Friday, October 10, 2008

Caution: Praise Of McCain Ahead

I know I've knocked Obama plenty of times on this blog (I'd guess somewhere around 6...), but I don't recall ever praising McCain. Today that's going to change. Here's why:

McCain is in the right on the purchasing-mortgages-and-renegotiating them issue. What he's proposed is to take the $700 billion bailout and use that money to buy mortgages off. Then the government will renegotiate those mortgages at whatever price the home is currently worth. Which means that if you've got a $200,000 mortgage and your home is now worth $150,000 (and this is very common right now) the government would basically forgive that extra $50,000, and start you off at the much more manageable $150,000. This is a plan that will save homeowners from foreclosures. This is a plan that eliminates a lot of the risk in the housing market. This plan should consequently help stabilize values (not entirely, but somewhat) and make it easier for people to get new credit.

Just think about it: right now people owe more on their homes than their homes are worth. This plan basically consists of the government swallowing the difference. That's a huge benefit. Plus it'll lower every monthly payment (by roughly the same percentage as it lowers the total owed), making it easier for people to pay their mortgages, and thus for the government to get something in return. And it's almost exclusively directed at the lower and middle classes. I spend time almost every single day trying to help my clients get loan modifications as a way of preventing foreclosure. They aren't easy to get (though they're getting easier), and they usually don't involve forgiving the entire difference in value. This plan is aimed at my clients. This is beautiful. This is NOT the kind of plan I expected to hear a Republican support. This is something I was hoping I'd hear from Obama. In fact, if Obama had come out with this, he would have sealed up my vote.

Instead, Obama's been really strongly opposed to it. Today he toned down the rhetoric a little, but he's still against the plan. He's saying it's too costly for taxpayers. That makes no sense, since it's already cost us - all of this money comes from the $700 billion bailout. You know, the one that Obama voted for. He's also saying that he disapproves of paying full-price for the mortgages because that "rewards" irresponsible lending companies. And here he would have a good point, except that the people who currently hold the mortgages are almost exclusively secondary purchasers. That means they weren't the ones who made bad loans, entered into fraudulent practices, or any of the other problems that caused this mess. They were buying up mortgages (Something that was supported by the Democratic party. Again, a surprising disappointment for me there. Largely tied to lobbying if I'm not mistaken.), without looking to see if they were good or not, but the current purchasers aren't nearly as much to blame as the ones who made the loans. So giving them full price, although it isn't ideal, is better than not doing the plan.

Basically then, we've got this $700 billion out there to help Wall Street. It's a lot of money that we should basically consider already-spent. At least McCain has proposed a great way for that money to be put towards helping the little guy.

I was about 90% towards voting Obama. Now I'm 50/50. And I don't know what to do. I really just wish Obama had embraced this plan too. Because all partisianship aside, McCain is right on this one.

He's a newspaper man
And he gets his best ideas from a newspaper stand


patric said...

wow, matt votes republican again. shocking.

and it's the democrats fault. they didn't do what he wanted them to do. he's gonna show them. if they had nominated hilary, he wouldn't have had to do this. but, no, he's gonna vote for someone who is nothing like the person he wishes was the nominee because he just can't let the team that beat his team win.

Matthew B. Novak said...

No no. I'm still undecided. Though you Obama supporters and your unreasonable position that there's no such thing as legitimate criticism are really starting to irk me.

empeterson said...

No kidding. Sheesh, cut Matt some slack. At least he's trying to make an informed decision, instead of automatically siding with one party out of party loyalty.

Mike said...

Isolating the "no such thing as legitimate criticism" position to Obama supporters is ludicrous.

I'm not sure how I feel about McCain's plan, as (like the bailout in general) it still feels like I (and my children, and my children's children, etc.) are paying for a lot of other people's bad decisions. As a fellow undecided, I'll have to look into it, but Lord knows as a quasi-libertarian, it sounds sketchy to me.

Matthew B. Novak said...

I didn't mean to limit it to Obama supporters. There are certainly McCain supporters who are also unreasonable about legitimate criticism. But two things:

1. I certainly find them to be fewer and further between. The whole "cult of Obama" thing seems to affect a lot of his supporters. I've met very very few who accept that there is legitimate criticism, and almost all of them were Hilary supporters.

2. Within the Democratic party those who didn't jump on the Obama bandwagon seem much more reasonable in accepting criticism of their candidate. They seemed more reasonable about it when it was Hilary, or Biden, or whoever, and they seem more reasonable about it now. But people who jumped into Obama's camp early seem to have trouble accepting any criticism of their candidate.

As for the bailout: yeah, it's a lot of money. But it's already spent, so don't let the price tag be the biggest detterant. Second, though some of the "bad decision" mortgages will get lumped in, the vast majority of these were procured with some type of fraud, so helping out the homeowners is more like preventing victimization than it is rewarding someone for a bad decision. The helping out Wall Street part, I'm not real big on. But at least McCain has come up with a way for this to help Main Street as well. Between the two alternatives, it's significantly superior.

Nate said...

McCain is not the worst candidate that the Republicans have ever put forward, however, his running mate is. The fact that he chose her shows a complete disregard for the future of our nation, choosing Palin was not in the country's best interest, and McCain has therefore demonstrated that he does not put the welfare of our country first. Also, a close look at the economic plans that each candidate is putting forth is very revealing. Obama is on the right track to helping the economy recover by rebuilding the middle class. I am about sick and tired of republican big business trickle down economics. We know what to expect from the Republicans, and no matter McCain may be saying today, thats what we will end up with if he wins. And God forbid the old geezer should croak because Palin is sooooo ready to step right up!

But all that aside, one of the more pressing issues that I am looking at in this election is healthcare. McCains healthcare plan is a mess and would be a serious downgrade from what is already a horribly flawed system, Obama at least is proposing changes that would be an improvement for some people.

Matthew B. Novak said...

I certainly agree that Palin was a terrible pick, though I don't think that reflects a disdain for the welfare of the country, just an isolated unjudicious decision. I'm also not too worried about her taking over.

I'm the first to tell you trickle down economics is bad policy, but with this plan McCain is coming seriously away from that, and it's a great start. I also don't think Obama's slight tax cuts for the middle class are really going to be such a boon, though they're superior to extending Bush's tax cuts for the wealthy.

I'm also comforted by the fact that McCain would be tempered by a Democratic Congress, meaning we wouldn't just have Republican policy running wild.

As for the healthcare... McCain's plan and Obama's plan are roughly a wash from what I've seen. Neither is really any good, both will cover some more people, but not everyone, and will cost about the same. If you've got more information on that, I'd be happy to check it out, but neither plan is anywhere near the universal single-payer system we need, and therefore neither plan is a compelling reason to vote for a candidate.