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All Downhill Now

| Tue Sep. 16, 2008 2:54 PM EDT

ALL DOWNHILL NOW....Did Sarah Palin peak 10 days ago and we just didn't know it? Maybe! John Sides has the chart.

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A Republican Strategist's Take on the Presidential Race

| Tue Sep. 16, 2008 2:52 PM EDT

Republican public relations strategist Marty Youssefiani has worked on numerous House and national races, and when I saw a CNN analysis by his old mentor Ed Rollins the other day on how Palin changed the game, I asked Youssefiani for his take. By way of background, when I spoke with Youssefiani in the late spring, he was fairly convinced that Obama would win the election, on the strength of inspiring the registration of so many new, first time voters.

Ed is right in that [Palin] changed the short term dynamics of the game. But I'm increasingly skeptical about McCain's ability to sustain the energy -- through three debates and this volcanic economy! (I have a hunch McCain may have peaked too early.)
On the other side, Obama can ill-afford to (personally) engage in the nasty game; instead he needs to figure out -- very quickly -- how to close the sale and convince the margins that he is not surface thin. On that note, Biden's (unfathomable pick over Hillary) problem is: unlike Palin, his personal likability factor ranks with that of Ashcroft! He has always come across as mean, bitter and personally angry. He is probably the truly smartest one of the bunch, but time is running out on him and he's got to be careful with Palin.
On the "Bradley Factor": I do think it is very, very real vis-a-vis the polls; however, in my opinion, come Nov 5, the biggest story will be how the genius pollsters missed/under factored the massive new registered voters, which will counter balance the Bradley factor -- in favor of Obama, and, at the end, make the difference. There you have it.

I asked Youssefiani about the conventional wisdom in the past being that young people say they're going to vote, but don't.

Very true. But my hunch is that we are going through a paradigm shift and that all bets are off this year. We're guaranteed to break all voting participation records... The country is following both campaigns closer than ever before (reflected by the Nielson ratings); New registration surge is not waning and if battleground [Virginia] is any indication (requests for 200,000 additional new registration forms) we are in for a tidal wave come November. Sure, I may be wrong, but I like my chances that we are more likely to see an unprecedented wave of more dedicated new/young voters than not -- especially if the economic news continues.

Stamp Tax

| Tue Sep. 16, 2008 2:23 PM EDT

STAMP TAX....Dean Baker proposes a simple way to put a modest damper on Wall Street — just enough of a damper, he suggests, to keep irrational exuberance from becoming too irrational:

The basic point is very simple. We impose a modest transactions tax on all financial transactions, for example a tax of 0.02 percent on the purchase or sale of a future contract or a tax of 0.25 percent on the purchase or sale of a share of stock. (The United Kingdom has had a tax of 0.25 percent on stock sales and purchases for many decades.) Such a tax could easily raise a $150 billion a year, enough to pay for a national health care program or a major clean energy initiative.

A tax of this magnitude will have almost no impact on someone who intends to buy and hold a financial asset. No airline is going to be discouraged from hedging on jet fuel futures because of a 0.02 percent tax, nor will any farmer be dissuaded from hedging on her corn crop.

....The only people who will really be hit by the tax are speculators; people who buy futures at 2:00, with the intentions of selling at 3:00. Even a modest tax can put a serious dent in the profits of those whose business is short-term speculation. We will therefore see less of this speculation, but it is hard to see why we should care.

This is sort of like the idea of charging a tiny fee for sending email: normal people wouldn't even notice it, but it's more than enough to make spamming a losing proposition. The difference is that an email tax is technologically impossible, while financial transaction taxes are generally quite simple and reasonably enforceable.

I only have two brief comments. First, I don't know if this is a good idea on the merits. However, I've always had a temperamental aversion to ultra-short-term speculation, so it seemed worth passing along just to spark some discussion. Second, unless I'm mistaken, this wouldn't have had any effect on our ongoing credit crisis, which was fundamentally caused by systemic mispricing of risk and the assumption of insane amounts of leverage, not too much speculation. (Also, perhaps, a bit of fraud here and there, but that's a little less clear.) So this shouldn't be taken as a proposal directly aimed at the current mess.

It still might be worth thinking about, though. Dean has more details in an old paper here.

Viral McCain

| Tue Sep. 16, 2008 1:16 PM EDT

VIRAL McCAIN....It's true that David Ignatius, Richard Cohen, and the Washington Post editorial board have become members of the Enough Club recently, all of them penning sad notes about the decline and fall of John McCain ("He has become the sort of politician he once despised," says former McCain groupie Cohen). But a friend emails to say that what's important isn't whether they say it, but whether anyone reads it. And judging from this morning's "Most Viewed Articles" list on the Post home page, people are reading it. And emailing it too. The McCain campaign has evidently decided that it's going to pretend not to care what anyone else thinks, but it looks like there's a chance that this won't work after all. Perhaps my faith in human nature will shortly be restored.

Engaging Iran

| Tue Sep. 16, 2008 12:36 PM EDT

ENGAGING IRAN....Should we engage directly with Iran, as Barack Obama suggests? The experts speak:

Five former U.S. secretaries of state said on Monday the next American administration should talk to Iran, a foe President George W. Bush has generally shunned as part of an "axis of evil."

....The five — Colin Powell, Madeleine Albright, Warren Christopher, James Baker and Henry Kissinger — all said they favored talking to Iran as part of a strategy to stop Tehran's development of a nuclear weapons program.

Sure, that's nearly every living former secretary of state in the last 30 years, but who listens to experts these days? Not John McCain! Listening to experts is for wimps.

Mission Creep Dispatch: Katherine McCaffrey

| Tue Sep. 16, 2008 12:29 PM EDT

mccaffrey.pngAs part of our special investigation "Mission Creep: US Military Presence Worldwide," we asked a host of military thinkers to contribute their two cents on topics relating to global Pentagon strategy. (You can access the archive here.)

The following dispatch comes from Katherine T. McCaffrey, an assistant professor of anthropology at Montclair State University in New Jersey and author of Military Power and Popular Protest: The US Navy in Vieques, Puerto Rico.

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McCain's Top Policy Man: McCain Qualified for Presidency Because He "Helped Create" BlackBerrys

| Tue Sep. 16, 2008 11:40 AM EDT

This, I suspect, will be as big a headache for the McCainers as the "How many houses do I own?" episode. I mean, we're still joking about Al Gore inventing the internet eight years later, right?

Asked what work John McCain did as Chairman of the Senate Commerce Committee that helped him understand the financial markets, the candidate's top economic adviser wielded visual evidence: his BlackBerry.
"He did this," Douglas Holtz-Eakin told reporters this morning, holding up his BlackBerry. "Telecommunications of the United States is a premier innovation in the past 15 years, comes right through the Commerce committee so you're looking at the miracle John McCain helped create and that's what he did."

Update: For what it's worth, BlackBerry is made by a Canadian company.

Update Update: The AP gets sassy in its write-up, saying, "McCain has acknowledged that he doesn't know how to use a computer and can't send e-mail, one of the BlackBerry's prime functions."

Too Many Updates!!: The Obama campaign keeps its eye on the ball in its response:

"If John McCain hadn't said that 'the fundamentals of our economy are strong' on the day of one of our nation's worst financial crises, the claim that he invented the BlackBerry would have been the most preposterous thing said all week," said Obama campaign spokesman Bill Burton.

Why Would You Trust a Life-Long Deregulator to Regulate the Markets?

| Tue Sep. 16, 2008 11:26 AM EDT

I want to reiterate as plainly as possible a point that David and Josh Marshall both made yesterday.

McCain is now responding to the turmoil on Wall Street by saying things like, "We will have transparency and accountability and we will reform the regulatory bodies of government." American workers, he says, have been "betrayed by a casino on Wall Street of greedy, corrupt excess."

But why should we trust this guy to bring the proper regulation to the financial industry? Who is he to play the populist? He is a life-long supporter of deregulation, his campaign staffers made millions lobbying for failed lenders, and his top economic adviser, Foreclosure Phil Gramm, helped pass the deregulation that created this mess in the first place.

Update: The NYT mines this vein.

The View from Abroad on Palin: God Help Us

| Tue Sep. 16, 2008 11:10 AM EDT

Here's columnist Bradley Burston in Israeli daily Ha'aretz:

I get it. I get that millions of Americans have a crying need for someone to stand up and say the things that Sarah Palin has been telling them. ...
But it wasn't until I got into the taxicab this morning, that I realized what the American voter truly faces this November. The radio was playing a clip from her ABC News interview, the one in which she was asked about the Bush Doctrine. The problem was not that she was unacquainted with the doctrine. Millions of Americans are unacquainted with it. The problem is that Sarah Palin was also asking those millions of Americans to put her first in line for the most important position in humankind. ...
Even my Israeli cab driver, a non-American through and through, knew more about the Bush Doctrine than Sarah Palin. And that is cause for serious concern. ... There is something in the smugness, the faith-based rigidity, the dismissiveness, that suggests that once again, we may have a national leader who knows better how to divide than to rule.

On the bright side, Burston continues, the realization that Israeli politics would never elevate such an inexperienced statesman to a top leadership position restored some faith in their country to the writer and his colleagues. "'This would never have happened in Israel, ever' remarked a journalist friend ... With irony bordering on the painful, the journalist added, 'Sarah Palin has restored my faith in Israel.' Israel is far from a model of good government, wise policymaking and exemplary leaders. But here, at least, voters and the politicians make it their business to know inside and out .... politics ... for what politics really is, in America and Israel both: a matter of life and death."


Obama On the Air With "Fundamentals"

| Tue Sep. 16, 2008 11:01 AM EDT

Yesterday morning, amidst financial disaster or near-disaster, John McCain said, "the fundamentals of our economy are strong." Today, the Obama campaign is making him pay.

In response to anyone who thinks they can use statistics and technical definitions to argue the fundamentals of the economy are strong, I would echo a point Paul Krugman made last night on MSNBC (video): Given the state of our banks, our homes, our jobs, and our wages, if we aren't in a recession yet we need to seriously rethink our definition of recession.