McCain Channels Hoover on Foreclosure Crisis

Ohio Treasurer Rich Cordray and Cuyahoga County Treasurer, situated at the epicenter of the foreclosure crisis and long considered national leaders on the issue, have always asserted that the mortgage foreclosure crisis is the greatest financial challenge faced by our generation, comparable only to the Great Depression. Of course, President Herbert Hoover reacted to the stock market crash of October 1929 by announcing in February 1930 that the preliminary shock had passed and employment was on the mend.

So, who is the new Hoover as this catastrophe unfolds? George Bush was the leading contender until his Federal Reserve head honcho Ben Bernanke turned conservative financial ideology on its head by bailing out subprime mortgage-crippled Bear Stearns late last week (an action that Dean Baker of the Center for Economic and Policy Research calls "Socialism for the Rich"). So who else?

The honor goes to Bush wannabe John McCain, who said yesterday that he is "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," and rejected proposals by the Democratic candidates to help homeowners at risk as "sounding expensive." His proposal for dealing with the nation's greatest financial crisis in nearly a century is to convene a few panels to look into the problem, and maybe he will consider any proposals they make.

For a refreshing contrast, consider the leadership displayed by Senate Majority Leader Harry Reid (D-NV) in introducing S.2636, the "Foreclosure Prevention Act," which gives bankruptcy judges the power to modify harmful mortgages marketed by subprime lenders in recent years, and would help more than 600,000 families stuck in bad loans keep their homes. It also ramps up resources available to foreclosure counseling services, and permits municipal governments to use tax-exempt bonds to help refinance subprime loans.

As for McCain's grand design, it's far too late for sitting back and convening panels to study the problem. This crisis is continuing to deepen and it's nowhere near a resolution. Economist/blogger Bonddad spells it out in an excellent post Tuesday called "Housing Nowhere Near a Bottom". The glut of foreclosed homes now flooding the market at fire-sale prices guarantees that home values will continue to decline, further cutting middle class families' primary source of credit; vacancy rates in cities are topping the highest levels ever recorded; and record-high household debt, rising commodities prices, and tight credit will continue to forestall consumer spending, a critical element of any recovery. And today he points to signs that the stock market may continue to stagnate, including another wave of adjustable mortgage resets that will occur in 2010.

McCain's blithering idiocy about the economy should be a cause of concern all across the nation but it's especially alarming here in Ohio, where the Columbus Dispatch reports today that one in ten residents are on food stamps, almost double the rate when Bush took office in 2001. And the point isn't lost on ODP Chair Chris Redfern, who reacted strongly to McCain's speech:

"It took all of five minutes for the Federal Reserve to bail out Bear Stearns, but after countless months of skyrocketing foreclosures, George Bush and John McCain still can't wrap their heads around the problem," said Ohio Democratic Party Chairman Chris Redfern. "John McCain has displayed a frightening level of indifference toward the most fundamental economic challenge facing Ohio families."

Continued after the break. Lest you think that McCain's indifference to the foreclosure crisis is an isolated incident, Think Progress spells out his history of denying assistance to homeowners. And McCain has repeatedly downplayed the economy as a campaign issue, as when he said in Florida in late January that national security is "the real issue" even if voters call the economy their number one concern.