McCain's Bailout AgencyJohn McCain says the bailouts of major corporations must stop (he is right), but he wants to create a new government agency to "fix" bad companies before they go belly-up:
That agency, a Mortgage and Financial Institutions trust, would work with the
private sector and regulators to identify institutions that are weak and fix
them before they go broke.
Memo to the McCain camp: You are the nominee of the Republican Party. The party opposite are usually the ones who are big into the government bailout business-they have mastered the art of bailing out everyone and everything and making it look and sound perfectly acceptable. One of the biggest arguments against the present administration from members of the President's own party is that on fiscal matters, he tends to govern as though he were a Democrat.
When the government, led by either party, engages in bailouts of any kind it is a terrible risk. In the immediate timeframe, the bailout always appears as though it has "saved" something or other. The long-term consequences of nearly any bailout are often not felt for many years, but bailouts tend to reward and encourage risky behavior which is a long-term danger to the economy.
Whether he knows it or not, John McCain is proposing a giant bailout agency. It is a bad move for a Republican candidate to make.