What happened
All three presidential contenders outlined their economic policies this week, with Democrats Hillary Clinton and Barack Obama urging a bigger role for the federal government in resolving the housing crisis and Republican John McCain saying that would amount to an unwise bailout. (BusinessWeek.com)

What the commentators said
Identifying the problem is “the first step toward solving it,” said National Review in an editorial, and “McCain demonstrated a better understanding of the housing crisis than either of his potential Democratic opponents.” The Democrats assigned “too much blame to ‘predatory lending’ while absolving irresponsible borrowers who took out loans they could not afford,” while McCain expressed a “broad and accurate view” of the many causes of the crisis, and wisely said he’d consider any fix that doesn’t “reward irresponsible behavior.”

McCain sounds like he just woke up from “a long nap,” said The Dallas Morning News in an editorial (free registration). His laissez faire approach is “steps behind” what Washington is already doing. Clinton’s approach is “also unsettling,” as her 90-day moratorium on foreclosures and five-year freeze on subprime adjustable-rate mortgages would cause a “deeper freeze of the housing market.” Obama’s focus on tighter regulation and helping subprime borrowers convert to fixed, 30-year loans comes closest to “a reasonable market-based, middle-ground solution to the immediate crisis.”

“The cascading effects of the sub-prime crisis have pushed this country to or even past the brink of a recession,” said the Los Angeles Times in an editorial (free registration). Clinton and Obama may have gone too far with their “interventionist” approaches. But McCain owes voters more than fuzzy generalities to go on. He should answer Clinton and Obama with a detailed plan of his own “for remedying the current credit malaise and let the campaign trail be the proving ground.”

The candidates’ positions on the economy are indeed telling, said Paul Krugman in The New York Times (free registration). McCain is supposed to be a “maverick,” yet his plan offers not “straight talk” and “originality,” but pandering to “right-wing ideologues.” Obama is supposed to be a “transformational figure,” yet on the economy he is “cautious and relatively orthodox.” And Clinton—who, according to critics on the right and left, “tortures puppies and eats babies”—offers policies that are “surprisingly bold and progressive.”

Their “philosophies might seem starkly different,” said Emund L. Andrews, also in The New York Times (free registration), but “in reality” the candidates all agree that “major government involvement is needed to rescue the financial and housing markets.” The Democrats think Washington should rescue individuals, so both Clinton and Obama “proposed broad government rescue plans for homeowners that would each cost about $30 billion.” Republicans call that a “bailout,” but their push to rescue the markets amounts to a massive intervention as well.