Kevin Drum - September 2008

Debate Liveblogging

| Fri Sep. 26, 2008 9:59 PM EDT

DEBATE LIVEBLOGGING....Here it is. The main event. Obama vs. McCain. Is your skin tingling? Are you drunk yet?

Wrapup – Am I off base, or was this one of the most soporific presidential debates in a while? Frankly, I didn't think either one of them did very well. There was way too much rambling, and way too few sharp points. Overall, McCain was more lively than Obama, but if the point of the debate was for Obama to show that he could hold his own on national security, then count it a win for Obama. I wouldn't call him a big winner, but he certainly did at least as well as McCain, and that might have been all he needed.

Of course, within a few minutes I expect conservatives will all be telling us that McCain was simply brilliant tonight. Absolutely masterful. I expect many repetitions of McCain's talking point about Obama being naive. If they say it often enough, they figure eventually everyone will agree with them.

10:36 – McCain says directly that he thinks Obama is unprepared to be president. Was that a good move? Or too much?

10:32 – Why does Obama keep starting to make a good point and then suddenly veer off to something else? He was about to make a good point about the danger of overfocusing on Iraq, but suddenly he's off on China, then healthcare, then the economy, then veterans affairs. Shouldn't he instead drill home a point about winning in Iraq requiring that Iraqis themselves take responsibility for their own security? Or something. But finish the point, in any case.

10:29 – Obama supports missile defense? I didn't know that.

10:24 – Todd Gitlin notes that Obama looks at McCain and reacts to him, but McCain stares rigidly ahead and refuses to make eye contact with Obama. Weird.

10:22 – McCain is really driving home two themes: (1) He's visited everywhere and met everyone, and (2) the world is full of threats, threats, threats. Will his constant repetition of these things wear on people? Not sure.

10:17 – Obama had some opportunities to drive home his point on preconditions, but I'm not sure he did. Conversely, McCain's little burlesque about sitting across the table from Ahmadinejad while he insults Israel was demagogic, but it might have been effective.

10:07 – Obama says the Iraq war has made Iran stronger. That's a good point, and maybe one that a lot of viewers don't understand. But he didn't really make the sale.

10:04 – According to the audience-o-meter, even Republicans didn't react to McCain's reference to "existential threat" and "second Holocaust."

9:52 – Decent answer from Obama about what we need to do in Afghanistan in Pakistan. Things are picking up a little bit.

9:39 – McCain: I hate President Bush. I'm a maverick!

9:34 – How did we get on nuclear power plants? Wasn't the question about what programs they'd cut because of the cost of the Wall Street bailout?

9:31 – This is just excruciatingly boring.

9:27 – Obama just said we have to free ourselves from dependence on Mideastern oil. I think that's one of our bingo squares. Hooray!

9:25 – McCain is kinda rambling now.

9:22 – If the audience-o-meter is any indication, these guys are putting the entire country to sleep.

9:20 – Hmmm. Obama has decided to refer to McCain as "John," not "Senator McCain." Good idea? Or bad?

9:19 – McCain: Spending is bad. Earmarks are evil. Gateway drug. DNA of bears. Yada yada yada. Obama: Senator McCain is absolutely right. But....tax cuts for the wealthy. CEOs! 95%! McCain: Earmarks! I'm the sheriff! Sigh.

9:13 – Come on, guys. Let's pick up the pace. So far this isn't even as interesting as a stump speech.

9:08 – Wow. McCain actually had the balls to say that House Republicans "decided to be part of the solution to our problem"? That's chutzpah.

9:07 – John McCain is feeling better tonight. Why? Because Republicans and Democrats are sitting down together to work on our financial crisis. You could have fooled me....

9:05 – What is that weird line at the bottom of the CNN screen? Instant audience reaction, it seems. Is that really necessary?

9:02 – Ah. "National security" includes the global financial crisis. Glad to get that cleared up.

8:59 – Apparently the French conduct better debates than us. Sheesh. We're losing our global lead in everything.

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Friday Cat Blogging - 26 September 2008

| Fri Sep. 26, 2008 4:24 PM EDT

FRIDAY CATBLOGGING....Good news: the debate is back on! Hooray! As you can tell, Domino and Inkblot are almost rapt already. They desperately want to know the candidates' plans for bailing out the cat food industry and preventing mass feline panic. The other good news is that it means our bingo card drinking game is once again the must-have accompaniment for your evening. Click the link, download a card, and have a drink anytime one of the candidates repeats a phrase in one of the squares. And while you're there, donate a few dollars to help Mother Jones continue to produce great progressive journalism. The drunker you get, the more money you should donate!

I'll be liveblogging the debate, of course — assuming my brain hasn't turned into tapioca by then — so come on back and follow along. I'm hoping McCain staggers on stage in a rumpled, ill-fitting suit with mismatched socks just to show how hard at work he's been trying to save our nation's economy. "Didn't have time to change," he'll blurt out melodramatically, and Jim Lehrer will nod along knowingly. Or something.

Finally, in other cat news, you'll be glad to hear that after years of negotiations with the USDA, Ernest Hemingway's six-toed cats are once again safe from evil government bureaucrats. "The cats have been living on the grounds for years, and we're not a zoo, carnival or amusement park," said the president of the Ernest Hemingway Home and Museum in the Florida Keys. And that's exactly where they'll stay.

Buying Wall Street

| Fri Sep. 26, 2008 3:46 PM EDT

BUYING WALL STREET....Over at the Wall Street Journal editorial page, zillionaire hedge fund guru John Paulson outlines what he thinks is a better alternative for stabilizing markets than the current bailout plan. Paulson, of course, is famous for betting a couple of years ago that the mortgage market was going to collapse and becoming rich from his foresight, so that makes him worth listening to.

And unlike, say, the blatherings of the House Republican Study Committee, his plan isn't self-evidently idiotic. Basically, instead of having the Treasury buy up toxic mortgage securities, he thinks they should directly recapitalize the financial system by purchasing senior preferred stock in failing banks:

The financial market is stabilized, companies get recapitalized, failures are avoided, debt securities are supported, and time is gained for illiquid assets to mature.

The institutions continue to function, their cost of funding will decline as equity capital increases, and innocent third parties like bank depositors, broker/dealer clients and insurance-policy holders are all protected. The only difference is that potential losses are kept with the shareholders where they belong.

Paulson thinks his plan is superior to the current proposal on several counts — and although I'm not sure he's right about that, that's not what gets me. What gets me is that the Wall Street Journal editorial page is now running pieces that essentially suggest nationalizing failed banks — which is exactly what this plan would do if the required capital infusions are large enough (which they probably would be, since it doesn't take much capital to buy a majority stake in a failing bank). Conversely, I, the liberal, am really queasy with this notion. I'm all in favor of better regulation, but the federal government already owns one of the biggest insurance companies in the world, and I'm not thrilled at the idea of them acquiring any more of Wall Street.

We're in looking glass territory here. Am I too queasy about taking over banks? (That's a serious question. Am I?) Is the Journal too sanguine about it? What's going on?

Betting on the Bailout

| Fri Sep. 26, 2008 2:09 PM EDT

BETTING ON THE BAILOUT....Brad DeLong on the modified Paulson plan:

To get get a $500B macroeconomic gain in production and employment, Paulson wants to take on a position with an expected value of -$100B. But the true value of that position could be anywhere between +$200B and -$400B. Looks like a good bet to me.

I think that's right. In fact, I think the bet might even be a little better than that. With the equity provisions now in place, along with the plan's implied commitment to do whatever it takes to keep the economy stable even if it requires more than just the current bailout, there's a pretty good case to be made that taxpayers are unlikely to lose money on the deal. Conversely, although $500 billion seems like a reasonable guess about the cost in GDP contraction of doing nothing, there's a sizeable chance of it being way worse. In that sense, it's sort of like global warming, where you really have to pay attention to the small but nontrivial chance of catastrophe.

Still, at a minimum Brad is right: it's $100 billion vs. $500 billion. That's an easy bet. He also has about the best short summary of yesterday's events I've seen:

John McCain announces he is suspending his campaign, cancels on David Letterman, gets made-up for and does an interview with Katie Couric, goes and talks to the Clinton Global Initiatiive the following day, persuades Bush to call a meeting at the White House, gets to Washington DC in the afternoon, goes and talks to the House Republicans, goes to the meeting, sits in the back of the meeting and is evasive, and when the meeting breaks up, three things are clear:

  • John McCain won't say what financial rescue packages he supports or opposes.

  • George W. Bush won't say that support for Paulson is a test of Republican loyalty.

  • The House Republican caucus doesn't support their leaders.

  • The House Republican caucus doesn't have an alternative plan.

That's quite an accomplishment. It is hard to read it any other way than as John McCain rallying the House Republicans to blow up the bipartisan agreement that was being negotiated. The House Republicans don't want to do anything to hold CEOs accountable, to protect taxpayers, protect homeowners, or provide oversight. The Treasury rejected the not-quite-ideas they put forward at the White House meeting last week.

And he passes along this nugget from Politico:

According to one GOP lawmaker, some House Republicans are saying privately that they'd rather "let the markets crash" than sign on to a massive bailout. "For the sake of the altar of the free market system, do you accept a Great Depression?" the member asked.

God save us from the Republican Party.

McCain Blinks

| Fri Sep. 26, 2008 1:21 PM EDT

McCAIN BLINKS....So I guess John McCain has blinked after all. The pull of the klieg lights was just a little too enticing for him, so he's abandoning his role as Savior of the Bailout to head to Mississippi tonight for his first debate with Barack Obama. In possibly the most laughable comment of a laughable campaign, he claims that he's able to do this because negotiators are now making "significant progress" in talks that would have been finished yesterday if he hadn't parachuted heroically into Washington in the first place.

Still, give the old guy credit. He knows how to put on a show. If I were hiring a PR-Exec-in-Chief, he'd be my first choice.

McCain's Stunts

| Fri Sep. 26, 2008 1:10 PM EDT

McCAIN'S STUNTS....John McCain biographer Matt Welch writes in the LA Times today about McCain's fondness for political stunts designed to draw attention to his own virtue:

But if McCain's latest "country-first" outburst is a mostly empty symbol in terms of actual campaigning, it's a meaningful one in other ways. By taking what was originally Obama's behind-the-scenes initiative of cobbling together a joint candidate statement on the bailout package and opportunistically turning that into yet another chance to portray his patriotism as shinier than his opponent's, McCain is ripping what little facade remains over his campaign. This is not an election about ideas or policy; it's an election about a Great Man, facing down an interloper.

....But as many Great Men come to learn, there is a colossal downside built into running a campaign on outsized personal virtue. The line between stoic, honorable service and showy moral vanity is oftentimes difficult to maintain.

And when a candidate confuses his own political ambitions with the fortunes of his country, that's when Great Men turn into self- parodies.

On the other hand, David Brooks, even after watching the events of the past two weeks, can still say of McCain, "He is, above all — and this is completely impossible to convey in the midst of a campaign — a serious man prone to serious things." He might want to rethink that.

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Pass the Bill

| Fri Sep. 26, 2008 12:26 PM EDT

PASS THE BILL....Can I say something? Thank you.

I understand that John McCain wants to rescue his drowning campaign and thinks a dramatic moment as Savior of the Financial System might be just what he needs. I understand that House Republicans are right-wing lunatics who probably think we could solve all our problems if we just went back on the gold standard. I understand that congressional Democrats don't want to pass a bailout bill unless they have political cover from across the aisle. I understand that Henry Paulson is not the most credible messenger and that his original rescue proposal was a joke. I'm very happy that Chris Dodd and others have added oversight, equity shares, CEO compensation limits, and funding tranches to the Paulson bill. It's still not perfect, but at this point it's not a bad job from the sausage factory either.

Now: will you just pass the fucking thing? We've been flailing around with enormous, unprecedented, ad hoc rescue attempts for over a year, and they haven't worked. Despite what lunatic Republicans think, despite what the public thinks, despite what even some of the reality-based blogosphere apparently thinks, our financial system really does seem to be on the verge of seizing up. This is not just a scam cooked up by George Bush and Ben Bernanke and a sinister cabal of GOP machers.

We're already fated to suffer through at least a moderate recession whether we like it or not, but I, for one, would like to avoid a massive one. I would like to do this even if the price includes saving a few rich people from having to sell their second yachts. We can settle their hash later. I would even like to do this despite the fact that I don't know with absolute certainty that everything in the current bill is either necessary or sufficient. It's true that a few more days of discussion probably won't hurt, but that doesn't mean it's OK to waste time assuaging the egos and political careers of grandstanding presidential candidates and the economic illiterates who man the GOP House caucus. For chrissake, people, just pass the bill.

Now go read Steven Pearlstein.

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.

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.

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.