Tuesday, September 30, 2008

"Obama Demands Bailout in Major Address"

Ari Melber:
RENO, Nev — Sen. Barack Obama doubled down in gambling country Tuesday, telling a morning rally at a university here that Congress must pass a bailout plan to tackle the financial problems that are "no longer just a Wall Street crisis, [but] an American crisis."
"It's the American economy that needs this rescue plan," Obama told 12,000 millennials in a serious, impassioned tone.

For the first time, the Democratic presidential nominee explicitly hitched his ongoing argument about social change to the financial crisis, arguing that the nation must transcend its differences and unite behind the bailout.

It was his most dramatic economic address since the financial crisis began. In contrast to the parsing that passed for policy leadership at last week's first presidential debate, Obama emphatically advocated an urgent bailout, regardless of public opinion or partisan squabbling.

"To the Democrats and Republicans who opposed this plan yesterday, I say – step up to the plate and do what's right for this country," he told the crowd packed into the quad at the University of Nevada at Reno.

Then Obama offered a new narrative, one that many Americans may resist: He cast the bailout as another historic American achievement — a challenging but invigorating opportunity to come together for the common good.

"This country and the dream it represents are being tested in a way that we haven't seen in nearly a century. And future generations will judge ours by how we respond to this test," he said. "Will they say that this was a time when America lost its way and its purpose? When we allowed our own petty differences and broken politics to plunge this country into a dark and painful recession? Or will they say that this was another one of those moments when America overcame? When we battled back from adversity by recognizing that common stake that we have in each other's success?"

By now, such rhetoric is familiar to the public: Obama's knack for fusing the language of (progressive) movement organizing with (conservative) American exceptionalism. Today, he took a risk by wrapping it around a deeply unpopular and complex measure that is widely seen as a sop for reckless elites. It was MLK meets CNBC.

"I believe that this is one of those moments. I know that many of you are anxious about your future and the future of this country," Obama continued. "Despite all of this, I ask you to believe – believe in this country and your ability to change it. I ask you what has been asked of the American people in times of trial and turmoil throughout our history – what was asked at the beginning of the greatest financial crisis this nation has ever endured. In his first fireside chat, Franklin Roosevelt told his fellow Americans that "..there is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people themselves. Confidence and courage are the essentials of success in carrying out our plan. Let us unite in banishing fear. Together, we cannot fail."

Obama channeled FDR's era — the fear of depression and the promise of a populist agenda — to recast the bailout as a working-class imperative:

"America, together, we cannot fail. Not now. Not when we have a crisis to solve and an economy to save. Not when there are so many Americans without jobs and without homes. Not when there are families who can't afford to see a doctor, or send their child to college, or pay their bills at the end of the month. Not when there is a generation that is counting on us to give them the same opportunities and the same chances that we had for ourselves," he said, his voice hitting the characteristic intensity that rounds out Big Speeches.

"Now is the time to make them proud of what we did here. Let's give our children the future they deserve, and let's act with confidence and courage to show the world that at this moment, in this election, the United States of America is still the last, best hope of Earth."

It was the kind of grand, sprawling argument that Obama makes better than most politicians alive — whether you agree with him or not. Right now, most American don't.

Democracy Now: “Bridge Loan To Nowhere” (audio and video)

Democracy Now with audio and video:
On Monday, the House voted 228 to 205 against authorizing the largest government intervention in the financial market in U.S. history. The measure would have granted the Treasury unprecedented authority and up to $700 billion dollars to relieve faltering banks and other firms of bad assets backed by home mortgages, which are falling into foreclosure at record rates. As the economic crisis worsens and spreads across the globe we speak with Robert Johnson, former chief economist of the Senate Banking Committee and Bruce Marks, the Founder and CEO of NACA, the Neighborhood Assistance Corporation of America.

"Bailout - local delegation votes, reax" (with video)

Strange Bedfellows (Seattle P-I online-only political blog):
How Washington's House members voted on the $700 billion emergency financial rescue package that was defeated Monday:

Yes: Rep. Jim McDermott. Rep. Norm Dicks. Rep. Adam Smith. Rep. Rick Larsen. Rep. Brian Baird (All Democrats).

No: Rep. Dave Reichert. Rep. Cathy McMorris Rodgers. Rep. Doc Hastings. (All Republicans). Rep. Jay Inslee (Democrat).
Here's what they are saying:

Rep. Jim McDermott, Democrat, 7th Congressional District (Seattle). Voted for the bill.

"I thought long and hard about it, and I know that (House Speaker) Nancy (Pelosi, D-Calif.) and (House Financial Services Committee Chairman) Barney Frank (D-Mass.), who negotiated it, care about the American people in much the same way I do and they got the very best deal they thought they could get. I can tell you 27 reasons why it was not a good package but I think we needed to get started on this issue," McDermott said in an interview with the P-I.

McDermott said the Democrats who voted against the bill shared his concerns about it: that it didn't give the government enough of an equity stake in the distressed assets that would be bailed out; that it didn't provide for enough oversight by Congress; and that it didn't offer homeowners enough protection from foreclosure.

McDermott also said he wished Congress could hold hearings on the bill.

"We're trying to do this on the back of a galloping horse," he said.
Despite the setback for the bill, McDermott said he thinks negotiators will resume discussions and produce a financial rescue package that can win approval.
"Every time something like this happens, people think it's the end of the world; it's not," he said. We're going to come up with something, I think, because everyone agrees something needs to happen."

Rep. Jay Inslee, Democrat, 1st Congressional District (northern King and southern Snohomish counties). He voted against the package, the only Washington state Democrat to join the state's Republican members in opposition.

"For all the talk of protecting the taxpayer, there were only limited promises that the taxpayers' $700 billion investment would be paid back and there were no provisions to help struggling homeowners," Inslee was quoted in a news release from his office.
"We needed a pro-growth bill to stimulate the economy, and that is not what we got," Inslee said in the release. "The American people deserve better. I could not, with good conscience, vote for the bill presented to me."

Rep. Dave Reichert, Republican. Voted against the bill.

"Undeniably, action is necessary to address the crisis in our financial markets and ensure that credit remains available for middle class families to buy homes and put their children through college. That's evident by the daily fluctuations in the market. I'm hopeful that Congress will soon consider a modified version of the bill that was rejected today that will stabilize markets, utilize more private capital, and bring new oversight, reform, and accountability while protecting taxpayers.

"It's more important to get this legislation right than to act in haste. Panic on Wall Street brought us to this point, and we cannot let panic in Congress push through a remedy that is worse than the illness. Instead of a $700 billion blank check, we need a comprehensive package that helps Wall Street recover with more private capital, not taxpayer dollars; that holds accountable the bad actors who contributed to this crisis; and that enforces existing laws while modernizing outdated ones."

Darcy Burner, Democratic candidate for the 8th Congressional District (running against Reichert)

"Darcy believes we need to do something to strengthen our financial markets but she did not support this current bailout package. She felt it did not do enough to protect taxpayers andlimit out of control executive pay. And it did not address in an effective way the deregulation and lack of oversight over the financial markets that has been responsible for putting us in this situation in the first place." � Sandeep Kaushik, Burner spokesman.

Rep. Adam Smith, Democrat. Voted for the bill.

"Like many Americans, I had major concerns with the Bush Administration's initial financial recovery proposal. It contained no help for ordinary Americans struggling with their mortgage payments, no oversight and no protection for taxpayers. It was a major power grab attempt by the Administration in the form of a $700 billion blank check and Congress correctly rejected that plan. I also worried about the true extent of this economic crisis � would it just punish Wall Street people who acted unwisely? Or would it impact us all? And, if the latter was true was action by Congress required?"

"After listening to many of my constituents, small business owners, local bankers, and many others in the business and financial world, I have concluded that this crisis is more serious than just the normal downside of the business cycle; that failure to act by Congress could turn a severe economic slow down into a panic--a run on banks and all financial institutions that could plunge us into a deep and lasting recession; and that the plan before Congress, while offering no guarantees, represented a prudent and necessary step to prevent this much more painful economic outcome."

Rep. Cathy McMorris Rodgers, Republican. Voted against the bill.

"The financial crisis we are facing right now is greater than anyone could imagine. It is difficult for all of us to get our arms around the depth and complexity of this crisis. The decision on whether to support this package is one of the most difficult I have faced. I agree this bill is much better than the one we started with. It does more to protect the taxpayer, it does more to ensure Wall Street executives are held accountable, and it does more to increase oversight.

"Despite the positive changes that were made, I voted against this bill because, on principle, I am not convinced it is the right approach and I believe there are still numerous questions about its feasibility. Committing 700 billion of our tax dollars requires a longer, more thoughtful debate."

Rep. Doc Hastings, Republican. Voted against the bill.

"I judged this bill on two primary grounds: what could the cost be to the taxpayers and is it good policy for the federal government to seize the financial markets in this way.

The final bill provides more taxpayer protections than the first proposal, yet it still potentially leaves taxpayers holding the $700 billion bag for the reckless actions of Wall Street and that is something I cannot support.

And on the question of increased government intervention in the marketplace, I am just plain opposed to such a massive intrusion into the economy and the marketplace.

As to the crisis about which we are warned, I hope it can be abated, though I do believe additional steps can be taken to allow for the infusion of new capital, instead of focusing solely on preventing a freeze of existing capital. I also believe an insurance-centered approach would allow for relief in a way that places the responsibility for paying on Wall Street and those being bailed out."
Howie P.S.: You can watch Nancy Pelosi's remarks that "Lead to GOP Finger-Pointing" here, and Barack Obama's remarks yesterday here. Ben Smith is now reporting that Obama "steps off the sidelines with a specific proposal calculated to win more Democratic support for the bailout, and a promise to involve himself personally. His statement, out early this morning," here. Ken Camp reviews the options in "Bailout: What's next" (NPI Advocate). Matt Stoller chimes in with "Treasury Officials Admit Bill's CEO Compensation Measure and Restrictions on Paulson Were a Farce" (H/t to Glenn Greenwald who's no fan of the bailout bill that failed yesterday). Booman says "Be a Grown-Up...it is an acceptable piece of legislation under the circumstances." Ari Melber, riding onboard Air Obama, has "Obama Demurs on McCain Bailout Attack, For Now" this morning. Ari says ends with this back and forth
Jeff Zeleny, a reporter for The New York Times, crouched near the motorcade and asked for a response to McCain’s latest attack — that Obama was “injecting politics” into the fight over the bailout.

Obama said he had already addressed the issue in his speech on Monday, and he pledged that he would have more to say tomorrow. This is a campaign, so that promise is pretty safe.

Obama also yelled back that he’d learned not to take the bait — though that’s not an exact quote, and I’m not sure what it means anyway. (McCain’s bait? Zeleny’s?)
Howie P.P.S: I vote for the bait in question as belonging to McCain.

Monday, September 29, 2008

"O2B Candidate Burner on the Bailout Bill" (with video)

mcjoan (front paged on Kos):
Orange to Blue candidate Darcy Burner has joined those Democrats who recognize that the financial crisis needs to be addressed, but that bailing out the financial industry to the tune of $700 billion without helping Main Street isn't the way to do it.
From an e-mailed statement:

Darcy believes we need to do something to strengthen our financial markets but as she said this morning prior to the vote she did not support this current bailout package. She felt it did not do enough to protect taxpayers and amounted to little more than a wealth transfer from the middle class to the very wealthy. It did not do enough to limit out of control executive pay. And it did not address in an effective way the deregulation and lack of oversight over the financial markets that has been responsible for putting us in this situation in the first place.

More from the Seattle Times

Eighth Congressional District candidate Darcy Burner said this morning that if she were in Congress, she would have voted against a $700 billion bailout of the financial industry that the House of Representatives is considering this morning.

"We need to do something," she said. But she said the compromise package being pushed by Democratic leaders in Congress doesn't go far enough to protect taxpayers.

Burner said it doesn't fix the underlying problems that caused the financial crisis, namely too much deregulation of the financial industry. And she said it doesn't do enough to limit executive pay.

Which is what she said on September 20, when the $700 billion Bush proposal was announced.

Burner, like a lot of candidates and a helluva lot more Americans, want this thing done fairly. This bailout package can be restructured in a way that protects taxpayers, that helps to actually stem the financial crisis that all of the people who've lost their homes are in the middle of, while it also addresses Main Street. It can be done. It has to be done.

Is Palin "slowly melting" or is McCain "Stuck With Palin"?

Ari Melber:
Gov. Sarah Palin’s candidacy is clearly deteriorating. The only question is whether the decline is more like Lehman Bros or a polar ice cap.
Palin’s initial popularity could turn out to be a bubble – a delusional valuation that crashes the moment that reality reasserts itself. Critics are watching Thursday’s debate for such a moment. That’s when raw, unfiltered information about Palin will finally hit the political markets.

Palin’s shortcomings, however, could take much longer to break through. Couple the scripted strategy of the McCain campaign with an A.D.D. press corps – distracted by everything from lipstick on a pig to the pigs on Wall Street – and Palin’s looming vice presidency may bother the public about as much as global warming. Yes, some people see the inevitable disaster, but the majority thinks the problem is distant enough to be ignored.

On the Obama plane en route from Chicago to Denver today, I tried asking Obama’s staff about the possible routes for Palin’s further demise. A normally chatty spokesperson turned taciturn – no comments on Palin at all. During that exchange, Sen. Obama himself briefly walked through the aisle, clutching an open laptop, but he was not taking questions.

Back in Chicago, the closest Obama staffers come to touching Palin is clicking the forward button – they emailed reporters today with a scathing new column by Newsweek’s Fareed Zakaria. The normally measured columnist, former editor of Foreign Affairs and one of the cooler Sunday pundits, rips into Palin as a novice disaster, a talking-point-dispensing robot full of “nonsense” and “gibberish” who is “utterly unqualified to be vice president.” Amplifying that low rumble among conservative critics, he called for her early exit: “Will someone please put Sarah Palin out of her agony?”

Palin’s favorable ratings have been slowly melting, and today’s Washington Post reports that more heat is on the way. “The worst may be yet to come for Palin,” writes Howie Kurtz, “sources say CBS has two more responses on tape that will likely prove embarrassing.”

If there are more memorable mistakes piling up this week, Palin will have even less room for error at Thursday’s debate.

George Stephanopoulos says the stakes are high — and he knows, since network anchors help decide who “wins” debates.

“A major mistake on foreign policy would be absolutely fatal to her candidacy,” he said on “Good Morning America.” “She’s become a problem for Senator McCain, no question about it,” he explained. “When you become a punch line in politics, it is one of the worst things that can happen, and that is what’s happening to Sarah Palin now.”

Obama is attacking McCain in Colorado today for his gambling ties, and while no one here is saying it, the biggest bet of McCain’s career is about to get called on Thursday.

Andrew Sullivan:
Nate Silver says dropping Palin doesn't make electoral sense for McCain:

Not only would this hurt McCain, but it would also harm downballot candidates; the odds of Democrats finishing with 60+ Senate seats or 260+ House seats would increase markedly.

If he drops her or she quits, it's devastating. Why? Because it's all about his judgment and executive skills. He did no vetting and made his pick in an instant of insanity. This was his first serious presidential-level decision. It makes Bush's decision-making look Solomonic. If McCain is forced to acknowledge this, his own campaign is over too. So they cannot give in; they have to double-down; they will train her to do something crazy and polarizing in the debate. They will pray that Biden is sexist or condescending and, given Biden, that may not be too big a gamble. There will be more fireworks and more gambits and more nuttiness: just to prevent Americans from thinking through the real decision before them.

But Americans will still have to ask themselves: could we trust Palin as leader of the free world at a moment's notice? And: why did McCain present us with this option? Unlike the pundits, the voters have to check reality. And the Palin reality is objectively horrifying.

Presidential Debate: SNL Version (video)

NBC.com, video (09:12):
McCain and Obama go head to head...

"Journalist William Greider on the Financial Turmoil and Bailout Plan"

BREAKING--Howie P.S.: It has just been announced that the bailout plan bill has failed to pass the House.KUOW.org (audio):
Congress struggled with the proposed $700 billion bailout plan last week. The cost per taxpayer – about $2500. William Greider, political journalist and National Affairs Correspondent for The Nation, says Paulson's proposal is a "historic swindle." Why? Greider writes that tax payers "are the naked investors in this drama, asked to put up many billions to rescue Wall Street firms with nothing more than a vague promise it will save the Republic." Today we look at the financial turmoil with Greider.

Democracy Now: "“Is This the United States Congress or the Board of Directors of Goldman Sachs?” Rep. Dennis Kucinich Rejects $700 Billion Bailout"

Democracy Now (with audio and video):
The House is set to vote today on a $700 billion emergency bailout plan for the financial industry. The proposed legislation was forged during a marathon negotiating session over the weekend between lawmakers from both parties and Treasury Secretary Henry Paulson. The 110-page bill would authorize Paulson to initiate what is likely to become the biggest government bailout in US history, allowing him to spend up to $700 billion to relieve faltering banks and other firms of bad assets backed by home mortgages, which are falling into foreclosure at record rates.
Howie P.S.: The Kucinich interview starts after the daily news roundup. If you stay tuned afterwards, there are two more good stories: 1)"FDR in 1933: There Must Be A Strict Supervision Of All Banking and Credits and Investments" with the NY Times' Adam Cohen and 2)"Senators John McCain and Barack Obama Debate Iraq, Pakistan, Russia During First Debate" with The Nation's Robert Dreyfuss.

Ari Melber: Reporting from "O Force One"

Sen. Barack Obama campaigns in Fredericksburg, Va. (Flickr, Obama Campaign)

Ari Melber ("Obama Plays Offense on the Road"-Washington Independent):
Sen. Barack Obama is not looking back. In a flurry of campaign activity since Friday’s debate, the Democratic presidential nominee hit several large rallies, paired up with Sen. Joe Biden, his running mate, for two joint events, delivered a keynote address to a Congressional Black Caucus gala, sat for a half-hour grilling on “Face The Nation,” huddled with advisers in Chicago and prepared for a tour through Western swing states early this week.
In interviews and discussions aboard the campaign bus, Obama’s aides sold the packed schedule as a contrast to Sen. John McCain, the Republican nominee, who hunkered down in Washington after the debate, continuing his strategy of playing economic statesman inside the Beltway. “As John McCain sat in his condominium in Arlington, Sen. Obama spoke directly with more than 20,000 voters in North Carolina,” said Obama spokesman Bill Burton.

While all campaigns declare victory after debates, the Obama camp’s post-debate posture looks more like genuine offense than strategic bluffing.

Snap surveys and traditional polling after Friday’s debate largely favored Obama, which campaign manager David Plouffe heralded in a presentation for the traveling press. He pointed to a CBS survey indicating that after the debate, the number of uncommitted voters who said Obama understands their “needs and problems” jumped 21 points, to 79 percent. In a separate question about McCain’s standing, the Republican nominee improved 5 points on that score, from 36 to 41 percent.

Plouffe argued that Obama’s increase was striking because he already had a “healthy edge” on understanding people’s problems. The campaign also flagged a new USA Today/Gallup poll showing that 12 percent more debate viewers thought Obama won on Friday — 46 percent said Obama did better, while only 34 percent who said Mccain did better.

Yet Obama’s aides did not address a significant setback in the same debate polling. While Obama used the debate to prioritize his signature issue of opposing the Iraq war, a view now shared by most of the public, more voters actually thought McCain would make the “right choices” in Iraq.

In fact, McCain’s support on that measure jumped 12 points among uncommitted voters after the debate — to 56 percent. Only 48 percent of voters said the same about Obama, who gained four points on Iraq from the debate, according to the CBS poll of uncommitted voters. Sensing an opening, GOP operatives spent the weekend blasting Obama for advancing a “misguided and weak” foreign policy that offers “defeat” in Iraq.

Without directly responding, Obama’s campaign appears to have staked its confidence on the surveys showing a lead among debate viewers — which suggests that the Iraq issue did not hinder Obama’s overall standing.

The ultimate indicator of a campaign’s confidence, however, is not in the spin or the early polls or debate reviews. It is written, with sparse prose studded with logistics, in a nominee’s weekly schedule.

Obama’s current itinerary reinforces his retooled stump speech: It is a portrait of bullish offense.

Since the debate, Obama has drawn crowds topping 20,000 in two reliably red states, North Carolina and Virginia. It is hard to imagine McCain pulling off the same feat in, say, California. Then, Obama pulled 36,000 to a Sunday rally in the pale blue state of Michigan.

Obama may have been cool and cordial during the debate, but he punched hard at those weekend rallies. He alternatively blasted and mocked his opponent’s campaign. Looking over crowd of 20,000 in Greensboro, N.C., on early Saturday morning, Obama made a show of laughing at McCain’s newfound interest in running as a change agent. “He’s been grabbing our signs, using our slogans. Come on, John!” Obama said, “come up with your own stuff!”

Later, at a large 26,000-person rally at the University of Mary Washington in Virginia, where the soccer team rescheduled a game to accommodate the campaign stop, Biden reinforced Obama’s post-debate aggression. He assailed McCain for saying after 9/11 that the U.S. could simply invade “Iraq, Iran or Syria” in retribution for the attacks. The GOP nominee was “dangerously wrong,” Biden hollered, for mistaking Iraq as the central front in the battle against terrorists.

On the economy, Biden depicted McCain as erratic and out of touch, “lurching” between opposite positions. “I served with John McCain,” he said, explaining that he had personally seen McCain devote a career to deregulation and “tethered to Bush’s economic policies.”

As dusk turned to darkness, and rain drenched the enthusiastic young crowd, Obama repeated his core attack on McCain’s debate performance. “Through 90 minutes of debating, John McCain had a lot to say about me, but he had nothing to say about you,” Obama thundered.

The rain kept coming until Obama’s white dress shirt was soaked through. Biden even interrupted, to offer him a baseball cap as protection from the downpour, but Obama declined. The rough weather seemed to mirror Obama’s outrage against McCain’s debate performance: “He didn’t even say the words ‘middle class’ — not once!”

Just as he had at other stops, Obama mixed righteous indignation with withering ridicule. Reprising McCain’s now infamous line about fighting earmarks for bear research in Montana, Obama channeled Jon Stewart to dismiss this as a distraction. “He’s really hung up on those bears,” he said to laughter and applause.

Obama also tweaked Alaska Gov. Sarah Palin for her doubletalk on earmarks. If you believe McCain and Palin will cut their lobbyist ties after they reach the White House, Obama told the students, “I’ve got a bridge to sell you in Alaska!”

Obama’s happy warrior vibe carried over off-stage, as best I could tell. He made a rare social visit to the press section of “O Force One” on Saturday afternoon, congratulating a Wall Street Journal reporter on her recent engagement. He joshed around, inspecting her ring, asking where her fiancé worked (Goldman Sachs), and bantering with a few other reporters about baseball. Obama looked perfectly happy, and only begged off after a reporter asked a serious question about the debate.

The first presidential debate was widely covered as a draw, though undecided voters leaned towards Obama anyway. That may reflect a gravitational shift towards the Democratic nominee, regardless of his prime-time sparring ability, but even that dynamic could lull Obama into complacency. Some supporters worry that even when he’s doing well, Obama is doing just enough to get by.

“This debate was Obama’s whole campaign in miniature: morally ambiguous, a slew of missed opportunities for devastating blows and a fundamental lack of a well-crafted plan,” wrote Paul Rosenberg on the liberal blog OpenLeft. In the end, he concluded, it was little more than “a good-enough strategic posture smoothly executed to pull out a tie, which is all he really needed.” Obama probably needs more to close the deal.

On Monday, Obama continues his offensive, visiting two states Bush carried in 2004 that could tip the election. He first has a rally at a high school gym in Westminster, Colo., then a stop in Nevada. Yet if swing voters there take to his current style — calm in debate, aggressive on the stump — then Obama may just be a happy warrior long past November.
Howie P.S.: For a look at how race, gender and class issues are impacting Obama's campaign, check out James Carroll's "Obama's three challenges" in today's Boston Globe.

Sunday, September 28, 2008

"Barack in the Virginia Rain" (video)

BarackObama.com, video (26:10):
The day after his first presidential debate, Barack Obama addresses over 25,000 in Fredericksburg, VA -- calling for the political and economic reform needed to fix our broken economy.
Howie P.S.: Jed Lewson adds
You can find local news coverage of the event here, including the front page of the local newspaper.

"An Appropriately Populist Anti-Bailout Rant"

Dennis Kucinich (The Nation):
The $700 billion bailout for Wall Street, is driven by fear not fact. This is too much money in too a short a time going to too few people while too many questions remain unanswered. Why aren't we having hearings on the plan we have just received? Why aren't we questioning the underlying premise of the need for a bailout with taxpayers' money? Why have we not considered any alternatives other than to give $700 billion to Wall Street? Why aren't we asking Wall Street to clean up its own mess? Why aren't we passing new laws to stop the speculation, which triggered this? Why aren't we putting up new regulatory structures to protect investors? How do we even value the $700 billion in toxic assets?

Why aren't we helping homeowners directly with their debt burden? Why aren't we helping American families faced with bankruptcy. Why aren't we reducing debt for Main Street instead of Wall Street? Isn't it time for fundamental change in our debt based monetary system, so we can free ourselves from the manipulation of the Federal Reserve and the banks? Is this the United States Congress or the board of directors of Goldman Sachs? Wall Street is a place of bears and bulls. It is not smart to force taxpayers to dance with bears or to follow closely behind the bulls.

That Kucinich is spot on comes as no great surprise.
Howie P.S.: The Nation post concludes with
When he bid for the Democratic presidential nomination this year, he spoke more consistently and more bluntly about the economic crisis than any of the other contenders.

Kucinich was not treated particularly seriously the media or his fellow Democratic candidates.

Now that Kucinich has been proven right, however, Barack Obama might want to pay attention to what the former mayor, state legislator and veteran congressman is saying.

He actually gets it.

"Hell to Pay: Burner v. Reichert" (with video)

BarbinMD, with video (00:31) (front-paged on Daily Kos):
Update: And in an hour we passed our goal and are at 3,502 donors and have raised $20,565 tonight (so far)! Kudos to the entire community for helping to let the Republican slime machine know that there will be Hell to Pay when they smear and lie about our O2B candidates. And I know it's been a long night, but let's set one last goal...can we reach 3,600 donors before morning? I'll give the final numbers in tomorrow's Midday Open Thread. But until then, let's keep this going and help get Darcy Burner elected.


Update: Did I say 3,400? It took you guys less than an hour to reach and pass that goal. You rock! We're now up to 3,424 donors and have raised $18,154! And that's not counting the donations you've made to the other great O2B candidates. Let's keep this thing going...heck, it's not even 9:00 on the west coast, so let's give the late arrivals a chance to get involved. After all, we need to give Darcy a little breathing space so she can track this woman down and give her a talking to:

Darcy has a great story about the irrationality of all this. She was out shopping for Batman band-aids for her boy, and a woman spotted her in the aisle. "You look just like Darcy Burner," the woman said. "I am Darcy Burner," said Darcy. "Oh, I am so excited," said the woman, "I can't wait to vote for you and Sarah Palin." Darcy swears that this is true.

It's still early, so let's go crazy...let's try for 3,500 donors before the end of the night.


Update: I am in awe of you guys. In just under 2 1/2 hours, we've added 355 donors, for a total of 3,273 and $14,192. Okay then...let's try something new. We know that many people give until it hurts, but there's also a lot of people who give even though it does hurt, and to remind people that every donation counts, let's see how see how many $5 donations we can get in the next hour. And if you can give more, spread a little love to our other O2B candidates. And let's set a new goal for donors tonight...how about 3,400?


Update: Wow, this is amazing! In just under 90 minutes, we've already got 244 donors and have raised $9,634. I guess I underestimated you guys. Okay, how about we try for 3,300 donors tonight? And remember, it's Darcy's night, but while you're donating, don't forget our other outstanding O2B candidates.

Let's make sure this is the message that's blanketing the airways in WA-08!


Darcy Burner is, simply, one of us.

You know ... progressive geeks. And proud of it. Her grace under the pressure of losing her home, her firm commitment to advancing everything we believe in--from net neutrality to getting out of Iraq--and her pride in robust progressivism make her the ideal candidate in a district ripe to flip our way this cycle. And the Republicans know it, which is why Burner's repeat challenge this year to incumbent Republican Dave Reichert is coming under steady fire from the right because she came within inches of unseating him in 2006. She's become the target of two of the wealthiest arms of the conservative movement: the U.S. Chamber of Commerce and the NRCC.

As laid out in the original Hell to Pay nomination thread Thursday:

In WA-08, Darcy Burner is running an innovative and energetic race. She didn't even let losing everything she owned in a house fire in July stop her. Which is why the Republicans have made defeating Burner their number 1 priority among House races. The Chamber of Commerce blanketed Seattle-area airwaves with an ad lying about her economic plan. That's on top of the whopping $1 million NRCC has reserved in television time in the Seattle market to run attack ads against her.

Darcy Burner has a fight on her hands and we need to make sure she has the ammunition to fight back. Are you ready to make sure that there is Hell to Pay for the rightwing attack machine's lies about one of our Orange to Blue candidates? The lies and smears have already cost James Inhofe $12,000 and Norm Coleman $25,000, and tonight it's Dave Reichert's turn to learn that you don't mess with Texas Kossacks. So tonight let's send a message to Dave Reichert, the U.S. Chamber of Commerce and the NRCC that there will be Hell to Pay when you launch lying ads against one of our own.

She's starting out tonight with 2918 donors on the Orange to Blue candidate page. Let's aim for getting her ... 3,200 donors by the end of tonight.

Ready? Set? DONATE!

She's BAAACK: "Tina Fey As Sarah Palin: Katie Couric SNL Skit (VIDEO)"

Huffington Post, with video (click here for the SNL video):
Tina Fey returned to Saturday Night Live to reprise her widely hailed impersonation of Alaska Governor Sarah Palin.

The sketch mocks Palin's recent interview with CBS News' Katie Couric (played on SNL by Amy Poehler), touching on Palin's trip to New York and her comments about Russia and the financial bailout.

Note that Fey often quotes directly from Palin's original interview -- apparently no parody was required. Here's the SNL transcript with the original video:

FEY AS PALIN: "Like every American I'm speaking with, we're ill about this. We're saying, 'Hey, why bail out Fanny and Freddie and not me?' But ultimately what the bailout does is, help those that are concerned about the healthcare reform that is needed to help shore up our economy to help...uh...it's gotta be all about job creation, too. Also, too, shoring up our economy and putting Fannie and Freddy back on the right track and so healthcare reform and reducing taxes and reigning in spending...'cause Barack Obama, y'know...has got to accompany tax reductions and tax relief for Americans, also, having a dollar value meal at restaurants. That's gonna help. But one in five jobs being created today under the umbrella of job creation. That, you know...Also..."

Some more highlights:

POEHLER AS COURIC: "On foreign policy, I want to give you one more chance to explain your claim that you have foreign policy experience based on Alaska's proximity to Russia. What did you mean by that?"

FEY AS PALIN: "Well, Alaska and Russia are only separated by a narrow maritime border. (using her hands to illustrate) You got Alaska here, this right here is water, and this is Russia. So, we keep an eye on them."

POEHLER AS COURIC: "And how do you do that exactly?"

FEY AS PALIN: "Every morning, when Alaskans wake up, one of the first things they do, is look outside to see if there are any Russians hanging around. And if there are, you gotta go up to them and ask, 'What are you doing here?' and if they can't give you a good reason, it's our responsibility to say, you know, 'Shoo! Get back over there!'

POEHLER AS COURIC: "Senator McCain attempted to shut down his political campaign this week in order to deal with the economic crisis. What's your opinion of this potential 700 billion dollar bailout?"

FEY AS PALIN: "Like every American I'm speaking with, we're ill about this. We're saying, 'Hey, why bail out Fanny and Freddie and not me?' But ultimately what the bailout does is, help those that are concerned about the healthcare reform that is needed to help shore up our economy to help...uh...it's gotta be all about job creation, too. Also, too, shoring up our economy and putting Fannie and Freddy back on the right track and so healthcare reform and reducing taxes and reigning in spending...'cause Barack Obama, y'know...has got to accompany tax reductions and tax relief for Americans, also, having a dollar value meal at restaurants. That's gonna help. But one in five jobs being created today under the umbrella of job creation. That, you know...Also..."

POEHLER AS COURIC: "What lessons have you learned from Iraq and how specifically, would you spread democracy abroad?"

FEY AS PALIN: "Specifically, we would make every effort possible to spread democracy abroad to those who want it."

POEHLER AS COURIC: "Yes, but specifically what would you do?"

FEY AS PALIN: "We're gonna promote freedom. Usher in democratic values and ideals. And fight terror-loving terrorists."

POEHLER AS COURIC: "But again, and not to belabor the point. One specific thing."

(several seconds of FEY and POEHLER staring at each other)

FEY AS PALIN: "Katie, I'd like to use one of my lifelines."


FEY AS PALIN: "I want to phone a friend."

POEHLER AS COURIC: "You don't have any lifelines."

FEY AS PALIN: "Well in that case I'm gonna just have to get back to you!"

Howie P.S.: I was hoping for an opening skit featuring Grumpy McSame's debate performance, but Caribou Barbie was pretty good, again. James Fallows makes a request for us "To be serious about Palin and Couric." It's not that easy. His conclusion:
I am not aware of any other current figure in national politics -- by which I mean any member of the Senate or House -- who would do a worse job under questioning. There could be some I don't know about. But they're not on a national ticket.

MTV News: Barack Obama Says McCain's Debate Attacks 'Didn't Make Much Sense' (with video)

MTV News, with video:
Less than 15 hours after he made his closing remarks in the first presidential debate, Democrat Barack Obama gave his first post-debate interview when he and running mate Joe Biden sat down with MTV News following a campaign stop in Greensboro, North Carolina.
The discussion ran the gamut from Biden to Kanye West, but Obama seemed most eager to dissect Friday night's often-testy debate with Republican nominee John McCain, specifically McCain's repeated assertions that his experience makes him the stronger candidate and that Obama "just doesn't understand" the complexities of issues like foreign policy and the economy.

"I don't get taken aback by that kind of stuff. The problem was, every time he said it, when he tried to follow it up with an actual statement about policy or his positions about what it was he presumably understood or did 'get,' it didn't make much sense," Obama told MTV News' Sway Calloway. "If you look at Iraq, for example, the question was asked, 'What lessons have you learned?' and his lesson was 'Well, we should just stay.' Well, that's not a policy. ... The question was 'Should we have gone?'

"He says that because he doesn't have a record to defend himself. We've become accustomed in our politics to folks just being able to make stuff up — it's one of the few areas of public life where the standards somehow are lowered in terms of what you say about other people," he continued. "For example, he suggested that I'm talking about raising everybody's taxes, when every analyst has shown I'm actually calling for a tax cut for 95 percent of [American] families."

He also took issue with a just-released McCain campaign commercial, which made pointed reference to the number of times Obama agreed with the Arizona senator's comments during the debate: "I don't assume the American public are passive consumers, watching these things going, 'Oh, John McCain runs an ad, so I guess it must be true.' If that were the case, we'd already be losing." Obama also addressed a recent New York Times story that pointed out "dubious claims" in some of his own campaign ads.

"The truth is, we put out tons of ads, and there have been two or three times where we've slipped beneath my standards, where it was kind of a stretch. And when that happens, I tell my team, 'Pull it down,' " he said. "In this kind of thing — where it's a fierce competition — it's not going to be perfect. [But] I think generally people will take a look at how we've run this campaign, and people will say, 'This is someone who has been positive, who's been factual and who's been trying to promote the core ideal that we need to change our economic policies so that we have prosperity not just at the top, but in the middle of America.' "

And to that point, Obama said he wasn't outwardly concerned with who actually won last night's debate (though, when pressed, he admitted that he has data that says he did), but rather that the issues wouldn't get lost in the post-debate cloud, saying that, oftentimes, the media get too focused on who won instead of what's really important to the American people: "What did each candidate say?"

"I think the pundits and the press, you guys are looking at tactics. What the American people are looking at is they might lose their job ... they might lose their house," he said. "And I could cite all the polls that showed the overwhelming number of people who watched [the debate] thought I won ... but even that's not actually relevant. What's relevant is the substance of this thing, which is people out there are hurting, and John McCain has promoted the same policies of George Bush, and people know they're not working. They understand we can't continue four more years of doing the same thing."

Saturday, September 27, 2008

"On strategy and tactics" (with video)

James Fallows (The Atlantic):
The least self-aware moment for John McCain in last night's debate came at the half-way point, when he said, "I'm afraid Senator Obama doesn't understand the difference between a tactic and a strategy."
In a sense McCain was sticking to his battle plan in saying this -- the plan being on-message hammering-home of the "Obama doesn't understand" theme. In another sense, he lost his way, since he immediately segued not into a discussion of strategic matters in Iraq and Afghanistan but into an anecdote. But that kind of literal parsing of his answer -- tactical analysis, you might call it -- really misses the point.

There has been no greater contrast between the Obama and McCain campaigns than the tactical-vs-strategic difference, with McCain demonstrating the primacy of short-term tactics and Obama sticking to a more coherent long-term strategy. And McCain's dismissive comment suggests that he still does not realize this.

Some examples are so familiar as to need no explanation: McCain choosing the ten-day tactical "bounce" from the surprise choice of Sarah Palin, in exchange for the enormous strategic risk in choosing an un-vetted and now obviously unqualified running mate. Or McCain rolling the dice with his threat to boycott the debate -- and then, once on stage, appearing to be only mildly interested in the financial-bailout deal that 72 hours earlier was the stated reason for overturning all agreements about the debates .

But the personas that the two men chose to present in the debate indicated the difference in a profound way. The truths of debates are these:

* Emotional messages, which are variants on "how do I feel about this person?", are all that matter in presidential debates. Issues discussions are significant mainly to the extent they shape these impressions. For instance: a candidate's view on the economy feeds the impression of whether he sympathizes with "people like me." Or views on foreign policy feed the impression of whether he would be "a leader we can trust."

* Barring a truly disastrous performance, each side's partisans will think their candidate did well, and will be reinforced in the reasons for supporting the person they already like. Thus John McCain supporters will think he sounded confident and masterful; Obama supporters will think he kept presenting the big-picture perspective on national security and the economy. Which means therefore:

* The audience that matters is people who start out undecided or uncertain -- and finally are looking for emotional reassurance about who they can imagine as president for the next four years. In general, such viewers are only now starting to pay serious attention to the campaign -- in contrast to people already committed to helping (or stopping) one of the candidates. That is why the first debate is a unique "re-launch" opportunity for the candidates to present themselves to people who realize it's time to make up their minds.

Everything John McCain did on stage last night was consistent with trying to score tactical points in those 90 minutes. He belittled Obama with the repeated "he doesn't understand"s; he was explicitly insulting to him in saying at the end "I honestly don't believe that Senator Obama has the knowledge or experience" for the job (a line Joe Biden dare not use so bluntly on Sarah Palin); and implicitly he was shockingly rude and dismissive in refusing ever to look Obama in the eye. Points scored -- in the short term, to the cheers of those already on his side.

Obama would have pleased his base better if he had fought back more harshly in those 90 minutes -- cutting McCain off, delivering a similarly harsh closing judgment, using comparably hostile body language, and in general acting more like a combative House of Commons debater. Those would have been effective tactics minute by minute.

But Obama either figured out, or instinctively understood, that the real battle was to make himself seem comfortable, reasonable, responsible, well-versed, and in all ways "safe" and non-outsiderish to the audience just making up its mind about him. (And yes, of course, his being a young black man challenging an older white man complicated everything he did and said, which is why his most wittily aggressive debate performance was against another black man, Alan Keyes, in his 2004 Senate race.) The evidence of the polls suggests that he achieved exactly this strategic goal. He was the more "likeable," the more knowledgeable, the more temperate, etc. (Update: though from here on out he doesn't have to say "John is right..." anywhere near as often as he did last night.) .

For years and years, Democrats have wondered how their candidates could "win" the debates on logical points -- that is, tactics -- but lose the larger struggle because these seemed too aggressive, supercilious, cold-blooded, or whatever. To put it in tactical/strategic terms, Democrats have gotten used to winning battles and losing wars. Last night, the Democratic candidate showed a far keener grasp of this distinction than did the Republican who accused him of not understanding it.
Howie P.S.: Goldy also directs the reader to John Coles' "The Narrative Starts to Settle In" with a video mashup by Jed Lewison--"Angry John McCain" (video 01:22)." Here's a taste from the Coles post:
That is just a sample of what is going to come. 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).

Barack's Dilemma

David Goldstein (HorsesAss.org):
I don’t know if Obama’s cool and collected debate demeanor is a strategy or simply who he is, but as much as I would personally like to see our candidate punch back as good as he gets—and better—I think last night’s approach ultimately serves him well.

Not because voters don’t want to see their presidents appear strong—they most emphatically do—but Obama, perhaps uniquely, must carefully avoid appearing too strong. If you know what I mean….

Ahem… um… as McCain might phrase it, “the point is“… while we may have come a long way toward fulfulling Martin Luther King Jr.’s dream, white America doesn’t much like its big, black men to appear aggressive or threatening… and in case you hadn’t noticed, Barack Obama is a big, black man.

Oh sure, on the football field or the basketball court such aggression is accepted and even celebrated, but in the political arena the standards are quite different. Yes, in politics, we still like our big, black men to be orderly and loyal, like Colin Powell, or quiet like Justice Thomas… or even a sweet, dumb, gentle giant like that character in The Long Green Mile.

But threatening? No, Obama can’t afford to come off as threatening, let alone contemptuous of an elderly white man like McCain. So as much as I’m with the brawling Irishmen on what I’d personally like to see from our candidate, I understand I’m not the typical swing voter, and nowhere near the mindset of an undecided independent. No, as much as it may pain me, Obama needs to show McCain respect, even when it is totally unreciprocated, if he is to win the hearts, minds and votes of the uncommitted.

He may not have stirred any passions in his base, but I’m guessing more voters than not came away from the debate with a greater sense of comfort in the notion of Obama as commander in chief, and that’s all he needed to achieve last night.
Howie P.S.: Obama is actually a big, skinny, half-black man, but David's point is well-taken.

Saturday Morning Leftovers

David Horsey, Seattle P-I (image).

"Zero," video (00:31)--BarackObama.com.

"Initial Polls Show Obama Winning The Debate," TPM Election Central.

"Obama Is Right: McCain Was Wrong [video-01:22]," Jed Lewison (Huffington Post):
McCain had no defense for Barack Obama's best riff of the night. Fact is, McCain was wrong on Iraq. As they say, the YouTube doesn't lie:

Friday, September 26, 2008

Debate Reactions Roundup (excerpts)

"Debate Open Thread" (with video)--Jed Report:
My basic take on why Obama won the debate is really simple -- I think he showed that he is absolutely ready to become president, that he has the judgment and resolve to do the job. And just as importantly he showed that he cared. In some ways, I think McCain was irrelevant -- his only chance was if Obama fell on his face -- but the fact that he was angry and sneering sure didn't help his cause, not one bit.

"Un-Suspended: Live-Blogging the Debate" (with video)--Al Giordano:
Focus group and polling data is coming in now, from Fox, CNN, CBS, and Mediacurves so far. All of them agree that Obama and McCain each "won" among members of their own party, and Obama significantly won among Independent voters. The latter group is all that matters. Obama helped himself among swing voters tonight. McCain, not. In Reaganesque tones, he upped the "comfort" factor with him as commander in chief. I think within a couple days this is likely to be reflected in swing state polling.

"FOX News Focus Group: Obama Wins Debate" (video-02:46)--Huffington Post:
Frank Luntz interviewed undecided voters in Las Vegas. Verdict? Obama won.

"My reaction"--Markos:
Here's what really struck me: Obama's biggest weakness is the notion that he's not ready or experienced enough. It was the basis of many a McCain attack: "Senator Obama doesn't understand/doesn't get it..." He flat out accused Obama of not having the judgment to lead at one point.

Obama fought back by speaking at length on every issue, aided by a format that allowed him to speak beyond 30 second sound bites, and he name dropped countries and foreign leaders by the bucketful, to underscore the fact that he knows what he's talking about. It was very effective.

"Who Won The Debate? Reviews Go To Obama" (with video)--Nico Pitney (Huffington Post):
Several positive reviews for Obama. A CBS News instant poll finds:

40% of uncommitted voters who watched the debate tonight thought Barack Obama was the winner. 22% thought John McCain won. 38% saw it as a draw.

68% of these voters think Obama would make the right decision
about the economy. 41% think McCain would.

49% of these voters think Obama would make the right decisions about Iraq. 55% think McCain would.

"What Is This Money Even For?"

Hunter (front-paged now on Kos):
What Devilstower said in an earlier post can't be repeated enough. The $700 billion figure isn't an explainable one, given the purported problem at hand of "bad mortgages".

And that's where we get that math problem. 1% of all mortgages -- the amount now in default -- comes out to $111 billion. Triple that, and you've got $333 billion. Let's round that up to $350 billion. So even if we reach the point where three percent of all mortgages are in foreclosure, the total dollars to flat out buy all those mortgages would be half of what the Bush-Paulson-McCain plan calls for.

Then we need to factor in that a purchased mortgage isn't worth zero. After all, these documents come with property attached. Even with home prices falling and some of the homes lying around unsold, it's safe to assume that some portion of these values could be recovered. In the S&L crisis, about 70% of asset value was recovered, but let's say we don't do that well. Let's say we hit 50%. Then the real outlay for taxpayers would be around $175 billion.

Which, frankly, is a number that Wall Street should be able to handle without our help. After all, the top firms on Wall Steet payed out $120 billion in bonuses alone between 2000 and 2006. If they've got that kind of mad money, why do they need us to step in now? And why do they need twice as much as all the mortgages that are even likely to implode?

Indeed. And despite what we've been told, then, we can only presume that the problem is in fact not all the bad, scary subprime mortgages. And it's not. Yes, a lot of people are finding themselves upside-down on their houses right now, but Paulson isn't proposing we do squat to solve that -- and even the "controversial" Democratic counterproposal, that we actually do at least a little something to help those people, after they've already gone bankrupt, is pathetically weak.

Instead, we're getting a Wall Street bailout not of the mortgages, but of the absurd, speculative, economy-wrecking derivatives based on those mortgages, derivatives that investors and banks ravenously sold each other at unsupportable and quite-probably-crooked prices. Those derivatives, generally speaking, are "bets" on the state of the underlying mortgages. And they didn't just bet wrong -- they bet irrationally, based on presumptions of near-zero risks to those underlying mortgages. And worse, the big banks even -- bafflingly -- got special permission to overleverage themselves 40 to 1, all but assuring collapse if those derivatives went south. Which they did.

Fine, then, but how is that self-induced bubble an unweatherable economic crisis for the rest of us? Yes, those banks may fail -- as they should. It'd be a crime if they didn't, given their mismanagement of their accounts. But the real problem is that those banks are, literally, too big to be allowed to fail. Their failure would present a liquidity problem for the rest of the market. They can do anything -- they could even burn money on the street -- and the strong preference of government would be to bail them out for it, because the alternative is financial chaos.

The subprime mortgages aren't the problem. And the overleveraged firms shouldn't be a problem. The problem is keeping the rest of the economy afloat no matter what happens to the firms in trouble.

The problem is that there's a lot of different ways to do that, and it's not at all clear that Paulson's way is the best. Paulson proposes to bailout the firms in question, by giving them the Mother Of All Do-Overs. We taxpayers will buy, from banks both in trouble and not in trouble, up to $700 billion dollars worth of the overpriced, now-worth-much-much-less derivatives in question. That will provide a real (inflated) price for the derivatives, and lo and behold -- the firms will be saved, because we've now created a market for their unmarketable, worthless products. They stay afloat, because the taxpayers pay them to do it. And, importantly, since all the banks now know that if any of the other banks are hemorrhaging money through these bad derivatives, the taxpayers will bail them out at some decent price, all the banks trust each other again, and feel free to loan each other money again, and the liquidity problems are solved. In theory. If the Fed can keep up with all the bad paper being tossed at them.

But while that's unquestionably the best possible plan Wall Street could themselves possibly come up with -- it doesn't just save their bacon, it makes large parts of their debts simply vanish -- it's an obscenely expensive thing, and is rife with problems. The temptation for profiteering on the part of the corporations is going to be huge, and quite doable. The underlying mortgages are still defaulting, and more importantly the bursting of the housing bubble has put millions of people into an insupportable amount of debt, and those are not going to be happy consumers, so the economy is still going to go very south, very quickly.

And it smacks, strongly, of the very same dynamic that has governed the last few decades of American history. We're transferring yet another giant chunk of money from the general public to the most wealthy. In this case, a trillion dollars or so worth.

All the while, we're being told that we can't be punitive about this, and punish the firms in question. We can't set new regulations. We can't take equity in the firms we're giving so much money too. We can't do squat except buy their bad paper, and hope to hell that they survive, while the rest of us wallow in the steep recession almost certain to come as a result of the housing bubble collapse.

Is that the best approach? I'm not convinced, and I'm more than a little angry at the Democrats for, once again, accepting what they are given and trying to tweak it rather than coming up with true counterproposals. Propping the housing market up from the bottom may be much cheaper than trying to prop up the entire derivatives market from the top, and would seemingly have the same stabilizing market effects. Taking equity in firms in exchange for taking their crappy, non-marketable products would, yes, seem the absolute least we could do -- there must be an upside for the taxpayer in providing this trillion-dollar investment at the expense of ballooning our national debt and crippling public sector works for a decade or more. But that's still weak tea, all things considered.

Not being talked about as much, though, is that we must allow overextended companies to fail. It is an essential part of our economy that economy-threatening recklessness on the part of speculators not be rewarded, and especially not be rewarded by the government. Any actions to stabilize the economy should indeed inject liquidity -- but it's not clear that injecting liquidity through the very companies most in trouble is sustainable or even rational.

More than that, I think Americans can and should be quite furious at the way this extraordinarily business-friendly proposal has been steamrolled through under premise of imminent crisis, with no serious debate of any more balanced alternatives. It is another black mark in the legacy of the Bush years -- for both parties. If the Congress really passes the Paulson plan with, as it looks now, absolutely no substantive debate of alternative plans, it has once again shirked its most basic duties, and is an embarrassment to the nation it supposedly represents.

One thing is for certain, though. No matter how bad a deal looks, doctrinaire Republicans can always be counted on to come up with an "alternative" that would be ten times worse. Their "alternative" plan, the one they're holding out for? Cut corporate taxes -- again -- and remove even more regulations on those companies -- again. Because that'll release the magic money fairies and the problem will be solved. And no, I'm not kidding. Except about the fairies. Maybe.

There's been nothing about the Washington reaction to this that has inspired confidence. And now that the fight has turned explicitly political -- with no regard whatsoever for the underlying economics -- I can only imagine it getting less substantive from here.

Thursday, September 25, 2008

Barack Obama on NBC Nightly News: "Obama hopes to 'build' off bailout progress" (video)

MSNBC, video (02:34):
Detouring from the campaign trail, both presidential candidates arrived in Washington as President Bush and congressional leaders negotiated the proposed bailout package. NBC's Brian Williams speaks with Sen. Barack Obama.

"150 Economists Petition in Opposition to the Bailout Plan"

From Meteor Blade's front pager on Daily Kos, "Bailing Out the Yachts":
To the Speaker of the House of Representatives and the President pro tempore of the Senate:

As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.
Signed (updated at 9/25/2008 8:30AM CT)

Acemoglu Daron (Massachussets Institute of Technology)
Adler Michael (Columbia University)
Admati Anat R. (Stanford University)
Alexis Marcus (Northwestern University)
Alvarez Fernando (University of Chicago)
Andersen Torben (Northwestern University)
Baliga Sandeep (Northwestern University)
Banerjee Abhijit V. (Massachussets Institute of Technology)
Barankay Iwan (University of Pennsylvania)
Barry Brian (University of Chicago)
Bartkus James R. (Xavier University of Louisiana)
Becker Charles M. (Duke University)
Becker Robert A. (Indiana University)
Beim David (Columbia University)
Berk Jonathan (Stanford University)
Bisin Alberto (New York University)
Bittlingmayer George (University of Kansas)
Boldrin Michele (Washington University)
Brooks Taggert J. (University of Wisconsin)
Brynjolfsson Erik (Massachusetts Institute of Technology)
Buera Francisco J. (UCLA)
Camp Mary Elizabeth (Indiana University)
Carmel Jonathan (University of Michigan)
Carroll Christopher (Johns Hopkins University)
Cassar Gavin (University of Pennsylvania)
Chaney Thomas (University of Chicago)
Chari Varadarajan V. (University of Minnesota)
Chauvin Keith W. (University of Kansas)
Chintagunta Pradeep K. (University of Chicago)
Christiano Lawrence J. (Northwestern University)
Cochrane John (University of Chicago)
Coleman John (Duke University)
Constantinides George M. (University of Chicago)
Crain Robert (UC Berkeley)
Culp Christopher (University of Chicago)
Da Zhi (University of Notre Dame)
Davis Morris (University of Wisconsin)
De Marzo Peter (Stanford University)
Dubé Jean-Pierre H. (University of Chicago)
Edlin Aaron (UC Berkeley)
Eichenbaum Martin (Northwestern University)
Ely Jeffrey (Northwestern University)
Eraslan Hülya K. K.(Johns Hopkins University)
Faulhaber Gerald (University of Pennsylvania)
Feldmann Sven (University of Melbourne)
Fernandez-Villaverde Jesus (University of Pennsylvania)
Fohlin Caroline (Johns Hopkins University)
Fox Jeremy T. (University of Chicago)
Frank Murray Z.(University of Minnesota)
Frenzen Jonathan (University of Chicago)
Fuchs William (University of Chicago)
Fudenberg Drew (Harvard University)
Gabaix Xavier (New York University)
Gao Paul (Notre Dame University)
Garicano Luis (University of Chicago)
Gerakos Joseph J. (University of Chicago)
Gibbs Michael (University of Chicago)
Glomm Gerhard (Indiana University)
Goettler Ron (University of Chicago)
Goldin Claudia (Harvard University)
Gordon Robert J. (Northwestern University)
Greenstone Michael (Massachusetts Institute of Technology)
Guadalupe Maria (Columbia University)
Guerrieri Veronica (University of Chicago)
Hagerty Kathleen (Northwestern University)
Hamada Robert S. (University of Chicago)
Hansen Lars (University of Chicago)
Harris Milton (University of Chicago)
Hart Oliver (Harvard University)
Hazlett Thomas W. (George Mason University)
Heaton John (University of Chicago)
Heckman James (University of Chicago - Nobel Laureate)
Henderson David R. (Hoover Institution)
Henisz, Witold (University of Pennsylvania)
Hertzberg Andrew (Columbia University)
Hite Gailen (Columbia University)
Hitsch Günter J. (University of Chicago)
Hodrick Robert J. (Columbia University)
Hopenhayn Hugo (UCLA)
Hurst Erik (University of Chicago)
Imrohoroglu Ayse (University of Southern California)
Isakson Hans (University of Northern Iowa)
Israel Ronen (London Business School)
Jaffee Dwight M. (UC Berkeley)
Jagannathan Ravi (Northwestern University)
Jenter Dirk (Stanford University)
Jones Charles M. (Columbia Business School)
Kaboski Joseph P. (Ohio State University)
Kahn Matthew (UCLA)
Kaplan Ethan (Stockholm University)
Karolyi, Andrew (Ohio State University)
Kashyap Anil (University of Chicago)
Keim Donald B (University of Pennsylvania)
Ketkar Suhas L (Vanderbilt University)
Kiesling Lynne (Northwestern University)
Klenow Pete (Stanford University)
Koch Paul (University of Kansas)
Kocherlakota Narayana (University of Minnesota)
Koijen Ralph S.J. (University of Chicago)
Kondo Jiro (Northwestern University)
Korteweg Arthur (Stanford University)
Kortum Samuel (University of Chicago)
Krueger Dirk (University of Pennsylvania)
Ledesma Patricia (Northwestern University)
Lee Lung-fei (Ohio State University)
Leeper Eric M. (Indiana University)
Leuz Christian (University of Chicago)
Levine David I.(UC Berkeley)
Levine David K.(Washington University)
Levy David M. (George Mason University)
Linnainmaa Juhani (University of Chicago)
Lott John R. Jr. (University of Maryland)
Lucas Robert (University of Chicago - Nobel Laureate)
Luttmer Erzo G.J. (University of Minnesota)
Manski Charles F. (Northwestern University)
Martin Ian (Stanford University)
Mayer Christopher (Columbia University)
Mazzeo Michael (Northwestern University)
McDonald Robert (Northwestern University)
Meadow Scott F. (University of Chicago)
Mehra Rajnish (UC Santa Barbara)
Mian Atif (University of Chicago)
Middlebrook Art (University of Chicago)
Miguel Edward (UC Berkeley)
Miravete Eugenio J. (University of Texas at Austin)
Miron Jeffrey (Harvard University)
Moretti Enrico (UC Berkeley)
Moriguchi Chiaki (Northwestern University)
Moro Andrea (Vanderbilt University)
Morse Adair (University of Chicago)
Mortensen Dale T. (Northwestern University)
Mortimer Julie Holland (Harvard University)
Muralidharan Karthik (UC San Diego)
Nanda Dhananjay (University of Miami)
Nevo Aviv (Northwestern University)
Ohanian Lee (UCLA)
Pagliari Joseph (University of Chicago)
Papanikolaou Dimitris (Northwestern University)
Parker Jonathan (Northwestern University)
Paul Evans (Ohio State University)
Pejovich Svetozar (Steve) (Texas A&M University)
Peltzman Sam (University of Chicago)
Perri Fabrizio (University of Minnesota)
Phelan Christopher (University of Minnesota)
Piazzesi Monika (Stanford University)
Piskorski Tomasz (Columbia University)
Rampini Adriano (Duke University)
Reagan Patricia (Ohio State University)
Reich Michael (UC Berkeley)
Reuben Ernesto (Northwestern University)
Roberts Michael (University of Pennsylvania)
Robinson David (Duke University)
Rogers Michele (Northwestern University)
Rotella Elyce (Indiana University)
Ruud Paul (Vassar College)
Safford Sean (University of Chicago)
Sandbu Martin E. (University of Pennsylvania)
Sapienza Paola (Northwestern University)
Savor Pavel (University of Pennsylvania)
Scharfstein David (Harvard University)
Seim Katja (University of Pennsylvania)
Seru Amit (University of Chicago)
Shang-Jin Wei (Columbia University)
Shimer Robert (University of Chicago)
Shore Stephen H. (Johns Hopkins University)
Siegel Ron (Northwestern University)
Smith David C. (University of Virginia)
Smith Vernon L.(Chapman University- Nobel Laureate)
Sorensen Morten (Columbia University)
Spiegel Matthew (Yale University)
Stevenson Betsey (University of Pennsylvania)
Stokey Nancy (University of Chicago)
Strahan Philip (Boston College)
Strebulaev Ilya (Stanford University)
Sufi Amir (University of Chicago)
Tabarrok Alex (George Mason University)
Taylor Alan M. (UC Davis)
Thompson Tim (Northwestern University)
Tschoegl Adrian E. (University of Pennsylvania)
Uhlig Harald (University of Chicago)
Ulrich, Maxim (Columbia University)
Van Buskirk Andrew (University of Chicago)
Veronesi Pietro (University of Chicago)
Vissing-Jorgensen Annette (Northwestern University)
Wacziarg Romain (UCLA)
Weill Pierre-Olivier (UCLA)
Williamson Samuel H. (Miami University)
Witte Mark (Northwestern University)
Wolfers Justin (University of Pennsylvania)
Woutersen Tiemen (Johns Hopkins University)
Zingales Luigi (University of Chicago)
Zitzewitz Eric (Dartmouth College)

"Obama Activists Launch Debate Petition"

Ari Melber (Washington Independent):
That didn’t take long. Within hours of Sen. John McCain’s effort to scuttle Friday’s presidential debate, a group of liberal activists launched a sleek online petition for Americans to “demand the debate” goes on. The site currently shows Sen. Barack Obama behind a lectern — thoughtful, poised, in command — squaring off against a floating question mark — in bright red — representing Sen. John McCain’s mystery status.

The site declares it represents a group of “concerned citizens” who are not “affiliated with anybody.” It does appear independent of any campaign or political organization. But, the effort is pro-Obama, obviously, and was created by Michael Whitney, a self-described “progressive… interwebologist” in D.C. who helped found Generation Dean.

If a carefully negotiated agreement and public promise don’t make Sen. John McCain feel that he has to keep his word to debate, a progressive web petition isn’t going to make the difference. But the site sill provides a focused portal for all kinds of voters to track and speak out on the debate over the debate. At this point, the Commission on Presidential Debates can surely use any public attention it can get to hold McCain to his commitment.

Finally, Congressional leaders just announced a fundamental agreement on the bailout, so McCain may be the only one who thinks his presence is needed in Washington at 9pm Friday.