From Deseret News archives:

Hopefuls speak out on crisis

Published: Sunday, Sept. 7, 2008 12:20 a.m. MDT
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TERRE HAUTE, Ind. — Democratic presidential nominee Barack Obama said Saturday that any government takeover of troubled mortgage giants Fannie Mae and Freddie Mac must put the interests of taxpayers and homeowners first. His opponent, GOP nominee John McCain, said it was essential to restructure the mortgage giants.

"Any action we take must be focused not on the whims of lobbyists and special interests worried about their bonuses and hourly fees, but on whether it will strengthen our economy and help struggling homeowners," Obama told reporters after a campaign stop in Indiana.

He stopped short of making detailed proposals, saying "we need to carefully address" the possible impact on community and regional banks. "But we must not allow government intervention to protect investors and speculators who relied on the government to reap massive profits," he said.

In Colorado, McCain said, "today we're looking at a federal bailout of our home loan agencies." His running mate, Alaska Gov. Sarah Palin, said a "McCain-Palin administration will make them smaller and smarter and more effective for homeowners who need them." She did not elaborate.

Later, at a rally in Albuquerque, McCain added: "We need to keep people in their homes, but we can't allow this to turn into a bailout of Wall Street speculators."

In an interview for CBS "Face The Nation" to be aired today, McCain said the mortgage giants need to be restructured.

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"It's hard, it's tough, but it's also the classic example of why we need change in Washington," he said. "It's an example of cronyism, special interest, lobbyists, a quasi-governmental organization where the executives were making hundreds of — some billion dollars a year while things were going downhill, going to hell in a hand-basket. This is the kind of cronyism, corruption, that's made people so justifiably angry."

Obama, talking of possible changes to Freddie Mac and Fannie Mae, said: "We can't have a situation in which, during boom times, management and investors are soaking up huge profits, taking extraordinary risks, and thinking to themselves that if they get into trouble because of these risky investments that somehow the taxpayers are going to be there to bail them out."

Obama restated his call for a second stimulus package this year.

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