Will candidates’ financial plans work? – CNN.com
(CNN) — In the wake of the country’s financial meltdown, Sens. Barack Obama and John McCain have been telling voters they’ll fix the economy while their opponent would only make it worse.
As the economy dominated voters’ concerns, McCain and Obama stepped up the political blame game and got more specific about how they would deal with the country’s financial problems.
The candidates’ focus on the economy comes during a week of roller coaster activity in the financial markets:
There was the collapse of U.S. investment bank Lehman Brothers, a Bank of America buyout of Merrill Lynch and a government bailout of insurer AIG. Then, President Bush on Saturday asked Congress for the authority to spend up to $700 billion to purchase troubled mortgage assets and get things under control.
To summarize:
McCain wants to fire the current SEC chief (who is leaving at the end of the Bush Administration anyway); set-up a Mortgage and Financial Institutions Trust to protect companies against bankruptcy; and set-up a commission to streamline government agencies. What’s missing? Funding.
Obama wants to pass a Homeowner and Financial Support Act to “provide funds to prevent catastrophic failures in the financial industry and help keep people in their homes”; a $50-billion emergency economic stimulus package to create a million jobs rebuilding infrastructure and schools, and assist local governments so they don’t have to cut services; and ease bankruptcy laws for individuals. Again, what’s missing? Funding.
For the most part, I obviously prefer Obama’s plan, since provides for jobs and education. I’m not sure I agree with easing the bankruptcy laws … the people who got mega-mortgages and now can’t afford to pay them have to pay some price for their stupidity. Somehow, allowing them to keep their McMansions doesn’t seem quite like the right way to do it.
When I was buying my current home, I bought a tiny little condo, because I wanted to make sure that I could afford to pay my mortgage no matter what. I wanted a 30-year fixed; and that’s what I got. So why should someone who makes less money than I do, but who bought a $400,000 home on an option-ARM get to keep their house?
Maybe that sounds cruel, but somewhere along the line, you’ve got to inject a little reality into the discussion.
I am amazed at both reactions. When buying houses I’ve been approved for far more then I could ever realistically afford. I’d rather protect the home buyer than the institution, but I agree some people should not be bailed out because of their poor choices.
In general, I agree with you … the homeowner should be protected to some extent, but to me this means helping homeowners refinance at lower rates to help keep the average homeowner in their houses, and to enable them to continue to make payments.
It does not mean making it easier for the guy making $40K per year who bought a $500K house on an option-ARM to declare bankruptcy so they can’t be foreclosed and evicted.
It means helping banks restructure their more toxic mortgages into something that might stand a chance of getting paid off, rather than just throwing additional money at the banks (even though this help will likely help me keep my job).
It’s going to be a big mess for whomever wins the election. I think Obama is smarter, and has a better understanding of both the micro- and macro-economic structures; but he’s got to be spot-on in turning the economy around, or he’s going to be a one-termer, like Carter, and Bush the First before him.
There was a scathing story about cox in bloomberg this morning, about while all the crisis has gone on he has been at Birthday parties, and obsessing about a new database..
“Sounds like he is doing a good job coxie”
he will be thrown under the bus as a sacrifice to convince people they aren’t voting for MC-Same.
Bailouts are only for the rich. They are better than us.
Have to love Art,
Always has been, Always will be.
If you get a chance watch friday “Fastmoney” carl icahn was on, talking about how worthless ceo’s are, and that they are just glorified “Head of the Fraternaty”… and don’t do anything but drink beer and golf