Reactions of Obama and McCain on government bailout of Freddie Mac and Fannie Mae.

Thinkprogress:

In March, Sen. John McCain (R-AZ) took a hard line against government economic intervention, saying that it is “not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers.”

And now:

Despite McCain’s supposed opposition to bailing out “those who act irresponsibly,” Senior Policy Adviser Douglas Holtz-Eakin has issued a statement supporting the bailout:


John McCain supports the steps needed to keep the financial troubles at Fannie Mae and Freddie Mac from further squeezing American families and endorses the idea that management and shareholders should not benefit from government backing. While details are not yet available, the actions taken today are consistent with those objectives. Fannie and Freddie have been the poster children for a lack of transparency and accountability, and remind us of the needed reforms to financial markets in general.

Statement from Senator Obama on Fannie Mae and Freddie Mac

The extremely serious situation with Fannie Mae and Freddie Mac affects millions of homeowners, our financial system, and our entire economy. I have been and will continue to monitor this situation closely, and I’ll evaluate whatever plan is put forth by this Administration with the following three benchmarks:

First, any action we take must be focused not on the whims of lobbyists and special interests worried about their bonuses and hourly fees, but on whether it will strengthen our economy and help struggling homeowners who are also being hit by lost jobs, stagnant wages and spiraling costs for everything from gas to groceries.

Second, we must protect taxpayers, not bail out the shareholders and management of Fannie Mae and Freddie Mac. This is a challenging situation, and there are some community and regional banks, including those serving low-income communities, that we need to carefully address. But we must not allow government intervention to protect investors and speculators who relied on the government to reap massive profits.

Finally, we must ensure that any plan clarifies the true public and private status of our housing policies. We need to make clear that in our market system, investors must not be allowed to believe that, unlike working families, they can simply invest in a “heads they win, tails they don’t lose” context.

For too long, Washington ignored the warning signs in the housing and financial markets, and has been unwilling to take the kind of actions that I have been advocating for over two years to crack down on reckless borrowers and help struggling homeowners. We cannot afford more of this “wait and don’t see” approach to our markets and our economy.

With today’s announcement, as well as the discouraging job report Friday, I once again urge the Administration and Senator McCain to drop their opposition to a second stimulus package, and to come together around a package like I have proposed, with immediate relief for families and $50 billion to struggling states so that they don’t have to cut back on health care and education and can rebuild roads and schools and help restore jobs and confidence to our economy.