When the Fannie/Freddie crisis simmered over a few weeks ago, I dismissed the possibility of it making a significant dent on the public consciousness. I figured Fannie and Freddie were too opaque for the common person to understand. After all, even genius congressmen like Barney Frank found the twins inscrutable after having decades to unwind their mysteries. Then again, Fannie and Freddie gave Barney lots of reasons to stifle his normally insatiable curiosity. But now I'm reversing myself - Fannie and Freddie should earn the same level of infamy that Enron did earlier in the decade. The opacity of Enron's operations certainly didn't shield the energy giant from public opprobrium.
For years before Fannie and Freddie's ultimate meltdown, observers warned about the dangers that the renegade twins represented. These observers routinely pointed out how Fannie and Freddie purchased the obedience of congress, especially Democrats in congress. Who were these observers sounding these alarms? In the media, there was the Wall Street Journal editorial page. And in congress, there was John McCain. The Journal put itself on the Fannie beat six years ago. John McCain began screaming for Fan and Fred reform in 2005.
When Barack Obama came to congress in 2005 with his extraordinarily inquisitive mind, he had every reason to know that Fannie and Freddie were bad news. So what did the relentless agent of change blessed with the magnificent judgment do? He instantly became the twins' favorite kissing cousin in congress. Since 1988, only Chris Dodd has raised more money from Fannie and Freddie than Obama, and Dodd had 20 years to shake down the twins where Obama has had only four.
But Obama's relationship with the twins runs still deeper. The two Fannie CEOs who did the most to corrupt the company, Franklin Raines and Jim Johnson, have close ties with Obama. Raines is one of Obama's ranking economic advisors. Jim Johnson was actually in charge of vetting Obama's potential running mates until Obama responded to public pressure and threw Johnson under the bus where he now resides comfortably with Tony Rezko.
Obama's dealings with Fannie and Freddie are consistent with his pattern. He talks a big game about change, and yet his actions belie the bravado. It's not that Obama merely fails to live up to his reformer rhetoric. Both in Chicago and in Washington, he somehow wound up keeping close company with the least desirable denizens. In both locales, he showed a bewildering combination of poor judgment and rank hypocrisy.
Please understand - I'm not a big fan of the "Change! Change! Change!" mantra that both candidates have adopted. And I certainly don't think that whichever candidate manages to say the word "Change!" the most times between now and Election Day deserves to win. If either candidate actually had any ideas on the economy besides chanting "Change," I'd be much happier to debate those ideas. But since the debate for the moment anyway has boiled down to who is the real agent of change, Barack Obama's relationship with the twins that have wrought so much damage to our economy is extremely relevant.
In the week to date, the Obama campaign has badly beaten the McCain campaign. McCain's "planned" gaffe on Monday where he praised the fundamentals of the economy harmed him. I can forgive that error - McCain was doing the responsible thing, trying to help soothe a crisis rather than exploit it.
But since Monday, the McCain campaign has allowed Obama and his surrogates to make a big issue of the fact that some former lobbyists work for the Maverick. The charge is ludicrous but fair enough. The question, however, is why hasn't the McCain campaign hit back? In the coming days, the McCain campaign should make Fannie and Freddie synonymous with Enron; the only ethical problem in doing so will be the gross unfairness to Enron's memory.
And then, the McCain campaign should make Obama's deep connections with the twins famous. The press lampooned George W. Bush for playing golf with Ken Lay and having a nickname for him. Barack Obama's ties with Fannie and Freddie run considerably deeper. And George W. Bush never had "Change!" as his mantra.
