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McCain Throws Aside Free Market Rhetoric, Embraces Government Bailout Of Fannie Mae And Freddie Mac

In March, Sen. John McCain (R-AZ) took a hard line against government economic intervention, 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.” Watch it:

In what may be the “largest financial bailout” in U.S. history, the federal government is now set to take over Fannie Mae and Freddie Mac, two government-sponsored enterprises that “own or guarantee almost half of the country’s $12 trillion in outstanding home mortgage debt.”

Despite McCain’s supposed opposition to bailing out “those who act irresponsibly,” Senior Policy Adviser Douglas Holtz-Eakin has issued a statement supporting the bailout:

John McCain supports the steps needed to keep the financial troubles at Fannie Mae and Freddie Mac from further squeezing American families and endorses the idea that management and shareholders should not benefit from government backing. While details are not yet available, the actions taken today are consistent with those objectives. Fannie and Freddie have been the poster children for a lack of transparency and accountability, and remind us of the needed reforms to financial markets in general.

Organizations such as Fannie Mae and Freddie Mac are too important to allow to fail. McCain and the Bush administration are willing to throw away their hard-line ideologies when it comes to powerful corporations, but not when it comes to struggling homeowners who also need government intervention. As Center for American Progress Senior Fellow David Abramowitz noted:

There are many good reasons, of course, to act to avert a [financial corporation’s] bankruptcy. … But the reasons are no less compelling when the devastation hits individual Americans directly—home by home, block by block, neighborhood by neighborhood—instead of mainly in the boardroom circles in which F. Scott Fitzgerald traveled, and which have changed so little since the Roaring Twenties.

This is now the second major government bailout McCain has backed this year. In March, he supported the Federal Reserve’s $30 billion credit line to finance the takeover of Bear Stearns by JP Morgan.

Think Progress Home Page

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Politics is the art of looking for trouble, finding it whether it exists or not, diagnosing it incorrectly, and applying the wrong remedy.
Ernest Benn

I think we should see a debate between McCain the Senator and McCain the Campaigner.

They sure do disagree about everything!

indeed they do. I liked him allot more as a senator.

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Seriously, if only he could have changed for the better. The one thing we DON'T need is change for the worse.

It's not the government's place to subsidize home-ownership......or anything for that matter. You have the right to pursue happiness, you don't have the right to capture it.

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"Bring me that horizon".

Talk to Mccain - though I'm sure he'll tailor his answer to whatever you want to hear. He's also proposing a huge new social program that will not only offer job training, but will make up the difference in wages for everyone while they go through job training. He's getting rather less fiscally conservative as the season moves on - I guess it's only the far right he feels that he needs.

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Politics is the art of looking for trouble, finding it whether it exists or not, diagnosing it incorrectly, and applying the wrong remedy.
Ernest Benn

But is it the government's job to ensure the economy doesn't endure severe shocks if it can do something about it? I mean, it's fine being a purist but if an economy is going to get a kicking and the government can alleviate or or even stop it, then isn't the government duty-bound to do so?

The government's job is to protect our rights and property....nothing more. It was the government that caused the great depression be and extreme contaction of the money supply.


They really can't do much. They can dole out subsidies, but it is usually directed at the wealthiest of society. How does that help? You don't subscribe to 'trickle down' economics do you?

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The law perverted! And the police powers of the state perverted along with it! The law, I say, not only turned from its proper purpose but made to follow an entirely contrary purpose! The law become the weapon of every kind of greed! Instead of checking crime, the law itself guilty of the evils it is supposed to punish! - Frederick Bastiat

What can anyone do to affect the economy? Really little.. Unless it is totally Controlled by government which is a fundamental reason for the failure of the Soviet Union.. and why China had to turn to free enterprise.

Why is Venezuela failing? Why has Cuba failed?


No human or group of humans can control an economy without destroying it.

You got a direct hit on China but...

Cuba Is doing ok considering they have an embargo and cannot trade with the worlds center of commerce.

And The reports of Venezuelans demise are greatly exaggerated.

The Federal Government can do small nuanced things to help stimulate the economy. Or kill it for that matter.

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