And if Obama fails to make this the central issue and doesn't put McCain on the hook for this meltdown, we can forget about November. This is the issue on everyone's mind so losing control of this debate will hurt badly. Obama must remain ahead on this problem and quit giving McCain a free ride or launching an intellectual debate over McCain's role (though we saw Obama fighting harder later in the day on Monday, and that's good). He's already given up too much, too easily on owning "change" and without a hard move, he's going to lose on the economy as well. This is a Republican problem and McCain is making a move to appear as though he had nothing to do with it.
David Corn, who has had some brilliant articles on the McCain-Gramm links, has another classic out today. Learn more about what McCain failed to explain today when he criticized the Wall Street failures.
If McCain wants to hold someone accountable for the failure in transparency and accountability that led to the current calamity, he should turn to his good friend and adviser, Phil Gramm.
As Mother Jones reported in June, eight years ago, Gramm, then a Republican senator chairing the Senate banking committee, slipped a 262-page bill into a gargantuan, must-pass spending measure. Gramm's legislation, written with the help of financial industry lobbyists, essentially removed newfangled financial products called swaps from any regulation. Credit default swaps are basically insurance policies that cover the losses on investments, and they have been at the heart of the subprime meltdown because they have enabled large financial institutions to turn risky loans into risky securities that could be packaged and sold to other institutions.
Lehman's collapse threatens the financial markets because of swaps.
