The Bush administration is pushing its bailout plan by claiming the only way to save the economy is by having the federal government buy $700 billion worth of bad paper from big financial firms that screwed up. Conservatives should hate this because it is a massive federal intervention in the market. Liberals should hate this because it's a handout to the richest people and companies in America. But the Bush administration and Wall Street are insisting it's the end of the world and this is the only choice. Well, is it this or nothing? Many on Capitol Hill—especially Democrats—are buying the general premise of the White House plan but insisting on lipstick-on-a-pig modifications involving CEO compensation, taxpayer protection, and oversight and transparency. But are there other approaches to the problem besides putting the Treasury in charge of a $700 billion fire sale? Yup. Here's a quick roundup.

Rep. Henry Waxman (D-Calif.) just sent a letter to Lehman Brothers CEO Richard Fuld, who's scheduled to testify before the House Oversight Committee on October 6, to follow up on a previous document request. Among other things, the committee had sought e-mails and other documents that had been sent or received by Fuld over the past six months. According to Waxman, Lehman blew [PDF] Thursday's deadline to produce the records. And Fuld's counsel has apparently told the committee that he doesn't expect to have much to turn over.

In conversations with Committee staff, your counsel stated that he and his team are working on collecting your e-mails from this time period, but they expect to produce relatively few to the Committee because you were an infrequent user of e-mail.

Your counsel and his team have also informed Committee staff that they do not currently plan to produce any documents sent, received, or reviewed by you during the past six months that are nonelectronic, such as internal memoranda from company officials, assessments of the company's potential liabilities, or warnings of the company's impending collapse. According to your counsel, although these documents did exist at one time, they were typically "discarded."

The ad below was created by Brave New PAC and Democracy for America. CNN refused to run it and MSNBC is pulling it off air after one day, claiming it has received viewer complaints. Bill O'Reilly was slamming NBC for running it, which may have added motivation. What say you? Outside the bounds?

feffer.jpgAs 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 John Feffer, codirector of Foreign Policy In Focus at the Institute for Policy Studies in Washington, DC.

Surrounding China's String of Pearls

In 1919, the English geographer Halford Mackinder argued that control of the "Eurasian heartland" was the key to world domination. Mackinder believed that Eastern Europe was the gateway to controlling this huge landmass stretching from his home country to the far shores of Asia. And indeed, Eastern Europe proved pivotal in the next conflagration, World War II, as well as in the US policy of containing the Soviet Union in the Cold War era.

As Capitol Hill negotiations on the Wall Street bailout proceeded on Friday afternoon, Representative Brad Sherman, a Democrat who has questioned the under-construction plan, sent out this brief message to his fellow House Democrats:

Skeptical about the Administration's $700 Billion Bailout Plan?
Dear Democratic Colleague:
Please come to a meeting of the Skeptics Caucus to discuss President Bush's $700 billion bailout bill. One staffer may attend with you.

The main story today about the bailout is that House Republicans are raising objections to the proposal and blocking a deal. But there are House Democrats worried that the deal-which would let the federal government buy up $700 billion of bad paper from Big Finance firms-- is moving too fast and is too problematic. How many? Let's see who shows.

So the debate is on. What's going to happen?

mccain_debate_ad.png Well, if you believe the McCain campaign, their man has it in the bag. The ad at right is already running on the web. It was spotted by Chris Cillizza.

For my part, I actually don't think candidates ever really win or lose these things. Following the debate there will be approximately one zillion mouth-hours spent by TV pundits and campaign surrogates talking about how candidate A delivered a commanding performance or how candidate B convinced America that he is presidential enough for the job, but historically the best a candidate can expect to get coming out of a debate is a 2.25 point bounce. When Bush lost 2.26 points coming out of the first 2004 debate with Kerry, it was the largest single-debate swing since 1988.

The best a candidate has ever done over the course of an entire debate season (there are, as you almost certainly know, two or three debates every campaign), is a 3.5 point bounce, which Bush got in 2000 after his three debates with Gore. The average swing after a debate season, dating back to 1988, is a paltry two points. And there's nothing to say that that two point bounce isn't wiped out by the events of the campaign's homestretch.

Analysis of the debate is of course welcome. But when the talking heads reach into their bag of sports analogies and tell you that one of the candidates "landed a knockout punch" or "hit a home run," don't believe them. It's a safe bet that both candidates did well enough to reassure their supporters but not well enough to swing an appreciable number of undecideds. Journalists would spend their time better by fact-checking the candidates, searching for hypocrisies or panders, and examining the candidate's answers for reflections of character, readiness, and future policy decisions.

(Much love to for help with the numbers.)

Update: Really good video on the history of presidential and vice-presidential debates over at PBS.

I asked Republican political consultant Marty Youssefiani what he thinks of the politics of the House GOP ploy to blow up at the last minute the bailout deal worked out between the Republican White House and Congressional leadership. Youssefiani responded:

Well, there should be no surprise that politics is in the mix here, but at the core there are legitimate philosophical diffrences. Don't forget, laissez fair is cooked before our eyes. At the end though we will have a deal otherwise the country will tank, take down the global market and with it directly heighten the prospects of flash conflicts worldwide.
The big issue here is a failure in communication with the public: Main Street simply does not fully grasp what this crisis means and how quickly it will be affected if Wall Street is not bailed out.
As for McCain, it's no secret that economics was not what he learned on the "flight deck," but can he get creative and turn the issue in his favor? My sense is that this mess puts the election away, unless he leads in shaping a creative alternative plan that includes immediate direct aid to Main Street. One way he can get on the offense is to throw some of this funny money to the people (i.e. stimulus checks, one-time retroactive tax credits per household, and government mortgage guarantees, etc.). Can't bail out the fat cats without throwing something to the people! It would be popular, change the narrative and provide evidence his "suspension"/ 24-hour Washington stop was more than bad theater.
I'd [advise McCain to] use the stage at Old Miss tonight to pitch the offense. With 90 million Main Streeters watching, show what it means to shake things up!

In case you hadn't already predicted that McCain will play the populist looking out for the interests of Main Street, now you've been warned.

From the New York Times article on the largest bank collapse in American history:

But the seizure and the deal with JPMorgan came as a shock to Washington Mutual's board, which was kept completely in the dark: the company's new chief executive, Alan H. Fishman, was in midair, flying from New York to Seattle at the time the deal was finally brokered, according to people briefed on the situation. Mr. Fishman, who has been on the job for less than three weeks, is eligible for $11.6 million in cash severance and will get to keep his $7.5 million signing bonus, according to an analysis by James F. Reda and Associates.

That's right. The chief executive of WaMu is getting $19.1 million for three weeks of work. Natch. And these are the people taxpayers are supposed to be bailing out?


In the market for a T-72 battle tank? Well, there are some folks in Somalia who are standing by to take your order. Yesterday, a band of pirates in speedboats, armed with AK-47s and RPGs, attacked a Ukrainian cargo ship passing through the Gulf of Aden. The ship carried a crew of 21, bound for Mombasa, Kenya. It also carried—to the pirates' surprise and delight, one should think—a cargo of 33 Russian battle tanks, large amounts of ammunition, and assorted parts for armored personnel carriers.

The shipment's intended final destination remains unknown (reports indicate Kenya or South Sudan), but it has probably been secreted to Eyl, a town in Somalia's Puntland region, a haven for pirates that has, says the BBC, "a flourishing local industry" based on ransoming stolen ships and cargoes back to their rightful owners.

"We must meet as Americans, not as Democrats or Republicans, and we must meet until this crisis is resolved," John McCain said on Wednesday, explaining his decision to suspend his campaign and not participate in the first presidential debate. A McCain aide told Reuters, "If the package is reached and the country is saved, there will be a debate. But if there's no deal, how can you get on a plane...for a debate?"

On Friday morning, McCain's campaign released this statement:

He is optimistic that there has been significant progress toward a bipartisan agreement now that there is a framework for all parties to be represented in negotiations, including Representative Blunt as a designated negotiator for House Republicans. The McCain campaign is resuming all activities and the Senator will travel to the debate this afternoon.

Note the adjustment in standards. First, the McCain camp said deal or no debate. Two days later, the position was, negotiations are under way so let's debate. Was this change an act of decisive leadership or a necessary political flip-flop? Maybe Jim Lehrer, the moderator of Friday night's debate, can ask him that.