Obama supports the Dodd Plan, Hillary supports a much more liberal plan (including a 30 billion dollar emergency fund), and McCain’s plan has been in the headlines recently.

McCain has been all over the news with his recent comments on the housing crisis, but what do they really mean for the economy? His plan does not seem as conservative as you would expect from the GOP candidate, but when we examine it closely there is more leeway than it initially seems. Let’s take a look at some of his most quoted comments:

“I will not play election-year politics with the housing crisis.”

-Alright, this comment doesn’t tell us much about his ideas, expect that he won’t be very specific. He has also said that he “will not allow dogma to override common sense” so before we dive into his other comments, understand that he is purposely being vague about this so everything said here is more speculative than our other housing crisis articles.

“Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy.”

-Here it seems like he is going very (classically) liberal on us, but he doesn’t completely remove the option of a bail-out. In fact, he supports the Fed’s bail-out of Bear Stearns. He does seems to understand the dangerous effect that a Bear Stearns failure would have on the economy as a whole, and therefore we can assume that he has a better grasp on the economy than it seemed like initially.

“I have always been committed to the principle 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.”

-This is pretty straight forward, but his other comment seems to override this one. What we mean is that the failure of just about any big bank would endanger the entire economy, so we can probably expect bail-outs for large banks and lenders (regardless of how “irresponsible” they act) and nothing for the small borrowers.

“In our effort to help deserving homeowners, no assistance should be given to speculators. Any assistance for borrowers should be focused solely on homeowners, not people who bought houses for speculative purposes, to rent or as second homes.”

-Last comment. This is a really interesting comment because it seems like the most uncharacteristically liberal. What we can get here is that small-time businesses will be left out to dry while homeowners will receive subsidies, possibly helping the larger mortgage companies and banks.

To summarize, we can expect small companies to be hurt, while larger ones are most often bailed out. Banks and mortgage companies will probably receive a bit of a boost (or a least not be hurt as much) and the economy overall will probably be stable (if not strong) under McCain.

~Invest this!