McCain and the “Keating Five”

I have been wondering how long it would take for the “Keating Five” scandal of the late 1980’s to become part of the Presidential campaign rhetoric. In his Column September 27 in The Oakland Press (http://de.theoaklandpress.com/Default/Skins/OPDigital/Client.asp?Skin=OPDigital&Daily=OLP&AppName=1) Bill Press takes McCain to task for his role in the Keating Five scandal. Because this column doesn’t appear on Press’ web site as of today, and you need a subscription to access the Oakland Press online, I’m reproducing most of the column here:

Take this to the bank, if you can still find one open for business: Two months from now, we will look back and assert that the week of Sept. 15 was the week John McCain lost the presidential election of 2008.
Why? Because that’s when Wall Street collapsed, causing real economic pain to tens of millions of Americans and exposing the failure of those conservative, unfettered free-market economic policies John McCain has championed his entire career.
This isn’t the first time McCain has been caught at a financial crime scene. Remember his first appearance on national radar? When the dust cleared from the 1980s failure of 747 savings and loans, there stood so-called reformer John McCain, right in the middle of it all: One of five senators investigated for pressuring the Federal Home Loan Bank Board to drop its investigation of crooked Lincoln Savings and Loan owner Charles Keating.

This is not the first time Bill Press has been caught at a journalistic crime scene. To lump McCain with DiConcini, Riegle and Cranston is just plain inaccurate. According to the Wikipedia entry for the Keating Five scandal,

After a lengthy investigation, the Senate Ethics Committee determined in 1991 that Alan Cranston, Dennis DeConcini, and Donald Riegle had substantially and improperly interfered with the FHLBB in its investigation of Lincoln Savings. Senators John Glenn and John McCain were cleared of having acted improperly but were criticized for having exercised "poor judgment".

The Wikipedia entry goes on to report on a meeting on April 9 1987 between Senators Cranston, DeConcini, Glenn, McCain, and Riegle and three members of the Federal Home Loan Bank Board San Francisco Branch:

The regulators then revealed that Lincoln was under criminal investigation on a variety of serious charges, at which point McCain severed all relations with Keating.
It seems likely, if not perfectly clear, that McCain was simply trying to get the investigation of Keating, a constituent and admittedly a friend, off dead center.

At one point in the meeting McCain said "To be blunt, you should charge them or get off their backs."

Press continues

Suddenly, in response to this week’s disastrous economic news, and in one of the most daring flipflops of American politics, McCain is trying to reinvent himself as the champion of government regulation, promising to push for new regulations on financial institutions.

This is not quite accurate. It appears that the reason the negotiations in Congress on the $700 billion bailout failed was that McCain sided with the House Republicans who were pushing for a lower level of government intervention – loans instead of government takeovers, and possibly repeal of the “Mark to Market” rule and the Sarbanes-Oxley act.

But it’s too late for McCain to change his spots.

Suppose McCain is changing his spots. If he is changing based on the lessons of hard experience, let’s congratulate him for learning from experience.
McCain was implicated in the Keating scandal and interviewers and Barack Obama ought to question him about his involvement and what he learned from it. If his answers are satisfactory he shouldn’t be defeated for his peripheral involvement in a scandal 20 years ago.

Bill Press on energy: More liberal misconceptions

Bill Press’ column (http://www.billpressshow.com/column)
For 6/19/08, titled “MCCAIN SELLS OUT TO BIG OIL” repeats a number of liberal misconceptions that need to be corrected.

He says

Just look at the difference between Barack Obama and John McCain on energy. Obama proposes a windfall profits tax on big oil companies to help develop wind and solar energy, research new alternative energy technologies, and wean ourselves from fossil fuels. McCain proposes drilling for oil off the coast, one of the oldest and worst ideas in the Big Oil pipeline.

Since when is the government a source of innovation? Government labs don’t have to show a profit, so they don’t have to develop practical, market-oriented technology. Government grants go to universities and research labs that also don’t have to show a profit. True, useful products and technologies come from university research, but they would come much faster if the universities would partner with profit-making corporations. Generally the government doesn’t require this. Jimmy Carter proposed a massive “Synfuels” effort during his administration. Whatever happened to that?

He continues

Offshore drilling will destroy our most beautiful stretches of coastline, and wreck our valuable tourism and fishing industries. And it will continue our dependency on fossil
fuels.

This is based on the drilling technology of the 60’s. It’s true that some spills occurred during drilling then, but drilling and production techniques have improved since then. During Hurricane Katrina no oil was spilled from platforms in the Gulf of Mexico. Compared to spills from tankers, the spills from drilling are miniscule.

He writes
Even if the moratorium were lifted tomorrow, it would take at least 10 years to develop the offshore rigs and onshore tanks, pipelines and roadways necessary to begin production.

This is like saying, “Why should I start college? It’ll take 4 years to get a degree.” If we had continued to explore for petroleum deposits, we wouldn’t be in the fix we’re in now. If we start now to explore, the potential for new production will calm speculation in oil futures, which will apply downward pressure to oil prices. And in ten years we won't be experiencing the shortage we are dealing with now.

Continuing, he writes
By that time, with a new energy policy, we could be well on our way to a new, alternative-energy future.

No one is saying we shouldn’t develop alternative energy sources. But this will require considerable time, and current estimates indicate that known alternative energy sources are not capable of supplying the energy we currently use. So time will be needed to develop new energy sources and implement conservation measures. In the meantime we need petroleum.

Finally he writes

Offshore drilling won’t bring any relief for consumers, either. The U.S. Department of Energy estimates there are 18 billion barrels of oil in the moratorium areas. At present rates of consumption, those fields would be exhausted in less than 2 1 /2 years. According to the Campaign for America’s Future Online, lowering the price of crude by $1 per barrel saves roughly 2.5 cents per gallon. Which means that getting rid of the ban on coastal drilling would lower the price at the pump by less than 6 cents — by 2025.

Mr. Press fails to mention the huge petroleum reserves locked in the oil shale deposits in Colorado and other western states. Extraction technology for getting at that oil in an environmentally safe way is not yet available, but progress is being made.

The alternative energy sources Mr. Press mentions should be developed. But at present they are expensive compared to petroleum and not capable of supplanting the role of petroleum. For the present we need to continue to explore for and develop petroleum, while continuing to develop alternative energy sources.