This time, Republican Sen. John McCain has flip-flopped on deregulation of the banking and lending industries. While out on the campaign trail last week, Sen. McCain responded to the turmoil on Wall Street by saying, “We need strong and effective regulation.” Sounds like a pretty straightforward statement, but McCain’s rhetoric last week simply doesn’t mesh with his twenty-plus year record as a staunch supporter of deregulation, saying more than once he’s “fundamentally a deregulator.”

In 1999, McCain voted for a Senate version of a law that loosened barriers between banks and investment firms that dated to the Great Depression. Supporters said the law was needed so US financial institutions could compete globally; the law enabled the rapid growth of some of the Wall Street giants now either bankrupt, bought out, or in trouble. And let’s not forget McCain’s involvement in the “Keating Five” scandal in the late 1980’s, when he was faulted for poor judgment by advocating on behalf of a major campaign contributor (Charles Keating of “Keating 5” fame) with savings and loan regulators. In changing his rhetoric to now support the regulation of Wall Street, Sen. McCain has shown he’s a political opportunist and he’s cemented his reputation as a hypocrite of the higher order.

What’s worse, Sen. McCain’s hypocrisy seems to know no limits, as he’s started attacking Sen. Barack Obama’s tenuous ties to former Fannie Mae CEO Franklin Raines, while conveniently neglecting to mention McCain’s own ties to Fannie Mae and Freddie Mac, thanks to Rick Davis, the McCain campaign manager and a former lobbyist for both companies:

Last week the McCain campaign stepped up a running battle of guilt by association when it began broadcasting commercials trying to link Mr. Obama directly to the government bailout of the mortgage giants this month by charging that he takes advice from Fannie Mae’s former chief executive, Franklin Raines, an assertion both Mr. Raines and the Obama campaign dispute.

Incensed by the advertisements, several current and former executives of the companies came forward to discuss the role that Rick Davis, Mr. McCain’s campaign manager and longtime adviser, played in helping Fannie Mae and Freddie Mac beat back regulatory challenges when he served as president of their advocacy group, the Homeownership Alliance, formed in the summer of 2000. Some who came forward were Democrats, but Republicans, speaking on the condition of anonymity, confirmed their descriptions.

The value that he brought to the relationship was the closeness to Senator McCain and the possibility that Senator McCain was going to run for president again,” said Robert McCarson, a former spokesman for Fannie Mae, who said that while he worked there from 2000 to 2002, Fannie Mae and Freddie Mac together paid Mr. Davis’s firm $35,000 a month.

H/T to John over at Sprawled Out.

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