Obama plans on making the Keating Five Scandal an issue for McCain

Obama today "warned that controversial issues such as McCain’s ties to the Keating Five savings and loan scandal are fair game."

This from a 2000 article in Slate:

The Senate Ethics Committee probe of the Keating Five began in November 1990, and committee Special Counsel Robert Bennett recommended that McCain and Glenn be dropped from the investigation. They were not. McCain believes Democrats on the committee blocked Bennett's recommendation because he was the lone Keating Five Republican.

In February 1991, the Senate Ethics Committee found McCain and Glenn to be the least blameworthy of the five senators. (McCain and Glenn attended the meetings but did nothing else to influence the regulators.) McCain was guilty of nothing more than "poor judgment," the committee said, and declared his actions were not "improper nor attended with gross negligence." McCain considered the committee's judgment to be "full exoneration," and he contributed $112,000 (the amount raised for him by Keating) to the U.S. Treasury.

A new type of campaign by Obama?

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Anonymous Anonymous said...

Anyone who has read public choice theory would know it's practically impossible for either Obama or McCain to be honest, ethical people. So it will be fun watching them reveal the skeletons in the closet.

McCain's return of money to the US Treasury is amusing. Congressman Ron Paul returns more than that every single year, voluntarily without having done anything wrong!

5/10/2008 11:40 PM  
Blogger John Lott said...

Dear sukrit sabhlok:

I don't think that is what public choice implies. I have written a lot on this topic in journals and in my book Freedomnomics. In fact, I think that honesty is given a premium in politics because voters want to put in office politicians who will do what they promise. Unlike firms, politicians can only live so long. This makes it hard to use the threat of not being re-elected to discipline wayward politicians. The solution is to put in office politicians who intrinsically value certain policy outcomes because if they will lower their own level of utility if they don't follow through and do what they promised. I have almost a whole chapter on this in Freedomnomics.

5/11/2008 8:30 PM  
Anonymous Anonymous said...

My impression is that it's practically impossible for any politician to be honest. This is because of something Gordon Tullock wrote (p. 14): "Private businessmen, who deal with better informed consumers than do politicians, are also subject to surveillance by public officials who, dishonest though some may be, very commonly have no personal motive to protect a particular private businessman. The amount of dishonesty which has turned up in private business in spite of these inspections gives a rough idea of the almost complete uniformity of dishonesty in politics." (emphasis added)

Anyway, I'm not an expert...I will check out your book when I have the time.

5/12/2008 10:36 AM  
Blogger John Lott said...

Well, I know Gordon well, but the empirical research on this is overwhelming on the other side. If google has Freedomnomics online, see if you can read the chapter on reputations. I also have a review article in 1996 in Public Choice with Bruce Bender. It is old, but it is still pretty accurate in describing the issues.

5/12/2008 1:55 PM  
Blogger SteveMDFP said...

Sigh. Guilt-by-association smears are slimy. Sarah Palin should be ashamed of herself.

The Pharisees smeared Jesus by pointing out that he was keeping the company of prostitues, sinners, tax-collectors.

Who anybody is friendly with is an irrelevant distraction and is character assasination.

What is important is specific actions, especially actions taken in the context of public service.

John McCain was not censured by the Senate Ethics Committee, true. But he was NOT EXONERATED by that body. He was, in fact, reprimanded. How convenient that this fact gets swept under the rug by McCain supporters.

"Exercising questionable judgement" is the phrase, and it's an exceedingly valid point for discussion, particularly when McCain brags about being "exonerated" in this affair.

I think we need officials who don't "exercise questionable judgement" in their official capacities.

10/06/2008 1:44 PM  

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