Presidential profiles—McCain

Mortgage Banking, Sept, 2008 by Walter White

"These are people who have lost faith in their government to respond when they needed it most," said Fiorina, who was on the New Orleans tour with McCain. "He's most focused on making sure the federal government is accountable and transparent. If you look at the aftermath of Katrina, government on many levels needed more effectiveness and coordination."

A frequent surrogate for the McCain campaign, Fiorina also said during the July Meet the Press interview: "And by the way, he [McCain] has also said that every American that loses his or her job is a problem. But interestingly, at the same time that the American economy has shed 428,000 jobs ... the one place in the economy that's working is small business--233,000 jobs were produced by small businesses. And that's why it's critically important that we not raise taxes on small businesses, that we not raise taxes on the American people."

McCain's take on economic policy focuses on encouraging capital formation and ensuring proper levels of capital reserves for financial institutions. In prepared text delivered to a Hispanic small-business roundtable in Orange County, California, in March 2008, McCain stated that "in financial institutions, there is no substitute for adequate capital to serve as a buffer against losses. Our financial-market approach should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital."

Congress action on the recently enacted housing bill had stalled until equity investors speculated that Fannie Mae and Freddie Mac lacked the capital to cover their $1.5 trillion mortgage-backed securities (MBS). On July 17 and July 18, 2008, the markets roiled and pummeled the stock prices of both GSEs, and over the weekend of July 19, Treasury Secretary Henry Paulson negotiated a compromise to put the most significant housing bill in decades on the fast track to bipartisan passage.

President Bush signed the Housing and Economic Recovery Act on July 30. The measure succeeded in being passed because it brought together a bipartisan approach to help stabilize an uneasy housing market still seeking a bottom. Support for the wide-reaching legislation came from both industry groups and consumer advocacy organizations.

"The Center for Responsible Lending [CRL] has provided information and its research to both campaigns. We have met with Senator McCain's key policy-makers, and he has two of the best experts available in Doug Holtz-Eakin and Mark Zandi [chief economist for Moody's Economy.com, West Chester, Pennsylvania]. Both of them know well and fully appreciate the depth and importance of the housing and financial crisis," said Mike Calhoun, president of the Durham, North Carolina-based CRL.

The commander in chief of housing policy

It is clearly a conundrum. McCain appears to shun political theater; rather, he seeks the presidency to right the ship and set a new course for the economy and housing. Polling indicates Americans trust McCain on foreign affairs, but the verdict is still out on him and the economy.