John McCain was one of five senators accused of corruption in 1989 for their dealings with Charles Keating, chairman of the bankrupt Lincoln Savings and Loan Association. Keating apparently “contributed” $1.3 million dollars to the senators to get the regulators off his back. His corporations eventually failed, and the government was on the hook and had to pay out two billion dollars.
Fast forward twenty years, and McCain is calling for a brand-new three-letter agency: the MFI. The Mortgage and Financial Institutions Trust will “work with the private sector and regulators to identify institutions that are weak and fix them before they become insolvent.” He also called for firing the chairman of the SEC, Christopher Cox, which is a typical CYA tactic: blame a subordinate.
Also, Henry Paulson, Secretary of the Treasury, is petitioning Congress for the power to allow him to purchase almost any bank asset: home loans, mortgage-backed securities, and “other assets,” including foreign securities. On top of that, he asks that the judicial system not be allowed to review any of the Treasury’s actions. It is worth remembering that the Treasury, unlike the Fed, has access to U.S. tax dollars.
http://www.bloomberg.com/apps/news?pid=20601087&sid=acVoMK3FiuqQ&refer=home
So I guess we can expect more of the same.