McCain's Plan for Presidential Debate #2 - Will He Succeed?

[Art]

Boring and predictable. Maybe they should have just shown a rerun of the first debate as many of the comments made by both candidates seem to have been lifted verbatim from there.

Because it was so dull and boring and because neither candidate would answer questions directly there was no runaway victor, though overall I'd say Obama won the debate by a small margin. However by the criteria of who helped their election chances the most Obama won handily, because his mission on the night was not to lose points, in which he succeeded, whereas McCain lost heavily, as he needed an election changing night and failed miserably in accomplishing that.

 

[Art]

He could have been talking about Colossus, the machine at Bletchley Park designed to crack German code.

He may try to claim that, but he wasn't

Besides Bletchley Park scientists were civilians not military and Colossus was for code breaking not communication.

 

[Defennder]

I just saw this website:
http://thatone08.com/

Here's some context from a right-wing source:
http://newsbusters.org/blogs/brent-baker/2008/10/08/networks-condemn-mccain-calling-obama-one

 

[Astronuc]

Obama made a goof when he commented on computers saying that a group of military scientists developed computers due to a need to communicate, nope that was the internet. Probably most people missed that.

It's unfortunate that our political leaders are not well informed on science and technology, especially given the significance it has in our economy. I suppose they rely on their staffs and those of various government agencies to draft policy for their approval.

The History of Computers
http://inventors.about.com/library/blcoindex.htm

The invention of the computer
http://en.hnf.de/Permanent_exhibiti...he_computer/The_invention_of_the_computer.asp

There is not just one inventor of the computer, as the ideas of many scientists and engineers led to its invention. These ideas were developed in the 1930s and 1940s, mostly independently of each other, in Germany, Great Britain and the USA, and were turned into working machines.

And a predecessor to the computer was the analytical engine (Babbage, 1837).
http://www.fourmilab.ch/babbage/
http://www.computerhistory.org/babbage/

McCain's bold new mortgage plan isn't new and apparently isn't his
Commentary: Sounds like he still hasn't read the Paulson plan

WASHINGTON (MarketWatch) -- John McCain proposed a bold new idea to save America from the worst financial crisis in 70 years: Have the federal government buy bad mortgages and modify them to keep people in their homes.

Except his idea isn't so new; it's part of the $700 billion bailout package approved by the Senate and signed by the president last week.

It was all over the news. Right in between the stories about the Dow crashing 1,700 points and the campaign ads about Sen. Barack Obama's terrorist pals.

At the second presidential debate on Tuesday, the very first question the two candidates were asked was on how they would help ordinary citizens weather the crisis. See full story.
Obama started off, going directly into his stump speech, saying the downturn was the "final verdict on the failed economic policies of the last eight years," and then listing all the things he'd do for the middle class.

When his turn came, McCain said he'd protect home values by ordering the Treasury secretary to "immediately buy up the bad home loan mortgages in America" and renegotiate the terms so people could stay in their homes.

"I know how to do that, my friends," McCain said. "And it's my proposal, it's not Sen. Obama's proposal, it's not President Bush's proposal."

The problem, of course, is that it is President Bush's proposal. At least, it's Treasury Secretary Henry Paulson's proposal. It's the heart of the $700 billion plan.

According to Section 110 of the law, the government is going to buy up "troubled assets," including residential mortgages, and then do everything it can to "minimize foreclosures" by modifying the terms of the loans by reducing interest rates, reducing the principal or "other similar modifications."

Is McCain's claim about 'his proposal' going to be like Al Gore's internet claim?

 

[Evo]

I knew they were planning to buy the debt from foreclosed homes, but a loan that has a slow pay on it? A loan that has not been foreclosed? Hell, I'll stop paying my mortgage so I can take advantage of this! If I can get taxpayers to pay off half of what I owe on my house, I won't have to sell it at a loss. YEEHAA! I will just sit on it then until the prices start going back up and make a huge profit. Too bad about all you homeowners out there that scrimp and save to pay your mortgages on time, and all of you people that can't afford a home, too bad for you too!

I think with my reduced payments I'll go to that ritzy spa in CA that the AIG execs went to.

Does anyone else see a problem with this plan?

What about the people that are at risk of becoming homeless or having to move into bad areas because they can't pay their rent? Are they scum because they didn't manage to get a mortgage they can't afford?

As a homeowner of an overpriced house that I'm trying to sell, I could make like a bandit on this bailout. I, however, think it is unfair to ask taxpayers making less money than me that couldn't in their wildest dreams afford a house like mine to buy down my payments so I can live in a large gorgeous home for less than they pay for a 1 bedroom bungalow. Oh heck, what am I saying, give me the money!

 

[Alfi]

Watching the worm was the most enjoyable thing for my wife and I.

I'd like to see the raw data for that worm thing also. If my observations were correct I think Obama won by the amount of top +'s I saw.

 

[Art]

I knew they were planning to buy the debt from foreclosed homes, but a loan that has a slow pay on it? A loan that has not been foreclosed? Hell, I'll stop paying my mortgage so I can take advantage of this! If I can get taxpayers to pay off half of what I owe on my house, I won't have to sell it at a loss. YEEHAA! I will just sit on it then until the prices start going back up and make a huge profit. Too bad about all you homeowners out there that scrimp and save to pay your mortgages on time, and all of you people that can't afford a home, too bad for you too!

I think with my reduced payments I'll go to that ritzy spa in CA that the AIG execs went to.

Does anyone else see a problem with this plan?

What about the people that are at risk of becoming homeless or having to move into bad areas because they can't pay their rent? Are they scum because they didn't manage to get a mortgage they can't afford?

As a homeowner of an overpriced house that I'm trying to sell, I could make like a bandit on this bailout. I, however, think it is unfair to ask taxpayers making less money than me that couldn't in their wildest dreams afford a house like mine to buy down my payments so I can live in a large gorgeous home for less than they pay for a 1 bedroom bungalow. Oh heck, what am I saying, give me the money!

Presumably they will need a formula based on some kind of means test to distinguish between the 'can't pay' and 'won't pay' otherwise as you say it would be grossly unfair on those who are making their payments regularly. Another possibility is the gov't take a stake in the property to the value of their bailout which they hold onto until they are repaid.

 

[Evo]

Presumably they will need a formula based on some kind of means test to distinguish between the 'can't pay' and 'won't pay' otherwise as you say it would be grossly unfair on those who are making their payments regularly. Another possibility is the gov't take a stake in the property to the value of their bailout which they hold onto until they are repaid.

Can you imagine the amount of due diligence and time that it would take to scrutinize every individual mortgage? How many other properties might this person own? What kind of investments do they have, what is their net worth? I know people that own a lot of homes and don't work, they live off of the rental income. Do we give these people a break? This plan is ludicrous. Obama was right when he said what we need to do is address the problems like loss of jobs and income that are making it difficult for people to pay their mortgages in the first place.

 

[Astronuc]

I knew they were planning to buy the debt from foreclosed homes, but a loan that has a slow pay on it? A loan that has not been foreclosed? Hell, I'll stop paying my mortgage so I can take advantage of this! If I can get taxpayers to pay off half of what I owe on my house, I won't have to sell it at a loss. YEEHAA! I will just sit on it then until the prices start going back up and make a huge profit. Too bad about all you homeowners out there that scrimp and save to pay your mortgages on time, and all of you people that can't afford a home, too bad for you too!

I think with my reduced payments I'll go to that ritzy spa in CA that the AIG execs went to.

Does anyone else see a problem with this plan?

What about the people that are at risk of becoming homeless or having to move into bad areas because they can't pay their rent? Are they scum because they didn't manage to get a mortgage they can't afford?

As a homeowner of an overpriced house that I'm trying to sell, I could make like a bandit on this bailout. I, however, think it is unfair to ask taxpayers making less money than me that couldn't in their wildest dreams afford a house like mine to buy down my payments so I can live in a large gorgeous home for less than they pay for a 1 bedroom bungalow. Oh heck, what am I saying, give me the money!

Do I detect a feeling of indignation? One is not alone in this.

Yeah - there's a lot wrong here. I'm not sure how this is going to get handled fairly. The devil is in the details.

 

[Amp1]

Originally Posted by lisab

My jaw dropped when I heard that! What a very strange choice of words...

Yes, Demeaning, condescending and possibly racist. I'm Native American/African American and I have heard the phrase 'that one' used when referring to a thing or chattel, an object. He COULD have said "that Liberal", "That Democrat" more refined and in line with the usual smear. Saying "that one" immeadiately made me suspect he was trying to anger Obama, in the 'Ghetto" it almost like calling out - "Yo mama". That is my feeling and opinion.

 

[Astronuc]

Obama was right when he said what we need to do is address the problems like loss of jobs and income that are making it difficult for people to pay their mortgages in the first place.

That is the crux of the matter.

There's a problem when a CEO or corporate manager makes a multiple in one year of what a typical wage earner might or might not make in a lifetime.

 

[Art]

Can you imagine the amount of due diligence and time that it would take to scrutinize every individual mortgage? How many other properties might this person own? What kind of investments do they have, what is their net worth? I know people that own a lot of homes and don't work, they live off of the rental income. Do we give these people a break? This plan is ludicrous. Obama was right when he said what we need to do is address the problems like loss of jobs and income that are making it difficult for people to pay their mortgages in the first place.

I agree with you, it would be expensive to administer and it would be wide open to abuse. Nevertheless this has been signed into law so I was simply postulating on what controls will be put in place. I suppose one advantage would be the data gathered on incomes etc should help in the prosecution of the greedy financiers who sold them the mortgages in the first place.

 

[Evo]

I agree with you, it would be expensive to administer and it would be wide open to abuse. Nevertheless this has been signed into law so I was simply postulating on what controls will be put in place. I suppose one advantage would be the data gathered on incomes etc should help in the prosecution of the greedy financiers who sold them the mortgages in the first place.

I don't think the majority of the defaults on mortgages were caused by "greedy financiers". That might be a small portion, but most people over the years have been laid off, had to take lower paying jobs, go from a two income family to a one income family, had to pay ever higher taxes, had adjustable rate mortgages that have gone up as expected, but their incomes did not go up as expected. These people I don't blame. I do blame the people that lied and cheated and went along with schemes to qualify for a home they knew was too expensive. "Have your Aunt Sarah deposit $10,000 into your bank account and leave it there until after the mortgage company checks with your bank, then give her the money back". That's an often used trick to make it look like you have money that you don't. I have no pity for these people and I certainly don't think they should be bailed out.

 

[LowlyPion]

If by "minorities" you mean "black people", yes. I thought Hispanic voters tended to vote Republican? Mostly for religious reasons. I could be wrong.

------------White-----------Black--------------Hispanic
Sept 26 - Oct 5
Obama----42%----------------89%----------------62%

McCain----50%----------------2%------------------26%

http://www.gallup.com/poll/108040/Candidate-Support-Race.aspx

While McCain likely couldn't have managed to lose much more of the black vote if he had called him the vilest epithets at this point, he does run the risk of further alienating whites, who don't agree with such divisiveness, though more importantly demonstrating in the starkest terms his lack of suitability, sensitivity, and fitness for dealing with Foreign affairs, where gosh darn it all not all our allies or our enemies are white.

 

[WarPhalange]

Okay, doing temporary money transfers like that is just wrong and I had no idea it happened. In that case both sides should definitely not be helped.

But even the greedy financiers had to find victims that were willing to go along. Someone who makes minimum wage should know that he can't afford a $300K house. Obviously the bank was stupid to sucker the guy into it and should be punished for it, especially since they knew the risk a lot better and reassured those buyers that it's fine, but the guy still had to sit down and think things through before buying the house.

 

[Amp1]

Obama made a point that one of the first places he would seek to free up monies to fund his economic initiatives is the war in Iraq; Having the Iraqi gov't take more responsibility for their countrys' recovery and rebuilding. However, he doesn't want to give away to McCain much in the way of details, even to give the public a snapshot. That would allow special interests to plan ways to subvert or plagerize his ideas.

Obama didn't rise to the baiting McCain was throwing at him. HE answered the questions put to him more thoughtfully an lucidly than McCain - who at times almost sounded like Palin, half way stuttering, repeating buzz words several times a second, linking slogans and spin phrases in a somewhat nonsensical way. I can hardly wait for a transcript.

Oh, yeah...Bill Mahr was on Leno last night- he called Palin something 'Avon Lady'. And added if she has such a good learning curve... how dumb was she to start?

 

[WarPhalange]

If by "minorities" you mean "black people", yes. I thought Hispanic voters tended to vote Republican? Mostly for religious reasons. I could be wrong.

I was under the impression that the recent Republican immigration policy (i.e. just build a wall) pissed off a lot of Latinos.

 

[Evo]

Debate Transcript

http://www.cnn.com/2008/POLITICS/10/07/presidential.debate.transcript/

 

[LowlyPion]

I don't think the majority of the defaults on mortgages were caused by "greedy financiers".

I say yes and no to this. The problem being that the business model for lending changed, and the pooling of interests led to incentives to qualify and turn a blind eye to suitability. The salespeople raked in commissions off the closing points and were incented to close business, any business to profit. They offered advice on how to fill in the form, where to fudge, how to fudge - in short encouraging non-qualifying incomes to over-reach in grabbing the American dream.

I signed a variable rate mortgage some years ago, and I got the nudge, nudge, wink, wink treatment on how to fill it into move it along. I didn't play the game, but got it anyway. Fortunately for me I only used it as a bridge loan that I fully paid off before the variable rate kicked in, but I have thrown out nearly a half ton of paper in the form of mail solicitations and offers for mortgage deals since.

The pressure to just move credit in the market was pretty frantic, is I guess my point, and there were plenty of slick operators out there playing the game. I think Tony Mozilo at Countrywide is a total poster boy for this kind of abuse.

 

[Evo]

I say yes and no to this. The problem being that the business model for lending changed, and the pooling of interests led to incentives to qualify and turn a blind eye to suitability. The salespeople raked in commissions off the closing points and were incented to close business, any business to profit. They offered advice on how to fill in the form, where to fudge, how to fudge - in short encouraging non-qualifying incomes to over-reach in grabbing the American dream.

I signed a variable rate mortgage some years ago, and I got the nudge, nudge, wink, wink treatment on how to fill it into move it along. I didn't play the game, but got it anyway. Fortunately for me I only used it as a bridge loan that I fully paid off before the variable rate kicked in, but I have thrown out nearly a half ton of paper in the form of mail solicitations and offers for mortgage deals since.

The pressure to just move credit in the market was pretty frantic, is I guess my point, and there were plenty of slick operators out there playing the game. I think Tony Mozilo at Countrywide is a total poster boy for this kind of abuse.

I equally blame the people that agreed to go along with the schemes. I guess I just expect people to own up and face the consequences of their actions. Stupidity is not an excuse in my book and I don't feel that taxpayers should have to bail someone out in those situations. But then I am not a nice person.

I'm all for helping people that have suffered financial reversals beyond their control, but if a person is defaulting because they fudged on their loan application, too bad.

 

[LowlyPion]

Debate Transcript

http://www.cnn.com/2008/POLITICS/10/07/presidential.debate.transcript/

This was the point I remembered finding Obama the most polished, even though I think his answer approached the original question more obliquely than some might want.

"What don't you know and how will you learn it?"

Sen. Obama, you get first crack at that.

Obama: My wife, Michelle, is there and she could give you a much longer list than I do. And most of the time, I learn it by asking her.

But, look, the nature of the challenges that we're going to face are immense and one of the things that we know about the presidency is that it's never the challenges that you expect. It's the challenges that you don't that end up consuming most of your time.

But here's what I do know. I know that I wouldn't be standing here if it weren't for the fact that this country gave me opportunity. I came from very modest means. I had a single mom and my grandparents raised me and it was because of the help of scholarships and my grandmother scrimping on things that she might have wanted to purchase and my mom, at one point, getting food stamps in order for us to put food on the table.

Despite all that, I was able to go to the best schools on Earth and I was able to succeed in a way that I could not have succeeded anywhere else in this country.

The same is true for Michelle and I'm sure the same is true for a lot of you.

And the question in this election is: are we going to pass on that same American dream to the next generation? Over the last eight years, we've seen that dream diminish.

Wages and incomes have gone down. People have lost their health care or are going bankrupt because they get sick. We've got young people who have got the grades and the will and the drive to go to college, but they just don't have the money.

And we can't expect that if we do the same things that we've been doing over the last eight years, that somehow we are going to have a different outcome.

We need fundamental change. That's what's at stake in this election. That's the reason I decided to run for president, and I'm hopeful that all of you are prepared to continue this extraordinary journey that we call America.

But we're going to have to have the courage and the sacrifice, the nerve to move in a new direction.

Thank you.

 

[LowlyPion]

I equally blame the people that agreed to go along with the schemes. I guess I just expect people to own up and face the consequences of their actions. Stupidity is not an excuse in my book and I don't feel that taxpayers should have to bail someone out in those situations. But then I am not a nice person.

I don't disagree that people too are to blame. They were offered the temptations and they took the bite from the poisoned mortgage apple. But the apples were dangled so temptingly and with such encouragement. The American Dream that they are bathed in daily on their TVs. Their own home, the extra family room, the modernized kitchen, granite counters, more square feet than they can afford to heat or cool. Eden.

 

[NeoDevin]

I equally blame the people that agreed to go along with the schemes. I guess I just expect people to own up and face the consequences of their actions. Stupidity is not an excuse in my book and I don't feel that taxpayers should have to bail someone out in those situations. But then I am not a nice person.

I'm all for helping people that have suffered financial reversals beyond their control, but if a person is defaulting because they fudged on their loan application, too bad.

Purchasing and renegotiating the loans will help out two groups: The people who owe money that they cannot pay, and the people they owe the money to. There is a third group involved though, the people who loaned them the money in the first place (and then sold the mortgage to it's current owner).

On the third group, the lenders, we can call them immoral, but they weren't unintelligent, and they didn't break any laws. The borrowers were stupid enough to take out a mortgage they couldn't afford, and the owner of the mortgage were stupid enough to buy these high-risk mortgages. Both groups made poor business decisions and therefore must (should?) live with the consequences. If the government buys these mortgages and renegotiates, they are basically telling both people and corporations: ``You are not responsible for your own poor business decisions''. The whole idea of a bailout without first addressing the underlying causes of the problem (poor financial education for the borrowers, poor regulation on the lenders) is ridiculous. It's a stop-gap which will only postpone (and make worse) the inevitable crash.

Edit: Oh yeah, my reason for quoting Evo: I fully agree with what you posted (except that you're not a nice person). You (like me) just expect people to take responsibility for their own decisions. On the second part, I would extend it not only to people who fudged the loan application, but also to anyone who made a poor decision to accept, whether or not there was any fudging going on.

 

[BobG]

Purchasing and renegotiating the loans will help out two groups: The people who owe money that they cannot pay, and the people they owe the money to. There is a third group involved though, the people who loaned them the money in the first place (and then sold the mortgage to it's current owner).

On the third group, the lenders, we can call them immoral, but they weren't unintelligent, and they didn't break any laws. The borrowers were stupid enough to take out a mortgage they couldn't afford, and the owner of the mortgage were stupid enough to buy these high-risk mortgages. Both groups made poor business decisions and therefore must (should?) live with the consequences. If the government buys these mortgages and renegotiates, they are basically telling both people and corporations: ``You are not responsible for your own poor business decisions''. The whole idea of a bailout without first addressing the underlying causes of the problem (poor financial education for the borrowers, poor regulation on the lenders) is ridiculous. It's a stop-gap which will only postpone (and make worse) the inevitable crash.

Edit: Oh yeah, my reason for quoting Evo: I fully agree with what you posted (except that you're not a nice person). You (like me) just expect people to take responsibility for their own decisions. On the second part, I would extend it not only to people who fudged the loan application, but also to anyone who made a poor decision to accept, whether or not there was any fudging going on.

Right or wrong, there's a precedent for telling people and corporations, "You are not responsible for your own poor business decisions''. Bankruptcy is one precedent, although it's not without some negative consequences.

Companies bailing on their pension plans is another. Union leaders and corporations agreed to a plan that later put companies at a competitve disadvantage. The choice became punish workers that believed in those agreements and depended on them for their retirement; or punish retirees and current workers by forcing the companies out of business altogether.

When the going gets bad, the goal is to minimize damage. Fairness never enters into it.

You know the other option to the government buying bad assets is for the government to buy stock in the banks similar to the bailout of AIG. The banking industry is opposed to that plan for the same reason you'd rather have someone give you $100,000 for the junk in your garage that you need to get rid of rather than have someone take control of your house for $100,000 including control over whether they kick you out of your house or not.

The other option is getting pretty close to nationalizing the banking industry which is a pretty bad idea in principle (but so is having to bail out the banking industry for $700 billion).

 

[NeoDevin]

Companies bailing on their pension plans is another. Union leaders and corporations agreed to a plan that later put companies at a competitve disadvantage. The choice became punish workers that believed in those agreements and depended on them for their retirement; or punish retirees and current workers by forcing the companies out of business altogether.

The workers should have gotten it in writing, at which point they could take the company to court if the company didn't live up to their end.

When the going gets bad, the goal is to minimize damage. Fairness never enters into it.

And the much lauded free market of the USA is non-existant.

You know the other option to the government buying bad assets is for the government to buy stock in the banks similar to the bailout of AIG.

The other option is to let the market sort itself out, with some new regulations to prevent it from happening again.

The banking industry is opposed to that plan for the same reason you'd rather have someone give you $100,000 for the junk in your garage that you need to get rid of rather than have someone take control of your house for $100,000 including control over whether they kick you out of your house or not.

This example is valid if the house is worth only $100,000, and the junk is worth about $50.

The other option is getting pretty close to nationalizing the banking industry which is a pretty bad idea in principle (but so is having to bail out the banking industry for $700 billion).

Why is that a bad idea in principle? Maybe had it been nationalized from the start, this mess would never have occured?

 

[Astronuc]

Purchasing and renegotiating the loans will help out two groups: The people who owe money that they cannot pay, and the people they owe the money to. There is a third group involved though, the people who loaned them the money in the first place (and then sold the mortgage to it's current owner).

On the third group, the lenders, we can call them immoral, but they weren't unintelligent, and they didn't break any laws.

Actually the middle group are mortgage brokers or originators that set terms of the mortgage on behalf of the lenders. The government definitely needs to go after the brokers who made fraudulent loans, and any reseller or any lender that failed to do due diligence.

The FBI already has a widespread investigation going on, and I'm sure it will expand.

And in case anyone misunderstands - Evo is a very nice person.

 

[Evo]

Last night an analyst was saying that the plan to buy out mortgages sounded great but doubted it was feasible the way McCain stated it.

 

[jal]

Last night an analyst was saying that the plan to buy out mortgages sounded great but doubted it was feasible the way McCain stated it.

Poulson (sp?) was asked and he would not support it as stated and he has authority to do something else.

 

[NeoDevin]

And in case anyone misunderstands - Evo is a very nice person.

Agreed completely.

 

[edward]

Last night an analyst was saying that the plan to buy out mortgages sounded great but doubted it was feasible the way McCain stated it.

The odd thing about the plan to buy up mortgages from home owners is that the bailout has or soon will also buy them.

 

[Astronuc]

The odd thing about the plan to buy up mortgages from home owners is that the bailout has or soon will also buy them.

See my post #74 - it's not McCains proposal, but rather "it's Treasury Secretary Henry Paulson's proposal. It's the heart of the $700 billion plan.

According to Section 110 of the law, the government is going to buy up "troubled assets," including residential mortgages, and then do everything it can to "minimize foreclosures" by modifying the terms of the loans by reducing interest rates, reducing the principal or "other similar modifications."

In any event, McCain said that when he is president he would order the Treasury . . .

But McCain wouldn't be president until Jan 20. He would want to wait that long (104 days from today)? However, by that time, the troubled mortgages would hopefully be identified and the money would have started flowing, i.e. the money will be dispositioned before the next president takes office.

Ideally, Ben Bernanke, Henry Paulson and Neel Kashkari will have made a concerted effort toward the stabilization and recovery.

Kashkari Summary Biography - http://www.treas.gov/organization/bios/kashkari-e.html