McCain's Policy Chief Trashes Paulson's Recapitalization Proposal

In an interview with National Public Radio's "On Point" this morning, John McCain's chief policy adviser, Douglas Holtz-Eakin, blasted Treasury Secretary Henry Paulson's announcement that the government may directly inject money into banks, saying that the Congressional debate never included "public discussion about putting taxpayer money into financial firms as equity investments."

"I think that's not the way the an administration should conduct itself," he said. "That's at odds with the notion that we have an informed democracy with all of its leadership agreeing on the policies."

Host Tom Ashbrook pointed out that a "Republican administration" was behind the proposal, to which Holtz-Eakin responded that it mattered not.

"It's not the way things should be done in the United States and that's very disturbing if that's the route they intend to take," he said.

Obama adviser Austan Goolsbee told Ashbrook that Holtz-Eakin's comments surprised him because the authority to nationalize banks was granted to the administration in the bailout bill.

"It is, I might point out, almost exactly what the government did with AIG, they gave them money and took equity, and John McCain supported that action," he said.

During Tuesday night's debate, McCain proposed to use the government's authority to buy mortgages directly from banks at their market value and renegotiate their terms with homeowners. His campaign has had trouble selling the proposal to conservatives, the media seems to be ignoring it, and McCain hasn't put any ad money behind it.