Everyone's been scratching their heads, wondering whether McCain effectively conceded the election on Tuesday: where was the game changer? everyone is saying. I think it was there and we just haven't realized it yet: he's hiding the ball.
McCain is trying to buy millions of votes with his economic proposal: Democrats need to be ready for this and understand the potential upside for him of this long shot.
So far, because the McCain campaign communicates so badly, no one has paid attention to the plan except economists: rightly, they're scoffing. But voters may have a different opinion once they understand what's going on in this proposal.
If they're selfish. Which they are.
UPDATE: Terrific response from Obama: he was way ahead on this!!!
Obama was on it. Hooray for a President better at his job than we are, and way better than the scoffers in comments!
The only policy proposal that I think McCain got any traction from was the gas-tax holiday: a stupid macroeconomic idea that sounded good to low-information voters.
Well, how does this McCain proposal grab you?
SCENE: a kitchen table
Bank: Where's your mortgage payment?
Selfish Voter: Um.
Bank: ...
McCain: (bursting through screen door) I'll handle this. (to Bank) How much does he owe you?
Bank: X hundred thousand and change.
McCain: Here you go, a check from the US Treasury for the full amount.
Bank: (leaves)
McCain: (to Selfish Voter) So what did you pay for that house?
Selfish Voter: X hundred thousand. Now it's only worth X-Y. Man, I'm such an idiot! Thanks for your help. Do I have to move out now?
McCain: Tell me what. You just pay me back X-Y and we'll call it even.
Selfish Voter: Wow! Really?
McCain: Now you see why you voted for me?
Selfish Voter: Wow, thanks, John McCain! How did you ever talk Congress into paying Y times ten million mortgages, by the way? That's gotta be like $300 billion completely down the tubes.
McCain: Sssshhhh. This is a campaign-promise fantasy, don't spoil it....
McCain has seen an opportunity in the bandying-about of this $700 billion figure. He sees that most Americans think that that money is about to be SPENT on Wall Street. (In fact, it's being 'committed'/loaned/invested and will flow back gradually, at some number of quarters on the dollar. Here's to the Swedish plan where we get actual equity!) So he's making a play for Main Street: instead of just giving all that money to Wall Street, he's saying, why I don't I hand it over to Main Street? Cuz that's where the votes are!
This is, as many economists have noted, a cockamamie scheme. It's effectively calling Do-Over! on the housing bubble, and letting everyone who lost money in real estate (especially the banks way over their heads with the prospect of foreclosing everywhere) get it all back at the taxpayers' expense.
But the point isn't whether this is good policy. The point is that with these kinds of numbers to throw around John McCain COULD ACTUALLY BUY A LOT OF VOTES. Think about it: someone says to you, a low-information selfish voter, that if you vote a certain way a populist former POW will buy out your bad mortgage and resell you your own house much much cheaper.
Selfish affluent voters have always been the heart of the Republican base. McCain is now going for selfish poorer voters -- and if we're not ready he could start to get them.
Cockamamie scheme. Long-shot pander for votes. Cynical use of the Treasury for political goals. Country last, getting elected first. Sound familiar?
McCain has lost so much at the craps table that he's got to go to roulette to try to win back what he's lost. It's an eighty-to-one shot, but he's decided what the hell? We need to be prepared for the fact that he's getting eighty-to-one odds, and only needs to hit the jackpot once with a cynical ploy in order to be back in the race.
This ploy COULD explode into the media and the public consciousness if the McCain campaign gets organized. Be ready!
Not sure what the best answer is but will update this diary tomorrow.
See DeLong for more on the proposal: it is as I've described, and I'm not even kidding. Incredible!
Jim vdH
Clarification from comments: this is merely meant to be a heads-up on the substance of McCain's suggestion. Remember he LIKES TO GAMBLE. He is not giving up. This was meant to be his big Tuesday surprise, and it's got a long fuse. It could start to hit to the consciousness in the same way the gas-tax holiday (also a very very stupid idea) did. And politically it's not totally stupid -- just mostly stupid. Like betting on a single number in roulette after a bad night at the craps tables.
This isn't a 'concern diary' in the sense of 'concern troll': it's a suggestion that we might be underestimating the potential impact of this plan, not on the policy debate but on voters. It's a huge giveaway in cash from the Treasury, and since the bailout is out there as a 'huge giveaway' it seems like McCain is correcting the Wall Street/Main Street balance. Since people don't understand the bailout he could get traction by selling this as a bailout for homeowners.