11/09/2008 05:12 am ET Updated Dec 06, 2017

26 Days Out: Pay No Attention to the Embarrassingly Horrible Economic Plan Behind the Curtain

Jesse Lee is the Online Rapid Response Manager for the DNC, this is a daily update on the day's messaging.

In McCain's latest attempt to appear competent or knowledgeable on the economy, during Tuesday's debate he announced his latest big, bold, erratic plan. He and his campaign spent the next day boasting about it. Then something happened -- everybody looked at it and realized it was awful, as an Obama campaign memo and ad today explain:

Your favorite and mine, Brad DeLong gives arguably the definitive take-down:

Brad DeLong, New York Daily News: "John McCain's new foreclosure plan is a giveaway to the banks... Put this in perspective. Under the just-passed $700 billion bailout bill, the Federal Housing Administration is already charged with guaranteeing and refinancing up to $300 billion of mortgages. But there is a big difference between that and what McCain proposes. What we already have requires that the bank get only 85% of the face value back. Under the deal McCain is offering, the banks could get back 100%. Why do they deserve it? ...Out of the blue, McCain has just proposed a large, no-strings-attached gift of taxpayer cash to bank executives who failed at their business of risk management, and to bank shareholders who failed at their business of hiring executives. That's simply corrupt."

Krugman: "John McCain's bailout plan manages to take everything that's wrong with the Paulson plan and make it worse."

And when your plan is too beneficial to the wealthy, irresponsible and/or crooked CEOs for even the Wall Street Journal editorial board and the National Review, you're reaching into new territory.

Wall Street Journal editorial: "The 'Resurgence' is different, the McCain campaign says, because it is more 'aggressive.' By this, it means that this one doesn't require lenders or investors to share the pain. Instead, the government will buy the mortgages for their full amount and write a new mortgage that reflects the current (lower) value of the home. The taxpayer -- not the lender or homeowner -- absorbs the losses on loans that exceed the value of the home."

National Review: "McCain's plan would also be a gift to lenders who abandoned any sense of prudence during the boom years. Under the Frank-Dodd bill, lenders must agree to 'take a haircut' -- slang for writing down the value of a mortgage -- in order to qualify for federal insurance on a distressed mortgage. The lender bears an initial loss but is protected if the borrower eventually defaults. McCain would transfer that initial loss to the taxpayers. Under his plan, the government would buy mortgage loans at face value and then reduce the principal and interest on these loans to accommodate distressed borrowers. Taxpayers would take so many haircuts we would all look like Britney Spears after a three-day bender."

What to do? Look over there, it's a stupid smear web ad! Let's talk about something else! Naturally Fox News agrees, like McCain economics has never been their big thing either. Obama spokesman Bill Burton patiently explained the situation to them this morning, starting off by asking, "Hey, I'm guessing you guys don't want to talk about the economy, huh?"

I never thought I'd say this, but perhaps John McCain should take David Frum's advice.

David Frum: "We conservatives are sending a powerful, inadvertent message with this negative campaign against Barack Obama's associations and former associations: that we lack a positive agenda of our own and that we don't care about the economic issues that are worrying American voters."

Wouldn't want anybody getting that idea.