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Rob McKenna's Defining Debate Moment: Blaming Homeowners for the Housing Collapse

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The defining moment of yesterday's gubernatorial debate in Spokane came when Republican Rob McKenna offered voters a window into his corporate world view through a question he asked Jay Inslee.

McKenna made it clear he blames the middle class for the 2008 financial collapse when he asked Inslee: "If you were in Congress today -- or if you could do it over -- would you vote for bills that would make it possible for people with poor credit to obtain mortgages with no money down?"

McKenna must have forgotten to check Inslee's record of standing up against Wall Street. Inslee was able to fill him in, reminding McKenna that he was one of only 57 to vote against the 1999 repeal of Glass-Steagall, a set of safeguards in the banking and loan industries that, once removed, opened the door to the eventual collapse of our nation's mortgage industry.

"Well, in fact, I voted against the deregulation of Wall Street -- which really was the reason we had this financial collapse," Inslee responded. "The reason, in fact, that we have had such a titanic loss of our [home] values is we had an unrestrained Wall Street... When Bill Clinton asked for my support -- to support the deregulation of Wall Street -- to in fact repeal Glass-Steagall -- I said no. I voted against it. I'm a person who's willing to stand up against my own party."

Unbelievably, when given the opportunity to follow-up, McKenna misfired again, accusing homeowners of being at fault.

"… I didn't ask about Glass-Steagall or the deregulation of Wall Street. I was asking about the votes that the Congressman took to lower lending standards for loans guaranteed by the GSEs - by Fannie Mae and Freddie Mac… The problem was it wasn't just those people who were using those no money down loans. It wasn't just people those people using those pay option arms. It also invited speculators and others in who thought they could get rich with no money down, who were watching those TV shows on cable TV."

Inslee closed the exchange saying the middle class is not to blame.

"Fundamentally, the Romney-McKenna view in life is that the reason we have problems is because of homeowners, not Wall Street. I have a fundamentally different view. So no, I do not believe that our economy collapsed because of homeowners. I believe our economy collapsed because of Wall Street irresponsibility."


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