Analysis: Political Implications Of Aiding Lenders

The White House is optimistic that the Treasury Department's plan to bolster Fannie Mae and Freddie Mac "will help add stability." Steve Inskeep talks with NPR News Analyst Cokie Roberts to sort through the political implications of the Fannie Mae and Freddie Mac news.

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STEVE INSKEEP, host:

NPR news analyst Cokie Roberts has been listening along with us and joins us, as she does most Monday mornings. Cokie, good morning.

COKIE ROBERTS: Good morning, Steve.

INSKEEP: So what, if anything, are the presidential candidates saying about all this trouble?

ROBERTS: You know, Steve, I hardly would ever say this, but this situation is basically too serious for politics. As you just heard Jim says, this is a very dicy situation. These are such big entities controlling so much money. So you really haven't heard a lot about it. Barack Obama did say that any government action should focus on protecting the homeowner, not the highly paid executives at Fannie and Freddie. But these are, as I say, just such huge entities that politicians of all stripes are trying to just calm any fears. And that was certainly the message yesterday on CNN from Senate Banking Committee Chairman Chris Dodd.

Senator CHRIS DODD (Democrat, Connecticut; Senate Banking Committee Chairman): Fear is understandable. What's important here are facts, and the facts are that Fannie and Freddie are in sound situation. They have more than adequate capital - in fact, more than the law requires. They have access to capital markets. They're in good shape. The chairman of the Federal Reserve has said as much. The secretary of the treasury has said as much.

COKIE ROBERTS: Chris Dodd and the House chairman of financial services committee Barney Frank say they will probably put this treasury plan onto the housing bill that is working its way through Congress.

INSKEEP: Okay, so when voters hear all these politicians saying don't worry, everything's fine, we're just frantically working through the weekend to take care of things, do they feel more or less reassured?

ROBERTS: Well, I think that in terms of the politics of it all, that they don't feel terribly reassured. It might reassure investors, particularly foreign investors who hold a lot of those companies. But I think that when you're talking about economics, it works to the Democratic candidate's benefit. You know, it's interesting. Right now, Steve, Barack Obama and John McCain are very close in the polls. Even the Newsweek poll that had Obama substantially ahead a couple of weeks ago now has him back within the margin of error. But the Democrats lead the Republicans on the economy - the question of who do you trust more to handle the economy - by double digits, in some polls by more than 20 points.

So I think it's - when we're talking about the economy and not talking about foreign policy, I think that's helpful to Barack Obama.

INSKEEP: Although, of course, Obama also to address foreign policy. Iraq is an issue that seemed like an advantage for him, maybe a little less than it might have at one time, seeming that way now. And here he is writing in the New York Times today about it in an article called "My Plan for Iraq."

ROBERTS: Well, he's gotten attacked from both sides on Iraq, and it is an issue where John McCain runs even or better among the voters. But there's been a big flap on the Democratic left over where Barack Obama stands on the issue, and it's been a problem for his campaign. So he's taking advantage of the Iraqi prime minister's - Maliki's call for timetable for the withdrawal of US troops - for him, for Obama to restate his call for the withdrawal of combat forces. And he says in this op-ed that he would draw down the forces over his first 16 months in office, which is what he has said before. They'd be redeployed by 2010. So I think what he's doing here is trying to calm his left flank because they're upset with him over what seemed like what they would call flip-flopping on Iraq over wiretapping, over capital punishment, over gun control, so I think he's shoring them up. And he's likely to continue doing that when he goes to the NAACP this week in the wake of the controversial remarks made by the Reverend Jesse Jackson.

INSKEEP: One other thing, Cokie Roberts. I guess it would normally seem like a good thing if you're Barack Obama and you make the cover of a leading magazine. Do you think he's happy to be on the cover of the New Yorker Magazine in the way that he is this week?

ROBERTS: No, I don't. The New Yorker has a very controversial cartoon of Barack Obama in Muslim garb, Michelle Obama with a machine gun and an ammunition belt. They are in what appears to be the Oval Office with the American flag burning in the fireplace and a picture of an unnamed Muslim above the fireplace.

The New Yorker says it is just a satire on what right-wingers are saying about Obama. The Obama campaign says it's tasteless and offensive, and the McCain says we completely agree.

INSKEEP: Certainly provocative. Cokie, thanks as always.

ROBERTS: All right, Steve.

INSKEEP: That's NPR's Cokie Roberts.

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