Confusion is bad enough, as we're familiar with that routine from McCain almost every day, but being illegal is even worse. Each day he throws something out there more bizarre than yesterday, hoping that something will stick. This is a campaign that is in turmoil without any clear direction. His newest plan to buy up bad mortgages has infuriated the right (and beyond) and runs contrary to previous statements about bailing out buyers who were irresponsible. More from Marc Ambinder:
They point me to Section 101e of the law, which requires the Secretary of the Treasury to "take such steps as may be necessary to prevent unjust enrichment of financial institutions participating in a program established under this section"
Here's the key part...
... "including by preventing the sale of a troubled asset to the Secretary at a higher price than what the seller paid to purchase the asset." Any loan that is not held by the originator, and the vast majority loans are not, would fall under this provision."
So -- if the bank gave you a 100 dollar loan.... and sold it for 80 bucks last year, and it's trading at 50 dollars now, the law prohibits the government from buying it at $100 -- face value -- because that would "unjustly enrich" the entity which purchased the mortgage from the bank.
Under TARP, the government wouldn't be able to buy it for more than $80... which isn't face value.
So if they buy it at face value, wouldn't they violate the law?
McCain himself, one week ago, praised TARP's taxpayer protection planks and his campaign has claimed credit for pressuring Congress to add them in.
The McCain campaign did not respond to e-mails seeking comment.
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