ALL THAT REMAINS IS TO CAVE-IN GRACEFULLY:

Most Asian markets recover on hopes of U.S. bailout (LA Times, October 1, 2008)

Most Asian markets bounced back Wednesday on hopes that a $700 billion bailout for the U.S. financial system will soon win legislative approval, although doubts persisted about the long-term outlook for the global economy.

Japan's Nikkei 225 index, the benchmark for Asia's biggest bourse, gained 108.40 points, or 0.96 percent, to close at 11,368.26. On Tuesday, it plunged 4.1 percent to its lowest in more than three years on disappointment that the U.S. House of Representatives had rejected the bank rescue package.

IMF adds to pressure on Congress to approve bail-out (Graeme Wearden and Andrew Clark, 10/01/08, guardian.co.uk)

The International Monetary Fund has added to the growing pressure on the US Congress to approve the Wall Street bail-out, as stockmarkets rose on optimism that a deal will be hammered out this week.

Dominique Strauss-Kahn, managing director of the IMF, warned last night that the US must take urgent steps to protect its economy from the ongoing financial crisis.

"We're right at the moment where action is needed," warned Strauss-Kahn. "A non-perfect plan is better than no plan at all," he added, in an interview with Reuters in Washington.

The prospect of a deal this week sent shares up in London this morning, where the FTSE 100 continued yesterday's bounce-back.

House GOP dazed after bailout failure (JOHN BRESNAHAN | 10/1/08, Politico)

An air of confusion and disbelief still reigned among House Republicans on Tuesday, as GOP leaders kept a low public profile, quietly calling their colleagues to try to figure out what led to Monday’s bailout vote meltdown and what steps to take next.

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HEY, BRO, THERE WAS ONE OTHER THING WE COULD HAVE DONE THAT TIME WE VIOLATED THE TIMEZONE RULE:

Best Steam Trains: Walt Disney's Carolwood Barn (MOLLY LAMBERT October 02, 2008, LA Weekly)

Steam trains were an obsession for Walt Disney since his childhood. From his earliest sketches, he planned to have a railroad circling around the park at Disneyland. Ward Kimball and Ollie Johnson, two of Disney Studios’ “Nine Old Men” of animation, shared the same obsession. They introduced Walt to their hobby of narrow-gauge live-steam backyard railroading, inspiring Disney to re-create the barn from his family home in Missouri and make his own miniature track. He used the barn as a workshop for his Carolwood Railroad, a fully operating steam train built an eighth of the size of the real thing on a half-mile of track. Although his train, the Lilly Belle, resides at Disneyland, Walt’s Carolwood Barn has been relocated to Griffith Park’s former Travel Town, now known as the Los Angeles Live Steamers Museum. The Barn is open free to the public on the third Sunday of each month, 11 a.m. to 3 p.m., with guided tours provided by members of the Carolwood Pacific Historical Society

Los Angeles Live Steamers Museum, 5202 Zoo Dr., L.A., (323) 662-8030; www.lals.org or www.carolwood.org.

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AND THE SOBERING THOUGHT...:

Bailout not dead yet (RYAN GRIM & MARTIN KADY II, 9/30/08, Politico)

The bailout is back.

Senate leaders have decided to take up the failed House version of the $700 billion economic rescue bill, and plan to add a widely supported change in the Federal Deposit Insurance Corp. caps.

Dollar Takes Bite Out of Euro On Ravenous Overseas Cravings: Yen Also Takes Fall Against Currency on Bailout Hopes (DAN MOLINSKI, 9/30/08, Wall Street Journal)

The dollar soared against the euro as signs of trouble in the European banking sector created overseas demand for greenbacks.

The yen also fell victim to the U.S. currency Tuesday, as a partial recovery in U.S. stock markets from Monday's free fall boosted risk appetite, leading investors away from the low-yielding Japanese currency.

Currency investors put aside their worries about the U.S. banking system Tuesday as optimism rose that Congress soon may reach agreement on the government's proposed $700 billion financial-rescue package.

...as big a mess as the Congress is they're more effective than anyone else's government. Here's one time we could use some help saving the world economy and there's no one but us.

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WE'RE FILLING UP THE EMPTY LITTLE WESSELS, HORST (via pchuck):

Your flesh will crawl right across your desk:

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IT IS AN ACCURATE REFLECTION OF THEIR IMMATURITY:

Where Credit Is Due (David Freddoso, 9/30/08, National Review)

House Republican leaders] blamed the failure of the bailout bill on a speech given by House Speaker Nancy Pelosi.

“We could have gotten there today had it not been for the partisan speech that the speaker gave on the floor of the House,” House Minority Leader John Boehner (R., Ohio) said yesterday. Pelosi’s speech, he said, “poisoned our conference, caused a number of members that we thought we could get, to go south.” [...]

[D]o House Republican leaders really want us to believe that Republicans killed the bailout just because their feelings were hurt? Are they trying to tell us that Republicans are touchy whiners who will let their country down on a supposedly essential matter because they were offended by typical, turgid partisan rhetoric?

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WHERE THE WINGS MEET:

Ron Paul, Dennis Kucinich: 'Lipstick' off (Mark Silva, 9/30/08, The Swamp)

Ron Paul and Dennis Kucinich are on top.

Let history record that, for one fleeting moment perhaps this week, the most anti-establishment candidates for either major parties' presidential nominations this year - two who stirred a lot of emotion but attracted few votes -- were riding the wave of the victorious majority of the House of Representatives.

They balked at the bailout.

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OOPS, WE'RE IDIOTS:

House Members Receive Angry Calls on Vote, Aides Say (James Rowley and Nicholas Johnston, 9/30/08, Bloomberg)

Lawmakers received a flurry of calls demanding that they revive the U.S. economy after the House's rejection of a $700 billion financial-rescue plan triggered a record drop in stocks, House aides said.

The calls countered an earlier outpouring of opposition to the legislation.

``A lot of people called to complain about losing their shirt,'' said Sean Brown, press secretary for Republican Representative Joe Barton of Texas, who opposed the measure. Calls have gone from overwhelmingly against the bill to about 60- 40 or 70-30 in favor of it, Brown said.

Guess whose principles about markets are about to respond to the pressure of the market.

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CAN'T ANYONE HERE PLAY THIS GAME?:

Pakistani Taliban leader dead, sources say (CNN, 9/30/08)

The leader of Pakistan's Taliban, Baitullah Mehsud, is dead from kidney failure, sources told CNN.

The Pakistan government blamed Mehsud for the December 27, 2007, assassination of former Prime Minister Benazir Bhutto.

If we had a CIA the rumor would be that he died from alcoholism, venereal disease or AIDs.

MORE:
Suspected US drone strike kills four in Pakistan: officials (AFP, 9/30/08)

A missile strike by a suspected US spy drone hit a house in a Pakistani tribal area bordering Afghanistan, killing at least four people and wounding nine, security officials said Wednesday.

The attack is the latest in a string of incidents on the rugged frontier that have raised tensions between Islamabad and Washington, including a clash between Pakistani troops and US-led forces in Afghanistan.

It happened shortly after Pashtun tribesmen shot at three drones circling the village of Khusali Toorikhel in North Waziristan, a known haunt of Taliban and Al-Qaeda militants.

Might be a good idea to hide instead of shoot.

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Beef-Sauced Hot Lettuce Salad (Contra Costa Times, 9/30/08)

4 packed cups coarsely torn romaine lettuce

1 tablespoon peanut oil or vegetable oil

1 tablespoon minced garlic

1 tablespoon minced ginger

½-pound (1 packed cup) ground beef

1 tablespoon soy sauce, or to taste

1 tablespoon Jinjiang (black rice) vinegar, or to taste

½ cup warm water

2 teaspoons cornstarch

1 tablespoon cold water

½ teaspoon roasted sesame oil

1. Place lettuce in a wide salad bowl or serving dish and set aside. Place a wok or heavy skillet over medium-high heat.

2. When wok is hot, add the oil and swirl to coat the bottom of the pan. Toss in the garlic and stir-fry 10 seconds, then add the ginger. Stir-fry over medium-high to medium heat until slightly softened and starting to turn color.

3. Add the meat and use the spatula to break it up so there are no lumps, then add the salt and stir-fry until most of the meat has changed color.

4. Add the soy sauce and vinegar and stir to blend. Add the warm water and stir. (The dressing can be prepared ahead to this point and set aside for 20 minutes. When you are ready to proceed, bring to a boil.)

5.
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While the dressing mixture is coming to a boil, place cornstarch in a small cup or bowl and stir in the cold water to make a smooth paste. Once liquid is bubbling in the pan, add the cornstarch mixture and stir for about 1 minute; the liquid will thicken and become smoother. Taste for salt.

6. Add the sesame oil, stir, then pour the dressing onto the lettuce. Immediately toss the salad to expose all the greens to the hot dressing. Serve immediately for crunchy lettuce, or for a softer texture, let the salad stand 5 minutes before serving.

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NOBODY'S FOOL:

Remembering a great racing fan and man, Paul Newman (Frank Deford, 9/30/08, Sports Illustrated)

One time, years ago, when he was still indisputably the handsomest man in the world, my wife ran across him in a bookstore. All the other women were pretending not to notice, bumping into the aisles. Newman was with one of his daughters. At the checkout counter, he called over to her: "OK, honey, let's go." And, my wife swears, every woman in that store -- including my wife herself, I'm sure -- gave an involuntarily head feint toward the door. It was better than watching a vaudeville sketch.

The last time I saw him was a few months ago. There were already rumors that he was dying. He was never so large as he appeared on the screen, but now, even as he was still in good humor, he looked positively frail. We were at a small concert, and, just by chance, he and Joanne sat right next to me and my wife. When the lights dimmed I happened to glance over, and I saw that, right away, he'd taken his wife's hand. They'd only been married 50 years. He kept holding it all the way through, just like they were teenagers. Lord, but it was so dear.

I reached over and took my wife's hand. There are not many things any of us could do so well as Paul Newman, but, I thought, if you could follow his lead in any way, then you'd be a fool not to.

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WHO NEEDS THE HOUSE GOP?:

Stunning day for Dow: Closes up more than 450 (AP, 9/30/08)

Wall Street has ended sharply higher as investors bet that lawmakers will salvage a $700 billion rescue plan for the financial sector. The Dow Jones industrials surged nearly 500 points to the 10,860 level.

The rally offset Monday’s 778-point rout, one of the biggest selloffs in years. The recovery wasn’t unexpected as carnage on Wall Street often attracts bargain hunters.

However, the seized-up credit markets where businesses turn to raise money showed no sign of relief. A key rate that banks charge to lend to one another shot higher, a tightening of the availability of credit that could cascade through the economy.

Senate Republican 'Adults' to Guide House Kids on $700 Billion Bailout? (Paul Bedard, 9/30/08, US News)

We're hearing lots of talk this afternoon that with the House unable to quickly come up with an alternative to the $700 billion bank bailout it rejected Monday, the Senate is ready to take the lead. It's being described this way, says a source: "It's time for the adult body to take over." And that's from a Republican.

Dem Leaders Pledge Cooperation with White House, GOP (The Page, September 30th, 2008)

Pelosi, Reid express their willingness to work together on pushing an economic rescue package through Congress in a letter to the President.

“We welcome your statement this morning and are committed to working with you and our Republican colleagues to enact a bipartisan bill without further delay.”

Obama presses Dems to back the bailout (CARRIE BUDOFF BROWN, 9/30/08, Politico)

Barack Obama on Tuesday stepped up his advocacy for the Bush Administration’s endangered $700 billion bailout plan by making a round of calls to rank-and-file Democrats in the House and casting congressional inaction in dire, real-world terms. He also massaged his pitch, no longer using the word “bailout” to describe the bill.

In a speech laden with warnings about the impact on average voters, Obama made his strongest push yet for the financial package rejected Monday by the House, saying the upheaval was “no longer just a Wall Street crisis – it’s an American crisis, and it’s the American economy that needs this rescue plan.”

FDIC wants to temporarily boost deposit insurance limits (LA Times: Money & Co., September 30, 2008)

The Federal Deposit Insurance Corp. will seek authority from Congress to temporarily raise deposit insurance limits, the agency’s chairwoman, Sheila Bair, said today. [...]

Raising the limit "would provide the dual benefits of providing additional liquidity to banks for lending as well as provide some additional reassurance to depositors above the current limits," Bair said.

Higher limits could be particularly helpful for smaller banks as they struggle to hold on to deposits amid public fears of rising bank failures because of loan losses.

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THE LAST TEMPTATION OF THE RIGHT:

World leaders look to US for salvation as economies near abyss (AFP, Sep 30, 2008)

World leaders called on the US government to take action to stave off global financial collapse Tuesday after Congress rejected a 700 billion dollar bailout in a move which stunned global markets.

Japan sweats as U.S. rescue stalls (HIROKO NAKATA, 10/01/08, Japan Times)

The uncertainty swirling around the financial crisis in the United States has sparked concerns in Japan that more bad news is on the way for exporters, consumption and the economy, analysts said Tuesday.

The U.S. House of Representative's shocking rejection of a $700 billion rescue plan Monday sent Wall Street into its worst single-day plunge — on a points basis — and triggered a 483-point selloff in Tokyo stocks Tuesday.

"The situation is getting quite serious," said Hideo Kumano, chief economist at Dai-ichi Life Research Institute. "All we can do is to wait for an amendment to the U.S. bailout plan."

The Low-Down on Libor: Why its Surge Signals Desperation in the Credit Markets (Katy Marquardt, 9/30/08, US News)

After the rejection of the bailout bill by the House of Representatives, banks hoarded cash, driving Libor up to 6.88 percent. A week ago, Libor was at 2.95 percent. (Normally, it's slightly more than the Federal Reserve's target fed funds rate.) Points out MarketBeat: "It's more than a little ironic that while investors are buying banks' stocks—shares were up sharply across the sector—banks themselves were unwilling to buy each others' shortest term debt. Banks are so desperate for funds that they paid 11% for $30 billion in overnight funds from the European Central Bank, up from 3% just Monday."

The Associated Press answers the million-dollar question: So how does this affect my life?

A. More than half of U.S. adjustable rate home loans are tied to Libor, so a recent increase in this benchmark rate mean monthly mortgage payments will rise for affected homeowners if the rise is sustained. A typical adjustable rate home loan will adjust based on the six-month Libor, plus 2 to 3 percentage points. Plus, many home equity lines of credit, small business loans and student loans also use Libor as an index. Student loans, for example, can be set based on the three-month Libor rate plus, say, 4 percentage points or the one month Libor rate, plus 9 percentage points.

Meanwhile, The "TED spread"—which represents the difference between what banks charge each other to borrow for three months and what three-month U.S. treasuries yield—surged to its highest level in more than 25 years Monday.

Much as they'd like to crawl into a hole and avoid the fact, with great power comes great responsibility.

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YOU CAN'T BE SOCIALLY CONSERVATIVE AND NATIONALIST:

Is the Republican Alliance Finally Breaking?: The rebellion of House Republicans yesterday was more than a tactic to help John McCain. It may have been the beginning of the end of the political deal that has defined the last three decades. (Mark Schmitt, September 26, 2008, American Prospect)

Everything in America seemed to converge in a few meeting rooms in Washington yesterday: The rapid meltdown of the speculative economy. George Bush's desperate desire to remain relevant. The evolution of the opposition Democratic Party, in the person of Rep. Barney Frank, into a profoundly serious governing party ready to help George Bush's Treasury Secretary Hank Paulson write the bailout he should have written in the first place. And then John McCain trying to do two things at once: Shake up his campaign and win a few more news cycles, and get a hit of the only kind of legislative success he ever had, when he would sweep into the room where there was some sort of bipartisan deal to be cut, and insert himself into the middle of it. (Although that tactic almost always produced more press coverage than legislation.)

By the end of the day, it was clear that the most significant issue was the defection of the House Republicans, which could have an impact on the Republican political coalition of more lasting consequence than its derailing of the bailout. Where McCain swept in to heal a partisan breach, the real differences turned out to be between, on one side, Democrats in the House and Senate, Senate Republicans, George W. Bush, and Bush's Treasury Secretary Henry Paulson, who asked for the deal; and on the other side, the Republicans in the House of Representatives.

The anti-immigration/anti-mortgage Right has its natural allies in the secular and protectionist Left, not in the Christian/social conservative/Third Way center. The politics of Pat Buchanan/Tom Tancredo and Dennis Kucinich/Bernie Sanders are equally estranged from those of George W. Bush and Bill Clinton.

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ONE FOR ALL...:

Candidates, Bush urge reviving financial bailout (JIM KUHNHENN, 9/30/08, Associated Press)

President Bush warned Tuesday that failing to pass a financial rescue plan would bring severe consequences to the U.S. economy. "Congress must act," he declared in an appeal that John McCain and Barack Obama echoed.

McCain and Obama separately urged Congress to redouble efforts to get a deal through and both proposed increasing federal deposit insurance to $250,000, as a key part of it. Both McCain and Obama called and spoke to the president on Tuesday, a White House official said. [...]

Bush noted that the maximum $700 billion in the proposed bailout was huge, but was dwarfed by the $1 trillion in lost wealth that resulted from Monday's stock-market plunge.

"Because the government would be purchasing troubled assets and selling them once the market recovers," he said, "it is likely that many of the assets would go up in value over time. Ultimately, we expect that much - if not all - of the tax dollars we invest will be paid back."

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THE ENDURING COSTS OF GORE V. BUSH:

For Many Americans, Fear and Distrust Run High (Joel Achenbach and Ashley Surdin, 9/30/08, Washington Post)

Many people yesterday afternoon were still absorbing the news that the stock market had gone into a dive -- hitting a couple of ledges on the way down the cliff -- and it is possible that sentiment for some kind of bailout could increase as investors look at their portfolios.

"I thought: This doesn't seem to be affecting me or my family," said Chuck Taggart, 46, a New Orleans native who lives in Los Angeles. "Then I looked at my 401(k) today."

It was down 19 percent.

"I'm nervous about the whole thing."

To a degree that few Americans could have appreciated just a few weeks ago, the economy runs on credit. But politics runs on a form of credit, too, generically known as trust, and trust has been a scarce commodity recently in Washington.

President Bush, burdened with historically low approval ratings, was slow to try to sell to the American people what he called a "rescue." Academic economists frowned upon the legislation, and radio talk show hosts railed against it.

The bailout lacked a sympathetic character at the heart of the narrative. And many Americans simply did not believe that the government had the basic competence to do the right thing.

"You've got massive public distrust and dissatisfaction, with the bailout specifically, with government in general, and George Bush and the entire political establishment," said Doug Muzzio, professor of public affairs at Baruch College in New York.

In a USA Today-Gallup poll conducted Friday and Saturday, 39 percent of respondents said they approved of the way Democratic leaders in Congress responded to the financial crisis, 31 percent approved of the Republican congressional leadership's response, and 28 percent approved of Bush's handling of the situation.

"This vote is a reflection of a lack of political capital, not of financial capital," said Mitchell Moss, a professor of urban planning at New York University. "The bankruptcy exists in our political leadership, not on Wall Street. We need to bail out Nancy Pelosi and George Bush."

The one bright side of the House GOP trying to be populist is that just as they opposed the plan because of the shouting on the Right they'll support it when their constituents realize that they're the ones losing money.

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THE GOP CLAIMS ITS FIRST VICTIM:

Ideal of the Scoop (NY Sun, September 30, 2008)

Following are excerpts of remarks by the Editor of the Sun, Seth Lipsky, to the newspaper's staff:

It is my duty to report today that Ira Stoll and I and our partners have concluded that the Sun will cease publication. Our last number will be the issue dated September 30, the first day of Rosh Hashanah. I want you to know that Ira and I, and our partners, explored every possible way to avoid having to cease publication.

We have spoken with every individual who seemed to be a prospective partner, and everywhere we were received with courtesy and respect. I tend to be an optimist and held out hope for a favorable outcome as late as mid-afternoon today. But among other problems that we faced was the fact that this month, not to mention this week, has been one of the worst in a century in which to be trying to raise capital, and in the end we were out not only of money but time.

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A CONSPIRACY SO VAST:

European Governments Rescue Another Failing Bank (Edward Cody and Mary Jordan, 9/30/08, Washington Post)

European confidence was eroded over the weekend by a raft of emergency bank rescues. By Monday morning, after Asian stock markets had nose-dived, credit markets were seizing up, meaning that the normal flow of trading among banks wasn't taking place. The European Central Bank then announced it was pumping an extra $173 billion into European markets. In Washington, the Federal Reserve said it would make an additional $620 billion available for future lending to nine foreign central banks.

The head of one of those nine, Bank of Japan Governor Masaaki Shirakawa, said Monday that global financial liquidity "has almost dried up."

European banks are strained by the recent collapse of property booms close to home, notably in Britain, Spain, Portugal and Ireland, by exposure to bad U.S. mortgage securities, and by the general drying up of short-term credit. Japan's economy is already suffering from a highly unusual trade deficit, and domestic demand for goods appears to be waning, too, the Tokyo government reported Tuesday. Last month household spending fell 4 percent and factory output dropped 3.5 percent.

The House rejection of the White House's $700 billion rescue plan seemed likely to increase international concern over what might be next.

In Europe, the banking crisis "can hardly spread further -- it is everywhere," said Willem Buiter, a professor at the London School of Economics and former member of the Bank of England's monetary policy committee.

European Central Bank President Jean-Claude Trichet sat down Sunday with several European finance ministers in Brussels to discuss loosening European Union rules on government guarantees for banks in need of quick infusions of capital. Their meeting suggested that European governments feared they would need to intervene again.

French President Nicolas Sarkozy, who said Thursday that French banks appeared able to overcome the threat, summoned the country's top bank executives, his senior financial aides and the governor of the Bank of France for an urgent meeting Tuesday. His finance minister, Christine Lagarde, renewed her promise that "the government will assume its responsibilities" to prevent losses to French savings and investment account holders.

Sarkozy's office said he had conferred Friday with President Bush, pushing his idea for a meeting of heads of state from the major industrial powers by year's end to envision a top-to-bottom overhaul of the world financial system. The summit could be held at Bretton Woods, N.H., where officials met in 1944 to set the basics of today's world financial system, the Paris media reported.

Those evil geniuses at ACORN have co-opted central bankers and heads of state all over the world to help them get their funding from those House GOP dupes.

MORE:
Wild Times in the Credit Markets (Ben Levisohn, 9/30/08, Der Spiegel)

With the financial system bailout plan derailed by the House of Representatives on Sept. 29, the resulting plunge in equities made headlines around the world. But while the stocks gyrate, it's important to keep one thing in mind: The big problem for financial markets is still the credit crunch. So as bad as equities have looked -- and during the big Sept. 29 sell-off, they looked pretty bad -- the true indicators investors should be watching are obscure measures such as credit default swaps, TED spreads, and commercial paper volume (all explained below).

These names may sound wonky and insider-y, but they are nonetheless vital to understanding just how difficult, costly, and fearful the credit markets have become. They're the reason the stock market, in general an indicator of investor sentiment, plunged on Sept. 29 after the bailout failed. Without the plan, the markets recognized that the credit markets, the lifeblood of American business, will get worse before they get better. "The market understands the lack of liquidity that exists and the repercussions it will have on companies big and small," says American Capital CEO Malon Wilkis.

Bush attempts to reassure markets (BBC, 9/30/08)

US shares are expected to rise on opening after President George W Bush renewed calls for Congress to back the $700bn (£380bn) banking rescue plan.

Although Wall Street saw sharp falls on Monday after Congress blocked the deal, investors appear hopeful a fresh plan can be agreed later this week.

Mr Bush warned that if agreement is not reached, the US economy faces "painful and lasting damage".

Global shares have seen volatile trading since Monday's deal failure.

Papers dismayed at US finance vote (BBC, 9/30/08)

"Meltdown" is how many of the papers describe the extraordinary falls in the financial markets after the shock vote.

According to the Times, money markets lurched close to a "catastrophic breakdown" on hearing the news.

For the Daily Telegraph, what could have averted the "potential collapse of the global financial system" has left it "staring into the abyss"

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THE PLAN IS THE McCAIN CANDIDACY...:

McCain at dead end as House rejects bailout plan (STEVEN R. HURST, 9/30/08, AP)

Republican John McCain has maneuvered himself into a political dead end and has five weeks to find his way out.

Last Wednesday, McCain suspended his presidential campaign to insert himself into a $700 billion effort to rescue America's crumbling financial structure. In so doing, he tied himself far more tightly to the bill than did his Democratic opponent, Barack Obama.

Then, as the bailout plan appeared ready for passage Monday in the House, McCain bragged that he was an action-oriented Teddy Roosevelt Republican who did not sit on the sidelines at a moment of crisis.

The implication: that he played a critical role in building bipartisan support for the unprecedented bailout.

...the only question is does the House GOP save it or kill it.

They've plunked down everything on the hope that the crisis is fake and that Americans don't want anything done about it. That's a losing bet, but the public rightly identifies them with it, Wall St. Problems Viewed as 'Crisis' in Latest Poll (Jon Cohen and Jennifer Agiesta, 9/30/08, Washington Post)

Most Americans see the current financial situation as a "crisis," and there is overwhelming concern that the failure of the House of Representatives to pass the economic recovery package will deepen the problem, according to a new Washington Post-ABC News poll.

But the poll also revealed significant public concern with the bill Congress rejected yesterday, as few voters said the package did enough to protect "ordinary Americans," and nearly half said it did not go far enough to shore up the nation's economy.

Nevertheless, nearly nine in 10 expressed concern that the failure of the bill could lead to a more severe economic decline, including a slim majority calling themselves "very worried." High levels of concern cross party lines, but Democrats and Republicans have contrasting views of the urgency of the situation. In the poll, 60 percent of Democrats call the economic woes a crisis, compared with 44 percent of Republicans. [...]

Asked to assess responsibility for the legislation's failure, 44 percent said Republicans were the reason, 21 percent said the Democrats and 17 percent said both sides were responsible.

MORE:
Vote casts shadow on McCain, Obama (BEN SMITH & GLENN THRUSH, 9/30/08, Politico)

Reluctant Republicans ignored Sen. John McCain, undermining the Republican presidential nominee’s efforts to cast himself as a problem-solving legislative leader. [...] It was the House Republicans, whose support McCain had returned to Washington to seek, who drove a stake through the bill’s heart: Two-thirds of the Republicans voted against the bill; nearly two-thirds of the Democrats voted for it.

The failure to pass the measure, and the commensurate historic drop in stock prices around the world, overshadowed the presidential campaign, as it has for a week, and swamped McCain’s attempts to turn the conversation toward a more general argument about taxes and spending. The election remains squarely situated on the economy, turf on which polls suggest McCain is far less trusted than Obama.

Happy Days For Obama (William Murchison, 9/30/08, Real Clear Politics)

I think the election of Barack Obama has not been cinched, but that the Democratic ticket's chances are vastly enhanced. It is a melancholy thought. I share it with reluctance.

If I correctly read human nature, I see my fellow Americans as ready for a brand-new version of the same-old same-old. I see them ready, that is, for "change." For anything but news accounts about the crash of companies and the shredding of retirement accounts and stock portfolios.

The most sensible editorial page on the planet, the Wall Street Journal's, saw the bailout bill as generally, under the anguished circumstances, OK. That gave some hope. Yet the House went ahead and shot the thing down. I have the sense that Americans, whatever their view of the proposed bailout, are sick of the whole sideshow.

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NOT A PARODY:

In Conversation: Woody Allen: New York’s hometown auteur on whether a lifetime of psychoanalysis has paid off, and why kids from Yale no longer like good movies. (Adam Moss, Sep 28, 2008, New York)

NY: Do you have a theory about why the culture keeps getting coarser?

WA: The country has, over the years, moved to the right. And it’s possible that accompanying that move to the right, you also get a lessening of taste. But I don’t know if what I’m saying is true, because I have shown some very good films—Bergman, Fellini—to kids from good schools like Yale. Bright kids. And they were not impressed. You know, it wasn’t as though I picked out some kid from the Midwest who’s a churchgoing barbarian.

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MOVIE OF THE MOMENT:

The interesting thing to consider as you watch Friend Ed Driscoll is whether Bonnie and Clyde hasn't become the Right's ur-text this week, as they act out against bankers and newly bourgeois homeowners.

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WHAT IS IT THAT THEY'RE SUPPOSED TO POLICE?:

Why the US is losing in Afghanistan (Anthony H Cordesman, 10/01/08, Asia Times)

The problem is not simply US troop levels. It is dealing with a failure to create anything like an effective overall strategy to fight the war, if strategy is defined as a requiring a practical plan to implement and the resources to act.

Afghanistan is larger than Iraq, has a larger population, has far more difficult terrain to fight in, and has a virtual enemy sanctuary in Pakistan on its eastern and southern borders. It is also a nation which has never had a cohesive government and whose governmental structure was in war or near chaos over two decades before the US invasion. It also never had a military or police force that was more than a fraction the size of Iraq, and had no modern national military forces after 1993.

While there are no reliable statistics on either country, the CIA data provide as good a rough estimate as any. Moreover, many of these numbers show just how much more serious the nation building challenge is in a country that has never moved towards major economic development in the past, and that Afghanistan faces ethnic, sectarian, and linguistic divisions at least as serious as those in Iraq.

While there are no reliable estimates of the size of Taliban-HI-Haqqani forces in Afghanistan relative to the size of al-Qaeda in Iraq and its affiliates, the background briefings given by various intelligence organizations indicate that the insurgent threat to Afghanistan - core cadres (the guesstimate of 10,000 is often used for both wars), part time fighters, and associated supporters - is probably at least as large as the insurgent threat in Iraq.

Recent background briefs also indicate that there are now significantly more foreign fighters involved in the insurgency in Afghanistan than the insurgency in Iraq, although numbers vary so much from estimate to estimate that it is impossible to provide even a reasonable range of numbers.

A comparison of the cost to date of the Afghan and Iraq Wars, however, reflects the same comparative lack of resources that is reflected in troop levels and in aid personnel. In spite of significant allied contributions, the Afghan War has so far received less outside funding than the Iraq War, and has had fewer combat troops than were committed to the Coalition forces in Iraq at their peak.

Afghanistan is also a far poorer country, had no savings and capital resources to draw upon once the initial fighting war over, and not oil exports or other economic activity capable of funding the basic needs of its population, much less funding development and strong national security forces.

By Mr. Cordesman's own definition of "strategy," this essay doesn't answer the question it purports to. There's a lot about the adequate resources end of things but, not surprisingly, precious little about the practical plan for creating a cohesive state where one has never existed before, for overcoming the ethnic divisions in the region, nor even for crushing the insurgency over the "border" in Pakistan.

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NO FAIR, PEAKING:

The tank isn't empty: a review off The Myth of the Oil Crisis: Overcoming the Challenges of Depletion, Geopolitics, and Global Warming By Robin D. Mills (Steven Martinovich, September 29, 2008, Enter Stage Right)

The peak oil argument largely stems the prediction made by Hubbert in 1956 that American peak oil production would take place in 1970. The problem with Hubbert's methodology is that it has only ever been proven correct that one time. His succeeding predictions, including that the world would hit peak oil production in 1995, have been uniformly wrong. That hasn't stopped his acolytes from continuing to promote the notion that we are in imminent danger of running out of oil.

Mills, a petroleum economics manager for the Emirates National Oil Company in Dubai, argues that peak oil advocates have long underestimated the amount of estimated and proven reserves and that exploration has largely keeping pace with production when necessary. The recent rise in oil prices doesn't reflect scarcer resources but underinvestment on the supply side and global economic growth on the demand side.

To support his argument Mills carefully surveys the world's oil producers and analyzes their past, present and predicted future output. Unlike peak oil advocates, Mills generally takes a guardedly optimistic view and argues that many nations have untapped resources that haven't been exploited for various reasons which include economics, technical and environmental, or that they simply aren't needed at the moment.

From there Mills examines what he refers to as "unconventional oil", oil that is derived from deep sea drilling, the arctic and shale, among other sources. He estimates reserves as high as a trillion barrels of oil, more than enough to keep the global economy moving for decades. Mills also looks at the role that alternative fuels will likely play in lessening oil use and acting as a cushion for the inevitable day when we transition from an oil-based economy.

MORE:
-EXCERPT: from Myth of the Oil Crisis

The current high prices certainly seem to give some credibility to the idea that we are approaching some fundamental limit of oil resources. But we should remember how we arrived at this situation, since the culprit is not constraints on oil in the ground: it is the long 1986-98 period of low prices and under-investment. Low prices decimated the oil industry, while the rise of energy-hungry new powers in Asia, combined with robust demand in the developed world and geopolitical upsets in major producers, stealthily ate up spare production capacity. The inevitable result, perhaps amplified by ‘speculation’ and market nervousness, has been a so-far inexorable rise in the oil price.

This price rise is not driven, then, primarily by geology. But many commentators outside the energy business, and some within it, believe high oil prices vindicate their often-repeated claims that ‘peak oil’ is imminent. Supporters of this view point to the work of the American geologist M. King Hubbert, whose seminal 1956 paper prophesied a peak in US output by 1965-1970 (the actual year was 1970), a success often taken to prove that oil depletion must follow ‘Hubbert’s Curve’. Yet when applied to other countries, ‘Hubbert’s Curve’ and its variants are at best approximately right, but frequently wildly wrong.

Predictions of the date of ‘peak oil’ require some estimate of the amount of oil reserves known today, and the quantity to be found in the future. Believers in imminent depletion state that global reserves, particularly in the OPEC countries, are heavily over-stated, that exploration success is falling well short of replacing production, and that technology does not unlock significant new oil. These assumptions imply that we are on the cusp of producing half of our ultimate total of oil. Hubbert’s method therefore predicts imminent decline.

Although a few countries may be over-estimating their reserves, comprehensive industry databases suggest that, if anything, the aggregate official figures are somewhat low. OPEC’s upgrades in the mid-1980s are mostly reasonable given prior conservatism, exploration success and advances in technology. Lack of recent exploration success is due to limited effort during the low-price era, and to restrictions on access to promising areas like major OPEC countries, Russia and the US offshore. In any case, huge recent discoveries in areas like deepwater Brazil confound the pessimists. ‘Reserves growth’ is a real and major phenomenon in many major oil regions, not an artefact of conservative reporting – the best place to look for new oil is in oil fields, with fresh ideas and methods.

‘Unconventional’ oil is becoming conventional, and making up a growing proportion of supply. Output from the famous ‘oil sands’ of Canada is growing rapidly; heavy oil all around the world is attracting new attention, from the UK to Russia to Saudi Arabia to Congo. Liquid fuels can be made from abundant coal and gas. ‘Second generation’ biofuels, from non-food crops, promise to overcome the problems of rising food prices, while the trillions of barrels in oil shales may be on the verge of being unlocked. And a wide swathe of oil demand can be substituted by abundant natural gas, which, even more than oil, is nowhere near ‘peak’, and which emits much less carbon dioxide.

Nor is geopolitics the insuperable threat it is made out to be. The abundance and geographic dispersal of unconventional oil and other energy sources renders a long-term oil embargo self-destructive. Nor is the Middle East rabidly hostile to the West and keen to wield the ‘oil weapon’, despite xenophobic claims. Modern ‘resource wars’ cannot pay for themselves, as the Iran-Iraq war and the recent Iraq conflict amply demonstrate. Terrorism is not capable of disrupting the long-term energy picture – as long as it does not provoke its victims into ill-conceived retaliation. The military, practical and political difficulties of blocking the ‘choke-points’ of international oil trade are widely under-estimated. ‘Energy independence’ cannot be attained at acceptable cost by any large consuming or producing nation. Retreats into paranoid self-sufficiency threaten a re-run of the grim 1930s; energy security can only be achieved, or at least improved, by a balance between the needs of exporters and importers, and a web of mutual inter-dependency.

Even the serious environmental problems associated with fossil fuel extraction and use, particularly some unconventional sources, can be tackled by new technologies, incentivised by policies to make the ‘polluter pay’. The environmental impact of modern oil extraction, even in sensitive areas such as offshore or in the Arctic, is much less than generally imagined. The very real threat of climate change requires a portfolio of solutions. A key one is ‘carbon sequestration’, the locking away of carbon dioxide in underground reservoirs, a method that can also liberate additional oil and gas. Despite claims to the contrary, all the components of carbon sequestration are proven; they need only to be put together on a large, repeatable scale.

Energy efficiency and renewable energy are key components of the fight against both climate change and the phantom of oil depletion. A growing economy and living standards would be possible even in the face of declining oil use. ‘Neo-Luddite’ calls for the end of industrial civilization are, if taken seriously, both naïve and apocalyptic. In this sense, oil will never ‘run out’; it will be replaced by something better. That is

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AT THE INTERSECTION OF "SCIENCE" AND POLITICS:

The Darwinian Basis for Eugenics: a review of Darwin Day in America. By John G. West (Anne Barbeau Gardiner. September 2008, New Oxford Review)

Darwinists are always trying to set a distance between the theory of evolution and the eugenics movement, but West cites Darwin, in The Descent, as approving of how "the weak in body or mind are soon eliminated" among "savages," and disapproving of how civilized men "build asylums for the imbecile, the maimed, and the sick," with the result that "the weak members of civilized societies propagate their kind." Then, comparing man to livestock, Darwin added, "no one who has attended to the breeding of domestic animals will doubt that this must be highly injurious to the race of man." After this statement, he gave lip service to compassion for the weak, but the implication remained that such compassion undercut the survival of the human race. Darwin again complained about how "the reckless, degraded, and often vicious members of society, tend to increase at a quicker rate than the provident and generally virtuous members." He would return to this point in his last conversations with Alfred Russel Wallace, speaking "very gloomily on the future of humanity" because "in our modern civilization natural selection had no play, and the fittest did not survive." (Although Herbert Spencer coined the phrase "survival of the fittest," Darwin readily appropriated it as an "accurate" description of natural selection.) The Darwinian basis for eugenics is often down­played, West observes, yet it is a fact that eugenicists drew their "inspiration" directly from Darwinian biology. A number of the chief eugenicists of the early 20th century declared that natural selection was the "law" they followed to improve the race. Moreover, the American leaders in eugenics, who were "largely university-trained biologists and doctors" affiliated with places like Harvard, Princeton, Columbia, Stan­ford, and the Museum of Natural History, presented eugenics as biologically "justified." Between 1920 and 1939, West shows, Darwin's theory was constantly used in high-school biology textbooks to support eugenics, something that shows how much mainstream science accepted this form of population control. The book that Darwinist schoolteacher John Scopes was using in his Tennessee high-school classroom before his infamous "Monkey Trial" was G.W. Hunter's Civil Biology (1914), which followed the trend of advocating eugenics on Darwinian grounds. There Hunter spoke of "parasites" in society who, if they "were lower animals, we would probably kill them off to prevent them from spreading."

Scholars today place the blame for the eugenics debacle on politicians, but West finds it more accurate to describe the movement as "an effort by scientists to dictate government social policy based on their presumed scientific expertise." This was the first time they used science "to expand the power of the state over social matters."

Scholars also turn a blind eye to the argument for racism that eugenicists drew from The Descent. Darwin there claimed that the break between apes and man in evolution fell "between the negro or Australian and the gorilla." West argues that Darwin's allegation about blacks belonging to "a more primitive stage of human evolution" soon became a powerful scientific rationale for racist public policies, including laws against miscegenation.

The effect of Darwinian materialism on criminal law was deadly too. In 1876, Italian criminologist Cesare Lombroso argued that criminals were a "throwback to earlier stages of Darwinian evolution," and in 1924 Clar­ence Darrow argued (in defense of Leopold and Loeb) that criminals were "programmed for crime by material forces over which they had no control." Since eugenicists believed that criminal tendencies were inherited, they strove to curtail the breeding of groups that produced criminals. By the early 1930s, thirty states in the U.S. had sterilization laws, and by 1958, around 60,000 Americans had been sterilized, many by coercion. When Oliver Wendell Holmes, a Supreme Court Justice, approved of Virginia's forced-sterilization law, he said it was the way to "build a race." Later, when Nazis forcibly sterilized the "unfit" in the 1930s, they claimed to be acting, like us, on "biological principles." Hitler even declared that he had studied the laws of several American states for the sterilization of people whose breeding was "injurious to the racial stock."

After eugenics was discredited by Nazi use, leading American eugenicists turned to contraception and abortion for population control. In 1953 they issued a document entitled "Freedom of Choice for Parenthood: A Program of Positive Eugenics," in which they linked so-called "voluntary parenthood" to natural selection. The tactics were new, the principles the same: West cites Alexander Sanger, grandson of Margaret, as making a Darwinian defense of abortion in 2004, asserting that "abortion is good," and "we must become proud that we have taken control of our reproduction. This has been a major factor in advancing human evolution and survival."

How many people do you have to kill before Progressives acknowledge it isn't an advance?

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WELL PLAYED, DAVID:

David Cameron vows to avoid US-style deadlock in dealing with economic crisis: Tory leader vows to put party politics aside as he unveils three-point plan to protect UK from fallout (Deborah Summers, 9/30/08, guardian.co.uk)

"We can't allow what happened in America to happen here," the Conservative leader said, as he pledged to work with the government to bring stability to the financial crisis.

In an emergency statement to the Conservative party conference in Birmingham, Cameron vowed put party politics aside as he unveiled a three-point plan to protect Britain from the worst of the economic fallout.

"This is a moment when democracies are being tested," Cameron said. "We need to show that we can deal with crisis."

Republicans deserve that one.

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THERE IS NO CRISIS, IT'S JUST A TRICK TO TURN ME SOCIALIST!:

They Just Don't Get It (Steven Pearlstein, September 30, 2008, Washington Post)

The basic problem here is that too many people don't understand the seriousness of the situation.

Americans fail to understand that they are facing the real prospect of a decade of little or no economic growth because of the bursting of a credit bubble that they helped create and that now threatens to bring down the global financial system.

Politicians worry less about preventing a financial meltdown than about ideology, partisan posturing and teaching people a lesson. Financiers have yet to own up publicly to their own greed, arrogance and incompetence. And leaders of foreign governments still think that this is an American problem and that they have no need to mount similar rescue efforts in their own countries.

In the coming weeks and months, all of these people will come to understand how deep the hole really is and how we're all in it together.

They'll come to understand that the giant sucking sound they hear is of a massive deleveraging of the global economy and the global financial system as households and governments, businesses and investment funds adjust to living in a world with less debt and more inflation.

And they will come around, reluctantly, to the understanding that the only way to get out of these situations is to have governments all around the world borrow gobs of money and effectively nationalize large swaths of the financial system so it can be restructured, recapitalized, reformed and returned to private ownership once the crisis has passed and the economy has gotten back on its feet.

Dysfunction in Washington Exacts a Heavy Price (Gerald F. Seib , 9/29/08, Wall Street Journal)

[E]ven if senators manage to revive the bailout plan, a great deal of damage already has been done:

American voters, who didn't like the plan in the first place, will like even less the discovery that Washington's response to their concerns was to collapse into genuine dysfunction. [...]

The U.S. -- meaning both parties and the public and private sectors -- has to worry about what global investors make of the picture of disarray they now see in the U.S. That's a crucial consideration because the U.S. now depends on foreign capital to finance both a trade deficit of more than $700 billion and a $400 billion federal budget deficit. Today, foreign lenders hold about half of America's public debt, and the nation relies on them to finance more than 70% of its new debt, the nonpartisan Peter G. Peterson Foundation estimates.

The reason foreign investors have been willing to pony up this cash has been their basic, longstanding belief that the U.S. system -- financial and political -- makes America the ultimate safe haven.

At what point does that basic belief start to erode? And what are the consequences of that possibly happening? The question is even more acute because of the likelihood that even more foreign capital will be needed, at least in the short term, to help the American government finance the very bailout now being debated.

The more immediate question, of course, is what happens now.

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WHERE'S MOOKIE WHEN YOU NEED HIM:

What Petraeus Understands (Linda Robinson, September 2008, Foreign Policy)

The Mesopotamian lessons that will be most useful in the South Asian conflict derive from Petraeus‘s famous counterinsurgency manual, which emphasizes a “population-centric” approach. In Iraq, his command placed top priority on securing the population, meeting its needs, and shoring up the legitimacy of the government versus the insurgency. Engineers built walls and soldiers erected checkpoints to protect the population and keep out car bombers.

Much has been made of the coalition’s recent successes against al Qaeda in Iraq. But only in a very focused way did Petraeus take an “enemy-centric” approach to the terrorist organization. Killing the bad guys worked because the killing was more discriminate and the hardcore elements were separated from the rest of the insurgency and the population support base. Thanks to new human intelligence gained from the population and former insurgents, these operations were more precisely aimed at small numbers of “irreconcilables.” Biometric devices helped create a computerized, shareable registry of possible insurgents, which led to more accurate targeting. Other technical means then allowed rapid targeting of entire cells, but it was human intelligence that ensured the targets were the right ones. Then, U.S. and Iraqi troops held the areas after counterterrorist operations, unlike in the past.

Toward the mass of the Sunni insurgency, Petraeus adopted a new strategy. “We can’t kill our way to victory,” he was fond of saying. He sought instead to convert those who were fighting—bringing the “reconcilable” insurgents in from the cold.

The obvious parallel in his new role is to the Pashtun nation that straddles the border of Pakistan and Afghanistan. Pashtuns form the support base for the Taliban insurgency, which in turn gives sanctuary and support to the much smaller al Qaeda network. The United States and NATO need an approach that wins over the Pashtuns, looks for Taliban converts, and uses the resulting intelligence in a very focused counterterrorist campaign against al Qaeda. Unfortunately, this is contrary to the dominant thinking in the policy debate. Many in Washington are pressuring the administration and Pakistan to “get tough” in the tribal areas when in fact they need to “get smart.”

The problem with this theory is that Iraq's Sunni didn't start co-operating with the U.S. and the elected government until Sadrists and other Shi'ite militias had engaged in enough reprisals to convince them that not only were they the minority that elections had revealed them to be but that the Shi'a weren't the sheep Saddam had led them to believe they were. This, combined with many of the al Qaedists not being Iraqis, created an incentive for the Sunni to put down the violence within their own territory that was directed at the Shi'a and the government and to try for as much peaceable self-government as they could get. Who is going to scare the Pashtun enough that they too decide to reckon with the problem in their midst?

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THE UNDESERVING POOR:

Poverty, race influence society's generosity (Rick Wilson, 9/28/08, Charleston Gazette)

The issue of race has cast a long and often ugly shadow over American life. That's hardly news, especially in a state that was born out of a Civil War sparked by racially based slavery. But some serious economic research has found that the effects of race and racism extend farther that we might suspect.

Many observers have noticed that the capitalist economies of Western Europe tend to spend more public resources than the United States on social programs such as old age, disability and survivor's pensions; family and child benefits; and unemployment and labor market programs. These nations also have some form of universal health care, although they spend less of their gross domestic product (GDP) on this than we do.

Harvard economists Alberto Alesina and Edward Glaeser, and Bruce Sacerdote of Dartmouth College investigated this issue. In 2001, they published a paper titled "Why Doesn't the United States Have a European-Style Welfare State?" (Note: the term "welfare state" as used here doesn't refer simply to programs that attempt to assist the poorest families but rather a range of programs and benefits across the population.)

They found that many things influenced these differences, such as different attitudes about inequality, different histories, economic and constitutional factors. But one of the biggest factors is the issue of race.

As they put it, "Racial discord plays a critical role in determining beliefs about the poor." Since members of racial minority groups are often seen as more likely to be poor, public policies that would reduce poverty are seen as primarily benefitting those groups - even though it doesn't really work out that way in practice.

This is one of the unacknowledged factors driving the Right's eagerness to punish sub-prime lending, which is why the same folks who were most vehemently opposed to the immigration bill are in full throat again.

MORE:
Kill the bailout: Illegal immigration and the mortgage mess (Michelle Malkin, September 24, 2008)

[F]ault lies at the feet of the crime-enabling banking industry and the ethnic lobbyists and the illegal alien-enabling Bush administration.

They screwed us. Now, they want us to fork over a trillion dollars.

Screw them.

Kill this bailout.

Is Karl Rove to Blame for the Mortgage Meltdown? (Steve Sailer, September 28, 2008, V-Dare)

[T]he foremost long-term goal of President George W. Bush's political strategist was to bring Hispanics into the Republican Party.

As you'll recall, Rove's best-known tactic for trying to appeal to Latino voters was repeatedly pushing "comprehensive immigration reform" (i.e., an amnesty for illegal immigrants).

Rove, though had other arrows in his quiver. One of his plans was to turn Hispanics into Republicans by providing them with loose credit so they could become homeowners.

(Rove's belief that there's a connection between being able to afford a home and voting Republican is not irrational. As I've documented since 2004, states with higher degrees of "affordable family formation" vote Republican more than states where people can less afford to buy houses. That's why the Republican "Red States" tend to be inland, where land for housing is abundant and cheap, while Democratic "Blue States" tend to have expensive housing because oceans or Great Lakes restrict suburban expansion.)

Thus, George W. Bush made several speeches rallying enthusiasm for his October 15, 2002 White House Conference on Increasing Minority Homeownership. For instance, there was his classic Bushian effort on June 18, 2002:

The goal is, everybody who wants to own a home has got a shot at doing so. The problem is we have what we call a homeownership gap in America. Three-quarters of Anglos own their homes, and yet less than 50 percent of African Americans and Hispanics own homes. … So I've set this goal for the country. We want 5.5 million more homeowners by 2010 -- million more minority homeowners by 2010. (Applause.) …

The five and a half million marginal minority homeowners that Bush bunglingly called for is a big number. At a mortgage of, say, modest $127,000 each, that would add up to, let me check my calculator, oh, $700 billion. Well, whaddaya know …

Bush rattled on:

I'm going to do my part by setting the goal, by reminding people of the goal, by heralding the goal, and by calling people into action, both the federal level, state level, local level, and in the private sector. (Applause.) …

And so what are the barriers that we can deal with here in Washington?

Now that you've asked, Mr. President, allow me to point out that the number one barrier to minority homeownership is that many American minorities don't earn enough money to be able to afford their own home.

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BUT WE WERE ONLY TRYING TO TEACH THOSE BANKERS AND POOR BORROWERS A LESSON...:

When Judges Make Foreign Policy (NOAH FELDMAN, 9/28/08, NY Times Magazine)

During the boom years of the 1990s, globalization emerged as the most significant development in our national life. With Nafta and the Internet and big-box stores selling cheap goods from China, the line between national and international began to blur. In the seven years since 9/11, the question of how we relate to the world beyond our borders — and how we should — has become inescapable. The Supreme Court, as ever, is beginning to offer its own answers. As the United States tries to balance the benefits of multilateral alliances with the demands of unilateral self-protection, the court has started to address the legal counterparts of such existential matters. It is becoming increasingly clear that the defining constitutional problem for the present generation will be the nature of the relationship of the United States to what is somewhat optimistically called the international order.

This problem has many dimensions. It includes mundane practical questions, like what force the United States should give to the law of the sea. It includes more symbolic questions, like whether high-ranking American officials can be held accountable for crimes against international law. And it includes questions of momentous consequence, like whether international law should be treated as law in the United States; what rights, if any, noncitizens have to come before American courts or tribunals; whether the protections of the Geneva Conventions apply to people that the U.S. government accuses of being terrorists; and whether the U.S. Supreme Court should consider the decisions of foreign or international tribunals when it interprets the Constitution.

In recent years, two prominent schools of thought have emerged to answer these questions. One view, closely associated with the Bush administration, begins with the observation that law, in the age of modern liberal democracy, derives its legitimacy from being enacted by elected representatives of the people. From this standpoint, the Constitution is seen as facing inward, toward the Americans who made it, toward their rights and their security. For the most part, that is, the rights the Constitution provides are for citizens and provided only within the borders of the country. By these lights, any interpretation of the Constitution that restricts the nation’s security or sovereignty — for example, by extending constitutional rights to noncitizens encountered on battlefields overseas — is misguided and even dangerous. In the words of the conservative legal scholars Eric Posner and Jack Goldsmith (who is himself a former member of the Bush administration), the Constitution “was designed to create a more perfect domestic order, and its foreign relations mechanisms were crafted to enhance U.S. welfare.”

A competing view, championed mostly by liberals, defines the rule of law differently: law is conceived not as a quintessentially national phenomenon but rather as a global ideal. The liberal position readily concedes that the Constitution specifies the law for the United States but stresses that a fuller, more complete conception of law demands that American law be pictured alongside international law and other (legitimate) national constitutions. The U.S. Constitution, on this cosmopolitan view, faces outward. It is a paradigm of the rule of law: rights similar to those it confers on Americans should protect all people everywhere, so that no one falls outside the reach of some legitimate legal order. What is most important about our Constitution, liberals stress, is not that it provides rights for us but that its vision of freedom ought to apply universally.

The Supreme Court, whose new term begins Oct. 6, has become a battleground for these two worldviews. In the last term, which ended in June, the justices gave expression to both visions. In two cases in particular — one high-profile, the other largely overlooked — the justices divided into roughly two blocs, representing the “inward” and “outward” looking conceptions of the Constitution, with Justice Anthony Kennedy voting with liberals in one case and conservatives in the other. The Supreme Court is on the verge of several retirements; how the justices will address critical issues of American foreign policy in the future hangs very much in the balance.

The Right wants to purify the party and the markets but seems to have given no thought to the other consequences that follow, like importing transnationalism into our law.

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SINGHING FROM THE SAME HYMNAL:

American Giver (Ashley J. Tellis 09.29.08, Forbes)

The House of Representatives has voted to approve the U.S.-India civilian nuclear cooperation agreement. This action brings the controversial Bush initiative to the edge of completion, and when concluded in the Senate--an outcome expected any day now--the president will secure a rare and dramatic foreign policy victory with far-reaching consequences.

Although the U.S. and India have been democracies since their inception, disagreement over India's nuclear weapons program during the Cold War became the single most important impediment to closer bilateral ties. President Bush's decision to change course--after over 30 years of failing U.S. opposition to India's nuclear program--was intended to decisively remove this impediment.

With the impending conclusion of legislative action in Congress, the president's vision of an empowered India entrenched in the ranks of America's friends and allies will have been realized. No one in New Delhi, Washington or elsewhere can have any doubt that the successful consummation of this improbable initiative is owed fundamentally to Bush's personal investment--and his willingness to expend his scarce and diminishing capital selling it to a skeptical Nuclear Suppliers Group and an initially furious Congress.

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WHEN THE ADULT NATION ACTS CHILDISH:

Asia stocks fall after US failure (BBC, 9/30/08)

Japan's benchmark Nikkei stock index has fallen almost 5% in early trading, hours after a US financial rescue plan failed to gain Congressional backing. [...]

Now Asia is reacting to the shock, and in early trading on Tuesday, the Tokyo Stock Exchange's Nikkei-225 index fell almost 580 points to 11,163.74, a lost of 4.94% of its value in a matter of minutes.

Australia and New Zealand saw similar precipitous losses, with the S&P/ASX-200 index shedding 5.3% in Sydney and a 4.7% fall in Wellington.

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RIGHT AS TO EFFECT, WRONG AS TO CAUSE:

Obama has advantage on economy (MARK J. PENN, 9/29/08, Politico)

The financial crisis has redefined the presidential race, bringing into stark relief the candidate who can deal with the complexities of the global markets and return the country to prosperity over the next four years.

The race is no longer about change, experience, Iraq, tax cuts or universal health care. The job posting has been fundamentally altered.

Just as the Russia-Georgia conflict tilted the race toward Republican nominee John McCain a few weeks ago, this economic crisis shifts everything once again — this time to Democratic standard-bearer Barack Obama. Voters will now increasingly cast ballots on the economy, as opposed to national security or social values.

While the Democrats benefit from an economic downturn it isn't because anyone thinks they can run the economy better but because they're the security party and people who are scared want their mommies. If the economy truly is screwed then give us the Welfare Party, not the Marketeers.

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WHERE'S JOHN?:

McCain's Moment (William Kristol, 9/29/08, Weekly Standard)

No one wants to take ownership of the task of rescuing the economy right now. The Bush-Paulson plan has failed. The administration, House Democrats, and House Republicans (above all) have all proved unable to deliver. But there is someone who might be able to save the economy--and incidentally the Republican party: John McCain.

He should come back to D.C. But this time he needs to take charge--either by laying out the outlines of his own plan, or presiding over meetings at which a real plan that can pass is cobbled together. He might also insist on the immediate passage of a couple of provisions (raising or removing FDIC insurance limits, for example) that could mitigate the damage that could be done over the next few days.

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WELL. THEY DO HAVE THE COURAGE OF THEIR CONVICTIONS:

Washington to Wall Street: Drop Dead: The Republicans killed the bailout bill—and McCain's chances. (Daniel Gross, 9/29/08, Newsweek)

Well, maybe we don't need much of a private-sector financial system after all. That's the conclusion that most House Republicans, and a minority of House Democrats, seem to have reached in voting down the $700 billion bailout bill on Monday. Maybe it's best that, in a few weeks, there will be essentially two large banks left in the country, JPMorgan Chase and Citigroup. After all it has done, perhaps that's what the financial sector deserves.

Was the bailout bill killed by malice or by incompetence? It's hard to argue against incompetence, since it has been so rampant, especially on the Republican side of things in Washington. The congressional leadership and the White House clearly lacked the heft—or the energy—to whip recalcitrant members into line. "I don't understand why President Bush didn't go to members of his party and say vote on this," Maria Bartiromo wondered on CNBC Monday afternoon. (Maria, if you have to ask, you don't want to know.) Sen. John McCain, who interrupted his campaign to deal with the crisis, claimed—via his surrogates—that he wielded great influence in improving the deal and making it palatable. Then he left town as it collapsed.

The one thing you can say in favor of the House Republicans is that it was guys in contested seats who voted against the bill and they'll lose in the Fall. They did place their ideology above their careers. Of course, they also placed ideology above party, country, constituents...

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IF WE DESTROY THE MARKET...:

House to Wall Street: Drop dead (MarketWatch, Sept. 29, 2008)

In a stunning vote on Monday, the House rejected the financial rescue package on a vote of 205 to 228. Republicans voted against the bill by a two-to-one ratio, and in the process rejected their own leadership, who had worked for nearly a week to craft a bill that could gain a majority. [...]

Many Republicans in the House were never persuaded that the credit crunch in the financial system is an impending disaster deserving of taxpayer aid. Politicians who had cut their teeth on free-market principles couldn't accept the idea that the federal government should back up the banks who had foolishly bet everything on the housing bubble.

...we'll teach everyone that free markets work!

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AH, THE BRIGHT SIDE:

Oil plunges $10 as US bailout plan voted down (Stevenson Jacobs, 9/29/08, AP)

Oil prices plunged over $10 a barrel Monday as a U.S. financial bailout plan failed to win legislative approval, increasing fears tat a prolonged economic downturn that could sharply curtail energy demand.

Light, sweet crude for November delivery sank $10.52 to settle at $96.36 on the New York Mercantile Exchange, after earlier dropping as low as $95.04. It was crude's lowest trading level since prices edged back below $100 earlier this month; crude previously hadn't traded that low since February.

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NOW THAT WOULD BE BEAUTIFUL:

The End of the U.S. Financial System as We Know It? (Larry Kudlow, 9/29/08, NRO: The Corner)

A number of Republican House members and staff, along with others who are plugged in, are telling me that Nancy Pelosi and the Democrats will come back with a new bill that includes all the left-wing stuff that was scrubbed from the bill that was defeated today in the House.

As this scenario goes, the House Democrats need 218 votes, and they have to pick up a number of black and Hispanic House members who jumped ship because the Wall Street provisions, in their view, were too benign. So things like the bankruptcy judges setting mortgage terms and rates, the ACORN slush-fund spending, the union proxy for corporate boards, stricter limits on executive compensation, and much larger equity ownership of selling banks through warrants will all find itself back in the new bill.

Watching the Rightwing kooks try to come try terms with their having forced Democrats to give 20% of the federal budget to ACORN (or whatever delusion they're laboring under) would be worth the price of admission.

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WHERE WAS JOHN?:

House Republican leader says no revote on bailout Monday (CNN, 9/29/08)

Rep. John Boehner, the Republican leader in the House of Representatives, says the chamber will not vote again Monday on a $700 billion plan to bailout the financial services sector, after it was dramatically defeated on the floor.

So the US and world economies are at stake, John McCain thought the bill important enough to suspend his campaign and his entire reputation is built on bipartisan coalition building and he's off campaigning somewhere today? What ever happened to "a cause greater than self"?

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IF YOU HAVE A 401K OR IRA...:

House Rejects Bailout Package, 228-205; Stocks Plunge (CARL HULSE and DAVID M. HERSZENHORN, 9/29/08, NY Times)

In a moment of historic drama in the Capitol and on Wall Street, the House of Representatives voted on Monday to reject a $700 billion rescue of the financial industry.

The vote against the measure was 228 to 205. Supporters vowed to try to bring the rescue package up for consideration again as soon as possible.

Stock markets plunged sharply at midday as it appeared that the measure would go down to defeat.

Stocks plunge as House votes 'No' (Alexandra Twin, September 29, 2008, CNNMoney.com)

Stocks skidded Monday afternoon, with the Dow tumbling as much as 711 points, after the House rejected the government's $700 billion bank bailout plan.

Stocks had tumbled ahead of the vote and the selling accelerated on fears that Congress would not be able come up with a fix for nearly frozen credit markets. The frozen markets mean banks are hoarding cash, making it difficult for businesses and individuals to get much-needed loans.

...that was the House GOP taking money out of your pocket, but, don't fret, they won't get many more opportunities.

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INSTEAD, HE MADE US BUMS::

The Bay of Pigs Invasion, John F. Kennedy: an excerpt from Failures Of The Presidents; From The Whiskey Rebellion And War Of 1812 To The Bay Of Pigs And War In Iraq
by Thomas J. Craughwell with M. William Phelps (courtesy FSB Associates)

A TOTAL FAILURE. Many of the men of Brigade 2506 believed fervently that they were the first wave of Cuban freedom fighters who would liberate their homeland from Castro. They were convinced as they storrned ashore that they would be supported overhead by some of the finest fighter pilots of the U.S. Air Force, and they thought that as they advanced into Cuba, the U.S. Marines would be right behind them. Whether the insurgents had talked themselves into this conviction or the trainers from the United States had made such a promise is still a subject of debate.

The air support promised by the CIA consisted of sixteen B-26 twin-engine light attack bombers. From an airstrip in Nicaragua to the Bay of Pigs was a journey of 1,000 miles, round-trip, which left a B-26 with enough fuel to provide less than forty minutes of air cover for the Brigade. Anything longer than forty minutes and the pilots risked running out of gas somewhere over the Caribbean.

On April 14, 1961, just three days from the invasion, Kennedy called CIA Operations Chief Bissell to ask how many planes he planned to use in the operation. Bissell told the president the CIA planned to use all sixteen of their B-26s. "Well I don't want it on that scale," Kennedy replied. "I want it minimal." So Bissell cut the number of planes for the invasion to eight. The next day, those eight planes attacked the three airfields of the Cuban air force, knocking out some of the aircraft, but not enough to cripple the fleet.

On the morning of April 17, as the Cuban militia pinned down the men of Brigade 2506, the Cuban planes that had survived the air strikes attacked the exiles from the air. Meanwhile, the B-26s, their fuel low and their forty minutes up, veered away from the beach for the flight home. The Brigade's commander, San Román, radioed his CIA handlers for help. "We are under attack by two Sea Fury aircraft and heavy artillery," he reported. "Do not see any friendly air cover as you promised. Need jet support immediately." When San Roman's request was denied, he replied, "You, sir, are a son of a bitch."

With the sea at their backs, no means of retreat, and no chance of advancing into the interior of Cuba, the Brigade was in a desperate position. Back in Washington, the CIA and the Kennedy administration concluded that the invasion would fail. In a conversation with his brother, Robert Kennedy, the president said he wished he had permitted the use of U.S. ships to back up the Cuban exiles. "I'd rather be an aggressor," he said, "than a bum."

On April 18, Kennedy authorized six fighter jets from the aircraft carrier Essex to provide one hour of air cover for the CIAs attacking B-26s over the beach at the Bay of Pigs. But the jets from the Essex and the B-26s missed their rendezvous because the Pentagon forgot to factor in the one-hour difference in time zones between the B-26s' base in Nicaragua and the beach in Cuba.

That same day, Kennedy's national security advisor, McGeorge Bundy, gave the president a status report on the invasion. "The Cuban armed forces are stronger, the popular response [is] weaker, and our tactical position is feebler than we had hoped," Bundy said. That was perhaps the kindest possible description of the Bay of Pigs operation.

As a humanitarian concession, the president permitted U.S. destroyers to approach the Cuban coast to pick up survivors. The ships were authorized to get within two miles of shore after dark, but no closer than five miles during daylight hours. The directive meant the rescue mission was beyond the reach of almost every man in Brigade 2506. A handful who had managed to swim to one or another of the bay's outlying cays were picked up, but the rest lay dead on the beach or were captured by Castro's forces.

At 2 p.m. on April 19, after two days of being pounded by militia, tanks, and the Cuban air force, Commander San Román and Brigade 2506 surrendered. "Everything is lost," Allen Dulles told former vice president Richard Nixon. "The Cuban invasion is a total failure."

Sixty-eight Cuban exiles were killed in the Bay of Pigs debacle; 1,209 were captured, and nine of them died of asphyxiation in a windowless sealed truck that took them from the beach to prison in Havana. After twenty days of interrogation, the prisoners were given show trials and sentenced to life in prison.

Soon after the conviction of the men of Brigade 2506, Castro made a public offer to exchange the prisoners for farm machinery. Kennedy leapt at the proposal. Immediately he formed the Tractors for Freedom Committee, chaired by former first lady Eleanor Roosevelt, with the purpose of collecting donations to purchase farm equipment for Cuba. But the group was not able to meet Castro's exorbitant demand of $30 million worth of capital relief, and it disbanded. The tractor deal fell through.

Negotiations between the two governments went on sporadically over the next twenty months. Finally, on December 24,1962, Castro announced that he was releasing the Brigade 2506 prisoners in exchange for $53 million in medicine and food from the United States. He also promised, "as a Christmas bonus," to permit 1,000 of the prisoners' relatives to emigrate to the United States.

The animosity between Cuba and the United States intensified after the Bay of Pigs debacle. Cuba allied itself with the Soviet Union, while America continued its policy of isolating Cuba economically and diplomatically. Soviet Premier Nikita Khrushchev viewed America's failure at the Bay of Pigs as a sign of Kennedy's weakness and inexperience, an assessment he felt was confmned after meeting Kennedy at the Vienna Summit of April 1962, where it appeared to some that Kennedy was sandbagged by Khrushchev's threat to cut off West Berlin from the Western powers. Within six months, Khrushchev was placing nuclear missiles in Cuba, an action that brought the world as close as it has ever come to all-out nuclear war.

In the face of the missile crisis, Kennedy held firm. The Soviets backed down, removing the nuclear weapons from Cuba, but the tension between Cuba and the United States has dragged on for more than forty years. During that time, political observers and historians have argued that the failed invasion actually strengthened Castro's grip on Cuba. Certainly Che Guevara thought so. In August 1961, at a meeting of the Organization of American States in Uruguay, he sent a note to Kennedy saying, "Thanks for Playa Giron [another name for the site of the invasion]. Before the invasion, the revolution was weak. Now it is stronger than ever."

We'll be giving away a copy in our Election 2008 Contest.

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IT'S THE DARNDEST THING...:

Against Intuition: Experimental philosophers emerge from the shadows, but skeptics still ask: Is this philosophy? (CHRISTOPER SHEA, 10/03/08, The Chronicle Review)

At the heart of experimental philosophy lies a suspicion of so-called "intuitions." An intuition in philosophy is something far more potent than it is in ordinary discourse. Intuitions rear their heads when philosophers write such things as, "In this case, we would surely say …," or, "It would be natural to say …" (for example, that killing a man to harvest his organs is wrong). It is a deeply rooted sense, tested from multiple angles and honed through thought experiments and dialogue. The trustworthiness of intuitions (whose roots can be traced back to Plato and Socrates, who thought they represented glimpses of the true, ideal world usually hidden from us) hardly goes undebated by traditional philosophers — quite the opposite — but the experimental philosophers apply a new kind of pressure. They think that by studying human minds, using empirical techniques, and drawing on the insights of modern psychological science, they can get a better sense of where intuitions come from, and whether or when they should be granted credence.

Experimental philosophy has suggested, for example, that people from East Asian cultures may have different intuitions on very basic philosophical questions — reference (what nouns refer to in certain situations), morality, epistemology (what it means "to know" something) — than members of Western societies do. Experimental philosophers also draw on work by contemporary psychologists demonstrating just how malleable human cognition is, how easily redirected and reshaped it is by external cues, even as the conscious mind remains blissfully unaware. Opinions on crime and punishment, for instance, can be altered by placing people in a dirty room designed to trigger feelings of disgust: Subjects in such experiments respond more punitively when asked what should be done to certain hypothetical criminals.

"If we keep getting the same kind of results with the right kinds of controls and right kind of experiments," says Stich, "then there is a problem with the central method that philosophers have used throughout the 20th century, and for a long time before that": the reliance on armchair intuitions.

Understandably, such claims have met with resistance. "A philosophical problem is not an empirical problem," writes Judith Jarvis Thomson, the noted MIT moral philosopher, in an e-mail message to The Chronicle, "so I don't see how their empirical investigations can be thought to have any bearing on any philosophical problem — much less help anyone to solve a philosophical problem."

When several philosophers, including Stich and Joshua Knobe, an assistant professor at the University of North Carolina at Chapel Hill, along with a few psychologists, including the University of Virginia's Jonathan Haidt, proposed to Oxford University Press a new journal focusing on empirical studies of moral philosophy, they got back one particularly scathing anonymous review: "This group," it said, "is overly impressed by dubious functional MRI studies purporting to demonstrate the neurophysiological underpinnings of moral thinking, and by small sample, 'rinky-dink experiments' conducted by philosophers who are not trained experimentalists."

While much of the proposal authors' work was "perfectly philosophically respectable," the reviewer said, "a great deal of their interest lies in what I can only describe as the desire to eliminate morality (or at least the study of morality) from the discipline of philosophy itself."

...whether you punch an experimental philosopher in the nose when you're in a dirty room or a clean room makes no difference to whether he thinks what you did was right, though he may want you punished more severely in the dirty one.

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SIDESHOW:

SPIEGEL INTERVIEW WITH US GENERAL DAVID PETRAEUS: 'The Longest Campaign of the Long War': In an interview with SPIEGEL, General David Petraeus, until recently commander of the American forces in Iraq and future head of the US Central Command, discusses his new job, progress in Baghdad and how lessons from Iraq may apply to the escalating situation in Afghanistan. (Der Spiegel, 9/29/08)

SPIEGEL: How long will it take to win this fight, according to your cold realism?

Petraeus: I did a week-long assessment in 2005 at (then Defense Secretary Donald) Rumsfeld's request. Following our return, I told him that Afghanistan was going to be the longest campaign of what we then termed "the long war." Having just been to Afghanistan a month or so ago, I think that that remains a valid assessment.

Heck, if you're talking about The Long War, the campaign against USSR took seventy years, against France took over two hundred, and it's not even proper to consider the sort of tribalism that plagues Afghanistan/Pakistan to be part of the war.

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CONSIDER THIS FOR A MOMENT...:

The Bailout Bill That Nobody Likes (Jay Newton-Small, 9/29/08, TIME)

Wanted: someone who will claim credit for saving the U.S. economy. With little fanfare and all the enthusiasm of a hangover, congressional leaders from both parties on Sunday unveiled a detailed agreement on legislation to bail out Wall Street. But no presidential candidates were in sight, and few in Congress were doing much bragging about their handiwork.

Last week, jockeying for the title "savior of the economy" seemed intense, with both the Democratic and Republican candidates flying into Washington and overeager negotiators emerging with a premature victory announcement. But after dramatically suspending his campaign and asking to postpone last Friday's debate in order to deal with the financial crisis, John McCain kept a decidedly low profile in the final days of negotiations. His staff said McCain kept track of events by phone, keeping in touch with Treasury Secretary Henry Paulson and House minority leader John Boehner, and calling members on both sides of the aisle, urging them to support the deal. "I'm proud that we were able to get this done, and I'll give the credit to everybody else," McCain insisted on ABC's This Week on Sunday morning.

Yet on Sunday it was hard to find anyone willing to take credit for the agreement.

...helping to pass this bill is the first significant legislative accomplishment of Barack Obama's career. That said, it is a big one.

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SO WAS THE POINT OF THIS EXERCISE...:

McCain Aide: "He will be there for the vote." (The Page, 9/29/08)

...just to make it look like he was caving to political pressure instead of being a leader?

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I'M BAD, I'M NATIONWIDE:

There is a new free website PublishALetter.com that allows one to submit letters to the editors of all the key newspapers in the US and the world. Since the letters are often not printed,one can also publish those letters on the site itself. While the site does not welcome mass mailings, it can be an important neutral avenue for your audience to have their independent voices heard and shared.

Would you please consider letting your audience know about the site?

Tapan Chakrabarty
Managing Partner
Publishaletter.com LLC

tapan@publishaletter.com
www.publishaletter.com

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CAN'T WE AT LEAST GET BACK TO THE RIGHT OF SWEDEN?:

The Stockholm Curve (Wall Street Journal, 9/29/08)

"The corporate tax is one of the taxes which large companies really study when they plan to set up business somewhere," says Jan Björklund, leader of the country's Liberal Party, in promoting the tax cut plan. The corporate tax reduction will bring the Swedish rate down to 26.3% from 28%, continuing its fall from a high of 57% in 1987. This means that Swedes will soon have a corporate tax rate one-third lower than the U.S. average of 39.5% (the 35% federal rate plus the state average).

Sweden remains a high-tax country overall, with individual rates well above 50% plus pension and payroll obligations. Maria Rannka, president of the Swedish think tank Timbro, has reported that entrepreneurship had become such an alien concept that more than half of Sweden's 50 largest companies were founded before World War I and only two after 1970 -- the period when taxes and social welfare programs proliferated.

Now, however, Sweden is discovering that it must cut taxes to compete with Ireland, Eastern Europe and fast-growing Asia.

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DIDN'T CHRISTOPHER HITCHENS ALREADY TELL US THIS?:

Why faith in God really can relieve pain (Jonathan Petre, 28th September 2008, Daily Mail)

In a bizarre experiment, academics at The Oxford Centre For Science Of The Mind ‘tortured’ 12 Roman Catholics and 12 atheists with electric shocks as they studied a painting of the Virgin Mary.

They found that the Catholics seemed to be able to block out much of the pain.

And, using the latest brain-scanning techniques, they also discovered that the Catholics were able to activate part of the brain associated with conditioning the experience of pain.

The findings were welcomed by the Anglican Bishop of Durham, the Rt Rev Tom Wright, who said: ‘The practice of faith should, and in many cases does, alter the person you are.

‘It can affect the patterns of your brain and your emotions. So it comes as no surprise to me that this experiment has reached such conclusions.’

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DOES JUST KNOWING HOW TO RIDE A UNICORN MAKE ONE GREAT?:

Clinton hesitant to call Obama a 'great man' (Emily Sherman and Kristi Keck, 9/29/08, CNN)

Former President Bill Clinton was hesitant to characterize Barack Obama as a "great man" Sunday, a phrase he had no qualms using last week to describe Obama's rival John McCain. [...]

Clinton then explained what he meant in characterizing McCain as a "great man."

"I think his greatness is that he keeps trying to come back to service without ever asking people to cut him any slack or feel sorry for him or any of that stuff because he was a POW," Clinton said of the Republican presidential nominee.

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THIS IS WHERE SARAH PALIN SHOULD BE...:

Union Leaders Confronted by Resistance to Obama (STEVEN GREENHOUSE, 9/29/08, NY Times)

[M]any union members have a history of basing their votes on noneconomic issues, giving Mr. McCain and his running mate, Gov. Sarah Palin of Alaska, a shot at winning their support. Mr. Pyne, who knocks on doors wearing a Steelworkers for Obama T-shirt, witnessed that firsthand while visiting Scott Siegel, a union plumber, and his wife, Amy.

“We basically vote pro-life,” said Ms. Siegel, a mother of five. “As a ‘little person,’ I don’t feel that any of these candidates have our best interests in mind. So if there’s a specific thing that sways our vote, it would be abortion.”

...and she should just be hammering Obama/Biden on social issues.

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THE ADVICE OUGHTN'T BE HOW TO DEBATE WOMEN...:

Democrats on Hill Worried About Biden at Debate (Jake Tapper, September 29, 2008, Political Punch)

[A]s the two vice presidential nominees prepare for their one debate this Thursday, there are a number of Democrats who, off the record, say they're worried that despite his far greater breadth of knowledge, Biden could whiff it.

He can be verbose and has a propensity for gaffes, they say. The son-of-Scranton candor they usually find charming can sometimes seem reckless or insensitive.

That Biden will be debating the first Republican woman vice presidential nominee makes his challenge all the greater.

In recent weeks, in fact, Biden has taken advice from Democratic Sens. Hillary Clinton, Barbara Boxer and Dianne Feinstein, presumably offering tips on how to debate women without seeming sexist or bullying.

On Sunday, Obama’s chief strategist David Axelrod sought to lower expectations. Much of this is spin, but some of it is quite legitimately rooted in Biden's occasional charge to open-mouth-insert-foot.

...but how they used their sex to their advantage in debates. And that isn't even the biggest problem he faces. Ms Palin's task could hardly be easier here: every time she's called on she raises a position that Joe Biden and Barrack Obama have taken in the Senate and forces him to defend it. Not only does this allow her to fill in their blanks with a portrait of how liberal their records are but there is pretty nearly zero chance that Senator Biden can control himself and avoid condescending, blustering and outright fibbing when he's on the defensive.

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SETTING FREE THE SARAHCUDA:

How McCain Wins (WILLIAM KRISTOL, 9/29/08, NY Times)

With respect to his campaign, McCain needs to liberate his running mate from the former Bush aides brought in to handle her — aides who seem to have succeeded in importing to the Palin campaign the trademark defensive crouch of the Bush White House. McCain picked Sarah Palin in part because she’s a talented politician and communicator. He needs to free her to use her political talents and to communicate in her own voice.

I’m told McCain recently expressed unhappiness with his staff’s handling of Palin. On Sunday he dispatched his top aides Steve Schmidt and Rick Davis to join Palin in Philadelphia. They’re supposed to liberate Palin to go on the offensive as a combative conservative in the vice-presidential debate on Thursday.

That debate is important. McCain took a risk in choosing Palin. If she does poorly, it will reflect badly on his judgment. If she does well, it will be a shot in the arm for his campaign.

In the debate, Palin has to dispatch quickly any queries about herself, and confidently assert that of course she’s qualified to be vice president. She should spend her time making the case for McCain and, more important, the case against Obama. As one shrewd McCain supporter told me, “Every minute she spends not telling the American people something that makes them less well disposed to Obama is a minute wasted.”

The core case against Obama is pretty simple: he’s too liberal. A few months ago I asked one of McCain’s aides what aspect of Obama’s liberalism they thought they could most effectively exploit. He looked at me as if I were a simpleton, and patiently explained that talking about “conservatism” and “liberalism” was so old-fashioned.

Maybe. But the fact is the only Democrats to win the presidency in the past 40 years — Jimmy Carter and Bill Clinton — distanced themselves from liberal orthodoxy. Obama is, by contrast, a garden-variety liberal.

Old-fashioned is a pejorative?

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THE MAIN THING THE WEEK'S NEGOTIATIONS DID...:

Dr. Paulson's Tough Medicine, In a Pill the Public Can Swallow (Steven Pearlstein, 9/29/08, Washington Post)

The normally sure-footed Paulson stumbled badly last weekend when he rushed to the Capitol with a vague and poorly explained proposal that all but invited politicians and the news media to label it as a "$700 billion bailout for Wall Street" -- a moniker from which it nearly never recovered.

In fact, even in its original form, the Paulson plan would not have cost taxpayers anywhere near $700 billion, nor was Wall Street ever to be the primary beneficiary. The aim all along was to restore the flow of credit to Main Street's homeowners and businesses through banking and credit channels that have become dangerously constricted in recent months, threatening to choke off capital to the entire economy.

By acting as a buyer of last resort and allowing financial institutions to compete to sell some of their depressed mortgage-backed securities, Paulson hoped to jump-start credit markets to the point that prices for the securities would rise to close to their real economic value, private investors would feel confident enough to re-enter the market and banks would have the capital to begin lending again.

Paulson also intended to use some of the money to inject fresh capital into banks and financial institutions whose failure would jeopardize the stability of the financial system, in exchange for government ownership and control, much as the Treasury and Fed had done with Fannie Mae, Freddie Mac and insurance giant AIG.

And all along he had made informal promises to congressional leaders that, as the government gained effective control of millions of troubled mortgages, it would use its newfound position to prevent unnecessary foreclosures by renegotiating the loans on more favorable terms.

All three elements -- the auctions, the negotiated recapitalizations and the foreclosure mitigation -- survived the week's negotiations and remain the core of the 106-page bill, along with the mandate to implement the program quickly, to structure it as he sees fit and to alter it as market conditions require.

What was added over the past week was a panoply of procedural safeguards, taxpayer protection and structural reforms to provide an acceptable political context for the use of so much public money and the grant of such extraordinary discretion and power.

...was turn a golden opportunity for the Republican nominee into a party-inflicted bumble. Had the House GOP come out of the Wednesday meeting saying that John McCain had convinced them they needed to be on board it would have enhanced his deserved reputation as a legislative dealmaker and appealed to independents, who love that kind of stuff. Instead they ginned up the base against a bill they were going to have to swallow sooner or later. Not very deftly played.

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WHAT DO FACTS HAVE TO DO WITH ANYTHING?:

An astonishing mea culpa from the CBC (Jonathan Kay, 9/28/08, National Post)

Earlier this month, I wrote a column blasting CBC.ca coumnist Heather Mallick for writing a vulgar, juvenile hit-job on Sarah Palin. I also blasted the CBC for publishing it. I ended with these words: "The folks at the CBC might want to take care of their credibility problem before it’s too late. Otherwise, I suspect, the next government will take care of it for them.

Today, the CBC announced thet were doing just that:

We erred in our judgment -- By John Cruickshank, CBC News -- Sept. 28, 2008

More than 300 people have taken the trouble this month to complain to the CBC ombudsman about a column we ran on CBCNews.ca about Republican vice-presidential candidate Sarah Palin on Sept. 5. The column, by award-winning freelance writer Heather Mallick, was also pilloried by the National Post in Canada and by Fox News in the U.S.

… Vince Carlin, the CBC Ombudsman, has now issued his assessment of the Mallick column. He doesn't fault her for riling readers by either the caustic nature of her tone or the polarizing nature of her opinion. But he objects that many of her most savage assertions lack a basis in fact. And he is certainly correct.

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TOM TANCREDO'S DREAM:

Far Right storms election as Austrians back anti-EU rhetoric (Bojan Pancevski, 9/29/08, Times of London)

The far Right has made a grand return in Austria, emerging from yesterday’s elections as the second biggest parliamentary block, according to preliminary results.

The two parties that campaigned on an anti-immigrant and anti-European Union ticket have captured about 29 per cent of the vote, pushing the country’s traditional conservative party into third place.

Heinz-Christian Strache and his Freedom Party, who were accused of xenophobia and waging an antiMuslim campaign, won 18 per cent — a rise of 7 per cent compared with the last elections. Mr Strache’s former mentor, Jörg Haider, won 11 per cent of the vote with his new party, the Alliance for the Future of Austria.

You'd think the American Right might note that even in Austria such politics doesn't get much over a quarter of the vote. But, then, you'd think the parties of the European Right would realize they cost themselves votes by not opposing the EU.

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AH, THE CLASSIC RECIPE FOR TRUTH-TELLIING...:

Omert: Israel will have to withdraw (JTA, 09/29/2008)

Israel will have to leave the West Bank and east Jerusalem, and compensate Palestinians for settlement blocs in a peace deal, Ehud Olmert said.

"In the end of the day, we will have to withdraw from the most decisive areas of the territories. In exchange for the same territories left in our hands, we will have to give compensation in the form of territories within the State of Israel," Israel's prime minister said in an interview published Monday in Yediot Achronot.

It is the first time Olmert has been so specific about what he believes a peace with the Palestinians will look like. Yediot pointed out in the article that Olmert did not go so far in his statements when he was firmly in office and not the caretaker head of a government in transition.

First, lose power....

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NOT THE NEW DEAL IS THE POINT:

A successful bailout? Watch lending between banks (JEANNINE AVERSA, 9/28/08, AP)

The New Deal it is not. The government's biggest economic bailout since the Great Depression is aimed not at relieving unemployment or reforming questionable business practices, but at resuscitating financial markets debilitated by lousy bets on the housing market.

Put simply, the hastily crafted plan lawmakers agreed to in principle on Sunday is intended to revive jittery and fragile banks on Wall Street with enough money — by using taxpayer funds to purchase billions upon billions of their worst mortgage-related assets — so that lending, the lifeblood of the American economy, flows freely again.

If it is working, signs will emerge almost immediately in the interest rates on U.S. bonds and in an array of obscure — but crucial — financial benchmarks.

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TREAT HER LIKE THE REST OF AMERICA TREATS YOU...:

At Debate, Biden Told: Ignore Palin (RUSSELL BERMAN, September 29, 2008, NY Sun)

As Senator Biden prepares to face off against Governor Palin on Thursday night in the campaign's lone vice presidential debate, Democratic strategists have a few words of advice for the lawmaker of Delaware: Ignore the Alaskan.

Mr. Biden's 35 years in the Senate dwarf Ms. Palin's single month of experience on the national stage, but Democrats are worried that his penchant for verbal missteps and his occasionally aggressive style could be a liability as he faces only the second woman to serve as a major party nominee for the vice presidency.

"His goal is to ignore Palin and focus on connecting with voters sitting in their living rooms by making clear he is indeed one of them — an uncommon, common man," a Democratic strategist who served as an aide to Vice President Gore during the 2000 campaign, Christopher Lehane, said.

...like there's no one there.

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BECAUSE IF CONSERVING MEANS ANYTHING...:

Rescue Tests Bush's Conservative Legacy (JOHN D. MCKINNON, 9/29/08, Wall Street Journal)

President George W. Bush's $700 billion rescue plan for financial markets is prompting widespread soul-searching within the conservative movement.

While many Republican lawmakers seek to distance themselves from the plan, or disown it altogether, White House officials hope the heated opposition gradually will cool if the plan works.

Many frustrated conservatives see Mr. Bush's rescue plan, on top of his decision to invade Iraq, as cementing his legacy as a big-government conservative.

To others, it marks his apostasy from conservative orthodoxy.

...it's that you should blow up the US economy for ideological reasons, right?

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LIKE HITLER V. STALIN:

Signs of trouble seen before Syria bombing: Syria has strained ties to some Sunni Arab countries because of its support for Shiite groups. Troops along Lebanese border may be intended to stop an attack from militants, analysts say. (Borzou Daragahi, 9/29/08, Los Angeles Times)

When Syria deployed thousands of soldiers along its frontier with northern Lebanon this month, some here feared that the Syrians were preparing to retake a country their military had dominated until it was pushed out in 2005.

But now, after a bombing Saturday that was the deadliest in Syria since 1986, analysts are wondering whether the troops were defensive, meant to stop an imminent attack from Lebanon-based Sunni Muslim militants inspired by Al Qaeda and sometimes trained in Iraq. [...]

Northern Lebanon has long been a bastion for Sunni radicals, some of them veterans of the Iraq insurgency. Fatah al Islam, a group with Al Qaeda ties, fought the Lebanese army last year in a months-long battle that left hundreds dead.

On Aug. 12, just hours before newly selected Lebanese President Michel Suleiman paid a landmark visit to Damascus, a roadside bomb struck a bus in the northern Lebanese city of Tripoli, killing at least 12 people, 10 of them soldiers of the Lebanese army, which is widely perceived as sympathetic to Syria. Dozens have died in clashes between Sunnis and Lebanon's Alawite sect, which also has strong ties to Syria.

Lebanese scholar Ahmad Moussalli said he told several Syrian officials over lunch in Damascus three weeks ago to expect an attack on their soil. Saturday's bombing, he said, was unsurprising.

"This constitutes payback against Syria because it is anti-Islamist and is against the spread of such Islamism in the north of Lebanon," said Moussalli, a professor of political science and Islamic studies at the American University of Beirut.

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INCREDIBLE:

Key House GOP Opponent of Bailout Bill Changes Tune (Jake Tapper, September 28, 2008, Political Punch)

I'm told by someone in the room that Rep. Paul Ryan, R-Wisc., ranking Republican on the House Budget Committee and an admired conservative within his caucus, just made what I'm told was a credible argument FOR the bill.

Said Ryan of the bill: "It sucks."

But, he said, it has to pass to preserve the free market system and stave off a financial collapse.

Why did you seek office if not to be helpful when something like the free market system is in crisis? This will likely be recalled as your proudest moment in Congress.

MORE (via Jim Yates):
Who's Afraid of a Big, Bad Bailout? (John Mauldin, 9/26/08, Frontline Thoughts)

Flying last Tuesday, overnight from Cape Town in South Africa to London, I read in the Financial Times that Republican Congressman Joe Barton of Texas was quoted as saying (this is from memory, so it is not exact) that he had difficulty voting for a bailout plan when none of his constituents could understand the need to bail out Wall Street, didn't understand the problem, and were against spending $700 billion of taxpayer money to solve a crisis for a bunch of (rich) people who took a lot of risk and created the crisis. That is a sentiment that many of the Republican members of the House share.

As it happens, I know Joe. My office is in his congressional district. I sat on the Executive Committee for the Texas Republican Party representing much of the same district for eight years. This week, Thoughts from the Frontline will be an open letter to Joe, and through him to Congress, telling him what the real financial problem is and how it affects his district, helping explain the problem to his constituents , and explaining why he has to hold his nose with one hand and vote for a bailout with the other.

Just for the record, Joe has been in Congress for 24 years. He is the ranking Republican on the Energy and Commerce Committee, which is one of the three most important committees and is usually considered in the top five of Republican House leadership. He is quite conservative and has been a very good and effective congressman. I have known Joe for a long time and consider him a friend. He has been my Congressman at times, depending on where they draw the line. I called his senior aide and asked him how the phone calls were going. It is at least ten to one against supporting this bill, and that is probably typical of the phones all across this country. People are angry, and with real justification. And watching the debates, it reminds us that one should never look at how sausages and laws are made. It is a very messy process.

I think what follows is as good a way as any to explain the crisis we are facing this weekend. This letter will print out a little longer, because there are a lot of charts, but the word length is about the same. Let's jump right in.

It's the End of the World As We Know It

Dear Joe,

I understand your reluctance to vote for a bill that 90% of the people who voted for you are against. That is generally not good politics. They don't understand why taxpayers should spend $700 billion to bail out rich guys on Wall Street who are now in trouble. And if I only got my information from local papers and news sources, I would probably agree. But the media (apart from CNBC) has simply not gotten this story right. It is not just a crisis on Wall Street. Left unchecked, this will morph within a few weeks to a crisis on Main Street. What I want to do is describe the nature of the crisis, how this problem will come home to your district, and what has to be done to avert a true, full-blown depression, where the ultimate cost will be far higher to the taxpayers than $700 billion. And let me say that my mail is not running at 10 to 1 against, but it is really high. I am probably going to make a lot of my regular readers mad, but they need to hear what is really happening on the front lines of the financial world.

First, let's stop calling this a bailout plan. It is not. It is an economic stabilization plan. Run properly, it might even make the taxpayers some money. If it is not enacted very soon (Monday would be fine), the losses to businesses and investors and homeowners all over the US (and the world) will be enormous. [...]

Why do we need this Stabilization Plan? Why can't the regular capital markets handle it? The reason is that the problem is simply too big for the market to deal with. It requires massive amounts of patient, long-term money to solve the problem. And the only source for that would be the US government.

There is no reason for the taxpayer to lose money. Warren Buffett, Bill Gross of PIMCO, and my friend Andy Kessler have all said this could be done without the taxpayer losing money, and perhaps could even make a profit. As noted above, these bonds could be bought at market prices that would actually make a long-term buyer a profit. Put someone like Bill Gross in charge and let him make sure the taxpayers are buying value. This would re-liquefy the banks and help get their capital ratios back in line.

Why are banks not lending to each other? Because they don't know what kind of assets are on each other's books. There is simply no trust. The Fed has had to step in and loan out hundreds of billions of dollars in order to keep the financial markets from collapsing. If you allow the banks to sell their impaired assets at a market-clearing fair price (not at the original price), then once the landscape is cleared, banks will decide they can start trusting each other. The commercial paper market will come back. Credit spreads will come down. Banks will be able to stabilize their loan portfolios and start lending again.

Again, the US government is the only entity with enough size and patience to act. We do not have to bail out Wall Street. They will still take large losses on their securities, just not as large a loss as they are now facing in a credit market that is frozen. As noted above, there are many securities that are being marked down and sold far below a rational price.

If we act now, we will start to see securitization of mortgages, credit cards, auto loans, and business loans so that the economy can begin to function properly.

What happens if we walk away? Within a few weeks at most, financial markets will freeze even more. We will see electronic runs on major banks, and the FDIC will have more problems than you can possibly imagine. The TED spread and LIBOR will get much worse. Businesses which use the short-term commercial paper markets will start having problems rolling over their paper, forcing them to make difficult cuts in spending and employment. Larger businesses will find it more difficult to get loans and credit. That will have effects on down the economic food chain. Jim Cramer estimated today that without a plan of some type, we could see the Dow drop to 8300. That is as good a guess as any. It could be worse. Home valuations and sales will drop even further.

The average voter? They will see stock market investments off another 25% at the least. Home prices will go down even more. Consumer spending will drop. What should be a run-of-the-mill recession becomes a deep recession or soft depression. Yes, that may be worst-case scenario. But that is the risk I think we take with inaction.

A properly constructed Stabilization Plan hopefully avoids the worst-case scenario. It should ultimately not cost the taxpayer much, and maybe even return a profit. The AIG rescue that Paulson arranged is an example of how to do it right. My bet is that the taxpayer is going to make a real profit on this deal. We got 80% of AIG, with what is now a loan paying the taxpayer over 12%, plus almost $2 billion in upfront fees for doing the loan. That is not a bailout. That is a business deal that sounds like it was done by Mack the Knife.

This deal needs to be done by Monday. Every day we wait will see more and more money fly out the doors of the banks, putting the FDIC at ever greater risk. Panic will start to set in, moving to ever smaller banks. Frankly, we are at the point where we need to consider raising the FDIC limits for all deposits for a period of time, until the Stabilization Plan quells the panic.

I understand that this is a really, really bad idea according classical free-market economic theory. You know me; I am as free market as it comes. But I also know that without immediate action a lot of people are really going to be hurt. Unemployment is not a good thing. Losses on your home and investments hurt. It is all nice and well to talk about theories and contend the market should be allowed to sort itself out; and if we have a deep recession, then that is what is needed. But the risk we take is not a deep recession but a soft depression. The consequences of inaction are simply unthinkable.

---

SAY WHAT?:

McCain, Obama may skip bailout vote (CARRIE BUDOFF BROWN & AMIE PARNES, 9/28/08, Politico)

Though McCain took the unusual step last week of threatening to skip the first presidential debate to focus on the crisis, he may not make it back to Capitol Hill to weigh in on the legislation.

“It’s impossible to know until the vote has been announced,” McCain spokesman Tucker Bounds said Sunday.

Is Mr. Bounds smoking crack? The only even mildly acceptable answer is: "John McCain felt this bill was so important to America's economy that he suspended his campaign in order to work for its passage. Of course he'll be there. On the other hand, there's no reason for Senator Obama to show up just to support Mr. McCain's work."

---

THOUGH THE SCORE SUGGESTS IT WAS TOO ENJOYABLE (via Brandon Heathcotte):

Old is new as team rides rails (Kent Somers - Sept. 27, 2008, The Arizona Republic)

The Cardinals have traveled to games by plane and bus, but it has been more than 50 years since they arrived by train. But that's how they rolled Saturday.

The team boarded an Amtrak train in Washington around noon and arrived in Newark, N.J., around 3 p.m. to begin final preparations for their game Sunday against the New York Jets at Giants Stadium.

Linebacker Karlos Dansby munched on a boxed snack of chicken in the dining car as he mused about this new mode of travel.

"The only train I've been on is the little bitty train that goes around the zoo," he said. "I'm glad we're taking this trip. I think it will bring us closer together." [...]

As soon as the players boarded, several of them, led by running back Edgerrin James, renamed a dining car the "party car."

The music and laughter flowed. [...]

The train was still in the station when it was announced that lunch choices were filet and chicken and pasta. And, oh, the man on the intercom said, don't forget the crab cakes, a local specialty.

We've got a new favorite team.

---

ANOTHER REASON TO FLIP THE TICKET:

McCain retracts Palin's Pakistan comments (Emily Sherman, 9/28/08, CNN)

Sen. John McCain retracted Sarah Palin's stance on Pakistan Sunday morning, after the Alaska governor appeared to back Sen. Barack Obama's support for unilateral strikes inside Pakistan against terrorists [...]

Saturday night, while on a stop for cheesesteaks in South Philadelphia, Palin was questioned by a Temple graduate student about whether the U.S. should cross the border from Afghanistan into Pakistan.

"If that's what we have to do stop the terrorists from coming any further in, absolutely, we should," Palin said

Senator McCain should reverse his own stance, not retract hers. She and Barack Obama are right.

---

TO WHICH THE HOUSE GOP RESPONSE WAS ADDING SAND:

Lending freezes as anxiety grips capital markets: Credit is so tight, routine transactions have been hobbled. With interbank lending stifled, regulators are worried. (Tom Petruno and Walter Hamilton, 9/26/08, Los Angeles Times)

To many Americans, the scope of the now year-old U.S. financial crisis may be evident only when it shows up in a bad reaction in the stock market. Over the last two days, the market has rallied, yet the credit situation has remained dire.

"If the Dow goes down 1,000 points, you know exactly what that means," said Michael Darda, chief economist at the investment firm MKM Partners in Greenwich, Conn.

"You'll see it on the news and in your 401(k). It's palpable and understandable. If the credit markets freeze, that hits the economy with a lag, but it's just as powerful, maybe more so."

The economy and banking system run on credit, much of it short-term in nature. Untold billions of dollars change hands each day to fund U.S. banks' operations and the workings of companies and local governments.

If that money stops flowing, the economy loses the lubricant that keeps the gears turning.

In normal times, for example, one bank may have a large need for cash just for a day or two. Other banks may have excess cash and are happy to lend it to peers at relatively low interest rates.

In recent weeks, that back-and-forth flow of credit has been badly hampered as banks increasingly have been unwilling to lend to one another, fearful they won't be repaid if financial conditions worsen.

"What credit really is is trust and faith," said Pimco's Gross. At the moment, he said, "there is no trust, there is no faith."

Why now?

Soaring mortgage defaults and plummeting real estate prices have been rocking the financial system for the last year, resulting in massive loan losses for many banks and other institutions that fed the housing mania earlier this decade.

But the fallout from the mortgage debacle reached epic proportions this month, beginning with the government's takeover of ailing mortgage-finance giants Fannie Mae and Freddie Mac on Sept. 7.

That was followed by the failure of brokerage Lehman Bros. Holdings Inc. on Sept. 14, and the Federal Reserve's rescue of insurance titan American International Group on Sept. 16.

On Thursday, federal regulators seized Washington Mutual Inc. in the biggest bank failure in U.S. history.

And Friday, shares of Wachovia Corp., one of the nation's biggest banks and mortgage lenders, dived 27% as many investors fled, fearing that it could be the next institution to fail.

"This is scary," said 75-year-old Dan Fuss, who manages $110 billion in bonds for investment firm Loomis, Sayles & Co. in Boston. "Right now, when you think this through, any bank . . . is at risk" of the market's instant judgment of which institutions are solvent and which are not, he said.

The Federal Reserve and other major central banks have flooded the global financial system with hundreds of billions of dollars in short-term credit this month, trying to calm nerves and get banks to begin lending to one another again.

But the Fed can't force banks to extend credit, least of all when the most primal of instincts -- self-preservation -- rules the day.

In the last two weeks, fear also has gripped other parts of the credit markets.

Money market mutual funds, for example, normally buy short-term IOUs of companies, financial institutions and municipalities. But the $3.3-trillion money fund business has been upended since Sept. 16, when one of the oldest money funds revealed that it had lost 3% of its principal value because of losses on Lehman Bros. IOUs it held.

That marked only the second time in 38 years that a money fund had suffered a loss. The news triggered record outflows from the sector as nervous investors pulled their cash, which in turn drove many fund managers in recent days to stop buying corporate debt and instead load up on super-safe short-term U.S. Treasury bills.

Other big investors, spooked by what they see happening in the banking system, are shunning long-term bonds in favor of hoarding cash. That has stymied states and cities that need to borrow in the bond market to fund public works projects.

$700-billion Wall Street bailout plan is unveiled: It would require the government to gain an equity stake in companies that benefit from the rescue. In an unusual Sunday session of the House, angry lawmakers denounce the plan. (Maura Reynolds and Nicole Gaouette, 9/28/08, Los Angeles Times)

[T]he plan faces fierce opposition from Republicans and Democrats angry at what they say is a taxpayer bailout of Wall Street "fat cats." As the House opened for an unusual Sunday session, lawmakers from both parties rose, one after another, for one-minute speeches denouncing the agreement -- and signaling a continuing struggle as policymakers and their staff work out the final details.

"This morning we should be very much alarmed," said Rep. Scott Garrett (R-N.J.), addressing taxpayers directly. "Obviously, Washington is not listening to your wishes. Those who used to work for Goldman Sachs will support this deal. . . . Those who have blocked reform in the past will support this deal. I will not support this deal."

Rep. Marcy Kaptur (D-Ohio) railed against the agreement and the Wall Street financiers who would be helped. "These criminals have so much political power they can shut down the normal legislative process," she said.

Rep. Ted Poe (R-Texas) rose to compare the administration's urgings to rush a bailout plan to the pressure exerted on Congress to act after the Sept. 11 terrorist attacks.

"This is the same politics of fear we're hearing from the financial fat cats on Wall Street," Poe said. "Backroom deals trouble me because they usually turn out to be bad deals for America."

The conservative Texan was followed and echoed by the staunchly liberal Rep. Dennis J. Kucinich (D-Ohio), who said, "The $700-billion bailout is driven by fear, not fact."

The far Right is the far Left.

---

NOR DID THE NAZIS GET TO KEEP THEIR LEBENSRAUM:

Tit-for-Tat Kurds Reverse Saddam's 'Ethnic Cleansing' (AFP, 9/28/08)

Aziz was just four years old in 1975 when his family was evicted from Bawaplawi village, near the northern city of Khanaqin, and Arab settlers grabbed their home.

Now schoolteacher Aziz is back and has done to the Arabs what they did to him.

"Our homes were taken over by the Arabs without paying us any compensation," Aziz, 37, said at the modest single-storey brick house which he has occupied since the fall of Saddam's regime in 2003.

"We moved in and took any house that was empty. The Arabs who were here had fled."

Saddam's "Arabisation" campaign sought to change the demography of Khanaqin, which originally had a vast majority of Kurds and a smaller minority of Shiite Arabs, Turkmen and Jews.

With the fall of Saddam's regime, the Kurds are back and the Arabs are nowhere to be seen, at least in Khanaqin.

Is it news that Kurdistan isn't an Arab nation?

---

FALLING MARKETS=OBAMA, STABLE=McCAIN:

McCain Ready for A Change Of Subject: Credit Crisis Has Given Obama a Distinct Edge (Dan Balz and Shailagh Murray, 9/28/08, Washington Post)

In the two weeks that the Wall Street financial crisis has dominated the political debate, the presidential race has shifted from what had been essentially a dead heat to one in which Sen. Barack Obama has opened up a narrow but perceptible advantage nationally, as well as in a number of battleground states.

The burden now falls on Sen. John McCain to reverse the effects of the focus on the economy, and to keep the contest close enough so that a dominant debate performance, a gaffe by Obama or some outside event can shift the momentum back to him.

Although Friday's debate in Oxford, Miss., produced no outright winner, strategists in both parties said the coming weeks, which will include three more debates -- two between McCain and Obama and the third between vice presidential candidates Gov. Sarah Palin and Sen. Joseph R. Biden Jr. -- could be decisive in determining whether the election remains on a trajectory favorable to Obama or shifts back toward too-close-to-call status.

McCain advisers are well aware that the past two weeks have brought a shift in the race, but they say that between now and Election Day, there is plenty of time for the fortunes of the two candidates to change again.

While they ought not get overmuch credit for doing the right thing by their country, the Democrats in Congress are to be commended for passing a financial bailout that can only hurt them politically.

---

WHO'S GOING TO EXPLAIN TO THE REALISTS...:

Nuclear Pact With India Gets Approval of House (Glenn Kessler, 9/28/08, Washington Post)

The House overwhelmingly gave final approval yesterday to a landmark civil nuclear agreement with India, putting the Bush administration in reach of a substantial foreign policy achievement.

The legislation, which passed 298 to 117, still faces obstacles in the Senate, where it has been approved by the Senate Foreign Relations Committee but several senators have blocked it from coming to the floor for debate. The administration has pressed for final action before Congress adjourns, even though the 2006 bill that gave preliminary approval to the deal called for a much longer period of discussion and debate.

"I urge the Senate to quickly take up and pass this important piece of legislation before their October adjournment," President Bush said yesterday. "Signing this bipartisan bill will help strengthen our partnership with India."

...that India is our partner?

---

CRANK UP THE XM RADIO:

Friend Bruno Behrend will be on "Beyond the Beltway" with Bruce Dumont tonight, Sunday, 7-9 pm EST.

http://www.beyondthebeltway.com/ is the link for a list of stations and it's on XM\/Sirius Radio.

Bruno Behrend
Host - Extreme Wisdom Radio Show
Weekdays 10 AM-Noon on 1220 WKRS
www.extremewisdom.com
Listen Live - http://1220wkrs.com/pages/93518.php

---

FORTUNATELY FOR THE DEMOCRATS...:

Biden the bumbler (Jeffery T. Kuhner, September 28, 2008, Washington Times)

Mr. Biden has become a national joke. And although late-night comedians are lapping it up at his expense, the Democrat's penchant for silliness raises a very serious issue: How could Mr. Obama have chosen such an irresponsible, vacuous person to be his running mate? Compared to Mr. Biden, Gov. Sarah Palin is the embodiment of mature, seasoned leadership.

Democrats have a ready excuse: That's just Joe being Joe. He may be gaffe-prone and loquacious, they argue, but he's substantive on the big issues-especially, foreign affairs. This is false. Mr. Biden is a classic Washington insider: He is full of credentials, sits on numerous panels (including being chairman of the Senate Foreign Relations Committee), and boasts of vast experience. He is impressive on paper; in reality, he is intellectually and morally weak.

He has been wrong on almost every major issue during his last 35 years in the Senate. Mr. Biden is a trendy transnational progressive, who votes the liberal line when it is politically convenient - regardless of the costs to the national interest or in human lives.

Along with congressional Democrats, he voted to cut off support to South Vietnam. This ensured America's defeat, and enabled communist forces to conquer Vietnam. The result was a regional holocaust, in which hundreds of thousands of Vietnamese were slaughtered, the country's Chinese minority was ethnically cleansed, and more than a million citizens were jailed or tortured in Hanoi's gulags. The decline of American influence in Southeast Asia also led to the brutal Khmer Rouge seizing power in Cambodia, and systematically murdering more than 2 million people.

Moreover, Mr. Biden opposed America's anti-communist efforts in Nicaragua, El Salvador and Angola. He voted against Ronald Reagan's military build-up and his Strategic Defense Initiative - pivotal factors in the Soviet empire's defeat.

Mr. Biden's Iraq policy has been erratic and inconsistent.

...Mr. Biden has disappeared from view so completely that the next time you're likely to see him is on a milk carton.

---

DIVISIONS DON'T SERVE US AS WELL...:

Egyptian sheik's outburst against Shiites roils Mideast: Sunni cleric Yusuf Qaradawi calls Shiites heretics trying to invade Sunni nations, tapping into anti-Iran anxieties. Shiites express dismay at the remarks amid Iraq war and efforts to forge unity. (Jeffrey Fleishman, 9/27/08, Los Angeles Times)

A popular Sunni Muslim cleric with a television show and a website that churns out religious edicts and dieting tips agitated centuries-old animosities in the Islamic world recently by referring to Shiite Muslims as heretics seeking to invade Sunni societies.

The bitter, often bloody, divide between the two main branches of Islam has been an undercurrent since the 7th century, but Sheik Yusuf Qaradawi's vitriol comes at a fragile time, when Sunni countries such as Saudi Arabia and Egypt are wary that the predominantly Shiite nations of Iraq and Iran could destabilize the region. [...]

"Shiites are Muslims but they are heretics and their danger comes from their attempts to invade Sunni society," said Qaradawi, who was quoted in the Egyptian independent daily Al Masry al Youm. "They are able to do that because their billions of dollars trained cadres of Shiites proselytizing in Sunni countries. . . . We should protect Sunni society from the Shiite invasion." [...]

Qaradawi is a prominent moderate cleric, but he has grown skeptical of Shiite intentions. Two years, ago he suggested that Shiites were using the mystical Sufi order of Islam as a cover to penetrate Sunni society. His most recent volleys undercut efforts by Islamic leaders to ease religious tensions, and raise questions about his motivations. Much of the funding for Qaradawi's Qatar-based media enterprises comes from Sunni nations uneasy over Iran's widening influence in the Persian Gulf.

Abul-Fazel Amoee, an Iranian political scientist, said Qaradawi had become an instrument of anti-Shiite propaganda orchestrated by Sunni royals. He said this parallels the "deep rivalry between Saudi Arabia and the Islamic Republic of Iran, and the stage of this competition or ideological battle today is the field of Iraq."

Sectarian differences should "not be handled by exchanging outlandish and fanatical statements. I'm talking about both sides -- Qaradawi and the Shiites," said Abdel Moati Bayoumi, a religious scholar and member of Egypt's Islamic Research Academy. He said divisions between Sunnis and Shiites, which began as a fight over succession after the death of the prophet Muhammad in the 7th century, would weaken Muslim states and serve foreign interests.

...as the success of the invasion would.

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IT NEVER CEASES TO AMAZE...:

Battle of Bajaur a crucial test for Pakistan (AFP, 9/28/08)

A massive battle with Islamist militants in a remote Pakistani tribal region is proving to be pivotal to the country's fight against Al-Qaeda and the Taliban, officials say.

The six-week army operation in the remote region of Bajaur on the Afghan border is suspected to have sparked furious extremists into bombing the Marriott Hotel in Islamabad just over a week ago, they say.

While Waziristan has captured most of the headlines about Pakistan's tribal belt in recent years, the military says Bajaur is where it faces the stiffest resistance since joining the US-led "war on terror" in 2001. [...]

"This is at the centre," said Major General Tariq Khan, head of the paramilitary Frontier Corps force, which is leading the fighting.

The operation should be completed in another month and a half, Khan told reporters, but added: "If we do not take any action it will become an independent agency spreading out terror in all directions."

...how incompetent the foe is. Everyone--but them--realizes that they're rather easy to kill; the hard part is getting reluctant local governments to wage the war. But when the Qaedists bomb those governments it forces them to fight. Were one a conspiracy theorist and silly enough to believe the CIA effective the notion that extremist bombings were a Western plot would make sense.

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MAVERICK'S NEW PRISON WIFE?:

McCain as the Alpha Male (David S. Broder, September 28, 2008, Washington Post)

It was a small thing, but I counted six times that Obama said that McCain was "absolutely right" about a point he had made. No McCain sentences began with a similar acknowledgment of his opponent's wisdom, even though the two agreed on Iran, Russia and the U.S. financial crisis far more than they disagreed.

That suggests an imbalance in the deference quotient between the younger man and the veteran senator -- an impression reinforced by Obama's frequent glances in McCain's direction and McCain's studied indifference to his rival.

Whether viewers caught the verbal and body-language signs that Obama seemed to accept McCain as the alpha male on the stage in Mississippi, I do not know.

Just consider the gender of the parties the two respectively lead.

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TWO EISENHOWER REPUBLICANS VS THE FRINGES OF EACH PARTY:

Bailout plan makes strange bedfellows: The financial crisis and the proposal to address it with billions of taxpayers' dollars have exposed deep fracture lines in both political parties and have fostered some unusual alliances. (Tom Hamburger and Peter Wallsten, 9/28/08, Los Angeles Times)

[T]he crisis exposed sharply different outlooks among Republicans who consider financial markets and big corporations the main engines of the U.S. economy, for example, and those whose sympathies are closer to small business, as well as conservative purists who see government intervention in the marketplace as an intolerable violation of basic principles.

For the Democrats, those who consider strong financial markets vital to the United States and its place in the global economy found themselves at odds with others who identify more with working Americans and nurture a long-standing distrust of Wall Street.

In both parties, that meant that some of the hottest reactions against the $700-billion plan came from core constituencies. [...]

Obama has gone further on the specifics than McCain, rankling some Democrats and labor advocates by suggesting that a proposal to ease bankruptcy provisions as a way to help homeowners -- an approach that is anathema to many Republicans -- does not belong in the final bailout plan.

"It's not a secret that Obama's closest advisors come from Wall Street," snapped Dean Baker, an economist who advises labor and community activist groups in Washington. "He has decided to run a low-risk campaign from the center, and that's what we are seeing here."

Because of their shared indignation at the idea of taxpayers bailing out the financial industry, some Democrats find themselves sharing common ground with conservative Republican activists, who fear their party too is bowing to pressure from Wall Street.

One result is that dissident liberals and conservatives have been reaching out to each other. "There's a lot of people in their conference who are not thrilled with the plan . . . and they are looking for options," said Rep. Jeb Hensarling (R-Texas), chairman of the Republican Study Committee.

"The different factions of the Republican Party have always been held together around the basic understanding that we were going to keep the government out of people's business," said Matt Kibbe, president of FreedomWorks, a conservative advocacy group.

"I'm afraid that McCain is making the same mistake."

Such comments about McCain and the criticism of Obama over the bankruptcy issue reflect the risks of getting involved in the crisis, but their efforts have also drawn praise from some participants.

"Both McCain and Obama are playing a significant role" moving a deal forward, said Rick Hohlt, a prominent Republican lobbyist representing banking and other interests. "Both candidates are perceived as change candidates who are anti-Washington."

Those credentials are important to win over skeptical Republicans and Democrats, he said.

GOP lawmakers credit McCain with working quietly Friday and Saturday to coax some of those skeptics into supporting a deal of some kind. On Saturday, McCain worked from a call list of at least 20 lawmakers, aides said -- and some lists even included skeptical Democrats.

"He understands what the House Republican concerns have been and has been helpful in moving the bill in that direction," said Rep. Adam H. Putnam (R-Fla.), a member of the House GOP leadership. "But he has done so in a low-key, under-the-radar way that doesn't defeat the larger purpose."

Putnam, who received a phone call from McCain on Saturday morning, said both McCain and Obama have, in the end, helped push lawmakers closer to a deal.

"I thought the most helpful thing they can do is come together and detox this town to essentially give their blessing to a bipartisan deal," Putnam said.

"It appears that that's what they have done."

While Barack Obama is outside the mainstream on social issues, his economic triumvirate--Paul Volcker, Robert Rubin, & Warren Buffet--would do a Republican administration proud.

---

DEAL! (via Ari Mendelson):

Lawmakers Reach Accord on Huge Financial Rescue: Vote is Imminent on $700 Billion Bailout Plan (Lori Montgomery and Paul Kane, 9/28/08, Washington Post)

A senior administration official, who requested anonymity to speak freely about the plan, said both sides had made significant concessions to achieve compromise. The Bush administration has agreed to accept a number of Democratic demands, including:

· The money would be dispersed in segments, with Paulson receiving $250 billion immediately, $100 billion upon White House certification of its necessity and the final $350 billion only after Congress has been given 15 days to object.

· Firms participating in the bailout would be required to grant the government warrants to obtain nonvoting shares of stock, so taxpayers can benefit if the companies return to profitability.

· Firms taking advantage of the bailout would be required to limit compensation for senior executives, with especially severe limits on "golden parachutes" at failing firms. The compensation limits will be enacted primarily, but not solely, through the tax code by reducing tax deductions for firms that pay executives more than $400,000 a year.

The administration also agreed to Democratic demands that the financial services industry should help pay for the program. Under the agreement, the president would be required to propose a fee on the industry if the government has not recovered its money through sales of the assets within five years.

Democrats also made a number of concessions, abandoning demands that bankruptcy judges be empowered to modify home mortgages on primary residences for people in foreclosure. They also agreed not to dedicate a portion of any profits from the bailout program to an affordable housing fund that Republicans claimed would primarily assist social service organizations that support the Democratic Party, the official said.

Meanwhile, House Republicans won a major victory, persuading negotiators to include a provision that would require the Treasury Department to create a federal insurance program that would guarantee banks and other firms against loss from any troubled asset, the official said.

One nice thing about a measure where the details don't matter is that you can throw bones to the wingnuts.

MORE:
Could the bailout turn a profit for taxpayers?: Some economists say the mortgage-backed securities the Treasury wants to buy from crippled banks could rise in worth when market unfreezes. 'The devil is in the details,' says one expert. (Michael A. Hiltzik, 9/28/08, Los Angeles Times)

[S]ome economists say that the mortgage-backed securities the Treasury proposes to buy from crippled banks have been so beaten down in price that taxpayers could actually profit once the market for these securities -- now virtually nonexistent -- unfreezes.

"It's entirely within the realm of possibility that we'll make money on this deal," says J. Bradford DeLong, professor of economics at UC Berkeley.

DeLong observes that several government bailouts of the past have ended up in the black, including the 1994 rescue of the Mexican peso. The U.S. government eventually recorded a $500-million profit on its share of Mexico's $50-billion international loan package.

Of more immediate relevance, the government's takeover of stricken insurance company American International Group may have already produced a paper profit, and could produce more gains as AIG's asset portfolio is sold off or recovers its value.

"Very senior people in charge of asset portfolios on Wall Street have said they are envious of the terms the government imposed on AIG," DeLong says. "They think the Fed's going to make a fortune." He conjectures that the $700-billion bank bailout could yield somewhere between a $100-billion loss and a $100-billion gain.

Paulson has also endorsed requiring banks that sell troubled assets to the government to give some sort of equity warrant, so that taxpayers can share in profits once those institutions recover financially.

---

BUT THE OLYMPICS WERE NICELY REGIMENTED:

China's new slave empire (PETER HITCHENS, 27th September 2008, Daily Mail)

These poor, hopeless, angry people exist by grubbing for scraps of cobalt and copper ore in the filth and dust of abandoned copper mines in Congo, sinking perilous 80ft shafts by hand, washing their finds in cholera-infected streams full of human filth, then pushing enormous two-hundredweight loads uphill on ancient bicycles to the nearby town of Likasi where middlemen buy them to sell on, mainly to Chinese businessmen hungry for these vital metals.

To see them, as they plod miserably past, is to be reminded of pictures of unemployed miners in Thirties Britain, stumbling home in the drizzle with sacks of coal scraps gleaned from spoil heaps.

Except that here the unsparing heat makes the labour five times as hard, and the conditions of work and life are worse by far than any known in England since the 18th Century.

Many perish as their primitive mines collapse on them, or are horribly injured without hope of medical treatment. Many are little more than children. On a good day they may earn $3, which just supports a meagre existence in diseased, malarial slums.

We had been earlier to this awful pit, which looked like a penal colony in an ancient slave empire.

Defeated, bowed figures toiled endlessly in dozens of hand-dug pits. Their faces, when visible, were blank and without hope.

We had been turned away by a fat, corrupt policeman who pretended our papers weren't in order, but who was really taking instructions from a dead-eyed, one-eared gangmaster who sat next to him.

By the time we returned with more official permits, the gangmasters had readied the ambush.

The diggers feared - and their evil, sinister bosses had worked hard on that fear - that if people like me publicised their filthy way of life, then the mine might be closed and the $3 a day might be taken away.

I can give you no better explanation in miniature of the wicked thing that I believe is now happening in Africa.

Out of desperation, much of the continent is selling itself into a new era of corruption and virtual slavery as China seeks to buy up all the metals, minerals and oil she can lay her hands on: copper for electric and telephone cables, cobalt for mobile phones and jet engines - the basic raw materials of modern life.

It is crude rapacity, but to Africans and many of their leaders it is better than the alternative, which is slow starvation.

---

ENOUGH WITH THE SMALL FRY:

Syria: 17 killed, 14 wounded in car bomb explosion in Damascus (ALBERT AJI and BASSEM MROUE, 9/27/08, Associated Press)

The explosion knocked down part of a 13-foot high wall surrounding a security complex that houses several buildings in the Sidi Kadad area. Hours after the morning explosion, traffic returned to normal on the highway, but dozens of plainclothes Syrian police lined the road. [...]

Saturday's bombing is the deadliest in more than decade. On New Year's Eve 1997, a bomb went off aboard a public bus in Damascus, killing 12 people and wounding dozens. Syria blamed Israel for the bombing, though Israel denied the charge.

The last major explosion to strike Damascus was in February when a car bomb killed the commander of Lebanon's Shiite militant Hezbollah group, Imad Mughniyeh. Hezbollah and its top ally, Iran, blamed Israel for the assassination, but Israel denied any involvement.

Last month, Brig. Gen. Mohammed Suleiman, a senior military officer close to President Bashar Assad, was assassinated by a sniper on a yacht at a beach resort in the northern port city of Tartous.

Syria has long been on Washington's list of states supporting terrorism, and the Bush administration has sought to isolate the Assad regime for its support of Hezbollah guerrillas and radical Palestinian groups. Its attempts intensified after the 2005 assassination of former Lebanese prime minister, Rafik Hariri, which many in Lebanon blame on Syria. Damascus has denied involvement.

Syria also has long been accused of allowing Muslim militants to use its territory to cross into Iraq, where they take part in attacks against U.S. and Iraqi forces.

Syria's nuclear liaison killed (JTA, 09/26/2008)

"The reason that Syria has been late in providing additional information (is) that our interlocutor has been assassinated in Syria," Mohammed ElBaradei, the director of the International Atomic Energy Agency told the IAEA board in a meeting Thursday, according to a recording obtained by the French news agency.

ElBaradei did not name the liaison, but AFP speculated that he might be Mohammed Sleiman, the chief of security for Syrian President Bashar Assad and the country's liaison with the Hezbollah terrorist group in Lebanon. He was assassinated last month.

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RESTORING VELOCITY:

WHY THE BAILOUT?: THE CASE BUSH HASN'T MADE (BRUCE BARTLETT, September 27, 2008, NY Post)

The basic problem is that the financial sector faces systemic risk in a way that no other industry does: By its nature, it is a house of cards that can collapse at a moment's notice.

Let me explain.

First, the vast bulk of the nation's money supply is in the form of bank deposits, not currency and coin. No bank on earth could pay even a fraction of its depositors if they all demanded all their funds in cash immediately. This is called a run on the bank (and is very familiar to anyone who has ever watched "It's a Wonderful Life").

During the Great Depression, such runs forced hundreds of banks to close. At the time, there was no system for protecting bank deposits - so a vast amount of money literally disappeared in the process. The nation's money supply contracted by about a third between 1929 and 1933.

As a general proposition, a one-third decline in the money supply would, in the aggregate, lead to about a one-third decline in the prices of all goods and services. If that could happen quickly and easily, changes in the money supply would have no effect on the real economy.

But that's not the case, of course. Businesses resist selling goods for less then they paid for them, workers resist cuts in their pay, and so on - leading to an economic depression.

Bush, lawmakers say deal on bailout is near (David R. Sands and Sean Lengell, September 27, 2008, Washington Times)

Both ends of Pennsylvania Avenue sounded a note of rising optimism Saturday as President Bush and leading congressional negotiators said talks for the $700 billion Wall Street rescue plan were back on track and a deal could be cut before the international markets open late Sunday.

Treasury Secretary Henry M. Paulson Jr. traveled to Capitol Hill to huddle with top Democratic and Republican lawmakers, just hours after President Bush in his weekly radio address said he was "confident that we will pass a bill to protect the financial security of every American very soon."

In a possible signal that a deal was close, the House Rules Committee began drafting guidelines for a debate and vote that could take place as early as Sunday, which would send the bill to the Senate for final passage Monday.

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WE NOMINATED WHO?:

Marathon becomes brawl (John P. Avlon, September 27, 2008, Politico)

In boxing, like politics, the candidate who controls the center of the ring — and forces his opponent to fight with his back against the ropes — is best positioned to win.

John McCain started fighting for the center in the first moments of the debate — using his opening statement to offer best wishes to the newly hospitalized Ted Kennedy (usually the subject of Republican attacks, not accolades), and then repeatedly stressing his decades-long bipartisan record to distance himself from the Bush administration.

The only effective canned line of the debate also reflected this centrist theme ("It's hard to reach across the aisle from that far on the left") — while also taking a clean shot at Obama's liberal Senate voting record.

Barack Obama, on the other hand, might be the first candidate in modern political history to run from the center in the party primary and then move to the left in the general election.

Obama's rise as the inspirational post-partisan candidate ("there are no red states, there are no blue states, there is only the United States") was what kept him from being labeled the left's anti-Iraq protest candidate. He won in places like Iowa because he was the non-polarizing alternative to Hillary Clinton's establishment candidacy.

But since winning the nomination, Obama has spent more time trying to grow the Democratic Party rolls from the ground up, rather than trying to win independent and centrist voters over to a larger common cause. This was evident again in last night's debate.

Elections are won by the candidate who connects with moderates and the middle class.

You tend not to get exposed in the Democratic primaries as a Leftist out of the mainstream--though by the end of this year's even Hillary and Bill were revealing the Unicorn Rider--which leaves the same dynamic in the Fall almost every time. Other than when the Democrats nominate Southern religious governors, the GOP just has to explain to the electorate that the other party's nominee is a stock Northern liberal and the rest follows.

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CAUCUS VS PRIMARY:

The Debate: The Prime Minister and the President (David Ignatius, 9/26/08, Post Partisan)

Barack Obama was running for prime minister and head of government in Friday night’s debate. He spoke with the precision of a parliamentary debater during question time. He had a three-point program for everything, but he didn’t deliver many memorable lines or offer the grace notes of leadership. When asked point-blank for his stand on the bailout plan, Obama gave a judicious non-answer: “We haven’t seen the language yet.”

John McCain was running for president and head of state. He was channeling Ronald Reagan, with all his talk about the evils of federal spending and government meddling with the health care system. He seemed almost to be emphasizing his age and gravitas.

The main difference being that prime ministers are chosen by elites while presidents are elected by the people.

MORE:
Advantage: experience (Chicago Tribune, September 27, 2008)

As the debate shifted to national security issues, McCain demonstrated why many voters see this as a strong area for him. He's been involved for decades in deciding whether the U.S. engages militarily in hot spots such as Somalia, Lebanon and Bosnia—and it shows. His cautious words about the careful use of power indirectly addressed the fear of some Americans that he'd be a trigger-happy president. Similarly, Obama's pledge to add troops in Afghanistan and his forceful language on terrorist breeding grounds in Pakistan addressed the fear of other Americans that he'd be a weak commander in chief.

On Iraq, Obama spoke repeatedly about his opposition to initiating that war. But he didn't directly respond to McCain's key points—that a surge-enabled victory in Iraq will leave this country with a stable ally in a bad neighborhood, and that the next president has to decide not whether to enter Iraq but how to leave in a way that best serves America. Obama gamely noted that he had chosen Sen. Joe Biden, a specialist in foreign affairs, as his vice presidential candidate.

The bulk of Friday night's debate took place on the turf McCain knows best: foreign affairs and military endeavors. That showed. Obama spoke capably on one topic after another; McCain, who has traveled to numerous crisis locales and joined in more foreign policy debates, spoke with more fluency and experience.

As one TV talking head said afterward, McCain spent the night on offense; Obama found himself playing more defense.

Sen. Obama, You're No Muhammad Ali (Howard Fineman, 9/27/08, Newsweek)

I know Ali and senator: you are no Ali.

For whatever reason (I think there are several, personal and strategic), you either don’t know how to or can’t be a closer. You can’t finish with the kind of flurry that drops your foe to the canvas. You didn’t do it to Sen. Hillary Rodham Clinton and, at least Friday night here at Ole Miss, you didn’t do it to Sen. John McCain.

But here’s the question: Is a devastating puncher who we want in a president? Is that who we want in our next president?

Well, maybe not. Maybe we’ve had enough pugnacity for a while. Maybe George W. Bush and Dick Cheney have given pugnacity a bad name. Maybe voters want a more peaceable style. Maybe right now they want an open hand, not another closed fist.

That’s the only reason I can think of why most of my colleagues (and, apparently, judging from the instant polls of viewers) decided that Obama had “won’” the debate here in Oxford.

On debating points--and if campaigns are boxing--McCain won. He was the sneering aggressor. He had Obama backpedaling for much of the night on foreign policy. Obama, for his part, missed several chances to counterattack, especially on the economy. Obama’s answers were strewn with annoying “ums” and “ahs” as he played for time to calibrate the least-damaging response.

Can Obama Counterpunch His Way to the White House?: In last night's debate, Barack Obama refrained from going after John McCain, and left viewers looking for a soundbite disappointed. Will this strategy work? (HAROLD MEYERSON, September 27, 2008, American Prospect)

If it had been a VFW convention, John McCain would have won last night's debate in a walk. He'd been there. Knew the pain of a defeated American army. Knew Kissinger almost before Kissinger knew English. Knew Eisenhower had composed a resignation letter in case the Normandy invasion had failed. Knew about Ike's resignation letter even though it never existed: Eisenhower wrote a letter accepting all the blame in case the invasion failed, but made no reference whatsoever to resigning.

But who cares? When it helped him and when it didn't, McCain provided the better theater in last night's debate.

More importantly, McCain punched and Barack Obama counter-punched through much of their first debate.

Verdict on Obama: Mealymouthed, Pathetic (ROBERT DREYFUSS on 09/27/2008, The Nation)

If, God forbid, foreign policy had to be the deciding factor in choosing between Barack Obama and John McCain, then last night's terrible showing by Obama would make me a Ralph Nader voter in a heartbeat. Obama's performance was nothing short of pathetic, and only a Democratic-leaning analysts and voters with blinders on could suggest that Obama won the debate. More important, he utterly blew a chance to draw a stark contrast with John McCain on America's approach to the world.

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SOMETIMES ALL IT TAKES IS A SUBHEAD...:

Last ditch bid to stave off fresh bank panic: World waits for US bail-out decision (Ruth Sunderland and James Robinson, 9/27/08,
The Observer)

...to explain how irresponsible the Right is being. They're as afraid of acting like the superpower we are in the financial field as Democrats are in fields of fire. W summed the situation up with typical concision in the White House meeting the other day: “If money isn’t loosened up, this sucker could go down.”

MORE:
Lending deep-freeze: Tight lending in focus as a key measure reaches highest level ever (David Goldman and Catherine Clifford, 9/26/08, CNNMoney.com)

"Things have frozen over again," said Steve Van Order, chief fixed income strategist with Calvert Funds. "Banks are nervous about lending to each other, and the commercial paper market has come to a standstill."

Market gauges of lending showed higher prices for loans between banks. When lending tightens in this way, businesses and consumers have to pay more for loans, such as mortgages, or can't get them at all.

For instance, one gauge that banks use to determine lending rates rose to an all-time high. The difference between the London interbank offered rate, or Libor, and the Overnight Index Swaps rose to an unprecedented 2.08%. The Libor-OIS "spread," or difference between the two rates, measures how much cash is available for lending between banks. The higher the spread, the lower availability of cash for lending.

Another lending measure was just below a 26-year high. The "TED spread" - the difference between three-month Libor, what banks pay to borrow money for three months, and the three-month Treasury borrowing rates - was at 2.94% after hitting 3.37% Thursday, the widest margin for that measure since 1982. Just a three weeks ago, the TED spread was at 1.04%.

With loads of troubled assets on their balance sheets, banks are hesitant to take on more loans if the risk of default is high. Furthermore, when banks need to write down those assets, they have less cash on hand to issue loans. That stops the financial system's gears from turning, in turn hurting customers who need a loan to finance a home, a car or tuition.

"The interbank lending markets are clogged up, because there is a freeze-up in the pipes that normally carry funding from central banks to banks to customers," Van Order explained.

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TO DUST BE RETURNING:

Legendary Actor Paul Newman Dies at Age 83: Paul Newman, superstar who personified cool onscreen, dies at 83 after battling cancer ( (The Associated Press, 9/26/08)

He got his start in theater and on television during the 1950s, and went on to become one of the world's most enduring and popular film stars, a legend held in awe by his peers. He was nominated for Oscars 10 times, winning one regular award and two honorary ones, and had major roles in more than 50 motion pictures, including "Exodus," "Butch Cassidy and the Sundance Kid," "The Verdict," "The Sting" and "Absence of Malice."

Newman worked with some of the greatest directors of the past half century, from Alfred Hitchcock and John Huston to Robert Altman, Martin Scorsese and the Coen brothers. His co-stars included Elizabeth Taylor, Lauren Bacall, Tom Cruise, Tom Hanks and, most famously, Robert Redford, his sidekick in "Butch Cassidy" and "The Sting."

Like many an artist (see under Jack Nicholson), his greatest role is his most religious turn, with him in the role of Christ. But this has always been a personal favorite:

LikeTelevision Embed Movies and TV Shows


Were you the great editor in the sky you'd only change two scenes in his career: he'd answer the phone when Charlotte Rampling calls and you'd cut Raindrops Keep Falling.

MORE:
-WIKIPEDIA: Paul Newman

-FILMOGRAPHY: Paul Newman (IMDB)
Paul Newman Dies at 83 (ALJEAN HARMETZ, September 27, 2008, NY Times)

Paul Newman, one of the last of the great 20th-century movie stars, died Friday at his home near Westport, Conn. He was 83.

The cause was cancer, said Jeff Sanderson of Chasen & Company, Mr. Newman’s publicist.

If Marlon Brando and James Dean defined the defiant American male as a sullen rebel, Paul Newman recreated him as a likable renegade, a strikingly handsome figure of animal high spirits and blue-eyed candor whose magnetism was almost impossible to resist, whether the character was Hud, Cool Hand Luke or Butch Cassidy.

He acted in more than 65 movies over more than 50 years, drawing on a physical grace, unassuming intelligence and good humor that made it all seem effortless. Yet he was also an ambitious, intellectual actor and a passionate student of his craft, and he achieved what most of his peers find impossible: remaining a major star into craggy, charismatic old age.

Confidence Man (CHARLES TAYLOR, Salon)

It's flip to say that the first half of Paul Newman's career shows how little acting can count for in the movies, while the second half shows how it can count for everything. The Newman of "The Long Hot Summer," "The Hustler," "Hud" and "Cool Hand Luke" was certainly an actor, and the Newman of "Slap Shot," "Fort Apache the Bronx," "Absence of Malice," "Blaze" and "Twilight" is by God a movie star. But pare down the exaggeration and you arrive at a kernel of truth. Had Paul Newman not made the change in his acting that began with 1977's "Slap Shot," made the conscious decision to delve deeper into himself and see what surprises might be waiting there, he might have spent his later screen career as a charming memento of the gorgeous and cocky smartass he started out as. Newman must have recognized that, and in the roles of the late '70s and early '80s, he found a way out. It's easy to look at those performances as the finest vintage of a dependable old pro. I'd argue that they are as exploratory and revelatory and, in their most daring moments, as naked as the work of Sean Penn, Robert Downey Jr. and Nicolas Cage, the finest actors of their generation.

Paul Newman dies at age 83 after battling cancer (Jay Stone, 9/27/08, Canwest News Service)

He used to joke that his epitaph would read, "Here lies Paul Newman, who died a failure because his eyes turned brown."

It was self-deprecation with a hint of truth: an impossibly handsome, blue-eyed film god, Paul Newman carried his good looks like both a gift and a curse, and it was when he went beyond them -- into roles as a callous womanizer or a self-involved failure or, later in his career, as an aging and rueful rebel -- that he showed he was also a fine actor.

The irony was that those roles were the farthest from what he was in real life. When he was dying, film critic Shawn Levy, who was working on a biography of Newman, wrote of him, "Funny, upright, smart, brave, moral, talented, faithful, honest, manly, wise, humble."

Actor Paul Newman dies at 83 (Lynn Smith, 9/27/08, Los Angeles Times)

Annoyed by the public's fascination with his resemblance to a Roman statue, particularly his Windex-blue eyes, Newman often chose offbeat character roles. In the 1950s and '60s, he helped define the American anti-hero and became identified with the charming misfits, cads and con men in film classics such as "The Hustler," "Hud," "Cool Hand Luke" and "Butch Cassidy and the Sundance Kid."

Newman's poker-game look in "The Sting" -- cunning, watchful, removed, amused, confident, alert -- summed up his power as a person and actor, said Stewart Stern, a screenwriter and longtime friend.

"You never see the whole deck, there's always some card somewhere he may or may not play," Stern said. "Maybe he doesn't even have it."

Newman claimed his success came less from natural talent than from hard work, luck and the tenacity of a terrier.

"Acting," he once said, "is really nothing but exploring certain facets of your own personality trying to become someone else." In early films, he said he tried to make himself fit the character but later aimed "to make the character come to me."

Academy Award-Winning Actor Paul Newman Dies at 83 (Adam Bernstein, 9/27/08, Washington Post)

Brooding and sinewy, with luminous blue eyes and a husky voice, Newman resembled a preppy Greek God in his earliest screen roles. He quickly rebelled against conventional casting that tried to turn him into a pretty-boy alternative to Marlon Brando and James Dean. He became known as an introspective and nonconformist performer -- a perfect anti-hero idol for the socially rebellious 1960s and 1970s.

In many of Newman's best films -- "The Hustler," "Hud," "Harper," "Cool Hand Luke," "Butch Cassidy and the Sundance Kid," "The Sting," "Slap Shot," "The Verdict," "Nobody's Fool" and "The Color of Money" (for which he won the Oscar) -- he played amoral rats, genial louts, self-destructive idealists, drunkards and has-beens. Some of his characters redeem themselves by being defeated or killed, and others just continue bumming along.

Newman hated to see his characters triumph on charm alone. No one, he said, would pay money to see such a beautiful man win the woman and save the day. Off-screen, he mocked his sex-symbol status and said that his personality was closest to the vulgar, second-rate hockey coach he played in "Slap Shot" (1977). His approach likely saved his career as he matured into a disciplined performer, one of the most enduring and polished of screen stars.

PAUL NEWMAN, 1925–2008: The Verdict: A Legend: Paul Newman played a lot of antiheroes, but his cool charm made viewers love him all the same. (David Ansen, 9/27/08, Newsweek)

When Paul Newman turned 70, I asked him about the pros and cons of aging. "What's difficult about getting old," he said, with that gravelly voice that set in in his 60s, "is remembering the way things used to be. There were such things as loyalty. The community hadn't disintegrated. The individual had not been deified at the expense of everything around him. I don't think that's just an old codger, you know, wishing for the old days. Goddam, they were better. There was a lot of ugliness, but there was a lot more grace." Newman, a modest man, would have been embarrassed to be told that he exemplified that grace, both on screen, where in his prime he played heels whom everyone fell in love with, and off, where his generosity, professionalism and decency were legendary.

Paul Newman dies at 83 (Jenny Percival, 9/27/08, guardian.co.uk)

He initially tried to play down concerns about his health after reports that he was having cancer treatment in New York. This year he pulled out of directing a Connecticut stage production of John Steinbeck's Of Mice and Men because of unspecified health problems. He later issued a statement that said he was "doing nicely".

But AE Hotchner, who helped create the successful Newman's Own food company in 1982, confirmed in June that the actor had been ill for 18 months. "It's a form of cancer, and he's dealing with it. Paul is a fighter," Hotchner told the Associated Press.

In August, the US press reported that Newman had finished chemotherapy and told his family he wanted to die at home. The former chain smoker is said to have developed lung cancer.

Paul Newman: 'A pretty boy actor, but a hell of a good one' (Barry Norman, 9/27/08, Daily Mail)

With Paul Newman gone maybe only Clint Eastwood, five years his junior, is left of a generation of movie stars who defied the years to become and remain icons of the cinema screen.

You don't have to be much of an actor to become a film star - looks and personality often do it for you --but you have to be a very good one to remain a star and Newman was an extremely fine actor.

HE USED HIS FAME TO GIVE AWAY HIS FORTUNE. (Dahlia Lithwick, Sept. 27, 2008, Slate)

The Hole in the Wall Gang Camp opened in Connecticut in 1988 to provide a summer camping experience—fishing, tie-dye, ghost stories, s'mores—for seriously ill children. By 1989, when I started working there as a counselor, virtually everyone on staff would tell some version of the same story: Paul Newman, who had founded the camp when it became clear his little salad-dressing lark was accidentally going to earn him millions, stops by for one of his not-infrequent visits. He plops down at a table in the dining hall next to some kid with leukemia, or HIV, or sickle cell anemia, and starts to eat lunch. One version of the story has the kid look from the picture of Newman on the Newman's Own lemonade carton to Newman himself, then back to the carton and back to Newman again before asking, "Are you lost?" Another version: The kid looks steadily at him and demands, "Are you really Paul Human?"

Newman loved those stories. He loved to talk about the little kids who had no clue who he was, this friendly old guy who kept showing up at camp to take them fishing. While their counselors stammered, star-struck, the campers indulged Newman the way they'd have indulged a particularly friendly hospital blood technician. It took me years to understand why Newman loved being at the Hole in the Wall Gang Camp. It was for precisely the same reason these kids did. When the campers showed up, they became regular kids, despite the catheters and wheelchairs and prosthetic legs. And when Newman showed up, he was a regular guy with blue eyes, despite the Oscar and the racecars and the burgeoning marinara empire. The most striking thing about Paul Newman was that a man who could have blasted through his life demanding "Have you any idea who I am?" invariably wanted to hang out with folks—often little ones—who neither knew nor cared.

For his part, Newman put it all down to luck.

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WE'RE MAKIN' OUT LIKE BANDITS:

Believe It or Not, Bailout Won’t Substantially Expand the Deficit (Phil Izzo, 9/26/08, WSJ: Real Time Economics)

In congressional testimony earlier this week, Peter Orszag, director of the nonpartisan Congressional Budget Office, told lawmakers that the program should be treated on net-expected-cost basis. The cost wouldn’t be recorded as gross outlays, but as “the purchase cost minus the expected value of any estimated future earnings from holding those assets and the proceeds from the eventual sale of them.” Since the value of the assets will be set by what the government pays, the program should at least be budget neutral in the near term. That approach would be similar to the current budgetary treatment of other programs such as student loans or lending to farmers.

The program does still have to be funded, and that likely means debt issuance from the Treasury. The government will have to borrow to buy the assets, but it’s no different than borrowing to buy anything else. Once the purchase is done, the buyer owns something that has value and can liquidated. Of course, right now those assets don’t have a market, but Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke expect that to change.

The program could even mean less issuance of government debt over the long term. “The TARP is being used to purchase assets which are intended to be sold or held to maturity,” said Michael Feroli of J.P. Morgan Chase. “As these assets are sold or mature in 2010 and following years, they will reduce the need for Treasury issuance, as funding inflows from running down the TARP portfolio defray other funding needs.”

If only it didn't transfer $140 billion to ACORN....oops, the tin foil slipped...

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WHO'LL TELL HARRY LIME?:

Daredevil Crosses English Channel On Rocket-Propelled Wing (Associated Press, 9/26/08)

A Swiss daredevil crossed the English Channel strapped to a homemade jet-propelled wing Friday, parachuting into a field near the white cliffs of Dover after a 10-minute solo flight.

Yves Rossy leapt from a plane at more than 8,800 feet (2,500 meters), fired up his jets and made the 22-mile (35-kilometer) trip from Calais in France. Mr. Rossy passed over a thin strip of land in front of South Foreland lighthouse, looped over onlookers and opened his parachute, his wings still strapped to his back.

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CAN ANYONE READ THIS DANG THING?:

Nevermind the me-tooism problem Mr. Obama had, having to check the name on the bracelet makes it look a bit gimmicky, no?

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THE WAGES OF POLITICAL CORRECTNESS:

The Bradley Effect (WILLIAM SAFIRE, 9/28/08, NY Times Magazine)

The root of the phrase is in the campaign for the governorship of California in 1982. Surveys up to and including exit polls reported that Tom Bradley, the first black mayor of Los Angeles, was well ahead of George Deukmejian, the Republican. But the popular mayor lost by 1.2 points. How could that happen? Speculation ranged from inaccurate sampling, to last-minute mind-changes, to latent racism, to freely lying voters, to the reluctance of those being polled to admitting a preference that may be socially unacceptable — anti-black — in talking to interviewers.

Those impressed with the Bradley effect (put “so-called” in front if you dispute it) point to a series of polling surprises in races between candidates of different races. In 1989, David Dinkins won the New York mayoralty with a two-point margin after polls gave him a double-digit lead; on the same day, Douglas Wilder, who had been ahead by 15 points in the pre-election weeks, squeaked through to win the governorship of Virginia by less than 7,000 votes.

“My lesson was learned in 1978,” says Tully Plesser, the veteran Republican pollster telling me about that year’s Massachusetts race for senator. “Late polling for the Republican incumbent Senator Edward Brooke had him nearly 8 points ahead of Democrat Paul Tsongas, and Tsongas was elected by a 10-point margin.”

Is there such a thing as “the so-called Bradley effect”? Some on the right think so: Wesley Pruden in his column in The Washington Times defines it as “the phenomenon of black candidates to register significantly better in public-opinion polls than on Election Day.” Others differ. Daniel Hopkins, a postdoctoral fellow at Harvard, issued a lengthy scholarly study last month of what he calls the “Wilder effect” and concludes that it was significant “only through the early 1990s” and “disappeared swiftly at about the time that welfare reform silenced one critical, racialized issue.”

Wait — there’s another linguistic wrinkle. Martin Peretz argues in The New Republic that all the talk about the Bradley effect has an impact on the race, which he has named “the Bradley-Effect Effect,” which “actually benefits Obama. Is it so crazy to think working-class voters will react to the racism charge by going out of their way to prove it false?”

Yes, it actually is crazy to think that a Kansan will act like a Beltway liberal, even assuming that Mr. Peretz won't pull the R lever in the privacy of the booth.

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THE ABSENCE OF REGULATIONS APPROPRIATE TO THE 21ST CENTURY:

Washington’s Invisible Hand (DAVID LEONHARDT, 9/28/08, NY Times Magazine)

[A]nyone trying to understand the causal chain — how the end of Glass-Steagall led to the end of Lehman Brothers — will have a hard time doing so. To many banking experts, the reason is simple enough: namely, that the law didn’t really do much to create the current crisis. It is a handy scapegoat, since it’s easily the biggest piece of financial deregulation in recent decades. But one act of deregulation, even a big one, and the absence of other, good regulations aren’t the same thing. The nursemaid of the current crisis isn’t so much what Washington did, in other words, as what it didn’t do.

The point of Gramm-Leach-Bliley was to tear down the wall, built by Glass-Steagall, separating banks that did risky investing from those that did basic lending. (The mingling of those two helped create a cascade of bank failures during the Depression.) Thus were born Citigroup, Bank of America and J. P. Morgan Chase, behemoths that owned bank branches, bought and sold stocks and shepherded corporate mergers.

But what else do those firms have in common today? They weren’t the ones that imploded, at least not first. While hardly unscathed, some of them are emerging as survivors amidst the wreckage. The first fatalities were firms that didn’t change all that much in the wake of Gramm-Leach-Bliley. Until their dying day, Bear Stearns and Lehman Brothers were both classic investment banks.

They got in trouble by making a series of risky new bets while Washington did nothing new to stand in the way.

...is not the case for regulations appropriate to the 1930s.

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DO YOU SUPPOSE HE CAN EVEN FIND INDIA ON A MAP?:

McCain's fantasy league of democracies (Derrick Z. Jackson, September 27, 2008, Boston Globe)

[T]here was a curious moment in this first debate that was a boomerang on that tactic, for anyone with the least bit of memory about the last 7 1/2 years. McCain said he would put pressure on Iran by forming a league of democracies, a group of nations with whom we share interests, ideals, and values.

A league of democracies? McCain was fortunate that Obama did not walk all over that one.

McCain's Republican Party, under President Bush, did everything it could in these last two terms to tell the world that we were in our own league.

Except that under W we've added Iraq, Afghanistan, Liberia, etc. to the list of democracies, added India, Indonesia, Brazil, etc. to the League, and our opponents in that effort--Schroeder, Chretien, Annan, and that French guy--have all been swept into the dustbin of History, replaced by pro-American leaders. Were Mr. Jackson less of a Realist he might notice reality.

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HITTING IT STIFF:

Beyond Ideology, a Generational Clash (ALESSANDRA STANLEY, 9/27/08, NY Times)

Mr. Obama was not particularly warm or amusing; at times he was stiff and almost pedantic. But all he had to do was look presidential, and that was not such a stretch. Mr. McCain had the harder task of persuading leery voters that he can lead the future because he is so much part of the past.

Except that, outside the editorial offices of the Times, polls show that people are comfortable with the idea of John McCain leading the country and thought that Senator Obama would win the debate. Just showing up isn't enough when you're supposed to deliver the Sermon on the Mount every time you speak.

MORE:
‘Senator McCain Is Absolutely Right…’: Barack Obama plays Mr. Nice Guy — and loses — in the first debate. (Byron York, 9/27/08, National Review)

A candidate determined to appear congenial might do that once, or even twice, but Obama did it eight times:

“I think Senator McCain’s absolutely right that we need more responsibility…”

“Senator McCain is absolutely right that the earmarks process has been abused…”

“He’s also right that oftentimes lobbyists and special interests are the ones that are introducing these…requests…”

“John mentioned the fact that business taxes on paper are high in this country, and he’s absolutely right…”

“John is right we have to make cuts…”

“Senator McCain is absolutely right that the violence has been reduced as a consequence of the extraordinary sacrifice of our troops and our military families…”

“John — you’re absolutely right that presidents have to be prudent in what they say…”

“Senator McCain is absolutely right, we cannot tolerate a nuclear Iran…” [...]

But Obama’s problem wasn’t just saying “John is right” too many times. He also let McCain control the discussion even when — especially when — the conversation turned to issues that play to Obama’s strength. The debate was scheduled to focus entirely on foreign policy and national security, but for obvious reasons moderator Jim Lehrer devoted the first half-hour to the current financial crisis. Polls show Obama with a pretty big lead on economic issues, and yet McCain was able to turn the discussion — ostensibly about the $700 billion bailout proposal — into an extended examination of federal spending and earmarks, two issues about which McCain has strong feelings and a good record. When McCain pointed out that Obama had asked for $932 million in earmarks — “nearly a million dollars a day for every day that he’s been in the United States Senate” — Obama answered weakly that yes, the process has been abused, “which is why I suspended any requests for my home state, whether it was for senior centers or what have you, until we cleaned it up.” Not his best moment.

When the debate came around to the topic of the evening, McCain outshone Obama on topics like Russia and Pakistan while hitting him over and over for his comments, made in earlier Democratic debates, that he would meet Iranian president Mahmoud Ahmadinejad “without precondition.” On Iraq, the two men fought to a draw, with McCain arguing that Obama was wrong on the surge and Obama arguing that McCain was wrong on the war. It seems unlikely they will change anyone’s mind about that.

The bottom line was that Obama did well enough, but McCain did better.

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THE PERFECT LIBERAL ENVIRONMENT?:

Harper edges closer to majority: Liberal support bleeding to Conservatives, NDP; Bloc surging in Quebec (TONDA MACCHARLES, 9/27/08, Toronto Star)

The Conservatives have a tenuous grasp on a majority government, while the Liberals and New Democrats are in a dead heat for second place, a new poll shows.

The survey, conducted for the Toronto Star by Angus Reid Strategies, found that 40 per cent of Canadians would vote Conservative if an election were held tomorrow.

The Liberals under Stéphane Dion continue to drop, losing core supporters to the Tories as well as to the other parties. For the first time in the campaign, the Liberals and New Democrats, under Jack Layton, are tied at 21 per cent support. The Greens register 7 per cent support nationally.

There are several stories in the poll, which plumbed the views of 1,508 Canadians at the end of the third week of the campaign for the Oct. 14 election. In fact, the horse race is becoming an issue itself: The poll suggests Canadians are now seriously weighing what a majority Conservative government under Harper would mean.

W isn't just going to have outlasted Cretin but his party at this rate.

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TREND LINES:

Iraq: Sadr Movement Growing Daily - Spokesman (Qassim al-Kaabi, 9/27/08, Asharq Alawsat)

Spokesman for the Sadri Trend, Salah al-Ubaydi, told the Asharq Al-Awsat that the Sadri Trend is not a "political party consisting of figures that could change their political line or leave one political party to join another." He said that the Sadri Trend is a popular movement which is growing daily. Al-Ubaydi added that the "call by the al-Kufah Mosque Imam to refer to the voters' registration centers has boosted the registration from200,000 to well over two million persons. This explains that the Sadri Trend still exists and that its approach to the activities it performs is the approach of the opposition and armed resistance.

However, the approach has now shifted to another style - the style of waiting for the results of the negotiations on the Iraqi-US agreement. Al-Ubaydi said that if the "Iraqi political parties do not reach an agreement with the Americans, we will have to review our position. We will discuss the kind of agreement reached and the results of the negotiations. We will surely give our views, and we will voice our support of the Iraqi government if it insisted on the departure the occupiers from our country. This is our condition. We will also look into the agreement in terms of whether it will be useful to the Iraqi society or not. We are not saying that we are accepting the agreement. We could give a period of grace of one to two years for the implementation of the agreement, if this is the useful thing to do."

Asked about the inaction which characterizes the Sadri bloc in the Iraqi parliament, the spokesman for the Sadri Trend said that the "reason for the inaction of the Sadri bloc is that it has no interests like the other blocs which have a specific number of cabinet portfolios or senior posts in the government. However, we made a condition which was difficult for the other parties of the parliamentary blocs to accept, namely, the departure of the occupiers. Asked about participation in the upcoming elections, al-Ubaydi said that the "Sadri Trend will support all the independent lists in which professional candidates and technocrats will run." He added that the "persons in the Sadri Trend who wish to run for the elections should participate in the independent lists and should be figures of high stature in their own community. However, persons in the Sadri Trend will not participate in the election lists that take into account courtesies and consist of public figures that have a bleak history in their own country."

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COME SUNDAY, IT'LL BE ALRIGHT:

Bailout progress _ Frank sees accord by Sunday (JULIE HIRSCHFELD DAVIS, 9/27/08, AP)

Lawmakers say they're making progress and hope to reach an agreement over the weekend on a $700 billion government bailout to rescue Wall Street bankers from the bad loans that threaten to derail the economy and send it into a deep and long depression.

In a sign of movement, House Republicans dispatched their second-ranking leader, Rep. Roy Blunt of Missouri, to join the talks after their objections to an emerging compromise had brought negotiations to a standstill.

Negotiators were pushing for a deal before Asian markets open Monday.

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PAST DIFFERENCE:

Why Americans are more tolerant: Canadians often consider themselves to be more tolerant than their "backwards" neighbours to the south. But is this simply a myth? (Pete Vere, September 23, 2008, Western Standard)

Which brings me to the second reason the American concept of freedom of speech won me over. With free speech comes responsibility. This is not a leftist cliche, although it’s often misapplied by leftists. What this really means is that freedom of speech is every citizen’s responsibility. That’s you and me. If your neighbor says something hateful or abhorrent, speak up about it!

Americans feel more secure speaking up. This is what makes them more tolerant than Canadians. Ingrained in their psychology is the belief that every individual is equal under the law, and rights and freedoms are every individual’s responsibility. Thus they might gripe about minorities, but in the end Americans accept them.

Look no further than our parallel elections. With the exception of Elizabeth May, leader of Canada’s fifth party, every major party leader north of the border is a middle-aged, middle-class, mild-mannered white male. And when gender is excluded, Ms. May fits the stereotype perfectly. Yet even then she is not projected to win any seats.

In contrast, the U.S. election has produced two strong female candidates - one of whom is married to a snowmobile-racing champion from a First Nations community. One of the presidential candidates is an African-American born of a Muslim father. The other a tough-talking former Navy pilot and senior citizen who often bucks his own part

We talk about tolerance in Canada. More often than not, as our electoral choices show, Canadian tolerance is just an excuse to avoid discussing our differences. Thus Canadians stick to what’s comfortable, what’s least likely to offend the most people. We don’t want our differences to cause division and disrupt the social peace.

Americans, on the other hand, relish their differences. Tolerance is created by confronting their differences, then discovering that they share many of the same values and concerns. Americans understand, rightly, that tolerance is a product of free speech. The First Amendment allows them to get past their differences, correct misconceptions, and move on to more pressing issues.

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A TIE DON'T GO TO THE MESSIAH:

The Mac is back (ROGER SIMON | 9/26/08, Politico)

[M]cCain not only found a central theme but hit on it repeatedly. Obama is inexperienced, naive, and just doesn’t understand things, McCain said.

Sure, McCain is a pretty old guy for a presidential candidate, but he showed the old guy did not mind mixing it up. He stood behind a lectern for 90 minutes without a break — you try that when you are 72 — and he not only gave as good as he got, he seemed to relish it more.

At least twice after sharp attacks by McCain, Obama seemed to look to moderator Jim Lehrer for help, saying to Lehrer, “Let’s move on.”

McCain Was Good. But Good Enough? (Michael Crowley, 9/26/08, New Republic: The Stump)

For one thing, McCain certainly benefited tonight from low expectations--expectations fueled in part by liberal critics who have caricatured him as a doddering old fool. He outperformed them easily.

McCain also had a clarity of message that Obama lacked. His core message is easy to sum up: Let's cut waste and spending. I'm a tough leader. Obama is naive and unprepared. Obama, by contrast, had no single message that he repeatedly drove home. He came across as sensible, studious, and thoughtful--but at times abstract and passionless. Obama did land some good shots at McCain's judgment over Iraq. But some of his other attacks--including his quips about McCain's "bomb Iran" song, and seemingly not wanting to meet with the president of Spain--seemed halfhearted, almost as though Obama was embarrassed to make them. (To his credit, perhaps.) I was almost reminded of Hillary's dead-on-arrival "change you can Xerox" crack from some primary debate 100 months ago.

And stylistically, McCain was more in control. He was the one setting the tone and introducing nettlesome topics, forcing Obama to respond and defend himself.

Obama's Emotional Deficit (Noam Scheiber, 9/26/08, New Republic: The Stump)

I'd guess the CW will be that McCain won on points, with nothing close to a knockout, and I'd echo that judgment. McCain had Obama on the defensive over earmark requests and his $800 billion in new spending, then later on the surge and those rogue-leader meetings. [...]

My biggest problem with Obama is that he cedes almost all the emotional ground to McCain. For my money, the exchange that defined the debate was McCain sarcastically suggesting Obama would just tell Ahmadinejad "no" when he threatens to annihilate Israel. Obama tried to interrupt McCain several times during this mini-rant, then just kind of let the matter drop when he had a chance to respond. What he needed to do was look straight into the camera and inject a little emotion of his own. Something like, "Israel is one of our most loyal allies in the world. Their security is absolutely sacred to me. And if Mahmoud Ahmadinejad or any other tin-pot dictator thinks he can threaten Israel in my presence or anywhere else, he's in for a rude awakening. I would leave absolutely no doubt in his mind how we treat countries looking for fights with our allies."

Any analysis has to begin from the fact that the media and the Left have built Senator Obama up so much that a guy who's a mediocre debater at best was widely expected by the electorate to dominate. Thus, he's a loser if their performance was roughly equal and a big loser if you think he had a rough night.

MORE:
Obama Remains Firm on Meeting Rogue Leaders Without Preconditions (Susan Davis, 9/26/08, The Page)

“I reserve the right as president of the United States to meet with anyone of my choosing if I feel it would protect the United States,” Obama said, adding that Kissinger, a McCain friend and adviser, recently said the U.S. should negotiate directly with Iran without preconditions, although he said he preferred it be at the State Department level.

McCain said it was “fiction” and that Obama was parsing words

Kissinger: Obama Misstates My View (The Page, 9/26/08)

“Senator McCain is right. I would not recommend the next President of the United States engage in talks with Iran at the Presidential level.”
Obama said during the debate that Kissinger, a McCain adviser, supports presidential talks with the Iranian president.

Senator McCain is right seems to be the big theme of the night.

MORE/MORE:
Score one for John McCain (S.E. CUPP, September 26th 2008, NY Daily News)

Throughout the debate, which focused on both the economy and foreign policy, McCain had facts, figures and names at his fingertips, speaking from decades of experience in the trenches - literally and figuratively - and repeated the phrase, "Senator Obama doesn't seem to understand . . ." He called Obama naive, dangerous and inexperienced, and his attacks, which seemed to frustrate Obama, put him on the defensive for the majority of the night.

Obama's expectations here were low. Foreign policy is McCain's strength and Obama merely had to hold his own to come away from this unscathed. He did - in the first third of the night, devoted to the economy, Obama performed well, invoking the clauses that Democratic voters want to hear. But he seemed at times too cool, even verging on arrogant.

In an early stumble, he couldn't give any concrete examples of how the current economic crisis would affect his budget were he to become President, even when pressed repeatedly by the moderator, Jim Lehrer. McCain proposed spending freezes and defense cuts.

When the debate turned to foreign policy, McCain pressed him on his failure over a long period to visit Afghanistan, though Obama repeatedly stressed that this was where he would focus his foreign policy efforts in the war on terror. And here, Obama awkwardly brought up his running mate Joe Biden, seeming to suggest that what Obama lacked, Biden would make up for.

But McCain's biggest score was when Obama relayed the lesson he's learned from Iraq: that we never should have gone there in the first place. McCain rightly pointed out that the job of the next U.S. president will not be to ruminate over why we went or whether it was a good idea, but to determine how and when to leave. Obama had a difficult time dancing around the success of the surge, which he has long been reluctant to admit.

And on Iran, Obama's past embrace of conditionless diplomatic meetings with Iranian President Mahmoud Ahmadinejad, Venezuelan President Hugo Chavez and other leaders of rogue regimes came back to haunt him. McCain effectively cornered him, asking, "We're going to sit down with Ahmadinejad, and he says he wants to wipe Israel off the map, and we say, No you're not?"

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WHICH IS WHY MAVERICK SHOULD HAVE STAYED AND MOVED THE DEBATE TO TUESDAY:

Frank predicts bailout deal by Sunday (Julie Hirschfeld Davis and David Espo, 9/26/08, ASSOCIATED PRESS)

The Bush administration and Congress anxiously revived negotiations Friday on a $700 billion financial bailout, one day after the largest bank collapse in U.S. history provided a brutal reminder of the risks of failure.

"I'm convinced that by Sunday we will have an agreement that people can understand on this bill," predicted Massachusetts Rep. Barney Frank, a key Democrat in eight days of up-and-down talks designed to stave off an economic crisis.

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KILLING THEM IS EASY, IF ONLY YOU'LL FIGHT THEM...:

Battle with the Taliban: Pakistan could defeat militants in months: Pakistani troops are fighting a mountain battle that their generals claim will break the back of the Taliban insurgency within a matter of months. (Isambard Wilkinson in Tang Khatta , 9/26/08, Daily Telegraph)

The army claims it has killed over 1,000 militants in Bajaur, a place described by commanders as the "centre of gravity of the insurgency".

"The threat from Bajaur radiates in all directions," said Maj Gen Tariq Khan, the commanding officer of the Frontier Corps, a paramilitary force engaged in the bulk of counter-insurgency operations in the tribal areas.

"If we dismantle this here and destroy its leadership then 65 percent of militancy will be controlled. If they lose this, they lose everything."

Khar and its surroundings are deserted. Soldiers have taken over the area's numerous schools and nearly a third of Bajaur's one million people have fled the fighting.

At Tang Khatta militants took cover in fields of half-harvested maize, caves and dried-up ravines a mile away. [...]

Washington has expressed its approval for the Bajaur operation but analysts have asked why Islamabad allowed parts of the area to be governed by a Taliban parallel government.

Before the operation militants had launched over 60 attacks on paramilitary troops, cut off all main roads, set up training camps and assassinated a dozen tribal leaders.

The battle for Bajaur began only after 2,000-3,000 militants overran a paramilitary post at Loi Sam, which the military has not yet retaken.

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ANYTHING YOU CAN DO WE CAN DO WORSE:

Economists not keen on GOP bailout (VICTORIA MCGRANE, 9/26/08, Politico)

The plan centers on insuring mortgage-backed assets at prices and premiums set by the government, creating a virtual backstop for the debt. This would not require an initial outlay of taxpayers’ funds in the neighborhood of Paulson's $700 billion. Democratic leaders say Paulson doesn’t believe a mortgage insurance proposal will work, though he hasn’t said so publicly.

“I frankly don’t understand how this is supposed to work,” said Douglas Elmendorf, an economist at the nonpartisan Brookings Institution and an outspoken critic of the Paulson rescue plan.

People generally buy insurance for events that are unlikely to happen; a homeowner pays out a couple hundred dollars for fire insurance, and if their house burns down they get hundreds of thousands of dollars from their insurance company, provided by premiums collected from other policyholders, he explained.

“But with mortgage-backed securities, the bad thing has already happened,” Elmendorf said. “They’ve lost their value.”

The emerging GOP alternative does not resolve the problem of how the government prices the toxic assets at the heart of the crisis, experts said. In the Paulson plan, the government has to figure out how much to pay for the assets. But in the GOP alternative, the government would have to determine the premium prices to insure against the risk that the mortgages behind the assets don’t get paid off.

Many observers were buoyed by the modifications unveiled Thursday by Democrats and Senate Republicans that would allow the federal government to take out warrants — the option to buy shares — on some of the companies’ participating in the rescue. That way, if Treasury paid way too much for a firm’s assets, taxpayers would share in the windfall to the company.

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MAYBE HE IS JEREMIAH DENTON:

John McCain falters as bailout swamps US election (Tom Baldwin and Suzy Jagger, 9/26/08, Times of London)

John McCain today hastily departed from Washington leaving behind the planned $700 billion Wall Street bailout teetering on a knife-edge.

With both sides playing for the highest stakes, the Republican nominee appeared to blink first as he raced down to Mississippi to face Barack Obama in a presidential TV debate.

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GETTING OUT OF A JAM BY GETTING OUT OF POWER:

McCain's way out? (Domenico Montanaro, 9/26/08, NBC: First Read)

So what if McCain shows up and tonight and says, "I'm sorry I couldn't sign on to this Washington-Wall Street plan that I worried was putting an even bigger burden on taxpayers than this mess already has. Now, Sen. Obama, I understand that you are confident in these folks in Washington and New York who have everyone convinced this is the only plan. And I respect that, but I am hearing from people all over the country who don't get this plan and don't understand how it will work. And why should they trust a group of folks in Washington and New York who broke this system to fix it?"

McCain is not winning this political battle right now as the media elite do believe the White House, Wall Street and Congressional Democrats on this. It's a pretty strong united front for us not to believe this. That said, McCain and House Republicans are channeling their inner populist, something the Republican Party hasn't done in quite some time. Don't write off this McCain strategy just yet if Obama appears too cozy with Washington and New York elites, and it's McCain who is the one looking like the outsider.

And there might be an immigration analogy here. Has McCain learned a lesson from that first battle that almost sunk his campaign and decided to listen to the base on this? This whole fight looks a bit like immigration with media, political elites on one side and “conservative populists” on the other.

On the other hand, Republicans were hurt in 2006 after running solely against immigration reform -- not helping them with Hispanics and female voters -- and it cemented the idea that Republicans were callous toward immigrants.

The funny thing is the Right is saying the GOP should stop the plan, just like they did immigration reform! Apparently because it isn't enough to lose a midterm, you need to make yourselves the minority party. On the bright side, Republicans could lose so many seats that amnesty will sail through. 100 million new Americans are worth a couple years out of power and letting the 12 million immigrants who the GOP refused citizenship become legal will goose the housing market.

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FUNNY HOW THE MARKET-PURIST RIGHT IS ANTI-MARKET WHEN IT SUITS THEM, EH?:

The Mark-to-Market Melee: Is an obscure accounting rule to blame for the credit market meltdown? (Daniel Gross, April 1, 2008, Slate)

In recent weeks, some have been arguing that just as Abraham Lincoln suspended habeas corpus in a time of war, perhaps regulators should suspend mark-to-market in this time of crisis. Paul Craig Roberts, a veteran supply-sider and former Reagan administration official, wrote on March 11 that the mark-to-market rule "is imploding the U.S. financial system by requiring financial institutions to value subprime mortgages at their current market values." His solution: Suspend the rule, let financial institutions "keep the troubled instruments at book value, or 85-90 percent of book value, until a market forms that can sort out values, and allow financial institutions to write down the subprime mortgages and other troubled instruments over time." In other words, let's assign an imaginary happy value to these assets until the seas grow calmer. Steve Forbes echoed the sentiment in his column in Forbes, calling for a 12-month suspension of mark-to-market in "exotic financial instruments (primarily packages of subprime mortgages)." The reason: "It's preposterous to try to guess what these new instruments are worth in a time of panic." This line of thinking quickly wormed its way into McCain's big economic speech. He put it more anodyne terms: "First, it is time to convene a meeting of the nation's accounting professionals to discuss the current mark-to-market accounting systems. We are witnessing an unprecedented situation as banks and investors try to determine the appropriate value of the assets they are holding, and there is widespread concern that this approach is exacerbating the credit crunch." For its part, the Securities and Exchange Commission issued an opinion letter, in which it told firms, "[I]t is appropriate for you to consider actual market prices, or observable inputs, even when the market is less liquid than historical market volumes, unless those prices are the result of a forced liquidation or distress sale."

The language is technical, but the arguments here are simple and really quite silly—especially coming from folks who value market indicators over all else. These folks are saying that when markets are volatile and irrationally pessimistic, it's just not fair to force people to act as if the market prices are real.

But you'll notice that they never made that argument back when markets were irrationally optimistic, as they were from 2003-2006. No hedge fund manager ever told a bank that it should lend him less money because the value of the collateral he was putting up was clearly a product of unwarranted optimism or that he shouldn't collect management fees based on the assets under management because their value was clearly inflated. Nobody ever complains about the market's ruthlessness and inefficiency when it's making them money.

MORE:
A Conservative Case for the Paulson Plan (Robert T. Miller, September 26, 2008, First Things)

All intelligent conservatives, therefore, recognize that there are known classes of cases where markets do not work. Free-rider problems such as that with national defense present one example, and collective action problems are another. A third—the one relevant in this case—is a market panic. From time to time, market participants become so irrational that markets cease to function because no one is willing to buy or sell. That is exactly what has happened in the mortgage-backed securities market right now. Financial institutions all over the world are holding various kinds of mortgage-backed securities, and everyone knows that these securities are worth less than people paid for them. How much less, however, no one knows for sure. That will ultimately depend on what percent of homeowners default on their mortgages and how much the lenders recover when they foreclose on the loans.

Now, no one believes that the default rate will be all that high (the rate is around 6% now, and even in the Great Depression it never got much above 40%), and everyone knows that when a lender forecloses on a home, it will receive at least most of its money back. Under normal circumstances, market participants would gather the available data, make some informed estimates about these matters, and calculate a price for the relevant securities. Pricing securities is always a very uncertain business, and under normal circumstances this doesn’t bother anyone. Right now, however, people are so panicked about mortgage-backed securities that they will either not buy such securities at all or will pay only absurdly low prices for them. Merrill Lynch, for example, sold some securities like these last July for as little as 22 cents on the dollar. We thus have the most extreme form of market failure imaginable: the total collapse of a market, not because the items traded in the market are valueless (in fact, everyone agrees that they are very valuable), but because people are too panicked to value them.

Such behavior is highly irrational, and savvy people everywhere know it’s highly irrational. Hence we saw that coolest of rational minds, Warren Buffett, buying into Goldman Sachs earlier this week. Once a market-collapsing panic starts, however, it is very difficult to stop. It’s like trying to convince the crowd in the theater that there really is no fire after all. Sometimes, a particularly respected market participant can stop the panic. J.P. Morgan did that in the financial crisis of 1907. Nowadays, however, no private party has the clout to do it.

Fortunately, the government does. What the Paulson plan amounts to is this: The government will buy up all the securities that the market is currently too irrational to value, and it will hold them for a while—long enough for the market to calm down and return to sanity. Then the government will resell the securities into the market. Since the government will have bought the securities at panic prices and sold them at more rational prices, the government may well turn a tidy profit on the deal. Exactly this has happened before. Back in 1998, the Federal Reserve organized the major investment banks to bail-out distressed hedge fund Long Term Capital Management, and when all its positions were finally unwound, the banks had made a profit. There is thus good reason to believe that the treasury will make money, not lose money, on the Paulson plan.

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AND REALLY...:

Boehner: I Won’t Allow White House to “Gang Up” on Me (The Page, September 26th, 2008)

The House Republican leader suggests in an afternoon presser that he’s unfairly taking the fall for stalling progress of the bailout bill.

“I don’t know what games were being played at the White House yesterday. Gang up on Boehner. If they thought they were rolling me they were kidding themselves.”

...isn't John Boehner more important than the economy, the President and the presidential election? Why is it you can never find a bus when you need to throw someone under one?

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GAME ON:

McCain to attend the debate (Mark Murray, 9/26/08, NBC First Read)

The McCain campaign just announced that the Arizona senator will attend tonight's presidential debate. "The McCain campaign is resuming all activities and the Senator will travel to the debate this afternoon," the statement reads. "Following the debate, he will return to Washington to ensure that all voices and interests are represented in the final agreement, especially those of taxpayers and homeowners."

Maverick has one huge advantage heading into tonight,

In the CNN/Opinion Research Corp. survey, 59 percent of likely voters said they expect Obama to do a better job in the debates, while 34 percent picked McCain.

Tie goes to the expected loser.

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GOING "THE OTHER WAY":

Bill Clinton’s Return Poses a Test of Party Loyalty (PAUL VITELLO, 9/26/08, NY Times)

As comfortable as Mr. Clinton is in saying, “I like John McCain,” and “I like Sarah Palin,” no one seems to have heard him say the same for Mr. Obama. Instead, when speaking of Mr. Obama, the Democratic nominee, Mr. Clinton has assumed a professorial stance that sometimes drifts toward emotional aloofness and disregard.

“Is it me, or he didn’t want to say the name ‘Barack Obama’?” the comedian Chris Rock asked with barely contained anger when he appeared Monday night on “Late Show With David Letterman” immediately after Mr. Letterman’s 15-minute interview with Mr. Clinton.

Answering Mr. Letterman’s questions, Mr. Clinton gave a dispassionate discourse on the cultural and political dynamics of the race, which, he said, would ultimately play in Mr. Obama’s favor. Mr. Clinton mentioned his wife, Senator Hillary Rodham Clinton, who had lost the Democratic primary to Mr. Obama, far more often than he mentioned the party’s standard-bearer. And in predicting victory for Mr. Obama, Mr. Clinton suggested that it would happen because people were hurting economically. He did not say that Mr. Obama’s victory would be because voters especially wanted Mr. Obama to be president.

“People will wind up liking both of them,” Mr. Clinton said. “People will go in that polling booth and say: ‘You know, I really admire Senator McCain. He gave about all you could give to this country without getting killed for it. But I’ve got to have a change, and I’m going the other way.’ ”

By “the other way,” he apparently meant Mr. Obama.

Man, he's good.

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DO REPUBLICANS WANT THE PRESIDENCY OR IDEOLOGICAL PURITY?

Against all the odds this is an extremely winnable election for the GOP, Uncertain Times (Andrew Kohut, 9/25/08, Pew Research Center)

In every recent election the public has accurately picked the winner by this time in the cycle. But not this year. Two weeks ago when we asked voters to put aside their own preferences and make a prediction, 39% said McCain would win and exactly the same number chose Barack Obama. Four years ago in September, the race was close, but by a 60%-to-22% margin voters thought President Bush would be re-elected.

In 2000 at this time, voters believed Al Gore would win. But they changed their minds by late October and picked George W. Bush. In 1992 and 1996, boxcar majorities (61% and 75%, respectively) thought Clinton would win.

So do House Republicans pass the plan and prove the validity of the McCain narrative or kill it and spend the next few years in the wilderness?

MORE:
Gut Check (Steven Pearlstein, September 26, 2008, Washington Post)

Now let me tell you something very simple and very important: You can try to prevent a financial meltdown or you can teach Wall Street a lesson, but you can't do both at the same time. [...]

[[W]e need to act quickly. The financial situation is now downright scary. Don't look at the stock market -- that's not where the problem is. The problem is in the credit markets, which are quickly freezing. I won't bore you with technical indicators like Libor and Treasury swap spreads, but if you talk to people who work these markets every day, as I have, they report that the money markets are in worse shape than they were last August, or even during the currency crises of 1998.

Banks and big corporations and even money-market funds are hoarding cash, refusing to lend it out for a day or a week or a month. Even the best companies are having trouble floating bonds at reasonable rates. And the shadow banking system -- the market in asset-backed securities that ultimately supplies the capital for most home loans, car loans, college loans -- is almost completely shut down.

People are so nervous, and there is so much distrust, that all it would take is one more hit to trigger the modern-day equivalent of a nationwide bank run. Financial institutions would fail, part of your savings would be wiped out, jobs would be lost and a lot of economic activity would grind to a halt. Such a debacle would cost us a lot more than $700 billion.

Third, the latest proposal hammered out between the Treasury and Democratic leaders won't cost anywhere near $700 billion unless we get a 1930s-like Depression, in which case we'll have much bigger problems to worry about. Depending on how the program is managed, and how things turn out with the economy and the housing market, the best guess is that the government could wind up either losing or making a couple of hundred billion dollars.

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NEWT TURNED US INTO DEMOCRATS:

Wall Street to GOP: Drop Dead (James Pethokoukis, 9/26/08, US News)

Economic conservatives may be horrified at the thought of a trillion-dollar bailout of Wall Street, but the GOPers on Wall Street seem horrified that they are being left to wither on the vine by Washington. Take a look at this email I just got last night from a money manager:

I am a lifelong ( 51 years old) "rock-ribbed" conservative.... What an eye opener this week has been! I now realize what a blowhard Newt truly is by advocating the GOP bail on the Paulson Plan. As a professional money manager I can tell you I am shocked, dismayed and depressed that the Speaker would excoriate the GOP to abandon this plan which is URGENT and necessary to avoid a financial catastrophe that once commenced may be irreversible. The level of ignorance of financial and economic reality displayed by the Speaker , Rep. Boehner, Sen. Shelby , et al, has been frightening and sad. I thought the GOP had a better grasp of such matters than the Dems. Apparently not.

House GOP rebranding and bailout clash (Frank James, 9/26/08, The Swamp)

Ever since their defeat in 2006, House Republicans have talked about how they lost their brand and needed to regain it if they had any hope to retake the House majority. And they've taken numerous steps since 2006 to try and rebuild the trust of fiscal conservatives, calling constantly for reduced spending and extending President Bush's tax cuts.

Now they have the Bush Administration, as it's heading out the door, trying to thrust a $700 billion bailout package on them and they're not going to have it. It doesn't fit the narrative they believe will lead them back to the House majority.

The administration's problem is that House Republicans have little incentive to give in to the president who not only is soon to be the ex-president but is unpopular to boot.

House Majority Leader John Boehner and the rest of the Republican conference plan on being around for a while and they don't want to support a bailout package if it's going to severely damage their ability to re-establish their small-government, lower taxes and less-spending brand.

If the GOP is willing to tank the economy to establish their new "brand," isn't it fair to ask whether that brand isn't Hooverism? An ideology that places country second is an obvious political loser.

MORE
Bush: “We are going to get a package” (MIKE ALLEN, 9/26/08, Politico)

President Bush declared Friday morning that both parties will “rise to the occasion” and pass “a substantial rescue plan,” despite a collapse of negotiations that resulted in some of the ugliest Capitol Hill finger-pointing in years.

“The legislative process is sometimes not very pretty, but we are going to get a package passed,” Bush stepping out of the Oval Office into the Rose Garden for a brief statement that had been scheduled for five minutes after the New York Stock Exchange opened.

McCain's Choice (William Kristol, 9/26/08, Weekly Standard)

If it fails, McCain will have, I think, three alternative paths:

1. Support Bush/Paulson/the Democrats. The rationale would be that the emergency is grave, the markets require action, and this is the only legislation that can pass. This is where most observers expect McCain to end up, it may well be where he has to end up, and it may be the right place to end up--IF the emergency is so grave and IF this is the only alternative that can pass. McCain could still stipulate he’ll improve the plan when he becomes president, that Bush and the Democrats messed this up, etc., etc. This outcome becomes likely if the markets start to meltdown today. It’s not particularly attractive substantively or politically, but....

2. Support House Republicans. Very dicey, obviously.

McCain Huddles in Boehner’s Office (The Page, September 26th, 2008

MSNBC reports the Arizona Senator meets with the House Republican leader along with Rep. Cantor and other GOP congressmen on the bailout legislation ahead of morning congressional talks.

It would be too late to save his candidacy at that point--the House GOP having refuted its premise--but Maverick would have to come out and blast them and portray his own vote for the plan as rising above the moronic partisanship of his own party.

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THE GENIUS OF NCLB:

Most elementary schools in California will fail to meet proficiency requirements by 2014 (PhysOrg, 9/25/08)

In California, student mastery in ELA and mathematics is measured with the California Standards Tests (CST). To determine how the challenge of mastery is being met, a research team led by UC Riverside's Richard Cardullo examined several years of CST data.

The researchers report in the Sept. 26 issue of Science that mathematical models they used in their analysis predict that nearly all elementary schools in California will fail to meet the Adequate Yearly Progress (AYP) requirements for proficiency by 2014, the year when all students in the nation need to be proficient in ELA and mathematics, per the "No Child Left Behind Act of 2001" (NCLB).

At which point, under the terms of the law, every child will qualify for a public school voucher.

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WHAT CHOICE DOES HE HAVE?

Pakistan says top militants among 1,000 dead (AFP, 9/26/08)

Pakistan has said that troops have killed 1,000 Islamist militants in a huge offensive, a day after President Asif Ali Zardari lashed out at the US over a clash on the Afghan border.

Five top Al-Qaeda and Taliban commanders were among the dead in a month-long operation in Bajaur district, currently the most troubled of Pakistan's unstable tribal areas close to the porous frontier, a top official said on Friday.

The clashes force Zardari to fight them.

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WELL, IT'S NEVER BORING WHEN MAVERICK IS AROUND:

Selfless or Reckless? McCain Gambles On Voters' Verdict (Dan Balz, 9/25/08, Washington Post)

John McCain is a gambler by nature, and the bet he placed Wednesday may be among the biggest of his political life.

The Republican presidential nominee is hoping that his abrupt decision to suspend campaigning, seek a delay of Friday's debate with Democrat Barack Obama, and return to Washington to help prod negotiations over a financial rescue package will be seen as the kind of country-first, bipartisan leadership he believes Americans want.

What he risks, if things don't go as he hopes, is a judgment by voters that his move was a reckless act by an impetuous and struggling politician that hardened partisan lines in Washington at just the wrong moment and complicated efforts to deal with the biggest financial crisis in more than half a century.

Markets in turmoil as US financial bail-out stalls (Julia Kollewe, 9/26/08, guardian.co.uk)

Stockmarkets were plunged into turmoil today after talks on a $700bn (£380bn) rescue for the US financial sector descended into chaos and the country's largest savings and loans company Washington Mutual collapsed in America's biggest banking failure.

The FTSE 100 index in London dropped 90.2 points in early trading, a fall of 1.74%, and traded down 60.2 points at 5136.8 points mid-morning, a decline of 1.16%. All Asian stockmarkets slid, with Japan's Nikkei closing down nearly 1%. Oil prices were also hit by the uncertainty over the bail-out package, with US crude falling $3 to $105 a barrel. The yen jumped by more than 1% against the dollar as investors rushed to buy the safe haven currency. The dollar fell to ¥105.26.

Spread-betting firm GFT Global Markets predicted the Dow Jones industrial average would fall 147 points and the Nasdaq 29.5 points when the US markets open.

On debate day, uncertainty looms (ALEXANDER BURNS, 9/26/08, Politico)

Since Wednesday, when McCain unexpectedly announced he would suspend his campaign to focus on the economic crisis, it has been unclear whether McCain would join Obama at the debate. And it remained that way after negotiations over a $700 billion Wall Street bailout plan broke down Thursday and late-night talks ended inconclusively.

McCain senior adviser Steve Schmidt said Thursday night that the Arizona senator was focused on passing a compromise bailout bill and would be on the phone, cajoling colleagues and trying to get closer to a deal.

“He’s working very, very hard to try to get majority votes,” Schmidt said.

Wall Street bailout plan proves elusive: After White House talks collapse, further negotiations falter amid partisan wrangling. Sunday is seen as a crucial deadline. (Richard Simon, Maura Reynolds and Nicole Gaouette, 9/26/08, Los Angeles Times)

There were signs that, behind the scenes, skeptical Democrats and Republicans were beginning to move toward a compromise version of Treasury Secretary Henry M. Paulson's original plan, but it remained to be seen whether there would be enough votes to pass legislation.

"I'm seeing both Republicans and Democrats start to move toward voting for it," Rep. John Campbell (R-Irvine) said. "I can't tell you that there's a majority at this point, but there's movement."

The working proposal contained most of the features that critics of the administration's original plan had been demanding: limits on compensation for executives of companies that take part in the bailout, a provision for taxpayers to share in any profits from the sale of distressed assets, and payout of the $700 billion in three stages instead of one. The final $350-billion tranche would require a congressional vote.

Bailout Negotiations in Disarray (GREG HITT, DAMIAN PALETTA and DEBORAH SOLOMON, 9/26/08, WSJ)

Negotiators broke off talks Thursday night with no agreement and with plans to reconvene in the morning, without House Republicans. It was the Republicans' surprise championing of a competing plan late Thursday that derailed a carefully crafted compromise previously taking shape.

Folks have already started comparing the House GOP's performance to the government shutdown. It may not be precise but it is instructive. In that case the shutdown itself mattered less than holding out until Bill Clinton folded before they re-opened it. Instead, Republicans blinked and so failed to get what they wanted in a deal and got all the blame for the impasse. They had all the leverage but used it poorly.

Here, all that matters (because of the narrative of the McCain and Obama candidacies) is that Maverick be seen to have helped broker a deal. The shape of the deal isn't significant. House Republicans have no leverage because passage of a deal that they voted against would be so harmful to their own presidential candidate as to inflict grave losses in November.

The main similarity would thus end up being that the GOP leadership was inept in both showdowns.

Ironically though, the GOP's best hope of being saved comes from the Democrats and the possibility that they are so reactionary and anti-business that they'll squander the gift they've been handed. After all, consider how easyt it would be for them to salt away the election this weekend:

Friday Morning: Barack Obama press conference in which he says: "Look, I don't agree with George Bush on a lot of things but I agree with him--and Henry Paulson, Ben Bernanke, Warren Buffet, Paul Volcker, and Robert Rubin--on the importance of this deal to the economy. I, therefore, urge all my colleagues t set aside partisan differences and pass the Paulson Plan.

Friday evening: House passes plan--ideally without many GOP votes--every Democrat announcing that despite his own reservations he's following the example of his party leader.

Saturday: Senate passes plan -- with enough Republicans to avoid a filibuster -- forcing John McCain to either follow the Unicorn Rider or side with House Republicans who are so partisan they wouldn't even vote with W.

That's ballgame, folks. The narrative of both candidacies is that: "I'm the post-partisan agent of change who can get things done in Washington." John Boehner is trying his best to prove that it is Barack Obama's narrative that is true.

MORE:
Talks Implode During a Day of Chaos; Fate of Bailout Plan Remains Unresolved (DAVID M. HERSZENHORN, CARL HULSE and SHERYL GAY STOLBERG, 9/26/08, NY Times)

When Congressional leaders and Senators John McCain and Barack Obama, the two major party presidential candidates, trooped to the White House on Thursday afternoon, most signs pointed toward a bipartisan agreement on a grand compromise that could be accepted by all sides and signed into law by the weekend. It was intended to pump billions of dollars into the financial system, restoring liquidity and keeping credit flowing to businesses and consumers.

“We’re in a serious economic crisis,” Mr. Bush told reporters as the meeting began shortly before 4 p.m. in the Cabinet Room, adding, “My hope is we can reach an agreement very shortly.”

But once the doors closed, the smooth-talking House Republican leader, John A. Boehner of Ohio, surprised many in the room by declaring that his caucus could not support the plan to allow the government to buy distressed mortgage assets from ailing financial companies.

Mr. Boehner pressed an alternative that involved a smaller role for the government, and Mr. McCain, whose support of the deal is critical if fellow Republicans are to sign on, declined to take a stand.

Which is why congressmen don't become president--he's acting like a legislator instead of a leader.
Political Wisdom: A Wild Day Spawns Questions About McCain: Here’s a summary of the smartest new political analysis on the Web: (Gerald F. Seib and Sara Murray, 9/26/08, WSJ: Washington Wire)
Is McCain's Gamble Paying Off? (Toby Harnden, 9/26/08, Real Clear Politics)

Having been firmly in control of the campaign narrative for more than a week and surging in the polls, Senator Obama has been knocked off his stride. Senator McCain stumbled in addressing the Wall Street crisis from the outset with his "fundamentals are strong" statement and then lurched first one way and then the other. Then, suddenly, he seized the initiative.

Obama was put on the defensive immediately after McCain's shock announcement when President George W. Bush - in a move that appeared to bee coordinated with the Arizona senator - called to invite him to Thursday's White House summit. The Democratic nominee could hardly refuse and it looked like he was following McCain's lead.

Polls show that Obama's biggest vulnerability is on whether he can be commander-in-chief and whether he's ready to lead. McCain's Achilles heel is his links to Bush. The acrimonious White House summit boosted McCain on both fronts.

Bush's lack of political capital - he's as bankrupt as Lehman Brothers - meant that he lost control of the meeting and of his own rescue package. Inside the room, McCain largely kept his own counsel but he ended up in the driving seat.

Strangely, rather than McCain being the one supporting Bush, it was Obama. Having based his campaign on running against Washington, it was the Illinois senator who found himself defending the package fashioned and championed by the Washington insiders at either end of Pennsylvania Avenue.

McCain, Obama square off on whether to square off (Scott Helman, September 26, 2008, Boston Globe)

With no done deal on the $700 billion Wall Street bailout, John McCain and Barack Obama last night intensified their extraordinary staredown over whether to hold their first presidential debate tonight.

McCain, who is insisting that a bailout agreement be in place first, said only that he was "very hopeful" the debate would go ahead. Obama said that voters deserved to hear the candidates, that he planned to be there, and that "I hope he will be there as well."

Both candidates returned to Washington yesterday for a private meeting with President Bush and congressional leaders on the bailout, but Obama's camp disputed whether McCain had truly suspended his campaign as he had promised.

Shelby Plays Role of Contrarian: Alabama Senator Calls Plan 'Flawed From the Beginning' (Christopher Lee, 9/26/08, Washington Post)

Everything seemed to be headed toward a deal -- and then Sen. Richard C. Shelby emerged from the White House with a bit of bad news.

"We hadn't got an agreement," said Shelby (Ala.), the ranking Republican on the Senate banking committee. "There's still a lot of different opinions. Mine is: It's flawed from the beginning."

Shelby has made no secret of his distaste for the plan all week. His strong opposition was a primary reason that Sen. Robert F. Bennett (Utah), a close friend and political ally of Senate Minority Leader Mitch McConnell (Ky.), was leading talks on the package for Senate Republicans.

But it is also what made Shelby's inclusion in White House talks, which were designed to reach agreement on a $700 billion recovery plan, something of a surprise. Inviting a lawmaker completely opposed to a plan to a negotiation usually is not a recipe for reaching a deal.

-Talks Falter on Bailout Deal : White House Summit Fails to Yield Accord as House GOP Floats New Plan (Paul Kane and Lori Montgomery, 9/26/08, Washington Post)

A renegade bloc of Republicans moved to reshape a massive bailout of the U.S. financial system yesterday, surprising and angering Bush administration and congressional leaders who hours earlier announced agreement on the "fundamentals" of a deal.

At a meeting at the White House that included President Bush, top lawmakers and both presidential candidates, House Minority Leader John A. Boehner (R-Ohio) floated a new plan for addressing the crisis that has hobbled global markets.

Democrats accused Boehner of acting on behalf of GOP presidential candidate Sen. John McCain (Ariz.) in trying to disrupt a developing consensus. The new proposal also displeased White House officials, including Treasury Secretary Henry M. Paulson Jr., who chased after Democrats leaving the meeting and -- half-jokingly -- dropped to one knee and pleaded with them not to "blow up" the $700 billion deal, according to people present at the meeting.

The Photo McCain Wanted (E. J. Dionne Jr., September 26, 2008, Washington Post)

The simple truth is that Washington is petrified about this crisis and will pass something. There are dark fears floating through the city that foreign investors, particularly the Chinese, might begin to pull their billions out of our system.

Scarier than the bad mortgages are those unregulated credit default swaps that financier George Soros has been warning about. There are $45 trillion of those esoteric instruments sloshing around the global financial system. They were invented as a hedge against debt defaults, but even the financial smart guys don't fully understand their impact or how to price their real value.

Fear is a terrible motivator for careful legislating, but it's a heck of a way to bring about a lot of bipartisanship. McCain jumped into this game in the fourth quarter. Many of the players on the field, caked in mud and exhausted but determined as they approach the goal line, wonder why this new would-be quarterback has suddenly appeared in their midst.

McCain could yet play a constructive role by rounding up votes from restive Republicans. Oddly, the biggest obstacle to a bill may not be Democrats but Republicans who refuse to go along with their own president. And -- yes, there is an election coming -- Democrats will be wary of going forward unless a substantial number of Republicans join them.

Bailout deal wobbles amid partisan divide (James Oliphant, 9/26/08, The Swamp)

Deal or no deal?

A day that began on an optimistic note devolved into an evening of partisan bickering and finger-pointing, as Democratic supporters of a $700 billion Bush administration plan to bail out the financial sector accused Republicans of trying to scuttle the deal at the last moment.

And they also suggested that the man who had come into town to save the deal, John McCain, had, in fact, wrecked it by encouraging the fracas, after a White House summit billed as a chance for both parties to work together ended with no agreement and perhaps more division on the issue than ever.

Lawmakers Weigh Political Risks of Stance on Bailout Plan
By SARAH LUECK and MICHAEL PHILLIPS, 9/26/08, WSJ)

With leaders in Congress working on a controversial financial-rescue plan, rank-and-file lawmakers face a crucial election-year question: If they back the proposal, will they pay at the polls?

Populist outrage has been spilling out across the country from people of all political stripes. Lawmakers say they have received hundreds of calls and emails in recent days, almost uniformly against the idea of giving the government the power to buy billions of dollars in distressed assets to keep the financial system afloat.

Things Fall Apart (Daniel Politi, Sept. 26, 2008, Slate)

A dizzying day of high-stakes Washington drama has left everyone confused and unsure about whether the $700 billion bailout to save the nation's financial system has any chance of making it through Congress. Whereas yesterday's papers were filled with optimism that a compromise would be reached, today no one knows whether the breakdown in negotiations means the plan is doomed or if it just represents a brief stumbling block.

McCain Ploy Ultimately Changes Little (Carl Leubsdorf, 9/26/08, Real Clear Politics)

Critics immediately accused the Arizona senator of political grandstanding in the face of faltering poll numbers, noting that congressional leaders and Bush administration officials already were resolving differences over the massive package.

Supporters argued that Mr. McCain's move meant he would be able to claim a large share of responsibility if a package ultimately passed because his support was needed to get enough House Republican votes to create the bipartisan support Democratic leaders demanded.

In fact, both critics and supporters may be right.

Mr. McCain's move was clearly political, since he was not directly involved in hammering out the complex legislation. But his role as the party's de facto leader may give him leverage over GOP congressmen who would otherwise not fall in line.

Indeed, the Republican standard-bearer seems to have acted less to rescue the talks than to ease the potential damage to himself and his party for opposing, or even killing, a bipartisan bailout proposal.

Circumstances leading to his announcement Wednesday strongly suggest that.

Paulson and Obama (American Spectator, September 26, 2008)

When Sen. Barack Obama was given the floor to speak during White House negotiations, according to White House aides, he did so raising concerns about a House Republican alternative to the Paulson/Bernanke $700 billion bailout. But those concerns weren't necessarily his, as he was not aware of the GOP plan before reviewing notes provided him by Paulson loyalists in Treasury prior to entering the meeting. [...]

"Paulson and his team have not acted in good faith for this President or the administration for which they serve," says a House Republican leader who was not present at the White House meeting, but who instead is part of the team hammering out the House GOP alternative. "We keep hearing about how Secretary Paulson is working with Democrats on this or that, yet he never seems to consider working with the party that essentially hired him.

He works for the American people, not the House GOP caucus.

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SOMETIMES THE STUPID PARTY IS JUST sTUPID:

Wild White House meeting sets back deal (DAVID ROGERS, 9/25/08, Politico)

A high-profile White House meeting on Treasury’s $700 billion Wall Street rescue plan ended on a sour, contentious note Thursday after animated exchanges among lawmakers laced with presidential politics just weeks before the November elections.

“I can’t invent votes,” House Republican Leader John Boehner warned the administration about the lack of support in his conference for the massive government intervention. [...]

When Bush yielded early to Pelosi and Senate Majority Leader Harry Reid (D- Nev.) to speak, they yielded to Obama to speak for the assembled Democrats. And it was Obama who raised the subject of the conservative alternative and pressed Paulson on what he thought of the idea.

House Republicans felt trapped—squeezed by Treasury, House Democrats and a bipartisan coalition in the Senate. And while McCain spoke surprisingly little after asking for the meeting, he conceded that it appeared there not the votes for the core Paulson plan without major changes. [...]

Having called for the meeting, he will have to show if can deliver the votes of House Republicans, many of whom have been leery of him in the past. Mindful of this, the senator’s campaign issued a brief statement an hour after the breakup of the meeting.

“We're optimistic that Sen. McCain will bring House Republicans on board without driving other parties away, resulting in a successful deal for the American taxpayer.”

The reality is that if House Republicans would rather blow up the plan than win the Fall they may be able to, though it would officially be Nancy Pelosi administering the coup de grace. And if they won't pass a plan that the Republican president and nominee are asking them to then why should people vote for the Party? Mr. Boehner needs to fold gracefully or accept the blame for electing a President Obama with huge margins in Congress.

MORE:
Here's the opportunity House Republicans seem hellbent on botching:
Zogby Poll: McCain Recovers as Contest Takes Dramatic Turns; McCain 46% - Obama 44% (Zogby, 9/25/08)

Republican John McCain's poll numbers improved slightly as he suspended his campaign Wednesday to head back to Washington to focus on the looming national financial crisis, moving from more than three points behind Barack Obama last weekend to two points ahead in a Zogby Interactive survey just out of the field this morning.

All because the think they have leverage:
House GOP: We have leverage on bailout (Jackie Kucinich, 09/25/08, The Hill)

House Republicans say they have significant leverage on the revamped bailout package, claiming that Democrats will scramble for votes unless they make changes to it.

Republicans in the lower chamber are balking at the bailout package, saying that Democrats will be solely responsible for the ramifications of what they see as a flawed compromise.

Which they do, in the same way Cleavon Little had it in Blazing Saddles.

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HERE'S AN EXCELLENT OPPORTUNITY...:

Senate Democrats Block Rollback of D.C. Gun Laws (Congressional Quarterly, 9/25/08)

Senate Democrats objected Thursday to an attempt by Kay Bailey Hutchinson, R-Texas, to take up House-passed legislation that would roll back District of Columbia gun laws.

Majority Whip Richard J. Durbin , D-Ill., objected, calling the bill an attempt “take away the authority” of the city to write its own gun laws.

Hutchinson said it is “the prerogative of Congress” to make laws affecting the District.

Gun-rights advocates say the District government is not abiding by a Supreme Court decision in District of Columbia v. Heller that voided the city’s handgun ban in June

...for Senator Obama to show he isn't anti-gun. He can lead his party on the issue.

MORE:
Obama seeks to take down NRA ad Ben Smith, 9/25/08, Politico)

The Obama campaign has written radio stations in Pennsylvania and Ohio, pressing them to refuse to air an ad from the National Rifle Association.

"This advertisement knowingly misleads your viewing audience about Senator Obama's position on the Second Amendment," says the letter from Obama general counsel Bob Bauer. "For the sake of both FCC licensing requirements and the public interest, your station should refuse to continue to air this advertisement."

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LEAVING DEMOCRATS AS THE LAST MAOISTS?:

China Cuts Corporate Tax To Shore Up the Economy (ANDREW BATSON, 9/25/08, WSJ: Washington Wire)

China's government is moving closer to extending nationwide a tax change that would lower businesses' bills, as policy makers look to the country's flush finances for ways to offset an economic slowdown and the global financial turmoil.

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JOHN McCAIN NEVER MADE ANY MONEY, SAVING THE WORLD FROM SOLOMON BROTHERS...:

Bailout Deal Could End Debate Standoff (AMY CHOZICK and ELIZABETH HOLMES. 9/25/08, WSJ: Washington Wire)

The debate over the first presidential debate appeared to be coming to an end Thursday as lawmakers neared an agreement on a federal financial bailout package.

Sen. John McCain, addressing attendees Thursday at the Clinton Global Initiative in New York, said he couldn't stay on the campaign trail while the U.S. was suffering an economic crisis.

Sen. John McCain said he won't wait for a final vote on the $700 billion plan to bail out U.S. financial markets. Rather, if the White House and members of Congress reach an agreement or make a deal to help the ailing financial sector, the Republican candidate will travel to Oxford, Miss., for the debate scheduled for Friday night. On Thursday afternoon, top House and Senate Democratic and Republican lawmakers reached a tentative agreement, with some predicting the measure would pass both chambers of Congress. Precise language was still being worked out.

"American families expect that bold leadership will prevail and that a bipartisan financial rescue package will be secured -- then the campaigns will resume," McCain campaign spokesman Tucker Bounds said.

"My work here is done"

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USUALLY ONLY THE FOLKS IN THE STANDS ARE BEING TORTURED:

Brazilian player brutally murdered (Anthony Sormani, 9/25/08, SI.com, Goal.com)

Brazil is in mourning after former Vasco de Gama player Thiago da Silva was brutally tortured and murdered, allegedly by hired assassins on the orders of his ex-girlfriend.

Da Silva, 25, who had been playing for second-division team Estacio de Sa Soccer Club, died in a Rio de Janeiro hospital Wednesday night, six days after being mortally shot in an attack by three men on a soccer field.

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AND YOU THOUGHT THEY HATED KANSAS BEFORE?:

Pollster Zogby says presidential election could end in landslide (Jill Terreri, September 25, 2008, Democrat and Chronicle)

The presidential election might be a tight race now, but one of the country’s top pollsters thinks the race will end in an electoral landslide.

John Zogby, president of Zogby International, told a group of businesspeople today that it’s up to Democratic Sen. Barack Obama to convince voters to go with him. If he’s not successful, the country will likely vote for “a comfortable old shoe”, that being Republican Sen. John McCain.

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CHECKING IN ON THE F.O.O.'s:

WBBM-TV: Feds may indict Blagojevich (UPI, 9/25/08)

U.S. federal agents say they have enough evidence to indict Illinois Gov. Rod Blagojevich for fraud and conspiracy, WBBM-TV, Chicago, reported Thursday. [...]

Prosecutors also mentioned Blagojevich in an indictment as the intended beneficiary of at least one extortion attempt by Blagojevich fundraiser and businessmen Antoin "Tony" Rezko.

Rezko was convicted June 4 on 16 of the 24 counts against him. He awaits sentencing in October on mail and wire fraud, aiding and abetting bribery and money laundering convictions. He still faces two more trials.

The Chicago Sun-Times has reported Rezko could cut his prison time significantly by cooperating in investigations of other public figures, including Blagojevich.

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HAVE YOU THANKED MAVERICK TODAY?:

US markets bounce on news of bailout deal (Susan Thompson , 9/25/08, Times of London)

Stock market investors were immediately buoyed by the news that Republicans and Democrats had reached an agreement to rescue Wall Street, sending the US markets soaring.

Rising markets sink all Hope.

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IF THERE'S GLASS IN YOUR SANDBOX YOU CALL THE UNICORN RIDER...:

GOP, Democratic Negotiators Reach Agreement in Principle (William Branigin, Dan Eggen and Paul Kane, 9/25/08, Washington Post)

House and Senate negotiators emerged from a closed-door meeting today and said they have reached basic agreement on a massive financial rescue plan that they hope to pass soon.

...if the global economy needs to be saved you call Maverick.

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IF YOU DIDN'T KNOW BETTER...:

Hmong Heroes May Have Seen CIA Nod for Coup: Allegedly Planned Overthrow of Government of Laos (JOSH GERSTEIN, September 25, 2008, NY Sun)

Evidence is mounting that at least some of the 11 men indicted in California last year for allegedly planning the overthrow of the government of Laos may have believed their plan had the tacit approval or even the outright support of the CIA.

Documents filed in federal court in Sacramento last week show that in 2004 a retired CIA employee held detailed discussions about a military intervention in Laos with one of the key defendants in the case, General Vang Pao, an aging Hmong leader who fought an American-backed secret war against the Laotian government in the 1960s and 1970s.

According to an FBI report, the former CIA operative, Michael Spak, told prosecutors and defense attorneys in the case last summer that he talked with the general for three to four hours about military tactics and provided him with written cost estimates and "talking points" for a military campaign.

Mr. Spak, who faces no charges, said the general wanted to work with the Lao government to ease the suffering of the Hmong people.

...you'd swear the Hmong used to beat us up on the playground because we seem to go out of our way to screw them over.

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EXACVTLY THE EVENTUALITY ARIEL SHARON WAS TRYING TO AVOIDD:

The One-State Solution: A two-state solution was a compromise. But talks have gone nowhere, so many Palestinians are giving up. (Sari Nusseibeh, 9/20/08, NEWSWEEK)

Israelis have long described their West Bank settlements—long fingers of territory that stretch along the north-south and east-west axes, serviced by highways, electrical networks, etc.—as organic extensions of the Israeli community. But Israeli construction has (again according to Peace Now) increased by 550 percent in the past year. This building, combined with that of the nearly complete separation wall or barrier, and reports that Israel wishes to maintain security control along the eastern edge of the Jordan Valley, sends another message: that Israel plans to hold onto the land for good. Combine this with the still unaddressed refugee problem, and it's no wonder many former two-staters are giving up hope.

It is important to remember that the Palestinian national movement only began to endorse the idea of a two-state solution 20 or 30 years ago, as a practical compromise. Realizing that Israel wasn't going anywhere, moderates decided that their best hope for a state was one alongside Israel, not one that sought to replace it. Yet the 15 years of negotiations that have followed have produced little, and thus it's no surprise that faith in this supposedly pragmatic option is waning. The lack of progress, as well as the unmistakably expansionist reality on the ground and the growth in popularity of Hamas, have left little room for anyone seeking a positive future for Palestine. Except, that is, to rejuvenate the old idea of one binational, secular and democratic state where Jewish and Arab citizens live side by side in equality.

Lord, pity a people who don't understand demographics.

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LOCKED & LOADED:

Sarah Palin Surprises World's Women Leaders (Tammy Haddad, 9/25/08, Newsweek)

The political press may continue to grumble about their lack of access to GOP vice-presidential nominee Sarah Palin. But the 100 powerful women gathered Wednesday to support the White Ribbon Alliance, an international group of organizations to prevent the death of women in childbirth, got a rare audience with the rising political star.

Wendi Deng Murdoch, wife of press baron Rupert Murdoch; Sarah Brown, wife of British Prime Minister Gordon Brown; and Queen Rania Al Abdullah of Jordan hosted the gathering to lead a discussion on how to reach the goal of the United Nations Millennium Project: to reduce the worldwide maternal mortality rate 75 percent by the year 2015. [...]

When CNN’s Christiane Amanpour asked Palin for an interview, she declined-but suggested that the vice-presidential candidates should step in for Friday’s scheduled presidential debate.

Careful, Joe Biden has already blown one aneurysm--don't scare him like that.

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MALIKI CAN ONLY DELAY MOOKIE:

Iraq Reschedules Elections. Again. (Larry Kaplow, 9/24/08, Newsweek: Checkpoint Baghdad)

As he was installed in his new job as top commander in Iraq last week, Gen. Ray Odierno called the provincial elections "critical" for bringing stability and emphasized the expectation they would take place this year. The holding of provincial elections is one of the benchmarks Congress required the White House to use in measuring progress in Iraq.

But to the major Iraqi parties in power, the prospect of elections probably looks more like a threat. They're loath to admit it but members of mainstream Shiite parties worry they will lose governorships to loyalists of radical cleric Muqtada Sadr. The Sunni minority leaders in the government fear they will lose seats in Sunni areas to upstart tribal factions who take credit for fighting off al Qaeda and barely participated in the vote the last time around.

In July, NEWSWEEK talked to Baha al-Araji, one of those disaffected Sadr followers in the parliament, and he accused the leading parties of seeking to keep pushing the date into next year. Then, he said, they will argue that it just makes sense to postpone the local vote and hold it along with national elections for parliament at the end of 2009. It seemed a little conspiratorial at the time but only elections by the new deadline will prove him wrong to suspicious Iraqis.

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YOUR BRAIN ISN'T YOU:

What Happens When We Die? M.J. Stephey, 9/19/08, TIME)

A fellow at New York City's Weill Cornell Medical Center, Dr. Sam Parnia is one of the world's leading experts on the scientific study of death. Last week Parnia and his colleagues at the Human Consciousness Project announced their first major undertaking: a 3-year exploration of the biology behind "out-of-body" experiences. The study, known as AWARE (AWAreness during REsuscitation), involves the collaboration of 25 major medical centers through Europe, Canada and the U.S. and will examine some 1,500 survivors of cardiac arrest. TIME spoke with Parnia about the project's origins, its skeptics and the difference between the mind and the brain.

What sort of methods will this project use to try and verify people's claims of "near-death" experience?

When your heart stops beating, there is no blood getting to your brain. And so what happens is that within about 10 sec., brain activity ceases —as you would imagine. Yet paradoxically, 10% or 20% of people who are then brought back to life from that period, which may be a few minutes or over an hour, will report having consciousness. So the key thing here is, Are these real, or is it some sort of illusion? So the only way to tell is to have pictures only visible from the ceiling and nowhere else, because they claim they can see everything from the ceiling. So if we then get a series of 200 or 300 people who all were clinically dead, and yet they're able to come back and tell us what we were doing and were able see those pictures, that confirms consciousness really was continuing even though the brain wasn't functioning.

What was your first interview like with someone who had reported an out-of-body experience?

Eye-opening and very humbling. Because what you see is that, first of all, they are completely genuine people who are not looking for any kind of fame or attention. In many cases they haven't even told anybody else about it because they're afraid of what people will think of them. I have about 500 or so cases of people that I've interviewed since I first started out more than 10 years ago. It's the consistency of the experiences, the reality of what they were describing. I managed to speak to doctors and nurses who had been present who said these patients had told them exactly what had happened, and they couldn't explain it. I actually documented a few of those in my book What Happens When We Die because I wanted people to get both angles —not just the patients' side but also the doctors' side — and see how it feels for the doctors to have a patient come back and tell them what was going on. There was a cardiologist that I spoke with who said he hasn't told anyone else about it because he has no explanation for how this patient could have been able to describe in detail what he had said and done. He was so freaked out by it that he just decided not to think about it anymore.

There's a whole mess of stuff materialists are better off just not thinking about.

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GOTTA LOVE THAT THESE DAYS...:

The Spies Who Love Obama: Why some of Bush's intel professionals are now working for a Democrat—and how they'd reform the CIA. Part Two in a series on the candidates' national security policies. (Laura Rozen, September 25, 2008, Mother Jones)

As has become painfully clear since 9/11, intelligence is only as good as the worldview of the person receiving it. The team of former intelligence professionals who have come together to advise Barack Obama describe a candidate who they believe is open-minded and intellectually inclined to absorb information... [...]

"Old man Bush was a great guy," says one veteran intelligence officer now supporting Obama, who requested anonymity. "He was truly interested and sensitive to intelligence. But this Bush administration has done terrible damage to the intelligence business. They have operated a perpetual campaign, treated intelligence as a political tool, and never fully appreciated why it must be non-partisan and objective and can't be tampered with."

...it's a selling point for the Left that the Unicorn Rider will do whatever the CIA tells him to. Of course, its propensity for always overestimating threats means that he'd do nothing, which is what the Realists prefer.

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LIKE MS SILVERMAN SAYS:

Poll: Backing for Obama lags earlier Dems (Jewish Telegraph, 09/25/2008)

Obama leads 57 percent to 30 percent among those polled in the American Jewish Committee's 2008 Annual Survey of American Jewish Opinion, with 13 percent undecided, but he significantly trails the Jewish vote for recent Democratic presidential candidates.

By contrast, John Kerry received 76 percent of the Jewish vote four years ago against George W. Bush, and in the three prior presidential elections, Democrats won 78 to 80 percent of Jewish votes.

And many of the 57% are just being PC. You thought the exit polling in FL diverged from the vote in '00? Wait'll you see '08.

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AND THEY ONLY HAVE HIM UP 2% AMONG MEN?:

Poll: Gregoire 50-48 (Seattle PI, 9/25/08)

A new SurveyUSA poll shows Gov. Chris Gregoire leading GOP opponent Dino Rossi 50 percent to 48 percent.

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THANKS, BUBBA:

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WANT TO HAND ME THE LUFA, GEORGE:

Deal said to be near on big financial bailout plan (Julie Hirschfeld Davis, 9/25/08, Associated Press)

President Bush is bringing presidential candidates Barack Obama and John McCain into negotiations on a $700 billion rescue of Wall Street as Democrats and Republicans near agreement on a bailout plan with more protections for taxpayers and new help for distressed homeowners.

Senior lawmakers and Bush administration officials have cleared away key obstacles to a deal on the unprecedented rescue, agreeing to include widely supported limits on pay packages for executives whose companies benefit.

By asking for Maverick's help W makes him look presidential and the prospect of him skipping the debate to work out the deal while the Unicorn Rider wanders about is enough to force Democrats to pass the package quickly. It's a mutual backscratch extravaganza.

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MO IN MI, NO MO JR. IN CO:

WOLVERINE STATE POLL: TIED (TIME: The Page, September 25th, 2008)

NBC News Michigan numbers:

Obama 46, McCain 46

Poll has Schaffer closing on Udall (The Denver Post, 09/25/2008)

The Rasmussen Reports poll gives Udall a slim two-point lead over Schaffer, 46 percent to 44 percent. Rasmussen gave Udall a six-point lead in its survey a month ago, and the survey's authors said the latest numbers suggest the race is tightening. The telephone survey of 700 likely voters was conducted Tuesday and has a margin of error of plus or minus 4 percentage points.

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SEE, YOU KNEW THEY'D FIGURE IT OUT EVENTUALLY:

Barney Frank: White House "Photo Op" Designed to Help McCain (Jake Tapper, September 25, 2008, Political Punch)

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HE'S CIRCUMSUPERSIZED! (profanity alert):

WARNING: Do not be sipping your coffee while watching this, because we aren't buying you a new keyboard.

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MSSRs. BUFFETT, VOLCKER AND RUBIN SHOULD BE THERE TODAY TOO:

Buffett backs Treasury plan: Billionaire says market meltdown is 'an economic Pearl Harbor' (ERIK HOLM, 9/24/08, Bloomberg News)

Billionaire Warren Buffett, calling turmoil in the markets an "economic Pearl Harbor," said his $5 billion investment in Goldman Sachs Group is an endorsement of the Treasury's $700 billion bank rescue plan.

"I am betting on the Congress doing the right thing for the American public and passing this bill," Buffett said on cable channel CNBC Wednesday. "I certainly have a vote of confidence in Goldman and vote of confidence in Congress."

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WHENEVER THEY DO HAVE THE FOREIGN POLICY DEBATE...:

The Exception That Proves The Rule: How a state oil company succeeds—by not acting like one. (Robert Bryce, September 25, 2008, The American)

[A]t a time when most national oil companies—and most OPEC members—are seeing their output stagnate or decline, Petrobras, Brazil’s national oil company, is dramatically increasing its output.

And without that new Brazilian production, today’s oil prices would likely be higher. Between 1997 and 2007, Petrobras’s oil production doubled to about 2 million barrels per day. By 2015, the company expects its production to double again. At that level, Petrobras would be the undisputed energy superpower in the Western Hemisphere, with output almost twice that of national oil companies PDVSA of Venezuela or Mexico’s Pemex. And given its surging output, Brazil is reportedly interested in joining OPEC.

So how did Petrobras evolve into such a successful company while its fellow national oil companies have stalled? There are a number of reasons for its remarkable success, and most of them have to do with Petrobras’s embrace of capitalism and transparency. Now the world’s tenth-largest producer of liquid hydrocarbons, Petrobras has become an elite global energy player by doing what most other national oil companies refuse to do, including selling shares of the company to the public. And while many other big oil exporters, particularly within OPEC, either refuse to disclose their production data or publish fictitious numbers, Petrobras issues frequent press releases that discuss the latest developments within the company, including production trends, financial conditions, and new discoveries. And there have been plenty of new discoveries.

Last November, the company announced the discovery of the offshore Tupi field, a deposit that may hold 8 billion barrels of oil equivalent—one of the largest oil finds in decades. Since then, it has announced numerous smaller, but still significant, fields containing huge quantities of oil and gas. The Tupi discovery alone could make Brazil the 12th largest holder of oil reserves. (It currently ranks 17th.)

Those discoveries are remarkable when compared with the dismal results being reported by PDVSA and Pemex. Art Smith, a Houston-based energy investor and founder of Triple Double Advisors, an energy-focused investment fund, says that “Pemex and PDVSA don’t lack for available resources; they lack the intelligent allocation of capital and technical skill.”

...you'll be able to tell how out of touch the Beltway is with America's future by how little time they spend on Brazil, India, Indonesia, etc.

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WHAT'S THE POINT OF LARGE INFRASTRUCTURE PROGRAMS...:

Aso has dragons to slay (Catherine Makino, 9/26/08, Asia Times)

An outspoken conservative, Aso does not hide his distaste for communism and supports a firm United States-Japan alliance. But what distinguishes him from other hawks in the LDP is his pragmatic approach and his disarming smile. [...]

Just where Aso stands on foreign policy can be gauged from a suggestion he made two years ago that it was time Japan began a debate on whether or not to acquire nuclear weapons.

But the new prime minister's most daunting challenge will be to revive the flagging economy and address the effects of the global financial turmoil. Some attribute the worsening situation in the agro-centric rural areas to reforms under Koizumi, especially the draconian cutting of large-scale public works projects which had created job opportunities.

"The crux of the problem lies in the fact that you now have a declining input into the economy, as you have a declining population, and the growth in productivity has not caught up,'' Taniguchi said.

...if there's no populace to utilize the structure?

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WHETHER YOU'RE AN OBAMANAUT OR A McCAINIAC....

'Change' election turns out conventional (JOHN F. HARRIS & JIM VANDEHEI, 9/25/08, Politico)

Recall the early promise of 2008: There would be two candidates who spent the past several years expressing disdain for the stale partisanship of Washington and the stupid pet tricks that characterize presidential campaigns. There was an electorate supposedly hungering not for a change of leaders but a change in the fundamental ways in which politicians compete and debate ideas and solve problems.

For the first time in over 30 years there would be a campaign with no one named Bush or Clinton on the ticket. New personalities would drive new coalitions, as some liberals embraced John McCain’s independent-mindedness and spontaneity and some conservatives responded to Obama's earnest appeals to transcend old ideological and cultural divides.

New personalities and new coalitions, in turn, would create a new map—as the whole nation would be in play rather than a targeted set of battleground states.

Well, forget it: Six weeks before Election Day, a day before the first scheduled debate, the forces of innovation and authenticity are being routed by the forces of conventionality and cliché.

...you'd do well to recall that the last two times we had match-ups with so little difference between two candidates with such modest ideas were Ford v. Carter and Bush v. Dukakis, which rendered one-termers in both cases. In the absence of distinct governing philosophies and/or political agendas both presidents found themselves prey to congresses that felt unfettered by the Executive. Considering that Maverick and the Unicorn Rider are both creatures of the legislature either is likely to be an even more trivial figure than those unillustrious predecessors. Add in the age and health of a President McCain and the big political question may be: Jeb or Sarah in '12?

MORE:
Nominees in Need of Ideas (Michael Gerson, September 24, 2008, Washington Post)

A sitting president normally must accept the boring constraints of real-world choices. Campaigns can inhabit the utopia of their own ambitions.

But it is President Bush and Treasury Secretary Henry Paulson, by proposing the massive government purchase of bad debt, who have assumed the mantle of Franklin D. Roosevelt. It is John McCain and Barack Obama who are playing the role of Roosevelt's more timid, forgotten foils, "Martin, Barton and Fish." Having last week criticized the role of the Federal Reserve in bailouts -- demonstrating a tin ear of elephantine proportions -- McCain now calls for a bipartisan oversight board to review the government's rescue attempt.

Mankind perishes. The world grows dark. McCain calls for a review board.

Obama has been no better, responding with his usual mix of caution and blame. Having delayed the announcement of his own proposal to better gauge the political reception of Paulson's approach, Obama now helpfully adds that it "can't just be a plan for Wall Street, it has to be a plan for Main Street" -- stepping up to the crisis with his own emergency cliche plan.

The weakness of these reactions is disturbing in itself. It also symbolizes a larger reality. The 2008 presidential campaign has become notable for its vacuity and exceptional for lacking the exceptional.

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SURE, WE'D MAKE MONEY OFF THE DEAL...:

What's the True Cost? (Robert J. Samuelson, September 25, 2008, Washington Post)

Love it or hate it, the true cost of Treasury Secretary Hank Paulson's proposed rescue of the financial system is not the sticker price of $700 billion. Conceivably, the government could make money; with glum assumptions, the losses would probably be less than $250 billion. No one knows the correct answer -- not Paulson, not Federal Reserve Chairman Ben Bernanke nor anyone else -- but here's how to think about the problem.

Under Paulson's proposal, the Treasury could buy distressed mortgage-backed securities. Consider a batch of hypothetical securities originally worth $100 million and paying an interest rate of 6 percent. They're no longer worth $100 million because half of the homeowners have stopped making their monthly payments. Suppose, then, that the government buys the mortgages for $50 million. It earns 6 percent on its $50 million, and if it borrowed money at 4 percent to buy the securities, it would make a tidy profit. If the government holds the securities until maturity and all the remaining homeowners repay their mortgages, the government would come out ahead.

...but it's just as bad an idea for the government to own such instruments in the longer term as it would have been for Bill Clinton to buy stocks with the SS Trust Fund. As a simple business proposition, snapping up this discounted debt is a no-brainer for the American tax-payers, but government oughtn't be in business. It would be acquiring too much power.

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THEORY VS REALITY:

The modern Tory hero should be Jefferson: Daniel Hannan and Douglas Carswell unveil their plan for radical reform to decentralise power, make voting count and challenge apparats from Brussels to town halls (Daniel Hannan and Douglas Carswell, 24th September 2008, The Spectator)

In theory, Europeans find American elections vulgar and plutocratic. In practice, they find them utterly gripping. This is partly because the US is wealthy and powerful, but mainly because American campaigns, being more participatory than European ones, are more interesting.

All organisations grow according to the DNA encoded at the time of their conception. The US was founded in a revolt against a distant and autocratic regime. In consequence, its polity developed according to what we might call Jeffersonian principles: the idea that power should be diffused and that government officials, wherever possible, should be elected.

Most European constitutions, by contrast, were drawn up after the second world war. Their authors believed that democracy had led to fascism, and that the ballot box needed to be tempered by a class of sober functionaries who were invulnerable to public opinion.

The difference between the American and European approaches can be inferred from their foundational charters. The US Constitution, including all 27 amendments, is 7,600 words long, and is mainly preoccupied with the rights of the individual. The Lisbon Treaty contains 76,000 words and is chiefly concerned with the powers of the state. The American Constitution begins, ‘We, the people...’; the Treaty of Rome begins, ‘His Majesty the King of the Belgians...’

Americans pride themselves on having got away from titles and deference. Their rugged egalitarianism, they believe, is what makes New World politics more optimistic and less cynical than Old World politics. And they have a point. American political culture produced The West Wing, predicated on the idea that even the politicians you disagree with are patriots. Britain’s produced Yes, Minister and The Thick of It, predicated on the idea that all MPs are petty, jobbing crooks.

But a political culture is not some numinous entity that exists outside a nation’s institutions; rather, it emanates from those institutions. Congressmen would be every bit as stuck up as MEPs if they were protected by party lists. It’s just that party lists are unthinkable in a system where everyone from the sanitation officer to the DA is elected, where power is localised, and where politicians are selected through open primaries.

Imagine how open primaries would change the culture of Westminster.

Want to know what American Imperialism really consists of? It's the global obsession with our elections--made possible by the communications revolution--and the way it makes folks abroad frustrated that they don't have as much say in how they're governed.

MORE:
Wall Street's Blow to US Prestige?: The surprising answer is no. Most business people still view the US as a beacon of free enterprise and praise its swift response to the crisis. (Jack Ewing, 9/25/08, Der Spiegel)

The boulevards of Paris are a pretty reliable place to troll for anti-American sentiment. And sure enough, self-described anarchist Bernard Barbry is happy to weigh in with his opinion of the U.S. financial system. "The banks have brought this on themselves, and they deserve what they get," says Barbry, out for a stroll on a busy street in southwestern Paris. Surprisingly, though, the retired journalist isn't predicting America's downfall. The U.S., he believes, will remain powerful, and the crisis on Wall Street won't affect Washington's influence on world affairs. "I like Americans," he says. [...]

As the world grapples with the fallout from Wall Street's shenanigans, there's no shortage of consternation, and even anger. But so far the international image of the U.S. economic model has shown amazing resilience. Lehman Brothers may be in the morgue and AIG on government-funded life support, but most businesspeople think the U.S. is more about Silicon Valley and Hollywood than the erstwhile dynamos of Wall Street. Even in China -- where broadcaster CCTV-2 has been running two hours of special programming every night about the financial crisis -- the U.S. is still a land to be emulated. "I see two Americas: One is wealth-creating, innovative, with people like Bill Gates, and the other is made up of speculators," says Wang Jianmao, an economics professor at China Europe International Business School in Shanghai. "China should learn more from wealth-creating America."

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THE SCIENTISTS THINK THEY'RE GOD....:

Barack Obama, David Cameron and CERN adverts baffle commuters: Mystery adverts featuring images of Barack Obama, David Cameron and the CERN particle collider have sparked debate among baffled commuters and bloggers. (Matthew Moore, 25 Sep 2008, Daily Telegraph)

The adverts, which all have bold black backgrounds, started appearing at London Underground stations and on trains earlier this week, and were published in several national newspapers this morning.

They contain no text, and there are few clues to what they are promoting.

...and Barrack Obama thinks he's Christ?

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TOOK THEM A FEW HOURS...:

Bush Boosts the Financial Plan — and McCain, Too (John D. McKinnon, 9/24/08, WSJ: Washington Wire)

Giving a political boost to Republican presidential nominee John McCain as well as his own financial rescue plan, President George W. Bush on Wednesday evening called for a summit meeting on the financial crisis on Thursday to include congressional leaders as well as the two major-party presidential candidates.

McCain called for exactly such a meeting on Wednesday afternoon, at the same time he announced he would be suspending his presidential campaign to focus on resolving the financial markets problems. McCain’s moves –- backed up by the White House announcement –- could give him a bit of momentum in voters’ eyes on the question of which candidate is better addressing the financial crisis. That in turn could help him close the advantage that his Democratic rival, Sen. Barack Obama, enjoys with voters on fixing the economy.

...but they're starting to figure it out. It'll be fun to watch over the next 24 hours as the Left and far Right go from claiming that Maverick bailed out of the debate because he was afraid to raging that it was a cynical ploy for political advantage. It's not that the latter is far from the truth, but they'll be furious that they were duped.

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THE ONE BEFORE THE ONE:

The Chosen One (Gary Smith, 12/23/96, Sports Illustrated)

It was ordinary. It was oh so ordinary. It was a salad, a dinner roll, a steak, a half potato, a slice of cake, a clinking fork, a podium joke, a ballroom full of white-linen-tablecloth conversation. Then a thick man with tufts of white hair rose from the head table. His voice trembled and his eyes teared and his throat gulped down sobs between words, and everything ordinary was cast out of the room.

He said, "Please forgive me...but sometimes I get very emotional...when I talk about my son.... My heart...fills with so...much...joy...when I realize...that this young man...is going to be able...to help so many people.... He will transcend this game...and bring to the world...a humanitarianism...which has never been known before. The world will be a better place to live in...by virtue of his existence...and his presence.... I acknowledge only a small part in that...in that I know that I was personally selected by God himself...to nurture this young man...and bring him to the point where he can make his contribution to humanity.... This is my treasure.... Please accept it...and use it wisely.... Thank you."

Blinking tears, the man found himself inside the arms of his son and the applause of the people, all up on their feet.

In the history of American celebrity, no father has ever spoken this way. Too many dads have deserted or died before their offspring reached this realm, but mostly they have fallen mute, the father's vision exceeded by the child's, leaving the child to wander, lost, through the sad and silly wilderness of modern fame.

So let us stand amidst this audience at last month's Fred Haskins Award dinner to honor America's outstanding college golfer of 1996, and take note as Tiger and Earl Woods embrace, for a new manner of celebrity is taking form before our eyes. Regard the 64-year-old African-American father, arm upon the superstar's shoulder, right where the chip is so often found, declaring that this boy will do more good for the world than any man who ever walked it. Gaze at the 20-year-old son, with the blood of four races in his veins, not flinching an inch from the yoke of his father's prophecy but already beginning to scent the complications. The son who stormed from behind to win a record third straight U.S. Amateur last August, turned pro and rang up scores in the 60s in 21 of his first 27 rounds, winning two PGA Tour events as he doubled and tripled the usual crowds and dramatically changed their look and age.

Now turn. Turn and look at us, the audience, standing in anticipation of something different, something pure. Quiet. Just below the applause, or within it, can you hear the grinding? That's the relentless chewing mechanism of fame, girding to grind the purity and the promise to dust. Not the promise of talent, but the bigger promise, the father's promise, the one that stakes everything on the boy's not becoming separated from his own humanity and from all the humanity crowding around him.

It's a fitting moment, while he's up there at the head table with the audience on its feet, to anoint Eldrick (Tiger) Woods—the rare athlete to establish himself immediately as the dominant figure in his sport—as SPORTS ILLUSTRATED'S 1996 Sportsman of the Year. And to pose a question: Who will win? The machine...or the youth who has just entered its maw?

Tiger Woods will win. He'll fulfill his father's vision because of his mind, one that grows more still, more willful, more efficient, the greater the pressure upon him grows.

The machine will win because it has no mind. It flattens even as it lifts, trivializes even as it exalts, spreads a man so wide and thin that he becomes margarine soon enough.

Tiger will win because of God's mind. Can't you see the pattern? Earl Woods asks. Can't you see the signs? "Tiger will do more than any other man in history to change the course of humanity," Earl says.

Sports history, Mr. Woods? Do you mean more than Joe Louis and Jackie Robinson, more than Muhammad Ali and Arthur Ashe? "More than any of them because he's more charismatic, more educated, more prepared for this than anyone."

Anyone, Mr. Woods? Your son will have more impact than Nelson Mandela, more than Gandhi, more than Buddha?

"Yes, because he has a larger forum than any of them. Because he's playing a sport that's international. Because he's qualified through his ethnicity to accomplish miracles. He's the bridge between the East and the West. There is no limit because he has the guidance. I don't know yet exactly what form this will take. But he is the Chosen One. He'll have the power to impact nations. Not people. Nations. The world is just getting a taste of his power."

Ah, the odd notion that ethnicity is signifigance.

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WHY NOT HAVE HER PASSING AS TINA FEY AS SNL STAFFERS REVEAL "SECRET" PARTISAN BIASES?:

Sarah Palin to Make SNL Cameo? (OK, 9/24/08)

Two weekends ago, Tina Fey ignited an internet sensation with her hilarious, spot-on spoof of Republican Vice-Presidential candidate Sarah Palin on the season premiere of Saturday Night Live. And now, according to sources close to the show, it looks like there's a possibility the Alaska Governor could get a chance to get her on-air revenge with a cameo appearance of her own!

Comments

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IT'S WHAT WE DO:

America rises to the occasion as storm heads for Europe: An almighty crash has been averted, very narrowly. There is no guarantee that the revolutionary actions of the US government will prevent a full-fledged global slump, but at least we now have a fighting chance. (Ambrose Evans-Pritchard, 21 Sep 2008, Daily Telegraph)

By taking the colossal wreckage of the credit bubble onto its own books in a $700bn (£382bn) taxpayer sink, Washington has forestalled a run on the world banking system, and may hopefully have saved the viable core of modern capitalism.

Hank Paulson's "Super Sink" is the "game changer" we have all been waiting for in this interminable crisis. It puts a floor under the toxic debt that is bleeding the banking system to death, and ends the downward spiral of CDOs, CLOs, HELOCs, and such instruments of leveraged excess that lie at root of the credit terror.

No doubt the Fed, the Treasury, and Congress have made a string of mistakes but they are now rising to the occasion – the reflexes of a wounded but still formidable superpower. The US has shown time and again that it has the institutions and flair to pull itself out of disaster.

We will find out soon enough whether the rest of the world can respond with such dispatch as the hurricane smashes into them. As of today, the core risk is no longer in the US. It has rotated to the weaker and more brittle polities of Europe, Latin America, and Asia – especially China.

You often hear chatter about how other economies are starting to matter and about other regions, if not regimes, approaching superpower status. The reality dawns....

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KNOWING WHEN TO FOLD 'EM IS A START:

Bush Invites McCain, Obama to White House To Discuss Bailout (JENNIFER LOVEN, 9/24/08, Associated Press)

The White House press secretary, Dana Perino, said Mr. Bush called Mr. Obama on tonight to extend the invitation.

She said the president and Mr. Obama spoke for several minutes and had a good conversation about the country's financial crisis.

Obama Agrees to Meet Bush Thursday in Washington (Mark Halperin, 9/24/08, TIME: The Page)

The meeting in Washington, DC will include Sen. McCain and other congressional leaders.

He couldn't not, could he?

It's not even his fault that he just got played by Maverick and W. It's just the dynamics of the situation.

MORE:
Joint Statement of Sens. Obama and McCain on the Financial Crisis (WSJ: Washington Wire, 9/24/08)

Sen. Barack Obama and Sen. John McCain issued the following joint statement on the financial crisis, about six hours after agreeing to do so:

Joint Statement of Senator Barack Obama and Senator John McCain

“The American people are facing a moment of economic crisis. No matter how this began, we all have a responsibility to work through it and restore confidence in our economy. The jobs, savings, and prosperity of the American people are at stake.

“Now is a time to come together – Democrats and Republicans – in a spirit of cooperation for the sake of the American people. The plan that has been submitted to Congress by the Bush Administration is flawed, but the effort to protect the American economy must not fail.

This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe. Now is our chance to come together to prove that Washington is once again capable of leading this country.”

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SCIENTISTS AREN'T EVEN TRYING TO WHEN THEY COOK THE BOOKS (via Mike Daley):

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ALL DEMOCRATS HAVE TO DO IS WRITE THE BLANK CHECK BY FRIDAY:

McCain Calls for Debate Delay to Focus on Financial Crisis (Michael D. Shear and Robert Barnes, 9/24/08, Washington Post: The Trail)

Democratic rival Barack Obama declined to follow suit, saying he would return only if congressional leaders requested his presence and said there was no reason to suspend the campaign or delay Friday night's presidential debate.

A president, Obama said, "is going to have to deal with more than one thing at a time."

The dramatic events on the campaign trail began after Obama called McCain early this morning to seek a joint statement on on their goals for the bailout measure now being negotiated between Congress and the Bush administration. But before that statement was issued, McCain went before television cameras to say he was putting the campaign on hold and wanted to delay Friday night's presidential debate on foreign policy. Among other things, McCain senior adviser Steve Schmidt said McCain would begin unilaterally pulling down his campaign ads and cease fundraising.

"It has become clear that no consensus has developed to support the Administration's proposal,'' McCain said in a brief statement to reporters. "I do not believe that the plan on the table will pass as it currently stands, and we are running out of time.''

McCain said he is calling on President Bush "to convene a meeting with the leadership from both houses of Congress, including Senator Obama and myself. It is time for both parties to come together to solve this problem."

President Bush said he welcomed the gesture. "We are making progress in negotiations on the financial markets rescue legislation, but we have not finished it yet,'' said press secretary Dana Perino. "Bipartisan support from Sens. McCain and Obama would be helpful in driving to a conclusion.''

Reid Seeks McCain Pledge (Roll Call, September 24, 2008)

Fearing a political backlash against Democrats, Senate Majority Leader Harry Reid (D-Nev.) has told the White House that it must serve up support from Republican presidential nominee Sen. John McCain (Ariz.) if it hopes to ensure bipartisan backing for a massive economic bailout package by week's end.

If W convenes the meeting how do Harry and Barry get out of going?

MORE:
Boehner favors McCain proposal (Politico, 9/24/08, Patrick O'Connor)

“Our economy is facing unprecedented challenges, and we must work together to find a solution," Boehner said. "I strongly support Sen. McCain’s proposal for a bipartisan leadership meeting of both Houses of Congress, including Sen. McCain and Sen. Obama. Given that it is only a few months before a new President takes the oath of office, it is vital that the next president play an active role in crafting this critical plan.”

The reality is that people consider the growth of the economy to be almost exclusively a Republican concern (Democrats exist to redistribute wealth once it's been created), so any plan is going to be associated with Senator McCain. Make him the party spokesman on the deal, put him in the pictures with W and Congressional Democrats and let the Unicorn Rider traipse around the country demonstrating how superfluous he is to governance.

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IT'S NOT IMPORTANT TO DO ANYTHING...:

McCain taking ads down (Jonathan Martin, 9/24/08, Politico)

Aiming to prove how serious he is about addressing the financial crisis, John McCain has instructed his staff to take all his campaign commercials off the air, a spokesman tells Politico.

"As John McCain said, now is the time to put partisanship aside and come together to do the work that the American people expect," said Tucker Bounds.

...but it's vital to be seen to be doing something.

Similarly, with the Paulson Plan none of the details matter as much as passing something.

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NO MATTER HOW MUCH THE RIGHT ROMANTICIZES THEM...:

Our Generals Almost Cost Us Iraq (MACKUBIN THOMAS OWENS, 9/24/08, Wall Street Journal)

In late 2006, President Bush, like President Lincoln in 1862, adopted a new approach to the war. He replaced the uniformed and civilian leaders who were adherents of the failed operational approach with others who shared his commitment to victory rather than "playing for a tie." In Gen. David Petraeus, Mr. Bush found his Ulysses Grant, to execute an operational approach based on sound counterinsurgency doctrine. This new approach has brought the U.S. to the brink of victory.

Although the conventional narrative about the Iraq war is wrong, its persistence has contributed to the most serious crisis in civil-military relations since the Civil War. According to Mr. Woodward's account, the uniformed military not only opposed the surge, insisting that their advice be followed; it then subsequently worked to undermine the president once he decided on another strategy.

In one respect, the actions taken by military opponents of the surge, e.g. "foot-dragging," "slow-rolling" and selective leaking are, unfortunately, all-too-characteristic of U.S. civil-military relations during the last decade and a half. But the picture Mr. Woodward draws is far more troubling. Even after the policy had been laid down, the bulk of the senior U.S. military leadership -- the chairman of the Joint Chiefs of Staff, Adm. Mike Mullen, the rest of the Joint Chiefs, and Gen. Abizaid's successor, Adm. William Fallon, actively worked against the implementation of the president's policy.

If Mr. Woodward's account is true, it means that not since Gen. McClellan attempted to sabotage Lincoln's war policy in 1862 has the leadership of the U.S. military so blatantly attempted to undermine a president in the pursuit of his constitutional authority. It should be obvious that such active opposition to a president's policy poses a threat to the health of the civil-military balance in a republic.

...at the end of the day they're just bureaucrats.

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THE DICE DON'T LIE:

The Fall of the Phillies (Joe Posnanski, 9/24/08)

[T]oday’s topic is possibly the most famous collapse in baseball history, the fall of 1964 Phillies, and also my good friend Bob Dutton. Bob is now the excellent Royals beat writer for the Kansas City Star and the president of the Baseball Writers Association of America … more to today’s point, though, he was a 9-year-old Philadelphia Phillies fan in 1964. He lived that collapse. It shaped him. As I watch the Mets try to fall apart in the final weeks for the second straight year (and also the Brewers) I think of those 9-year-old Mets fans (and also Brewers fans), who will take this with them forever.

We can start our sad tale on Sept. 20, 1964, when the Phillies beat the Dodgers 3-2. JIm Bunning threw a five-hitter that day — both the runs he gave up were unearned and due to a Vic Power error — and the victory gave the Phillies a 6 1/2 game lead with 12 games to play. Bob remembers that the Wilmington Morning News ran a magic number on the front page — not the front of sports but the front page of the entire paper, which impressed him — and he remembers so clearly seeing that the Magic Number was 7. He remembers seeing that, of course, because it would stay at 7 for a very, very long time.

Funny thing is, even at age 9 Bob knew what most clear-thinking Philadelphia fans knew — the Phillies were winning with smoke, mirrors, trap doors, wires, sleight of hand, David Copperfield arrogance, planted audience members and all sorts of other magician tricks.

Bob says: “Yes, Richie Allen was a wonderful rookie talent. Johnny Callison was having a deal-with-the-devil year. Jim Bunning and Chris Short, especially Bunning, were terrific and capable of beating anyone. Gene Mauch was then, as he always would be, at his best in milking the maximum from an underdog club. … Even so, as the summer unfolded, the Phillies hung in there. You kept waiting for the collapse. We all did, really. I mean, we knew the Phillies weren’t as good as the Dodgers or the Giants or the Reds or the Cardinals. But they kept defying the odds.”

I remember this feeling in Kansas City in 2003. You KNEW the Royals weren’t good enough, and yet the summer went along and they stayed in first place, and after a while you just shrugged and decided that maybe they had the blessings of the gods. They didn’t, of course. But the Royals had the good sense to fall out of things early enough to make the year still seem cheerful. By September 20th, even the most cynical of Phillies fans had to move all his chips in with this team. Nobody blows a 6 1/2 game lead with 12 games to go.

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