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McCain's Insane Mortgage Proposal

By Matt Cooper

Well, John McCain didn't waste any time. In response to the first question of the second presidential debate, the Arizonan offered to buy back any mortgage in America that's worth more than the value of the home.

Since maybe as many as 40 percent of the homes in America may be under water--that is, the mortgage is worth more than the home--that's quite a tall order, one that makes the $700 billion bailout/rescue plan look like bubkes. It's a stunning nationalization of mortgages, wild in its cost and implications and somewhat bizarre coming from someone who had tried to pare back Fannie Mae and Freddie Mac. I suspect in the coming days McCain will dial back the plan because it was so outlandishly expensive and such a federal intrusion into the market--not that we're still worrying about that.

What it shows is that McCain isn't too old to be president; he's offering a lot of evidence that he's too adolescent. He's impetuous, imprudent. This latest proposal is as wild as the debate-canceling threat from a couple of weeks ago. I think we're getting a vision of the McCain presidency that's akin to Elvis firing up the Lisa Marie and taking his posse cross country for peanut butter and banana sandwiches. Every week would be an adventure.

That said, I thought McCain did pretty well. He was punchy, alert. Obama struck me as a bit more laconic than usual. He seemed tired and made a number of verbal miscues, the most notable was his whipping Delaware as the state with lax banking regulations. D'oh! You knew he regretted dissing his veep's home state as soon as he said it. He also credited the federal government with coming up with the computer; he meant the Internet.

Still, Obama's very good at connecting up policy with real people anecdotes, nowhere more powerfully than when he repeated the anecdote about his mother dealing with insurance companies while she lay dying of cancer.

On a day when the Dow tested new lows, it was remarkable that neither candidate has a (sensible) plan to stabilize the markets now, and both continue to offer promises as if none of this had happened.

McCain is still offering huge tax cuts and Obama continues pushing aggressive spending. Do you really think 95 percent of Americans will get a tax cut under President Obama? I sincerely doubt it. Will there be a President Obama? He crushed in the immediate post debate polls despite McCain's latest gambit. After tonight, it's starting to look more and more that way.

Matt Cooper

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Full post as published by Portfolio.com: Capital on October 07, 2008 (boomark / email).