Clear Differences on Foreclosures

The Republican and Democratic presidential candidates have always differed on a number of issues, but recent news has revealed a clear separation on how to treat foreclosures and the economy. According to statements reported in today’s NY Times, John McCain says he is not in favor of a vigorous government response to the mortgage crisis. In contrast, both democratic candidates favor programs varying between $30 billion (Clinton) and $10 billion (Obama).

In a statement that comes close to being a lie, McCain said yesterday “it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers.” In truth, he seems only to believe half this statement. As documented later in the same article, McCain supports the Fed’s recent move to provide $29 billion in loan guarantees to support the Bear Stearn’s bailout. So, either the Bear Stearns episode was not a bailout in McCain’s view or rewarding those who act irresponsibly is fine, as long as they are wealthy investment firms and not mere citizens who are struggling to keep their homes.