Archive for Economy

The Rise of the old new Republican Party

November 11, 2008 at 12:09 am · Filed under domestic policy, Economy, Politics ·Tagged , , , , , , , , , , ,

Where is the big multiplier?  

I just heard Robert Reich, former Labor Secretary to President Clinton, make a case for spending Treasury dollars on infrastructure projects (on MSNBC’s 1600 Pennsylvania Avenue).  Reich rightly notes that infrastructure investment, and not necessarily financial institution bailouts, creates jobs – lots of jobs.  Infrastructure can be a multiplier for a flagging economy; it can help get the gears moving again.  

Government spending has a bad name in DC.  But in fact, only investing in our nation’s energy production, transportation and other infrastructure pays back in dividends in jobs, resources and a shot of confidence.  Once Americans feel like they can spend again – with the government pumping its case into jobs to give the initial push – then cash and credit can flow again from banks and wallets.  

So long as Democrats don’t overreach at this crucial recasting of government players, passing a reasonable sized stimulus package like what I am hearing the Democrats, including their president-elect, calling for is a good thing to do. If President Bush softens his stance, modifies the package some in negotiations and then signs it, such a bill could be a positive last initiative for President Bush, and ironically, a piece of compassionate legislation to make the end of the national conservative agenda for at least 2 years.

Karl Rove, Mike Huckabee, Florida Senator Mel Martinez (a potentially vulnerable Republican in 2010) and other Republicans have be calling for working with the newly-elected President and Democratic congress, and to do so by bringing ideas to the table.  Therein – new ideas to the table – lies the rise of the old new Republican Party.  

There is no old Virginia, no real America.  But there are old Republicans, the careful ones who lost grip of their party in the waning 1990’s.  The new Republicans leaned lazily on low taxes and ran up the bill on a Chinese credit card.  The party faces a crucial decision on how to get the country out of its mini-depression, as I’ve now heard it called.

Of a public works program style stimulus effort, the party leaders must ask, “where does the money come from,” as Dan Lundgrun (R -CA) wondered to Chris Matthews today.  And maybe it won’t work in the immediate term.  These are fair concerns.  But what else have you got?  Where are your solutions. Because that is what elects a candidate (ideally).

In the coming days, the Republican Governors are gathering in Florida, and it will be an opportunity to make sense of what just happened, rebuild the platform and its players, and audition for the next cycle. The Republican party must answer the challenges ahead with real ideas, or else wander the wilderness for eight years to think about what they’ve done.

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John Quixote and his trusty Sancho Palin

October 10, 2008 at 2:58 am · Filed under Economy, Politics ·Tagged , , , , , , ,

Just in case John McCain’s flashy, nutty, new bailout plan doesn’t catch fire (and it most certainly won’t, even among his staunchest supporters), McCain and all his surrogates are trying desperately to sow last minute doubts about Obama’s character in voters’ minds.  This line of attack is all over the news, but to McCain supporters’ chagrin, it just doesn’t seem to be sticking to Obama.

The conservative columnist George Will, who now compares McCain – Palin to Don Quixote and Sancho Panza, sums up why the attacks don’t stick:

But the McCain-Palin charges have come just as the Obama campaign is benefiting from a mass mailing it is not paying for. Many millions of American households are gingerly opening envelopes containing reports of the third-quarter losses in their 401(k) and other retirement accounts — telling each household its portion of the nearly $2 trillion that Americans’ accounts have recently shed. In this context, the McCain-Palin campaign’s attempt to get Americans to focus on Obama’s Chicago associations seem surreal — or, as a British politician once said about criticism he was receiving, “like being savaged by a dead sheep.”

I just got my envelope in the mail today.  I’ve lost 15% of my 401 (K) savings in this last quarter. I don’t give a crap who these two candidates know, used to know or ever wanted to know.  I just want this economic meltdown to stop.  I’m freaked out.  I’m worried about the job market, the housing market, the (health) insurance market.  And I can pretty much guarantee the candidates that all voters want to hear from them is a convincing grasp of the problem and its solutions.

My guess is that team McCain will continue their irrelevant line of character attacks through Sunday, when the media will have tired of reporting on the character fight and will turn instead to McCain’s last-chance-debate narrative.  If, at that point, his poll numbers continue to slide or flag, he’ll abandon this too for some other shiny new tactic he hopes will save the sinking ship.

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McCain’s bankrupt “homeowner reSURGEnce plan”

October 10, 2008 at 2:40 am · Filed under domestic policy, Economy, Politics ·Tagged , , , , , ,

Senator McCain’s debate promise to buy up bad mortgages and resell them to homeowners at their devalued rates was indeed not a passing senior moment.  He’s doubled down on the debt, I mean, bet, having posted on his website his new “Homeowner Resurgence Plan.”

Someone ought to tell Mr. McCain that the word “surge” does not, in fact, possess magical cure-all qualities.

His big plan boils down to this: The government would buy bad mortgages from lenders at the original value of the mortgage, and then sell those mortgages back to the owner living in the home at the current, devalued rate (however they determine that).  So, the predatory lenders get off scot-free and off the hook.  The owner of the home (so long as he or she lives in the home and proves credit-worthiness at the time of the purchase) gets a mortgage he/she can presumably handle.  And who is left holding the bag?  The rest of us taxpayers, who are trying to make our mortgage payments without a bailout.  

How does McCain justify this genius way of spending taxpayer dollars to pay off irresponsible lenders?  His website says it would “improve the use of taxpayer money by reducing the need to spend taxpayer money to purchase toxic assets from Wall Street.”

So, now McCain is fine with spending our taxpayer dollars, as long as he throws them down a hole and we never get them back.  That $700 billion bank bailout in which we *might* possibly one day get our money back once the market ever recovers is suddenly sounding a whole lot better now, isn’t it?

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Kerry’s GOP challenger good for a laugh, if not challenge

October 9, 2008 at 2:07 pm · Filed under Economy, Politics ·Tagged , , , , , , ,

You can’t blame the guy for trying.  Well, on second thought, of course you can.

Republican Senatorial candidate from Massachussetts Jeff Beatty is trying  to close what I can only assume is a yawning gap between himself and former presidential candidate and current 4 term senator from Massachusetts, John Kerry.  Politicians always resort to finger-pointing and gotcha tactics when the outlook gets really bleak (just ask John McCain, Cindy McCain and Sarah Palin).

Beatty was correct that, just two weeks after its $84 billion bailout (loan) from the U.S. Treasury (taxpayers), AIG springing for a $440,000 spa retreat for top executives to think and talk and manicure their way out of insolvency just wouldn’t go over well with voters.  And of course, the situation was just made more ridiculous by AIG’s receipt of an additional $38 billion taxpayer-funded loan the day after Congress blew a gasket about the spa retreat.

Beatty is trying to link John Kerry to the insurance giant and has demanded that Kerry immediately dump his stock in it, which is valued at $2 million (probably not any more).

Now, I’m no fan of AIG at the moment, but given that we –  you, me and every other taxpayer out there – just gave AIG a nearly $130 billion loan, I would rather Mr. Kerry keep his stock right where it is.  Has no one informed Mr. Beatty that the stock market has suffered a more than 1,400 point freefall in just the last week – the biggest point drop ever?  You listen here, Mr. Politician, no one’s selling anything, you hear?

Everybody just take a deep breath and back away from the panicky, sell-off inducing rhetoric over a global business so important the U.S. government couldn’t let it fail, shall we?  That goes for the other twenty-six members of Congress who currently hold stock in AIG, and any of their opportunistic challengers who would rather win an election than see us get our billions back.

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Five reasons why Barack Obama won the townhall debate

October 8, 2008 at 3:59 am · Filed under domestic policy, Economy, foreign affairs, Politics, Uncategorized ·Tagged , , ,

Barack Obama won the second presidential debate tonight.  Here are five reasons why:

1) To understand what the candidates did right and wrong tonight, let’s take a moment to review the last debate.  As the first presidential debate opened, John McCain was having the worst week of his campaign, and expectations were extremely low for him.  People were impressed he didn’t freak out and go Jack Nicholson on Obama or Lehrer.  For not taking a knockout punch that night, and for being articulate (though repetitive) and surprisingly quick on his feet, McCain was able to fight to a respectable draw that night.

Not so tonight.  With the economy flatlining for more than two straight weeks, and polls showing a marked advantage for Obama even among the reddest of swing states (North Carolina??), it is clearly taking its toll on John McCain’s poll numbers across the board.  Conventional wisdom said that McCain needed to win this debate to get back in the race.  He simply did not do that.

2) The conventional wisdom of the week has also suggested that McCain needs to come out swinging.  (You’re hearing a lot about a 1960’s anti-Vietnam radical who engaged in domestic terrorism, am I right?)  But there is a stark difference between punching in ads and on paper, through surrogates and slogans, and having one of the candidates repeatedly injecting childish venom into every question he fields in a 90-minute period, as millions of Americans hang on their every word (if it’s interesting enough).  McCain’s incessant finger-pointing at Obama predictably registered negatively with the 30 or so Ohio undecideds sitting in CNN’s studio.  “You know who voted for it? You might never know.  That one,” with a sneer and a point at Obama, came off shockingly juvenile on McCain’s part.  It was unnerving and unpresidential.

McCain’s finger-pointing left him no time to talk about his own positive message, and his own plans for America.  He said it best himself eight years ago–the voters turn away from negative attacks because they convey a lack of vision for the country.

3) Need I even say this?  The economic woes – five straight days of stock market tumbles, taking with them billions of dollars in average Americans’ pension and IRA plan earnings – only serve to remind voters that heads need to roll in Washington.  And it may not be simply a rejection of George Bush, but that there is a fundamental preference for Democrats during deep financial crisis.  When the majority of the population begins to really worry about their own financial  future (not just their neighbors’), to whom will they turn?  To the government, of course. Who else is there?  The free market?  I certainly don’t mean to advocate for a socialist takeover (as John McCain seemed to do tonight!), but we’re getting awfully close to seeing how the Great Depression and the New Deal came to pass.  And while people may not trust Democrats to cut our taxes, but they do seem to trust Democrats to give a boost to the needier among us when we need it.  And nowadays, more swing voters are feeling needy than usual.

4) It seems unfair to keep beating up on McCain, but there’s more.  You had the sense listening to McCain that he was just throwing campaign slogan bites and policy rhetorical flourish bits around, one after another in a rushed, breathy fashion.  He sounded, actually like he was trying to nail jello to the wall (to steal one of his lines tonight).  Obama, in contrast, did a good job of consistently sounding mellifluous; he was listing coherent points in order and connecting them with poise and clarity.  CNN’s viewer reaction gauge at the bottom of the screen told the story.  Obama was much more consistently scoring high marks, with some dips and crests of course, whereas McCain’s favorability ratings remained largely lower, flat and unmoving.  He was putting the viewers to sleep – a lot.

5) Finally, McCain’s characteristic accusatory, jargon-filled, up-and-down cadence and delivery have probably begun to grate on people at this point in the campaign.  I went a little bit mad every time he repeated in that nasal, holier-than-thou tone, “I know what it’s like . . . ”  The word “reform” has lost all meaning to America.  To McCain, it’s become mere filler.  If I spent the time poring over the transcript, I could give copious examples, but you don’t need me to.  Just trust me on this one, my friends.

So, to wrap:

Rather than list for you five things Barack Obama did right tonight, I’m going to point out why I don’t have to.  As long as he didn’t stumble or fall (he didn’t), Obama is sitting in the catbird seat.  He’s in charge and he just needs to keep her steady as she goes.  Tonight, he did just that, and that is all he needed to do.

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When we still had freedom, and monkeys

October 7, 2008 at 2:18 pm · Filed under domestic policy, Economy, Environment, Politics ·Tagged , , , , , , , , , , ,

At last Thursday night’s debate, Sarah Palin issued a dire warning about our way of life as we know it:

It was Ronald Reagan who said that freedom is always just one generation away from extinction. We don’t pass it to our children in the bloodstream; we have to fight for it and protect it, and then hand it to them so that they shall do the same, or we’re going to find ourselves spending our sunset years telling our children and our children’s children about a time in America, back in the day, when men and women were free.

Hmm, what a coincidence that she would talk about “extinction” and tellin’ our kids and grandkids about what life used to be life.  1,700 conservation researchers met for the International Union for Conservation of Nature in Barcelona this week, and they delivered a similarly dire, if a bit more specific, warning:

The researchers concluded that 25 percent of the mammal species for which they had sufficient data are threatened with extinction, but Schipper added that the figure could be as high as 36 percent because information on some species is so scarce.

Land and marine mammals face different threats, the scientists said, and large mammals are more vulnerable than small ones. For land species, habitat loss and hunting represent the greatest danger, while marine mammals are more threatened by unintentional killing by pollution, ship strikes and being caught in fishing nets . . .

Primates face some of the most intense pressures: According to the survey, 79 percent of primates in South and Southeast Asia are facing extinction.

But Governor Palin gets it.

We have got to clean up this planet. We have got to encourage other nations also to come along with us with the impacts of climate change, what we can do about that.

Well, sort of.

The chant is “drill, baby, drill.” And that’s what we hear all across this country in our rallies because people are so hungry for those domestic sources of energy to be tapped into . . . And we’re building a nearly $40 billion natural gas pipeline which is North America’s largest and most you expensive infrastructure project ever to flow those sources of energy into hungry markets . . . And East Coast politicians who don’t allow energy-producing states like Alaska to produce these, to tap into them, and instead we’re relying on foreign countries to produce for us.

You just don’t get a sense of urgency from either campaign about the state of the natural world around us.  And when they talk about it, they never talk about human development – no matter what kind of fuels it uses – and its nearly total encroachment of wildlife habitats.  The climate is in crisis; from the air we breathe, to the animals large and small, land and marine, that depend on complex, fragile econsystems that are experiencing a meltdown more dangerous and irrevocable than a handful of giant banks holding bad paper.

Where’s the climate bailout?  Where are the regulators?  Our forests and our oceans are over-leveraged and it is time to inject some liquidity into this market.

When I hear Sarah Palin boil it all down to buying less oil from ‘countries that don’t like us very much’ and more from the Alaska National Wildlife Refuge, I shudder.  I see myself reading to my disbelieving grandchildren about yesterday’s forests and up in the treetops, animals called monkeys used to swing.

But it doesn’t have to end that way – not yet.  The International Union for Conservation of Nature study came just before tonight’s townhall-style presidential debate.  Surely some audience member will ask the candidates to think about the planet, and all life on it, for just a moment?

The issue of humans and our interdepedence on this planet is still considered softball territory in the American political debate landscape.  (Gosh, China sure has an overpopulation problem!) But how seriously and in depth McCain and Obama take the question will tell us something about their commitment to the real transcendant threat of our times.

Both campaigns badly want to turn the page on the Bush administration.  Reinvigorating U.S. leadership on the climate crisis is an easy, and strategic way to truly do it, and show the world that America cooperates again.  Let’s hope someone asks the candidates.

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Scrappy Palin, serious Biden: they both won, sort of

October 3, 2008 at 2:13 pm · Filed under domestic policy, Economy, foreign affairs, Politics ·Tagged , , , , , , ,

You’ve got to love Peggy Noonan.  You can always count on this former Reagan speechwriter to tell it like it is.  And if you are a Democrat, you really need to read her stuff.  She keeps you grounded and honest.  And sometimes she even reassures you (she’s not exactly Palin’s biggest fan).  Plus, she’s funny:

Sarah Palin saved John McCain again Thursday night. She is the political equivalent of cardiac paddles: Clear! Zap! We’ve got a beat!

But seriously, Noonan’s commentary on last night’s debate hits most of the nails right on the head. No matter who you support in this election, it’s hard to argue with her analysis. 

She killed. She had him at “Nice to meet you. Hey, can I call you Joe?” She was the star. He was the second male lead, the good-natured best friend of the leading man. She was not petrified but peppy . . .

As far as Mrs. Palin was concerned, Gwen Ifill was not there, and Joe Biden was not there. Sarah and the camera were there. This was classic “talk over the heads of the media straight to the people,” and it is a long time since I’ve seen it done so well, though so transparently. There were moments when she seemed to be doing an infomercial pitch for charm in politics. But it was an effective infomercial . . .

Joe Biden seems to have walked in thinking that she was an idiot and that he only had to patiently wait for this fact to reveal itself. This was a miscalculation. He showed great forbearance. Too much forbearance. She said of his intentions on Iraq, “Your plan is a white flag of surrender.” This deserved an indignant response, or at least a small bop on the head, from Mr. Biden, who has been for five years righter on Iraq than the Republican administration. He was instead mild.

The heart of her message was a complete populist pitch. “Joe Six-Pack” and “soccer moms” should unite to fight the tormentors who forced mortgages on us. She spoke of “Main Streeters like me.” A question is at what point shiny, happy populism becomes cheerful manipulation.

Palin’s shiny, happy populism overlooks a critical shortcoming of her ticket: there is no evidence that their policies would help mainstreeters.  Palin talks a great talk when there’s virtually no follow up from (filter between) the media.  How does their tax policy, which gives no tax break to 100 million middle “mainstreeters” but instead targets $4 billion in tax breaks to corporate America?  How is it helpful to mainstreet Americans with employer-based healthcare to lose their healthcare plan and get a $5,000 tax credit toward purchasing insurance that will surely cost double that amount out of pocket? Biden hit McCain and Palin on this point with perhaps the best zinger of the night: “So you’re going to have to place — replace a $12,000 plan with a $5,000 check you just give to the insurance company. I call that the “Ultimate Bridge to Nowhere.”

Had Joe Biden not been beaten into submission before the debate (“don’t come off too mean!”), he might have engaged Palin a bit more combatively than he did.  Palin came in with that advantage, and she worked it aggressively.  Still, while Palin won on appearance, Joe Biden won on substance. And this election, more than any in recent memory, demands substantive, reassuring leadership.  Joe Biden spent most of the night effectively articulately the Obama – Biden ticket’s policies.  When he hit back it was mostly aimed at John McCain.  Near the end of the debate, after Palin had used the word “maverick” so many times it made me cringe to hear it, Biden delivered a powerful indictment against the sunny maverick McCain image Palin continually invoked:

He’s been a maverick on some issues, but he has been no maverick on the things that matter to people’s lives.

He voted four out of five times for George Bush’s budget, which put us a half a trillion dollars in debt this year and over $3 trillion in debt since he’s got there.

He has not been a maverick in providing health care for people. He has voted against — he voted including another 3.6 million children in coverage of the existing health care plan, when he voted in the United States Senate.

He’s not been a maverick when it comes to education. He has not supported tax cuts and significant changes for people being able to send their kids to college.

He’s not been a maverick on the war. He’s not been a maverick on virtually anything that genuinely affects the things that people really talk about around their kitchen table.

Biden even made up ground on Palin’s home turf- her image as just an average mom with an average family to juggle.  He was proud and then vulnerable, recalling the days after his first wife and daughter died in a car crash (in which his two sons were critically injured):

But the notion that somehow, because I’m a man, I don’t know what it’s like to raise two kids alone, I don’t know what it’s like to have a child you’re not sure is going to — is going to make it — I understand.

All in all, Biden turned in a strong performance (aside from his excessive grinning at inopportune moments), perhaps stronger than we realize, given that so many of us went into this forgetting that Palin excels at debate, particularly a debate with such stringent rules on followup discussion (the sort of followup that Katie Couric was able to do in her interviews).  Again, Noonan is instructive:

[Palin] is not a person of thought but of action. Interviews are about thinking, about reflecting, marshaling data and integrating it into an answer. Debates are more active, more propelled—they are thrust and parry. They are for campaigners. She is a campaigner. Her syntax did not hold, but her magnetism did. At one point she literally winked at the nation.

As for those pundits who said that Palin’s goal going into this was merely to survive gaffe-free, I disagree. Her goal was to bloody up the Democratic ticket, and in doing so win points for “feistiness”.  She threw some cute and some tough punches, but nothing that Biden didn’t counter. Palin reclaimed some of her dignity last night, and succeeded in slowing, but not stopping, her own campaign’s bleeding–you don’t pull out of Michigan unless you are in deeper trouble than one debate performance can fix.  The Couric, Gibson and even Hannity interviews did irreparable damage to both McCain and Palin that just can’t be fixed with a wink and a cutesy “Say it ain’t so, Joe.”  

Here’s some final analysis from NBC’s Political Director Chuck Todd (who has inherited Tim Russert’s white board):

Palin started strong and proved to be a folksy cliché machine, which probably came across as extremely charming. She lit up the screen at times with her smile and occasional winks.

She proved extremely adept at avoiding questions or topics she didn’t want to answer, which is the big difference in her fairly smooth performance tonight and her near-disastrous performances in those one-on-one interviews.

This debate may have a shelf life of about 24 hours, perhaps 48 hours and that’s about it. 

And he’s right.  If there’s no blood on the floor, the media will move right along.  Next story: the House votes on that bailout-rescue package today.  It’s going to be nailbiter.

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Pelosi’s partisan snipe + GOP’s faux protest = dead bailout

September 30, 2008 at 5:33 pm · Filed under domestic policy, Economy, Politics ·Tagged , , , , , , , , ,

Wesley Pruden, over at the Washington Times, is one of many conservatives across this land to blame Nancy Pelosi, the House Speaker from San Francisco, for the failure of the bailout bill in the House yesterday.  Pruden goes on to make the best suggestion Sarah Palin has gotten all month: she should use Thursday’s debate with Joe Biden to whack the heck out of Nancy Pelosi for killing the bailout package with that pesky partisanship that Palin will end to if the American people so bless her and John McCain with the privilege to serve them.

It’s a great idea, considering there really aren’t any live ones out there to improve Governor Palin’s image of late.  I look forward to seeing how Joe Biden fields direct assaults from Palin.  But seriously, can we really blame Pelosi’s speech for the failure of the bill?  Here is what she said:

“When President Bush took office he inherited President Clinton’s surpluses — four years in a row, budget surpluses on a trajectory of $5.6 trillion in surplus. And with his reckless economic policies within two years he had turned that around and now eight years later the foundation of that fiscal irresponsibility, combined with an anything-goes economic policy, has taken us to where we are today.

“They claim to be be free-market advocates when it’s really an anything-goes mentality: no regulation, no supervision, no discipline. And if you fail you will have a golden parachute and the taxpayer will bail you out. Those days are over. The party is over in that respect.”

She added: “Democrats believe in a free market. We know that it can create jobs, it can create wealth, it can create many good things in our economy. But in this case, in its unbridled form as encouraged, supported by the Republicans — some in the Republican Party, not all — it has created not jobs, not capital, it has created chaos.”

The thing is, the prepared version of that speech was not nearly so direct a condemnation of the Republican party.  I feel for the poor staffer who wrote that speech and had to sit and listen as the boss went off message.  Yes, Pelosi’s comments were clearly not helpful, and they were not in good taste.  She should have waited until after the vote to deliver her stinging condemnation of Republican economic policies.  But was it enough to tank the bill?

One has to ask the question, why were the dozen or so Republicans – who John Boehner and his Republican whip (vote counter), Roy Blunt of Missouri, claim were spooked by the partisan rhetoric – why were they going to hold their nose and vote for a deal they didn’t like and that they thought would certainly hurt them politically?  They were prepared to do it, one can only surmise, for the good of the country, for the good of the economy.  What other reason could there have been?  Moreover, why didn’t all of the Republicans protest?  Why only twelve – the magic number needed to pass the bill?

Nancy Pelosi comes off looking idiotic for her gratuitous GOP-bashing on the House floor before the big vote.  But I cannot accept that her poorly-timed partisan jabs would give those 12 members license to throw the good of the country overboard.  Those members who objected to Pelosi’s partisanship actually succumbed to that very vice by rejecting the bailout bill at the last minute.

Barney Frank, the famously grumpy chairman of the House Financial Services Committee, wasn’t buying it either.

“Here’s the story: There’s a terrible crisis affecting the American economy. We have come together on a bill to alleviate the crisis. And because somebody hurt their feelings they decide to punish the country . . . And there are 12 Republican members who were ready to stand up for the economic interests of America but not if anybody insulted them . . .

“I’ll make an offer,” he added. “Give me those 12 people’s names and I will go talk uncharacteristically nicely to them and tell them what wonderful people they are and maybe they’ll now think about the country.”

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Who’s going to bail out the bailout?

September 29, 2008 at 8:01 pm · Filed under Economy, Politics ·Tagged , , , , , , , , ,

Wow.  Maybe John McCain should have skipped the presidential debate on Friday afterall.  Because whatever progress he deemed there to be on the bailout legislation under negotiation, it was not enough progress to pass it today.  The measure just failed by a vote of 228 – 205 (65 Republicans and 140 Democrats voted for it).  While it would have passed with 12 more votes, more likely is that 20 more members would have needed to support the deal, so that no 1 member sealed its fate.

What can we learn from this vote?  First, neither John McCain, nor Minority Leader John Boehner, leads the Republican caucus in the House of Representatives.  And if John McCain loses this election, watch for the results of another election – leadership elections in the House next year.  Fiscal conservatives have been growing bolder in the waning years of the Bush presidency.  This vote, above all others, shows that their resurgence is all but certain.  If Barack Obama wins, he’ll have a devil of a time passing tax hikes on the wealthy.

We also learned that Democrats and Wall Street make for strange and ultimately uncomfortable bedfellows.  The liberal wing of the party just wasn’t willing to reward what they consider to be Wall Street fat cats.  In this, they have more in common with the conservative Republicans.  But more importantly, Pelosi wasn’t enforcing party unity on this vote on purpose; the Democrats were bent on a balanced vote – which they did not get, and for which they were willing to let the bill fail, for now.

Meanwhile, the Dow drops five hundred points in less than an hour, following the House vote.

Ben Pershing discusses why the bailout failed, starting with the fact that the Bush administration never should have let the “Bailout” label stick.

Poor Salesmanship. Did you know that the general consensus is now that this bill will not cost $700 billion? If you didn’t, it’s because the bill’s proponents did a poor marketing job. From the start, the Bush administration did not do enough to emphasize the point that taxpayers would get at least some of the money back, and that gigantic price tag got stuck in the head of the public (and the media). The administration was also too eager and ambitious with its initial proposal, alienating many lawmakers right from the start by seeming to ask for the moon — give us everything we want, with no oversight . . .

Vulnerables Scared. If you have a difficult reelection race, what was your motivation to vote for this bill? “I voted in favor of a bill that I didn’t really like, because I had no choice,” doesn’t make for a particularly snappy campaign slogan. “I stood up to my party and Wall Street,” sounds much better . . .

No Center of Gravity. Who’s running Washington right now? Bush is the lamest of lame ducks, with a miniscule approval rating and no clout or political protection left to offer . . .

Ideological Problems. The simplest explanation of all for the loss was that a lot of members just didn’t like the bill. Capitol Briefing outlined last week all the reasons why House conservatives balked at the initial proposal, and the basic point still stands: A massive expenditure of taxpayer funds and intervention in the free market, combined with tough new regulations, simply offended too many conservatives’ most basic principles. And Republicans, being in the minority, feel no responsibility to govern. They calculated that the bill’s failure will be blamed on Bush (so what?) and the majority Democrats.

On the liberal end of the spectrum, most members believe this really does represent a “bailout” of Wall Street and a power grab by the Bush administration, and that the current crisis vindicates their longtime warnings that the financial system was riven by greed and insufficient regulation. For those members, the final package didn’t have nearly enough help for struggling homeowners.

Oh, and then there was ‘partisanship’.  The House Republican leadership claims that Pelosi’s pre-vote speech (which, among other things, blamed the Bush administration’s policies for this disaster and promised a “New Direction” next year . . . ) so deeply offended swing Republicans that they swung the other way.  Maybe she could have held off with the blaming, but can you really imagine some Republicans switching their vote on a subject of such vital importance to the nation’s economy over that?

So, what now?  Apparently the House will vote on the bill again shortly (today).  The sad fact is that the bill is now more likely to succeed after the first failed vote.  The ensuing panic on Wall Street this afternoon, painful as it was, was probably just the bailout this bailout needed.

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Who won the debate?

September 28, 2008 at 2:10 pm · Filed under Economy, foreign affairs, Politics ·Tagged , , , , , , , ,

If the debate were judged on the opening “lead” question alone, then Barack Obama won handily. But John McCain recovered from a shaky, unfocused beginning, and went on the offensive during the foreign policy portion of the debate.  He did very well, despite such a tumultuous week for his campaign.  He was surefooted and detailed oriented.  But his obvious condescension toward Obama was unattractive, as were his satisfied grimaces (McCain has an uncanny ability to look tense and angry when he is pleased) and his inability to turn and dialogue with his opponent.

While Obama did not turn in the knock out punch performance his supporters wanted, he did what he had to, and he did it well.  Obama was confident and concise.  The most important thing he had to do was to stop rambling like a professor you tune out halfway through a lecture.  His answers were meaty, purposeful and reassuring.  In fact, it was McCain who would dive into language that means nothing to people beyond the beltway, and never really channeled the anxiety of the middle class voter.

McCain did an excellent job of reminding viewers that he has years of experience dealing with foreign policy, but Obama also effectively reminded viewers about the candidates’ judgment.  He scolded McCain for talking as if the war in Iraq started last year, with the surge, when in fact it started 5 long years ago.  McCain beat on Obama for his willingness to meet with foreign leaders; a statement I am sure Obama wishes he could just plain take back, because there is never a response that closes the door on the discussion.

Yet, Obama did land a good hit on McCain, making him seem way out of touch on dealing with friends and foes when he said this: he would not meet potentially with the Prime Minister of Spain.  “I mean, Spain,” he repeated for incredulous emphasis.  “Spain is a NATO ally.  If we can’t meet with our friends, I don’t know how we are going to lead the world in dealing with critical issues like terrorism.”

One of the most compelling moments of the debate was when John McCain showed a bracelet he wears in honor of a fallen soldier.  His mother gave it to Mr. McCain and asked him to finish the mission in Iraq, and make sure his death was not in vain.  Obama countered, “I have a bracelet too,” from a mother who told Obama she didn’t want any more mothers to feel the pain she has suffered.  It was a powerful contrast.

All in all, it was a very balanced debate.  I am not sure that McCain brought any fence-sitters to his side, but Obama’s confidence just might have.  A CBS poll showed that more people felt better about Obama after the debate than they did about McCain.  Both the CBS poll and a CNN poll of viewers gave Obama the edge (51% to 38% in the CNN poll).  Obama walked away with a double-digit lead on the economy, and even edged out McCain on handling the war in Iraq.  And while more people thought John McCain was ready to be president, Obama gained 16% points on that score.

More good news for Obama – LA Times/Bloomburg just released a post-debate poll:

Though more voters still see McCain as more knowledgeable, Obama was seen as more “presidential” by 46% of debate-watchers, compared with 33% for the Arizona senator.

The difference is even more pronounced among debate-watchers who were not firmly committed to a candidate: 44% said they believed Obama looked more presidential, whereas 16% gave McCain the advantage.

The Republican candidate also has lost ground on several measures of voter confidence, including trust.

After the debate, 43% of registered voters who saw the event said Obama had more “honesty and integrity,” compared with 34% for McCain. A week ago, the same voters were evenly divided, with each candidate winning the trust of 40% of respondents.

Voters are also less confident than a week ago that McCain will strengthen the economy and less convinced he cares about voters like themselves.

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Washington’s game of chicken on Wall Street crisis

September 26, 2008 at 2:41 am · Filed under domestic policy, Economy, Politics, Uncategorized ·Tagged , , , , , , , , , , , , ,

First there was agreement – in principle – on a bailout package, and now there is not.  Why?

Secretary Paulson delivered his sweeping three page proposal to Congress last Friday.   Congressional leaders on both sides of the capitol (and the aisle) began negotiating the parameters of a retooled deal. They debated priorities like, does Paulson really need this much money upfront?  How do we know how much is needed?  Will taxpayers be left holding the bag, or is there a way to structure potential buyouts in such a way that taxpayers get any profits and Wall Street CEOs get chastened (with limited compensation packages).  And is there a way to help stop more home foreclosures?

All the while that the bipartisan, bicameral negotiators defined and addressed these questions, John McCain was refusing to take any clear position on the deal.  On Tuesday he claimed to not have read the Paulson proposal yet.  By Wednesday, a deal was in sight.  Word was most Senate Republicans would support it, thus Senator Bennett’s comment today that they had an agreement.

But while McCain waffled, House Republicans, led by the most conservative of them, were balking. They are up for re-election and a taxpayer bailout fundamentally violated the absolutist free market principles to which they adhere.  So even if John Boehner was open to the agreement taking shape in negotiations, it doesn’t mean the caucus is with him.  And even though Paulson reportedly reached out to McCain on Wednesday (the excuse to suspend the campaign), it’s not clear McCain can bring the caucus along either.  Speculation was (and still is) rampant that the rank and file GOP want to oppose the deal, while the Democrats grudgingly sign off.  It could pass, just barely, Bush would sign the bill, and Republicans would bludgeon Democrats over the next month as the party that used taxpayer money to rescue an unrepentant Wall Street.

And so that is the dynamic that took over in today’s meeting in the White House, in which John McCain reportedly took no stand and said little at all.  Neither House Minority Leader John Boehner nor John McCain can deliver the party, or afford to break with it.  And Nancy Pelosi and Harry Reid aren’t willing to risk being backed into a corner and locked into a deal with Washington’s least popular Republican, when $700 million dollars are at stake.  The question arises, should they just hold their nose, do the right thing and hope to talk taxpayers through why this was this right thing to do?  I’m not holding my breath on that one.

So what we have here is a game of chicken.  The upside to McCain will be if he and his renegade Republicans can force some of their alternative ideas onto a deal that gains bipartisan consensus. But no one has explained these ideas and McCain hasn’t backed them.  As I understand it a group including Eric Cantor (R-Va) and Jeb Hensarling (R-TX) want Wall Street “to pay for its bailout” by offering them government backed insurance, sort of like a homebuyer might buy mortgage insurance.  But if it is government backed – whatever that means – it still sounds a lot like our tax dollars at work, and I don’t see any potential profit at the other end, either.

So, could this all fall apart?  McCain has staked — rather, suspended — his campaign on getting a deal.  If he really wants a deal, can he force Republicans to move to the middle?  After the White House meeting with the candidates and congressional leaders, it wasn’t looking good.  Paulson later pleaded – reportedly on one knee?? – to Democrats, “Please don’t blow this up!”  To which Pelosi said, ‘We’re not the ones trying to blow this up; it’s the House Republicans!” “I know, I know,” Paulson sighed.

Maybe it will turn out that Paulson, Democrats and Senate Republicans were being too easy on Wall Street and the sky won’t really fall without this bailout.  Maybe there is a better way to restore confidence without the government footing or fronting the bill.  No one is crazy about the idea of buying “toxic waste,” especially with Ben Bernanke admitting in Q and A on Capitol Hill, he can’t guarantee this will work, and that he’s “been wrong quite a few times before.” If there is a better way, I’d sure like to hear it.

It is equally possible that the Republican party (minus, unbelievably, President Bush), with a little help from the Democrats, gambled the stability of our capital markets today — and thus ordinary Americans’ access to home, car, construction or school loans for the forseeable future — for the sake of this election.  What else could we have expected them to do?

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Will they, or won’t they debate?

September 25, 2008 at 2:33 pm · Filed under domestic policy, Economy, foreign affairs, Politics ·Tagged , , , , , , , , , , , , , , , ,

Yesterday, John McCain suddenly announced he would be suspending his campaign, and returning to Washington to help broker agreement on the rescue/bailout package that congressional leaders and Secretary Paulson have been negotiating.  He also called to cancel tomorrow night’s debate.

David Letterman was miffed that McCain blew off a scheduled appearance on his show last night, in his “race to the airport,” but sat for an interview with Katie Couric instead.  So, Letterman rolled live footage of McCain getting his face powdered before the interview.  “Hey, I’ve got a question for you,” Letterman yelled at the onscreen image of McCain.  “Need a ride to the airport?!”

For his part, Barack Obama wasn’t having any of it.

“With respect to the debates, it’s my belief that this is exactly the time when the American people need to hear from the person who, in approximately 40 days, will be responsible for dealing with this mess. And I think that it is going to be part of the president’s job to deal with more than one thing at once . . .”

“I think there’s no reason why we can’t be constructive in helping to solve this problem and also tell the American people what we believe and where we stand … So in my mind, actually, it’s more important than ever that we present ourselves to the American people and try to describe where we want to take the country and where we want to take the economy.”

President Bush went on the air last night to calm us all, and to explain why we won’t be able to get a car, home or school loan next year, even with a great credit record, if we don’t act now to stabilize our capital markets.  He’s right, actually.  But George Bush isn’t exactly someone most Americans feel confident in.

We are looking to the guy who, just over a month, is going to inherit this mess.  So, as Obama said, there is no better time to hold a nationally televised debate than now.

Senator Lindsey Graham, McCain’s debate negotiations pointman, had this to say yesterday: “We need a solution on this crisis more than we need a foreign policy debate.”  Oh, really?  I wonder what Mr. Graham had to say today, after Pakistani and American troops exchanged fire — with eachother — and Pakistan’s Prime Minister had this to say:

“We will not tolerate any act against our sovereignty and integrity in the name of the war against terrorism,” Pakistan’s prime minister, Yousaf Raza Gilani, told reporters on Wednesday. “We are fighting extremism and terror not for any other country, but our own country.”

And that’s not all.  Terrorist violence in Pakistan has been escalating,  and there are now reports that a “grim” new National Intelligence Estimate on the situation in Afghanistan is ready, but that it won’t be released until after the election.  Iran’s nuclear development activities aren’t on hold while Washington works to rescue Wall Street.  The North Korea deal still hangs precariously on the cliff of failure.  A new Israeli Prime Minister may or may not be able to hold a coalition government together to continue peace talks with the Palestinians, and with the Syrians.  Hugo Chavez gallivants off to see his new BFFs in Moscow every other month.  But hey, no biggie.  All that stuff can wait.

I agree with Financial Services Committee Chairman Barney Frank (never one to mince words) that McCain’s announcement was “the longest Hail Mary pass in the history of football or Marys.”  The negotiations include Senate and House leadership and the Senate Banking and House Financial Services committes.  John McCain will not be in the room at 10:00am this morning when the negotiators hammer out their remaining differences.  In fact, the negotiators will have to take a break from the actual business of negotiating to troop over to the White House and have a meaningless photo op with the President.  The president has little juice left for effective arm-twisting, and whatever lines in the sand he wants to express, are obviously represented for him by Hank Paulson.  The only thing that meeting could be good for is if Congressional leaders and Paulson have reached an agreement by the time they all arrive at the White House, and President Bush announces the deal when the “meeting” wraps.

At this stage, the arms that still need twisting are those members who don’t want the government, and thus the taxpayers, to have to front this money for Wall Street.  They are understandably angry, but they need to realize that things will only get far worse if we don’t act to stabilize the markets.  So the parameters really are around how much money truly needs to be fronted (Paulson is erring on the side of as much as he can have the authority to move around), what measures will be taken to penalize those at fault (limiting CEO pay, for example), what measures can be put in place to increase the likelihood and the amount of profit the taxpayer, and not the bailed out companies, will get later for fronting the money now, and, is there anything Congress can do to prevent more homes from being foreclosed (I have read about a proposal to allow bankruptcy judges to reset mortgage terms, but I doubt that would fly).

If John McCain wants to be useful, he should march over to Jeb Henslaring’s (R-TX) office and twist his arm.  “Jeb, I don’t like this anymore than you do,” he should say.  “But I need the caucus with me on this one.  I don’t want to be responsible for the deal failing, and Reid and Pelosi are threatening not to move if the GOP sits back on this one.  It sure would be nice to all buck the president, vote no and let the Democrats pass a socialist government takeover of Wall Street, but Harry and Nancy aren’t going for it.  So, I’ve come back to save the deal, right?  Seriously, I need you to shut up and fall in line.  You know, as if I were the leader of the Party now and I carried some real sway with you jerks?”

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On Economy, John McCain channels George Constanza

September 19, 2008 at 11:23 pm · Filed under Economy, Politics ·Tagged , , , , , , , , ,

How the presidential candidates response to real-life economic crisis is an excellent barometer for the kind of leadership we can expect from them if we elect them in November. 

So, Barack Obama stayed cool.  He has been measured, stern and, frankly nonpartisan in his response.  He has offered to “refrain from laying out a more detailed plan” to deal with the crisis until he has been fully briefed of the response being put together by Treasury Secretary Paulson, Fed Chairman Bernanke and congressional leaders, in an effort to keep highly-charged presidential politics from poisoning the well.  This is “not a time for fear, for panic,” he said today, but a time for “resolve and leadership.”  As I heard Pat Buchanan say tonight on MSNBC’s Race to the White House, Obama “realizes the near catastrophe” that could ensue if a swift and effective government response careens off course.  Buchanan went on to compliment Obama, whom he called a “quasi-statesman” in his handling of the crisis, and added that, having been dealt a good hand (in an accidental and unfortunate way) in the economic news this week, Obama has “played it exceedingly well.”

John McCain’s response to the news out of Wall Street has been slightly more excited:

 

 

McCain has gone from being “fundamentally a de-regulator” of private markets to lashing out against Wall Street, calling for heads to roll, creating new agencies, introducing crisis plans and taking ridiculously cheap potshots at Obama in a rush of negative ads.  On ABC’s This Week, the conservative George Will criticized McCain’s performance as “unpresidential” . . . “substituting vehemence for coherence.”  

This is not to say that the credit crisis is not to be taken very seriously.  But McCain’s political exercises– during a genuinely fragile time for the markets — are transparent and in poor taste. From an L.A. Times story:

McCain did not comment on the administration’s rescue plan Friday. Campaigning in Wisconsin and Minnesota, the GOP nominee instead devoted large sections of his comments to assailing Obama in increasingly personal terms.

McCain repeatedly questioned Obama’s ethics and accused him of putting his own interest ahead of the nation’s. And he issued dire warnings about the consequences of supporting the Democratic nominee. “A vote for Barack Obama will leave this country at risk during one of the most severe challenges to America’s economy since the Great Depression,” McCain told thousands of supporters at a rally in Blaine, Minn.

Obama, who has also grown increasingly combative, fired back at a rally in a sports arena in Coral Gables, Fla.

“This is a guy who spent nearly three decades in Washington, and after spending the entire campaign saying I haven’t been in Washington long enough, he apparently now is willing to assign me responsibility for all of Washington’s failures,” Obama said.

“I think it’s pretty clear that Sen. McCain’s a little panicked right now.”

I think so too.

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Move along, these are not the fundamentals you’re looking for

September 18, 2008 at 3:18 am · Filed under Economy, Politics ·Tagged , , , , , , ,

Looks like Team Obama is finally hitting McCain where it ought to hurt- on his complete lack of interest or concern for the economy ever since the credit crunch hit.

This tough new ad shows McCain repeating the refrain “but the fundamentals of the economy are strong,” over and over again in recent months.  After he foolishly repeated that line again on September 15, following the Merrill Lynch fire sale and the Lehman Brothers bust, and as AIG hung on for its financial life by a thread, he and Sarah Palin both insisted that everyone is just confusing his “verbiage” (a fancy choice of word for ‘word choice’).  He was actually referring to the American workforce and American ingenuity, and those are still very strong.  And as a matter of fact (taken to its logical Rovian conclusion), how dare Senator Obama insult the fine workers of America by suggesting that they are not strong, or that they have done anything wrong?

But, time and again, John McCain has brushed off the credit crisis with that “the fundamentals are strong” line, never once suggesting his own unique definition of the economic fundamentals–never, except after the Obama campaign jumped all over him for repeating this counterintuitive belief in the wake of such historic financial turmoil.  Actually, Obama has been hitting McCain for saying this for a while now, but it is only now that the media started to notice.

Economists refer to a number of indicators as “the fundamentals” of the economy in order to measure the overall health of it.  Here are some of the answers I have seen in a cursory web search for what those indicators are: Government deficits, savings rates , company profits, productivity, job growth, stability of the Banking system, purchasing power index, exports and imports balance, dollar value, gross domestic product…. Do any ONE of these appear strong to you, dear readers?  When you look at all of these fundamentals, it kind of frightens you, doesn’t it?

Which is why those aren’t the fundamentals John McCain wants to talk about.

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Informed consent

September 9, 2008 at 1:35 am · Filed under domestic policy, Economy, Environment, foreign affairs, healthcare, media, Politics ·Tagged

From Wikipedia:

Informed consent is a legal condition whereby a person can be said to have given consent based upon an appreciation and understanding of the facts and implications of an action. The individual needs to be in possession of relevant facts and also of his or her reasoning faculties, such as not being mentally retarded or mentally ill and without an impairment of judgment at the time of consenting. Such impairments might include illness, intoxication, insufficient sleep, and other health problems.

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