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Why McCain should lose, in a single sentence

You don’t get this very often: A single sentence that disqualifies a candidate not because of a scandal or a slip, but because it is an clear and forthright expression of the candidate’s beliefs. This is from a statement McCain wrote for Contingencies, published by the American Academy of Actuaries (via Paul Krugman):

“Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.”

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24 Responses to “Why McCain should lose, in a single sentence”

  1. Except….

    A large part of the issue in finance was the push over the last 15 years to get banks to stop “redlining” and offer loans to people who couldn’t possibly afford them. The various instruments that got banks in trouble was a way of kicking the can down the road.

    The problem was dumb regulations and legal pressure that forced bad loans. The dumb financial instruments were an unintended consequence of forcing banks to make bad loans.

    So no, David: you want to know why we are in this mess? It’s bi-partisan in nature, but all of the instincts to “help” that led to it came from your side of the aisle.

  2. He used a analogy that is only faulted because of Democratic regulation that led to fault mortgages. People who should not own homes and the Democratic leadership in Washington mixed with natural corporate greed lead to this bankrupt.

    You not knowing that but posting this quote out of context is absolutely astonishing.

  3. Nobody “forced bad loans,” that was unregulated greed, either on the individuals behalf or on the corporations behalf.

    We see similar greed in health care insurance, which I will write about later. The short story is, that as a doctor (and according to my patients), the BEST insurance is Medicare. There are no referrals needed for patients, there are no pre-approvals to be obtained before a test and they reimburse the doctor more than the private insurances do! There are no greedy CEOs, officers or stockholders to keep happy. And the Congress has a similar insurance for themselves, I believe.

  4. Andy, nobody was forced to give bad loans but they were heavily encouraged. Freddie Mac and Fanny Mays problems are because they were basically told they have our government as a saftey net. They didn’t have to fear falling apart if they gave the risky loans they gave.

    At the same time the regulations we were supposed to have in place were not there. People were not doing their jobs.

    But much of the change in bank regulation is good. I can easily chose between multiple banks that can fir my needs. And if I chose a bank there is a good chance I can find a branch of theirs in any major city in the US I go to. We didn’t have that ability before. That is good.

  5. Andy,

    You might want to ponder the pounding that folks like Barney Frank did on “redlining” 10-15 years ago, and then consider how much govt influence has always existed with Fannie Mae and Freddie Mac. Then you might look into just how much money your hero, Obama, has raked in from Fannie Mae, and who it was he picked to decide on his VP. And then you might consider how Joe “Mr Credit Card” Biden has been influencing the financial sector during his many, many years in Washington.

    If you guys want to have a cleanliness fight over this, I think you’ll find that Obama and Biden will end up wearing a lot of mud.

  6. Reagan deregulated S&L industry. See what happened. Greed is one of the deadly sins. Greed led to writing borderline illegal home loans–unregulated by anyone than the lender. Which led to failures up the line. Greed at every level, from buying more home than one should, to lender employees going for quotas/commissions, to CEOs, to stockholders.
    Rs do not believe in any biz regulation.
    BTW, could you fix your typo: “because it is an clear” to “because it is a clear”

  7. Remind me again who was President, and which party ran Congress, when Glass-Steagall was undone?

    I think Pam may have to execute a few head spins…

  8. According to the Wall Street Journal, Glass-Staegall was repealed in 1999 Under Clinton’s Administration. The legislation was spearheaded by conservative republican Phil Graham who chaired the committee. Apparently there was much compromise between the White House and the committee due to intense pressure from Industry lobbyists who were the real force behind this legislation. Just another example of corporate interests affecting public policy.

  9. Fannie Mae and Freddie Mac are two data points representing a large dollar value, but they are the tip of the iceberg. The wild-ass trading in derivatives has made a mockery of margin regulations and trillions of dollars are at risk right now because the chickens are coming home to roost.

    Today there is an upsurge in discussion of redlining and how the high risk mortgages associated with low income neighborhood home ownership contributed to America’s precarious position. That is such a red herring it would be laughable if it weren’t for the fact that people seek easy answers and working class blacks in low income jobs got a lot of those mandated high risk loans.

    Let me just call “racist alert,” here and go on for a minute. The high risk loans were bundled in packages that spread the risk for the investors, and if they had been treated like normal securities then the losses that naturally occur in a high risk group of investments would have been spread across the business landscape.

    What Pam calls “borderline illegal home loans” are barely material in our current circumstances as the entire economy faces a meltdown. Greed is the problem, and the derivatives industry, the pump and run salesmanship behind the hedge funds that fueled that industry is the real challenge.

    Bailing out the housing industry is a tidy first step to prevent collapse of the currency, but the derivatives problem must be addressed as well. I’ve excerpted a few pages of Warren Buffet’s 2002 annual report at where-in he explains some of the issues that we face right now.

    The problem comes from mismanagement, insufficient regulation, and inadequate administration of existing regulations. Anybody who says correction of the social injustice associated with redlining practices up to the 80s is the cause of today’s problems needs to think again. The accusation is a bold-faced racist lie.

  10. may be I m just plain stupid
    but I don t understand why 700 billions can t go to the loan clients so that they can pay them out, end up with a home
    and become a new middle class

    why giving it to the banks in exchange of nothing ?
    but again economy is really not my thing
    i just don t get it

  11. gianluca, “Economics” is supposedly rational. Politics is not. Firedoglake had a well reasoned proposal similar to your idea yesterday.

  12. I guess “markets are ideologically fueled exercises in mudslinging” just doesn’t have the same ring as “markets are conversations.”

    I’m just saying…

  13. frank. thanks
    so it s politics that I just don t get

  14. Meanwhile, McCain’s notion that the success of the banking industry under deregulation is evidence that deregulation is the wisest path for providing health insurance has now been shown to be ludicrous.

  15. I really think it’s funny when people judge a candidate off of one sound bite.

  16. Who cares?

  17. The “soundbyte” — actually, a quote from an article he wrote — wouldn’t matter except that it succinctly summarizes what’s wrong with McCain’s overall approach to government: Deregulate because you think unregulated markets bring about the best results. Well, if there were any question about that approach, they’re settled now. And even McCain apparently agrees since he’s rapidly switched his position on the topic.

    So, yes, ChiliMac, some quotes are worth excerpting.

  18. […] Quote via Joho. […]

  19. David W, If you were paying attention to what Sen. McCain was saying you would know he was talking about competition. Opening up the banking industry to greater competition isn’t the cause of the problem we are in now. Competition in banking has made it so we have more choice with more reasonable pricing. Competition is good.

  20. Competition in health insurance has not meant more choices for people. Most decisions about health insurance are not made by the individuals who have the insurance in any case, they are made by the company they work for. Many of the plans are quite similar in their coverage and in the fees they pay doctors and virtually all pay less than Medicare. Competition has resulted in more multi-million dollar salaries to health insurance company executives (some make $20 million or more) and a lot of money to the rest of the executives. See also my earlier response also.

    In banking, I have not noted much in the way of differences in my local banks, many of which have been taken over by others. I think we are on the fourth, or maybe fifth, iteration in 20 years in our personal account as it has changed hands to ever bigger corporations. My business account bank was taken over and I lost my interest bearing checking account-so much for the benefits of competition.

  21. Yes, ChiliMac, competition is good. (Of course, it’s not good in every area, because nothing is. There’s no single solution to all problems.) But McCain is contrasting competition with deregulation, and pointing to the success of the banking industry. Haven’t we learned that even where competition is the right approach, it can need regulation to keep it from (a) having results that don’t serve social needs and/or (b) becoming non-competitive? Or do you think competition is an end in itself?

    I continue to think that his single quotation from McCain expresses what’s fundamentally wrong with his approach, while inadvertently giving evidence that that approach is fundamentally wrong.

  22. “…. The Community Reinvestment Act was passed in 1977. Are we supposed to believe that CRA was working smoothly throughout the Carter, Reagan, Bush I, and Clinton years and then only under Bush II did overzealous anti-”redlining” enforcement come into play, perhaps a result of Dubya’s legendarily close relationship with ACORN? Or maybe overzealous enforcement back in the late 1970s is somehow responsible for a real estate blowout that only materialized 30 years later? It doesn’t even come close to making sense.

    “Beyond that, the mere existence of “subprime” loans — i.e., mortgages given to less-creditworthy individuals at higher interest rates — isn’t the problem here. The problems have to do with what was done with the loans after they were packaged, sold and used to make leveraged plays.”

  23. Good web site, thanks.. Happy Ramadan for everyone..

  24. Круто! Со смартфона немного тяжело читается, но оно того стоит!

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