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Bush: "This Sucker Could Go Down"

| Fri Sep. 26, 2008 1:59 AM EDT

Some things have to be read in the Gray Lady to be believed.

And by "this sucker," Mr. President, you mean... the economy? The country? The last smidgen of a remnant of a chance that someone who's been under a rock these past eight years might not consider this the Worst. Administration. Ever? But really, it's a measure of how cracked the world seems right now that I'm almost prepared to believe that the president has a point on this one. It sure would be a first.

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So Here's What We Know About the Status of the Bailout...

| Thu Sep. 25, 2008 11:35 PM EDT

The Senate Democrats, Senate Republicans, and House Democrats spent the week negotiating with Treasury Secretary Hank Paulson and the White House. Senate Democrats and Senate Republicans announced this morning that they had agreed on key principles. In a White House meeting this afternoon with all parties, including Barack Obama and John McCain, House Republicans hijacked the process by submitting an entirely new plan that no one had seen before. John McCain hasn't made his position clear, but has reportedly been huddling with House Republicans and places his sympathies with their plan, which can be found here.

It actually says, "Instead of injecting taxpayer capital into the market to produce liquidity, private capital can be drawn into the market by removing regulatory and tax barriers that are currently blocking private capital formation." That is, more deregulation.

While Democrats and Republicans are fighting about whether or not House Republicans stalled the bailout's progress so John McCain could be seen as a key player in a solution tomorrow or over the weekend, no one seems to be disputing that House Republicans are the reason a week's worth of work is in jeopardy. Here's an ABC report of a frantic Paulson after the unsuccessful White House meeting:

Paulson walked into the room where Democrats were caucusing after today's meeting at the White House and pleaded with them, "Please don't blow this up."
Rep. Barney Frank, D-Mass., chair of the House Financial Services Committee was livid saying, "Don't say that to us after all we've been through!"
House Speaker Nancy Pelosi said, "We're not the ones trying to blow this up; it's the House Republicans."
"I know, I know," Paulson replied.

Really interesting theorizing in Laura's post below, and you can get Kevin's take here.

Bailout Still in Trouble

| Thu Sep. 25, 2008 11:27 PM EDT

As my Hill friend said yesterday, the bailout seems to be in more trouble than some earlier reports indicated. My two cent summary of his take, which is worth reading, was that there is a seriously underestimated gap between the White House and Congressional leadership on one side, and the Congressional rank and file on the other; and that the media reports suggesting a deal was imminent by and large were being informed by the former, who are more committed to a quick deal; while the Congressional rank and file is more informed by being overwhelmed with thousands of calls from screaming constituents who are truly outraged over the prospect of a bailout of Wall Street fat cats. Vulnerable incumbents may not feel they can vote for anything resembling a bailout until after the election.

Here's his latest:

My take is that the politics are way more scrambled than anyone can get a handle on. Basically, Bush and the congressional Democratic leaders have a straightforward objective and agenda - getting a modified Paulson plan cobbled together and then, via consensus, passed and made law. Apart from that, though, there are many actors with many different objectives - both policy-wise and purely politically - and these cannot be arrayed along any single dimension, or even in any easy way at all. There are just many cross-cutting objectives, forces and circumstances, so the whole situation is probably too complex to strategize about, apart from the first group who have a strategy for achieving their objective. I don't think McCain has a clear sense of what his strategy is, and he is not trying to manipulate the situation - or not successfully - because he does not have any mastery of it (not because he doesn't want to). (Probably worth adding in that it is doubtful McCain has any policy convictions at all on this set of issues, at least in this context, since his historical positions are simply unacceptable in the current debate.).
Let me add that yet another peculiarity of the situation is that while, on the one hand, the House Republicans' alternative plan is laughable as a matter of policy - just laughable - they are alone in tapping into the widespread rage out there at the very idea of a gigantic bailout for Wall Street malefactors. Many House Democrats are feeling the same, but they have no representation at the table. So the House Republicans are, in some funny sense, sitting pretty politically.
And finally, watching the coverage remains quite weird, because there is this enduring assumption that a deal is going to be done, that it will be, fundamentally, Paulson's plan with modifications, and that that is the right thing. That may partly reflect the fact that everyone realizes we are at a dangerous moment. But I can't help but think it also reflects the fact that by and large the class of people in and driving the press coverage is completely disconnected from the perspective of people who are overwhelming, in a completely uncoordinated way, virtually every congressional office.
So it is a very very weird moment.

All the World's a Game

| Thu Sep. 25, 2008 10:00 PM EDT

ALL THE WORLD'S A GAME....Well, it appears that John McCain has succeeded in his plan to torpedo the bailout negotiations for a while so that he can swoop in and pretend to be their savior tomorrow. On CNN, Stephen Hayes says he'll get away with it because most people don't pay much attention to politics. "All they'll see is that that McCain suspended his campaign, flew to Washington, banged a few heads, and then we got an agreement. And that's a win for him." Sadly, he might be right.

There really seems to be no end to McCain's preening self-regard and stunt-of-the-week campaigning strategy these days, nor any end to his lack of regard for caring about what's actually best for the country. If this stuff were a game with no real-world consequences, I'd admire his gamesmanship. Since it's not, I'm just disgusted.

But if it's bread and circuses we're going to get, I might as well get the real thing: USC vs. Oregon State in Corvallis tonight. So that's where I'll be for the rest of the evening: watching a game that's supposed to be a game. I'll be back in a few hours.

UPDATE: Well, that was a bummer. Sort of like the rest of the week.

Remember the S&L Bailout? John McCain Hopes You Don't

| Thu Sep. 25, 2008 9:31 PM EDT

This afternoon, John McCain joined in a summit with his rival Barack Obama and President George W. Bush, after "suspending" his campaign and rushing back to Washington to help rescue the American economy. As pundits and the public argue over whether this is the patriotic act of a true statesman or the desperate stunt of a political operator, McCain hopes they will forget what it really is for him: pure deja vu. McCain has already been here and done this, back in the roaring eighties, when he was in the thick of another financial meltdown that yielded a huge government bailout—and the worst scandal of his own political career.

The savings and loan crisis developed along lines remarkably similar to the current sub-prime crisis: A flurry of deregulation gave S&Ls the capabilities of major commercial banks without the corresponding oversight and regulation. S&Ls proceeded to make high-risk investments, including thousands of unsound mortgages during a housing boom. The government looked away—until the bottom fell out and the S&Ls started to fall like dominoes. Then it stepped in with a bailout of then-unprecedented levels, which added to ballooning deficits and ushered in years of recession.

When the S&L scandal unfolded, Barack Obama was working as a community organizer in Chicago, and George W. Bush was busy running a series of failed oil ventures and managing his baseball team in Texas. But John McCain was already in Congress—and in the S&L mess up to his neck.

Cement Plant Powered by Huggies

| Thu Sep. 25, 2008 7:31 PM EDT

Here's an idea that gives new meaning to waste management: to help produce energy, the Devil's Slide Cement plant in Morgan, Utah burns surplus diapers.

By mixing leftover Huggies with traditional sources, the company cuts coal consumption by 30 percent and prevents the disposables from clogging landfills. Only catch? Unused nappies only, please.

—Nikki Gloudeman

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Sarah Palin Unplugged

| Thu Sep. 25, 2008 6:57 PM EDT

SARAH PALIN UNPLUGGED....Look, this is just getting scary. I don't care how partisan you are, you can't watch this clip from Sarah Palin's interview with Katie Couric without wondering if she's completely cracked under the pressure of running for vice president. The question is a simple softball about the bailout — something she's had weeks to bone up on — but her answer is incoherent. Not just the usual platitudes politicians offer when they don't feel like answering a tough query, but completely incoherent. Hell, it's barely even in English.

I don't even feel right making snarky jokes about this stuff anymore. This campaign has gone seriously off the rails. I've never seen anything like it, but everyone is still nattering on as if this is business as usual. If it is, though, we've already entered the world of Idiocracy and we might as well all just give up and enjoy our super-size Slurpees while we can.

IAEA's Syrian Contact Assassinated, Stalling Nuclear Probe

| Thu Sep. 25, 2008 6:44 PM EDT

At a closed door meeting in Vienna today, UN International Atomic Energy Agency director general Mohamed ElBaradei revealed that the reason the group's investigation into whether Syria was pursuing a nuclear program has been delayed is that its main Syrian contact has turned up assassinated.

"The reason that Syria has been late in providing additional information (is) that our interlocutor has been assassinated in Syria," ElBaradei told a closed-door session of the International Atomic Energy Agency's 35-member board. A recording of his remarks was obtained by AFP.

ElBaradei apparently did not provide any details on the circumstances of the murder of the group's liaison, nor on his identity. But the AFP cites various Arab media reports noting the assassination of Brig. Gen. Mohammed Sleiman (or Mohamed Suleiman) in the northern port town of Tartus in early August, describing him as a military advisor to Syrian president Bashar al Assad and Syria's liaison to Hezbollah. The LAT says intelligence experts have long suspected Suleiman was in charge of Syria's alleged nuclear and chemical weapons programs.

Iraqi Election Update

| Thu Sep. 25, 2008 6:21 PM EDT

IRAQI ELECTION UPDATE....A reader writes:

I hate to be a "why aren't you blogging about this" critic, but any reason you decided not to post about the passage yesterday of the Provincial Elections law in Iraq? It's the sort of thing you and others would usually mention, and when I saw the story in the NYTimes I expected it to be a big topic of discussion, even with the bail-out and campaign antics taking up media attention. But instead, it got no mention at all on any blog I regularly read.

Say what? They finally passed an election law? Seriously? I had no idea. Marc Lynch provides some commentary:

Today it appears that the impasse has finally been broken as the Parliament overwhelmingly passed a new provincial elections law based on a compromise on Kirkuk engineered by the tireless UN envoy Staffan de Mistura....What's more, they have agreed to push back the deadline for voting until January 31, 2009 (in the non-KRG provinces and Tamim province with Kirkuk). This will allow enough time for the Iraqi High Elections Commission (which will determine the exact date) to adequately prepare and organize and for the various political blocs to mobilize for the campaign.

....UPDATE: The Iraqi Parliament has released a detailed report, if not the actual text, of the law. Among the crucial details, beyond the elaborate compromise on Kirkuk: the vote will be open list, women's quota but no minorities quota, can use symbols of non-candidates except for religious figures (so no Sistani? Is Sadr "religious" figure?), and some limitations on use of mosques and other places of worship for campaigning. All in all looks pretty good - the open list is key, and goes against the preferences of what the ruling coalition, plus a way was found to accomodate the women's quota.

In my defense, it appears that even Juan Cole missed the news during the rush of events yesterday. Just goes to show what financial collapse combined with a day of world class political grandstanding will do.

The "compromise" on Kirkuk, by the way, is to go ahead and hold elections everywhere else while a commission convenes to cogitate for a while over the fate of Kirkuk. In other words, they're just kicking the can down the road. Still, this is good news regardless.

Sarah Palin and the Russians

| Thu Sep. 25, 2008 4:34 PM EDT

Andrew Sullivan posted this gem from CBS News regarding Palin's foreign policy credentials: Some things you just have to see to believe.