Saturday, October 11, 2008

Of Election Year Politics

A quick, belated word on McCain's grandiose plan to buy every mortgage in America.

McCain's plan, if you haven't read much about it, is to buy mortgages for homes that have decreased in value, then reduce the principal on those mortgages to reflect the home's now lower market price. According to McCain's press release outlining the plan, which you can read here, this program would be open to any mortgage holders that:

• live in the home (primary residence only).
• can prove their creditworthiness at the time of the original loan (no falsifications and provided a down payment).
There's just one problem. Under that guideline, McCain would be buying, well, every mortgage in America. Except, you know, the subprime ones that are driving this mess.

There's precious few properties that haven't decreased in value over the last year, so everyone in their brother will want in on the plan. Honey, come quick, the government is giving us a retroactive discount on our house!

At the same time, the plan explicitly excludes subprime borrowers, who are the ones actually doing all the defaulting.

At first, I thought this was a big mistake from an economically inept candidate. Seriously, if a broke liberal arts reject like me can poke an Alaska-sized hole in your economic plan, that's pretty much the height of ineptitude, right?

But thinking about it, I'm not sure they spent one minute deciding if this was economically viable. Those conditions are actually explicitly designed to include everyone. Except those no-good, irresponsible subprime borrowers. Screw them.

It's a text book case of an election year breeding bad policy. Who cares if it works? The key is to make middle America look at their ballot like a fucking coupon. McCain might as well be lobbing $300 billion from a parade float.

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