McCain’s latest erratic stunt is going to go over with his base like a lead balloon. These are the people who blame 100% (or a substantial majority) of this crisis on home buyers that couldn’t afford their loans. For the base, Wall Street was almost dragged into this so expect him to lose a few more allies out there.

Senator McCain announced a plan last night for the Treasury to directly purchase home loans from borrowers and servicers at full price and then give the borrowers cheaper fixed-rate FHA backed loans at lower principal values; in other words, give people their overpriced homes for free.

Don’t get me wrong, I realize we are in desperate times, and so we deserve nothing less than desperate measures. This plan is only for borrowers who are underwater on their loans (home is worth less than the loan) and who are delinquent or approaching delinquency. For those of us who acted responsibly in our borrowing and pay our debts responsibly, we get bupkiss—no wait, we get the honor of paying for the bailout with our tax dollars.

Then there’s the argument that if you lower the balances of all these loans to match property values, you’re just preventing foreclosures, instead of establishing a true price bottom for homes. That would delay a housing recovery by taking vast numbers of properties out of the sales market. You’ll note that pending home sales surged in the West in August, up 18 percent, thanks to a 24 percent drop in home prices (National Association of Realtors).

Now I’ll throw in one more of those moral danger issues: Not every homeowner is facing foreclosure, but most homeowners are facing lost equity. Why do you only help those who made really really poor financial choices? And on top of that, how do you stop people from deliberately going delinquent on their loans just to cash in on the bailouts?