Senator John McCain hit a grand-slam homerun today with an op-ed piece (“Take taxpayers off hook for rot at Fannie, Freddie”) that debunks the federal worship of Fannie Mae and Freddie Mac, and takes off the table the possibility that these GSEs will get a strong dose of steroids if he is elected president. This is a dramatic statement that completely differentiates his view from the go-along, get-along policy of Sen. Obama.

“Americans should be outraged at the latest sweetheart deal in Washington,” writes McCain. “Congress will put U.S. taxpayers on the hook for potentially hundreds of billions of dollars to bail out Fannie Mae

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[FNM  Loading...      ()   ] and Freddie Mac

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[FRE  Loading...      ()   ]. It’s a tribute to what these two institutions — which most Americans have never heard of — have bought with more than $170-million worth of lobbyists in the past decade.”

This is right on the money. This is the straight-talk McCain as true Washington reformer. The senator goes right to the heart of what Wall Street Journal editor Paul Gigot describes as a bad mix of government power backing private profit.

McCain goes on to argue that Fannie employees manipulated financial reports to line the pockets of senior executives. Freddie did likewise. Big Mac calls them a danger to financial markets. He says if one dime of taxpayer money ends up in those institutions “the management and the board should immediately be replaced, multimillion dollar salaries should be cut, and bonuses and other compensation should be eliminated. They should cease all lobbying activities and drop all payments to outside lobbyists.”

Sen. McCain argues that government backing is no longer needed for their original mission. He writes, “There are lots of banks, savings and loans, and other financial institutions that can do this job.”

Later on in the piece he argues for strong regulation of Fan and Fred “that limits their ability to borrow, shrinks their size until they are no longer a threat to our economy, and privatizes and eliminates their links to the government.”

This is as clear a statement as I’ve seen any politician make regarding the absolute folly of the GSE bailout that unfortunately will probably be passed by the Congress before the week is out. This is McCain at his very best. This is shot-across-the-bow stuff. I hope the voting public gets the message.