Filed under: Politics, Presidential elections, Housing
I never thought I’d be doing a post praising John McCain’s wisdom, but here goes.
In the midst of calls from members of both parties for a large government intervention in the mortgage crisis, John McCain stated in a speech in Los Angeles that “it isn’t the duty of government to bail out and reward those who act irresponsibly, whether they’re large banks or small borrowers.”
Exactly — Senator McCain is saying what needs to be stated but isn’t being said because of election-year politics. Democrats and some Republicans appear to be making a bet that you will win very few votes by saying that some people should lose their homes.
He added that “Some Americans bought homes they couldn’t afford, betting that rising prices would make it easier to refinance later at more affordable rates … Of those 80 million homeowners, only 55 million have a mortgage at all, and 51 million homeowners are doing what is necessary - working a second job, skipping a vacation and managing their budgets to make their payments on time. That leaves us with a puzzling situation: how could 4 million mortgages cause this much trouble for us all?”
Taking the focus off of homeowners and onto Wall Street, McCain said that “Capital markets work ideal when there is both accountability and transparency. In the case of our current crisis, both were lacking.”
Of course, Senator McCain is right, and I wonder what he thinks of the taxpayer-financed Bear Stearns (NYSE: BSC) bailout that will stuff over $1 billion into the pockets of investors who purchased a bad stock.
McCain’s honesty here’s refreshing — I have to wonder what Washington would be doing if this crisis hadn’t happened in an election year. My hunch is that we’d see more rational behavior focused on fixing problems, not appearing to be compassionate while bailing out people who made bad decisions.
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