BeNotAfraid
March 27th, 2008, 09:24 PM
McCain on the economy Tuesday:
http://www.boston.com/news/nation/articles/2008/03/25/mccain_to_address_housing_crisis_options/
"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," McCain said. "Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy."
He said any government assistance to alleviate the housing crisis must be temporary and should be accompanied by reforms that aim to make the system more transparent and accountable to prevent a repeat of the crisis. He said no assistance should be given to speculators, or people who bought houses to rent or as second homes.
Asked whether the Fed went too far in helping Bear Stearns, McCain said: "It's a close call, but I don't think so." He said he doesn't support federal bailouts unless it has catastrophic effects on the entire financial marketplace and there were indications that a Bear Stearns failure would have rippled across the entire economy.
McCain also said people shouldn't be able to buy homes with little or no money down, such as the interest-only loans banks have given the last few years. Lenders, he said, "should never insure loans when the homeowner clearly does not have skin in the game."
Obama on the economy today:
http://www.nytimes.com/2008/03/27/us/politics/27text-obama.html?_r=1&pagewanted=2&oref=slogin
A free market was never meant to be a free license to take whatever you can get, however you can get it. That's why we've put in place rules of the road: to make competition fair and open, and honest. We've done this not to stifle but rather to advance prosperity and liberty. As I said at Nasdaq last September, the core of our economic success is the fundamental truth that each American does better when all Americans do better; that the well-being of American business (OOTC:ARBU) , its capital markets and its American people are aligned. I think that all of us here today would acknowledge that we've lost some of that sense of shared prosperity.
Over 2 million households are at risk of foreclosure. Millions more have seen their home values plunge. Many Americans are walking away from their homes, which hurts property values for entire neighborhoods and aggravates the credit crisis. To stabilize the housing market and to help bring the foreclosure crisis to an end, I've sponsored Senator Chris Dodd's legislation creating a new FHA housing security program, which will provide meaningful incentives for lenders to buy or refinance existing mortgages. This will allow Americans facing foreclosure to keep their homes at rates that they can afford. Now, Senator McCain argues that government should do nothing to protect borrowers and lenders who've made bad decisions or taken on excessive risk.
And on this point I agree. But the Dodd-Frank package is not a bailout for lenders or investors who gambled recklessly; they will take their losses. It's not a windfall for borrowers, as they will have to share any capital gain. Instead, it offers a responsible and fair way to help bring an end to the foreclosure crisis. It asks both sides to sacrifice, while preventing a long-term collapse that could have enormous ramifications for the most responsible lenders and borrowers, as well as the American people as a whole. That's what Senator McCain ignores. For homeowners who are victims of fraud, I've also proposed a $10 billion foreclosure prevention fund that would help them sell a home that is beyond their means or modify their loan to avoid foreclosure or bankruptcy. It's also time to amend our bankruptcy laws so families aren't forced to stick to the terms of a home loan that was predatory or unfair.
If you read the entire text, he talks about 'common' or 'shared' prosperity quite a bit.
Hillary Clinton on the economy today:
http://news.yahoo.com/s/bw/20080325/bs_bw/mar2008db20080324129081
Over the past week, we've seen unprecedented action to maintain confidence in our credit markets and head off a crisis for Wall Street banks," Clinton said. "It's now time for equally aggressive action to help families avoid foreclosure and keep communities across this country from spiraling into recession."
Clinton argued that providing such FHA guarantees to backstop what would essentially be a private-sector auction would provide the best way of getting the frozen mortgage market unstuck and keeping people in their homes. But she also left open the possibility that the FHA may need to play a more active role in purchasing, restructuring, and reselling such underwater mortgages if providing guarantees to private-sector efforts proves not to be enough.
Clinton also argued that the government might eventually have to step in to directly buy up and refinance homes. While such moves would be temporary, she argued they may be necessary given the severity of the crisis now roiling the markets: "Just as it has in the past, this kind of temporary measure by the government could give our economy the boost it needs, and families the help they certainly need."
Such a system, she argued, could be designed to be self-financing over time. As with the Frank and Dodd proposals, the government would charge risk-adjusted fees to compensate for its expanded role. It would retain an equity kicker in the refinanced property so that it would pocket some of the gain when the price of a refinanced house were eventually to rise. As a result, she argues, there would be no cost to taxpayers over the long run.
Whose plan to you think would best help the economy--and how much of an impact will that even have?
I'm leaning towards McCain--mostly because it just seems that capitalism works best when we leave it alone. You can't have a hybrid system. He seems to be saying we need to take the most minimal action we can to keep huge banks from collapsing, but then back off. What do you guys think?
http://www.boston.com/news/nation/articles/2008/03/25/mccain_to_address_housing_crisis_options/
"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," McCain said. "Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy."
He said any government assistance to alleviate the housing crisis must be temporary and should be accompanied by reforms that aim to make the system more transparent and accountable to prevent a repeat of the crisis. He said no assistance should be given to speculators, or people who bought houses to rent or as second homes.
Asked whether the Fed went too far in helping Bear Stearns, McCain said: "It's a close call, but I don't think so." He said he doesn't support federal bailouts unless it has catastrophic effects on the entire financial marketplace and there were indications that a Bear Stearns failure would have rippled across the entire economy.
McCain also said people shouldn't be able to buy homes with little or no money down, such as the interest-only loans banks have given the last few years. Lenders, he said, "should never insure loans when the homeowner clearly does not have skin in the game."
Obama on the economy today:
http://www.nytimes.com/2008/03/27/us/politics/27text-obama.html?_r=1&pagewanted=2&oref=slogin
A free market was never meant to be a free license to take whatever you can get, however you can get it. That's why we've put in place rules of the road: to make competition fair and open, and honest. We've done this not to stifle but rather to advance prosperity and liberty. As I said at Nasdaq last September, the core of our economic success is the fundamental truth that each American does better when all Americans do better; that the well-being of American business (OOTC:ARBU) , its capital markets and its American people are aligned. I think that all of us here today would acknowledge that we've lost some of that sense of shared prosperity.
Over 2 million households are at risk of foreclosure. Millions more have seen their home values plunge. Many Americans are walking away from their homes, which hurts property values for entire neighborhoods and aggravates the credit crisis. To stabilize the housing market and to help bring the foreclosure crisis to an end, I've sponsored Senator Chris Dodd's legislation creating a new FHA housing security program, which will provide meaningful incentives for lenders to buy or refinance existing mortgages. This will allow Americans facing foreclosure to keep their homes at rates that they can afford. Now, Senator McCain argues that government should do nothing to protect borrowers and lenders who've made bad decisions or taken on excessive risk.
And on this point I agree. But the Dodd-Frank package is not a bailout for lenders or investors who gambled recklessly; they will take their losses. It's not a windfall for borrowers, as they will have to share any capital gain. Instead, it offers a responsible and fair way to help bring an end to the foreclosure crisis. It asks both sides to sacrifice, while preventing a long-term collapse that could have enormous ramifications for the most responsible lenders and borrowers, as well as the American people as a whole. That's what Senator McCain ignores. For homeowners who are victims of fraud, I've also proposed a $10 billion foreclosure prevention fund that would help them sell a home that is beyond their means or modify their loan to avoid foreclosure or bankruptcy. It's also time to amend our bankruptcy laws so families aren't forced to stick to the terms of a home loan that was predatory or unfair.
If you read the entire text, he talks about 'common' or 'shared' prosperity quite a bit.
Hillary Clinton on the economy today:
http://news.yahoo.com/s/bw/20080325/bs_bw/mar2008db20080324129081
Over the past week, we've seen unprecedented action to maintain confidence in our credit markets and head off a crisis for Wall Street banks," Clinton said. "It's now time for equally aggressive action to help families avoid foreclosure and keep communities across this country from spiraling into recession."
Clinton argued that providing such FHA guarantees to backstop what would essentially be a private-sector auction would provide the best way of getting the frozen mortgage market unstuck and keeping people in their homes. But she also left open the possibility that the FHA may need to play a more active role in purchasing, restructuring, and reselling such underwater mortgages if providing guarantees to private-sector efforts proves not to be enough.
Clinton also argued that the government might eventually have to step in to directly buy up and refinance homes. While such moves would be temporary, she argued they may be necessary given the severity of the crisis now roiling the markets: "Just as it has in the past, this kind of temporary measure by the government could give our economy the boost it needs, and families the help they certainly need."
Such a system, she argued, could be designed to be self-financing over time. As with the Frank and Dodd proposals, the government would charge risk-adjusted fees to compensate for its expanded role. It would retain an equity kicker in the refinanced property so that it would pocket some of the gain when the price of a refinanced house were eventually to rise. As a result, she argues, there would be no cost to taxpayers over the long run.
Whose plan to you think would best help the economy--and how much of an impact will that even have?
I'm leaning towards McCain--mostly because it just seems that capitalism works best when we leave it alone. You can't have a hybrid system. He seems to be saying we need to take the most minimal action we can to keep huge banks from collapsing, but then back off. What do you guys think?