Category Archives: Economy

Chicago Tribune rips apart McCain’s mortgage plan

this sunday, the chicago tribune, one of america’s staunchest conservative papers, tore into mccain’s mortgage plan:

Exactly three sentences after vowing to halt the spending spree, he unveiled a plan for the federal government to buy every bad mortgage and refinance it at taxpayer expense. “Is it expensive?” he asked. “Yes. But we all know, my friends, until we stabilize home values in America, we’re never going to start turning around and creating jobs and fixing our economy.”

It also looks like a much worse bargain for the Treasury than the Paulson plan. The latter would buy mortgage-backed securities at a premium over today’s fire sale prices, and then sell them later once the market has stabilized and prices have risen. In theory, the government could make a profit.

Not so with the McCain program. It would take a loss upfront. Say you have a $250,000 mortgage on a house worth $200,000. The government would pay off the original loan and then offer you $200,000 in a low, fixed-rate, 30-year mortgage. That means eating $50,000 right away. If your house later rises in value, the taxpayers would not get a share of the windfall, another departure from Paulson’s approach.

mccain boasted that this was his own plan, not bush’s and not obama’s. well there might be a reason no one else  thought this would be a good idea…

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Are windmills an earmark?

hardly a day goes by without the mccain camp bemoaning earmarks and quixotically vowing to eliminate them. mccain’s called them the “gateway to corruption”, he’s attacked obama for failing to cut them from the budget, he’s pretty much made this the central component of his budget plan.

but how much are these earmarks actually costing us?

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Members of “Economists for McCain” trash McCain

wow, this really takes the cake:

Many of the professional economists who formally endorsed John McCain’s economic plan are expressing bewilderment with his most recent proposal to rectify the home mortgage crisis.

some quotes from the economists:

Michael Connolly, an economics professor at the University of Miami, called the idea “Robin Hood economics.”

“It will provide an incentive for people to default [on their loans],” he warned. “And they might get rid of their negative equity and take the subsidy and default on their next loan too.”

Houston Stokes, a professor at the University of Illinois at Chicago, said he didn’t agree that the government should “pay a face value” due to the moral hazard it created.

“These guys got themselves into a jam and it is now their problem,” he said. “We should not overpay. We should buy these mortgages at the lowest price… I don’t want to be accused of helping out the Wall Street types.”

after mccain made the stunning announcement during the debates, obama immediately released a counter ad stating that mccain’s plan would shift the burden from the lenders to the taxpayers.

as CNN’s factcheck describes:

McCain previously supported renegotiating mortgages with lenders, who would take losses. His economic adviser, Douglas Holtz-Eakin, told reporters Wednesday that McCain now believes having the government pay the entire value of the loans is “the only way” to begin stabilizing the housing market “in a timely fashion.”

having taxpayers foot the bill for $300 billion of bad mortgages?

this isn’t just socialism, it’s lunacy.

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Why do economists hate John McCain?

is it just another MSM/left-wing conspiracy, or is it possible that john “i will buy $300 billion of bad mortgages” mccain is absolutely clueless when it comes to the economy?

according a recent poll conducted by the Economist, the majority of respondents were highly critical of mccain’s economic plans and his ability to lead the nation through the financial crisis.

some excerpts from the article:

Even among Republicans Mr Obama has the edge: 46% versus 23% say Mr Obama has the better grasp of the subject. “I take McCain’s word on this one,” comments James Harrigan at the University of Virginia ..

“John McCain has professed disdain for ‘so-called economists’, and for some the feeling has become mutual,” says Erik Brynjolfsson, a professor at the Massachusetts Institute of Technology Sloan School of Management. “Obama’s team is mainstream and non-ideological but extremely talented.”

Mr Obama, says Jonathan Parker, a non-aligned professor at Northwestern’s Kellogg School of Management, “is a pragmatist not an ideologue. I expect Clintonian economic policies.”

Twice as many economists think Mr McCain’s plan would be bad or very bad for long-run growth as Mr Obama’s. Given how much focus Mr McCain has put on his plan’s benefits for growth, this last is quite a repudiation.

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Top 10 McCainisms about the Economy

10. The issue of economics is not something I’ve understood as well as I should.

9. I’m going to be honest: I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated.

8. I don’t know where you got that quote from. I’m very well versed in economics; I was at the Reagan Revolution.

7. Recession is partly psychological and not inevitable.

6. I still believe our fundamental underpinnings of our economy are strong.

5. I’d like to see a lot of the unnecessary government regulations eliminated.

4. I think the deregulation was probably helpful to growth of our economy

3. 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.

2. Now, my friends, I’ll offer anybody here $50 an hour if you’ll go pick lettuce in Yuma this season and pick for the whole season. …you can’t do it, my friend. (McCain, defending illegal immigration at a labor union meeting)

1. “I understand the economy. I was chairman of the Commerce Committee that oversights every part of our economy.” –ignoring the fact that it is actually the Senate Banking Committee which is responsible for credit, financial services, and housing — the very areas currently in crisis, CNBC interview, Sept. 16, 2008

honorable mention goes to mccain’s former chief economic advisor, phil gramm:

“You’ve heard of mental depression; this is a mental recession….We have sort of become a nation of whiners.”

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Kablooooom!


there’s plenty of blame to go around, but only one man said that he would deliver the bailout package:

john mccain.

before the bailout his campaign had said:

“[T]his bill would not have been agreed to had it not been for John McCain. … But, you know, this is a bipartisan accomplishment, a bipartisan success. And if people want to get something done in Washington, they just watch John McCain.” — Former Massachusetts governor Mitt Romney, 9/29/08

“Earlier in the week, when Senator McCain came back to Washington, there had been no deal reached. … What Senator McCain was able to do was to help bring all the parties to the table, including the House Republicans.” — Senior adviser Steve Schmidt, 9/28/08

“But here are the facts, and I’m not overselling anything. The fact is that the House Republicans were not in the mix at all. John didn’t phone this one in. He came and actually did something. … You can’t phone something like this in. Thank God John came back.” — Sen. Lindsey Graham (R-SC), 9/28/08

“Before John McCain suspended his campaign yesterday, the situation that we’re looking at today looked very different then. After he showed leadership and called for bipartisanship, for us to partisanship aside and tackle this solution head on, here we are.” — Spokesman Tucker Bounds, 9/25/08

needless to say, john mccain failed to deliver. pelosi, despite all of her flaws and despite being one of the worst leaders ever, actually delivered her end of the bargain: she managed to get 60% of democrats to vote in favor of the bill.

john mccain failed to get his own party to fulfill his wishes.  his heroic effort to suspend the campaign, cancel his appearance on david letterman , and push himself into every possible photo-op turned out to be an abysmal failure.

the simple fact is that john mccain did not deliver.

well maybe there’s a silver lining to this. as atrios at eschaton writes:

“Obviously Sarah Palin needs to skip Thursday’s debate so she can go to Washington and negotiate a deal.”

yes, please save us johnny.

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Still worth it?

well no, i don’t think the $558 billion we spent on the war could’ve been better spent in this country.
why do you ask?

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