Saturday, September 20, 2008

McCain Wants to Spread the Underwater Pain

Presidential hopeful John McCain picked a terrible time to propose emulating America's financial innovation under the Bush administration. As trillions in assets disappear by the day, McCain reinforced his call for private Social Security accounts. Part of this week's bailout of Fannie Mae, Freddie Mac and AIG related to retirement concerns.

Consider this assessment from last November, after pension funds loaded up on mortgage backed securities and collateralized debt obligations.

Thomas Martin, president of the Homeowners Consumer Center, a Washington, D.C.-based consumer advocacy group, estimates that pension funds will take a $1 trillion hit from the devalued securities. 'This is going to be scary,' he said in an interview with Thomson Financial News. 'We think the Fed will have to step in and bail out at least the pension funds.'

The lawsuits against money managers have been rolling in from angry investors and employees who have incurred losses because of lenders' risky involvement in the subprime market. Countrywide Financial, Citigroup 's 401(k) plan, State Street Corp., Bear Stearns, and AIG are among those who have been sued.

Republican hopeful John McCain wants Americans to be able to invest a portion of their Social Security retirement in innovative investment instruments, the anchor threatening to drown the American economy. But that's not enough for the deregulator.

McCain wants private health insurance to be as innovative as our financial sector. I can only assume Republicans want Social Security and health insurance to drown in Grover Norquist's bathtub. In addressing the crisis, Congress plans to raise the federal debt limit by $1.5 trillion to $11.3 trillion dollars. Glug, glug...

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