Wash. Post's Balz reported McCain "again made clear his opposition to broad federal intervention or bailouts," ignored approval of Bear Stearns aid
SUMMARY: A post on The Washington Post's political blog, The Trail, stated that John McCain "once again made clear his opposition to broad federal intervention or bailouts." But the post, by Dan Balz, did not note that McCain reportedly agreed with the Federal Reserve's decision to extend a $30 billion loan to facilitate JP Morgan Chase's acquisition of Bear Stearns.
In an April 10 post on The Washington Post's political blog, The Trail, staff writer Dan Balz reported: "On the housing crisis, [Sen. John] McCain once again made clear his opposition to broad federal intervention or bailouts. He said he continues to oppose helping those who engaged in and fed the speculative frenzy in the housing and credit markets." Balz further reported that McCain economic adviser Douglas Holtz-Eakin "called McCain's approach superior to some Democratic measures because it places primary emphasis on the individuals in need, rather than the lenders." However, Balz did not mention that McCain reportedly agreed with the Federal Reserve's decision to extend a $30 billion loan backed by Bear Stearns assets to facilitate the acquisition of the near-bankrupt investment firm by JP Morgan Chase. The deal reportedly puts taxpayers at risk for $29 billion of the loan if the value of Bear Stearns' assets declines.
From Balz's April 10 post on The Trail:
McCain plans a more comprehensive economic speech for next week, but came here today to blunt criticism from Democratic rivals Barack Obama and Hillary Clinton that he is insensitive to the plight of ordinary Americans.
"Let me make it clear that that in these challenging times, I am committed to using all the resources of this government and great nation to create opportunity and make sure that every deserving American has a good job and can achieve their American dream," he said.
McCain noted that Americans face multiple economic pressures from the economic downturn, from declining home values and threats of foreclosure to the impact of rising gasoline prices on family budgets to fears that a worsening economic situation will throw more people out of work.
On the housing crisis, McCain once again made clear his opposition to broad federal intervention or bailouts. He said he continues to oppose helping those who engaged in and fed the speculative frenzy in the housing and credit markets
"Tax breaks for builders, funds to purchase homes in foreclosure, and tax credits that are not targeted to where the need is greatest do not constitute the federal help that is warranted," he said.
Instead, McCain proposed a federal program that would require individual homeowners to seek help from the federal government and, if they qualified for assistance, emerge with a restructured mortgage that would allow them to stay in their homes.
"There is nothing more important than keeping alive the American dream to own your home, and priority number one is to keep well meaning, deserving home owners who are facing foreclosure in their homes," he said.
There are some limitations. Those families who can afford the terms of their current, albeit higher, mortgage would not qualify. And the assistance would only cover primary residences and only go to families that can truly afford the new mortgage.
McCain economic adviser Douglas Holtz-Eakin said the housing assistance would reach an estimated 200,000 to 400,000 families, with an estimated cost of $3 billion to $10 billion. He said McCain's goal is to use federal money only for those families "who really need help." He also called McCain's approach superior to some Democratic measures because it places primary emphasis on the individuals in need, rather than the lenders.
McCain also demanded a Justice Department investigation to look into criminal wrongdoing in both the home mortgage industry and in the securitized credit instruments that were created to fuel the speculative bubble in the housing market.
I agree.
But the failure here is more to do with the conservative, market fundamentalist ideaology of deregulation. Had laws been in place to protect consumers from these swindlers we could have a stable economy going forward.
Oh of course. Here we go, an attack on the "conservative economic policies". All the while, no one was complaining turning around houses for a profit.
Theres an old saying Roundhouse..."dont spend money you dont have". Its the first thing I was taught when I got a credit card. Dont buy anything on it if you dont have the means to pay it off as soon as the bill comes. That is easily translated into this scenario. Dont buy a house at 5yr interest only when you wont have the money to pay the mortgage payment when the sixth year comes. If all you were trying to do was live in it at a discount for a few years then turn it around for profit, you essentially just gambled your life on the stock market. Its a free market, and the laws of Supply vs. Demand still qualify. If you didnt understand the terms of the loan, then you should have been smart enough not to sign it.
I'm not suprised by this, I have come to expect conservatives to cease at nothing in their race to excuse profligate behavior in pursuit of material excess.
Yeah, this is about conservative economics. For far too long and at far too great a price to the economic security of the middle class, conservatives have claimed to own economics, just like they claim to own national security. It's pathetic and 81% of the country agrees consevatives have no idea how to lead us to prosperity for most Americans.
You're blaming people for letting themselves be deceived and excusing the ethics lapses of lenders who willfully lent money knowing the borrower could not pay it back. Talk about no personal responsibility!
Wait a minute here. Lets disect this line by line....
So these people who "let themselves" be deceived are at no fault because why?
So let me get this right - lenders & credit card companies should ONLY lend money to people that they know can pay it right back? That sort of defeats the purpose of a loan, no? For example, who would need a credit card if they already had the cash to pay for what they were buying? Else, its their own fault for buying it! This is not a difficult concept Roundhouse. Sounds like you are one of those "5yr interest only" dummies who thought you were going to turn a profit and run.
Yes, lets talk about "personal responsibility". If you aren't responsible for your own finances, then no one is....or should be. Please please Hillary, will you balance my checkbook for me? Im too dumb to know what to put in the empty box.
I wouldn't mind so much your critique of this crisis if you were at least mindful that making money does not excuse immoral behavior.
Wait wait wait a minute here. Nowhere in my posts have you seen me defend the lenders. Im glad they got what they deserved.
However, the people who lost their homes were the ones seeking "excess materialism". Yes, buying more than they could afford....wanted something bigger and better without being able to afford it. Im not at fault, they are.
You implicitly defend this market fundamentalist approach that preaches no rules are good rules, the market will fix itself on its own, nonsense. It's that mentality that enabled lenders to carry out this swindle.
You may say you don't think Bear Stearns should have been given hundreds of millions in tax dollars before they were purchased privately but truth be told, I bet you know as well as I that their collapse would have rippled waves of suffering throughout our economy.
Safe to say that you are not a financially responsible person. Im not sure if your parents bailed you out every time you got in trouble in school or what.
But my god. You and the rest of the dip$hits blaming the government for losing a house you never should have bought in the first place need to stand up and take responsbility for yourself. If you have no self respect, you have nothing. Take some pride in what you do and what you spend your money on.
Columbus, did you know that many of those sub-prime mortgages were falsified? The lender companies showed the salesmen how to manipulate the software to show that someone was approved (i.e. could afford) the sub-prime mortgage when they really couldn't. Similarly, many lenders knew they were selling mortgages to people who couldn't afford it, but did so anyway to turn a buck.
Yes, some of the fault is with SOME of the borrowers, but not all. They were duped into thinking they could afford these sup-prime loans and were never told otherwise.
Personally, I'd like a little trust from my lender to make sure I'm not getting a raw deal. They are akin to used car salesmen, and the greedy underhanded tactics that go along with them.
You do realize that they companies did not have to falsify loan info. It was completely legal and normal practice to give out loans on a "stated income", but you would get a higher percentage rate. If you told a company that you made 75k/yr as opposed to giving them documentation proving it, you may get an 8% instead of 5% fixed rate, or even a bad arm loan.
Dont give me crap about giving loans to people who couldn't afford it. If that was the case, you may as well ask 80% of the American people to hand over their credit cards, and start paying cash. In case you haven't noticed, the lender is not one to care where you get the money just so long as you get it to pay him back. That has been the premise of a loan since before the US was even established. It is up to the individual person to recognize how much money they can afford to borrow and pay back.
People weren't duped. People were stupid and signed the bottom line without doing enough investigation into what they were doing. Anyone who thought they were getting this great deal on a mortgage for below the average rate when they have shitty credit.....guess what, your a sucker who should know better.
Hello McFly! Is anyone home?
Man, you really need to watch your invective. Do you think everyone completely understands how their credit score translates into the rates they receive? Hardly, that's why we have lenders who you SHOULD trust to give you sound financial advice. They duped these people into believing they could afford it. Like I said, some, not all. Some people were duped, and some people should have paid better attention to what they were signing. Like I said, they manipulated the software to show that some of these people were approved when they clearly were not.
And it only serves as an example of what can happen when technology is poorly applied in a thirst for greater business volume and/or cutting the cost of underwriting a loan.
My link above highlights this problem.
Do you think everyone completely understands how their credit score translates into the rates they receive?
Further proof that the borrowers did no due dilligence. Seriously man, you dont even need to research that to know it....just turn on any television channel to see that dork on stool advertsising for freecreditreports.com.
that's why we have lenders who you SHOULD trust to give you sound financial advice.
No, you are quite confused. Lenders are concerned with their own financial outlook. If you want someone to give you "sound financial advice", then you seek the help of a financial planner to help with your portfolio....or even go to your local library and read up on some books for FREE.
they manipulated the software to show that some of these people were approved when they clearly were not.
Clearly that is not the case. Those people only saw what they wanted to see. They saw a bottom line payment that they thought they could afford, however they did not plan for the future. The word "adjustable" is synonomous with "changing". Therefore the rate can change, altering your payment. The reason these people took those loans is for 3 reasons:
1. They thought they could sell within a few years to profit before the new rate kicked in (majority of borrowers did just this).
2. They underestimated the amount the rate could change or underestimated the fact that they may not always be making the same money that they currently were.
3. An ARM loan is typical for people with crap credit history & score. Reading any mortgage information for 5 minutes will tell you to look for a fixed rate mortgage. If you cant get one of these, chances are you are not financially responsible enough and that you should not be signing a mortgage loan.
what laws in particular would you put in place?
Now, don't go thinking the problem with subprime is the only problem we have with the economy. Sure, it's a big one, but the other challenges we have are independent of that.
Look at the price of food. Why is it going up so rapidly? Well, China and India are growing like crazy, and those people want to eat real food. So they're putting pressure on the the wheat, corn, beef (not India of course), pork, and rice markets. In the meantime, in the name of being green we are turning corn into ethanol, a very inefficient fuel, and reducing our food supply. that in turn raises the price of corn, so beef is up some incredible percent over the last year.
Well, it goes on and on. The dollar is cratering, and congress is dithering on the Colombia trade pact. How silly. Colombia can import 95% of their stuff to us without any tariffs at all. It is we who cannot sell to Colombia without tariffs. Wheat, tractors, all have about a 15% import tariff, so we are not competitive there with other countries. But Pelosi wants to suck up to the unions, so Caterpillar employees will go without jobs. Good job Nance.
Pelosi is no doubt standing up for the unioners, but lets be honest here. The problem with unions is that they price themselves out of jobs to a point where they are just not competitive. It is the demise of the US auto industry, and other companies are catching on.
Personally, if i was owner of a company, I wouldn't want to pay two people the same amount if one is not as skilled at his job as the other is.
The problem with the US auto industry is NOT the Unions. Toyota and Nissan are doing fine and THEY are Union in Japan. In fact Japan has has a higher average wage than the US since the 70's. Again you just repeat the brainwashed mantra you have been told to believe. The problem with the US auto industry is the MANAGEMENT. They keep making these schoolbusses to sell at a higher profit when Americans want other kinds of cars. They refuse to make their product LAST as long or have the quality we can expect from German and Japanese made cars. I buy a Jetta I can expect 250,000 miles from it. The US auto industry still wants their cars to die after a 100,000 miles so you will buy another one. Their problem is Ford was willing to KILL its customers to maximize their profits when they put out the Pinto which they KNEW would kill and maim their costumers because that would cost them less money than a redisign in the middle of production. Europe is a lot more unionized than the US and they are doing fine economically. The German car industry is doing fine with unionized workers. The problem is you expect those with the least to give up to sacrifice so those with the MOST can get more. THAT and of course you dont know what you are talking about and simply regurgitate what Screechmonkey radio has instructed you to believe.
The problem with the US auto industry is NOT the Unions. Toyota and Nissan are doing fine and THEY are Union in Japan.
Ahh not so much. Take a look at the auto unions in Japan and notice the key differences: healthcare and retirement. Japanese unions do not get these. That accounts for about 50% of the cost per worker. Union means nothing when comparing unless you look at what each offer.
They keep making these schoolbusses to sell at a higher profit when Americans want other kinds of cars.
Clearly not the case when a full size truck is the #1 selling car in America. Not to mention the popularity of SUV's. If people WANTED the other kinds of cars, they would not be buying SUV's or Pickups.
They refuse to make their product LAST as long or have the quality we can expect from German and Japanese made cars.
Clearly you are again incorrect. First and foremost, the cars themselves do last just as long, however they do not have as high of a resale value. Not to mention they are also cheaper to fix than Japanese and German autos. Also, you really need to research as some german cars like Audi/VW have some of the lowest reliability and maintenence scores in the auto industry.
The US auto industry still wants their cars to die after a 100,000 miles so you will buy another one.
Wow, talk about projecting. I would LOVE to see facts on that.
Europe is a lot more unionized than the US and they are doing fine economically.
I'm glad you brought that up. You should look at their debt to GDP ratios and realize that the large EU nations are worse off than the US. Not to mention you should look at their unemployment rates & standard of living figures. Clearly you are obtuse here as the proof is very easy to find.
Public debt as a % of GDP:
US 36.8%
UK 43.3%
Canada: 64%
Germany: 65.3%
France: 66.6%
Italy: 104%
Japan: 182%
Unemployment rates:
US: 5.1%
UK: 5.4%
Canada: 5.9%
Italy: 6.7%
France: 7.5%
European Union: 8.5%
German: 9.1%
Quality of Life Index (score out of 10).
The survey uses nine quality of life factors to determine a nation's score[1]. They are listed below including the indicators used to represent these factors:
US: 7.615
Canada: 7.599
Japan: 7.392
Germany: 7.048
France: 7.084
China: 6.084
Need I go on?
The problem is you expect those with the least to give up to sacrifice so those with the MOST can get more.
What exactly am I asking those with the least to give up? Id really like to hear this one. The problem is that you are not asking those with the most to sacrafice, you are asking those with most to give up what they rightfully earned.
Proof: The wealthiest 1 percent of the population earn 19 percent of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab. Meanwhile, the bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes. These are proportions of the income tax alone and don’t include payroll taxes for Social Security and Medicare.
There is no swidling yourself out of this one solon. Feel free to rant and rave about your wanted wealth redistribution, and about how I love Limbaugh or whatever other fantasy you can come up with. But while you speak rhetoric, i speak with real data.
This was a good rational post as far as it went. Since Japan and Europe HAVE both a Nationalized Health care AND REAL pensions it is comparing apples and oranges to talk about the Unions there not asking for them.
The article you linked to admitted at the outset that what YOU are trying to measure is less tangible than Standard of living. In comparisons of standard of living Europe consistantly outstrips the US.
Yes the wealthy pay more and that is how it SHOULD be. What you didnt show was the percentage of DISPOSABLE income the wealthy pay in contrast to the middle class. So you showed your stats but they werent the whole picture. Forget about the argument of what Unions get for healthcare and pensions. When the US has nationalized healthcare and a real pension system THAT will be a point until then it isnt.
And more information in comparing the US and Japanese auto unions for your obtuse mind....
As analyzed by Harbour-Felax, labor costs the Detroit Three substantially more per vehicle than it does the Japanese.
Health care is the biggest chunk. GM (Charts), for instance spends $1,635 per vehicle on health care for active and retired workers in the U.S. Toyota (Charts) pays nothing for retired workers - it has very few - and only $215 for active ones.
Other labor costs add to the bill. Contract issues like work rules, line relief and holiday pay amount to $630 per vehicle - costs that the Japanese don’t have. And paying UAW members for not working when plants are shut costs another $350 per vehicle.
that’s approximately $2,615 in costs per vehicle manufactured which GM has to pay (and thus pass on to its customers) that foreign automakers don’t. But that’s just the beginning. Labor work requirements, which state that workers can’t be laid off even when the auto company has no work for them, cost the auto industry even more:
What’s more, not only is the union work force a terrible expense for the auto industry it’s just flat-out less productive than it’s non-union counterparts:
Of course, one way to look at that statement is to say that the non-union automakers (Toyota, etc.) are just selling more cars than the union automakers. And that’s probably true, but it still proves the point that a union labor force is bad for business. Companies like Toyota are selling more cars because their cars are cheaper (thanks to lower labor costs) and better made (thanks to better workers). Both of those facts are an indictment of the union workers.
And it also exposes a larger truth. The more we foist costs like health insurance, high taxes and heavy regulation on American businesses the worse they’ll do in competing with their international counterparts. Something that will drive jobs and economic growth overseas.
Again, try to weasel out, but your backed into a corner solon....but then, you may like that.
I live in Florida and bought a house in '04 right before the market went insane. Banks are in the money business and they knew that they were writing mortgages for people who couldn't afford them. Since they sell those notes what do they care anyway? As for those of us who were a bit more careful, we are now mostly upside down, especially those of us who needed to refi to fix major things in our homes. I have no sympathy for Bear Stearns. As for the homeowners, both Hillary and Obama at least are willing to try and work with those facing foreclosure. At this rate though, if nothing is done, the foreclosure inventory could collapse the economy like nothing short of 10/29/29.
First of all, it was not a bailout of bear stearns. That entity will be gone. The stock which last year reached about 180, is now worth about 10. The point of the transaction is to salvage the assets they held and for which there was no market.
Who is to blame? Well, it'a a big cockadoodie sandwhich and everyone has to take a bite. People wanted homes, so they borrowed on terms they didn't understand, in some cases, or didn't care in others. They saw values going up and figured with no money down, what was to lose. If the zero down folks get foreclosed, it's just like they paid rent, and probably below market rent at that. not to say it's not a little bit traumatic.
now the mortgage lenders were pleased to help, because they could aggregage the loans for sale to financial institutions who wanted to get a little extra yield. the mortgage originators were making tons of money. mortgage brokers, just individuals, were taking home millions of dollars. they had little incentive to really question the bona fides of the borrowers. the people packaging the loans for sale likewise had little incentive to put the brakes on.
but all good things must come to an end. now if i could just sell my mom's house.
1492,
I think Rumple was trying to point out that in acting responsibly he/she should have made a great deal more on their investment. Considering the theory that property values double rough every 10 years.
Yes, I blame the corporations and the government that allow deregulation more than the people who got sucked into these deals. That is the point of a con one side makes out the other loses one-sidedly. The only problem with the mortage and loan industry is that they were too stupid to know when to fold the long con and hit the road. But hey there is a sucker born every minute and they have the politicaians they have paid off for years to bail them out on our behalf rather than stop this fiasco. Because God forbid there is not a free market although there has never really been a free market. EVER. Despite what the GOP believes.
And yes Bear was a bail out and it was done because someone will make money on this and already has. For if I have 180 million dollars and you save 10 milliion of it for me rather than letting me go totally bust as I deserve it is a bailout juest because they could not save all their rich friends money. I am sure they (the banks) did not worry as they foreclosed on homeowners until they realized they were go to be crushed buy the "invisible hand of the free market" -- oh wait they were not because of government involvement but don't regulate me that would be wrong. What crap.
Considering the theory that property values double rough every 10 years
As with anything, it goes in cycles. Anyone who bought a house, or sold a loan, based soley on that idea were too stupid to consider the risks. An investment opportunity is not a guaruntee. To place the government to blame for the laws of supply and demand on the open housing market is a cop out of both personal and corprorate fiscal responsibility.
You really disgust me.
How's St. Louis this time of year?
I dont say working class people are too stupid to take out a loan. I am a working class person who took out a home loan and have numerous school loans as well as a car loan. The difference you ask? Its becuase I know what I can afford, and therefore i do not spend more than my budget.
If you make $100/mo, you do not buy a house for $90/mo and have only $10 left over. That is not financial responsibility. You do realize that there is a reason numerous books and websites exist on home buying, and that your mortgage payment should only be 25-30% max of your monthly take home, right? Obviously you don't.
Have good night, dipstick. I'm done dealing with such a damn liar.
Haha. So funny. You have absolute nothing to back yourself up because you speak complete bull honky. Its always someone elses fault that i did this, or that i got caught, or that i cant do this.
Step up man. Take some responsibility for your self. Dont act like such a moron. You dont have to like the rules in order to learn and play by them.
To place the government to blame for the laws of supply and demand on the open housing market is a cop out of both personal and corprorate fiscal responsibility.
Government has a LARGE role in the current crisis:
An agreement between the Clinton administration and congressional Republicans, sets the stage for passage of the most sweeping banking deregulation bill in American history, lifting virtually all restraints on the operation of the giant monopolies which dominate the financial system.
The proposed Financial Services Modernization Act of 1999 would do away with restrictions on the integration of banking, insurance and stock trading imposed by the Glass-Steagall Act of 1933, one of the central pillars of Roosevelt's New Deal. Under the old law, banks, brokerages and insurance companies were effectively barred from entering each others' industries, and investment banking and commercial banking were separated.
The proposed deregulation will increase the degree of monopolization in finance and worsen the position of consumers in relation to creditors. Even more significant is its impact on the overall stability of US and world capitalism. The bill ties the banking system and the insurance industry even more directly to the volatile US stock market, virtually guaranteeing that any significant plunge on Wall Street will have an immediate and catastrophic impact throughout the US financial system.
Wow, thats about the most one sided projectizing article/post I've read on this subject yet.
While its obvious you are well versed in the topic of civil rights, I think you need to do some more research into the topics of Macroeconomics, Finance, and Business Law.
There is not a monopoly in the mortgage or banking industry, in fact there is a huge market of competition, each trying to promote their own interest rates and loan percentage rates in order to get people to do their finances with them. Loans, rates, and numerous other forms of lending are effected by many things - the fed rate, the market fluctuations, supply vs. demand, interest rates, and most importantly....your personal credit score & personal credit history!
While you may feel that the government should own and control the banking industry and wall street, that would be just one more thing that that the government controls in my life. Hence the words "small government".
There's a population somewhere that blames the government for the laws of supply and demand? Who'd a thought.
Why aren't they on the endangered species list?
Somhow never yours.
Social darwinism enthusiats somehow the ignore the interdependence issue called mutual altruism. Just words, though they actually do have teeth. Though like so much in the social world their application is erratic. You may escape them, you may not.
You might speak the truth about yourself, but I doubt it. I wonder how much your getting paid to do this.
It is amazing how people who know so little about this crisis spew so much garbage about it. I worked for a local bank about 5 years ago and several of us saw this coming then. The bank I worked for refused to do the types of loans that are now going bust and thank God they did. And despite what people are saying, it was not just the poorest of the poor doing this, but people who could afford a regular loan and were talked into these ARM loans by the lenders. They were told it was a no lose situation and when they would come to see us at the bank we would try and explain to them that it might not be what they were being told. Some would listen, but most would not. I mean, a credible lender is giving you a deal that saves you hundreds, sometimes thousands of dollars a month so why not?
Because the fine print that they skim over or neglect to explain says that in 3-5 years (if you were lucky) that rate is going to jump or you will owe a huge chunk of money all at once. Pretend all you want that the borrowers are as much to blame as the lenders, but it is just not true. They were selling something they did not have. They were not explaining what they were steering many people into. It was scam plain and simple.
Because the fine print that they skim over or neglect to explain says that in 3-5 years (if you were lucky) that rate is going to jump or you will owe a huge chunk of money all at once. Pretend all you want that the borrowers are as much to blame as the lenders, but it is just not true
The fine print that who neglected to ready or skim over - the loan seller or the person signing for the loan?
Pretend all you want that its the borrowers fault, but if you are an idiot and do not clearly read & understand something when your are signing your name to hundreds of thousands of dollars then shame on your dumbass.
Socialize the profits, privatize the losses? Better? At least those people did the work to get the profits or losses....unlike sitting on your ass collecting a welfare check. Now THAT is socializing the profits. No thank you to that again.
http://en.wikipedia.org/wiki/Keating_Five
Wait a second, THIS guy says no federal bailouts? Are you kidding me? He was in support of one of the BIGGEST Gov't bailout ever and it was for a well connected donor to boot! Don't give me that BS about him against bailouts. Where was that political courage when the S&L industry got $124.6 billion in taxpayer money?
Just because some douche bag says so doesn't make it true.