I subscribe to John McCain’s, Barack Obama’s, and Bob Barr’s supporter news letters (i.e. propaganda).
Today I received an e-mail regarding the bailout from John McCain. Here is an excerpt:
If we do nothing, many businesses may fail. Sonic Corporation, a drive-in restaurant chain based in Oklahoma, learned on Thursday that one of its lenders, GE Capital, had stopped extending new loans to the chain’s franchisees. That will block plans to rebuild restaurants, add equipment and open new locations.
When financing dries up, students can’t get loans. In Wisconsin, more than 100 Milwaukee Area Technical College students couldn’t access private loans to fund their education. Fortunately the school was able to come up with emergency loans, but this temporary arrangement cannot continue. Markets need to work so that people can get financial help and students can be educated.
What pathetic fear mongering! And baseless too! Take the first example, Sonic. Supposing that Sonic does actually want to expand at this point in time (seems like a wise time to put expansion plans on hold), all McCain has said is that ONE of it’s lenders has stopped extending loans. How is that bad? Perhaps GE is overextended and wants to ensure it is adequately capitalized. That is a good thing. Lack of adequate capitalization is what got us into this mess in the first place.
Now take the second example. First of all, John McCain doesn’t give a rats ass about this issue – he’s just using it because he knows the people who may vote for him do care. The student loan industry has been a mess for at least 6 months now. Funny that the issue should pop up now, since McCain needs support of the common man to bailout Wall Street. McCain also fails to mention that tuitions, which have risen much faster than inflation and wages over the last 8 years, will fall as a result of higher borrowing costs – otherwise the school will not have enough students who can afford to attend.