John McCain's late arrival to the economy debate this week with another plan to address the housing crisis is meeting with derision – across the political board. By economists and analysts alike, from the arch-conservative Wall Street Journal to the left-leaning Huffington Post, it has been seen more as a political stunt to cover for months of pretending the "fundamentals of the economy are strong."
In an article for Huffington Post former Clinton economic adviser Gene Sperling and economist Jared Bernstein described the McCain plan as a "gift from taxpayers to banks."
According to Bernstein and Sperling, McCain is proposing "to buy distressed mortgages at their full, face value from the banks and lending institutions that are currently stuck with them." In other words, taxpayers would bear the full financial brunt of the irresponsible lending and investment practices of banks who are now in trouble.
Even McCain's top economic adviser, Douglas Holtz-Eaking admitted to CNN that McCain's new plan allows banks to avoid "taking the hit." "Instead," CNN reported, "taxpayers pay for it, with the funding already provided by the $700 billion bailout bill. That could prove to be very unpopular with homeowners who aren't in trouble, as well as ordinary Americans."
Even conservatives have a problem with it. "You run into the question of whether or not then you are bailing out bad lending decisions," David C. John of the extreme right-wing Heritage Foundation told the Associated Press. The staunchly right-wing editorial board of the Wall Street Journal described itself as "less convinced" that McCain's plan is workable and that it "appears to offer no upside for taxpayers."
While right-wing opposition to McCain's plan centered on feasibility and an ideological distaste for helping homeowners at all, other less partisan observations argued that McCain's plan simply would saddle taxpayers with the financial burden of bailing out more irresponsible banks. Expert analysis reported in the Sacramento Bee suggested that many homeowners who might be victims of predatory lending practices would be excluded from McCain's plan. The Concord Monitor in New Hampshire opined that McCain's proposal would leave taxpayers with the bill, while shared responsibility for the crisis should see lenders carry their part of the burden.
Obama economic adviser Jason Furman described McCain's new plan as a way to "overpay" lenders for mortgages at taxpayers' expense. "The biggest beneficiaries of this plan will be the same financial institutions that got us into this mess, some of whom even committed fraud," he added.
In what appears to be another desperate "maverick" move to change public perceptions that he ignored the ongoing economic crisis, by all accounts, John McCain has hung the millstone of another silly idea around his sinking campaign's neck.
