McCain talks economics in Southland
John McCain said Tuesday that he understood Americans’ anger about the mortgage foreclosure crisis and was open to ideas for addressing the problem, but he rejected the sort of activist approaches proposed by his Democratic rivals for the presidency.
In a speech at a small printing business in Santa Ana, the presumptive Republican nominee said he was “committed to the principle 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.”
McCain cited the $30-billion plan by New York Sen. Hillary Rodham Clinton to aid homeowners and communities threatened by foreclosures, saying that it sounded “very expensive” and that he would “like to know how it’s paid for.”
His remarks came as the mortgage crisis and related economic troubles increasingly are moving to the forefront of the presidential campaign. Clinton and the Democratic front-runner, Sen. Barack Obama of Illinois, have criticized mortgage-lending practices and called for government intervention to provide relief to homeowners.
By contrast, McCain -- who has been trying to shore up his economic credentials -- placed some of the blame on homeowners themselves, while also scolding “complacent” lenders.
He also said government assistance should be limited to homeowners who intend to stay in their homes, not to those who bought second homes hoping to profit from them as rental properties. He added that aid should be temporary “and must not reward people who were irresponsible at the expense of those who weren’t.”
“I will not play election-year politics with the housing crisis,” he said at C&H; Letterpress Inc. in Santa Ana, addressing a group of Latino small-business leaders. “I will evaluate everything in terms of whether it might be harmful or helpful to our effort to deal with the crisis we face now.”
The Arizona senator’s remarks came on a busy campaign swing through the Los Angeles area, where he picked up the endorsement of former First Lady Nancy Reagan. McCain also attended a fundraiser hosted by former Univision Chairman A. Jerrold Perenchio and his wife, Margaret.
Reagan greeted McCain in the late afternoon during a brief meeting in front of her Bel-Air home. In a prepared statement, she called McCain “a good friend for over 30 years.” She said she and her husband got to know McCain after his 5 1/2 -year imprisonment in North Vietnam, and “were impressed by the courage he had shown.”
“I believe John’s record and experience have prepared him well to be our next president,” her statement added.
Reagan was not expected to speak to reporters, but she spoke up when McCain was asked about the timing of the endorsement. “Ronnie and I always waited until everything was decided, and then we endorsed. Well, obviously this is the nominee of the party,” she said, looking up at McCain and patting his arm several times.
In his remarks on the economy earlier in the day, McCain alluded to the recent intervention by the Federal Reserve and the Bush administration in the controversial rescue of Wall Street brokerage firm Bear Stearns Cos. McCain said government assistance to the banking system, which has been hit hard by the mortgage crisis, “should be based solely on preventing systemic risk that would endanger the entire financial system and the economy.”
When asked later whether federal officials had gone too far with the rescue, he said it was a “close call” but necessary because the near-collapse could have had “very harmful effects to our economy.”
Calling for more transparency and accountability in home-lending, McCain said the down-payment requirements for Federal Housing Administration-backed mortgages should be raised over time. He called for a meeting of the nation’s top mortgage lenders, and said they should “pledge to do everything possible to keep families in their homes and businesses growing.”
At one point, he cited the example of General Motors Corp., which offered no-interest financing for car buyers after the Sept. 11 attacks.
“We need a similar response by the mortgage lenders,” McCain said. “They’ve been asking the government to help them out. I’m now calling upon them to help their customers, and their nation.”
Officials at the Democratic National Committee immediately denounced McCain’s speech as evidence that he did not understand the impact of the mortgage crisis on American families. In a statement e-mailed to reporters, Chairman Howard Dean accused McCain of taking “the same hands-off approach that President Bush used to lead us into this crisis.”
Clinton, campaigning in Pennsylvania, told reporters that McCain’s speech sounded “remarkably like [former President] Herbert Hoover,” and said inaction had contributed to the current problems.
“Further inaction would exacerbate those problems,” she said, according to a transcript provided by her campaign. “I don’t think it’s an adequate response to say the government shouldn’t be helping either banks or people, because I think that would be a downward spiral that would cause tremendous economic pain and loss in our country.”
A spokesman for Obama, who has proposed a foreclosure prevention fund to help Americans refinance their mortgages, said McCain’s speech was essentially “suggesting that the best way to address the housing crisis is to sit back and watch it happen.”