McCain hits Obama on Fannie Mae ties

John McCain unveiled a new TV ad this afternoon that tries to paint Democratic rival Barack Obama as so inexperienced on the economy that he has to listen to shady characters.

"Obama has no background in economics," the announcer says.

"Who advises him? The Post says it's Franklin Raines, for 'advice on mortgage and housing policy,' " the announcer says, citing a Washington Post report this week.

"Shocking. Under Raines, Fannie Mae committed 'extensive financial fraud,' " the announcer says, as another newspaper headline appears on screen. "Raines made millions. Fannie Mae collapsed."

Raines, the head of Fannie Mae from 1998 to 2004, agreed in April to pay nearly $25 million in a settlement with the government in an accounting scandal.

"Taxpayers? Stuck with the bill," the announcer continues, as an image of an elderly woman appears. "Barack Obama, bad advice, bad instincts. Not ready to lead."

UPDATE: Obama's campaign just issued a response, including a denial from Raines.

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

"This is another flat-out lie from a dishonorable campaign that is increasingly incapable of telling the truth.  Frank Raines has never advised Senator Obama about anything -- ever.  And by the way, someone whose campaign manager and top advisor worked and lobbied for Fannie Mae and Freddie Mac shouldn't be throwing stones from his seven glass houses," said Obama spokesman Bill Burton.

In the tug-of-war this week over who can best respond to the Wall Street crisis, McCain has cited his proposal two years ago to rein in the quasi-public mortgage giants Freddie Mac and Fannie Mae, and criticized Obama for his ties to them and his inaction.

"He took more money from Fannie and Freddie than any Senator but the Democratic chairman of the committee that regulates them," McCain said today in Iowa. "He put Fannie Mae's CEO who helped create this disaster in charge of finding his Vice President. Fannie's former General Counsel is a senior advisor to his campaign. Whose side do you think he is on? When I pushed legislation to reform Fannie Mae and Freddie Mac, Senator Obama was silent. He didn't lift a hand to avert this crisis. While the leaders of Fannie and Freddie were lining the pockets of his campaign, they were sowing the seeds of the financial crisis we see today and enriching themselves with millions of dollars in payments. That's not change, that's what's broken in Washington."