'08 Campaigns Target 'Advisors'

Barack Obama's foes sought to sully the Democratic presidential nominee on Thursday by alleging in a new television ad that he takes advice from former Fannie Mae executive Franklin Raines.

"Obama has no background in economics. Who advises him? The Post says it's Franklin Raines, for 'advice on mortgage and housing policy.'"

"Shocking," continues the ad's narrator. "Under Raines, Fannie Mae committed 'extensive financial fraud.' Raines made millions. Fannie Mae collapsed. Taxpayers? Stuck with the bill."

Watch the ad of unspecified size which is set to air on national cable and unidentified broadcast television stations: LINK

An hour after the McCain ad was released to the press, the Obama campaign pushed back with a statement from Raines himself.

"I am not an advisor to Barack Obama, nor have I provided his campaign with advice on housing or economic matters," said Raines in a statement released by Obama's campaign.

The McCain charge stems from a July 16, 2008 story in The Washington Post in which Raines is described as having "taken calls from Barack Obama's presidential campaign seeking his advice on mortgage and housing policy matters."

The Obama campaign says that it is now seeking a correction from the Washington Post but it will not say whether it sought a correction back in July before McCain made Raines an issue in the campaign.

With Obama slated to meet Friday with his economic team in Miami, Raines is not the only Democrat whom Republicans are trying to use against Obama.

The Republican National Committee sent a missive to reporters on Thursday saying that Friday's meeting with Larry Summers and Bob Rubin is a "good opportunity" for Obama to ask his advisors "why they fought for the 1999 regulatory reforms that Obama now blames for the current crisis."

The RNC's invocation of Gramm-Leach-Bliley is potentially dicey because it may serve to remind voters of McCain's ties to its principal author.

Phil Gramm, the former Texas Republican senator, was a top McCain economic adviser until he was forced to step down earlier this year after referring to the U.S. as a "nation of whiners."

Beyond his work on legislation that broke down the firewalls between commercial and investment banks and insurance companies, Gramm played a key role in the deregulation of derivatives.

On Dec. 15, 2000, Gramm had a 262-page amendment slipped into an appropriations bill.

It blocked federal agencies from regulating financial derivatives. Analysts have said that this led to risky mortgage-backed securities being passed to investors.

During a July 24 NPR interview, McCain economic adviser Douglas Holtz-Eakin sought to separate McCain on procedural grounds from Gramm's 2000 amendment.

Holtz-Eakin said McCain is a "long-standing critic of that style of doing business, large omnibus spending bills that aren't scrutinized, provisions dropped into bills in the dead of the night without proper vetting."

"His view," said Holtz-Eakin, "of the way that Congress should work is defend a proposal on its merits in the House, defend it in the Senate, agree on it in a conference, have it passed by both houses and signed by the president of the United States. And to do things in any other way is to really betray the trust of the American public."

While McCain can argue that he favors a more transparent legislative process, it's much more difficult for him to substantively differentiate himself.

Back in January, McCain said that he respects "no one more in America" than Phil Gramm on economics.

Following the Bear Stearns collapse in March, McCain was very Gramm-like in calling for the further deregulation of Wall Street. .

"Our financial market approach should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital," said McCain in March of this year.

Now that the financial crisis has continued to expand, McCain did his best on Thursday to separate himself from the Bush administration's economic record, promising to "fire" Securities and Exchange Commission Chairman Chris Cox.

Obama responded by urging voters to go beyond getting rid of one guy and urged them to "get rid of this administration, get rid of this philosophy, get rid of the do-nothing-approach and put somebody in there who is going to fight for you."

Speaking of Gramm, Obama said Thursday that the former McCain adviser has "consistently opposed the sorts of common sense regulations that might have set out some rules for the road for these financial institutions and lessened the current crisis."

"When I was warning about the danger ahead on Wall Street months ago because of the lack of oversight," said Obama, "Sen. McCain was telling the Wall Street Journal -- and I quote – 'I'm always for less regulation.' This is what he said just a few months ago. Except now, with the magnitude of the crisis apparent even to the Bush White House, John McCain wants to reverse himself, he wants to reverse course. Now, all of a sudden, he has become a populist."

"John McCain can't decide whether he's Barry Goldwater or Dennis Kucinich," added Obama.

The Kicker:
"Ladies and gentlemen, John now says the problem is greed on Wall Street. John called for a Republican appointee, a former congressman, the head of the SEC to step down. That's a change in personnel, that's not a change in policy."
--Joe Biden in Youngstown, Ohio, on John McCain's Call for Firing SEC Chair Chris Cox

On the campaign front. . .

BARACK OBAMA
-- 9:45 am ET: Conducts economic policy meeting with Warren Buffet, Larry Summers, Dan Tarullo, Laura Tysonm, Bob Rubin, Paul Volcker, Paul O'Neil, Joe Stiglitz in Coral Gables, FL.
-- 11:45 am ET: Holds Women's Rally in Coral Gables, FL.
-- 5:30 pm ET: Holds fundraiser in Coral Gables , FL.
-- 7:15 pm ET: Holds fundraiser in Miami, FL.

JOE BIDEN
-- 12:00 pm ET – Holds Women's Rally in Sterling, VA.

JOHN McCAIN
-- 1:00 pm ET – Holds Rally in Blaine, MN

SARAH PALIN
-- 1:00 pm ET – Holds Rally in Blaine, MN

At the White House. . .

PRESIDENT BUSH
-- 3 p.m. ET - Stages photo op and speaks to the Boston Celtics.

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