Our guest blogger is Ed Paisley, Vice President of Editorial at the Center for American Progress Action Fund.

The Bush administration this weekend had to rescue home mortgage giants Fannie Mae and Freddie Mac after eight years of regulatory mismanagement of our home mortgage financial marketplace by administration appointees. Putting Fannie and Freddie into federal conservatorship is clearly the right step to take, yet Sen. John McCain (R-AZ) and his economic advisors embrace long-term changes to these two government-sponsored entities that are bad for the long-term interests of American homeowners and prospective homeowners.

For decades now, these two GSEs played an important stabilizing role in the home mortgage market, maintaining access to mortgage credit during periods of private market contraction and establishing good lending standards through “conforming” loans.” Under the Bush administration, however, financial regulators willfully took their eyes off unscrupulous mortgage originators, allowing the marketplace for home mortgages to grow in size and complexity without ever trying to match this growth with prudent regulation to protect the safety and soundness of the financial system, let alone consumers.

Now, Sen. McCain and his economic advisors are calling for more deregulation, not better regulation, in the wake of the takeover of Fannie and Freddie.

Imagine if the policy answer to the savings-and-loan crisis of the 1980s had been a $160 billion taxpayer rescue of the industry accompanied by further deregulation of the very financial institutions that got us into the problem in the first place. That, in essence, is what McCain economic policy advisor Douglas Holtz-Eakin is calling for when he demands that Fannie and Freddie be phased out of existence as GSEs so that the financial market players who brought us the subprime mortgage crisis can takeover the entire industry. Read more

Today, the Wall Street Journal notes that “corporate executives, who once discounted John McCain’s (R-AZ) campaign, have been key to the Republican presidential nominee’s rebound on the fund-raising circuit.” In June and July, McCain “raised $22.3 million from the top 25 industries,” particularly “executives at oil and gas, real-estate, securities and investment and insurance companies.”

Earlier in the year, McCain “struggled to secure donations from executives,” but that has turned around now that he’s elucidated his economic platform, which would benefit corporations and the wealthiest Americans, while doing nothing for the middle class.

However, there are two facets of McCain’s plan in particular that can explain his new-found favor with the executive class: his proposed corporate tax cut and his ticket’s embrace of the conservative call to “drill, baby, drill.”

- Corporate Tax Cut: A major aspect of McCain’s economic plan – Jobs for America – is a cut in the corporate tax rate from 35% to 25%. McCain claims this will help businesses grow and create jobs, but as the Wonk Room has previously noted, a cut in the corporate rate would do nothing for job creation. The Congressional Budget Office has said that cutting the corporate rate “does not create an incentive for [corporations] to spend more on labor” and “is not a particularly cost-effective method of stimulating business spending.” Meanwhile, the U.S. already brings in below average corporate tax revenue due to “the tax loopholes, shelters, and giveaways that minimize, or completely eliminate corporate taxes.” Simply put, the cut means that corporations will pay less taxes, with no incentive to pass those savings on to anyone else.

- Drill, Drill, Drill: During the Republican National Convention last week in St. Paul, the crowd broke into chants of “drill, baby, drill.” McCain, in what he called “a capitulation to the oil companies,” has already flipped on lifting the federal moratorium on offshore drilling, which he once opposed. And while McCain has not come out in favor of drilling for oil in the Arctic National Wildlife Refuge, his running mate, Gov. Sarah Palin (R-AK), favors drilling in ANWR, and said she would “beg to disagree with any candidate who would say we can’t drill our way out of our problem.” All this, despite the Energy Information Administration’s assessment that drilling “would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.”

To date, the oil and gas industries have donated $1,531,269 to the McCain campaign, according to the Center for Responsive Politics. Most of this money came in after he advocated lifting the offshore drilling ban. With friends like these, McCain is willing to forsake a middle-class tax cut in favor of “drill, drill, drill.”