

I want to believe that you know this, but your remarks suggest otherwise. "The primary regulator of Wall Street, the Securities and Exchange Commission, kept in place trading rules that let speculators and hedge funds turn our markets into a casino. They allowed naked short selling -- which simply means that you can sell stock without ever owning it." [Emphasis added.]

No, sir, it doesn't. Short sellers aren't owners, they're borrowers. They sell borrowed shares, pocket the proceeds, and buy back what they borrowed to "cover" the sale. Naked short selling is different; it's when short sellers sell shares that don't exist.

Perhaps your issue is that Cox was slow to put in place rules aimed at curbing naked shorting. Or maybe you think that he didn't take decisive enough action as Fannie Mae (NYSE: FNM  ) and Freddie Mac (NYSE: FRE  ) showed signs of collapse. If so, fine, but your remarks indict the entire system, not just Mr. Cox.

And shouldn't you be making a stronger case, sir? It was Cox, after all, who went before Congress to suggest that brokers be required to cover every short sale with a known, and available, borrowed position before approving a transaction. Goodbye, naked shorting.

Cox also is a reformer, as you claim to be. He's behind the SEC's push for an interactive financial reporting system based on a data description language called XBRL. The result: Improved access to financial data for common Fools. Dozens of companies have signed on to publish statements to the now-in-development IDEA database, including Microsoft (Nasdaq: MSFT  ) , IBM, and NYSE Euronext (NYSE: NYX  ) .

"My opponent sees an economic crisis as a political opportunity instead of a time to lead," you said yesterday. Today, I expect that you'll claim victory. You'll say that the administration and regulators are following your lead by temporarily banning short selling of financial giants such as Goldman Sachs (NYSE: GS  ) and AIG and by creating a system for absorbing the bad debts of ailing banks like Wachovia (NYSE: WB  ) and Washington Mutual (NYSE: WM  ) . Maybe you're right; maybe they did. And maybe this seemingly endless string of bailouts will adequately reprice risk and, at the same time, aid taxpayers.

Still, there's irony in your words. Your finger-pointing indictment of Chairman Cox is exactly what you've denounced: a political ploy. Did you really believe no one would notice? You're better than this, sir.

I look forward to your response.

Foolish best wishes,

Tim Beyers, Fool contributor and Motley Fool Rule Breakers analyst

Fool contributor Tim Beyers owned shares of IBM at the time of publication. He also hunts for the best of tech as a contributor to Rule Breakers, which counts NYSE Euronext among its recommendations. Here's how to try this market-beating service free for 30 days. Get access to all of Tim's Foolish writings here.

Microsoft is an Inside Value pick. Bank of America is an Income Investor recommendation. The Motley Fool's disclosure policy will never go bust.


Read/Post Comments (54) | Recommend This Article (89)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 19, 2008, at 4:04 PM, historictimes3 wrote:

    Nicely stated, Tim! :)

  • Report this Comment On September 19, 2008, at 4:14 PM, mrunyan wrote:

    No, he isn't better than that. Haven't you been listening for the past 16 months?

  • Report this Comment On September 19, 2008, at 4:38 PM, jsl4980 wrote:

    We can go to every other website to find out that politicians have no clue on the economy. Can we keep this site dedicated to good financial advice?

    Now that you've criticized one candidate this site will be considered part of the "elite liberal media" so you better start bashing Obama quick!

  • Report this Comment On September 19, 2008, at 5:00 PM, nhfine wrote:

    John MCCain clearly has no idea what he stands for today. Since when is he a populist advocating government regulation when he has opposed it for 29 years. Everything he says is for instant political gain. The best example is his statement at 9 am that the "fundamentals of the economy are strong" and then at noon it was that the fundamentals are in trouble.

  • Report this Comment On September 19, 2008, at 5:12 PM, huntercreek wrote:

    What a joke for a column. Even Jim Cramer, for the past 8 months, has been for Cox's ousting for months, and he's not even a McCain supporter. McCain is right, the past two Fed Reserve Chairmen, Greenspan and now Bernanke, along with the Bush administration, have encouraged a market with little boundaries or rules. When the stuff hits the fan, the taxpayers can take it on the chin. McCain is right, boot most of the elite academics out and totally reform the system.

  • Report this Comment On September 19, 2008, at 6:13 PM, jack955 wrote:

    "maybe this seemingly endless string of bailouts will adequately reprice risk and, at the same time, aid taxpayers".

    ???????

    Uhhh, maybe NOT. The only thing it will do is further convince Wall Street that any grossly irresponsible risk/reward decision made down the road is likely to cost the decision maker absolutely nothing. Taxpayers on the other hand, well, thats a different story.

  • Report this Comment On September 19, 2008, at 6:34 PM, fks3 wrote:

    A dangerous area to tread, Fool gurus. We come to you for financial advice, not political comment. While this piece, on its face, is financial it gets a bit political. Why? Because I haven't seen an equally sharp analysis of the the myriad, and equally stupid, economic and financial remarks of Obama. While I partially agree with your comments on McCain today, neither candidate appears to understand economics.

    Comments like this, against either side, made prior to an election will have an adverse effect on subscriptions. Tom, David, time to have a talk with the troops. I'll expect "Dear Senator Obama" on Monday, and then you need to let it drop.

  • Report this Comment On September 19, 2008, at 7:00 PM, Tinka82 wrote:

    Hear, hear, fks3!!

    At least make it equal. Perhaps we can find out who Obama's real economic advisor is??? He's apparently kicked Franklin Raines to the curb. 'He's not my advisor!' Just like Jeremiah Wright isn't really his pastor. Uh huh. Sure.

  • Report this Comment On September 19, 2008, at 8:05 PM, TMFMileHigh wrote:

    Thanks for posting everyone. For the record, we wrote a letter to Senator Obama some time ago: http://www.fool.com/investing/general/2008/08/29/a-letter-to...

  • Report this Comment On September 19, 2008, at 8:18 PM, tramagli wrote:

    It was squarely in Cox's corner to prevent Lehman, Bear, et al. from greedily using mortgage-backed securities, cdo's, and other alphabet- soup exotic derivitives to over-leverage in pursuit of a quick and easy buck. Cox let them of the hook of worrying about the consequences. The SEC is supposed to regulate the securities markets and prevent these schenanigans; Cox must go. I fully agree with McCain on that one, but not much else. Can't wait for you to give Obama's loony ideas the same trearment.

  • Report this Comment On September 20, 2008, at 3:36 AM, kemlab101 wrote:

    I think it's funny that John McCain thinks the president has the ability to fire the SEC chief:) The SEC babysits the markets - not the companies. If an investor wants to invest in a stupid company it's their problem - providing the company honest. Bear, MER, LEH, FRE, FNM are all honest - just stupid.

  • Report this Comment On September 20, 2008, at 7:28 AM, Celtics17 wrote:

    Oops, I think I'm on the NBC web site - meant to log into The Motley Fool.

  • Report this Comment On September 20, 2008, at 9:31 AM, extrader wrote:

    I'm sorry Tim, I disagree with you. Think of Mr. Cox as the cop on the beat who looked the other way and did nothing while a dealer was selling drugs on the corner. He should be fired and publicly disgraced for his lack of performance. If nothing else as a message to future cops on the beat.

  • Report this Comment On September 20, 2008, at 1:53 PM, dynopod wrote:

    Really? with all that's going on in the world, financial and otherwise this is what you pick for a column? How much did the Obama camp pay you for this petty article? are you suggesting that Senator McCain's comment makes him less fit than the entire Democratic party that set the wheels for this mortgage disaster in motion during the Clinton administration? Go back in your history book about 15 years to find out what really caused the recent financial collapse. Instead of bashing John McCain for what amounts to a trivial comment Acknowledge your a Democrat and keep you column based on objective financial commentary. If you can't quit and get a job at CNN.

  • Report this Comment On September 20, 2008, at 2:06 PM, TMFDiogenes wrote:

    Bravo, Tim! I agree that there are several flaws in McCain's thinking here: 1) As president, McCain wouldn't have the authority to fire Cox, an independent regulator. While it was pretty obvious going into Cox's nomination that he would take a laissez faire approach to the financial markets, McCain never raised any objections prior to voting for Cox. 2) As recently as March, well into this crisis, Cox, who McCain praised as at the time as "a fine man" was widely believed to be on the short list for McCain's running mate. 3) The only concrete rationale McCain offers for firing Cox is that Cox "allowed naked short selling -- which simply means that you can sell stock without ever owning it" and the elimination of the uptick rule. There are a few problems with this: Naked shorting is not allowed, but illegal; shorting had nothing to do with the crisis; and McCain has no idea what naked shorting is. 4) McCain, until this week, has been an avid supporter of DEregulating the financial industry. For example, one of his top economic advisors, Phil Graham, whose wife had been a member of Enron's board of directors, authored "the Enron loophole," and spearheaded the 1999 Gramm-Leach-Bliley Act -- which McCain supported -- that repealed the very reasonable post-Great Depression barrier between traditional and investment banking. Unlike short selling, this act actually had quite a lot to do with the present crisis.

    .

    Thanks, Tim, I'm glad someone had the guts to call McCain's scapegoating of Cox the political ploy that it is.

  • Report this Comment On September 20, 2008, at 11:53 PM, lowfiron wrote:

    Right on TMF Diogenes.

    Now the taxpayer is going to pick up the tab.

  • Report this Comment On September 22, 2008, at 10:25 AM, richman1211 wrote:

    The Congressional and Presidential approval ratings are more than twice as low as the market drop off this year.

    If you want some great history of this read some Kevin Philips books.

    This is a bi-partisan problem and they're all to blame, including Wall Steet profiteers and regulators.

    Please let's not become them. Since politicians are incapable of leadership and solutions we need to be strong together. We will pay the bill and we will need to provide the answers and solutions.

  • Report this Comment On September 22, 2008, at 11:42 AM, thelongviewman wrote:

    Senator Tim,

    You say tomato, he says tomato?

    You quote McCain as follows: "naked short selling -- which simply means that you can sell stock without ever owning it".

    You then suggest that he has no idea what he is talking about, and explain your conclusion by saying that "Naked short selling is different; it's when short sellers sell shares that don't exist".

    IMHO, this would seem to be a confounding case of a distinction without a difference. Other than your opinions on the pros and cons of naked short selling, what exactly is it in the avoidedly simplistic statement made by McCain that you deem incorrect? Do you mean to assert that naked short sellers DO own the shares they sell?

  • Report this Comment On September 22, 2008, at 2:28 PM, mashuribc wrote:

    Why don't you guys Google "Federal Housing Enterprise Regulatory Reform Act of 2005" and find out which advocate had this to say in support of it on May 25, 2006:

    "I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. 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."

    Hint, his initials are J.M. So, who here still wants to assert that he never supported regulation nor had any foresight of what is coming to pass now? Granted, his statement about the SEC chairman is silly political speak but don't try and glean his whole financial policy record from it.

  • Report this Comment On September 22, 2008, at 2:29 PM, willbskeptic wrote:

    Tim is right on the money. It's just pathetic that these days you can't call water "wet" without some people trying to whine about Obama. I used to be a big fan of McCain, but lately he has been going down hill fast.

  • Report this Comment On September 22, 2008, at 4:03 PM, Merengoso wrote:

    Dear Tim,

    Apparently you are too polite to state the obvious: Senator McCain is not the brightest light on the porch, financial or otherwise. He doesn't know the difference between Sunnis and Shiia, he doesn't know that Iraq and Pakistan do not share a border, on and on and on... Why does it surprise anyone that poor old Mr. McSame does not know that a president can not fire an independent regulator such as Mr. Cox? It is perfectly appropriate for someone who graduated fourth from the bottom of his class. So work with what you have and drill, baby, drill...

  • Report this Comment On September 22, 2008, at 4:12 PM, Merengoso wrote:

    Oh, I forgot... I must admit there is one very clever thing that McCain has done lately.

    He picked someone even more ignorant in more areas than himself as his running mate, "Wolf Killer" Palin.

  • Report this Comment On September 22, 2008, at 4:23 PM, acssgt316 wrote:

    I guess it was hopeless to expect this site to stay impartial during election time. Politicians have been doing this type of thing for as long as I can remember. I would have hoped that an entity such as this one that I pay for its service would have stayed out of politics. Very disappointing. Can I get my money back?

  • Report this Comment On September 22, 2008, at 4:50 PM, Baptistfundi wrote:

    McCain/Palin for President!

  • Report this Comment On September 22, 2008, at 11:48 PM, DBrown7 wrote:

    Some valid points raised in the article. But, regarding naked shorting, I don't think the issue was so much that Cox was slow to put in place rules to curb naked shorting as it was a lack of enforcement of the rules. He had to know there was a long list of stocks that were shorted in violation of reg. SHO. It was as if he was looking the other way . I wonder why.

  • Report this Comment On September 23, 2008, at 8:56 AM, dwscho wrote:

    I hope we can avoid writing the political commentary in the future. I didn't subscribe to several Fool services to hear political commentary. The rest of the web is full of this stuff.

  • Report this Comment On September 23, 2008, at 10:54 AM, MonsterZero71 wrote:

    What, no open letter about how Obama's buddies at Freddie Mac and Fannie Mae got us into this mess?

    I guess your outrage only runs one way.

  • Report this Comment On September 23, 2008, at 1:46 PM, KWT8011 wrote:

    People who comment here about an alleged lack of criticism from TMF on Obama's policies must not read that closely. The Motley Fool criticized Obama for calling the stock market irresponsible gambling regarding privitizing social security. There also is an article that is critical of his proposal of windfall profit taxes on oil companies. There may be more but those are two that come to mind that I have read.

    Further, they aren't critical of Obama because he's not the person who publically announced he'd fire Cox (without authority), claimed "fundamentals" were strong (he meant the workers are strong willed, but economically, that was a terrible choice of words), among other recent gaffes. Who is writing/proofreading his speeches?!

    Barack's economic policies certainly aren't the Holy Grail Wall St is looking for, but he isn't making embarrassing blunders left and right... at the moment.

  • Report this Comment On September 23, 2008, at 1:49 PM, KWT8011 wrote:

    One more thing, please check out factcheck.org to become more informed in your political commentary. Obama never had Raines as an official advisor to his campaign. There was a tenuous connection cited from the Style section of the Washington Post which was explained as someone from his camp spoke to him about his opinion on housing.

  • Report this Comment On September 23, 2008, at 2:40 PM, simon9998 wrote:

    At the end of Sarah Palin's first term:

    Dow 4000

    Unemployment 15%

    Foreclosures 20%

    A dozen more bank failures.

    2 trillion dollar deficit.

    The American voters re-elect her in a landslide because she shares their "values".

  • Report this Comment On September 23, 2008, at 2:41 PM, fosh60 wrote:

    A swing and a miss...

    If McCain wanted to flame the SEC, he should have pointed out this nugget.

    Up until 2003, all investment banks were allowed only 12 to 1 leverage. Then in 2004, the SEC basically gave five banks (and only five banks) the ability to lever up 30 or even 40 to 1. Bet you can guess the five banks. Bear, Lehman, Merrill, Morgan and Goldman. Three down.

    (Sept 19th Thoughts from the Frontline Weekly Newsletter)

  • Report this Comment On September 23, 2008, at 7:42 PM, ibarz wrote:

    Let's get them facts straight. First, McCain said he was going to fire the head of the FEC, NOT the SEC. Apparently both institutions have a guy named Cox. Second, he said these greedy manipulators are SHORTING STOCK WITHOUT EVEN OWNING THEM. So he wants you to buy it then short it.

    This guy has alzheimers written all over.

  • Report this Comment On September 24, 2008, at 12:39 AM, jamaljk wrote:

    Tim:

    I read your letter to Obama, and McCain. I am surprised you didn't write of Obama that "I've long believed you to be a man of intelligence and principle, a standout in an otherwise broken political system. That ended yesterday"- since he's pretty clueless about the economy too and does his bit of idiotic pandering. It's obvious where your loyalties lie - one can see right through your pretense of "objectivity".

  • Report this Comment On September 24, 2008, at 2:20 PM, CrickettH wrote:

    McCain the "Maverick" was one of the Keating 5. He was castigated for his "poor judgment." He got caught trying to put his hand in the cookie jar of a lot of elderly people. He voted favorably on the legislation that Phil Gramm pushed through that caused this mess. He's a big proponent of deregulation and getting rid of oversight. I really don't see where any of his silly remarks are any surprise.

  • Report this Comment On September 24, 2008, at 3:55 PM, snowfreeze wrote:

    So, what, do you seriously like Obama now or something? One comment makes you flip flop from one radical side to the opposite radical side? Geez.

  • Report this Comment On September 24, 2008, at 8:57 PM, boombamboom wrote:

    Hanlon had a similar take a couple days ago, saying McCain lost the election based on the bailout (http://www.greenfaucet.com/hanlons-pub/why-john-mccain-may-h..., but this I think I like your article even better.

    Johnny's campaign is going down the toilet! Hello, FDR, part II. Brutal.

  • Report this Comment On September 24, 2008, at 9:11 PM, lawyerboy40 wrote:

    I liked the article. I don't think it was political. Both candidates need to be shown errors in their judgment when it is based upon faulty reasoning and ignorance of the financial markets. While balanced regulation is necessary, I am afraid that politicians will over-react and place layers upon layers of bureaucratic regulation on the financial markets.

  • Report this Comment On September 24, 2008, at 11:36 PM, Sherman89 wrote:

    You know, it's not that John McCain doesn't know that the president can't fire the SEC chairman, or even that he doesn't understand what short selling is.

    The thing that scares me is that he runs to the first camera he can find and shoots off his mouth when he has no clue what he is talking about.

    People may fairly criticize Obama for not having taken the lead in this discussion, but the fact that he would hold his tongue and listen to others before making a fool of himself inspires more confidence.

  • Report this Comment On September 25, 2008, at 12:30 AM, realitycheck13 wrote:

    President Bush's overreaction to 9/11 may have helped doom the United States financially.

    First off, no one is down playing how horrible and shocking 9/11 was to the country. It truly was a time of grief and a huge wake up call to how porous our borders were and still are, but did the terrorist win in the long run.

    If you're a terrorist organization in the the late 90's trying to figure out the best way to attack the United States, your obviously not thinking of a frontal attack on its borders. We all know strong arming would never work against a country as militarily strong as the United States.

    You would need to come up with a plan which would create such a sense of fear among the general public that the political parties involved would be allowed to spend any amount of money in the name of fighting terrorism. We use the term "fighting" terrorism because it's impossible to "stop" terrorism. Stopping terrorism would be the equivalent of stopping evil, it just unfortunately can never be done.

    When 9/11 happened it allowed President Bush to exercise his religious views on the rest of the world, while trying to eradicate any "evil" he could. This has cost taxpayers over....

    continued at

    wwwmortgagebreakdown.com

  • Report this Comment On September 25, 2008, at 3:01 AM, letitgrow100 wrote:

    I think an Obama term will be just what the doctor ordered. Any thoughts on GS or COH. Take care fools!

  • Report this Comment On September 25, 2008, at 5:23 AM, fonz1921 wrote:

    I"m sure big mac has been up all night writing his response to you...what a joke

  • Report this Comment On September 25, 2008, at 5:25 AM, fonz1921 wrote:

    Its going to be funny to watch all the obama supporters /long term investors pay 28% on their capital gains over the next four years. He'll be great for the markets. Just wait and see. Actually i'll be paying 28% too on every dollar of profit I make on a long term holding. It just got a whole lot less funny.

  • Report this Comment On September 25, 2008, at 7:19 AM, Caprial wrote:

    Guys,

    Welcome to the communist system where the government decides which company will go to bankcruptcy and which one will survive. People who have collapsed the market received nice bonuses, ordinary people will pay for many years for that.

    When the price of crude oil was about 160$ per barrel, the price for gallon in the place I live, was about 4$. When the price of crude oil dropped down to 90$, the price for gallon was 3.8$??????

    America outsourced so many productions to China and India, developed their econmies and now meet the results for that.(if two members of one family receive 15-20$ per hour, they could afford to buy normal house and cars, if both work in Wallmart and receive 6.5-7 dollars per hour, they could afford to buy only junk foods).

  • Report this Comment On September 25, 2008, at 11:26 AM, scraccag wrote:

    To be fair, attacking Cox might have just been a good way to divert attention away from the fact that his campaign manager's lobbying firm had until last month been receiving $15,000 a month from Freddie Mac.

    http://www.forbes.com/feeds/ap/2008/09/24/ap5467770.html

    Maybe the first head that should roll is that of Rick Davis?

  • Report this Comment On September 25, 2008, at 11:51 AM, BottomIsIn wrote:

    Cox is the one responsible for allowing Lehman/MS/GS and Bear Stearns to go past the former limit of 11.5 to 1 on leverage.

    None of this more recent stuff happens without that...none of it. The housing market doesn't get quite as out of control and in no way do these firms blow up.

  • Report this Comment On September 25, 2008, at 12:41 PM, thimanc wrote:

    To me, this is not a question of whether McCain is right or wrong, but is this the guy that I see as Presidential and can lead this country.

    My answer is NO WAY.

  • Report this Comment On September 25, 2008, at 4:28 PM, Itsya36 wrote:

    I am glad you sent your message to John McCain, acknowledging the fact that he actually may have enough clout and intellect to be able to CONTRIBUTE to the solution of this huge economic debacle. Pointing fingers does not solve the problem... we need to have a bipartisan economic meeting of the minds to solve this problem.

    A wise man once said to me when I was having a personal crises, not financial,

    All problems do not have solutions, but they do have outcomes.

    The outcome is based on input.

  • Report this Comment On September 25, 2008, at 5:13 PM, Premarupa wrote:

    I can't believe McCain (and many other smarter fools) do not see the bigger picture: the root cause is corruption and greed at the highest levels. Cox was chosen precisely because he was a team player who wouldnt stand in the way of the plunder.

    Remember Spitzer - he correctly saw the problem with fraudulent and unethical lending practices, started to do something about it (since clearly the gov wouldn't do anything about it). And got the gov riled enough about it they went looking into his private life to get rid of him.

    One may not approve of Spitzer's private life (or of that of .. uh about anyone.. come to think about it.. let he who is without blemishes throw the stones .. ) but what he did and said regarding this issue is worth a re reread.

    From the Washington Post

    http://www.washingtonpost.com/wp-dyn/content/article/2008/02...

    Predatory Lenders' Partner in Crime

    How the Bush Administration Stopped the States From Stepping In to Help Consumers

    By Eliot Spitzer

    Thursday, February 14, 2008; A25

    Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

    Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.

    Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices.

    What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

    Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

    Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

    In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

    But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

    Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.

    When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

    The writer is governor of New York.

  • Report this Comment On September 26, 2008, at 11:39 AM, kryszrich wrote:

    Maybe McCain plans to appoint a hockey mom to the post. Oh wait, their popularity is going down.

    I predict the Republican Party will go under major restructure once they lose this election.

  • Report this Comment On September 26, 2008, at 1:31 PM, Ironbob wrote:

    First of all, it's already been said. McCain not only talked the talk but was willing to back it up with legislation. What was Obama doing all that time? Appearing on Oprah and pretending he's President by fiat.

    What's disgustingly arrogant is this idea of "Well they can call me if they need me". That's a line that a street walking whore would use while on the prowl on Santa Monica Blvd. in Hollywood, not the President of the US.

    Secondly, through your own words, McCain is right.

    "Reinstating the uptick rule might, at best, keep a spiraling stock from losing a point or two in a given day."

    Are you really this stupid or just an ignorant Democrat fool? What you are leaving purposely out of the discussion is that seldom would the uptick rule involve ONE depressed stock but rather a market-wide depression. One or two points on a few thousand stocks is nothing significant? Please tell me you don't believe your own BS.

    Third, to the writer that says terrorism cannot be stopped. Please tell the audience that you're not this stupid. In 1940 there were people like you who said Nazism would never be stopped.

    Any violent movement can be stopped in its tracks provided that there is no payoff for being involved in it. Right now, all terrorist have on the payroll are 72 imaginary virgins for men after they die. That's not going to last.

    So please, if you're going to post drivel like this on what is supposedly a financial forum how about looking at the guy who will do far more harm to them then McCain and you damn well know who that is.

  • Report this Comment On September 26, 2008, at 2:29 PM, drdocgoose wrote:

    I agree with those fools who reject your political commentary. It is for your financial acumen we come to you. Printing a diatribe on Mr. O'Bama's economic ignorance will not undo the damage you have done to your own organization's credibility. Perhaps we who subscribe to your service really are FOOLS! I would have expected "better than this" from you.

  • Report this Comment On October 01, 2008, at 1:32 PM, jamaljk wrote:

    "Politicians and investor advocates have faulted the SEC and Chairman Christopher Cox for lax regulation they say worsened the financial crises. At the same time, the banking industry and hedge fund interests are pressing the agency for changes they maintain are needed to keep the financial system moving." 10/01/08

  • Report this Comment On September 01, 2010, at 5:15 AM, karenh1234 wrote:

    Dear Mr.John McCain

    I've been trying to write to so many people I'm just

    trying to get some help.I hope it'snot a problem that

    Im not Democrate or Republican I'm just a fair person

    I hope thats not a problem I've been searing for some

    help for my young daughter she did finish high school

    an was starting medeical school she did do some of it

    during her summer break she wanted visit her cousin

    for her break and one day her cousin took her out to

    meet some of her friends an others she meet a person that everyone told her that person was a nice

    person for her to see while she was down to visit but

    after a while down their she found outit was mistake

    she was atthe wrong place at the wrong time then something bad happen an it can cost her life she never been an any trouble in her life she have agreat

    criminal history for a young person the court couldn,t

    believe at her age she had a good record for her age

    but the problem is she has been waiting for almost 3

    years just to go back to court to see what they are going to do she is trying to finish her career an work

    but this won't let her until she go to court it's very unfair to make aperson wait this long an she still have agood record after all these years she is 22years old an can't finish her life an career for one mistake compare to other young people her age this is her first time she just was at wrong place at wrong

    time they said she did'tdo anything wrong just wrong place at wrong time.Mr.McCain if you know anyone

    inGREENSVILLE NORTH CAROLINA where it happen

    at or see if they can get her court date so she can

    move an I canget better I won't get that well but it will

    help because i'm disable i never asked anyone for

    nothing all my life I did for myself until igot injuried

    I allways worked an took care of me an my children

    I do have a working track record and I don't blame no one for what happen to me things happen thats life. but Ido whis I can be able to work but trying to find a doctor for my condition I VE BEEN trying for

    years never no answer back it's been over 20 something years I gave up just see if some how you maybe able write find out,or anything to save my daughter's young life who never been in any trouble

    im not just asking anyone it's people with agood heart don't think Idon't watch you or don't know you

    ido watch cNN and you served most of your life in the war they may take the man out the war but they

    can't take the war from

  • Report this Comment On September 01, 2010, at 6:09 AM, karenh1234 wrote:

    the man. John McCain

    her name is jasmine i'll give last name when i get a response ok i hope i don't get in any trouble for this but i dod't think i did anything wrong i did't ask for money just advice onhelping my daughter thats not a crime for advice is it.if you don't know how can you try to find someone that have somthing to do with the law T5HANK YOU ANY WAY SO MUCH

    LAWYER TIM he is a pool lawyer 336.379.9542

    I thank it was in year2008 the supermcourt in greensvillenorth carolina THANK YOU MY FIRST TIMEWRITING ON A COMPUTER sorry for my spelling I do small brain damage from my injury.

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