Tuesday, September 30, 2008

The speech that brought the GOP to its knees

For the record, here is the withering speech from the Speaker that brought the Republicans in the House to their knees and compelled them to vote against the Nation's best interest.

Warning! It's rough.

In stark contrast,....

Biden works the diner answering questions about the economy.
One day after Sarah Palin complained of “gotcha journalism” based on questions she faced during a retail stop in Philadelphia, Biden answered some voters’ concerns about the state of the economy.

“It’s real trouble,” Biden told a worker from a local auto parts company who asked about “economic stuff.”

“What people are going to do if they don’t get this done, people are going to lose their jobs, their pensions," he said.

The Delaware senator said that if the bailout package works “the right way,” it would all be paid back. “It’s not a seven hundred dollar, seven hundred billion dollar check,” he said, comparing the original plan to the past savings and loan bailout. “We bought the bad loans, when the market came back, we sold it and made a profit.”
See, it's not so hard.

The next Palin scandal

Gov Palin now has until Monday, Oct 6 to file her financial disclosure. Not sure if this will include tax returns but it should.

My guess is that the Palin's did not claim as income the $17k plus in travel reimbursements the billed the state of Alaska to sleep at their family home.

Palin's debate

I'm convinced that the bar has been lowered so much, that Palin's mere recitations of talking points will be hailed by the talking heads as a 'victory'.

The first and third Presidential debates allow for two minute answers with 5 minutes of discussion for each question.

But the VP debate has shorted answers to 90 seconds with discussion of each question limited to two minutes. This is much more sound-bite friendly.

So I think when it's all said and done, it will be deemed a success.

McCain denies he was ever in Kansas City

TPM points to a new McCain interview with ABC News' Ron Claiborne, wherein McCain denies that he ever blamed Obama and the Dems for the bailout bills failure:

RC: Senator, you said that now is not the time to fix blame, but to fix the problem, but you said almost in the same breath that the democrats, including Senator Obama are responsible for the, the rescue plan falling apart.

JM: No, actually I said yesterday very clearly right before the media [that] it's time not to fix the blame, but to fix the problem. We need to sit down together republican and democrat. We don't have inflame the situation today. History will judge who was to blame, and who wasn't...

Here is McCain blaming Obama and the Democrats yesterday for the bill's failure.



McCain has also launched an ad explicitly blaming Obama and the Dems for the bill's failure. It is against Ward Report policy to post such ads, so you can find it on your own.

The House bailout vote

Leaders from both parties supported the bill but 66% of House
Republicans voted "no".

Pelosi wanted 100 GOP votes which is nearly half the cacus.

How many Dems voted "no" late when it was clear the GOP was going
south? I bet more than 12.

Sent from my iPhone

Suspend again?

TPM says McCain is considering it per his appearance on Fox this morning.

Will a second "suspension" be the key to no Palin debate?

My guess is that they are polling this right now.

I'm traveling today so posting will be light.

Sent from my iPhone

Monday, September 29, 2008

The swing districts did in the bill

So says Nate Silver.
This was predictable, I suppose, but it's remarkable to see how strong a relationship there is between today's failed vote on the bailout and the competitive nature of different House races.

Among 38 incumbent congressmen in races rated as "toss-up" or "lean" by Swing State Project, just 8 voted for the bailout as opposed to 30 against: a batting average of .211.

By comparison, the vote among congressmen who don't have as much to worry about was essentially even: 197 for, 198 against.

A complete breakdown follows below the fold.
Everyone hates the idea of spending $700B for a bailout but those of us who support the bill are scarred to death of a depression. I'm sick about the money because of everything I hoped we could do with a modern administration that will likely be beyond reach.

But I don't think we supporters really appreciate how unpopular this bill is with middle class and working class America. They are just offended by it and rightly so, and members of Congress are getting an earful from everyone calling.

I live in Missouri's First represented by Congressman Lacy Clay. There is not a safer seat in Congress and he unapologetically voted 'no' based upon all the negative calls he has received.

Conservatives seeking more concessions?

Michael Scherer reports on some possible carrots suggested by Norquist's group to bring over more votes.

I thought they would be outrageous and gratuitous, but are not so bad and could probably be fine tuned in negotiations.

"They're stacking the deck against her"

It is interesting to see the McCain camp roll out the Palin as victim strategy already.

Pfortenhauer: "The moderator will have some questions to answer herself" if she asks tough foreign policy questions of Palin.

Sunday, September 28, 2008

The nonsense of this being a minority mortgage problem

Stephen Bainbridge is embarrassed to be a conservative,....again.

Bainbridge knocks down the nonsense making the rounds in conservative circles that this is what happens when we let brown people have mortgages.
Put simply, the freezing up of the credit markets doesn’t have anything to do with either affirmative action or illegal immigration, and people who believe it does are on a par with the conspiracy theorists who think fluoridation is a Chicom plot.

When you look at the data, it’s true that minorities are slightly over-represented in the sub-prime mortgage market. Yet, whites (non-minorities) received 72.5% of subprime mortgages. Blacks got 16.2% of subprime mortgages, which isn’t all that different from the 12.4% of the general population that blacks comprise. The Hispanics about whom Malkin is so hysterical got only 6.2% of subprime mortgages, significantly less than their 14.8% of the general population. But you don’t find an analysis of that data at blogs like those of Malkin or Krikorian.

Palin speaks out in Philly (Updated below)

Sarah Palin won't surrender to the terrorist any longer! In Philly yesterday Palin spoke out,
Sarah Palin told a customer at a Philadelphia restaurant on Saturday that the United States should “absolutely” launch cross-border attacks from Afghanistan into Pakistan in the event that it becomes necessary to “stop the terrorists from coming any further in,” a comment similar to the one John McCain condemned Barack Obama for making during last night’s presidential debate.
Sen McCain was ready to pounce,
McCain fired back hard, arguing that newly elected Pakistani president Asif Ali Zardari has had his “hands full” and suggesting that Obama’s Palin's tough talk was naïve.

“You don’t say that out loud,” McCain said. “If you have to do things, you have to do things, and you work with the Pakistani government.”
Whereupon an aide whispered in McCain's ear and he concluded, "nevermind".

Update: McCain retracts Palin's agreement with Obama,
WASHINGTON (CNN)— Sen. John McCain retracted Sarah Palin's stance on Pakistan Sunday morning, after the Alaska governor appeared to back Sen. Barack Obama's support for unilateral strikes inside Pakistan against terrorists

"She would not…she understands and has stated repeatedly that we're not going to do anything except in America's national security interest," McCain told ABC's George Stephanopoulos of Palin. "In all due respect, people going around and… sticking a microphone while conversations are being held, and then all of a sudden that's—that's a person's position… This is a free country, but I don't think most Americans think that that's a definitive policy statement made by Governor Palin."
If the press wants to know what Palin thinks about anything they need to ask John, and not her. She will have an opinion when he gives her one. Everyone got that?

Zakaria: Utterly unqualified

Fareed Zakaria has been watching the Palin roll-out and interviews and he's concerned.

After recapping some of Palin's most "vapid emptying out of every catchphrase" about economics and Russian proximity to Alaska Zakaria writes,
Can we now admit the obvious? Sarah Palin is utterly unqualified to be vice president. She is a feisty, charismatic politician who has done some good things in Alaska. But she has never spent a day thinking about any important national or international issue, and this is a hell of a time to start. The next administration is going to face a set of challenges unlike any in recent memory....

And the American government is stretched to the limit. Between the Bush tax cuts, homeland-security needs, Iraq, Afghanistan and the bailout, the budget is looking bleak. Plus, within a few years, the retirement of the baby boomers begins with its massive and rising costs (in the trillions).

Obviously these are very serious challenges and constraints. In these times, for John McCain to have chosen this person to be his running mate is fundamentally irresponsible. McCain says that he always puts country first. In this important case, it is simply not true.
The McCain campaign has gone 'all in' on Palin and she's not going anywhere. The bar will be so low on Thursday night that anything short of her exiting the stage in tears will be deemed a success. The vapid 'dumb like us' base that also adored Gdub loves her as much as they hate McCain. The base would never accept her departure no matter how much she and McCain insisted it was her choice. Add to this the boost she has given to fundraising.

In short, McCain has made his bed and will have to live with it.

The Freddie Mac money trial to McCain

A lot has been written in the last week about McCain's ties to Freddy and Fanny after he and his campaign attempted to smear Obama with such ties.

Newsweek has been digging and it appears they may have something. McCain campaign manager Rick Davis is an partner and the Treasurer of lobbying firm Davis Manafort. At Davis' request, Freddie Mac began paying his firm $15k a month in 2006 for which neither Davis nor anyone at his firm did any work. The point of the payments was to buy access to McCain. These payment continued until last month.

The McCain campaign has attempted to deflect criticism by insisting that Davis has received no money from the firm since 2006, but this story has slowly unraveled.

Newsweek: A Freddie Mac Money Trail Catches Up With McCain.

Not so much "fantastic" as a shocking new low

Perhaps Murdoch's Times of London is no better than our National Enquirer and we should be skeptical of anything we read therein, because if true this would be a new low in modern American politics.
In an election campaign notable for its surprises, Sarah Palin, the Republican vice- presidential candidate, may be about to spring a new one — the wedding of her pregnant teenage daughter to her ice-hockey-playing fiancé before the November 4 election.

Inside John McCain’s campaign the expectation is growing that there will be a popularity boosting pre-election wedding in Alaska between Bristol Palin, 17, and Levi Johnston, 18, her schoolmate and father of her baby. “It would be fantastic,” said a McCain insider. “You would have every TV camera there. The entire country would be watching. It would shut down the race for a week.”
And I have to believe many conservatives would be mortified by such an exploitation.

Coates gets Palin exactly right

Ta-Nehisi Coates is really on to something with this post.

He crystallizes my thoughts perfectly. The McCain campaign had to know they were hanging Palin and her family out to dry. They just didn't care.
I've been thinking a lot about this nomination and rewatching the videos of Palin's interview. Honestly, it's all made me tremendously sad. There are lot of us lefties who are guffawing right now and are happy to see Palin seemingly stumbling drunkenly from occasional interview to occasional interview. I may have been one of them. But I'm out of that group now.

The Palin pick was the most crassest, most bigoted decision that I've seen in national electoral politics, in my--admittedly short--lifetime. There can be no doubt that they picked Palin strictly as a stick to drum up the victimhood narrative--small town, hunters, big families and most importantly, women.

Saturday, September 27, 2008

McCain's week and the blown deal

Subtitled "Drama at 1600"

Jonathan Weisman has an excellent account in the WaPo of the blow-up last week of the bailout deal. Weisman also sheds some light on possibly why McCain seemed so pissed at Obama at the debate.

As others have reported -- but not in this detail -- McCain blew up the deal worked out between Paulson, the Dems and Senate GOP. Boehner and some moderates in the House also seemed on board. However, conservative House members were never on board and they got McCain to hear them out in advance of the WH meeting and the GOP support for a bill unraveled. These House conservatives wanted a crazy insurance deal (crazy because it was way too late for that) and the scraping of the bailout everyone had spent the week hammering out.

Paulson got wind of the revolt and warned the Dems who somewhat turned the tables on McCain at the WH meeting provoking McCain to leave in a huff the meeting he had called to grandstand.

It's a good read.

"Failure of this plan risks another Great Depression. Really. "

Former Reagan economist and major league conservative Bruce Bartlett explains why we need the bailout NOW!

Frankly, he sounds a little freaked out which makes me a little freaked out.
Bottom line: We're closer to the precipice than Congress or most of the public understands. Our entire economic system really is at stake - and those treating the bailout plan as just another government spending program are seriously wrong.

Failure of this plan risks another Great Depression. Really.

You can see the fear in Treasury Secretary Henry Paulson's eyes and in those of Federal Reserve Chairman Ben Bernanke. But they dare not say how critical the situation is - lest it shake confidence and make matters worse.

This is not to say that the administration's plan is the best we could do. But now is not the time to come up with something better. There is no time. The program can be revised later, when the emergency is past. For now, everyone should hold their noses and vote "yes" on the bailout.

Palin heckled in Philly

Via Jake Tapper,
More than 400 McCain-Palin supporters were in the bar waiting for her; more than 300 McCain-Palin opponents were outside the bar, heckling her on as Philadelphians know how to do.

Sporting a red Phillies jacket, over a white t-shirt that read "Sarahcuda," Palin entered the bar to the protestors chanting "Obama! Obama!"

Some set off flares.

They held up signs: "McSame/Failin';" "Hey Hockey Mom -- keep the puck out of PA;" "Just like Bush in lipstick."

Cool Hand Luke

Paul Newman has died at the age of 83.

That really sucks.

The New York Times Obituary.

Zero

Obama's new ad goes up Monday.

Mark Halperin Report Card

Mark Halperin scores the debate narrowly for Obama with an overall A- to McCain's overall B-.

This debate was intended to be all about foreign policy which is supposed to be McCain area of real expertise, so I thought this comment from Halperin was interesting and I think accurate: "If he truly knows more about the world than Obama, he didn’t show it in this debate."

Foreign policy might be McCain's strength, but this format was not. The second presidential debate will be in a Town Hall meeting format which is really McCain's home turf. Furthering favoring McCain will be the moderator, Tom Brokaw who still has a man crush on McCain and has made clear that McCain can't be criticized by Democrats because McCain was a POW (video here). The danger for McCain in this format is that unlike every town hall he does, this audience will not be all Republicans who were hand picked by the local GOP bosses.

The next presidential debate will be Tuesday, October 7th at Belmont University in Nashville.

The VP debate will be next Friday Thursday, October 2nd at Washington University here in St. Louis. As I understand it, the VP format will be similar to last nights covering both foreign and domestic policy but will allow a 2 minute closing statement from each.

CNN Opinion Research Poll

Results:

Who Did the Best Job In the Debate?
Obama 51%
McCain 38%

Who Would Better Handle Economy?
Obama 58%
McCain 37%

Who Would Better Handle Iraq?
Obama 52%
McCain 47%

These kinds of polls are not especially scientific and according to CNN there was a "slight bias" in the sample favoring Democrats. What's important from my perspective is that Obama is on top such that we can say at worst, it was a tie.

Friday, September 26, 2008

Joe Biden spinning

Biden's on NBC spinning for Obama.

Where is Sarah Palin?

The first debate

I'm too much of a partisan to be able to look at these things objectively.

I thought both did very well and suspect Obama supporters will feel he won while McCain supporters felt McCain won.

Is it just me or does it appear that McCain really dislikes Obama? He seemed to scold him on several occasions.

Obama is so cool under pressure it's almost unnerving.

I do think Obama missed a chance to zing McCain by asking him directly where was the judgment he is so proud of when Pres Bush choose to invade Iraq with McCain being his biggest cheerleader.

Kathleen Parker calls on Palin to step down

Conservative columnist Kathleen Parker has heard enough and calls on Palin to step down for the good of the country.

Here's a taste,
I’ve been pulling for Palin, wishing her the best, hoping she will perform brilliantly. I’ve also noticed that I watch her interviews with the held breath of an anxious parent, my finger poised over the mute button in case it gets too painful. Unfortunately, it often does. My cringe reflex is exhausted.

Palin filibusters. She repeats words, filling space with deadwood. Cut the verbiage and there’s not much content there. Here’s but one example of many from her interview with Hannity: “Well, there is a danger in allowing some obsessive partisanship to get into the issue that we’re talking about today. And that’s something that John McCain, too, his track record, proving that he can work both sides of the aisle, he can surpass the partisanship that must be surpassed to deal with an issue like this.”

When Couric pointed to polls showing that the financial crisis had boosted Obama’s numbers, Palin blustered wordily: “I’m not looking at poll numbers. What I think Americans at the end of the day are going to be able to go back and look at track records and see who’s more apt to be talking about solutions and wishing for and hoping for solutions for some opportunity to change, and who’s actually done it?”

If BS were currency, Palin could bail out Wall Street herself.

Hewitt to House GOP: Pass the bailout

I'm surprised to see that Hugh Hewitt is telling the House GOP to take the deal.
Here's a shocker: No one likes the risks involved in Paulson 2.0 or the precedent of using so much public money to rescue reckless bankers, both private and semi-private..

But there is a very good chance that (1) it will actually make money for the Treasury and (2) without it the financial crisis will spread and the small businesses of America and the people who own and staff them will be deeply injured. These businesses are the backbone of the economy, and they are in danger. This isn't just a bailout of Wall Street; it is a breakwall for Main Street....

...you cannot stand by and watch people's business and savings hemorrhage and expect them to reward you for your purity of purpose and incompetence of execution.

McCain's next hail Mary?

Slate predicts McCain's next 10 Hail Mary campaign stunts,
1. Returns to Vietnam and jails himself.
2. Offers the post of "vice vice president" to Warren Buffett.
3. Challenges Obama to suspend campaign so they both can go and personally drill for oil offshore.
4. Learns to use computer.
5. Does bombing run over Taliban-controlled tribal areas of Pakistan.
6. Offers to forgo salary, sell one house.
7. Sex-change operation.
8. Suspends campaign until Nov. 4, offers to start being president right now.
9. Sells Alaska to Russia for $700 billion.
10. Pledges to serve only one term. OK, half a term.

GOP decides to turn bailout into campaign stunt

Any hopes for a bailout appear bleaker still.

Based upon the reporting of ABC's Jake Tapper, it would appear the GOP had decided to us this as a political bludgeon for Democrats.

The point missed here is that the 'plan' the Dems developed over the last week was what Treasury and the Fed wanted. What the GOP is talking about has been expressly rejected by Paulson and Bernanke.

If the Congressional Dems have any sense (big "if") they will tell the GOP to talk to Paulson and Bernanke and come to them when Treasury and the Fed have signed off.

They just wasted a week spinning their wheels and there's no point bidding against themselves, and playing into the GOP plan for "The McCain Act to Save America".

Palin -- Couric

Not exactly Nixon -- Frost.

When this is what your friends are saying, it's not good.

Rod Dreher of Beliefnet,
Couric's questions are straightforward and responsible. Palin is mediocre, again, regurgitating talking points mechanically, not thinking. Palin's just babbling. She makes George W. Bush sound like Cicero
Ouch.

And then this,
...she discusses why having Russia next to Alaska gives her relevant foreign policy experience. I am well and truly embarrassed for her. I think she's a good woman who might well be a great governor of Alaska. But good grief, just watch this train wreck,...

Any bailout must be bipartisan

Josh Green reviews recent history to explain why any bailout must be bipartisan.
"Henry Paulson’s dropping to one knee to woo Nancy Pelosi suggests, troublingly, that he doesn’t get Congress. The target of seduction should be the leader on the other side of the aisle."

Boehner out, Blunt in?

House Minority Leader John Boehner of Ohio favors a bailout along the lines worked out with Treasury this week, which has evidently gotten him replaced.

Buried in the details of McCain's statement is this: "...now that there is a framework for all parties to be represented in negotiations, including Representative Blunt as a designated negotiator for House Republicans."

What this means in that the House Republicans will never agree to any Federally funded bailout.

McCain looking for a way out? The Capitulation

McCain capitulates, declares victory and agrees to debate.

McCain looking for a way out? Part III in a series

Frank Fahrenkopf, co-chairman of the Commission on Presidential Debates, tells Newsweek's Tammy Haddad (video report) at the Memphis Airport that he will know by noon if the first presidential debate will take place. If McCain does not come by law there will be no debate because it is an "illegal contribution."

When asked what the absolutely drop dead time is he replied, "the final sweep by 5:00 pm."

Does anyone care about any of this? I clearly know nothing about politics because to me John McCain appears to be the worlds biggest jackass.

Executive compenstion limits,....

Why Americans hate CEOs.

NYTs,
But the seizure and the deal with JPMorgan came as a shock to Washington Mutual’s board, which was kept completely in the dark: the company’s new chief executive, Alan H. Fishman, was in midair, flying from New York to Seattle at the time the deal was finally brokered, according to people briefed on the situation. Mr. Fishman, who has been on the job for less than three weeks, is eligible for $11.6 million in cash severance and will get to keep his $7.5 million signing bonus, according to an analysis by James F. Reda and Associates.

Rollins on the House Republicans

Ed Rollins offers some insight into the House Republicans.

McCain looking for a way out? Part II

Link,
Sen. Lindsey Graham (R-S.C.) lowered the bar on “Today,” saying all it would take is “AN OUTLINE OR PROPOSAL that will protect the taxpayer.” Yesterday, the campaign had told the N.Y. Sun’s Russell Berman it would take a “locked-down agreement.”
This is going to get funny.

Drama

The NYTs offers a lengthy account of the high drama that unfolded at the WH conclave yesterday.
...in the Roosevelt Room after the session, the Treasury secretary, Henry M. Paulson Jr., literally bent down on one knee as he pleaded with Nancy Pelosi, the House Speaker, not to “blow it up” by withdrawing her party’s support for the package over what Ms. Pelosi derided as a Republican betrayal.

“I didn’t know you were Catholic,” Ms. Pelosi said, a wry reference to Mr. Paulson’s kneeling, according to someone who observed the exchange. She went on: “It’s not me blowing this up, it’s the Republicans.”

Mr. Paulson sighed. “I know. I know.”

The odd couple

I've been intending all week to link to this article from the front page of last Sunday's NYTs.

This is an excellent background piece on the events of last week that lead to Paulson and Bernanke seeking the bailout.

Paulson is a serious dude, but Bernanke is the brains behind this operation and they are both scared to death of cascading bank failures (see Washington Mutual) leading to the Great Depression II.

Ambinder: McCain's toughest day yet

Marc Ambinder's reporting on bailout negotiations has been gold plated.

He sees a bad day shaping up for McCain:
The CW in Washington this morning is that McCain's suggestion for the grand, high-stakes summit meeting was the very thing that caused all of Washington to explode.

True, there was no "deal" -- House Republicans were always balking and Speaker Pelosi really wanted House Republicans to pair with House Democrats.

But McCain's presence in Washington gave voice to House Republicans, deliberately, if Minority Leader Boehner was somehow in cahoots with McCain.
That's not likely -- the House caucus never trusted McCain and White House credibility among the GOP is ZERO. Indeed, maybe McCain feels privately duped by Boehner.

House Republicans did their best last night to bring McCain to their side, even though McCain did not intend to endorse any set of principles. Senate Republicans feel slightly emboldened now, in what became sort of a domino effect.

McCain needs to find a way to get House Republicans to buy into a deal.

If not -- and if there's a market sell-off -- McCain's going to have a tough, tough weekend. Never have the downside risks been so clear.
I can't see how there will not be a market sell-off, but what do I know?

I'll be curious to see if anyone blinks in the face of a sell-off. Will Pelosi cave a push through a bill?

Where exactly was McCain yesterday? He has said he supports a bailout along the lines of those negotiated this week with Treasury and yet it seems he didn't even show up yesterday. So much for leadership.

McCain is surprisingly prone to panic (see suspended campaign - again!). Will he panic in the face of a sell-off and start hammering the House GOP?

I don't think the House GOP will cave. Caving is not in their nature. These are the same people who impeached a President sporting an approval rating of more than 65% over a blow job.

And it's not just the House GOP. Plenty of House Dems aren't happy either and Sen Richard Shelby (R-AL) who is the ranking member on the Banking Committee is telling anyone who will listen that he won't vote for the bailout in it's current incarnation. I admire and respect Shelby's matter of fact approached to this matter. Shelby left yesterday's WH conclave early. Shelby says he would support a bill, but hasn't -- as far as I've heard -- said what conditions that bill would have to contain.

Final thoughts on the bailout

The Democrats are nuts to pass a Federal bailout without Republican support and Pelosi says she won't do it.

But if the market tanks today on news of no deal and the Washington Mutual failure, will the Dems rush to ram through a bill?

McCain looking for a way out?

Earlier this week, McCain could not have been more clear: He would not debate (no matter what!) until there was a deal on the bailout.

Not surprisingly, it appears now McCain looking for a way out of his foolish and hasty remarks. I just heard an NBC clip recorded last night wherein McCain said, "I'm very hopeful that we'll get enough of an agreement tomorrow so we can make this debate."

Country first!

This is going to be an interesting day.

Palin calls Kissinger 'beyond naive'

Ilan Goldenberg explains.

In fairness, it wasn't just Kissinger, James Baker and Colin Powell, and to be clear, they are not just "beyond naive", they also have "bad judgment".

It's too bad the financial crisis is muffling Sarah's voice calling out these Internationalist elitist who would bring ruin to our country.

Run Sarah run!

Thursday, September 25, 2008

McCain politicizes the negiotations?

David Kurtz quotes McCain spokesman Nancy Pfotenhauer tonight on Fox,
"You kind of have the Administration talking to the Democrats in Congress but maybe not working as closely as they should have with the Republicans. ... I don't know why people are shocked that that's how it played out tonight. ..."

"The conservative Republicans have been very, very focused on taxpayer protections, and one thing that Sen. McCain has been clear on from the beginning is that that's absolutely essential. ..."
Is it just me? How can this comment possible be helpful in seeking a 'bipartisan' agreement?

It appears the McCain campaign blowing up the bailout negotiations with Treasury for no other reason that an absurd political attempt to tie Democrats to the unpopular Republican President?

Am I misreading this?

Paulson and the administration want hundreds of billions of tax payer dollars to fund a bailout of the financial industry. Paulson has said the GOP suggestion of only private money and a capital gains tax cut is unworkable. There is no reason for Dodd and Frank to bid against themselves. They need to tell Paulson and the White House to come back when they have 100 GOP House votes.

'Meow'

Jake Tapper, noting the not so suspended McCain campaign, presents McCain's statment followed by a brief commentary: "Meow"

So now what does McCain do?

With the deal far from done what does McCain do now?

He did the exact opposite today of bring people together and now's he's pledged not resume his campaign or attend this, or ANY debate until a deal is done.

Not surprisingly, 75% of Americans think the debate should go on tomorrow and the campaign should continue.

Had a deal been struck today he could have saved face by declaring victory and going to the debate, but what the hell does he do now?

Will the CPD back down and cancel Friday? How will the voters of Mississippi feel about McCain behavior?

If the debate goes forward will McCain have a melt-down and us it as an excuse to blow off the rest of the debates?

And what does this say about McCain's judgment? He lets his words get ahead of him and draws lines he can't possibly honor.

Would he do this as president? Threaten military retaliation in a fit of pique and then either charge the country into foolish war to save honor or back down destroying U.S. credibility?

I think George Will got it right on Tuesday.

Bailout going no where fast,....

Marc Ambinder reports that the GOP sandbagged the deal the Dems spent the entire week hammering out with Treasury and the Fed, and Boehner simply can't deliver.
The fact is that Boehner doesn't have 100 votes from his conference -- 100 votes that Nancy Pelosi really wants. And that's not McCain's fault.

But Boehner and the White House -- and McCain -- if they want to get something passed -- do have the responsibility to persuade these Republicans to support the bailout .

After all, if not to get these recalcitrant Republicans on board, why did McCain go to Washington in the first place?

The Great Schlep

This is great.

Jewsvote.org has organized The Great Schlep to encourage Jewish grandchildren to schlep to Florida to visit their grandparents and convince them to vote for Obama.

Given how grandparents adore their grandchildren, this could swing Florida,.....or not.

UPDATE: Here's the video,


The Great Schlep from The Great Schlep on Vimeo.

Deal or no deal?

Marc Ambinder seems to confirm what I had been hearing that Republicans in the House and Senate don't want to back this bill. But it's more complicated than just that.

Bottom line from Marc is that there isn't really a deal right now. Or at least that's how I read his post. Maybe you see it differently.

White House cheap shot

So much for 'bipartisanship' from the White House.

Not surprising, but cheap none the less,
Presidential spokesperson Dana Perino on this afternoon's high-profile White House meeting among Bush, McCain and Obama: "Sen. McCain is the one who called for the meeting, and we thought it was a good idea."

John McCain's latest crazy, brilliant, desperate campaign tactic

John Dickerson attempts to explain/understand McCain's latest trip over the shark.

The status of tomorrow night's debate

It appears that a deal has been reached on a bailout package ending McCain's justification for not debating, so he has to show up tomorrow night, right?

I would imagine the McCain campaign will move into 'save face' mode and issue a press release declaring that John McCain singlehandedly saved the nation on the raw power of his honor, and can now resume the distasteful job of campaigning and debating.

Joe Klein offered an explaination

As to what actually happened yesterday.

In fairness, Klein is no longer a McCain fan.

Klein concludes,
Why was McCain so quick to pull out of the debate? After all, with the momentum slightly in Obama's direction, he needed a game-changer--and foreign policy is, allegedly, his area of expertise. His peremptory actions yesterday was not the behavior of a confident man. It was the behavior of a man uncertain, despite all the macho bluster, about his chances in the most important theater of battle in any presidential campaign, one where gimmicks, diversions and untruths can be directly countered by his opponent. McCain may clean Obama's clock in the coming debates--but it seems entirely possible that the old fighter jock may be frightened that he's about to ditch another plane.

The not so suspended campaign

I guess no one bothered to ask McCain to define "suspend".

Josh Marshall,
Lemme see, two of McCain's press spokespeople on TV attacking Obama; McCain attack ads up on TV across the country. This is the suspension? What did I miss?

McCain flakes out

I think Josh does a pretty good job spelling out exactly what it is that McCain has done,
...He wants to cancel the debate? And maybe also Palin's debate. Are you kidding? Why not cancel the election too? And because he has to go back to DC to solve the financial crisis? Really? The topic he knows nothing about and after he's shown up less in the senate in the last two years than anyone but Tim Johnson, the guy who had the stroke? Which of my employees is going to call from home tomorrow and say they can't come to work because of the financial crisis?

....if you were living in the real world, if you were some hotshot young executive at a Fortune 500 company trying to rise in the ranks, and you pulled some whacked crap like this, it would probably get you blackballed permanently. People would think you were either deeply unreliable or maybe just had a screw loose. And yet here he is -- is he kidding? He can't debate Barack Obama because he's got to go to Washington and save the economy? It's like the biggest 'dog at my homework' in history.
How much longer do respectable members of the GOP continue to make excuses for this mess? Defections have begun among the chattering class (Will on Tuesday for example), but when will serious members of the current or formerly elected GOP begin to publicly distance themselves?

Or maybe this is all brilliant will turn the election for McCain. All I'm certain of is that this is the strangest damn thing I've ever seen in an election.

Wednesday, September 24, 2008

Too late for McCain to pull ads?

MSNBC reports that the McCain campaign through their media buyers sent out a memo today claiming to pull their ads, however, it's not that simple.
A West coast media buying executive not working with the McCain camp tells NBC News that pulling ads isn't quite as easy as sending out such a directive. "Stations are telling me it can't happen," says the exec. "The campaign knows that it can't happen." That's because computer logs with already-scheduled ad placements may already be locked in.

The ad buyer adds that stations will likely have problems trying to stop ads from running tonight, and some may not be able to get off the air by tomorrow.
The campaign will likely be back on Friday and so no ads pulled, just a memo?

The joint statement is out

The Joint Statement is out and frankly, just silly.

Ambinder has the portion that didn't make the final draft, which was any substance.

McCain leaves Dave high and dry,...

And Dave is not happy. Watch the whole thing.

"This campaign is starting to smell,..."

McCain links deal on bailout to debates

It appears McCain intends to dump all the debates.

Wiping out the VP debate

The Obama campaign needs to insist on the VP debate and agree to only cancel the town hall style debate presently set for October 7. This would leave a VP debate and a presidential debate covering foreign policy and a second debate covering domestic policy.

I can't imagine that such a transparent move as canceling the VP debate won't blow up on McCain/Palin but then I'm always wrong about these things.

Delay really about Palin?

Brian in comments,
What if the end goal of all of this is to really buy more time for Sarah Palin? If they put off the debate this coming Friday, they'd almost certainly have to delay the Veep Debate. Given that she really is all that McCain's got going for him right now, he really can't afford to have her go lay an egg next week.
Maybe this is all about manufacturing a delay / dispute that will require the VP debate be canceled completely.

UPDATE: Bingo! CNN reporting that McCain wants the first Presidential debate moved to St. Louis Oct 2, which is presently scheduled as the VP debate.

'Gimmicks 'R' Us'

Not surprisingly, Joe Klein isn't buying McCain's explanation for suspending his campaign,
McCain suspends his campaign because of financial crisis? Oh please. Given today's poll numbers--even Fox has him dropping--it seems another Hail Mary (like the feckless selection of Palin) to try make McCain seem a statesman, which is difficult given the puerile tenor of his campaign's message operation.
Does suspending the campaign mean McCain will be pulling his media buys?

University of Mississippi statement

Via msnbc.com,
"The University of Mississippi is going forward with the preparation for the debate. We are ready to host the debate, and we expect the debate to occur as planned.

"At present, the University has received no notification of any change in the timing or venue of the debate.

"We have been notified by the Commission on Presidential Debates that we are proceeding as scheduled.

"We will keep you posted as information becomes available."

The Financial Crisis explained -- Part 1

Having read many, many articles and thought about this 'crisis' for hours (including a 6 hour drive to and from Bloomington IL this morning) I believe I now have a very basic understanding of the crisis.

This is much more a crisis in the bundled mortgage derivative market than anything else. Let me explain.

As a result of bank deregulation and the globalization of capital (money) a lot of money has poured into the U.S. the last 10 years or so. For many reasons I do not fully understand, there were not a lot of places to invest this money other than housing so billions upon billions poured into the housing market resulting in more and more sub-prime mortgages and exotic mortgages being written. These mortgages were bundled with good mortgages into giant financial security instruments that were globally traded. Literally no one really knew what the mortgage backed securities were worth but that was really beside the point as a market was made for them to be bought and sold between major financial institutions, insurance companies, central banks, etc. And since these securities were 'mortgaged backed' (meaning the debt was secured by residential real estate which was always ultra-safe) they seemed bullet-proof. So, with so much money pouring in, many major institutions borrowed many time their capital base to buy them. Others were loaning enormous amounts to those who were buying supposed bullet proof securities.

Then, some of the underlying mortgages stopped performing because they were sub-prime and the instruments appeared to be not so safe after all and the market for them began to demand discounts to buy them. But many of the institutions who owned them couldn't discount because they owed 100% or more of there full value to some creditor. And then it snowballed. Unable to sell the securities at a discount they also couldn't service the purchase money notes on them, which meant the creditors were seeing enormous defaults which shook the creditors foundations, as they realized they were undercapitalized with so many loans in default.

Here is an imperfect analogy. Imagine you pull together $100k and use it to buy a $10M apartment building. Your loan to Cash ratio is very high but no big deal because you have rental income that will pay the note and give you some excess cash. Then you and every other owner of apartment buildings lose half your tenants due to a local plant closing and you can't make the mortgage payment. There is still a market to sell the building but now it is only worth $2M. You literally can't sell it for $2M because you owe $10M. Every apartment building in town has the same problem and now the bank that foolishly loaned 100x the capital is in trouble, and they can't make loans to anyone for anything because they are about to go down.

A market still exists for the mortgage backed securities but at a fraction of the purchase price which doesn't help the security owner or the creditor who loaned 100 times capital to purchase the securities. And again, it's more about the market for these securities than the securities themselves. Most mortgages are not in default and are performing well. The odds are very good that many of the so-called 'toxic' securities have a value that is probably close to 80% (or greater) of the 'hold until maturity' value of the underlying loans. But the problem is that no market exists to buy the securities at a price that would allow the security owners to sell them and pay off their creditors. So enter the Treasury that plans to spend $700BILLION (to start with!) to create a market and buy the securities at very close to full value so the owners of the securities can pay off the loans on them, so those creditors can pay their creditors, honor their depositors, and make new loans to grease the wheels of the economy, etc.

Are you with me so far? Does any of this make sense? Please, please correct me where you think I got it wrong, or fill in any holes.

I have more to say but this post is long enough so I will write more later.

McCain is supending his campaign?

WTF!? This man is a major league kook.

At 8:30 this morning the Obama campaign privately contacted the McCain campaign suggesting the two present a joint statement outlining their "shared principles and conditions for the Treasury proposal". The Democrats and many Republicans have made it clear that they will not vote out any bill unless McCain votes 'yes' as they are not going to be skewered by Senator Honor. Apparently, McCain has agreed to the joint statement and then announced that he was suspending his campaign to return to Washington and deal with the crisis. He want's Obama to follow suit and suspend his campaign as well and cancel the Friday debate.

As Josh Marshall correctly notes, what has changed since last besides McCain's poll numbers?

If Obama agrees to suspend his campaign or cancel the debate, I'm going to have a stroke.

Tempermental queen?

I'm pretty sure George Will has just called McCain a temperamental queen.

It's no secret that George Will is not a fan of John McCain with the last straw being McCain - Feingold. But yesterday, Will seemed to take it up a notch.

In a scathing column, Will declared that John McCain temperamentally unfit for president.

Will begins,
Under the pressure of the financial crisis, one presidential candidate is behaving like a flustered rookie playing in a league too high. It is not Barack Obama.

Channeling his inner Queen of Hearts, John McCain furiously, and apparently without even looking around at facts, said Chris Cox, chairman of the Securities and Exchange Commission, should be decapitated. This childish reflex provoked the Wall Street Journal to editorialize that "McCain untethered..."
and concludes,
Conservatives who insist that electing McCain is crucial usually start, and increasingly end, by saying he would make excellent judicial selections. But the more one sees of his impulsive, intensely personal reactions to people and events, the less confidence one has that he would select judges by calm reflection and clear principles, having neither patience nor aptitude for either.

It is arguable that, because of his inexperience, Obama is not ready for the presidency. It is arguable that McCain, because of his boiling moralism and bottomless reservoir of certitudes, is not suited to the presidency. Unreadiness can be corrected, although perhaps at great cost, by experience. Can a dismaying temperament be fixed?

Tuesday, September 23, 2008

'Miss Frigidaire'?

Columbia Journalism Review thinks Couric may have a double standard.

I'm inclined to believe she's just a fraud.

Warren Buffett to the rescue?

Buffett to Invest $5 Billion in Goldman - WSJ.com

Skepticism about the crisis (updated )

Matt Yglesias has a good post up today wondering if this financial crisis is really as bad as it's being sold. Check it out.

UPDATE: Felix Salmon and Ryan Avent respond to the skeptics.

Read the first comment to Ryan's post too.

I feel completely overwhelmed by this issue. I don't begin to understand how the financial markets actually work and have been reading anything I can get my hands on to bone-up.

Bizzaro world (updated below)

Has the press finally had enough?

Probably not, but CNN actually did challenge the McCain campaign,
(CNN) — McCain-Palin campaign officials shifted course Tuesday after being informed by television news organizations that they would not broadcast footage of Sarah Palin’s meeting with Afghan leader Hamid Karzai Tuesday in New York — the Republican VP nominee’s first with a foreign leader — if a reporter was not allowed in to observe the pair.

CNN, which was the pool network for the event, informed the campaign of its decision. The network was then told a CNN producer would be allowed in the room to act as a media representative, just minutes before the photo op was scheduled to take place. However, print reporters and wire services were not allowed to observe the meeting, as they have been able to do at similar McCain events in the past.
There should be no compromise on such basic things. Either a pool reporter is present or no photo-op. The McCain campaign needs these photo-ops, and really shouldn't be indulged in ridiculous terms.

UPDATED: CBS has more.

Paulson is not in a position to bargain

The WSJ reports that Paulson is backing down on some key Democratic demands, but not all.

Paulson has agreed "to allow tougher oversight over the cleanup and provide fresh assistance to homeowners facing foreclosure" whatever that means.

So far Paulson is resisting provisions to allow bankruptcy courts to adjust the terms of mortgages and most offensively, the imposition of limits on executive compensation.

If Paulson wants a $700 BILLION taxpayer bailout of Wall Street he is in no position to dictate terms.

The key to the Treasury plan, as Ben Bernanke explained today, is that the taxpayer buy the most troubled mortgage loans on the books of financial institutions at prices "close to 'hold to maturity' prices instead of the fire-sale price". With taxpayers assuming the most rancid loans on an institutions books, the institution should resume profitability. The thought of executives taking multi-million dollar personal bonuses accuring directly from taxpayer money is beyond outragious and must be a deal breaker. Pauslon's argument that small banks and credit unions won't participate if their executives are "limited" to $400,000 per year in compensation shows how out of touch Paulson is with the non-Wall Street world or just dishonest.

Finally, the Democrats need to make it very clear to Paulson that aid to homeowners facing forclosure (in and out of bankruptcy), serious oversight and limits on executive compensation are not negiotable.

From a poltical perspective, there should be no problem explaining to voters that a deal is being held up because the republican administration is demanding that multi-million dollar executive bonuses be preserved and that individual Americans be left out of the $700 BILLION.

And finally, Democrats need to also make clear to Paulson and Bush that no deal will come up for a vote that doesn't have the votes from the GOP leadership and rank and file and winning that support is their problem. It is absurd to expect such monumental legislation be passed without both parties necks on the block.

Obama: Bailout likely to delay spending programs

While obvious, I'm pleased to see Obama facing this issue head on.

Will John McCain have the intellectual honesty and courage to tell his base that now might not be the time for a $2.2 TRILLION tax cut payable to them?

Monday, September 22, 2008

Polling the American Economics Association

59% of their economist find Obama's economic policies best for the country long term, with 31% favoring McCain.

Dems walking the plank?

The Dems would be fools to push through any bailout legislation without the GOP leadership and rank and file voting with them.

It appears that many republicans are positioning themselves to let the Dems bailout Wall Street and the Bush administration and then run against them on the issue.

Palin to capitulate on Troopergate investigation?

ABC News reports that Palin's lawyers met with the special investigator to broker her cooperation.

I'll believe it when it happens. My guess is that they will offer cooperation in exchange for an agreement that the investigation be postponed until after the election and if the investigator refuses, they will use the refusal as a justification for not cooperating.

GOP Congressman just say 'no'

Rep. Scott Garrett (R-NJ), a member of the House Financial Services and Budget Committees, is strongly opposed to the administration's plans to bail out Wall Street an aide confirmed to TPMmuckraker.

"There aren't any amendments that I have heard of that would make him turn around and support it," said Erica Elliott, Garrett's press secretary.
Lots of GOP opposition to Paulson's bailout and I can't see Dems going to the mat for the Bush Admin when his own party won't.

No one wants to support this and then have other other side campaigning against them on this issue.

McCain Lays Groundwork For Bailout Opposition

McCain won't back any legislation.

He's running from his own record of deregulation and doesn't want to side with the admin or give Paulson a blank check and he certainly won't sign on to any Democratic bill. Marc Ambinder explains.

McCain camp's bizarre conference call

McCain's liar in chief, Steve Schmidt had a conference call today with the press demanding that they stop calling McCain's campaign liars.

And in the precess lied repeatedly, "the call was so rife with simple, often inexplicable misstatements of fact that it may have had the opposite effect: to deepen the perception, dangerous to McCain, that he and his aides have little regard for factual accuracy."

Saying Schmidt 'jumped the shark' on the call, Joe Klein sees a different agenda,
...it should be remembered that Steve Schmidt is doing this for two (nefarious) reasons:

1. he's hoping to work the refs: if he complains enough about press bias, we mainstream sorts will cower, cringe and try to seek false equivalences between the two campaigns.

2. the more time we spend covering this nonsense, the less we'll spend on the real issues in this campaign.

Dodd circulates a more agressive bill

Sen Dodd is circulating a tougher bill.

Here are the highlights via the Politico,
Among the major provisions Dodd is adding:

* Authority for bankruptcy judges to restructure mortgages for homeowners facing foreclosure. This was considered a poison pill in a housing bill that passed Congress earlier this summer, but it has gained much more currency now that Washington wants to bail out Wall Street.

* A provision that would require the Treasury to take a 65 percent portion of 20 percent any profits it makes from the newly purchased assets and put it into the federal government's HOPE program, an affordable housing program.

* An oversight board that not only includes the chairman of the Federal Reserve and the SEC, but congressionally appointed, non-governmental officials.

* Limits on executive compensation. This is a major stumbling point for Paulson in his negotiations with Congress, but cracking down on Wall Street executive salaries will be a major selling point for lawmakers. Dodd and Frank have put in place what's known as a "claw back" provision aimed at revoking compensation that executives received based on fraudulent claims.

* An independent inspector general to investigate the Treasury asset program, appointed by the president.
PDF of the draft here.

Sunday, September 21, 2008

Obama's Statement of Principles for the Treasury Proposal

Link,
• No blank check. If we grant the Treasury broad authority to address the immediate crisis, we must insist on independent accountability and oversight. Given the breach of trust we have seen and the magnitude of the taxpayer money involved, there can be no blank check.

• Rescue requires mutual responsibility. As taxpayers are asked to take extraordinary steps to protect our financial system, it is only appropriate to expect those institutions that benefit to help protect American homeowners and the American economy. We cannot underwrite continued irresponsibility, where CEOs cash in and our regulators look the other way. We cannot abet and reward the unconscionable practices that triggered this crisis. We have to end them.

• Taxpayers should be protected. This should not be a handout to Wall Street. It should be structured in a way that maximizes the ability of taxpayers to recoup their investment. Going forward, we need to make sure that the institutions that benefit from financial insurance also bear the cost of that insurance.

• Help homeowners stay in their homes. This crisis started with homeowners and they bear the brunt of the nearly unprecedented collapse in housing prices. We cannot have a plan for Wall Street banks that does not help homeowners stay in their homes and help distressed communities.

• A global response. As I said on Friday, this is a global financial crisis and it requires a global solution. The United States must lead, but we must also insist that other nations, who have a huge stake in the outcome, join us in helping to secure the financial markets.

• Main Street, not just Wall Street. The American people need to know that we feel as great a sense of urgency about the emergency on Main Street as we do the emergency on Wall Street. That is why I call on Senator McCain, President Bush, Republicans and Democrats to join me in supporting an emergency economic plan for working families – a plan that would help folks cope with rising gas and food prices, save one million jobs through rebuilding our schools and roads, help states and cities avoid painful budget cuts and tax increases, help homeowners stay in their homes, and provide retooling assistance to help ensure that the fuel-efficient cars of the future are built in America.

• Build a regulatory structure for the 21st Century. While there is not time in a week to remake our regulatory structure to prevent abuses in the future, we should commit ourselves to the kind of reforms I have been advocating for several years. We need new rules of the road for the 21st Century economy, together with the means and willingness to enforce them.

Doing for healthcare what he's done for banking,....

John McCain has written an article for the in the current issue of Contingencies, (pfd),
"Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation."
Indeed. The "excesses" are in the regulations.

5 Conditions on the Wall Street bailout

Robert Reich suggests5 conditions for access to taxpayer dollars,
1. The government (i.e. taxpayers) gets an equity stake in every Wall Street financial company proportional to the amount of bad debt that company shoves onto the public. So when and if Wall Street shares rise, taxpayers are rewarded for accepting so much risk.

2. Wall Street executives and directors of Wall Street firms relinquish their current stock options and this year's other forms of compensation, and agree to future compensation linked to a rolling five-year average of firm profitability. Why should taxpayers feather their already amply-feathered nests?

3. All Wall Street executives immediately cease making campaign contributions to any candidate for public office in this election cycle or next, all Wall Street PACs be closed, and Wall Street lobbyists curtail their activities unless specifically asked for information by policymakers. Why should taxpayers finance Wall Street's outsized political power - especially when that power is being exercised to get favorable terms from taxpayers?

4. Wall Street firms agree to comply with new regulations over disclosure, capital requirements, conflicts of interest, and market manipulation. The regulations will emerge in ninety days from a bi-partisan working group, to be convened immediately. After all, inadequate regulation and lack of oversight got us into this mess.

5. Wall Street agrees to give bankruptcy judges the authority to modify the terms of primary mortgages, so homeowners have a fighting chance to keep their homes. Why should distressed homeowners lose their homes when Wall Streeters receive taxpayer money that helps them keep their fancy ones?

Saturday, September 20, 2008

Mallaby : A Bad Bank Rescue

Mallaby's concerns are the same as others, to wit, this appears to be a shareholder bailout.
In 1989, there was no choice. The federal government insured the thrifts, so when they failed, the feds were left holding their loans; the RTC's job was simply to get rid of them. But in buying bad loans before banks fail, the Bush administration would be signing up for a financial war of choice. It would spend billions of dollars on the theory that preemption will avert the mass destruction of banks. There are cheaper ways to stabilize the system.
And Mallaby sites some interesting ideas, including,
Raghuram Rajan and Luigi Zingales of the University of Chicago suggest ways to force the banks to raise capital without tapping the taxpayers. First, the government should tell banks to cancel all dividend payments. Banks don't do that on their own because it would signal weakness; if everyone knows the dividend has been canceled because of a government rule, the signaling issue would be removed. Second, the government should tell all healthy banks to issue new equity. Again, banks resist doing this because they don't want to signal weakness and they don't want to dilute existing shareholders. A government order could cut through these obstacles.

Meanwhile, Charles Calomiris of Columbia University and Douglas Elmendorf of the Brookings Institution have offered versions of another idea. The government should help not by buying banks' bad loans but by buying equity stakes in the banks themselves. Whereas it's horribly complicated to value bad loans, banks have share prices you can look up in seconds, so government could inject capital into banks quickly and at a fair level. The share prices of banks that recovered would rise, compensating taxpayers for losses on their stakes in the banks that eventually went under.
I don't pretend to even begin to understand the current crisis much less the bailout, but I am trouble at the thought of a shareholder bailout,...albeit less troubled than I am at a banking collapse and a second great depression.

And I don't think the proposed bailout precludes the suggested avenues of forcing banks to raise more capital, etc. I think the real problem for many is that they simply do not trust this administration,... and for good reason. But Howard Paulson really is another matter, and I'm not sure anyone really has any choice.

Krugman thinks it's a bad deal

Critics of the trillion dollar bailout think the problems has been misdiagnosed as a liquidity problem when in fact, the problem is much worse. Very bad loans were made and then packaged into securities that were bought at premium prices with borrowed money and insured -- all by people who had no idea what the stuff was really worth. When the bubble popped you had a domino effect of bad debt falling down upon bad debt.

Krugman explains,
Here’s the thing: historically, financial system rescues have involved seizing the troubled institutions and guaranteeing their debts; only after that did the government try to repackage and sell their assets. The feds took over S&Ls first, protecting their depositors, then transferred their bad assets to the RTC. The Swedes took over troubled banks, again protecting their depositors, before transferring their assets to their equivalent institutions.

The Treasury plan, by contrast, looks like an attempt to restore confidence in the financial system — that is, convince creditors of troubled institutions that everything’s OK — simply by buying assets off these institutions. This will only work if the prices Treasury pays are much higher than current market prices; that, in turn, can only be true either if this is mainly a liquidity problem — which seems doubtful — or if Treasury is going to be paying a huge premium, in effect throwing taxpayers’ money at the financial world.
In other words, Krugman fears we're not getting ride of the cancerous institutions and selling off their assets but rather relieving them and their shareholders of the obligation of their mistakes and sending them out to presumable sin again. With no guarantee that anything will actually get better.

Krugman: "Treasury needs to explain why this is supposed to work — not try to panic Congress into giving it a blank check. Otherwise, no deal. "

New Obama ad on SS

What we've seen this week in the markets is exactly why social security was created. The ultimate social contract between America and her workers so that those who work their whole life paying taxes and contributing to the SS trust fund -- building the largest economy in the world from which the luckiest among us earn incredible wealth -- will be guaranteed in their retirement a monthly check -- no matter what happens in investment markets. There is nothing more sacred.

Nothing spells relief like $1 Trillion dollars

The WSJ has a nice explanation of the week.

Meanwhile, Joe Biden's,....

The NYTsreports on Biden's week and worries that no one is noticing.

McCain’s campaign finance hypocracy

McCain is doing everything he can do to skirt his own campaign finance law, which must be really pissing off the conservatives who have never forgiven him for pushing the bill.

The NYTs details McCains efforts to avoid spending limits. Here's an example from the article,
This month, the McCain campaign began running banner Web advertisements asking for donations to the McCain-Palin Compliance Fund, a fund-raising vehicle rooted in a 1980s F.E.C. ruling that candidates who accept public financing can still collect private donations for legal and accounting costs for complying with campaign finance laws.

Only a careful observer, however, would have noticed the advertisements’ fine print, which said donations to the fund would be used to pay for “a portion of the cost of broadcast advertising,” as well as other expenses.

That would seem to be a far cry from the legal and accounting exemption.

What's a conservative think tank to do?

Marc Ambinder gets an email,
We ... are on strict 'no comment' lockdown. We've even pulled some analysts off scheduled TV spots and have been declining any new appearances on the issue.

The analysts I work with are supportive of the AIG deal. But there is significant push back from higher ups on the board that don't like it.

Hence our silence.

Friday, September 19, 2008

Another telling headline


ABC News: The Fall of the Gilded Age.

Here's the lede,
"It had been a long time coming, but in the last week, with the collapse of the investment bank Lehman Brothers and the distress sale of another, Merrill Lynch, thousands of jobs and some 700-billion dollars in wealth, in stock, simply disappeared.

"The gilded age is over," said Holly Peterson, wife of a multi-millionaire investment banker and daughter of multi-billionaire financier Pete Peterson.

"The whole era of conspicuous consumption and free spending and luxury ended as of this week," said Robert Frank, Wall Street Journal reporter and author of "Richistan," a book about America's super-rich."
Pictured is Lehman Brothers Chairman Richard Fuld's mansion in Greenwich, CT. Fuld also has an oceanfront estate in Florida and a luxury Park Avenue co-op. And despite Lehman's failure, Fuld's fortune remains in tact.

The ABC headline says it all

ABC News: Exclusive: New Doubts Over Palin's Troopergate Claims

This is not going away for the McCain campaign.

Thursday, September 18, 2008

Shorting stocks

Interesting.

The WSJ reports that NY AG Andrew Cuomo has opened an investigation into short selling of the stocks of several troubled companies.

More interesting is that Goldman Sachs is on the list of troubled companies being shorted.

Several hedge funds are also being investigated for "rumor mongering."

Cuomo thinks the SEC should freeze short selling on a temporary basis which seems eminently reasonable. I think Congress should make short selling illegal. It's a highly predatory practice that seems to me to have no positive effect on markets -- while having many negative effects including the issues that are the subject of Cuomo's investigation.

Am I missing something?

Wednesday, September 17, 2008

Troopergate update

Today's version of the story is that the state police chief was fired for being too anti-rape.
The last straw, the McCain campaign said, was in July, when Monegan planned to travel to Washington to seek federal money for a plan to assign troopers, judges and prosecutors who could exclusively handle sexual assault cases — one of the state's most intractable crime problems.
Apparently, Palin is pro-rape? Alaska leads the nation in sexual assaults. Mayor Palin insisted that any woman making a fuss, pay for her own rape kit.

Where's the President in this crisis?

Chris Matthews has a good point. Where is the President in this financial crisis?

"Plan for Change" Ad

Obama's latest ad, which at 2 minutes is probably a web only ad.

Obama on McCain and the 'old boy's network'

Barack Obama is not the natural stump speaker that Bill Clinton or John Edwards are. He's just not. But he seems to have finally found a rhythm on the general campaign, and courtesy of TPM, gets off a good riff today.

'Perhaps, It’s Time to Play Offense'

David Leonhardt has thoughtful column today arguing that it's time government went on offense and pursued policies aimed at correcting the underlying problems that have led us to this point,
At its core, the current crisis stems from two problems. Regulators, starting with Alan Greenspan, assumed that a real estate bubble couldn’t happen and that Wall Street could largely police itself. And households, struggling with incomes that haven’t kept up with inflation in recent years, said yes when those lightly regulated banks offered them wishful-thinking loans. No bailout can solve either problem.
Leonhardt argues that a simply policy change in the tax code that rewards saving as opposed to consumption would go a long way to aid families in preparation for retirement and provide a homegrown capital base for economic growth.

Leonhardt also makes the obvious suggestion that the government needs to reduce Medicare cost to attack the long term deficit issue which is true enough, but as with everyone else who makes that observation, he offers no suggestions.

National Polls


I don't think national horse race polling is especially informative at this point, but it is becoming more so as the election draws near.

I have on my sidebar information from pollster.com that shows an average of all major polls, which is always much more informative than any single poll.

Having said all of this, I think the current chart showing the national average is a little interesting and a little amusing.

The charts on the sidebar are clickable so that you can go to the pollster site and get specific polling data.

Tuesday, September 16, 2008

Fiorina's toast

CNN says Carly Fiorina will be banished from the McCain campaign for being such a pompous twit.

Of course this calls attention to the absurdity of the Palin pick.

Fiorina has been touring the country and making endless press appearances insisting to anyone who would listen that Sarah Palin is perfectly qualified to be the chief executive of an institution with a trillion dollar budget.

But when asked if Palin could be chief executive of an institution with a billion dollar budget like Hewlett-Packard, Fiorina thought it absurd. And had Fiorina answered Milhaven's question in the affirmative, she would have been widely ridiculed.

And in fairness to Fiorina, turns out she couldn't run HP either.

When did the the Chief Executive of the United States become widely viewed as insignificant?

Obama and the economy

Obama needs to deliver "a major policy speech" outlining the plan he rolled out last March to deal with the financial meltdown (and which he spoke about today in Golden CO). The speech should be followed by a press conference.

This would garner tremendous attention, make Obama very presidential and place a lot of pressure on McCain.

Meanwhile, back in Iraq,....

For the last two years the U.S. has paid about 100,000 Sunni insurgents and Al Qaeda at least $300 a month not to shot our soldiers and not murder every Shia they could find (aka The Awakenings), and it worked. But as of Oct 1, the Iraqi (Shia) Government is taking over, and the Sunnis are not happy.

The Shia Government has promised to continue the monthly payments as the Sunnis are incorporated into security forces and the government.

McClatchy,
"I see this will be a big mistake," said Naji Rahal, commander of 400 men in Taji. Over the years, 14 of his men have been killed, 23 injured, and six had their homes destroyed. Some of his men now wear police uniforms, but they have not been put on permanent staff, and he distrusted the leadership.

"It is breached," he said. "I saw an al Qaida member, a killer, who is a colonel in the (police) now. "If a report is written, who would the government listen to, this colonel or me?"

Said Jassim, who commands 5,000 men in Tarmiyah, said two of his sons had been killed fighting; a third lost his leg just two weeks ago. His men had sacrificed their lives, he said, and now their weapons were being confiscated.

"If they are left in the street, they will be targets for al Qaida."

He warned of another problem: "There are areas even the state cannot secure," he said. "No one can secure them but the tribal men."

The $85 Billion rescue of AIG

Matt Yglesias observes,
I hadn’t really ever thought that the Bush administration was going to wind up giving us the large scale nationalization of industry, but I’m not sure what else you call it when we follow up the deprivatization of Fannie and Freddie with the Fed securing an eighty percent stake in AIG in exchange for giant loan that the company desperately needed. With the auto industry also clamoring for bailouts we’re perhaps moving in the direction of Lenin’s New Economic Policy in which a market economy exists on small scales while the state controls the “commanding heights” of heavy industry and finance.

......these are some pretty big companies the government now owns and, among other things, this raises the question of how these companies are going to be run. There could be an effort to manage them in the broad public interest or out-of-control crony capitalism or something like the situation in present-day Russia. It seems to me that there this step has uncertain implications far beyond the world of high finance.

Move over Al Gore,....

John McCain apparently invented the Blackberry.

Who knew?

Obama on the stump in Golden CO

Good stuff. Obama is very comfortable talking about economic issues and reiterates the plan he rolled out last March.

"Fundamentals" Ad

The latest from the Obama campaign,

Palin's favorability ratings dive?

Via Newsweek,
Since Sept. 13, Palin's unfavorables have climbed from 30 percent to 36 percent. Meanwhile, her favorables have slipped from 52 percent to 48 percent. That's a three-day net swing of -10 points.
Interesting, but also an outlier. No reason to get excited, but interesting.

Dems file suit in MI to prevent caging

The Macomb County MI GOP chair claimed that they would seek to challenge voters in November whose homes were on foreclosure lists MI Dems to file a lawsuit seeking to block GOP caging.

2 Approaches to Wall Street

Jackie Calmes, who recently left the WSJ, had an excellent front page article today at the NYTs looking at how McCain and Obama would approach Wall Street.

Here's a hint: before McCain was in favor of regulations, he was against them -- for a very long time and until very recently.

Anti-Obama push polling

The Republican Jewish Coalition has been busted push polling FLA Jews for McCain.

The "poll" has accused Obama of having given money to the PLO and support to Hamas.

Tanning Assoc comes to Palin's aid

The Indoor Tanning Association, in a press release,
While partisan bloggers and the sun scare industry will use this as an opportunity to undermine Gov. Palin and demonize the indoor tanning industry, the fact is that Governor Palin's decision to get UV light from a tanning bed positively impacts her health.

Fiorina: Palin couldn't run major company

But she's qualified to be President.

These people really have no shame.

Appearing on the McGraw Milhaven radio show here in the Lou,Fiorina said Palin wouldn't be qualified to run a major corporation like HP, but then being POTUS is much easier.

Here's the clip,



UPDATE: Fiorina says none of the candidates could run a major corporation. Apparently the Federal Government runs itself.

Traveling

I'm traveling today so posting will be light.

David Brooks has lost faith

In a thoughtful column David Brooks finds Palin lacking.

Brooks sees the idea of the "uncertified citizen" or unprofessional executive as a quaint idea that was proven a bad idea by Bush who at least in his first term was "inept at governance."

Here's a taste,
Sarah Palin has many virtues. If you wanted someone to destroy a corrupt establishment, she’d be your woman. But the constructive act of governance is another matter. She has not been engaged in national issues, does not have a repertoire of historic patterns and, like President Bush, she seems to compensate for her lack of experience with brashness and excessive decisiveness.

The idea that "the people" will take on and destroy "the establishment" is a utopian fantasy that corrupted the left before it corrupted the right. Surely the response to the current crisis of authority is not to throw away standards of experience and prudence, but to select leaders who have those qualities but not the smug condescension that has so marked the reaction to the Palin nomination in the first place.
I too often use the expressions 'crisis in faith' or 'lost faith' as a cliche, but in David Brooks case, it appears very real. I think Brooks is really experiencing a crisis in faith with the GOP and the take over by the Southern / Texas radicals in charge the last 8 years and running McCain's campaign. In addition to this column, check out his appearance on The News Hours last Friday which I quoted here. He wanted to carry McCain's water but his heart was clearly not in it.

Monday, September 15, 2008

Romney calls McCain's lies "Reprehensible"

McCain wants to stick with his lies, so he's on his own.

"I think people are going to say 'what's the heart and soul of the Republican party going forward.'"



I've never really seen anything like the way media figures and even conservative commentators are responding to McCain's serial lying. Sure, Romney is jilted, but what about all the others?

Richard Cohen's crisis in faith

Richard Cohen, by his own admission, is a founding father of McCain's base, but Cohen has had a crisis in faith.

Cohen knew that McCain's ad accusing Obama of teaching sex ed to 5 year olds was a lie as was the silliness about lipstick on a pig. But McCain wasn't responsible for the acts of his campaign, Cohen told himself, "the formulation 'I approve this message' was just boilerplate."

Then McCain went on The View last week and was confronted with his lies.
"Actually, they are not lies," he said.

Actually, they are.

McCain has turned ugly. His dishonesty would be unacceptable in any politician, but McCain has always set his own bar higher than most. He has contempt for most of his colleagues for that very reason: They lie. He tells the truth. He internalizes the code of the McCains -- his grandfather, his father: both admirals of the shining sea. He serves his country differently, that's all -- but just as honorably. No more, though...

McCain has soiled all that. His opportunistic and irresponsible choice of Sarah Palin as his political heir -- the person in whose hands he would leave the country -- is a form of personal treason, a betrayal of all he once stood for. Palin, no matter what her other attributes, is shockingly unprepared to become president. McCain knows that. He means to win, which is all right; he means to win at all costs, which is not.

Bush 44

Here is Biden's speech in Michigan that I mentioned earlier today.

"The sequel is always worse than the original" Good stuff!

Taking on the POW issue

Brave New PAC takes on McCain's POW experience.



This doesn't seem to have much impact.