In a report on congressional action in the wake of the subprime mortgage crisis, National Public Radio's Brian Naylor uncritically reported McCain's statement that it's not the government's job to "bail out and reward those who act irresponsibly, whether they are big banks or small borrowers." Naylor did not note that McCain reportedly agreed with the Federal Reserve's decision to extend a $30 billion line of credit to facilitate the acquisition of Bear Stearns by JP Morgan Chase.
On the March 28 edition of National Public Radio's Morning Edition, reporting on congressional action in the wake of the subprime mortgage crisis and the near bankruptcy of global investment bank Bear Stearns, correspondent Brian Naylor asserted that Sen. John McCain is taking a 'go slow' approach and uncritically reported, "McCain said it was not the government's job to, as he put it, 'bail out and reward those who act irresponsibly, whether they are big banks or small borrowers.' " But Naylor did not note that McCain reportedly agreed with the Federal Reserve's decision to extend a $30 billion line of credit to facilitate the acquisition of Bear Stearns by JP Morgan Chase. Indeed, as Media Matters for America noted, on March 26, the Associated Press reported that the Federal Reserve "essentially bailed out the investment house Bear Stearns," adding that McCain disagreed with the suggestion that the Federal Reserve "went too far in helping" the bank. The article quoted him saying: "It's a close call, but I don't think so."
From the March 28 edition of NPR's Morning Edition:
RENEE MONTAGNE (host): Congress has one thing on its mind these days -- the economy and how to deal with the crisis stretching from Wall Street to Main Street. Lawmakers have come up with several dozen bills. They're considering everything from regulating Wall Street's investment banks, after the collapse of Bear Stearns, to allowing judges to rewrite mortgages. NPR's Brian Naylor has more.
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NAYLOR: It's the subprime mortgage crisis that ignited the brushfire that has now engulfed the U.S. economy, and it is there where Congress will first turn. The Senate is expected to take up a package of housing cures that include a controversial proposal to allow bankruptcy judges to change the terms of mortgages for homeowners facing foreclosure. The provision is strongly opposed by the banking industry and the Bush administration, and it lost a procedural vote when it came to the Senate floor late last month. But Democratic Senator Richard Durbin of Illinois says that was then:
DURBIN: Since that last vote, we've seen a lot of changes. We saw what happened to Bear Stearns and how this administration raced to their rescue. Now, whether you agree with that or not, it seems that there should be a focus on trying to help those families about to lose their homes as much as there was on trying to help this major Wall Street firm.
NAYLOR: Bear Stearns is the big investment bank that faced bankruptcy this month before the Federal Reserve Board arranged for another big bank, JP Morgan, to ride to its rescue. Democrats have been making the fairness argument, a key rallying point behind their proposals to help middle income homeowners who face losing their homes. Another proposal on the table involves the Federal Housing Administration, or FHA. Democrats led by Barney Frank in the House and Christopher Dodd in the Senate have proposed allowing the FHA to provide up to $300 billion to help refinance troubled mortgages. Dodd told NPR that each foreclosure has a ripple effect.
DODD: It isn't just the foreclosed property that causes the problem. There's the next door neighbor, the community that also suffers. For every one foreclosure in a square block, one-eighth square mile, there is a decline in value almost immediately of 1 percent of every other home in that square block. There's an increase of crime of 2 percent almost immediately in that area.
NAYLOR: An indication of the severity of the housing crisis was evident this week as all three presidential candidates addressed the issue. Yesterday, Democrat Barack Obama outlined his support of the Frank-Dodd bill:
OBAMA [audio clip]: It offers a responsible and fair way to help bring an end to the foreclosure crisis. It asks both sides to sacrifice, while preventing a long term collapse that could have enormous ramifications for the most responsible lenders and borrowers, as well as the American people as a whole.
NAYLOR: Obama has proposed an additional $30 billion economic stimulus plan, as has his rival, New York Democrat Hillary Clinton:
CLINTON: This money could be used to purchase foreclosed or distressed properties, which cities and states could then resell to low-income families or convert into affordable rental housing. It could be used to help neighborhoods with high foreclosure rates, avoid increased crime and blight, by investing in everything from police and fire support, to graffiti removal and better lighting.
Republican John McCain, however, is taking a "go slow" approach. McCain said it was not the government's job to, as he put it, "bail out and reward those who act irresponsibly, whether they are big banks or small borrowers."
McCAIN: Any assistance must be temporary and must not reward people who are irresponsible at the expense of those who weren't. In this crisis, as in all I may face in the future, I will not allow dogma to override common sense.
NAYLOR: The Bush administration is taking a similarly cautious approach when it comes to a housing rescue. Treasury Secretary Henry Paulson indicated this week that he does favor some increased federal oversight of investment banks, but he cautioned lawmakers against moving too quickly on regulations or housing, saying some of the proposals before Congress could cause more harm then good.