July 24, 2008

John!

We've been a little hard on the GOP nominee around here. It's worth pointing out when he does something right. Larry Kudlow links to this Op-Ed and has some kind words for Senator McCain:

Senator John McCain hit a grand-slam homerun today with an op-ed piece (“Take taxpayers off hook for rot at Fannie, Freddie”) that debunks the federal worship of Fannie Mae and Freddie Mac, and takes off the table the possibility that these GSEs will get a strong dose of steroids if he is elected president. This is a dramatic statement that completely differentiates his view from the go-along, get-along policy of Sen. Obama.

I think McCain is probably right that some intervention will be required. And more right to call for reform in exchange for exercising the Federal put.
What should be done? We are stuck with the reality that they have grown so large that we must support Fannie Mae and Freddie Mac through the current rough spell. But if a dime of taxpayer money ends up being directly invested, the management and the board should immediately be replaced, multimillion dollar salaries should be cut, and bonuses and other compensation should be eliminated. They should cease all lobbying activities and drop all payments to outside lobbyists. And taxpayers should be first in line for any repayments.

Even with those terms, sticking Main Street Americans with Wall Street's bill is a shame on Washington. If elected, I'll continue my crusade for the right reform of the institutions: making them go away. I will get real regulation that limits their ability to borrow, shrinks their size until they are no longer a threat to our economy, and privatizes and eliminates their links to the government.


That's a good start!

2008 Posted by jk at July 24, 2008 5:32 PM

McCain doesn't see the real conflict. It isn't Main Street versus Wall Street. It's me against my neighbors. The bailout is sticking responsible people with the bill, by making them pay taxes to pay for bad lenders and bad borrowers.

So McCain says taxpayers should be first for repayments. And at what interest rate? If I wanted to help bail out, I'd have done so already at a rate I wanted, thank you very much.

And no, NO ONE is "so large" that a government bailout is required. Let them fail for all I care. People's mortgages won't go away, you know, and there will be plenty of investors who will buy them up at a fair market price. Fannie and Freddie could completely disappear right now, but that wouldn't make people's houses disappear or force them to be convicted. It just means someone else would buy the mortgage.

Privatization is the ONLY "intervention" that should be done, but no politician will get elected by speaking about what's really required.

Posted by: Perry Eidelbus at July 25, 2008 3:06 PM

The points he concedes early are alarming, but read that last 'graf again:

I'll continue my crusade for the right reform of the institutions: making them go away. I will get real regulation that limits their ability to borrow, shrinks their size until they are no longer a threat to our economy, and privatizes and eliminates their links to the government.

Purty good stuff -- and nothing Senator Obama will dare flirt with.

Posted by: jk at July 25, 2008 5:50 PM | What do you think? [2]