Why on earth do people expect either candidate to have some complicated plan for fixing this? No one really knows what to do, that’s why it’s a crisis. The only solution anyone has come up with is basically have the taxpayer foot the bill, which probably won’t go down too well, especially since the Fed is having trouble finding money these days…
If the OP meant a general plan for the economy, not just the current crisis, well, McCain thinks the economy is fundamentally sound, so of course he has no plan to change it, why would he? 'course, then his numbers in the polls tanked and he suddenly became an economic populist, which is all rather hilarious.
Gee. If Sen. McCain thinks short-selling is a form of gambling, imagine how he’ll react when he discovers Futures Markets!
I caught his little economic speech this morning, but my concentration was not what it should have been. He seemed to alternate between attempts at stealing Sen. Obama’s thunder and usual conservative boilerplate (i.e., “Taxes are gonna crawl out from under the bed and eat us all!”).
(Side observation: how come Palin isn’t off by herself making speeches (which is about all veep candidates are good for) and instead keeps doing warm-up for McCain? Do they not trust her on her own??)
Oh, come on. Congressional efforts to improve oversight of Fannie and Freddie go back to the first Bush administration. If anything John McCain has been a latecomer to his supposed regulatory epiphany, and there are plenty of reasons to doubt his sincerity now: He voted against stricter control of Fannie and Freddie in 1992, and his current campaign manager Rick Davis formed and ran the Homeownership Alliance, a lobbyist group dedicated to reducing regulation on home lenders including Fannie and Freddie.
You might also want to take a look at the contents of the Federal Housing Enterprise Regulatory Reform Act of 2005, which was written was in response to accounting scandals at Fannie and Freddie. It had little to do with the failure of the subprime market itself, and absolutely nothing to do with the systemic problem of unregulated securities traded against sub-prime mortgages, a lynchpin of the current financial crisis. And McCain was late to even this modest bit of reform: He was a late co-sponsor after OFHEO presented their report and Fannie Mae had paid their fines. IMO McCain saw this as yet another granstanding move to capitalize on public outrage over accounting fiascoes like Arthur-Anderson.
Essentailly, McCain found a bill from recent years with the words “Freddie Mac” in it and is trying desperately to link it with the current scandal. I’ll agree there’s plenty of blame to go around for scuttling better oversight over the years, but if you want to lay it at the feet of Sen. Dodd, are you just as willing to hang Sen. Phil Gramm, McCain’s good friend and chief economic adviser (until it became politically expedient to dump him)?
He’s a complete idiot. It’s ironic to me that his position seems more in line with a lot of the screechers here on the board wrt the bailout…while Obama’s is closer to my own on this. I’d say though that by his statements in this CNN article that McCain is completely clueless about the current situation.
How he figures we’ll have a strong dollar if our economic institutions go into free fall is beyond me (let alone why a strong dollar is all that important at this time in any case). How we’ll be able to stimulate economic growth if banks can’t or won’t loan money is beyond me as well…and how they WILL loan money if we let the bottom drop out is beyond me. Also, how he expects people to keep their houses yet not have the government do anything is…well, beyond me as well. Clueless.
Umm, it was accounting tricks that led the FM’s to be able hide the fact that they held the shitty portion of the CDOs on their books. (Or rather some subsidiary somewhere). THAT’s the crux of the current situation. Everybody looked good on paper, and suddenly, wham!, they have to come up with $50 billion to cover bad debt that wasn’t even showing on their books. Who is going to loan money to an institution when you have now clue what their real assets/debts are?
My guess is that neither candidate wants to come up with an explicit plan for dealing with the current crisis because any realistic plan would go like this:
“We’ve just spent several hundred billion dollars bailing out reckless financial institutions and deadbeat mortgage holders. We need to raise taxes to pay for all this. Sorry about that.”
I’m pretty sure that this would be a non-starter as a campaign speech. People don’t want the truth, they want to be told that taxes will go down.
He’s not running to save anything or to be a hero, despite all the crap that comes out of his mouth. One of the reasons he’s such a canterous fellow to his fellow Senators is that they actually do challenge him or his opinions and simply don’t genuflect when they see him, particularly since he almost got himself killed for their behinds in Korea.
His campaign reflects his attitude about life. The idea that he’s of a privileged class and heritage and the only person he needs to top is his daddy. A reason he has no patience for anyone or thing who dares challenge or stand in his way.
His type does not need education, nor a plan. He just needs to be crowned and then appoint the folks that he feels will do his bidding.
You clearly do not understand the crux of the current situation then. Fannie Mae (along with other financial institutions) has been reporting quarterly losses for at least the last year; it’s the reason why, for example, they cut their dividend and sold $6 billion in stock in late 2007. Citigroup made similar capital-raising moves in 2007 and 2008; these losses were absolutely not the result of accounting practices.
Phony accounting is what did in Enron and Worldcomm. But the FM’s and others groups holding mortgage-backed securities have been in trouble for quite a while, and they have all been reporting it in their financial statements. The big “boom” is related to the unexpected size of the problem and the lack of a regulatory framework for the fair valuation of motrgage-backed securities (which leads to high-leverage positions). Some hedge-funds (which have no regulatory captial requirements) were undercapitalizing these “assets” at close to 30:1; it’s no surprise then that when things started to go south, the collapse would be huge.
The fact that John McCain is trying to use a late sign-on to a 2006 bill that attempted to improve accounting practices at the FMs as justification that he “predicted” this whole mess is laughable. His stump speeches are a scrambled list of populist platitudes about the “fundamentals of the economy”, the “casino culture” of Wall Street, or having the Fed work toward “a strong dollar”. On this issue at least, he clearly doesn’t know what he’s talking about, and Obama is exposing his incompetence.
It’s basically the same accounting tricks. Big banks, Merril Lynch were all parking their CDOs in off balance sheet entities. This minimizes the amount of disclosure necessary, so investors, other banks, etc didn’t see the huge liabilities attached lower tranches of those CDOs.
Accounting practices made the CDO investments seem much better than they actually were, leading to over leveraging of them. If Merrill Lynch hadn’t been able to hide the big risk, they never would have invested so heavily in them.
I think the very question is a bad one. The last thing we need is for candidates to come up with solutions in the five minutes they’ve got between campaign stops. Especially since a good solution might not be one that will get a lot of votes. Sometimes, people, it takes a lot of thought, debate, and study to come up with a solution for an issue as complicated as this. For the same reason I’m fine with Congress not doing anything right now. We don’t need a committee of 535, most of whom don’t understand the issues, interfering. I hope Paulson is including senior leadership in the discussions, especially if the solution includes passing a bill.
Bush uncharacteristically picked someone extremely competent for these jobs, and he is not getting in the way, so let’s allow them to work.
I think it is reasonable to find out the candidates’ basic economic philosophies, but not to expect them to come up with a plan for the current situation.
If McCain didn’t tell the North Vietnamese what the secret plan was after 5 years of torture, what makes you think you can get it now? Oh. Eight years of Bush. 'Nuff said.
McCain plans to do what his buddy Phil Gramm, a Texas idiot, tells him to do.