More on McCain’s housing speech

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Earlier I wrote that it was hard to pick a headline out of Sen. John McCain’s housing speech today, and tonight I stand corrected, by The New York Times: ‘Drawing a sharp distinction between himself and the two Democratic presidential candidates, Sen. John McCain of Arizona warned Tuesday against vigorous government action to solve the deepening mortgage crisis and the market turmoil it has caused, saying that ‘it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers.’ ‘

A long headline, but a good summary of an important speech.

More: ‘... in a departure from Democrats, who have focused on the lending industry’s role in the crisis, Mr. McCain suggested that some homeowners had also engaged in dangerous practices, including borrowing too much in hopes that a rising market would cover their mortgages.’

Key quotes from the speech, which you can read in its entirety here:

--’But in the process of a huge, and largely positive, upturn in home construction and ownership, a housing bubble was created. ... The normal market forces of people buying and selling their homes were overwhelmed by rampant speculation.’

Comment: It was a bubble -- sounds obvious, but you didn’t hear this from Sen. Clinton yesterday; her lengthy analysis of the housing problem failed this pass-fail test of intellectual honesty.

--’

Some Americans bought homes they couldn’t afford, betting that rising prices would make it easier to refinance later at more affordable rates. There are 80 million family homes in America and those homeowners are now facing the reality that the bubble has burst and prices go down as well as up.’ Comment: Again, sounds obvious, but Clinton’s speech treated falling prices as a crisis to be stopped, not a reality to be faced.

--’In our effort to help deserving homeowners, no assistance should be given to speculators. Any assistance for borrowers should be focused solely on homeowners, not people who bought houses for speculative purposes, to rent or as second homes. Any assistance must be temporary and must not reward people who were irresponsible at the expense of those who weren’t. I will consider any and all proposals based on their cost and benefits. In this crisis, as in all I may face in the future, I will not allow dogma to override common sense.’

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.