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Paul Kiesel
Paul Kiesel
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McCain: Mortgage Flip-Flopping

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To have a change of mind or heart is not a bad thing. People change their minds all the time. So when most people accuse politicians of flip flopping, they’re really accusing them of changing their opinion on a particular issue, which is technically a natural thing to do and perfectly acceptable.

However, when a politician is unequivocal in his/her view and appears to be inexorable, and then he or she changes positions on that issue in a short amount of time (within months and with no new information available), that is more or less a “flip flop” maneuver; it also proves the politician was unaware of some cracks or flaws in their former stance and has likely changed perspectives for political reasons.

Senator John McCain has done this today in regards to the mortgage crisis. With news of Fannie Mae and Freddie Mac having liquidity problems (which federal regulators are denying) and possibly needing a government bailout soon, McCain said, “Those institutions, Fannie and Freddie, have been responsible for millions of Americans to be able to own their own homes, and they will not fail, we will not allow them to fail [. . .] They are vital to Americans’ ability to own their own homes. And we will do what’s necessary to make sure that they continue to function,” (The New York Times, 7/10/08).

However, just three months ago, McCain suggested that it’s the borrowers’ fault for why we’re in this mortgage mess and that he couldn’t understand how such a small percentage of foreclosures and/or troubled mortgages are causing this much financial turmoil, “[Americans] bought homes they couldn’t afford [. . .] Only 55 million [homeowners] have a mortgage at all and 51 million are doing what is necessary [. . .] to make their payments on time. That leaves us with a puzzling situation: How could 4 million mortgages cause this much trouble for us all?” (New York Times, 3/25/08). He also said in March that government intervention is unnecessary and he wouldn’t support it, but clearly his statements today contradict his former ones.

McCain changed his mind not because of a change of perspective (the writing was on the wall back in March and April, as I wrote about a potential bailout that Fannie and Freddie might need later this summer), but, rather, because he would be politically killing himself to stick to his stance that terrorism is the most pressing matter for Americans, as McCain commented that, “Even if the economy is the, quote, No. 1 issue, the real issue will remain America’s security [. . .]” But this is clearly not the case as polls show that most Americans are in fact more concerned with the economy and other domestic issues. Now McCain is presumably more concerned with the economy.

Therefore, McCain had to switch his stance — he had to flip flop, but it wasn’t necessarily due to a genuine change of economic perspective; because banks and homeowners were struggling just as much in March as they are now. So does McCain really care about economic pains that Americans have been facing for months now or is he more in line philosophically with his top economic adviser former Senator Phil Gramm? — who today said that America was in a “mental recession” and was a “nation of whiners.” The New York Times reported on this just hours after McCain claimed to be concerned with the health of Fannie and Freddie and each institution’s ability to loan mortgages to Americans and not become insolvent.