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This Is What Democracy Looks Like

www.NationalView.org's Note From a Madman

October 9, 2008

 

McCain's Promises

 

John McCain stated at Tuesday night's presidential debate that there are going to be changes for all of us looking at Social Security as our only means of retirement in the coming years. The words he used might not have said exactly that, but the meaning was clear as day.

"My friends, we are not going to be able to provide the same benefit for present-day workers that we are going -- that present-day retirees have today,"
-McCain from the debate

Now that's not what a friend tells a friend, is it?

John McCain isn't looking at ways to fix Medicare, Medicaid and Social Security - he is looking for ways to end those programs. To paraphrase Ronald Reagan from his 1984 Presidential debate with Walter Mondale, you can bet that when a politician says he's going to cut your Social Security benefits, you can bet that he's going to do it.

 

Imagine had McCain, President Bush and the rest of those on the Right who wanted to "invest" our dollars in the market had gotten their wish. Where would our Social Security trust find be today? Where would those who are retiring today or soon be today?

The obvious fix to Social Security is easy: Raise or eliminate the cap which today stands at about $100,000. it fixes the problem permanently. But McCain can't do that because his real "base of haves and have mores" are in the group which earns over that magic $100,000 mark.

Wouldn't it really be something to have McCain say those same words (above) on a stage in Florida during a campaign speech?

-Noah Greenberg



McCain's Scheme

To recap: First John McCain said the "Fundamentals of the economy are sound"; then he suspended his campaign to spearhead the $700 billion bailout package (although never really suspending anything other than a David Letterman appearance); now he wants to help Americans who can't afford to pay their mortgages by giving money, unrestricted, to those very same financial institutions who screwed up the mortgage industry in the first place.

During Tuesday night's Presidential Debate, McCain offered up his new plan:

"I would order the secretary of the treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes -- at the diminished value of those homes and let people be able to make those -- be able to make those payments and stay in their homes,"
-McCain from the Tuesday night debate

McCain's campaign, however, after hearing of this plan, now called the American Homeownership Resurgence Plan to help homeowners make their monthly mortgage payment offered up an explanation of what McCain meant:

"Lenders in these cases must recognize the loss that they've already suffered,"
-the McCain Campaign, via letter

In other words, no plan is better than a plan.

What bothers me most about McCain offering to purchase even more bad debt from lending institutions is that, it appears, he was willing to part with more of our money - an additional $300 billion more - to purchase these loans at face value. So if Joe Bumstead purchased a house as a non-preferred borrower from Big Bank "A" for a million dollars; and now that property is worth somewhere in the $100,000 range, we, the US middle class tax payer as ,mortgage holder, would be out of luck.

And if that home were to somehow increase in value the day after the homeowner renegotiated his McCain-as-President-backed-US-Taxpayer-paid-for mortgage, that homeowner would reap the benefits of being able to sell that home and pocket the difference.

There's yet another scenario that boggles the mind here: Those with the money to spare - a.k.a. the McBush "base of haves and have mores" - and, believe me, there are still plenty of them left - can take some of their golden parachute dollars, buy up the homes at a discount from those who just renegotiated their loans, and make themselves a killing beginning the charade all over again.

While all of these shenanigans and schemes are going on, we, the middle-class taxpayers, are going to be footing the bill. As a result, our dollar will be worth less meaning that our money will purchase less of those same goods we need to live on every day.

In other words, the US Middle-Class gets to subsidize big business and these brand new huge financial institutions all over again.

Today on Andrea Mitchell’s MSNBC afternoon show, McCain spokesman Tucker Bounds attempted to play off the McCain plan as beneficial to homeowners. Bounds said that $300 of the $700 billion would go directly to homeowners. What Bounds failed to mention, and wouldn’t allow Mitchell to interrupt to ask, was the fact that McCain’s plan would purchase the mortgages, at face value, from the lender, something the campaign’s letter, itself, refutes.

Bounds stated that there can be no other way because the mortgage lender has a first right of refusal to the loan and they don’t have to turn it over to the government for re-finance purposes. If elected, McCain has every intention of paying top dollar - 2004-2006 dollars - for properties that are worth a fraction of their value today. And that money will go directly to the lenders.

If is sounds familiar, it should: It's exactly what those on the Right are trying to get away with in the "Mark-to-Market" scheme they're touting as a part of our economic recovery. Mark-to-Market refers to the practice of allowing Big Finance to keep their bad investments at the value of when they purchased it not what it's worth today. According to those in the know, it will allow Big Finance to borrow the dollars no one will lend them today. The problem is that they will be borrowing money against collateral that simply isn't there.

And that's just what McCain wants to do with this proposal.

Lenders cannot have this cake and eat it, too. Laws are made for the benefit of all, not for all who can afford it. It’s simple: If these lenders want our help to purchase the mistake which they made and facilitated, they should lose that right of first refusal. Certainly the give-and-take must come from all side: Lender, borrower and the US taxpayer as the new mortgage holder.

There is a way to make a plan like this make sense and that is to make it all or nothing. In a world of gray, we must give the lender the choice of obtaining our help or refusing it entirely. If we allow them to pick and choose we will be left with a substantial bill and they will only get richer and get ready for their next scheme.

And it is a scheme.

Here’s how any plan has to work:

-Those mortgagee’s who are having trouble paying their mortgage would apply for federal assistance
-Each would immediately have any actions taken by their lender frozen upon review
-The lender would have an opportunity to have their case heard

The lender could then negotiate with a federal regulator who would then set the new terms of the mortgage (new terms; fixed rate; etc) and would either accept the new terms or sell the mortgage to the Federal government program at market value, not what they purchased the loan for.

No schemes and no free rides. Everyone gets hurt, not just the US middle-class.

-Noah Greenberg


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-Noah Greenberg