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John McCain is taking a different path in his response to the mortgage crisis that is gripping the nation and financial markets. Where Hillary and Obama are touting multi-billion dollar packages for foreclosure assistance and loan modification, McCain is urging limited government intervention – preferring to let the mortgage mess sort itself out unless events occur that present systemic risks.A while ago I wrote about Hillary Clinton’s mortgage bailout plan and Barack Obama’s mortgage bail out plan, but noted that McCain was mum on the situation. I wrote to McCain’s team at the time requesting more details on the Senator’s plan of attack but received no response. Now the New York Times is covering the detail of his plan.From the New York Times article on John McCain’s mortgage bail out plan:
Drawing a sharp distinction between himself and the two Democratic presidential candidates, Senator John McCain of Arizona warned Tuesday against vigorous government action to solve the deepening mortgage crisis and the market turmoil it has caused, saying that ?it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers.? ?Rampant speculation? on both sides is the root cause of the crisis, Mr. McCain said. He placed part of the responsibility for the mortgage mess on lenders, who he said had grown ?complacent? in a rising market and as a result acquired a ?false sense of security? that caused them to ?lower their lending standards.?
?Some Americans bought homes they couldn?t afford, betting that rising prices would make it easier to refinance later at more affordable rates,? he said. Later he added that ?any assistance must be temporary and must not reward people who were irresponsible at the expense of those who weren?t.?
While it is refreshing to hear this point of view of limited government intervention the one point I worry about is whether the support of big business will be continued at the expense of main street. It’s easy to say “it’s not the government’s job” to bail out speculators; it’s another to stop the Fed and other bodies from doing just that. We’ll remain cautiously optimistic that McCain can walk that fine line.What do you think?
Last 3 posts by Morgan
- Subprime Bananas - June 28th, 2009
- Roubini: No confidence in government exit strategy - June 24th, 2009
- Goldman bonuses largest in firm's 140-year history - June 21st, 2009
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