Monday, September 29, 2008

Pay the Fiddler

If any gentlemen, whose money is a burden to them, choose to lead off a dance, I am decidedly opposed to the people's money being used to pay the fiddler. -- Abraham Lincoln

In this week's Sift:

  • Bailout Deal: I Wish I Knew What to Tell You. But I don't. The people who think they do all disagree.
  • Debate Reaction. McCain needed to back up his claim that he can lead and Obama can't. He didn't, so the tie goes to Obama.
  • Financial Crisis: The Brown People Did It. The ugliest meme around today is the one that blames the financial crisis on minorities and immigrants.
  • This Week in Sarah. Palin's Couric interview panicked people all across the political spectrum. And part of it hasn't come out yet.
  • Short Notes. Paul Newman. The difference between Christians and Christianists. What "freedom of the press" means in St. Paul. And neither George Will nor David Letterman is happy with John McCain.


Bailout Deal: I Wish I Knew What to Tell You
Last minute update (2:30 p.m.): The House defeated the bailout 228-205, with "less than a third" of House Republicans voting for it. The Dow is down 517 points.

Like every other recent weekend, this one brought big economic news that is hard to evaluate Monday morning. Congressional leaders and the administration have agreed on a $700 billion financial-system bail-out plan. The original 3-page plan has expanded to 110 pages (which I confess I haven't read).

The original Paulson plan was almost universally denounced. There is general agreement that the current bill is an improvement, but it's still not popular. The improvements:
  • Oversight. In the original, Paulson's decisions would be final.
  • Warrants. The government is going to get an option to buy stock in the companies it helps. If their stockholders benefit, the taxpayers will capture some of that benefit.
  • Not releasing all the money at once. I'm not as thrilled with this as some people are, because the procedure for blocking the later chunks of money looks too cumbersome to work unless some gross malfeasance is happening.
  • Executive pay cap. Again, I'm not as excited as a lot of people. I'd be amazed if there weren't a bunch of ways around this.
The House Republicans are still threatening to revolt against this deal. In theory, House Democrats could pass the plan without the Republicans, but it's generally agreed that would be suicide: It would let Republicans run against Bush-and-the-Democrats. In other words, it undoes the theme of the Democrats' whole fall campaign.

The obvious question, then, is why the Democrats would vote for this plan at all. The simple answer seems to be true: When the Treasury Secretary and the Chairman of the Federal Reserve come to you and say that we might be going into another Great Depression (and non-government folks like Warren Buffett agree), it's hard to say no. Democrats have a lot of doubts about this program, but they don't have the kind of certainty they think they need to oppose it. If that sounds a lot like the Iraq vote in 2002, well, yes, up to a point. But Hilzoy notes:
some people write as though we're being asked to trust the Bush administration about the existence of a crisis. This isn't true. It's not like the runup to the war in Iraq, where a lot of the crucial information was classified and we had to take the government's word for it.
Liberal bloggers and pundits are split. This isn't the plan that Paul Krugman would have designed, but he believes we need to do something. So if the choice is yes or no, he says yes. David Sirota and Sterling Newberry say a resounding no. Josh Marshall, like me, doesn't know what to think.

A lot of liberals would prefer that we follow the model that Sweden successfully used during its banking crisis in 1992. (The warrants in the current plan lean in that direction, but don't go as far as the Swedes did in government ownership.)

As for what will happen if the bailout passes, it's anybody's guess. Barrons even claims the taxpayers will make money on the deal. Seems unlikely to me, but why not? I can't disprove it.

Meanwhile, the dominoes continue to fall: Morgan-Chase picks up the failing Washington Mutual and Citicorp grabs distressed Wachovia. Next?

Very few articles make the connection between the credit crunch and stuff you can see. That's why I thought this was interesting: McDonalds thinks it needs to reassure its franchisees that they'll be able to get financing for the McCafe upgrade.


Debate Reaction
My immediate reaction to Friday's Obama-McCain debate was more-or-less in line with the way the story has spun out since: There was no knock-out punch, which works to Obama's advantage.

The danger of making experience your central issue and claiming that your opponent is "not ready to lead" (but you are) is this: When you finally debate your "unqualified" opponent, the difference needs to be apparent. If the other guy looks equally well prepared, he wins. That's what happened Friday. (Biden needs to watch out Thursday with Palin.)

Nonverbal cues always play a big role in debates, and here the difference was clear: Obama looked at McCain, called him "John", and acknowledged many times that McCain had made a good point. McCain didn't look at Obama, called him "Senator Obama", and acknowledged nothing.

How you read this difference seems to depend on your age and gender. (In post-debate polls, men gave McCain a small advantage while women overwhelmingly thought Obama was more impressive.) Older men (like David Broder) tended to interpret McCain's behavior as dominant. The McCain campaign apparently saw it this way themselves, and compiled all Obama's "John is right" statements into an ad reiterating that Obama is "not ready to lead." Young people and women tended to read it the opposite way: Obama was secure enough to give McCain his due, while McCain could not look Obama in the eye. (Primatologist Frans de Waal: "A confident alpha male chimpanzee would never show studied
indifference. I have seen such behavior only in males who were
terrified of their challenger.")

This nonverbal stuff harmonizes with substance: Obama's willingness to look at McCain harmonizes with his willingness to talk to hostile world leaders -- you don't have to agree with people to face them. His acknowledgement of McCain's good points reinforces his claim to be able to work in a bipartisan fashion. McCain's looking away likewise harmonizes with his view that you don't talk to foreign leaders unless they submit first, but it conflicts with his claim to be bipartisan.

DailyKos' DemFromCT sums up the post-debate polling, which looks good for Obama.

Financial Crisis: The Brown People Did It
I wish I were more familiar with the works of Joseph Goebbels, so that I could use the words of the Master to express this basic propaganda principle: When you're caught holding the bag, blame some group even more unpopular than you are.

So imagine that you're a free-market conservative, facing the obvious fact that unregulated capitalism has brought us to the brink of disaster. What to do? I know -- let's blame the whole thing on blacks and Hispanics. Here's how Investors Business Daily does it:
For those looking for a real start to today's financial meltdown and government rescue, you need to go back -- way back -- to 1977, and the Jimmy Carter presidency. ... The CRA (Community Reinvestment Act) forced banks and savings institutions -- then far more heavily regulated than today -- to make loans to poor, often uncreditworthy minority borrowers. ... Banks became pliable, easy targets. No bank CEO wanted to be mau-maued as an enemy of the poor.
There are a zillion things wrong with this interpretation, most of which are detailed in an article in The American Prospect. For example: Why did it take 30 years for the CRA to cause trouble?
Janet Yellen, president of the San Francisco Federal Reserve, offers the killer statistic: Independent mortgage companies, which are not covered by CRA, made high-priced loans at more than twice the rate of the banks and thrifts. With this in mind, Yellen specifically rejects the "tendency to conflate the current problems in the sub-prime market with CRA-motivated lending."
And Rick Perlstein explains why non-performing mortgages are only the beginning of the problem:
none of the financial contagion -- none of it -- would have happened had not greedy financial institutions invented the risky securities that used mortgages as their foundation, via procedures that created economic incentives to write non-performing loans.
But why should facts stop conservatives from shifting the blame? The most outrageous version of this right-wing argument was made by Michelle Malkin in the New York Post.
But there's one villain that has slipped notice: how illegal immigration, crime-enabling banks and open-borders Bush policies fueled the mortgage crisis.
Of course, nobody keeps statistics on mortgages to illegal aliens, so Malkin tries to support her claims by talking about Hispanics in general.
Half of the mortgages to Hispanics are subprime. A quarter of all those subprime loans are in default and foreclosure. ... A July report showed that in seven of the 10 metro areas with the highest foreclosure rates, Hispanics were at least one-third of the population; in two of those areas -- Merced and Salinas-Monterey, Calif. -- Hispanics comprised half the population.
If you're wondering what this proves -- beyond Hispanics being disproportionately poor, and poor neighborhoods having more foreclosures -- congratulations, you've seen through the fog.

But a lot of people won't see through the fog. The state of our economy and the plan to bail out Wall Street with taxpayer money has made them angry, and so the Right is giving them someone to be angry at: blacks, Hispanics, immigrants, and poor people.

Those are our domestic troubles. The people you're supposed to blame for our foreign troubles are Muslims. The right-wing Clarion Fund is distributing 28 million DVDs of the anti-Muslim documentary Obsession: Radical Islam's War Against the West. Friday, distribution in Dayton was followed by someone gassing a mosque during Ramadan. Chris Rodda connects the dots.


This Week in Sarah
You know things are bad when your allies are asking you to resign and your opponents are starting to feel sorry for you. Conservative columnist Kathleen Parker says this about Sarah Palin:
Only Ms. Palin can save Mr. McCain, her party, and the country she loves. She can bow out for personal reasons, perhaps because she wants to spend more time with her newborn. No one would criticize a mother who puts her family first. Do it for your country.
Moderates and liberals agree: Newsweek's Fareed Zakaria ("Is it too much to ask that she come to realize that she wants, in that
wonderful phrase in American politics, 'to spend more time with her
family'?") and the NYT's Bob Herbert ("it would behoove John McCain and the Republican Party to put the country first — as Mr. McCain loves to say — and find a replacement for Ms. Palin on the ticket.")

The New Republic's Christopher Orr notes that Palin got worse between the Charles Gibson and Katie Couric interviews and wonders whether the McCain campaign has "broken" Palin:
I'm reminded of the situation you see every now and then in sports, when a talented athlete--which, conveniently enough, Palin was--gets a taste of heavy duty coaching and, rather than being built up, is broken down, losing confidence in his game, becoming tentative, second-guessing himself even to the point of paralysis.
The NYT's Judith Warner looks into Palin's frozen expression and feels sorry for her:
I've come to think, post-Kissinger, post-Katie-Couric, that Palin's nomination isn't just an insult to the women (and men) of America. It's an act of cruelty toward her as well.
CNN's Campbell Brown expressed a similar sympathy-with-a-twist when she railed against the McCain campaign for shielding Palin from the press and any hard questions.
Tonight, I call on the McCain campaign to stop treating Sarah Palin like she is a delicate flower that will wilt at any moment. ... Allow her to show her stuff. ... Sarah Palin has just as much right to be a real candidate in this race as the men do.
The cause of all this hand-wringing is Palin's performance in the three interviews she has been allowed to have: Charles Gibson, Sean Hannity, and especially Katie Couric. Hannity is so pro-Palin that his interview has been called an "infomercial", and Gibson and Couric are not known as tough interviewers. (By contrast, Obama has sat down with Bill O'Reilly.) None of them pushed her the way a hostile interviewer would --
on Troopergate, whether her daughter's pregnancy has changed her mind about abstinence-only sex education, why her administration makes raped women pay for post-rape kits, her witch-hunting pastor, the cruelty of hunting wolves from the air, or a host of other issues. But in each interview, no matter how soft the questions, she could do nothing more than repeat canned talking points.

Somebody sent me this comment: "Sarah Palin is like an audio version of the Republican playbook magnetic poetry kit...that is, if you dumped the box on the floor and picked up random pieces and strung them together." For example, this response to Couric:
But ultimately what the bailout does is help those who are concerned about the healthcare reform that is needed to shore up our economy ... helping the ... it's got to be all about job creation too, shoring up our economy and putting it back on the right track. So healthcare reform and reducing taxes and reining in spending has got to accompany tax reduction and tax relief for Americans. In trade, we've got to see trade as opportunity, not as a competitive scary thing, but 1 in 5 jobs being created in the trade sector today -- we've got to look at that more as opportunity. All those things under the umbrella of job creation -- this bailout is a part of that.
"Did you get that?" CNN's Jack Cafferty asked. "If John McCain wins, this woman will be one 72-year-old's heartbeat away from being president of the United States. And if that doesn't scare the hell out of you, it should. ... I am 65 and I've been covering politics for a long time, and that is one of the most pathetic pieces of tape I have ever seen for someone aspiring to one of the highest offices in this country."

And Howard Kurtz warns: "the worst may be yet to come for Palin; sources say CBS has two more responses on tape that will likely prove embarrassing."

So it's not surprising that the McCain campaign is doing everything it can to limit Palin's exposure to unscripted exchanges. After Friday's Obama-McCain debate Joe Biden was on every network, while Palin watched the debate in a bar. The networks wanted to talk to her, but the campaign didn't make her available. And she's even getting into trouble talking to ordinary voters over a cheesesteak.

The silver lining in Palin's dark cloud is the advantage she has in Thursday's debate with Biden: If she doesn't make any huge errors, she'll have exceeded expectations. Here's what I expect: On Thursday Palin will attack with all the stuff too toxic for McCain to say -- Rev. Wright, Bill Ayers, questioning Obama's Christianity, and so on. The spin will be that this is fair play after all the attacks Palin herself has suffered.

Palin continues to be a godsend to comedians. If you don't think Tina Fey's portrayal of Palin is cruel enough, you should check out Sara Benincasa's YouTube site. Ms. Benincasa has been doing a Sarah Palin video journal since the convention. After Matt Damon's comment that Palin's story sounded like "a bad Disney movie," the folks at College Humor made a trailer for it. And 23/6 imagines Palin's handler freaking out while watching the Couric interview.


Short Notes
The next time someone starts blasting the "liberal Hollywood elite," remember to say a few words about Paul Newman. Liberal -- yes; he took great pride in being #19 on Nixon's list of enemies. Hollywood elite -- certainly. But he was married to the same woman for more than 50 years and raised five daughters. He started a company that made more than $200 million, and he gave it all away. "I’m not running for sainthood," he said. "I just happen to think that in life we need to be a little like the farmer, who puts back into the soil what
he takes out."

Tristero on Hullabaloo points out the important distinction between Christians and Christianists, defined as "political radicals who use the symbols of Christianity in order to gain secular power." It's similar to the distinction between Muslims and Islamists.

Onion Radio News: A laid-off zoologist went on a rampage with a tranquilizer rifle, "brutally sedating" 12 zoo visitors and two employees. (I guess guns don't tranquilize people; people tranquilize people.) And the Onion's print edition reports that a Darwin-shaped wall stain has appeared in Dayton, Tennessee. Thousands of evolutionist pilgrims have turned the site into "a hotbed of biological zealotry."

McCain has lost George Will.

The city of St. Paul has decided to drop charges against the journalists who were arrested during the Republican Convention. With no apparent intention of irony, Mayor Chris Coleman said, "This decision reflects the values we have in St. Paul to protect and promote our First Amendment rights to freedom of the press." (In this context "freedom of the press" seems to mean the freedom to leave detention after the news-making event is over.) This is a good time to go back and watch Amy Goodman's account of her arrest.

Comedian Jimmy Kimmel was not surprised when McCain temporarily suspended his campaign: "For a man his age, it's very difficult to maintain an election." The main victim of the campaign suspension seems to have been David Letterman, who was not happy about it.

1 comment:

David W in SF said...

The most telling sign that the Republican Party are back-stabbing cowards with purely political motivations on their "bipartisan support for the bailout package" was a quote from a Washington Post article from Roy Blunt indicating he was rounding up all 30 retiring Republican House members to get them to vote for this package and get it passed. (Can't find the quote at the moment.)

So, I tracked down a list of retiring Republican House members -- Wikipedia only lists 26, not 30 (http://en.wikipedia.org/wiki/United_States_House_of_Representatives_elections,_2008#Retiring_Incumbents)
and I looked at the roll call for the vote (http://talkingpointsmemo.com/news/2008/09/roll_call_of_the_sept_29_house.php).

And, yes indeed, a full 19 of the 26 no-longer-answerable-to-anyone Republicans voted "Yes" on the bailout (One didn't vote.) So, a mere 46 continuing Republican House members votes "Yes" on this "bipartisan package". (And I'm betting the other 46 are in VERY safe seats.)

This is a sure sign the Republican Party only cares about this bill for pure partisan power purposes, and not about any benefit for the country as a whole. They are obviously looking to use this bailout merely as a cudgel against the Democrats in 2008 and 2010 by merely pretending for a moment this is "bipartisan" to get it passed.

The Republican Party at work, again. What a surprise.