Mccain Waffles on Tough-Love View of Mortgage Mess
epublican John McCain, who has conceded economics is not his strong suit, says government isn't in the business of saving and rewarding banks or small borrowers who behave irresponsibly.
As the nation faces an economic downturn, the certain GOP presidential nominee was focusing on the turmoil in home financing in a session with local business leaders south of Los Angeles as he tried to rebut Democratic criticism of his economic credentials.
On Monday, the Federal Reserve essentially bailed out the investment house Bear Stearns. On Tuesday, the Fed Federal Reserve announced it has auctioned another $50 billion in short-term loans at an interest rate of 2.615 percent to cash-strapped banks to help them overcome credit problems. Since December, the Fed has provided a total of $260 billion in short-term loans to banks.
McCain wants to leave the door open to a wide array of proposals to address the problems.
But the small-government advocate and four-term Arizona senator also put restrictions on how far he was willing to go.
''I have always been committed to the principle 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,'' McCain said in remarks prepared for delivery. ''Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy.''
He said no assistance should be given to speculators, or people who bought houses to rent or as second homes.
In the short term, he called for the country's accounting experts to meet to discuss current accounting systems and said the country's top mortgage lenders should pledge do everything possible to help their cash-strapped but creditworthy customers.
''They've been asking the government to help them out,'' McCain said of lenders. ''I'm now calling upon them to help their customers, and their nation, out.''
''I will not play election-year politics with the housing crisis,'' he said. ''I will evaluate everything in terms of whether it might be harmful or helpful to our effort to deal with the crisis we face now.''
McCain seemed to suggest he might even be open even to solutions that stray from the Republican party line. ''I will consider any and all proposals based on their cost and benefits,'' he said. ''I will not allow dogma to override common sense.''
In the midst of a weeklong western fundraising swing, the GOP's next standard-bearer was using the event in the Republican stronghold of Orange County to showcase his grasp of the country's economic troubles _ and counter the notion that he's not up to the task of leading a nation on the brink of recession.
McCain has acknowledged in the past that he knows less about economics than he does about national security and foreign policy, and Democrats have seized on such remarks to argue that the Republican is a novice on bread-and-butter issues that voters care about most.
In recent weeks, Democrats have sought to portray McCain as in lockstep with President Bush on the economy, out of touch with challenges facing working families, and lacking a plan to help families struggling to stay in their homes.
With the outgoing chief executive of eBay Inc., Meg Whitman, alongside him, McCain opened with a nuts-and-bolts explanation of the conditions that caused the housing crisis and financial market problems.
McCain said lenders became complacent as housing prices continued to rise, lowering their standards and lending money to people who couldn't pay it back. Some consumers, he said, bought homes they couldn't afford, betting they would reap the benefits later of higher home prices. Meanwhile, he said, the housing market lacked accountability and transparency, and ''the initial losses spawned a crisis of confidence in the markets.''
03/25/2008 10:17 AM
By LIZ SIDOTI Associated Press Writer
SANTA ANA, Calif.
Republican presidential candidate, Sen. John McCain, R-Ariz., speaks during a town hall meeting Monday, March 24, 2008, in Chula Vista, Calif.
(AP Photo/Mary Altaffer)
epublican John McCain, who has conceded economics is not his strong suit, says government isn't in the business of saving and rewarding banks or small borrowers who behave irresponsibly.
