Tuesday, September 30, 2008
Harper's position on Iraq circa 2003 (supporting Bush) has clearly been something of an embarrassment for the Conservatives, and it's been quietly swept under the rug in the years since. One wonders how long the Liberals have been sitting on this, because you'd figure it could have helped them in 2006.
Of course, the question we should be asking is whether Harper has actually charted an irresponsible foreign policy course for Canada. Reading the posts headlining Progressive Bloggers, it sure seems to be the popular opinion, but I don't agree.
Sure, we're in Afghanistan, but we have the Liberals to thank for that. All our NATO allies are similarly engaged in that country. And the Harper government has pledged to withdraw within a few years.
Really, other than attempting to assert sovereignty over the Arctic (which, admittedly, will take a lot more than a few icebreakers), I'm not really sure what else the Harper government has done in terms of foreign relations. Maybe that's the problem. Maybe Canada is no longer punching above its weight, as Danielle Takacs argues here.
I'm not sure that this plagarized speech is evidence of that, only a reminder that Harper was wrong about the most bone-headed and destructive war of our generation and, for some reason, felt he needed to borrow rhetoric from other world leaders to defend it.
But it was defeated by a revolt of House Republicans. What's up with these guys? Here's David Brooks, the usually moronic conservative NYT columnist:
House Republicans led the way and will get most of the blame. It has been interesting to watch them on their single-minded mission to destroy the Republican Party. Not long ago, they led an anti-immigration crusade that drove away Hispanic support. Then, too, they listened to the loudest and angriest voices in their party, oblivious to the complicated anxieties that lurk in most American minds.
Now they have once again confused talk radio with reality. If this economy slides, they will go down in history as the Smoot-Hawleys of the 21st century. With this vote, they’ve taken responsibility for this economy, and they will be held accountable. The short-term blows will fall on John McCain, the long-term stress on the existence of the G.O.P. as we know it.
I’ve spoken with several House Republicans over the past few days and most admirably believe in free-market principles. What’s sad is that they still think it’s 1984. They still think the biggest threat comes from socialism and Walter Mondale liberalism. They seem not to have noticed how global capital flows have transformed our political economy.
Or as Kevin Drum put it:
The Republican Party is now officially hostage to a band of primitive conservative ideologues whose knowledge of economics was already outdated when Christians were being fed to lions. They are simply beyond belief.
They are definitely a different breed, perhaps the most shameless and brainless politicians in all of American politics.
Most observers believe that even those Republicans who voted against the bill secretly wanted it to pass. They know how important this is. But they didn't want to be seen supporting it (and wanted to be able to blame Democrats for its passage later on), so they put their own political survival above the fate of the nation itself, and that's where things stand today.
Pretty damning indictment.
But more importantly, this revolt of House representatives may signal something deeper: AL believes that Republicans are beginning to jump ship from the McCain campaign:
The more I think about the events of yesterday, the more I'm convinced that a substantial faction of the GOP has essentially written off John McCain and instead has its eyes on a 2010 and 2012 resurgence. How else can you explain the RNC releasing an ad attacking the very bailout bill that John McCain is trying to rally support and take credit for?
Ben Smith reports that the ad was cut and released before the House voted yesterday, at a time when everyone thought that the bill would pass (albeit narrowly). The goal of the House Republicans was not to kill the bill. The plan was to have enough Republicans (mostly retiring Republicans and those in very safe seats) vote for the bill to allow it to pass, but have every other Republican vote against it. Once the bill was safely passed, the RNC and those in the House who voted against the bill could then turn around and stoke public resentment of it.
This strategy--had it worked--may well have helped the GOP in the long term and allowed them to reinvent themselves for 2010 and 2012. It would not, however, have helped John McCain.
I honestly don't think there's any grand strategy behind it. I think at this point, it's every Republican for himself, and that is enough to explain the revolt. It's a party in confusion and disarray, not one reinventing itself for 2010 and 2012.
Monday, September 29, 2008
McCain: Obama Is To Blame For Bailout Failure
Desperate bluster from a small, angry man. The same man who bragged about his central effort in securing a compromise just this morning.
McCain is really on his last legs here; his stunt was a disastrous failure. The bailout may not have passed in any case, but his pretence of going to Washington to fix the mess was a complete farce.
At best, he did nothing to facilitate negotiations, and at worst, actually sabotaged them. Of course, he mostly kept his mouth shut while the grownups debated, but what he did do was inject presidential politics into a delicate situation. Then, after doing nothing to achieve compromise, he nevertheless took credit for achieving the compromise, and then on the very same day, the bill is defeated in the House by members of HIS OWN PARTY. And he has the balls to blame Obama for its failure!
I honestly don't see how McCain recovers from this. Combine today's events with the inevitable trainwreck on Thursday, and I think we're looking at 300 electoral votes minimum for Obama in November.
Isn't it time for McCain to "suspend" his campaign again?
So that's the good news: McCain, already in a deep hole, just dug it a little deeper.
But the bad news is that this is some serious shit. Largest ever one-day drop on the Dow. Same for the TSX. World markets will no doubt follow suit.
For all the ignorant crowing by some on the Left, what happened today is bad for everyone, rich and poor alike. Look, no reasonable person wants the crooks on Wall Street to be bailed out. It's a tough pill to swallow, and that's precisely what is making this politically untenable for so many incumbent Congressmen (read Nate Silver). And maybe there are better ways to do this.
But what happened today just erased more than $1 trillion worth of wealth. And Wall Street fat cats aren't the only ones suffering (in fact, they'll suffer less than most). It's people's retirement funds. It's their jobs. If nothing is done to fix this, everyone is going to feel the effects, and don't fool yourselves into thinking otherwise.
UPDATE: Ezra Klein's take on the failure of the bailout:
With leadership -- and elites -- so aggressively behind the bill, the massive defections suggest that congressmen are sensing a towering populist outrage. Like on the immigration bill, the opposition did not fear their party but their voters. The implication here is that the politics of the bailout are much more intense than most currently recognize.
The question is what comes next. The Dow has plummeted. It's lost 700 points in a single day. It's the sort of freefall that suggests the markets may well begin to lock, that the continually available credit that oils the economy may dry up, with catastrophic consequences. The pressure from the market collapse could sober some congressmen into voting for the next iteration of the bill after having extracted some quick and cosmetic changes. Few want to be judged, either by their constituents or by history, for crushing the American economy beneath their own political cowardice. Alternatively, House Democrats could construct a new strategy: Rather than looking for bipartisan agreement on a muddled bill, they could take full ownership and seek partisan agreement on aggressive bill. They could move away from the bailout model and towards outright nationalization. Only Pelosi knows if she's got the votes for that.
Above all, though, this is a failure of politics. Like with global warming, with health care, with the national debt, with immigration. It is further proof that we have a calcified political system incapable of responding to either long-term threats or short-term crises. The electoral and partisan incentives have made actual action too dangerous and rendered obstruction everyone's easy second choice. And in politics, you just about never get your first choice. And so the Republicans killed this bill. Without their cover, the Democrats couldn't save it, because politically, they couldn't take ownership of it.
Sunday, September 28, 2008
NDP platform pledges billions for child care
And billions more for First Nations. Billions for affordable housing and energy retrofitting programs. Another billion in $1000 grants for all first year university students.
Look, all this is great. But how does the NDP plan to pay for it? Apparently, by reversing corporate tax cuts and pulling out of Afghanistan. Since the Conservatives have pledged to withdraw from Afghanistan within a couple years anyway, that leaves the corporate tax cuts.
The NDP loves to attack big business and side with unions and "working families", but the simple fact is that outside of Alberta, our economy is hurting. Anyone who thinks higher corporate taxes are the answer doesn't know what they're talking about. Sure, they may help pay for the billions of dollars in new government spending. This year. But what about next year, when those same corporations that the NDP loves to rail against ship jobs overseas where the corporate taxes are lower? What happens when Layton's "working families" are no longer working and tax revenues fall? How will he pay for his new social programs then?
To me, the NDP represents the unrealistic and naive Left. The Left where everything is possible, nothing is too expensive, corporations are the villains and workers are the heroes, and complete social justice is achievable. The Liberals represent a much more pragmatic Left; sympathetic to many of the same principles, but much more responsible managers of the economy. There's a reason why Canadians have never entrusted the federal government to the NDP, and it isn't because we don't like child care benefits or grants for students or affordable housing. It's because we aren't all Kool-aid drinkers.
2. Excellent editorial by Frank Rich, summing up the absurdity of the McCain campaign.
3. Looks like they've agreed to a compromise on the bailout. Still $700 billion to buy out toxic assets, but the added provisions look good:
- The $700 billion would be disbursed in stages, with $250 billion made available immediately for the Treasury's use.
- Curbs will be placed on the compensation of executives at companies that sell mortgage assets to Treasury. Among them, companies that participate will not be able to deduct the salary they pay to executives above $500,000.
- An oversight board will be created. The board will include the Federal Reserve chairman, the Securities and Exchange Commission chairman, the Federal Home Finance Agency director and the Housing and Urban Development secretary.
- Treasury is allowed the option to take ownership stakes in participating companies under certain circumstances.
- Treasury may establish an insurance program - with risk-based premiums paid by the industry - to guarantee companies' troubled assets, including mortgage-backed securities, purchased before March 14, 2008.
-One provision requires the president to propose legislation to recoup losses from the financial industry if the rescue plan results in net losses to taxpayers five years after the plan is enacted.
The incremental nature of the bailout will allow for some evaluation of how well the plan is working before flushing more taxpayer dollars down the tubes.
Curbing the compensation packages of company executives is a very populist and, dare I say, appropriate step to take, given that the irresponsibility of these same people created this mess.
I'd like to see some more info on just how the "insurance program" being spoke of here is supposed to work, but it looks like they're leaving the door open for the government (and by extension, the taxpayer) to avoid losing vast sums of money, both by taking ownership stakes under "certain circumstances" and possibly legislation to "recoup losses". Though what those "certain circumstances" are and what the legislation would amount to is not immediately clear.
And I know that it's not what this specific bill was all about, but some tightening of the regulatory framework is the obvious next step unless we want the same thing to happen 10-15 years down the road. Those who fail to learn from their mistakes are doomed to repeat them.
Xenophon himself was an Athenian by birth (born 431 BC) and served as a mercenary soldier in the army of Cyrus the Younger, a Persian noble who campaigned against his brother, the King of Persia, with an army of 10,000 Greeks around the close of the fifth century BC. They fought their way all across the Persian empire, and ultimately defeated the King in battle, but only after the death of Cyrus, rendering their victory irrelevant. Stranded in hostile territory, they marched hundreds of kilometers back to Greece.
The campaign became the stuff of legend within Greece, and fueled the perception of Persian weakness that may have helped inspire the future kings of Macedon. It is chronicled in Xenophon's other major work, the Anabasis.
Banished from Athens for fighting on the side of the Spartan king Agesilaus II (whom he idolized), Xenophon most likely composed the Hellenica in a Spartan estate during the 360s BC.
He makes no secret of his biases, makes surprising omissions, and often digresses from the main account to relate some act of valour or honor that he admires. His research is not nearly as thorough as that of Thucydides; events that he did not experience personally are given briefer treatment, events that were painful to him personally are often ignored entirely.
Unlike his predecessor, he was not making a definitive history for all time. This was a personal work, written for himself and his friends, and those who were already familiar with the events that had transpired.
Although he fails as a historian, his work is nevertheless the primary surviving narrative account of the last years of the Peloponnesian war (as Thucydides died before finishing his history), and of the rise of Theban hegemony in the years following. Although Xenophon has fallen out of favor with modern historians due to his bitter hatred of the Thebans, his admiration of the Spartans in general and Agesilaus in particular, and his omissions (there is no mention of the Second Athenian Confederacy in the Hellenica, even though it was one of the most significant events of the age), it is still an essential and riveting read for those interested in the primary historical sources of Ancient Greece.
Saturday, September 27, 2008
Yes, I have a fan!
It seems this blogger, who goes by the alias of NosferatusCoffin (must be some kind of weird pedophile vampire groupie), describes himself as "The anvil that falls on liberal's (sic) heads", and whom I suspect is a lot like this guy in real life, thinks my blog was inspired by his blog, http://www.asmallcornerofsanity.com/.
Some comments from the thread, which I shall respond to in turn:
First, from Nosferatus Superstar himself:
This guy looks to be some Daily K(rhymes with punt) worshipping Canuck who I am sure was inspired by my blog's site title.Nope. You shouldn't be. In fact, I had never even heard of your shitty little nutjob blog. Second, I don't worship Daily Kos, only Michael Moore, Ward Churchill, Noam Chomsky, Malcom X, Che Guevera, and Karl Marx.
I suppose I should be flattered....NOT!
Next, "Covertness", who I'm sure is very, verrry sneaky in real life....
A canuk who spends all his time bitching about the US.No, I bitch about anything that is worth bitching about. It isn't my fault if so much bitch-worthy stuff comes from the US of A.
Another pearl of wisdom from our favorite vampire groupie:
Indeed. I suppose we should be grateful that he is already in Moose Land. Now, to just herd all Leftists there, for good.Actually, I have never seen a live moose in my entire life and I live in Nova Scotia. It says so right up there in the top right corner. Can't you morans read?
God knows there is plenty of empty space up there. Especially in the Yukon Territory.
...I guess I shouldn't mock the illiterate. They have value to society too; someone's gotta clean those dirty public toilets! But they probably shouldn't try to write blogs for a living...
Next, an actual admin (or "Lady Templar") by the name of Talismen (what is it with these people and their fantasy names?) said the following:
You should file suit against his ass.Yeah, good luck with that, you sister-fucking toothless rednecks. Hey, you want to hurl baseless epithets at me, it's only fair to respond in kind!
His canadian-whisky-drunken ass.
Just remember fellas, we Canadians are EVERYWHERE. Especially where you least expect us. And we have a plan....
Only about 4 points separate the Liberals and NDP in that poll, which is unusual, to say the least. I think it really speaks to just how frustrated the Left is with Dion's leadership, or lack thereof. They'll even turn to a guy with a mustache.
Layton has a tendency to be opportunistic and promise everything under the sun if he thinks it will play with the public. Most of the NDP's stated policies are nothing but feel-good socialist bromides. They are on the wrong side of the health care debate. The wrong side of the immigration debate. Their positions on the environmental debate are self-serving and cynical. And frankly, they are on the wrong side of fiscal responsibility.
The NDP may include as part of their platform "balanced budgets", but listening to Layton over the years, he has given little indication that he sees value in budget surpluses themselves, only an opportunity for more government spending. $5 billion going to pay down the debt would be a waste in his view, when it could be spent on social programs or handed out to organized labour instead.
Canada has made great progress in cutting our national debt burden, something that we as a nation should be very proud of. We are actually the only G-7 country currently running surpluses, and our debt to GDP ratio is down somewhere in the 30% range from a high of over 60% back in the nineties:
(Source: Public Works Canada, via The Bolt)
Our friends to the south could learn a thing or two about fiscal conservatism from us pinko commie Canucks. But not from the NDP.
I don't trust Layton to keep a balanced budget any more than I trust him to keep our military healthy or our economy strong. Nor, for that matter, do I trust the federal Conservatives, who are too obsessed with gimmicky tax cuts and making sure that Alberta doesn't have to share its oil money.
I am biased, so I didn't believe that what I saw was the same as what undecided American voters saw.
For example, I thought McCain was confused and incoherent in the early section (rambling on about cutting spending and confusing fiscal crises with financial crises), and didn't know what he was talking about for the most part. But for lower information voters who don't understand any more about these issues than McCain does, I thought it might have played. McCain always gets excited about earmarks and corruption in Congress, and this came through very strongly last night. Even though Obama pointed out that earmark spending is small potatoes compared to the massive spending increases that McCain proposes with tax cuts and an indefinite presence in Iraq, I thought that McCain might actually gain some traction on this issue.
Likewise, when I heard him talking tough about Russia and Georgia, and fearmongering about Iran, and playing up the success of the Surge, I thought it was putting Obama on the defensive. Most people just assume that McCain is experienced and knowledgable about this stuff, so I thought they'd take him seriously when he rambles on about a League of Democracies and warns that crazy Ahmadinejad wants to blow up Israel.
But it turns out that little of my fears were justified. The early polling results suggest that while Democrats liked Obama and Republicans liked McCain, the all important Independents and "uncommitted" broke quite decisively for Obama. Though McCain still squeaked by as having an edge on foreign policy, Nate Silver points out that the voters just don't care all that much about foreign policy, especially not during economic crises.
There also appears to be a narrative forming about McCain's attitude towards Obama, and it isn't good news for our lovable maverick. Contempt for your opponent is not behavior befitting a presidential candidate, and McCain had it in droves last night.
The classic case is Gore vs. Bush in 2000. On substance, Gore pummeled Bush during their first debate. But Gore was constantly sighing, rolling his eyes, and generally appearing exasperated, as if to say "I can't believe I'm running against this idiot". It didn't matter that Gore was right on the issues; his contempt for Bush became the dominant narrative in the media in the days following the debate, and many think it irrevocably changed the tone of the campaign. Gore clumsily tried to compensate later on, as John Cole remembers:
Look for the appearance of the following words in days to come: cranky, grumpy, crotchety, angry, mean, rude, sneering, snarling, contemptuous, off-putting, snide, boorish, and worst of all, not Presidential. SNL will probably drive the point home in a skit that will become the dominant narrative tonight, and McCain will become boxed in regarding his behavior in the second debate, much as Gore was unable to be as aggressive as he wanted in the second debate (I remember the running joke was that Gore had been medicated for the second debate). And if McCain does not tone down the contempt, it will simply feed the narrative. Or, if we are really lucky, as someone suggested in another thread, McCain will overcompensate and spend the entire time comically and creepily attempting to make eye contact with Obama (think Al Gore walking across the stage to stand next to Bush, and Bush looking at him as if to think “WTF are you doing?”).
McCain's undisguised contempt for Obama has the potential to become a big story. The media loves drama, they love a soap opera. Wrangling over the merits of the candidates' tax plans bores them, but McCain avoiding eye contact with Obama for 90 minutes is like a five course meal for the media stars.
This should be terrifying for the McCain campaign for two reasons. First, the base will not understand it. To them, a sneering,contemptuous jerk is a feature, not a bug. When they try to tone down McCain, it will turn off the diehards. Look at the reaction of the base to Palin’s RNC speech- they LOVED that she was, for all intents and purposes, nothing but an asshole the entire speech. They loved the “zingers” that were written for her. The rest of the country recoiled in horror, and Obama raised ten million the next 48 hours.That's an excellent point about Palin. I know conservatives who thought her convention speech was one of the best things since sliced bread. But for practically everyone else, it was an arrogant and presumptuous piece of vitriol that makes her subsequent fall from grace all the more satisfying.
Second, they have spent the last few months angrily lashing out at the media, and these were the folks who used to love McCain. The campaign no longer allows McCain to talk to the media, and the Straight Talk Express is the “No Talk” Express these days. So for the bobbleheads that will be pushing the new narrative of the mean old McCain, the contrast is real. It wasn’t just the snarling you and I saw on tv. It was the contrast from the nice,friendly, have some BBQ here are your donuts McCain to the new one. They used to know him as their friend, now he is a jerk- the change to them is more dramatic than it is to us, and as such, the mean McCain narrative will be easier for them to adopt and pass along.
This thing is going to spread and will be really bad for Johnny Drama, and I am loving it.
I think McCain did reasonably well to be honest, no major screwups.
He was really shaky during the first forty minutes or so, rambling on about spending and earmarks, and showing very little understanding of the root causes of the financial crisis. And he's very vulnerable on the corporate tax cut issue.
On foreign policy, I think McCain scored whenever he referenced his long career and experience travelling the world and meeting foreign dignitaries, but Obama delivered a strong defense of negotiating with hostile states, and my personal favorite moment of the entire debate was when he outlined the many predictions that McCain got entirely wrong on Iraq (my second favorite was when he ridiculed McCain's refusal to say he'd meet with Spain's prime minister).
On temperament, I think Obama won easily; he was cool and collected through the entire thing, while McCain was often irritated and often seemed to be barely containing his rage while Obama was talking.
It's been said that McCain really doesn't like Obama personally, and (like Hillary) views him as an inexperienced upstart who shouldn't even be on the same stage as him, and I think some of this came through tonight, as McCain often seemed condescending (apparently he couldn't bring himself to even look at Obama). I honestly don't know how voters will react to it.
I guess it's a win for McCain in that, after the chaos and craziness of the last few days, he at least assured voters that he hasn't totally lost his mind. But if all Obama needed to do was demonstrate competence on these issues for the benefit of undecided voters, it was a very good night for him.
(Photo: Chip Somodevilla/Associated Press)
Friday, September 26, 2008
It's a little hard to tell just what McCain's game is at this point. He pulls this big stunt of suspending his campaign to fix the financial crisis (but not really), goes to Washington, and pretty much keeps his mouth shut during negotiations because he doesn't have a clue (in stark contrast to Obama, who was fully engaged and peppered Paulson with questions). The deal then falls apart due to Congressional Republican objections, and McCain agrees to do the debate after all, even though he previously said he would not debate until a deal was worked out.
To be fair, it seems like the main opposition to the bailout was coming from embattled House Republicans, unwilling to be seen as supporting an unpopular handout to Wall Street while running for re-election. They came up with some nonsense about "insuring" the money market funds in question and a ridiculous idea to suspend the capital gains tax for two years (as Ezra Klein explains, no one is paying capital gains on any of these funds anyway, since they're all big losers).
So that's that. McCain accomplished nothing, exposed how small and unimportant he is when it comes to this issue, and yet again demonstrated that he is totally ignorant when it comes to economics. Possibly even worse, for all his grandstanding, he didn't do anything that Obama didn't also do. Obama was there for the negotiations. As I noted, he was engaged in the debate, much moreso than McCain. And all that without having to "suspend his campaign"! Imagine that.
There's just a couple of other things I'd like to post before my inevitable debate reaction later tonight:
This report, found via Balloon Juice, is pretty awesome to contemplate:
McCain Camp insiders say Palin "clueless"
Capitol Hill sources are telling me that senior McCain people are more than concerned about Palin. The campaign has held a mock debate and a mock press conference; both are being described as "disastrous." One senior McCain aide was quoted as saying, "What are we going to do?" The McCain people want to move this first debate to some later, undetermined date, possibly never. People on the inside are saying the Alaska Governor is "clueless."
Hee hee. I can't wait until October 2nd. Though we probably shouldn't lower expectations to such a degree that we'll be impressed if she so much as utters a complete sentence. But the complete and obvious lack of confidence in Palin's abilities being demonstrated by the McCain campaign can't be very encouraging for Republican loyalists.
Then there's this funny and appropriate video:
It's amazing how perfectly that fits.
Anyway, signing off until later tonight. Enjoy the debate everyone, it should be a dandy.
Thursday, September 25, 2008
But anyway, hard at work saving the world, John McMaverick didn't have any time to waste on politics! (well, he was still running ads, still sending surrogates out to attack Obama on TV, and all his campaign offices were open for business, but who's keeping score, right?) Tomorrow's debate could not go on as planned!
...except now that there is an agreement on the table, it looks like it will proceed as planned.
So was this big campaign suspending stunt really necessary? Even though he tried as hard as he could to get out of it, McCain will have to debate Obama tomorrow night. Given how incoherent and incompetent he's been over the past couple weeks, not to mention blatantly sleazy and dishonest, one would think Obama has a lot of ammunition to work with. It's quite possible McCain's just scared to death of going toe to toe with him. Debating is a lot different than sending out surrogates to lie for you and putting dishonest campaign ads on the airwaves; in a debate setting, the other guy can immediately refute your bullshit, and make you look foolish. It's not a perfect system, and lends itself far too easily to vacant soundbites, but at least it's relatively fair.
So not the best situation for McCain, and now he's wasted a lot of time that could have been spent on debate prep. But when you consider some other factors, it may have been worth it...
COURIC: Well, explain to me why that enhances your foreign policy credentials?No wonder McCain tried to grab the spotlight yesterday; he didn't want this disastrous interview to be the top story. It was an absolute trainwreck. I said essentially the same thing about the Gibson one, but this one was several orders of magnitude worse. Some think it might be because she still had some cocky arrogance at that point (her speech at the convention was well-received by the base), but now that her numbers have tanked, she realizes that she is truly in over her head, and her confidence has been deeply shaken.
PALIN: Well, it certainly does because our next door neighbors are foreign countries. they're in the state that i am the executive of. And there in Russia --
COURIC: Have you ever been involved with any negotiations for example, with the Russians?
PALIN: We have trade missions back and forth. We do -- it's very important when you consider even national security issues with Russia -- as Putin rears his head and comes into the airspace of the United States of America, where do they go?
It's Alaska, It's right over the border. It is from Alaska, that we send those out to make sure an eye is being kept on this very powerful nation, Russia, because they are right there, they are right next to our state.
Here's another gem:
COURIC: Why isn’t it better, Governor Palin, to spend $700 billion helping middle-class families struggling with health care, housing, gas and groceries? … Instead of helping these big financial institutions that played a role in creating this mess?
PALIN: Ultimately, what the bailout does is help those who are concerned about the health care reform that is needed to help shore up the economy– Oh, it’s got to be about job creation too. So health care reform and reducing taxes and reining in spending has got to accompany tax reductions.
What the hell is she even talking about? What does any of that have to do with the question? It's like she's desperately trying to recite all the stupid talking points that have been crammed into her brain by the McCain campaign, without understanding what any of it really means or doing any critical thinking of her own.
I almost feel bad for her, except that she made the conscious decision to accept the nomination. She had to know what it would entail; she had to know what would be expected of her. Running for the second most important job in the country is not a decision that ANYONE should take lightly. But she seems to have accepted only a matter of hours after McCain asked.
She deserves every bit of the ridicule coming her way, because this election is just too damn important to start pulling punches so we don't hurt poor Sarah's feelings. Fuck that.
UPDATE: Greenwald was wrong:
Sarah Palin isn't Dan Quayle. She is extremely smart -- much smarter than the average media star who will eventually be interviewing her -- and she is very politically skilled as well. She didn't go from obscure small-town city council member to Governor to Vice Presidential nominee by accident. She'll be more than adequately prepared for the shallow, 30-second, rote exchanges that pass for political interviews in our Serious mainstream discourse. Anyone expecting her to fall on her face or be exposed as some drooling simpleton is going to be extremely disappointed. That might (or might not) happen with real questioning, but she's not going to face that.
Credit where credit is due, Gibson and Couric didn't roll over for her. They actually asked her some real questions. Damn arrogant liberal elitest media! Anyway, this is what he thinks now:
One of two things is absolutely clear at this point: she is either (a) completely ignorant about the most basic political issues -- a vacant, ill-informed, incurious know-nothing, or (b) aggressively concealing her actual beliefs about these matters because she's petrified of deviating from the simple-minded campaign talking points she's been fed and/or because her actual beliefs are so politically unpalatable, even when taking into account the right-wing extremism that is permitted, even rewarded, in our mainstream. I'm not really sure which is worse, but it doesn't really matter, because with 40 days left before the election, both options are heinous.I go with (a).
UPDATE 2: Wow, my whole post is already obsolete.
Bailout deal breaks down.
Key members of Congress claimed agreement Thursday on an outline and crucial details of an urgent multibillion-dollar plan to stave off national economic disaster, but a historic White House meeting with President Bush, the two men fighting to replace him and other congressional leaders broke up with conflicts in plain view.Heckofajob, McCain. That's some great leadership there. Marc Ambinder reports on McCain's "contributions" to the negotiations:
During the White House meeting, it appears that Sen. John McCain had an agenda. He brought up alternative proposals, surprising and angering Democrats. He did not, according to someone briefed on the meeting, provide specifics.No specifics? What the hell do you need specifics for when you have McCain? He'll just sit both sides down and tell them to stop the bullshit. Easy, problem solved!
But with that said, this kind of thing is really not helpful:
Under fire for his government's $45 million in cuts to arts and culture
funding, the Conservative leader yesterday said average Canadians have no
sympathy for "rich" artists who gather at galas to whine about their
"I think when ordinary working people come home, turn on the TV and see
a gala of a bunch of people at, you know, a rich gala all subsidized by
taxpayers claiming their subsidies aren't high enough, when they know those
subsidies have actually gone up – I'm not sure that's something that resonates
with ordinary people," Harper said in Saskatoon, where he was campaigning for
the Oct. 14 election.
Rather cynically, he did not repeat the statement in French, as government arts funding enjoys considerably more support in Quebec.
It's not that I fundamentally disagree with Harper on this issue (I don't). But characterizing artists in general as "rich", and trying to insert a wedge between them and "ordinary people" is nothing but demagoguery. We can certainly debate the merits of arts funding, but this should not be a class issue.
Margaret Atwood wrote a good editorial for the Globe yesterday, pointing out that the cultural sector has become a vital part of our economy, employing some 600,000 people and generating billions of dollars in revenue. Most of those 600,000 are anything but rich snobs attending taxpayer subsidized galas.
Granted, some of them are whiners, and do look quite silly whining about "censorship" simply because the government isn't giving them enough money, but it really isn't fair of Harper to say it in a way that paints all artists with the same brush.
Wednesday, September 24, 2008
The McCain campaign had a close call this morning. Palin was almost forced to take a question from a reporter:
John McCain and Sarah Palin met with Georgian President Mikheil Saakashvilli and Ukrainian President Viktor Yushchenko, and in a break from preferred campaign policy, reporters were briefly allowed into the room for the photo-op. Big mistake .
McCain then looked around the room and gestured as if to welcome questions. The AP reporter shouted a question at Gov. Palin ("Governor, what have you learned from your meetings?") but McCain aide Brooke Buchanan intervened and shepherded everybody out of the room . Palin looked surprised, leaned over to McCain and asked him a question, to which your pooler thinks he shook his head as if to say "No."
Look, "What have you learned from your meetings?" is an easy one. It's not a trick question, or a "gotcha" question, or even a question intended to do test Palin's limited understand of international affairs. She could have easily said something like, "I've been encouraged by how much support the United States continues to enjoy around the world." No muss, no fuss. It's not rocket science.
But, no. The McCain campaign apparently believes the Republican vice presidential nominee is some kind of child, under strict instructions not to speak. Palin has no doubt been receiving extensive briefings on a variety of subjects, and could probably handle a random question or two, but the McCain gang is so convinced of her incompetence, they're just not willing to take the risk -- even after a genuine media backlash has begun in earnest in response to the campaign's heavy-handed approach.
It's really quite hilarious. She could be a heartbeat away from the presidency in a couple months, and yet the campaign is absolutely terrified of exposing her to the press. Terrified. Maybe stuff like this is why:
Katie Couric : If this doesn’t pass, do you think there’s a risk of another Great Depression?
Sarah Palin : Unfortunately, that is the road that America may find itself on. Not necessarily this, as it’s been proposed, has to pass or we’re gonna find ourselves in another Great Depression. But there has to be action taken, bipartisan effort – Congress not pointing fingers at this point at … one another, but finding the solution to this, taking action and being serious about the reforms on Wall Street that are needed.
Campbell Brown is fed up with all the sexism:
And now the McCain campaign is even floating the idea of cancelling the VP debate altogether, and rescheduling Friday's Presidential debate for October 2nd. Don't let them weasel out of this one, Obama.
On the lighter side, here's 236.com's hilarious take on McCain's invitation to Palin to be his running mate.
Couric: I'm just going to ask you one more time, not to belabour the point, specific examples in his 26 years of pushing for more regulation.
Palin: I'll try to find you some, and I'll bring 'em to ya.
Wow, any guesses as to why they don't think she's ready for the debate?
First, the bailout. It's really starting to look like the Paulson plan will not pass in its current form. No congressman facing re-election wants to go along with a massive $700 billion transfer of wealth from the taxpayers to Wall Street. Nor does John McCain. There is a bipartisan consensus forming that Paulson is largely full of shit, and that this is not the only option.
It isn't. There are a variety of other ways to go about fixing the financial sector, but they all involve Wall Street taking some losses. Imagine that! Free enterprises reaping the gains and incurring the losses that result from free market operations! What a radical concept.
Anyway, back to the fun stuff. John McCain decided to "suspend his campaign" today, and asked to postpone the first debate, so he could get to work on fixing the economic crisis. "Country first", right? Not that he has the slightest idea how to fix this mess (he probably thinks we just have to "defeat it" ), but I guess presidential candidates need to at least appear as though they have some idea of what they're talking about.
Personally, I think McCain, knowing that this is not his strongest issue, was hoping that the Dems would sign on to the $700 billion Paulson plan, including Obama, and then he could campaign on a platform of opposing it. But now that it looks like neither party will be on board, he won't be able to demagogue the bailout. So, he's throwing another Hail Mary, trying to appear Presidential while potraying Obama as putting politics above country.
To his credit, Obama has said no to any debate postponement, calling McCain's bluff. Whatever McCain's stated reasons for doing this, the real motive is transparently clear. He knows how badly things are going for him, and he desperately needs to establish some credibility on the economy. For that matter, what McCain plans to do back in the Senate is a rather puzzling question. He brings no extra expertise to the table, so it's not clear to me how his presence will do anything to achieve a speedy resolution.
If anything, it might be the opposite; McCain's reactions to this entire crisis have been laughably incoherent and often in opposition :
When the crisis on Wall Street began, and the markets began tanking nine days ago, the very first message from John McCain was, "The fundamentals of our economy are strong." That didn't work, and McCain dropped the line.
His second message was that he wanted to see a commission investigate how and why the crisis happened. That made McCain appear confused, so he dropped that line, too.
His third message was in opposition to the AIG bailout. That didn't last, and McCain took the opposite position 24 hours later.
His fourth message was to fire Christopher Cox from the Securities and Exchange Commission. That turned out to be ridiculous, and McCain dropped the line, too.
His fifth message was to blame lobbyists, influence peddlers, and the collapse of Fannie Mae and Freddie Mac. That became problematic given the lobbyists and former Fannie/Freddie officials on McCain's payroll.
McCain has simply gone from one ridiculous notion to another, flailing around, looking desperately for something coherent to say. Now McCain has come up with yet another stunt: suspend the campaign, delay the debate, and head back to his day job for the first time since April.
So to recap, McCain has no idea how to respond to this, and with this latest stunt, all he's going to do is inject more politics into the ultimate decision that Congress will make, one that is already being made under the worst possible conditions: fear and intimidation.
To summarize: the Paulson plan buys all the banks' sludge at inflated prices, allowing them to stay in business instead of filing for Chapter 11 bankruptcy. In short, Wall Street doesn't lose a thing, and, in fact, gets a lot more than they deserve, and the taxpayers are short $700 billion. This kind of perverse robbing from the poor to save the rich from well-deserved losses is pretty much unprecedented.
No one disputes that major action is necessary to preserve the financial sector, and by extension, the entire economy. But handing out $700 billion with no strings attached and giving the Treasury Secretary such wide-ranging power to do as he pleases with the money is certainly not the only option, and it's dishonest to suggest otherwise.
The Bush administration is trying to push this false dichotomy: "you have to go along with this specific plan or else the economy crashes", just as they did with Iraq("we have to invade Iraq or Saddam will give WMDs to terrorists and they'll kill us"), just as they did with terrorism and expanded government surveillance powers ("we need to spy without warrants, otherwise the terrorists will kill us"). But I don't think Congress will be bamboozled into doing what he wants quite so easily this time.
Tuesday, September 23, 2008
Rush Limbaugh baselessly asserted of Sen. Barack Obama: "Do you know he has not one shred of African-American blood?" Limbaugh continued: "He's Arab. You know, he's from Africa. He's from Arab parts of Africa.... [H]e's not African-American. The last thing that he is is African-American."Millions of people actually listen to this idiot. First off, Obama isn't from any part of Africa. He was born in Hawaii, to a white Kansan mother and a Kenyan father. Second, Kenya is not an "Arab part of Africa", and Barack Obama is not an "Arab".
Here is a basic geography lesson for anyone stupid enough to listen to and believe the likes of Rush Limbaugh:
Kenya is located in Sub-Saharan Africa, just south of Ethiopia and southwest of Somalia. The people are largely descended from Bantu tribes that expanded over much of central and southern Africa during the past several thousand years, and are, in very broad terms, part of the same racial group as the descendents of West African slaves that make up much of today's African American minority. They speak Swahili, a Bantu language that is not in any way related to Arabic or any other Semitic language.
Perhaps that's too many foren' soundin' werds for Limbaugh's admirers to understand, but I did the best I could.
2. While Joe Biden is out...being Joe Biden, Obama is getting remarkably little support from the big guns of the Democratic party. Where is Hillary? Where is Al Gore? Where is Bill Clinton?
3. A pretty scary story shedding more light on the Taliban's attack on French paratroops last month implies that the guerillas are refining their tactics, and becoming more deadly. 2008 is already the deadliest year so far for coalition forces. Meanwhile, Pakistan is shooting at US unmanned aircraft. Well that's just great.
4. The numbers for our election haven't budged too much. Maybe that's because we're just not all that excited. Personally, I was pretty happy to get my voter identification card in the mail. That was exciting.
Ezra Klein quotes an essay by Luigi Zingales from the University of Chicago that quite succinctly sums up the injustice and hypocrisy of it all:
The Paulson RTC will buy toxic assets at inflated prices thereby creating a charitable institution that provides welfare to the rich—at the taxpayers’ expense. If this subsidy is large enough, it will succeed in stopping the crisis. But, again, at what price? The answer: Billions of dollars in taxpayer money and, even worse, the violation of the fundamental capitalist principle that she who reaps the gains also bears the losses.
Capitalism? What's that?
It is much more appealing for the financial industry to be bailed out at taxpayers’ expense than to bear their share of pain. Forcing a debt-for-equity swap or a debt forgiveness would be no greater a violation of private property rights than a massive bailout, but it faces much stronger political opposition. The appeal of the Paulson solution is that it taxes the many and benefits the few. Since the many (we, the taxpayers) are dispersed, we cannot put up a good fight in Capitol Hill; while the financial industry is well represented at all the levels. It is enough to say that for 6 of the last 13 years, the Secretary of Treasury was a Goldman Sachs alumnus.
The problem that I see with all of this is that it is, at best, a short term solution. Removing all this debt from the equation may give a boost to the ailing financial market, but without correcting the root causes of this crisis (credit bubble, lack of regulations and protections for homeowners) history is likely to repeat itself. Moral hazard rears its ugly head again; if the industry knows that the government is waiting to bail them out whenever they fuck things up this bad, what's to stop them from doing it again?
That's assuming they'll even be in a position to do so. That bad debt isn't going anywhere; it's just being plucked from one basket into another. Time will tell, but most of that $700 billion (that could be better spent on health care, education, or alternative energy) is probably going to go down the tubes. The assets are likely worthless.
But the equity of these banks are not. Zingales argues that the banks should be filing Chapter 11 bankruptcy and "reorganizing" their debts (essentially swapping debt for equity), a move that is not without precedent (in fact, much of the airline industry has filed for Chapter 11 over the past few years). But that would mean Wall Street loses. Not such a radical concept for those that truly believe in the free market, but they are a rare species indeed.
Monday, September 22, 2008
In what has become an ongoing theme, the McCain-Palin campaign has released yetMore specifically:
another ad that makes false claims about Barack Obama's tax plan.
- The ad claims Obama will raise taxes on electricity. He hasn't proposed
any such tax. Obama does support a cap-and-trade policy that would raise the
costs of electricity, but so does McCain.
- It falsely claims he would tax
home heating oil. Actually, Obama proposed a rebate of up to $1,000 per family
to defray increased heating oil costs, funded by what he calls a windfall
profits tax on oil companies.
- The ad claims that Obama will tax "life savings." In fact, he would
increase capital gains and dividends taxes only for couples earning more than
$250,000 per year, or singles making $200,000. For the rest, taxes on
investments would remain unchanged.
It was also pretty funny last week when Factcheck attacked one of McCain's ads for...distorting one of Factcheck's very own reports:
McCain-Palin Distorts Our Finding
While McCain continues to lie about Obama's tax plan, his positions (if you can call them that) on the financial crisis are astonishingly incoherent, his attacks shockingly hypocritical.
I don't think he comes close to understanding the financial crisis, but his lurching back and forth over the past couple weeks has just been staggering. First he's against regulation, now he's for it. First he's against bailouts, then he was for them, and now he seems to be against them again. Then he called for the head of the SEC to be fired, something the President has no power to do, and something even conservatives don't support; the general reaction to this great idea was "WTF?"
Hell, he doesn't even understand what Fannie Mae and Freddie Mac are (nor does Palin), but he knows enough to smear Obama for having an extremely tenuous relationship with one of their former chief executives, even while his own campaign manager, Rick Davis, was getting greased with millions of lobbyist dollars from Fannie and Freddie, among other extensive connections between the McCain campaign and the two mortgage giants.
When confronted with some of the bullshit, campaign strategist Steve Schmidt really blew his top, full of all kinds of self-righteous rage about the media calling McCain a liar and "being in the tank" for Obama, which Joe Klein views as a "jump the shark" moment. Fuck the shark, this is a jump the stratosphere moment. I think that's my brains oozing out of my ears...
As always, TPM has a good rundown of McCain's disastrous week:
Oh, and to top it off, Paul Krugman discovered an editorial in which John McCain said the following:
Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would providemore choices of innovative products less burdened by the worst excesses of state-based regulation.
Ouch. You lose, sir!
Can't wait for the debates; Obama can really bust this thing open if he plays his cards right.
Saturday, September 20, 2008
The government also imposed a temporary ban on short-selling; the practice of day traders selling large amounts of stock to drive prices down, and then buying it back at the lower price, which many believe contributed to the meltdown we saw last week.
The first question a lot of people have is likely this: With the US government already running massive deficits, how can it be justified in purchasing almost a trillion dollars worth of bad mortgages just to bail out investors and executives who made exceedingly poor decisions based on greed?
First off, let's be clear about one thing; the cost of this to the overall economy is already present. It was incurred when these loans were taken out in the first place; this is not new spending. With that said, the government did just take out an enormous amount of new debt, which is why they had to ask Congress for a new debt ceiling (from $10.6 trillion to $11.3 trillion). Dean Baker has a post up explaining this:
From an economic standpoint, the cost of the bailout was incurred when the
bad loans were made. That was when people built a home, borrowed for a vacation,
and spent in some other way that demanded real economic resources in the form of
newly produced goods and services.
When the government supports a bailout, it is not directly creating
demand for new goods and services. It is simply ensuring that money that we
thought was already there (e.g. funds in a money market account) does not
disappear through a financial collapse. No one is going to spend more because
their savings account did not disappear. (They obviously would have spent less
if their savings account actually did disappear.)
Paul Krugman also has a nice graph up showing where the money will come from:
Ultimately, it will move in a circle. The banks will sell their sludge at a marked-down price, and use the money to pay off their debts to their debtors, who are represented here by "Public". And these people will move their money into Treasuries, which the government will be issuing to pay for the bailout.
Next, yes, it does seem grossly unfair to bail out these firms with taxpayer money, but there are a couple things to consider. First, the possibility that this is in large part a liquidity crisis with the banks just irrationally afraid to lend each other money and unable to raise cash through the sale of their mortgage related assets, and that these securities and money market funds are not really worthless (which Paul Krugman thinks is bullshit). If that is the case, the government may eventually be able to sell this stuff back at a profit over time, piece by piece, virtually eliminating all the new debt, but there's plenty of reason to be skeptical.
Here's Kevin Drum:
It's true that the Bernanke/Paulson bailout is aimed at illiquid debt
instruments. And those instruments are illiquid largely because they contain
lots of toxic mortgage securities and nobody knows how much this stuff is really
worth. It's unlikely that the toxic sludge makes these instruments literally
worth nothing, but who knows? The mere possibility that they're worthless means
that any bank who owns them might be insolvent, and since everyone owns
at least some of them, this in turn means that everyone might be
insolvent. Result: no one is willing to loan money to anyone else, because who
wants to loan money to a bank that might never pay it back? And since huge flows
of overnight interbank loans are the oil that lubricates the credit markets,
when this flow seizes up, the entire credit market seizes up. (What's more, if this
WSJ tick-tock is correct, the seizure became critical on Wednesday, which is
why B&P changed their minds midweek about pursuing a systemwide bailout that
they'd opposed earlier.)
So if you, like most of us, are unconvinced that any of this stuff has any actual value, and that the government is just bailing out criminals and handing the bill to the taxpayer, let's ask ourselves just who "the taxpayer" is. It's a fact that the rich (including, we assume, most of these bankers and mortgage executives who are responsible for this mess) pay a disproportionate share of the taxes, even in the US. It's also a fact that lower and middle income people who built houses and took out mortgages that they couldn't afford should take some responsibility for their actions. It isn't all Wall Street's fault.
This is a collective failure, if not a universal one. There is no easy solution that will be entirely fair, nor that will directly target the culprits while leaving the innocent unscathed. All we can do is minimize the bloodletting and try to prevent another such disaster in the future.
Good places to start would be minimum down payments on new home purchases (regulations which most countries have, but are currently non-existent in the US), and stricter leveraging regulation for all financial institutions (to avoid the sight of companies like Lehman Brothers being caught with their pants down as people scramble for their money).
UPDATE: This guy is pretty sure that there are no profits to be found here:
Think of a drunk gambler at a slot machine. He starts with $100 and slowly
loses. Every now and then he wins some money, but he keeps putting the coins
back into the slot until he has lost everything. That is how this plan will
Unless there is a dramatic changes, there will be no upside participation
in the financial companies for taxpayers, and the taxpayers will recapitalize
the banks by, in Krugman's words, "having taxpayers pay premium prices for lousy assets".
Friday, September 19, 2008
(h/t Far and Wide)
Perhaps not entirely fair. It's not like electing the Liberals will instantly turn Canada into a lush, green eco-paradise. But it definitely provides a stark contrast between the parties and speaks a language that everyone instantly understands. If only Dion was as effective a communicator...
And how 'bout them Greens? Polling 13% in the latest Ekos tracker. They're actually out-polling the NDP in Alberta. I can't understand why Harper ever wanted to exclude May from the debates; she's eating into the Left's base, not his. The more seats the Greens win (if any; let's not get too ahead of ourselves), the fewer will go to the Liberals and NDP.
"Oil and coal? Of course, it's a fungible commodity and they don't flag, you know, the molecules, where it's going and where it's not. But in the sense of the Congress today, they know that there are very, very hungry domestic markets that need that oil first," Palin said. "So, I believe that what Congress is going to do, also, is not to allow the export bans to such a degree that it's Americans that get stuck to holding the bag without the energy source that is produced here, pumped here. It's got to flow into our domestic markets first."
I love Blitzer's reaction:
"...alright, not exactly easy to understand what she was saying..."
But really, WTF is she talking about? Even if the US starts all kinds of new oil drilling projects, and puts in place a total ban on exports, it would do nothing to lower oil prices. Oil is an internationally traded commodity, and the prices are set on the world market. And it doesn't matter how much drilling they do, the majority of the US oil supply will still come from Canada, Mexico, and the Middle East:
New offshore drilling not a quick fix, analysts say
And in any case, increased American production from offshore drilling would not necessarily mean lower prices for American consumers because oil is a global commodity whose price is set by global supply and demand.
"Suppose the US produced all its oil domestically," said Robert Kaufmann, director of the Center for Energy and Environmental Studies at Boston University. "Do you think oil companies would sell oil to US consumers for one cent less than they could get from French consumers? No. Where oil comes from has no effect on price."
And there is not likely to be enough new American oil to make much of a difference, Kaufmann and others said. About 86 billion barrels of additional oil may lie offshore, according to the US government's Energy Information Administration. Of that amount, about 18 billion barrels are subject to the moratorium. Much of the rest lies in areas that are too expensive to exploit or that oil companies have not yet tapped for technical reasons, fueling the industry's desire for fresh territory.
"We're picking over bones," said Cathy Landry, a spokeswoman for the American Petroleum Institute. "If we had new acres, we could hypothetically make a big find. We need oil and natural gas in the future."
But in the best-case scenario, Kaufmann said, the United States could only produce an additional two to four million barrels of offshore oil a day - not enough to shift the global supply-demand balance in a world market that now consumes about 86 million barrels a day and is growing fast. About a quarter of that consumption now occurs in the United States.
Kaufmann said that by the time any additional offshore oil got to market, much of it would merely offset losses from the depletion of current oil fields. Meanwhile, oil producing nations can easily keep supply constant by limiting capacity if they know the United States is adding more.
"There's nothing on the supply side that we can really do to disrupt OPEC's ability to influence prices," he said.
More domestic production is not the way to lower the price of oil (or by extension, the price of gas). In fact, there really isn't any way to lower the price of oil over the long term. If we aren't at Peak Oil now, we will be soon, and there is nothing we can do to change that. Prices may fluctuate, as we are seeing now, but over the long term, the trend is clear. Cheap oil is a thing of the past.
Kind of strange how such an expert on energy policy doesn't know this basic fact, huh? The truth is, Palin's experience with the energy industry is limited to taxing oil companies and signing off on a plan for a new Alaskan pipeline that will be completed in a decade or so. She's not an "expert" on it in any sense of the word, unable to answer even a basic question about the oil market that even a second year economics major could handle with ease.
What a farce.
The volatility in the markets right now is just crazy. Investors don't know whether the sky is falling or whether riches are falling from the sky; one day it's PANIC PANIC! SELL SELL! The next day it's WE'RE SAVED! BUY BUY!
The TSX seems to be a lot worse in this respect than other world markets, partly because it's tied so strongly to the volatile oil industry. I have a feeling our investors may be a bit stupider too. But at least our banks are smart.
Ezra Klein has a post concerning whether the US government might actually turn a profit with their sweeping new role in the financial sector, which is an interesting question to say the least:
Matt Yglesias has a post asking whether the government will make a profit out of all this. I'm much more skeptical than he is, but it's worth adding one bit to his analysis. You keep hearing people say that we're in a "liquidity crisis." That's different than what people think we're in, which is an asset crisis. There are a lot of overvalued assets, yes, but the basic problem is that regulations on how much cash banks need to keep on hand have been loosened. Meanwhile, the panic around the overvalued assets is pushing people to take their money out of the market. But the banks don't have enough cash on hand to give people their money bank. Thus, collapse. Meanwhile, old-style banks like Bank of America whose leverage is limited to around 10-to-one (they can only have ten bucks of debt for every dollar on-hand) are riding this out pretty well.
In crises like this, the assets tend to look even more worthless than they are. The smart play would be to simply endure the panic, refuse to sell during the hysteria, and then make rather more money by selling when the chaos ends and the prices drift upwards towards a more natural level. But because these banks don't have sufficient liquidity, they can't do that. The government, by contrast, can. So they're going to buy these assets at very low prices and, in time, sell them off at slightly higher prices. This may mean they make some money. But whether that will be enough money to offset all the cash they'll have to pump into the market to ensure solvency remains to be seen.
In any case, what post would be complete without more examples of McCain demonstrating some rather blatant dishonesty? Today he was going after Obama for an alleged association with Franklin Raines, a former chief executive at Fannie Mae:
Republican McCain released a new spot Thursday that quotes The Washington Post as saying Democrat Obama gets advice on mortgage and housing policy from a former Fannie Mae chief executive, Franklin Raines. [...]
Obama's campaign says Raines is not an Obama adviser and that McCain's campaign knows it because Raines said so in an e-mail earlier this week to Carly Fiorina, a top McCain adviser. Obama's campaign provided The Associated Press with a copy of the e-mail.
"Carly: Is this true?" Raines asks above a forwarded note informing him that Fiorina was on television saying he was an Obama housing adviser. "I am not an adviser to the Obama campaign. Frank." [...]
Obama spokesman Bill Burton ... said Obama only met Raines once briefly at an event, and that Raines sought an introductory meeting with Obama Senate aide Mike Strautmanis. At that meeting, Burton said no advice was sought from or given by Raines, who also had served as President Clinton's budget director.
"This is another flat-out lie from a dishonorable campaign that is increasingly incapable of telling the truth," Burton said. "Frank Raines has never advised Senator Obama about anything -- ever."
Okay, so it's a lie. But even if it wasn't, what does McCain think he's going to prove?
As always, he's throwing bricks from a glass house. Steve Benen asks:
If getting advice from an official at a troubled financial institution is a
sign of bad judgment, then why is that two of McCain's top
advisors include John Thain, from Merrill Lynch, and Martin Feldstein, who
serves on AIG's board of directors?
The election is just 46 days away. Just as McCain's message should be
getting tighter, clearer, and more persuasive, McCain seems to be getting more
reckless, more scatterbrained, and less coherent.
I think Joe Klein nailed it; he's flailing.
Also, McCain's own connections to Fanny and Freddie and their lobbyists are far more extensive than Obama's. Could this campaign get any stupider?
Turns out it can. He also blamed Obama for the crisis! Seriously! This is the full quote:
“We’ve heard a lot of words from Senator Obama over the course of this campaign. But maybe just this once he could spare us the lectures, and admit to his own poor judgment in contributing to these problems. The crisis on Wall Street started in the Washington culture of lobbying and influence peddling, and he was square in the middle of it.”
Culture of lobbying and influence peddling? This from the guy whose campaign is literally being run by lobbyists? To attack a candidate who has refused all donations from lobbyists all along? But wait, there's more:
“Two years ago, I called for reform of this corruption at Fannie Mae and Freddie Mac. Congress did nothing. The Administration did nothing. Senator Obama did nothing, and actually profited from this system of abuse and scandal. While Fannie and Freddie were working to keep Congress away from their house of cards, Senator Obama was taking their money. He got more, in fact, than any other member of Congress, except for the Democratic chairmen of the committee that oversees them. And while Fannie Mae was betraying the public trust, somehow its former CEO had managed to gain my opponent’s trust to the point that Senator Obama actually put him in charge of his vice presidential search.”
Again with all the stuff stuff about Fannie and Freddie: "corruption", "working to keep Congress away from their house of cards", "betraying the public trust". Pretty strong words, but it was John McCain's own inner circle that pushed for the deregulation that made subprimes possible.
Yet again, with one inane, dishonest, baseless attack after another, McCain is counting on the voters to be stupid, and not bother to check the facts. It isn't working for him now, nor will it work in the future. McCain continues to lose ground in the polls (the Gallup tracker has Obama five points ahead now), and Palin has seen her favorable ratings plummet in the past week or so as she has been exposed as a pathological liar and total lightweight on nearly every issue of national significance. She will be the subject of my next post, because this one is too long already.
Thursday, September 18, 2008
As Josh Marshall explains, it doesn't matter how you choose to interpret it, this is a major gaffe:
Okay, a moment to take stock on the embarrassing McCain gaffe. As noted earlier, despite the fact that McCain repeatedly suggests that Spain is a country in Latin America, McCain's foreign policy advisor Randy Scheunemann, insists that McCain wasn't confused, knew exactly who Zapatero was and meant every word of what he said. So with the McCain campaign sticking to its guns, let's review the possibilities of what happened here.
Option #1: McCain is so addled he not only doesn't know who Zapatero is but doesn't even know where Spain is located.
Option #2: McCain was not confused but actually meant his very belligerent comments about Spain and the Zapatero government (Scheunemann's line).
Option #3: Through some mixture of confusion and inability to understand the interviewer's accent, McCain was confused about who he was talking about and decided to wing it, assuming that the person he was being asked about was some other left-wing strong man from Latin America and answering with the standard boilerplate about standing up to America's enemies.
So let's run through the options. I do think McCain's age and sharpness are real issues and legitimate campaign issues. But while I think it's possible that McCain's doesn't remember who 'Zapatero' is, I obviously don't believe that in a calm moment he wouldn't be able to locate Spain on a map. So let's rule out option one is a possible but unlikely option.
So what about option #2? It's true that the neocons around McCain really do not like Zapatero. There are several nonsensical reasons but it at least started with his position against the Iraq War -- and the fact that he shortcircuited right wing efforts to exploit the ghastly Madrid train bombings. So it is true that they don't like him. But this option isn't credible either for two and possible three reasons. First, in the exchange, McCain repeatedly refers to Spain as a country in Latin America. So if Randy really wants to stick to this explanation, he needs to explain why McCain thinks Spain is a country in Latin America, which I assume he doesn't want to do. You just can't have it both ways. Either he misunderstood at some level what he was being asked or he has a presidential disqualifying level of ignorance about geography. The second reason is that back in April McCain explicitly said that he wanted to move past earlier disagreements with Spain and said specifically that he wanted to Zapatero to visit him at the White House if he is elected president. So even if we set aside the geographical confusion, McCain's camp would need to explain why he's changed his policy 180 degrees since April. A possible third explanation is that McCain would not take such a confrontational stance toward a NATO ally. But let's be honest, I wouldn't put it past him. Still, one and two are dispositive.
So we're on to option #3. Some version of option #3 is the only credible answer. Whether it was because of ignorance, confusion or inability to understand what the interviewer was saying, McCain clearly didn't understand what he was being asked. And rather than stop and say, I didn't understand your question, could you restate it?, (Or, who are you referring to?) he decided to wing it and assumed he was being asked a question about another Latin American strong man bad guy. This is simply the only credible explanation that takes account of all the evidence. I think it's a generous read to conclude that the only issue was that McCain couldn't understand the interviewer's accent. But it's definitely possible. Even that, though, puts McCain in a pretty bad light.
Equally bad, Randy Scheunemann would rather further inflame Spanish-American relations by ridiculously insisting that McCain knew exactly what he saying than admit the obvious -- that he didn't understand the question. It wouldn't be that surprising. But given McCain has premised his whole campaign on foreign policy experience they've clearly decided it would simply be too damaging to admit he was either a) confused, b) ignorant or c) reckless enough to spout off aggressive remarks when he didn't even know who he was being asked about.
I too think #3 is the most likely explanation. Even I don't think McCain is unaware that Spain is a European country, and I'm pretty sure he knows that Zapatero is the Spanish PM (the interviewer was wrong too, there's no such thing as a "Spanish President"; Spain is a constitutional monarchy), at least in more lucid moments.
Still, it doesn't look good for a presidential candidate to so easily get confused, and it looks even worse for his chief foreign policy advisor to make things even worse by claiming that the candidate meant to give such a needlessly belligerent answer in reference to a longtime NATO ally.
More fun foreign policy gaffes:
Let's also not lose sight of the broader pattern. McCain thinks the recent conflict between Russia and Georgia was "the first probably serious crisis internationally since the end of the Cold War." He thinks Iraq and Pakistan share a border. He believes Czechoslovakia is still a country. He's been confused about the difference between Sudan and Somalia. He's been confused about whether he wants more U.S. troops in Afghanistan, more NATO troops in Afghanistan, or both. He's been confused about how many U.S. troops are in Iraq. He's been confused about whether the U.S. can maintain a long-term presence in Iraq. He's been confused about Iran's relationship with al Qaeda. He's been confused about the difference between Sunni and Shi'ia. McCain, following a recent trip to Germany, even referred to "President Putin of Germany." All of this incoherence on his signature issue.Actually, it's more accurate to say that Americans don't really care about "foreign policy", by and large (McCain's gaffes are all on points that many American voters would struggle with as well); they care about "national security". And how do they judge who's the best at "national security"? Usually by how eager they are to start wars and bomb people. This is why Bush was able to get such consistently high ratings on the "national security" issue, even though 9/11 happened on his watch, even though he started a disastrous war in Iraq and left the one in Afghanistan to fester, and even though the US's diplomatic standing in the world hit rock bottom during his presidency.
Even though an Obama administration would undoubtably have far better relations with the rest of the world, would be less likely to start misguided wars, and probably would even fight terrorists more competently, most Americans inexplicably continue to trust the Republicans more on this issue.
Anyway, not the very best week for McCain. Joe Klein thinks he's getting desperate:
First, the economic fundamentals are sound. Then we're in a major crisis.
He talks about the excessive compensation that CEOs receive, but continues to
have Carly Fiorina ($100 million for her failed stewardship of Hewlett Packard)
as an economic spokesperson. He wants to have a vigorous new regulatory regime
patrolling Wall Street--even though he has always opposed such a regime and his
pal Phi Gramm was the guy in charge of dynamiting the regulations--and yet he is
running this ad, warning against excessive federal power.
This is called flailing.
Funniest pair of headlines on TPM ever:
McCain: I Would Fire SEC Chairman
ABC: President Can't "Fire" SEC Chair
And what post would be complete without some more ridicule of Sarah Palin?
Sarah Palin likes to tell voters around the country about how she “put the government checkbook online” in Alaska. On Thursday, Palin suggested she would take that same proposal to Washington.
“We’re going to do a few new things also,” she said at a rally in Cedar Rapids. “For instance, as Alaska’s governor, I put the government’s checkbook online so that people can see where their money’s going. We’ll bring that kind of transparency, that responsibility, and accountability back. We’re going to bring that back to D.C.”
There’s just one problem with proposing to put the federal checkbook online – somebody’s already done it. His name is Barack Obama.
What can you say, really?