Kevin Drum

Palin-McCain: The Skirmishing Begins

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| Sat Oct. 25, 2008 11:32 AM PDT

PALIN-McCAIN: THE SKIRMISHING BEGINS....Yesterday I mentioned that I was looking forward to the (anonymous! on background!) war that was sure to erupt after the election between Sarah Palin and John McCain. Palin, after all, is not exactly famous for standing by her mentors in their hour of need. But guess what? I don't have to wait until after the election after all! Ben Smith reports:

Palin supporters, inside the campaign and out, said Palin blames her handlers for a botched rollout and a tarnished public image — even as others in McCain's camp blame the pick of the relatively inexperienced Alaska governor, and her public performance, for McCain's decline.

"She's lost confidence in most of the people on the plane," said a senior Republican who speaks to Palin, referring to her campaign jet. He said Palin had begun to "go rogue" in some of her public pronouncements and decisions. "I think she'd like to go more rogue," he said.

...."The campaign as a whole bought completely into what the Washington media said — that she's completely inexperienced," said a close Palin ally outside the campaign who speaks regularly to the candidate.

"Her strategy was to be trustworthy and a team player during the convention and thereafter, but she felt completely mismanaged and mishandled and ill advised," the person said. "Recently, she's gone from relying on McCain advisers who were assigned to her to relying on her own instincts."

Etc. etc.

Read the whole thing, which I take as just the barest teaser of the bloodshed that's gong to erupt between McCain and Palin loyalists after the election. My prediction: they're both going to come out of it with their careers in ruins. The only difference is that Palin probably won't realize it for a while.

UPDATE: More exciting skirmishing here! "She is a diva. She takes no advice from anyone," says a McCain adviser. "She does not have any relationships of trust with any of us, her family or anyone else. Also, she is playing for her own future and sees herself as the next leader of the party. Remember: Divas trust only unto themselves, as they see themselves as the beginning and end of all wisdom."

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Financial Meltdown Watch

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| Sat Oct. 25, 2008 11:12 AM PDT

FINANCIAL MELTDOWN WATCH....A while back I was wondering who was left to bail out, now that we'd announced plans to take care of big banks, little banks, investment banks, and Fannie and Freddie. Insurance companies? Hedge funds? Today we learn the answer:

The Treasury Department is dramatically expanding the scope of its bailout of the financial system with a plan to take ownership stakes in the nation's insurance companies, signaling new concerns about a sector of the economy whose troubles until now have been overshadowed by the banking industry, government and industry sources said.

Anybody else?

The availability of U.S. government cash in the middle of a global credit squeeze is drawing requests from insurance firms, auto makers, state governments and transit agencies. While Treasury intended for the program to apply broadly, the growing requests could put a strain on the $700 billion, a sum that only last month stunned lawmakers.

Meanwhile, in the spirit of the world catching a cold when America sneezes, emerging markets, which had almost nothing to do with causing the financial crisis, are going to pay an even steeper price than us:

In Hong Kong, the Hang Seng fell 8.3 percent to 12,618. Markets in India, Thailand, Indonesia and the Philippines were also down sharply as investors bailed from emerging markets around the world to cut their exposure to risky assets and meet redemption needs at home. On Thursday, key indices in Russia, Brazil and Mexico also fell.

"Funds are pouring out of emerging markets," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. "A lot of money that flowed into the region during the last five years from the U.S. and Europe is being cashed out. The global crisis has come to Asia."

It's sort of like global warming: we cause the problem, but poor countries suffer the brunt of the consequences.

Friday Cat Blogging - 24 October 2008

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| Fri Oct. 24, 2008 12:45 PM PDT

FRIDAY CATBLOGGING....I had something new and exciting planned for today, but a combination of technical problems and feline noncooperation scotched my best efforts. Maybe next week.

But things turned out OK anyway. Domino is taking the week off because I ended up snapping this picture of Inkblot at the last minute (i.e., about an hour ago) and I thought it deserved more prominent treatment than usual. Magnificent, isn't he? Mother Jones is a 501(c)(3) nonprofit, which means I'm not allowed to endorse candidates for office, but my reading of the law suggests that this applies only to human candidates. So consider this Inkblot's official campaign portrait. That's a face you can trust to get tough with Wall Street, get tough with Ahmadinewhoever, and get especially tough on our nation's growing problem of barking suburban dogs. Inkblot '08!

By the way, if you're in the Orange County area, I'll be on a panel today at UC Irvine that features "conversations among important contemporary bloggers." Unfortunately, Ezra Klein had to cancel, so they got me instead. My session is at 3:45. Details here and here if you want to drop by.

Like a Swiss Watch

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| Fri Oct. 24, 2008 12:42 PM PDT

LIKE A SWISS WATCH....Let's summarize the past couple of days: (a) Politico reports that La Palin has spent $150,000 on campaign outfits, (b) John McCain's brother calls 911 to complain about a traffic jam and then curses at the operator for telling him to get off the line, (c) the New York Times reports that Palin also spent $30,000 or so on hair and makeup over a period of two weeks, and (d) a white woman who claimed she was attacked by a black Obama supporter admits that the whole thing was a hoax.

But I guess this is no big deal because the McCain campaign was running so smoothly it could afford a few minor glitches like this, right?

Let the Defenestrations Begin

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| Fri Oct. 24, 2008 11:18 AM PDT

LET THE DEFENESTRATIONS BEGIN....Politico reports on what's going on behind the scenes in Republican circles:

With despair rising even among many of John McCain's own advisers, influential Republicans inside and outside his campaign are engaged in an intense round of blame-casting and rear-covering — much of it virtually conceding that an Election Day rout is likely.

...."If you really want to see what 'going negative' is in politics, just watch the back-stabbing and blame game that we're starting to see," said Mark McKinnon, the ad man who left the campaign after McCain wrapped up the GOP primary. "And there's one common theme: Everyone who wasn't part of the campaign could have done better."

"The cake is baked," agreed a former McCain strategist. "We're entering the finger-pointing and positioning-for-history part of the campaign. It's every man for himself now."

I am so looking forward to this. Is this schadenfreude? Or does that require at least a veneer of pretending that you're not really taking pleasure in the misfortunes of others? I'm not sure. But I'm looking forward to it anyway.

And you know the part I'm really looking forward to? Sarah Palin's role in all this. I expect her to rip McCain absolutely to shreds. On background, of course, but it will be no less vicious for that. Her future, such as it is, lies with the wingnut rump of the party, and she knows what her audience wants: John McCain's blood. And lots of it. They never liked him in the first place, and I expect them to be howling for his head on a platter starting at about 8:01 pm EST on November 4th.

You Are What You Drive

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| Fri Oct. 24, 2008 10:59 AM PDT

YOU ARE WHAT YOU DRIVE....That latest news from the Kelley Blue Book people:

McCain receives the highest support from full-size truck (66 percent), full-size SUV (61 percent) and luxury SUV (61 percent) owners. Obama leads McCain among luxury station wagon (59 percent), station wagon and sport wagon (55 percent), hatchback (52 percent) and luxury crossover vehicle (52 percent) owners. Among owners of hybrid vehicles, Obama leads with 48 percent of the preferences, nine points more than McCain.

Among brands, McCain is popular with owners of GMC trucks and Chevrolets, clearly part of real America. Obama is popular with owners of Minis, Subarus, and Saabs, obviously denizens of latte-sipping faux America.

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Subway Madness

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| Fri Oct. 24, 2008 10:40 AM PDT

SUBWAY MADNESS....Apparently AIG, over the years, has guaranteed several elaborate tax avoidance schemes that allowed local transit authorities to make some extra money via sale-leaseback agreements with banks. Now that AIG is kaput, the schemes are falling apart and the transit agencies may suddenly get billed for tens of millions of dollars. Transit fan Matt Yglesias is pissed:

WTF is happening here? Can't we, in exchange for all the money we're giving AIG, force the company to keep guaranteeing deals that are vital to keeping our public services running? Something about the implementation of this bailout is very troubling and it doesn't inspire a ton of confidence in the future of TARP.

Unfortunately, that doesn't seem to be the issue. AIG is still guaranteeing the deals. The problem is that the contracts with the banks terminate automatically if AIG doesn't maintain a high credit rating. Which, needless to say, they haven't. So now the banks are demanding payment.

Which just goes to show how all this stuff trickles down not just to Main Street, but to the subways underneath Main Street too. However, a Treasury Department spokesman says, "Treasury is aware of this situation." That should make us all feel better, right?

Campaign Trail Update

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| Fri Oct. 24, 2008 10:14 AM PDT

CAMPAIGN TRAIL UPDATE....Barack Obama and John McCain have finally found something they agree on: George Bush sucks. That's called "reaching across the aisle," boys and girls.

Housing Update

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| Fri Oct. 24, 2008 9:49 AM PDT

HOUSING UPDATE....The latest news on the housing market:

Although prices continued to fall, existing-home sales climbed more than expected during September, marking the highest level of home sales activity in more than a year.

Home resales rose to a 5.18 million annual rate, a 5.5% increase from August's unrevised 4.91 million annual pace, the National Association of Realtors said Friday.

....The home sales increase represents "a nice jump," said NAR economist Lawrence Yun. "Hopefully, this trend can continue."

OK, I admit it. I'm just trying to cheer you up. That "nice jump" appears to be about the only good news around today amidst an ocean of gloom. Here in California, the latest news is that home foreclosures, after jumping about a million percent over the last year, are now down. But only because of a new law that makes banks delay proceedings until 30 days after contacting the borrower. Woo hoo!

Quote of the Day - 10.23.08

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| Thu Oct. 23, 2008 7:51 PM PDT

QUOTE OF THE DAY....From Alan Greenspan, testifying before Congress on the derivatives market:

"Credit default swaps, I think, have serious problems associated with them."

Ya think? The subprime lending market may have been the trigger for our late financial collapse, but the truth is that the trigger could just as easily been mispriced risk (i.e., irrational exuberance) in a variety of other markets. If subprimes had been regulated better, maybe there would have been a bubble in commercial real estate instead. Or arctic oil drilling. Or online pet food companies. Who knows? Regardless of the trigger, however, it was only when the resulting bubble got multiplied tenfold by opaque global chains of credit default swaps that the bursting of an asset bubble went from routine disaster to worldwide financial meltdown. So yeah: there are serious problems there. Here's more from Greenspan:

"I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms," Mr. Greenspan said.

....Mr. Waxman pressed the former Fed chair to clarify his words. "In other words, you found that your view of the world, your ideology, was not right, it was not working," Mr. Waxman said.

"Absolutely, precisely," Mr. Greenspan replied. "You know, that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well."

Hmmm. Maybe not quite so well as he thought.

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