McCain’s Mortgage Buy-Up: Madness or Genius? (Updated)

Totally aside from who ‘won’ or ‘lost’ last night’s presidential debate, the hot topic on conservative blogs is (or will be, since I am writing this in the wee hours of the night morning) McCain’s proposal to directly buy up ‘bad’ mortgages.

In my opinion, this officially qualifies as a Bad Idea™.  But only if he actually means it.  Keep in mind that McCain may very well be planning on a single term, in which case broken campaign promises won’t come back to haunt him in the same way they would if he was planning to stand for reelection.  Also keep in mind that he already dislikes the way he is having to campaign, but is (mostly) playing to win at this point.

Regardless of whether he means it, though, I assume it was formulated as a strategic decision to help his campaign rather than as a plan that is seen as the cure for all that ails us and must be implemented no matter what.  With respect to his campaign, there are some very positive aspects to this.

First, it’s a concrete plan.  Both candidates, until now, have mainly just addressed the financial crisis in broad terms and supported the bailout bill.  By offering specifics, McCain helps establish himself as a leader in dealing with the crisis (coupled with his earlier suspension of his campaign, etc.).

Second, it’s ‘anti fat-cat.’  The main reason for the bailout’s unpopularity is that it is seen as primarily helping rich Wall Street-types.  It is easier for voters to see how McCain’s plan, as opposed to the bailout, will help them directly — whatever its merits, or lack thereof.  And even if they do not see a direct benefit, at least the money is not obviously going to rich investment bankers and overpaid CEOs.

Third, it eases the foreclosure fears and makes McCain, rather than Obama, the one that is protecting poor homeowners in danger of being kicked out in the street.  It will be hard for Obama to attack a plan that could have been lifted straight out of his community-organizing playbook.  If they attack at all, it will probably be limited to claims that this is merely a ploy and McCain does not really mean it.

I can only see two major negatives (again, strictly with regard to campaign strategy).  Conservatives will hate this, but McCain knows that they are not excited about him personally in any case and will likely bite the bullet to avoid electing Obama (and to vote for Palin).  I also anticipate negative reviews of the plan from economists and other experts.  I don’t doubt that some economists will give it a stamp of approval, though:  the old saw about asking three economists a question and getting seven different answers generally holds true.

The one unknown is how the media and the Left will react.  Aside from claims that McCain is not sincere, the plan itself should be pretty attractive to liberals.  In the article linked above, Michelle Malkin makes the point that this is pretty much what ACORN and similar groups want.  Anything other than outright hostility by the MSM is a win for McCain on this, and it is very possible that the media will either damn the buy-up plan with faint praise or ignore it altogether (I think expressing approval is out of the question; this is coming from McCain, and not Obama, after all).

Only time will tell, but I think this may be yet another instance — like the celebrity ad and naming Palin as VP — where McCain has stolen a march on Obama and recaptured the initiative.

UPDATE:

What seemed like genius in the middle of a bout of insomnia seems much less so now.  Specifically, McCain has mentioned this plan before last night’s debate, as far back as April.

I still think the upsides I mention above exist for his campaign, but that makes it much less likely to be a strategic move of any sort.

ANOTHER UPDATE:

Well, if you’re going to be wrong on the details, there’s no point taking half measures.  Apparently McCain was not only proposing this in April, but he is not even suggesting this as a new program.  This would merely be a modification or administrative change to the bailout that just passed.

Ed Morrissey at Hot AIr has a good explanation of it:

This proposal doesn’t go any farther than Congress has already gone in injecting the government into private lending markets in order to undo their disastrous interventions over the past decade.  It does offer a management strategy for the portfolios that Treasury will buy with that now-existing authority.  The plan follows a fairly straightforward private-sector strategy in an attempt to keep as many people in their homes as possible. Without some sort of renegotiation on these loans, we’ll start seeing massive foreclosures and the rapid deflation of home values everywhere — which is what McCain said he wanted to prevent.

I still don’t know enough details to have a firm opinion about whether this is a good idea or a bad one, but the more I find out the better I like it.  If we are stuck with the bailout — and we are — this seems to be a responsible and possibly effective approach.

I completely retract what I started this piece with, namely, this merely being a ploy by the McCain camp.  It appears to have been thought out in detail and is not just a gimmick.  In that respect I did McCain and his advisers a disservice.

However, I stand by my evaluation of the benefits of pushing this plan with regard to the campaign itself, ignoring the merits of the plan itself.  I don’t think anyone that supported the bailout can have a reasonable objection to this, and it puts McCain in the leadership position on the economy again.

Now that McCain has shown a willingness to bring up Ayers and Obama’s Fannie/Freddie connections, there has been talk that he needs to positively define himself and not just negatively define Obama.  I think this is the answer to those concerns, and the combination of the continued attacks and a push to raise awareness of this plan could be a deadly one-two punch for which Obama has no effective answer.