SANTA ANA, Calif. – Sen. John McCain addressed the mortgage foreclosure crisis and the weakening economy in a speech in Santa Ana on Tuesday, but offered no major prescriptions for quelling turbulence – instead calling for two panels to look at the problems.
McCain, who is eager to dispel questions about his economic credentials, said in Santa Ana that he understood the concern and anger among Americans about uncertainty in the markets, the drop in home prices and the lack of available credit.
But, alluding to intervention by the Federal Reserve and the Bush administration in the controversial rescue of Wall Street brokerage firm Bear Stearns Cos., McCain 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.”
“Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy,” he said.
Going forward, McCain called for more transparency and accountability from lenders. He advocated that any government assistance should be for homeowners alone, not those who bought homes with the goal of turning them into rental properties. He added that any 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, speaking to Hispanic small-business owners who listened to his remarks from the factory floor at C&H Letterpress Inc. in Santa Ana. “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.”
McCain called for a meeting of the nation’s accounting professionals and a separate meeting of the nation’s top mortgage lenders. He called on the mortgage lenders to “pledge to do everything possible to keep families in their homes and businesses growing,” citing the example of General Motors Corp. – which offered no-interest financing to its customers after Sept. 11, 2001.
“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. It’s time to help American families.”
The Arizona Republican, at times, sounded as though he was giving an economics lesson, saying that market forces were overwhelmed by “rampant speculation” and that the housing bubble was aggravated by “complex, interconnected financial bets that were not transparent or fully understood.”
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