Thursday, John McCain, the small government maverick reformer guy, proposed a whole new agency to rescue America’s bad loans from the good lenders who never imagined their hot paper would go up in smoke as Americans lose up to 40% of their home equities. The “Mortgage and Financial Institutions Trust” which he acronym-ed as “MFI” but looks more like M-FIT or MisFit to me.
Deja vu: The Resolution Trust Corporation was created in the 1980’s to take over all of the failed Savings and Loans, hand off the viable parts of the portfolios to a small group of industry insiders, then break up the rest, fire lots of employees and stick taxpayers with the bill in a lump sum. It helped cover up embarrassing cases like Neil Bush and Silverado in Colorado, which cost us more than $2 billion and Neil kept the change.
Then there was McCain’s pal from Phoenix, Charlie Keating, who gave lots of money to senators including McCain and 4 others, including Democrat Alan Cranston of California. McCain was the most special of the 5, since his wife Cindy was a partner with Keating in a shopping center deal. The 5 got caught pressuring regulators to go easy on Keating, and were disciplined by the Senate.
Charlie Keating was originally from Cincinnati, and was a classmate of my father’s in high school. I went to the same school, and Keating donated an olympic sized indoor pool to the school. He had an ego that size, and his son was a champion swimmer. Charlie learned his tricks from Carl Lindner, a Cincinnati mogul who owns banks, a retail dairy chain, and Chiquita bananas. He is a major Republican donor, which is a good investment in Ohio and has made him important to GOP leaders.
Lindner set Keating up with Lincoln Savings in California, and Keating moved to Phoenix to build a resort hotel called The Phonecian. Steve Pizzo is co-author of “Inside Job”, the definitive book about the S & L saga, and called Keating a financiopath. The signature crime at Lincoln was the sale of junk bonds to the elderly in the lobby of an S & L, where they thought they were dealing with insured investments. Keating kited millions of dollars scammed from little people, and gave some of it to Mother Theresa and some to John McCain.
So McCain, who opposed bailouts on Monday, by Thursday has whipped up a new mausoleum for financial crimes, bailing out corporate crimes and failures with tax dollars.