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Cracker Squire


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Location: Douglas, Coffee Co., The Other Georgia, United States

Sid in his law office where he sits when meeting with clients. Observant eyes will notice the statuette of one of Sid's favorite Democrats.

Monday, September 29, 2008

Goldman, Merrill Collect Billions After Fed's A.I.G. Bailout Loans

From Bloomberg:

As much as $37 billion from federal bailout loans to American International Group Inc. has gone to investment banks including Goldman Sachs Group Inc., the firm Treasury Secretary Henry Paulson used to run.

Without the government money, Goldman, Merrill Lynch & Co., Morgan Stanley, Deutsche Bank AG and other firms could have become some of the biggest creditors in a bankruptcy filing by AIG, the world's largest insurer, because of its billions in losses on subprime bonds and corporate debt.

Bailout Plan in Hand, House Braces for Tough Vote

From The New York Times:

Senator Judd Gregg of New Hampshire, the senior Republican on the Budget Committee and the lead Senate negotiator, raised the prospect of an economic catastrophe.

“If we don’t pass it, we shouldn’t be a Congress,” Mr. Gregg said.

Members of the conservative rank and file remained unconvinced.

“While it creates a gimmicky $700 billion installment plan, attempts to improve transparency, and has new provisions cloaked as taxpayer protections, its net effect is still a huge bailout of the financial sector that will snuff out the free market system,” said Representative Connie Mack, Republican of Florida.

Some Democrats bristled that they were now being called on to do the financial bidding of an administration they had viewed as previously uncooperative in dealing with executives who had performed irresponsibly or worse.

“Financial crimes have been committed,” said Representative Marcy Kaptur, Democrat of Ohio. “Now Congress is being asked to bail out the culprits.”

Throughout Sunday, small groups of lawmakers could be found around the Capitol exchanging their views on the plan. Some said they were willing to take a political risk and back it.

One, Representative Jim Marshall, a Georgia Democrat facing a re-election contest, told colleagues in a private meeting that he would vote for the measure to bolster the economy. “I am willing to give up my seat over this,” Mr. Marshall said, according to another person who was there.

Sunday, September 28, 2008

Financial Troubles Humble U.S.

From The Wall Street Journal:

The success of the pending rescue of the U.S. financial system probably depends as much on the central banks of China and the Middle East as on Congress and the Federal Reserve.

The U.S. is turning to foreign governments and other overseas investors to buy a good chunk of what could total $700 billion in Treasury debt expected to finance the bailout. Foreign investors also are needed to shore up the depleted capital of the nation's financial institutions, seen in the plan by Japan's Mitsubishi UFJ Financial Group to buy a large stake in Morgan Stanley, which is weighed down by bad debt and market distrust.

The financial crisis makes clear how much the interests of foreign lenders have become a top concern in Washington.

[F]oreign lenders have a great deal of sway. If they were to dump U.S. government debt -- or be unwilling to buy more -- the interest rates needed to attract buyers of Treasurys would soar. The already fragile U.S. economy would absorb yet another hit.

China, Saudi Arabia and other big foreign holders are unlikely to take antidollar measures precisely because they own so much U.S. debt. To the extent the dollar declines, so does the value of those nations' holdings.

The U.S. economy has managed to grow in recent years, even though Americans don't save much and the government has run huge deficits, because foreigners kept lending. The same was true in the 1980s. Now the U.S. needs foreign capitals to keep lending.

What a Surge Can't Solve in Afghanistan

David Ignatius writes in The Washington Post:

If there was one foreign policy issue on which Barack Obama and John McCain agreed during Friday night's debate, it was that the United States should send more troops to Afghanistan. The bipartisan enthusiasm for this surge is so strong that there has been relatively little discussion of whether this strategy makes sense.

Rather than more troops, the real game-changer in Afghanistan may be Gates's plan to spend an extra $1.3 billion on surveillance technology to find and destroy the leadership of the insurgency.

The Haqqani network, for example, is believed to be responsible for this year's Kabul bombings at the Serena Hotel in January, at the Victory Day parade in April and at the Indian Embassy in July. U.S. officials view the Haqqani group as "terrorists for hire," and they believe the organization has links with Pakistani intelligence. But [T]argeted Special Forces attacks on [the Haqqani network's]leadership are likely to have more impact than a general increase in U.S. troops.

The need for precise targeting is why Gates is stressing what's known as ISR -- short for "intelligence, surveillance, reconnaissance." He has been pushing for more than a year (against foot-dragging by the Air Force) for a big increase in the use of drones and cheap manned aircraft to watch the roads and mountain passes of this huge country and spot the insurgents before they strike. This ISR surge has more than doubled the number of daily Predator patrols in Iraq and Afghanistan over the past year, from 12 in June 2007 to 28 today, and that number should reach 55 by the end of 2009.

By using ISR sensors, U.S. forces can see what's coming at them across Afghanistan's porous borders. And with new surveillance tools, they may be able to identify the networks and individuals that pose the biggest threat -- and then call in Special Forces teams to capture or kill insurgent leaders. "You don't hit a whole town, you hit the two people you want," says Lt. Gen. Richard Zahner, who heads a new ISR task force.

As Gen. McKiernan [the new U.S. commander, Gen. David McKiernan] says, "It's not just boots on the ground" that will bring success in Afghanistan, but a range of factors such as governance, economic development and relations with neighboring Pakistan. The idea that we can saturate that vast country with enough American soldiers to provide security for the population seems unrealistic, to put it mildly.

Is McCain getting a bit like Bush? Frank Rich: "Bush has so little credibility he can govern only through surrogates (Paulson is the new Petraeus)."

Frank Rich writes in The New York Times:

[Y]ou must remember that McCain not only knows little about the economy but that he has not previously expressed any urgency about its meltdown. It was on Sept. 15 — the day after his former idol Alan Greenspan pronounced the current crisis a “once-in-a-century” catastrophe — that McCain reaffirmed for the umpteenth time that the “fundamentals of our economy are strong.” As recently as Tuesday he had not yet even read the two-and-a-half-page bailout proposal first circulated by Hank Paulson last weekend. “I have not had a chance to see it in writing,” he explained. (Maybe he was waiting for it to arrive by Western Union instead of PDF.)

There was no suspension of his campaign. His surrogates and ads remained on television. Huffington Post bloggers, working the phones, couldn’t find a single McCain campaign office that had gone on hiatus.

Much of the press paid lip service to McCain’s new “suspension” as it had to its prototype. In truth, the only campaign activity McCain did drop was a Wednesday evening taping with David Letterman. Don’t mess with Dave. Picking up where the “The View” left off in speaking truth to power, the uncharacteristically furious host hammered the absent McCain on and off for 40 minutes, repeatedly observing that the cancellation “didn’t smell right.”

In a journalistic coup de grâce worthy of “60 Minutes,” Letterman went on to unmask his no-show guest as a liar. McCain had phoned himself that afternoon to say he was “getting on a plane immediately” to deal with the grave situation in Washington, Letterman told the audience. Then he showed video of McCain being touched up by a makeup artist while awaiting an interview by Couric that same evening at another CBS studio in New York.

It’s not hard to guess why McCain had blown off Letterman for Couric at the last minute. The McCain campaign’s high anxiety about the disastrous Couric-Palin sit-down was skyrocketing as advance excerpts flooded the Internet. By offering his own interview to Couric for the same night, McCain hoped (in vain) to dilute Palin’s primacy on the “CBS Evening News.”

Letterman’s most mordant laughs on Wednesday came when he riffed about McCain’s campaign “suspension”: “Do you suspend your campaign? No, because that makes me think maybe there will be other things down the road, like if he’s in the White House, he might just suspend being president. I mean, we’ve got a guy like that now!”

That’s no joke. Bush has so little credibility he can govern only through surrogates (Paulson is the new Petraeus).

McCain and Team Have Many Ties to Gambling Industry

From The New York Times:

A lifelong gambler, Mr. McCain takes risks, both on and off the craps table.

Mr. McCain portrays himself as a Washington maverick unswayed by special interests, referring recently to lobbyists as “birds of prey.” Yet in his current campaign, more than 40 fund-raisers and top advisers have lobbied or worked for an array of gambling interests — including tribal and Las Vegas casinos, lottery companies and online poker purveyors.

As public opposition to tribal casinos has grown in recent years, Mr. McCain has distanced himself from Indian gambling, Congressional and American Indian officials said.

But he has rarely wavered in his loyalty to Las Vegas, where he counts casino executives among his close friends and most prolific fund-raisers. “Beyond just his support for gaming, Nevada supports John McCain because he’s one of us, a Westerner at heart,” said Sig Rogich, a Nevada Republican kingmaker who raised nearly $2 million for Mr. McCain at an event at his home in June.

Only six members of Congress have received more money from the gambling industry than Mr. McCain, and five hail from the casino hubs of Nevada and New Jersey, according to data from the Center for Responsive Politics dating back to 1989.

For much of his adult life, Mr. McCain has gambled as often as once a month, friends and associates said, traveling to Las Vegas for weekend betting marathons. Former senior campaign officials said they worried about Mr. McCain’s patronage of casinos, given the power he wields over the industry.

The $85 billion A.I.G. bailout saved the insurer’s trading partners -- of which Goldman Sachs was the largest -- but decimated its shareholders.

From The New York Times:

“It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions.”

— Joseph J. Cassano in August 2007, the former A.I.G. executive who ran the A.I.G. unit in London that lost billions of dollars that led to the government's $85 billion bailout earlier this month.

Two weeks ago, the nation’s most powerful regulators and bankers huddled in the Lower Manhattan fortress that is the Federal Reserve Bank of New York, desperately trying to stave off disaster.

As the group, led by Treasury Secretary Henry M. Paulson Jr., pondered the collapse of one of America’s oldest investment banks, Lehman Brothers, a more dangerous threat emerged: American International Group, the world’s largest insurer, was teetering. A.I.G. needed billions of dollars to right itself and had suddenly begged for help.

The only Wall Street chief executive participating in the meeting was Lloyd C. Blankfein of Goldman Sachs, Mr. Paulson’s former firm. Mr. Blankfein had particular reason for concern.

Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said.

Days later, federal officials, who had let Lehman die and initially balked at tossing a lifeline to A.I.G., ended up bailing out the insurer for $85 billion.

[The government's] two-year, $85 billion loan to A.I.G. [provided the company] a chance to sell its assets in an orderly fashion and theoretically repay taxpayers for their trouble. The plan saved the insurer’s trading partners but decimated its shareholders.

Saturday, September 27, 2008

We have wondered who would be next after Wall Street. They came before. -- Congress Approves $25 Billion in Loans to U.S. Auto Makers

From The Wall Street Journal:

Auto makers gained $25 billion in taxpayer-subsidized loans and oil companies won elimination of a long-standing ban on drilling off the Atlantic and Pacific coasts as the Senate passed a sprawling spending bill Saturday.

The 78-12 vote sent the $634 billion measure to President Bush, who was expected to sign it even though it spends more money and contains more pet projects than he would have liked. [The House passed the legislation earlier this week.]

The loan package for automakers would reward them with $25 billion in below-market loans, costing taxpayers $7.5 billion to subsidize the retooling of plants and development of technologies to help U.S. carmakers to build cleaner, more fuel efficient cars. Companies would not have to begin repaying the loans for five years, drawing objections from Sen. Jon Kyl (R., Ariz.), who predicted they would return for more help when the money is due.

Republicans made ending the coastal drilling ban a central campaign issue this summer as $4-plus per gallon gasoline stoked voter anger and turned public opinion in favor of more exploration.

The action does not mean drilling is imminent and still leaves the oil-rich eastern Gulf of Mexico off limits. But it could set the stage for the government to offer leases in some Atlantic federal waters as early as 2011.

The bailout bill probably will be passed Sunday or Monday. Here is someone Omaba should consider to be his Secretary of the Treasury.

Sen. Richard Shelby (R., Ala.) is the highest-ranking Republican member of the Senate Banking Committee, and the initial, one of the few, and clearly the most outspoken voices of dissent in the U.S. Senate on the bailout legislation.

Friday, September 26, 2008

The Photo McCain Wanted

E.J. Dionne, Jr. writes in The Washington Post:

John McCain's sudden intervention in Washington's deliberations over the Wall Street bailout could not have been more out of sync with what was actually happening.

He lamented that "partisan divisions in Washington have prevented us from addressing our national challenges." But for days, bipartisanship has been the rule on both sides of this argument. Republicans and Democrats alike were highly critical of President Bush's proposal to inject $700 billion into the financial system. Yet leaders of both parties were trying hard to negotiate an agreement with Treasury Secretary Henry Paulson. That's why they were close to an agreement in principle even before the two presidential nominees arrived for yesterday's White House meeting that McCain thought was so important.

House Speaker Nancy Pelosi and Minority Leader John Boehner normally fight about everything. But on Wednesday they issued a joint statement noting that "working in a bipartisan manner, we have made progress." That was true at least until yesterday's meeting, when Boehner, facing conservative defections, roiled the talks by offering an entirely new proposal.

And if McCain had been following the negotiations closely, he would have known that at times this week, Senate Democrats worried that Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, was too eager for a deal.

Frank did not need McCain to make him bipartisan, and he grumbled before yesterday's White House gathering that it was a mere "photo op." After the meeting, Senate Banking Committee Chairman Chris Dodd (D-Conn.) called it "political theater" that may have stalled an agreement.

Bush himself was uncharacteristically forthcoming with concessions. In his address to the nation, he said he wanted to "ensure that taxpayers are protected." That meant he had acceded to Democratic demands that the government get shares in the firms it rescues. He endorsed oversight mechanisms his administration's proposal had lacked. He accepted an idea his negotiators had resisted fiercely: limiting what the financial titans who got us into this mess could pocket from this rescue.

If you doubt that McCain's moves were about rescuing his candidacy rather than our economy, consider how his proposal to suspend the presidential campaign came about.

McCain had just finished a phone call with Obama on Wednesday in which they discussed a joint statement of principles and McCain broached the idea of suspending the campaign. Obama said he'd think about it, but McCain didn't give him time. To Obama's surprise, McCain appeared on television shortly after the conversation to announce his unilateral pause in campaigning and a call for postponing Friday's debate. This is bipartisanship?

As for getting the nominees to yesterday's White House meeting, Bush's lieutenants had been in discussions with McCain's people during the day Wednesday. Obama didn't get his invitation from the president until around 7:30 p.m., just an hour and a half before Bush's speech. This was an active intervention by Bush on behalf of McCain to box Obama into the photo op. Again, was this bipartisan?

The simple truth is that Washington is petrified about this crisis and will pass something. There are dark fears floating through the city that foreign investors, particularly the Chinese, might begin to pull their billions out of our system.

Scarier than the bad mortgages are those unregulated credit default swaps that financier George Soros has been warning about. There are $45 trillion of those esoteric instruments sloshing around the global financial system. They were invented as a hedge against debt defaults, but even the financial smart guys don't fully understand their impact or how to price their real value.

Fear is a terrible motivator for careful legislating, but it's a heck of a way to bring about a lot of bipartisanship. McCain jumped into this game in the fourth quarter. Many of the players on the field, caked in mud and exhausted but determined as they approach the goal line, wonder why this new would-be quarterback has suddenly appeared in their midst.

McCain could yet play a constructive role by rounding up votes from restive Republicans. Oddly, the biggest obstacle to a bill may not be Democrats but Republicans who refuse to go along with their own president. And -- yes, there is an election coming -- Democrats will be wary of going forward unless a substantial number of Republicans join them.

But McCain's boisterous intervention -- and particularly his grandstanding on the debate -- was less a presidential act than the tactical ploy of a man worried that his chances of becoming president might be slipping away.

Wall Street Executives Scored $3 Billion in Last Five Years as Banks Rose and Fell

From Bloomberg:

Wall Street's five biggest firms paid more than $3 billion in the last five years to their top executives, while they presided over the packaging and sale of loans that helped bring down the investment-banking system.

Thursday, September 25, 2008

Hundreds of Economists Urge Congress Not to Rush on Rescue Plan

From Bloomberg:

More than 150 prominent U.S. economists, including three Nobel Prize winners, urged Congress to hold off on passing a $700 billion financial market rescue plan until it can be studied more closely.

In a letter yesterday to congressional leaders, 166 academic economists said they oppose Treasury Secretary Henry Paulson's plan because it's a "subsidy" for business, it's ambiguous and it may have adverse market consequences in the long term. They also expressed alarm at the haste of lawmakers and the Bush administration to pass legislation.

This is a smart move. Democrats beware: Endangered Colorado Republican Bets on Vote Against Bailout

From The Wall Street Journal:

Betting on voter outrage over the Wall Street rescue bill before Congress, a three-term Republican congresswoman struggling for re-election has come out strongly against the bailout even before the final package is hammered out.

The rural Colorado district has long been solidly Republican. But three-term incumbent Marilyn Musgrave, an icon among social conservatives, has watched her margin of victory shrink with every election. Last time around, in a three-way race, she won with just 46% of the vote.

The bailout debate has given the Republican the chance to try to change the dynamic of her race with a forceful populist appeal.

"For years, Americans on Main Street have heard about the lavish excesses of Wall Street. We heard about their mansions, exotic cars and, above all, record profits," Rep. Musgrave said Monday. "Now, the party is over, and the same bankers are asking working families across the country to bear the consequences of their excess and greed. I refuse to burden families already struggling with soaring energy and food prices with bailing out investment banks that made bad decisions."

Wednesday, September 24, 2008

Payments to McCain campaign manager by Freddie Mac continued because as McCain's campaign manager, it was felt you couldn't say no.

From The Wall Street Journal Online:

The issue already seems to be affecting the presidential race. The latest Washington Post-ABC News finds historically pessimistic views of the economy, and indicates more voters trust Barack Obama to address the problems and handle the Wall Street crisis than Mr. McCain. That has improved Mr. Obama's overall support, the Post says, noting that among likely voters Mr. Obama leads Mr. McCain 52% to 43%, a sharp reversal from the slight lead Mr. McCain enjoyed after the Republican convention and a numerical superiority never achieved by John Kerry or Al Gore in 2004 and 2000.

Mr. McCain must also now explain emerging ties between his campaign manager, Rick Davis, and Freddie Mac, the mortgage giant that with Fannie Mae was recently taken over by the government. Two sources familiar with the arrangement tell Newsweek that since 2006, Mr. Davis's firm has been paid at least $345,000 by Freddie Mac. As the New York Times was reporting that Freddie paid a group run by Mr. Davis $30,000 a month until the end of 2005, Mr. McCain said Sunday night that Mr. Davis in the last several years had no involvement with Freddie. But, the Times today reports, payments of $15,000 a month to Mr. Davis's lobbying firm continued until Freddie was taken over by the government this month. Newsweek's two sources say "Davis himself approached Freddie Mac in 2006 and asked for a new consulting arrangement that would allow his firm to continue to be paid," the magazine reports. "The arrangement was approved by Hollis McLoughlin, Freddie Mac's senior vice president for external relations, because 'he [Davis] was John McCain's campaign manager and it was felt you couldn't say no,' one of the sources says.

House Democrats to Let Ban on Drilling Expire

From The Washington Post:

Congressional Democrats bowed to political pressure yesterday and agreed to let the ban on offshore oil drilling expire, a decision that would allow exploration just three miles off the Atlantic and Pacific coastlines unless the next president reinstates an executive branch order that prohibits drilling.

Drilling in the eastern Gulf of Mexico will remain prohibited within 125 miles of the shore under a separate provision in the 2006 energy bill.

The Democratic reversal on drilling came as the Senate voted overwhelmingly to approve a $100 billion extension of tax breaks, including incentives for renewable energy sources and the annual patch that will prevent millions of households from receiving higher tax bills under the alternative minimum tax.

Bailout Debate Spawns High-Stakes Lobbying Scramble

From The Washington Post:

Executives and lobbyists for tiny community banks, giant hedge funds, auto-loan companies and finance industry chieftains were working the phones yesterday and marching up to Capitol Hill to make sure their interests would not be forgotten as the $700 billion bailout proposal for bad debts works its way through Congress.

Tom Friedman pens a real keeper with Bush writing a letter to his Iraqi friends

From The New York Times:

From: President George W. Bush

To: President Jalal Talabani of Iraq, Prime Minister Nuri Kamal al-Maliki, Speaker Mahmoud al-Mashadani

Dear Sirs,

I am writing you on a matter of grave importance. It’s hard for me to express to you how deep the economic crisis in America is today. We are discussing a $1 trillion bailout for our troubled banking system. This is a financial 9/11. As Americans lose their homes and sink into debt, they no longer understand why we are spending $1 billion a day to make Iraqis feel more secure in their homes.

For the past two years, there has been a debate in this country over whether to set a deadline for a U.S. withdrawal from Iraq. It seemed as if the resolution of that debate depended on who won the coming election. That is no longer the case. A deadline is coming. American taxpayers who would not let their money be used to subsidize their own companies — Lehman Brothers, Bear Stearns and Merrill Lynch — will not have their tax dollars used to subsidize your endless dithering over which Iraqi community dominates Kirkuk.

Don’t misunderstand me. Many Americans and me are relieved by the way you, the Iraqi people and Army have pulled back from your own brink of self-destruction. I originally launched this war in pursuit of weapons of mass destruction. I was wrong. But it quickly became apparent that Al Qaeda and its allies in Iraq were determined to make America fail in any attempt to build a decent Iraq and tilt the Middle East toward a more democratic track, no matter how many Iraqis had to be killed in the process. This was not the war we came for, but it was the one we found.

Al Qaeda understood that if it could defeat America in the heart of the Arab-Muslim world, that it would resonate throughout the region and put Al Qaeda and its allies in the ascendant. Conversely, we understood that if we could defeat Al Qaeda in Iraq, in collaboration with other Arabs and Muslims, that it would resonate throughout the region and pay dividends. Something very big was at stake here. We have gone a long way toward winning that war.

At the same time, I also came to realize that in helping Iraqis organize elections, we were facilitating the first ever attempt by the people of a modern Arab state to write their own social contract — rather than have one imposed on them by kings, dictators or colonial powers. If Iraqi Shiites, Sunnis and Kurds can forge your own social contract, then some form of a consensual government is possible in the Arab world. If you can’t, it is kings and dictators forever — with all the pathologies that come with that. Something very big is at stake there, too.

It’s not the stakes that have changed. It is the fact that you are now going to have to step up and finish this job. You have presumed an endless American safety net to permit you to endlessly bargain and dicker over who gets what. I’ve been way, way too patient with you. That is over. We bought you time with the surge to reach a formal political settlement and you better use it fast, because it is a rapidly diminishing asset.

You Shiites have got to bring the Sunni tribes and Awakening groups, who fought the war against Al Qaeda of Iraq, into the government and Army. You Kurds have got to find a solution for Kirkuk and accept greater integration into the Iraqi state system, while maintaining your autonomy. You Sunnis in government have got to agree to elections so the newly emergent Sunni tribal and Awakening groups are able to run for office and become “institutionalized” into the Iraqi system.

So pass your election and oil laws, spend some of your oil profits to get Iraqi refugees resettled and institutionalize the recent security gains while you still have a substantial U.S. presence. Read my lips: It will not be there indefinitely — even if McCain wins.

Our ambassador, Ryan Crocker, has told me your problem: Iraqi Shiites are still afraid of the past, Iraqi Sunnis are still afraid of the future and Iraqi Kurds are still afraid of both.

Well, you want to see fear. Look in the eyes of Americans who are seeing their savings wiped out, their companies disappear, their homes foreclosed. We are a different country today. After a decade of the world being afraid of too much American power, it is now going to be treated to a world of too little American power, as we turn inward to get our house back in order.

I still believe a decent outcome in Iraq, if you achieve it, will have long-lasting, positive implications for you and the entire Arab world, although the price has been way too high. I will wait for history for my redemption, but the American people will not. They want nation-building in America now. They will not walk away from Iraq overnight, but they will not stay there in numbers over time. I repeat: Do not misread this moment. God be with you.

George W. Bush

“It’s financial socialism, and it’s un-American.”

From The New York Times:

[An] expression of disgust came from Senator Jim Bunning, Republican of Kentucky, who said the plan would “take Wall Street’s pain and spread it to the taxpayers.”

“It’s financial socialism, and it’s un-American,” Mr. Bunning said.

Americans Oppose Bailouts

From Bloomberg:

Americans oppose government rescues of ailing financial companies by a decisive margin, and blame Wall Street and President George W. Bush for the credit crisis.

By a margin of 55 percent to 31 percent, Americans say it's not the government's responsibility to bail out private companies with taxpayer dollars, even if their collapse could damage the economy, according to the latest Bloomberg/Los Angeles Times poll.

Tuesday, September 23, 2008

Praise the Lord: Fears of a voter backlash are pushing rank-and-file in Congress to resist $700 billion bailout. Call your Congressman now!!

From The Wall Street Journal Online:

Fears of a voter backlash are pushing rank-and-file Republicans and Democrats in Congress to resist the Bush administration plan to spend $700 billion to take troubled assets -- mostly mortgage-backed securities -- off the hands of struggling financial institutions, as Roll Call reports.

Monday, September 22, 2008

Crisis Draws Attention to McCain Social Security Plan -- Support for Market Could Be Hurt by Financial Strife

From The Wall Street Journal:

Financial turmoil may not just boost government's role in markets. It could undermine a push in recent years by conservatives, including John McCain, to inject more market forces into government-run and heavily regulated programs.

On the presidential campaign trail, Democrat Barack Obama is seizing on the recent turbulence to lambast proposals by Sen. McCain on Social Security and health care, two areas on which the Republican presidential nominee has embraced market-oriented solutions.

These proposals -- particularly private accounts carved out of Social Security -- were controversial to begin with, and the new crisis only heightens the concerns. The accounts are designed to generate greater returns than the government gets holding onto the money. But if workers invest their Social Security taxes in the stock market, what happens if the market is down when it comes time to retire?

Those are potent questions for voters, and the unfolding financial crisis could kill any chance this proposal had of becoming law when Congress eventually works out a solution to the retirement program's financial problems.

A Main Street bailout backlash in the making: The taxpayers are on the hook for the bad judgment of others. -- Wake up Main Street America!!

From The Washington Post:

This may be a Main Street bailout backlash in the making. The details of the financial crisis are still hard for most people to follow -- what with talk of exotic "derivatives" known as "credit-default swaps" and so on -- but the central fact of the matter hasn't been lost on anyone in this Northern Virginia community [Manassas Park]: The taxpayers are on the hook for the bad judgment of others.

And they say they don't like it. They didn't break it, but now they've bought it. Political leaders and financial titans say the bailout is necessary to save the economy, but on the ground, in such places as Manassas Park, people think that the bailout will reward the wrong people. There's a sense that too many folks bought houses they couldn't really afford, banks urged them on, common sense went on vacation, and now the grown-ups have to clean up the mess.

In Manassas Park and nearby communities in Prince William County, many people see the bailout as a violation of the basic rule that people and institutions must live within their means or face the consequences.

McCain's Rovian political strategy: All slime, all the time; envelop the presidential race in a thick fog of truthiness; & engage in false attacks.

Frank Rich writes in The New York Times:

NOT until 2004 could the 9/11 commission at last reveal the title of the intelligence briefing President Bush ignored on Aug. 6, 2001, in Crawford: “Bin Laden Determined to Strike in U.S.” No wonder John McCain called for a new “9/11 commission” to “get to the bottom” of 9/14, when the collapse of Lehman Brothers set off another kind of blood bath in Lower Manhattan. Put a slo-mo Beltway panel in charge, and Election Day will be ancient history before we get to the bottom of just how little he and the president did to defend America against a devastating new threat on their watch.

For better or worse, the candidacy of Barack Obama, a senator-come-lately, must be evaluated on his judgment, ideas and potential to lead. McCain, by contrast, has been chairman of the Senate Commerce Committee, where he claims to have overseen “every part of our economy.” He didn’t, thank heavens, but he does have a long and relevant economic record that begins with the Keating Five scandal of 1989 and extends to this campaign, where his fiscal policies bear the fingerprints of Phil Gramm and Carly Fiorina. It’s not the résumé that a presidential candidate wants to advertise as America faces its worst financial crisis since the Great Depression. That’s why the main thrust of the McCain campaign has been to cover up his history of economic malpractice.

McCain has largely pulled it off so far, under the guidance of Steve Schmidt, a Karl Rove protégé. A Rovian political strategy by definition means all slime, all the time. But the more crucial Rove game plan is to envelop the entire presidential race in a thick fog of truthiness. All campaigns, Obama’s included, engage in false attacks. But McCain, Sarah Palin and their surrogates keep repeating the same lies over and over not just to smear their opponents and not just to mask their own record. Their larger aim is to construct a bogus alternative reality so relentless it can overwhelm any haphazard journalistic stabs at puncturing it.

When a McCain spokesman told Politico a week ago that “we’re not too concerned about what the media filter tries to say” about the campaign’s incessant fictions, he was channeling a famous Bush dictum of 2003: “Somehow you just got to go over the heads of the filter.” In Bush’s case, the lies lobbed over the heads of the press were to sell the war in Iraq. That propaganda blitz, devised by a secret White House Iraq Group that included Rove, was a triumph. In mere months, Americans came to believe that Saddam Hussein had aided the 9/11 attacks and even that Iraqis were among the hijackers. A largely cowed press failed to set the record straight.

Just as the Bushies once flogged uranium from Africa, so Palin ceaselessly repeats her discredited claim that she said “no thanks” to the Bridge to Nowhere. Nothing is too small or sacred for the McCain campaign to lie about. It was even caught (by The Christian Science Monitor) peddling an imaginary encounter between Cindy McCain and Mother Teresa when McCain was adopting her daughter in Bangladesh.

If you doubt that the big lies are sticking, look at the latest Washington Post/ABC News poll. Half of voters now believe in the daily McCain refrain that Obama will raise their taxes. In fact, Obama proposes raising taxes only on the 1.9 percent of households that make more than $250,000 a year and cutting them for nearly everyone else.

You know the press is impotent at unmasking this truthiness when the hardest-hitting interrogation McCain has yet faced on television came on “The View.” Barbara Walters and Joy Behar called him on several falsehoods, including his endlessly repeated fantasy that Palin opposed earmarks for Alaska. Behar used the word “lies” to his face. The McCains are so used to deference from “the filter” that Cindy McCain later complained that “The View” picked “our bones clean.” In our news culture, Behar, a stand-up comic by profession, looms as the new Edward R. Murrow.

Network news, with its dwindling handful of investigative reporters, has barely mentioned, let alone advanced, major new print revelations about Cindy McCain’s drug-addiction history (in The Washington Post) and the rampant cronyism and secrecy in Palin’s governance of Alaska (in last Sunday’s New York Times). At least the networks repeatedly fact-check the low-hanging fruit among the countless Palin lies, but John McCain’s past usually remains off limits.

That’s strange since the indisputable historical antecedent for our current crisis is the Lincoln Savings and Loan scandal of the go-go 1980s. When Charles Keating’s bank went belly up because of risky, unregulated investments, it wiped out its depositors’ savings and cost taxpayers more than $3 billion. More than 1,000 other S.&L. institutions capsized nationwide.

It was ugly for the McCains. He had received more than $100,000 in Keating campaign contributions, and both McCains had repeatedly hopped on Keating’s corporate jet. Cindy McCain and her beer-magnate father had invested nearly $360,000 in a Keating shopping center a year before her husband joined four senators in inappropriate meetings with regulators charged with S.&L. oversight.

After Congressional hearings, McCain was reprimanded for “poor judgment.” He had committed no crime and had not intervened to protect Keating from ruin. Yet he, like many deregulators in his party, was guilty of bankrupt policy-making before disaster struck. He was among the sponsors of a House resolution calling for the delay of regulations intended to deter risky investments just like those that brought down Lincoln and its ilk.

Ever since, McCain has publicly thrashed himself for his mistakes back then — and boasted of the lessons he learned. He embraced campaign finance reform to rebrand himself as a “maverick.” But whatever lessons he learned are now forgotten.

For all his fiery calls last week for a Wall Street crackdown, McCain opposed the very regulations that might have helped avert the current catastrophe. In 1999, he supported a law co-authored by Gramm (and ultimately signed by Bill Clinton) that revoked the New Deal reforms intended to prevent commercial banks, insurance companies and investment banks from mingling their businesses. Equally laughable is the McCain-Palin ticket’s born-again outrage over the greed of Wall Street C.E.O.’s. When McCain’s chief financial surrogate, Fiorina, was fired as Hewlett-Packard’s chief executive after a 50 percent drop in shareholders’ value and 20,000 pink slips, she took home a package worth $42 million.

The McCain campaign canceled Fiorina’s television appearances last week after she inadvertently admitted that Palin was unqualified to run a corporation. But that doesn’t mean Fiorina is gone. Gramm, too, was ostentatiously exiled after he blamed the economic meltdown on our “nation of whiners” and “mental recession,” but he remains in the McCain loop.

The corporate jets, lobbyists and sleazes that gravitated around McCain in the Keating era have also reappeared in new incarnations. The Nation’s Web site recently unearthed a photo of the resolutely anticelebrity McCain being greeted by the con man Raffaello Follieri and his then girlfriend, the Hollywood actress Anne Hathaway, as McCain celebrated his 70th birthday on Follieri’s rented yacht in Montenegro in August 2006. It’s the perfect bookend to the old pictures of McCain in a funny hat partying with Keating in the Bahamas.

Whatever blanks are yet to be filled in on Obama, we at least know his economic plans and the known quantities who are shaping them (Lawrence Summers, Robert Rubin, Paul Volcker). McCain has reversed himself on every single economic issue this year, often within a 24-hour period, whether he’s judging the strength of the economy’s fundamentals or the wisdom of the government bailout of A.I.G. He once promised that he’d run every decision past Alan Greenspan — and even have him write a new tax code — but Greenspan has jumped ship rather than support McCain’s biggest flip-flop, his expansion of the Bush tax cuts. McCain’s official chief economic adviser is now Douglas Holtz-Eakin, who last week declared that McCain had “helped create” the BlackBerry.

But Holtz-Eakin’s most telling statement was about McCain’s economic plans — namely, that the details are irrelevant. “I don’t think it’s imperative at this moment to write down what the plan should be,” he said. “The real issue here is a leadership issue.” This, too, is a Rove-Bush replay. We want a tough guy who will “fix” things with his own two hands — let’s take out the S.E.C. chairman! — instead of wimpy Frenchified Democrats who just “talk.” The fine print of policy is superfluous if there’s a quick-draw decider in the White House.

The twin-pronged strategy of truculence and propaganda that sold Bush and his war could yet work for McCain. Even now his campaign has kept the “filter” from learning the very basics about his fitness to serve as president — his finances and his health. The McCain multihousehold’s multimillion-dollar mother lode is buried in Cindy McCain’s still-unreleased complete tax returns. John McCain’s full medical records, our sole index to the odds of an imminent Palin presidency, also remain locked away. The McCain campaign instead invited 20 chosen reporters to speed-read through 1,173 pages of medical history for a mere three hours on the Friday before Memorial Day weekend. No photocopying was permitted.

This is the same tactic of selective document release that the Bush White House used to bamboozle Congress and the press about Saddam’s nonexistent W.M.D. As truthiness repeats itself, so may history, and not as farce.

Friday, September 19, 2008

GOP Sees Rebound in Battle for Congress -- Party Hopes Momentum Will Help Limit Losses

From The Washington Post:

Volunteers began showing up at GOP campaign offices [in North Carolina] at quadruple the pre-convention pace, many of them conservatives who were lukewarm to presidential nominee John McCain but ecstatic about his running mate, Alaska Gov. Sarah Palin. Their enthusiasm could be Dole's saving grace on Nov. 4.

After months of fundraising doldrums, recruitment misfires and daunting polls, Republicans believe they are finally on the rebound in the battle for Congress. Both sides concede that the GOP stands almost no chance of taking back the House or Senate in November, but party leaders think the Palin factor and an increasingly competitive fight for the White House have generated enthusiasm and momentum that could limit GOP losses to only a few Senate seats and perhaps fewer than a dozen House seats.

Republicans are especially bullish about the changing Senate landscape. Democrats have never envisioned an easy path to a filibuster-proof 60-vote majority, but polls suggest that prospect has been reduced to a near impossibility in recent weeks.

Wednesday, September 17, 2008

I have been waiting on this article about this sudden McCain about-face: McCain Embraces Regulation After Many Years of Opposition

From The Washington Post:

A decade ago, Sen. John McCain embraced legislation to broadly deregulate the banking and insurance industries, helping to sweep aside a thicket of rules established over decades in favor of a less restricted financial marketplace that proponents said would result in greater economic growth.

Now, as the Bush administration scrambles to prevent the collapse of the American International Group (AIG), the nation's largest insurance company, and stabilize a tumultuous Wall Street, the Republican presidential nominee is scrambling to recast himself as a champion of regulation to end "reckless conduct, corruption and unbridled greed" on Wall Street.

McCain hopes to tap into anger among voters who are looking for someone to blame for the economic meltdown that threatens their home values, bank accounts and 401(k) plans. But his past support of congressional deregulation efforts and his arguments against "government interference" in the free market by federal, state and local officials have given Sen. Barack Obama an opening to press the advantage Democrats traditionally have in times of economic trouble.

House Adopts Plan to Ease Offshore Drilling Ban

From The New York Times:

The House on Tuesday night approved a measure that would ease a longstanding ban on offshore oil drilling and try to spur greater use of alternative fuels as Democrats and Republicans engaged in a bitter pre-election clash over America’s energy future.

Republicans, who have made political gains by portraying Democrats as flatly opposed to new drilling, said the measure was a sham intended to provide Democrats cover from voters furious over gas prices. They faulted it for failing to add incentives for coal and nuclear power and for not limiting environmental suits against drilling proposals. They also criticized Democrats for not negotiating with Republicans in writing the bill.

Once McCain's treasury secretary to be Phil Gramm's "mental recession" continues: McCain Laboring to Hit Right Note on the Economy

From The New York Times:

On Monday morning, as the financial system absorbed one of its biggest shocks in generations, Senator John McCain said, as he had many times before, that he believed the fundamentals of the economy were “strong.”

Hours later he backpedaled, explaining that he had meant that American workers, whom he described as the backbone of the economy, were productive and resilient. By Tuesday he was calling the economic situation “a total crisis” and denouncing “greed” on Wall Street and in Washington.

The sharp turnabout in tone and substance reflected a recognition not only that Mr. McCain had struck a discordant note at a sensitive moment but also that he had done so with regard to the very issue on which he can least afford to stumble.

With economic conditions worsening over the course of this year and voter anxiety on the rise, Mr. McCain has had to labor to get past the impression — fostered by his own admissions as recently as last year that the subject is not his strongest suit — that he lacks the experience and understanding to address the nation’s economic woes.

For much of this year, Mr. McCain has seemed to struggle to strike a balance between conveying the optimism that many voters want in their leaders, and the I-feel-your-pain empathy that they crave during hard times. His task is complicated by the tension between his plans to continue many of the economic policies of the unpopular incumbent Republican president he hopes to succeed, and his pledges to improve the American economy and shake up Washington.

As recently as January, Mr. McCain argued at a Republican debate that Americans were better off than they were eight years ago; by this summer he had released an advertisement that said “we’re worse off than we were four years ago.”

His first big speech on the mortgage crisis warned against excessive government intervention; a month later he released his plan for government action to help people keep their homes.

And a tour on which he embarked in July to emphasize his understanding of Americans’ economic pain was overshadowed when one of his top economic advisers, former Senator Phil Gramm of Texas, was quoted as saying that the United States was only in a “mental recession” and had become “a nation of whiners.”

Sunday, September 07, 2008

Peggy Noonan: No one has ever really laid a glove on Obama before, not in this campaign and maybe not in his life.

Peggy Noonan writes in The Wall Street Journal:

Sarah Palin killed. And more than killed.

Much has been said about her speech, but a few points. "The difference between a hockey mom and a pitbull? Lipstick" is pure American and goes straight into Bartlett's. This is the authentic sound of the American mama, of every mother you know at school who joins the board, reads the books, heads the committee, and gets the show on the road. These women make large portions of America work.

She has the power of the normal. Hillary Clinton is grim, stentorian, was born to politics and its connivances. Nancy Pelosi, another mother of five, often seems dazed and ad hoc. But this state governor and mother of a big family is a woman in a good mood. There is something so normal about her, so "You've met this person before and you like her," that she broke through in a new way, as a character vividly herself, and vividly genuine.

Her flaws accentuated her virtues. Now and then this happens in politics, but it's rare. An example: The very averageness of her voice, the not-wonderfulness of it, highlighted her normality: most people don't have great voices.

What she did in terms of the campaign itself was important. No one has ever really laid a glove on Obama before, not in this campaign and maybe not in his life. But Palin really damaged him. She took him square on, fearlessly, by which I mean in part that she showed no awkwardness connected to race, or racial history. A small town mayor is kind of like a community organizer only you have actual responsibilities. He wrote two memoirs but never authored a major bill. They've hauled the Styrofoam pillars back to the Hollywood lot.

John McCain also made a speech. It was flat.

The Pigs Get Fat, and the Hogs Get Slaughtered. -- Boeing Union Walks Out on Strike

Well, it happened. Boeing Co.'s machinists walked out on strike Saturday. Although the strike is expected to cost Boeing roughly $100 million a day in lost revenue, and put it under even more pressure in with its 787 Dreamliner which is already running nearly two years behind schedule, it may well prove far from painless for the machinists who expected the company to blink.

According to The Wall Street Journal:

The company's final contract proposal included a pay raise of 11% over the life of the contract, as well as a boosting of pensions by 14% to $80 a month for each year of service. Under the proposed contract, the average union member would earn roughly $65,000 a year before overtime that averages $10,000 a year or more.

The union said it wanted pay raises of at least 13% and a larger pension amount. It also wants Boeing to abandon plans to have workers take on a greater share of health-care costs.

Thursday, September 04, 2008

McCain & Obama on Georgia and Russia -- Putin feels threatened and encircled by a NATO that, in fact, has no hostile intent toward Moscow

David Ignatius writes in The Washington Post:

In the days after the Russian invasion of Georgia, the world had a chance to examine the different foreign policy styles of John McCain and Barack Obama. It was a telling comparison that offered some clear signs of how the two candidates would react to crises.

The contrast was between hot and cool; between quick action and cautious deliberation; between a man with his eye on military and strategic issues and another who is focused on diplomacy.

Listening to McCain, you sensed the beginning of a new Cold War; hearing Obama, you felt a desire to prevent that Cold War from taking root. McCain's advice could be summed up as "get tough" to deter the aggressor; Obama's tone suggested a desire to go slow until it was clear what moves made sense.

It's conventional wisdom that the tough stance is usually a political winner and that the Russia crisis has helped McCain. But I wonder: The war in Georgia actually makes a strong argument for Obama's more deliberative approach. What created this crisis was a misreading of signals and a failure to communicate clearly about the looming confrontation. There was plenty of McCain-style rhetoric, but not enough Obama-style diplomacy.

Within hours of the Aug. 8 invasion, McCain was voicing his indignation and demanding that Russia unconditionally halt its military operations and withdraw its troops. Three days later, he called the attack "a matter of urgent moral and strategic importance to the United States of America" and urged a series of measures to check Russia. Most important, he argued that NATO should reverse its April decision and approve Georgia's request for prompt membership -- a move that would commit the alliance to go to war if Georgia were attacked.

Obama's first reaction was more measured: "Now is the time for Georgia and Russia to show restraint," he said on Aug. 8. He had sharpened his tone by Aug. 11, but the focus was still on diplomatic solutions. "Let me be clear: We seek a future of cooperative engagement with the Russian government," he said.

Which approach will play better with the American public? Normally, the answer would be McCain's aggressive stance. Vladimir Putin's Russia makes such a convincing villain, and plucky Georgia such an attractive victim, that McCain's hard line has won wide support, even among Democrats.

But America is also weary of war in Iraq -- and of the mind-set that led the Bush administration to commit U.S. lives and resources without clearly thinking through the consequences. So perhaps people will listen to a candidate who argues that we need to look before we leap in the Caucasus. America's eagerness to "pay any price, bear any burden" overseas, as JFK put it, is surely diminished.

The Georgia crisis, in truth, shouldn't have surprised anyone. It has been coming at us in slow motion for several years. The Russians, far from hiding their intentions, have warned repeatedly that U.S. attempts to bring Georgia into NATO were unacceptable and would have consequences; the Bush administration didn't respond to Russia's statement of its interests in a way that might have deterred Moscow. It didn't make clear in advance the consequences Russia would pay if it attacked. Instead, the United States tried to play both sides of the street -- encouraging Georgia's NATO hopes, but not just yet.

Georgia's president, Mikheil Saakashvili, kept poking the Russian bear -- and finally launched the attack on South Ossetia that gave Russia a pretext for its devastating response. The administration knew Saakashvili was walking into a trap; officials even told him so privately -- but not with a decisive, high-level intervention that might have checked the disaster.

The notion that we are locked in a new Cold War is the most dangerous misjudgment of all. That's what is driving Putin: He feels threatened and encircled by a NATO that, in fact, has no hostile intent toward Moscow.

Rather than matching him in this march backward, the United States should lead its allies in a careful but firm process of containment. In drawing lines, we need to make sure they are realistic and sustainable -- and that the promises we make are ones we can keep.

Because of Putin's inability to escape Cold War thinking, the next president will face a serious Russia problem. Does America want a leader whose instincts in this new test are aggressive and confrontational, or deliberative and diplomatic? There's no obvious right answer yet, which will make this debate interesting.

Tuesday, September 02, 2008

There are 135 million reasons to change our approach to immigration.

From The Washington Post:

When the Census Bureau released its new population projections last month, most of the media focused on the country's changing racial composition. But this was almost certainly not the most important finding. The projections show that the U.S. population will grow by 135 million in just 42 years -- a 44 percent increase. Such growth would have profound implications for our environment and quality of life. Most of the increase would be a direct result of one federal policy -- immigration. If we reduced the level of immigration, the projections would be much lower. The question we have to ask ourselves is: Do we want to be a much more densely settled country?

Native-born Americans have only about two children on average, which makes for a roughly stable population over time. But with an estimated 1.5 million legal and illegal immigrants settling in the country each year, and about 900,000 births to these immigrants each year, immigration directly and indirectly accounts for at least three-fourths of U.S. population growth.

An increase of 135 million people by 2050 is equivalent to the entire populations of Mexico and Canada moving here.

The United States may well decide to continue to allow the settlement of 1.5 million immigrants (legal and illegal) each year. But legal immigration is a federal program like any other and could be reduced below the 1 million currently allowed to enter annually. Greater resources could also be devoted to reducing illegal immigration. It's important to understand that the new projections show us one possible future. We must decide as a country if this is the future we want.

David Brooks: What the Palin Pick Says

David Brooks in The New York Times reveals real insight about McCain and Palin. He writes:

John McCain is not a normal conservative. He has instincts, but few abstract convictions about the proper size of government. He’s a traditionalist, but is not energized by the social conservative agenda. As Rush Limbaugh understands, but the Democrats apparently do not, a McCain administration would not be like a Bush administration.

The main axis in McCain’s worldview is not left-right. It’s public service versus narrow self-interest. Throughout his career, he has been drawn to those crusades that enabled him to launch frontal attacks on the concentrated powers of selfishness — whether it was the big money donors who exploited the loose campaign finance system, the earmark specialists in Congress like Alaska’s Don Young and Ted Stevens, the corrupt Pentagon contractors or Jack Abramoff.

When McCain met Sarah Palin last February, he was meeting the rarest of creatures, an American politician who sees the world as he does. Like McCain, Palin does not seem to have an explicit governing philosophy. Her background is socially conservative, but she has not pushed that as governor of Alaska. She seems to find it easier to work with liberal Democrats than the mandarins in her own party.

Instead, she seems to get up in the morning to root out corruption. McCain was meeting a woman who risked her career taking on the corrupt Republican establishment in her own state, who twice defeated the oil companies, who made mortal enemies of the two people McCain has always held up as the carriers of the pork-barrel disease: Young and Stevens.

Many people are conditioned by their life experiences to see this choice of a running mate through the prism of identity politics, but that’s the wrong frame. Sarah Barracuda was picked because she lit up every pattern in McCain’s brain, because she seems so much like himself.

The Palin pick allows McCain to run the way he wants to — not as the old goat running against the fresh upstart, but as the crusader for virtue against the forces of selfishness. It allows him to make cleaning out the Augean stables of Washington the major issue of his campaign.

So my worries about Palin are not (primarily) about her lack of experience. She seems like a marvelous person. She is a dazzling political performer. And she has experienced more of typical American life than either McCain or his opponent. On Monday, an ugly feeding frenzy surrounded her daughter’s pregnancy. But most Americans will understand that this is what happens in real life, that parents and congregations nurture young parents through this sort of thing every day.

My worry about Palin is that she shares McCain’s primary weakness — that she has a tendency to substitute a moral philosophy for a political philosophy.

There are some issues where the most important job is to rally the armies of decency against the armies of corruption: Confronting Putin, tackling earmarks and reforming the process of government.

But most issues are not confrontations between virtue and vice. Most problems — the ones Barack Obama is sure to focus on like health care reform and economic anxiety — are the product of complex conditions. They require trade-offs and policy expertise. They are not solvable through the mere assertion of sterling character.

McCain is certainly capable of practicing the politics of compromise and coalition-building. He engineered a complex immigration bill with Ted Kennedy and global warming legislation with Joe Lieberman. But if you are going to lead a vast administration as president, it really helps to have a clearly defined governing philosophy, a conscious sense of what government should and shouldn’t do, a set of communicable priorities.

If McCain is elected, he will face conditions tailor-made to foster disorder. He will be leading a divided and philosophically exhausted party. There simply aren’t enough Republican experts left to staff an administration, so he will have to throw together a hodgepodge with independents and Democrats. He will confront Democratic majorities that will be enraged and recriminatory.

On top of these conditions, he will have his own freewheeling qualities: a restless, thrill-seeking personality, a tendency to personalize issues, a tendency to lead life as a string of virtuous crusades.

He really needs someone to impose a policy structure on his moral intuitions. He needs a very senior person who can organize a vast administration and insist that he tame his lone-pilot tendencies and work through the established corridors — the National Security Council, the Domestic Policy Council. He needs a near-equal who can turn his instincts, which are great, into a doctrine that everybody else can predict and understand.

Rob Portman or Bob Gates wouldn’t have been politically exciting, but they are capable of performing those tasks. Palin, for all her gifts, is not. She underlines McCain’s strength without compensating for his weaknesses. The real second fiddle job is still unfilled.

Monday, September 01, 2008

I sure don't wish this on anybody. May things work out for the best. -- Vice Presidential Candidate Palin Says Teenage Daughter Is Pregnant

Sarah Palin (third from right), her daughters Piper (center) and Bristol (second from right), and her husband Todd (right) join John McCain (left), his wife Cindy (second from left) and daughter Meghan at a campaign rally in Washington, Pa.

The Wall Street Journal is reporting that McCain's running mate Sarah Palin said her 17-year-old unmarried daughter is pregnant. The Alaska governor says Bristol Palin intends to marry the father of her child. McCain advisers said the campaign had known about the pregnancy before offering Palin the No. 2 spot on the ticket.

The announcement by Palin was aimed at rebutting Internet rumors that Palin's youngest son, born in April, was actually her daughter's. Sarah Palin's son Trig was born in April with Down syndrome. Bloggers have been suggesting that the child was actually born to Bristol Palin but that her mother, the Alaska governor, claimed to be the mother.