McCain: 'Not the duty of government to bail out'

Sen. John McCain has just finished a speech in Santa Ana about the economy and the housing crisis, and I'll be darned if I can spot the headline right now. Reuters leads with "McCain seeks solutions to housing crisis."

Don't we all?

Bloomberg News focuses a single line in the speech: "Republican presidential candidate John McCain said a government bailout of banks should be based 'solely on preventing systemic risk' and not on helping financial and property speculators."

Here's the Reuters lead: "Republican presidential candidate John McCain, looking to bolster his economic credentials, called on Tuesday for quick meetings of mortgage lenders and accountants to begin to tackle the U.S. housing crisis.  McCain, who has been criticized as weak on the economy, said he was open to a variety of solutions to ease problems in U.S. housing markets but did not specify an immediate approach."

The line that wants to be a headline: "I have always been 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," he said.

On first read, it appears the speech leaves open the possibility that McCain will embrace one of the ascendant myths in Washington right now: that government is capable of carefully crafting a bailout for the blameless.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo Credit: Getty Images

Comments

[MyLessThanPrimeBeef]

Very interesting.

I just read that Obama is related to Brad Pitt and Hilary is related to Angelina Jolie. Of course, Hilary is married Bill who warmed the seat between the older and younger Bush.

So, here we have at most 2 or 3 degrees of separation. We are all just one big family.

[jb]

C'mon Mike,
Tell us how you were "swindled"? Telll us that you did not plan on making a bucket of money on your "investment". It is my opinion that ALL purchasers of a house are speculators of some sort, and NONE should be rescued (if there was some illegal item in the loan, then hire a lawyer and sue, otherwise you deserve exactly whatever outcome you gambled on, postive or negative). Note that I lost nearly all of my money in the stock market tech bubble where I was similarly "suckered" by the advice of many "experts", I did not whine to anyone (ok maybe my wife a bit), but I sure as hell did not ask anyone for a bailout!

[CD]

AAB is right, who knows what McCain will really do when he gets there....But this may force the issue on the other candidates if they see Mac Cain getting new votes on this one. So not a bad thing after all.....

[Lou]

The war in Iraq and Bush's horrible presidency made people forget why they might vote Republican in the first place. I thought for certain I'd vote Democratic this year but with Clinton and Obama (especially Clinton) spewing all these lies about these poor victims and how the taxpayer should bail them out, it makes me sick. I'm leaning towards McCain.

Oh yeah, I was against the Bear Stearns bailout, so no hypocrisy from me.

[adrian]

Are we sure he will do what he preaches?
Bush had said so and he gave up.
It's easy to say "no" now, but what about later when surrounded by advisers in the White House telling him to bail out the financial guys because of an imminent collapse?
BTW, this whole mess happened under Bush Administration, don't forget, voters!!!

[NoWayinLA]

puckhead: "Dubya is the king of free market laissez-faire economic policy."

Not true at all, actually. Dubya has been about as far from laissez-faire as it's possible to get in a country with our identity. Dubya is a fascist... not in that I'm-angry-so-I'll-throw-around-WWII-metaphors-
because-that's-what-people-do-on-the-internet kind of way, but in the actual sense of fascism as a political philosophy. The fascist approach to economic policy involved a pseudo-capitalist system in which the government played a very active role, partnering with corporate interests for the benefit of both. Corporate interests helped advance government programs, in exchange for special favors and loose regulation. The government fostered a corporate-friendly atmosphere, to gain compliance from the aristocracy, to grow the tax and manufacturing base (to be able to make and buy more weapons), and to foster scientific advances (to be able to make cheaper and better weapons). The ultimate losers, of course, are the consumers.

Checking the legacy of Bush:

Refusal of Kyoto treaty
Veto of clean air standards
Denial of global warming
Push for oil drilling in Alaska reserve
Haliburton
Blackwater
Explosion of no-bid contracts
The entire Iraq war
Cheap money policy
Bears & Stearns
Economic stimulus package
Vast program of deregulation

That's just the stuff I can think of on short notice. That's a series of extremely hands-on economic policy to me. For the last several years, business was great. How are the consumers doing?

[Windfall]

"I have always been 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," he said.

Well, McCain has at least one principle that makes more sense than, My Grama is a typical white person and hence the moral equivalent of my ignorant, America-hating, racist spiritual mentor.

[are they crazy]

People - try reading the text of the entire speech - not just the headlines or soundbites. He also advocated saving banks to make sure the entire financial system doesn't go down and more. You can't judge someone by a poltical speech planned for the nightly network news. Look at his voting record on bankruptcy and deregulation of the banking industry. Look at his history as oneof the Keating 5 and the whole S&L bailout. That's the real problem with politics - a public too lazy to really investigate candidates and making decisions based on soundbites and spin.

[gary]

most of you are all sheep..................mccain can say anything to get your votes then change his mind. I voted for bush 2 times and I firmly believe "fool me once shame on you, fool me twice and shame on me" any democrat will out perform any republican. I remember the fear mongering that went on when clinton was elected. anybody wish for the good ole days of when clinton was in???? I sure as heck do and I have voted GOP since 1972. You are all sheep...bahhhhhhhhhh to you all.

[tony]

Before we heap too much praise on John McCain, let's not forget his ass-kissing of Charles Keating and Lincoln Savings in the 1980's.

John McCain, you aren't what you say. You are what you DO!
----

"McCain became enmeshed in a scandal during the 1980s when he was part of the so-called "Keating Five" - five United States Senators tied to the Savings and Loan crisis of that decade.[77] Between 1982 and 1987, McCain had received approximately $112,000 in political contributions from Charles Keating Jr. and his associates at Lincoln Savings and Loan Association, along with trips on Keating's jets.[77] Subsequently, in 1987, McCain was one of five Senators whom Keating contacted in order to prevent the government’s seizure of Lincoln, which was by then insolvent and being investigated for making questionable efforts to regain solvency; at Keating's request, McCain met at least twice in 1987 with federal regulators to discuss the government's investigation of Lincoln.[77]"

[sfvrealestate]

"I have always been 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,"
"...But it is our duty to stay in Iraq another 100 years and spend $5,000 a minute while we're there..."
Oh, well, I guess it's ME that's missing a moral compass.

[mbob]

Anyone who wants a fresh perspective on the middle east can go to www.tikkun.com

It's a site dedicated to spiritual progressives.

As moderates, they tend to get it in the neck from extremists on both ends.

[SReno]

Jeugenen, thanks for showing the world why you should never vote for the radical left.. Why don't you come up with your own party, so the Republicans can make fun of that one instead of mine.

[Crazy Thought]

Very simple solution...

The government should give each home owner a choice:
- We can save your House, but you will permantly lose your Social Security and Medicare.
- We can save your Social Security and Medicare, but you will lose your House.

You are a fool to think the government has unlimited money and wants to bail out your dumb ass everytime you mess up!!! If you can't be responsible, then you should move back in with your parents so they can make important decisions for you.

[Truth2Pwr]

Oh give me a break! Since when has anything a politician says prior to getting elected borne any relevance to what they actually do once they're seated?

I figure we're all screwed no matter who we vote for, so at least with Obama my ass can get some articulately delivered inspirational sunshine blown up it while the world crashes down around me.

[paintballers for america]

Thank you Truth2Pwr..........you actually make more sense then anybody else and most likely will be the most correct.

[Bobc]

I agree. Someone tell me how they bought a house, when they couldn't afford the loan?
What were you told about the loan agreement? What did you not understand about the interest rates?

What we have in our country now, is a bunch of greedy business people and greedy, give- it- to -me- now, people.....how many of these loans went to illegals and flippers?

I'd rather tax payers money went to S.S. than bail out banks and people......after all it was politicians that raided S.S, over and over!

[NevadaGal]

McCain is only saying this now as to look like a true, red blooded, Republican. Anybody out West knows this guy's blue liberal butte is lying.

Dr. Ron Paul is the ONLY Republican since day one that has said that market forces (no bailout) must prevail. Greed marched is in to this mess and know it is time for us to march right back out.

[boz skaggs]

The Keating Five were five United States Senators, who were accused of corruption in 1989, igniting a major political scandal as part of the larger Savings and Loan crisis of the late 1980s and early 1990s. The five senators, John McCain (R-AZ) (the Republican nominee for the 2008 U.S. presidential election), Alan Cranston (D-CA), Dennis DeConcini (D-AZ), John Glenn (D-OH), Donald W. Riegle (D-MI), were accused of improperly aiding Charles H. Keating, Jr., chairman of the failed Lincoln Savings and Loan Association, which was the target of an investigation by the Federal Home Loan Bank Board.

After a lengthy investigation, the Senate Ethics Committee determined in 1991 that Alan Cranston, Dennis DeConcini, and Donald Riegle had substantially and improperly interfered with the FHLBB in its investigation of Lincoln Savings, while John Glenn and John McCain had been only minimally involved. The Committee recommended censure for Cranston and criticized the other four for "questionable conduct."

In October 1989 The Arizona Republic reported that in addition to campaign contributions, McCain's wife and her father had invested $359,100 in a Keating shopping center in April 1986, a year before McCain met with the regulators. The paper also reported that the McCains, sometimes accompanied by their daughter and baby-sitter, had made at least nine trips at Keating's expense, sometimes aboard the American Continental jet. Three of the trips were made during vacations to Keating's opulent Bahamas retreat at Cat Cay. McCain also did not pay Keating for some of the trips until years after they were taken, after he learned that Keating was in trouble over Lincoln. [1] Lincoln Savings and Loan's collapse is said to have cost taxpayers $3.4 billion

[mapletree]

Well said commentator Truth....

I am not a liberal at all, I used to be a Republican before they left me out on the sidewalk-still believe in limited government and so on but...

I don't agree with Obama, but the FEDERAL MACHINE is in place and that isn't going to change with either of the three stooges running for election. But at least Obama speaks English and has energy and the appearance of an honest streak (for a politician anyway). At the very least he will look presentable when he meets with foreign governments. He has manners and likability.

Let's get real here that's all we really have the power to vote on these days.

Peter, could we have these comments numbered as well. Thanks.

[Peter I]

Read McCain's statement carefully. He is saying absolutely no bailouts for individual mortgage holders. He is saying, however, that bailouts of massive corporations holding mortgage debt are A-OKAY where "systemic" instability could occur. If a brokerage or bank is "too big to fail" it has to be bailed out at taxpayers' expense.

Talk about Moral Hazard!! This is outrageous. Expect more Bear Stearns, boys and girls.