by Abigail Adams

Created on: October 26, 2008

The fear invoked by the stock market crash of 2008 has out trumped the terrorist threat as communities across the U.S. brace themselves for the impact corrupt Wall Street practices will have on their daily life. The crisis has become highly politicized in the presidential race, and the campaigns of Barack Obama and John McCain have highlighted, through extensive attack ads, the connection of the opposing camp to fraud-ridden executives in the financial sector. However, these connections are widespread for both presidential candidates who have relied heavily on the profits from business practices responsible for the current economic meltdown to fund their political careers.

John McCain has called his involvement in the Keating 5 affair the, "worst mistake of my life". (1) The 2 year Senate Ethics Committee investigation into his interference with bank regulators on behalf of Charles Keating, a Savings & Loan industry high-flyer, and generous campaign contributor, whose financial collapse cost taxpayers $2.6 billion, nearly cost McCain his career in the Senate. In the midst of a financial meltdown triggered by accounting practices that mirror the fraud of the S&L era, the Obama campaign has revisited the scandal with the hope that it will cost McCain the Presidency. (2)

The Savings & Loan debacle of the late 80s was hailed as one of the worst financial crisis in the history of the U.S., and, with the closure of over 1,000 thrifts, evoked widespread images of the Great Depression. Bank regulators publicly reported that the most common causes of thrift failures in the S&L debacle were management misconduct, insider abuse, and outright fraud. The Keating 5 investigation was just one of many public probes into political interference with bank regulators attempting to take action against troubled financial institutions. The political protection S&L executives bought through campaign contributions enabled the continued operation of thrifts bank regulators called the "living dead", and escalated the cost of the inevitable bailout to $300 billion. (3)

The cost of the S&L debacle is still present in the federal deficit, and the recent collapse of global financial institutions has added an additional $700 billion tab for taxpayers to pay off. There is no dissention that fraudulent accounting practices, which disguised bad assets, and generated paper profits, were a contributing factor to the meltdown of Wall Street. (4) Discussion of the conditions

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