John McCain Mortgage Buy-Up Plan Pulled From His Butt?

During the debate on Tuesday night John McCain offered his latest fix…err… short-sighted gimmick… that was designed more to put some gas into his lethargic campaign than to actually address the needs of the economic crisis that faces the nation.  At least that was my first impression of his plan that seemed to land with a thud when looking at the faces of those assembled on the stage for the debate.  My other reaction was why as a taxpayer I would want to pay for the greed and lack of responsibility and outright stupidity for perhaps millions of Americans who made a very poor decision.  On the sofa I thought, ‘Count me as one that is not interested.’

But then I thought perhaps I should wait and read more about it before commenting.  Perhaps I was not aware of all the finer qualities of the idea, since the answers to the questions at the debate had time limitations.   There must be a gem inside the plan somewhere, or why would McCain advance it with such an assured look?  As readers will have noted I did not mention it in my review of the debate on Tuesday, as I really wanted more information.  But after a couple of days the stench from this plan is only increasing, and my initial response while on the sofa was I think correct.  McCain pulled this from his butt as a ‘Hail Mary’ and it landed with a thud.

“Beyond the costs, the proposal could encounter a backlash from voters, especially those who have had to work hard and sacrifice to keep current on their mortgage payments and who might resent bailing out fellow homeowners who got themselves into financial trouble.”

Politico’s Mike Allen reports that from Tuesday to Wednesday McCain changed his mortgage buy-up plan, making it “more generous to financial institutions and more costly for taxpayers.”

The McCain campaign told reporters in a Tuesday issue paper that lenders “must recognize the loss that they’ve already suffered.”

But when McCain posted the plan to his campaign website on Wednesday, that sentence was missing.

“It’s another example of John McCain’s erratic response to the economic crisis,” Obama communications directions director Dan Pfeiffer tells ABC News.

Pfeiffer advises that Obama will respond to McCain’s mortgage plan on the campaign trail, and the campaign is launching a new television ad.

“Who wins?” asks the narrator in Obama’s new ad.

“The same lenders that caused the crisis in the first place. Putting bad actors ahead of taxpayers? We can’t afford more of the same.”

“McCain Plan Draws Doubts From Experts on Mortgages,” blares the Washington Post. “Alan Blinder, a former vice chairman of the Board of Governors of the Federal Reserve, said he and others have supported the government buying loans at a discount and then restructuring them. But buying them at face value [as McCain is now proposing] is a dramatic departure, he said.”

“It is ‘outright loss for the taxpayer,’ said Blinder, an Obama supporter who said he has answered queries from the Obama campaign. ‘I don’t see why anybody, Republican or Democrat, would want to do that. Ironically, you would be giving the biggest gifts to the lenders who made the worst mortgages.'”

“Taxpayers, Not Lenders, Would Bear Costs of McCain’s Mortgage Proposal,” blares the New York Times.

The Times’ Jackie Calmes notes that the funding for McCain’s proposal would come from three sources: the bailout money, the FHA’s separate authority to refinance up to $300 billion in mortgages, or the mortgage-finance companies Fannie Mae and Freddie Mac, which the government now owns. (On Tuesday, the McCain campaign said the plan would come strictly from the bailout money).

On the Washington Post’s op-ed page, George F. Will writesthat conservatives participating in MSNBC’s dial group “wrenched their dials in a wrist-spraining spasm of disapproval” when McCain unveiled his plan during Tuesday’s debate.

The Wall Street Journal’s John D. McKinnonwrites that McCain’s proposal “could make winners out of investors – including predatory mortgage lenders – that the Bush administration and Congress have tried to exclude form the government’s largesse.”

We now know where McCain got his plan, and it should now be flushed.

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