The latest McCain campaign theme is to paint Obama as a candidate bent on turning America into a "socialistic" nation. As David Corn pointed out on Hardball last week, Governor Palin is a particularly strange messenger to bring this charge against Obama:

The funny thing about using the word socialism in this context, who is the most socialistic governor in the United States? That would be Sarah Palin. Alaska survives fiscally because what it does is it taxes the oil companies and then sends a check out to every citizen of Alaska, because the argument is-and actually, I like this argument-the citizens of the state own the wealth, the natural resources of the state collectively, and they all should get a payment back when those resources are exploited by the big bad oil companies. If that's not some form of socialism, I don't know what is.

Hendrik Hertzberg adds details:

The state that she governs has no income or sales tax. Instead, it imposes huge levies on the oil companies that lease its oil fields. The proceeds finance the government's activities and enable it to issue a four-figure annual check to every man, woman, and child in the state. One of the reasons Palin has been a popular governor is that she added an extra twelve hundred dollars to this year's check, bringing the per-person total to $3,269. A few weeks before she was nominated for Vice-President, she told a visiting journalist--Philip Gourevitch, of this magazine--that "we're set up, unlike other states in the union, where it's collectively Alaskans own the resources. So we share in the wealth when the development of these resources occurs." Perhaps there is some meaningful distinction between spreading the wealth and sharing it ("collectively," no less), but finding it would require the analytic skills of Karl the Marxist.

McCain and Palin like to point out Palin's high approval ratings in Alaska and that she has supposedly cut taxes while balancing the budget. What TV analysts covering the race generally fail to point out is that her stint as governor has coincided (until recently) with a huge spike in oil prices. Consequently, oil royalty payments to the state have soared.

Given the recent crash of oil prices, it will be interesting to see how popular Palin remains if she has to start slashing government services, instead of merely doling out a windfall. At any rate, it would be informative if some enterprising reporter would press either McCain or Palin on his or her philosophical view of Alaska's "socialism."

Posted by Brian at 12:32 AM | Permalink

This weekend has featured some stories similar to this, portraying a rift in the McCain campaign between McCain, Palin, and campaign advisers.

With 10 days until Election Day, long-brewing tensions between GOP vice presidential candidate Gov. Sarah Palin and key aides to Sen. John McCain have become so intense, they are spilling out in public, sources say.

Several McCain advisers have suggested to CNN that they have become increasingly frustrated with what one aide described as Palin "going rogue."

I'm reluctant to read too much into these anonymously-sourced stories because there's no way to verify how accurate these characterizations are. Like other observers, however, I did note subtle signs of tension between McCain and Palin during their interview with Brian Williams last week.

At any rate, in the long run this may be the more interesting dynamic to the story:

"She is a diva. She takes no advice from anyone," said this McCain adviser. "She does not have any relationships of trust with any of us, her family or anyone else.

"Also, she is playing for her own future and sees herself as the next leader of the party. Remember: Divas trust only unto themselves, as they see themselves as the beginning and end of all wisdom."

Next leader of the party? If McCain loses next week, could Palin make a run for the nomination in 2012?

She has gotten plenty of positive support from the GOP base and the rightist media to fan such ambitions. (Whether or not that media support will be there next time around, in the face of Republican competition, is another matter). I encourage her to go for it. I think she would be easier for the Democratic nominee to defeat than other potential candidates would be. One reason:

"Her lack of fundamental understanding of some key issues was dramatic," said another McCain source with direct knowledge of the process to prepare Palin after she was picked. The source said it was probably the "hardest" to get her "up to speed than any candidate in history."

Obviously she will be better prepared to run in 2012 with four years of preparation. But I sense in her a lack of intellectual curiosity (apparent in our current president) that may not be easily masked under the rigor of a year-long campaign.

Posted by Brian at 12:29 AM | Permalink

Five years too late:Former Federal Reserve Chairman Alan Greenspan said a "once-in-a-century credit tsunami" has engulfed financial markets and conceded that his free-market ideology shunning regulation was flawed.

"Yes, I found a flaw," Greenspan said in response to a grilling from the House Committee on Oversight and Government Reform. "That is precisely the reason I was shocked because I'd been going for 40 years or more with very considerable evidence that it was working exceptionally well."

Greenspan said he was "partially" wrong in opposing regulation of derivatives and acknowledged that financial institutions didn't protect shareholders and investments as well as he expected. Forecasting is an inexact science, he said.

Greenspan flashback:

The admission that free markets have their faults was a shift for the former Fed chairman who declared in a May 2005 speech that "private regulation generally has proved far better at constraining excessive risk-taking than has government regulation."

Not this time around. In the interviews I've heard Greenspan discuss the current financial crisis, he has always distanced himself from the problem. This may be the first time I've heard him admit that he was part of the problem.

Greenspan also contributed to the crisis by leaving interest rates too low for too long, promoting growth of the housing bubble. No mention in the article whether or not he has now discovered a flaw on that front.

Congress facilitated the problem by giving too much leeway to "The Maestro." Those days are over:

Waxman and other lawmakers repeatedly interrupted Greenspan as he answered their questions, in contrast to deference to his testimony while he was Fed chairman.

They should have been asking their questions years ago.

Now we are saddled with a huge mess. Professor Nouriel Roubini, who has a better track record in predicting this downturn than most pundits, sees darker clouds ahead:

Hundreds of hedge funds will fail and policy makers may need to shut financial markets for a week or more as the crisis forces investors to dump assets, New York University Professor Nouriel Roubini said.

"We've reached a situation of sheer panic," Roubini, who predicted the financial crisis in 2006, told a conference of hedge-fund managers in London today. "There will be massive dumping of assets" and "hundreds of hedge funds are going to go bust," he said.
. . .
"This is the worst financial crisis in the U.S., Europe and now emerging markets that we've seen in a long time,'' Roubini said. "Things will get much worse before they get better. I fear the worst is ahead of us."

Posted by Brian at 2:41 PM | Permalink

The polls in several battleground states are tight. A small number of votes could swing the outcome one direction or another. An unknown variable that has lingered over this campaign is: Will race be a factor that tips that balance of the election? Is the Bradley Effect in play with pre-election polls? Will undecided voters disproportionately break for the candidate of their own race?

Brian Schaffner looks for answers to these questions by comparing pre-election and exit polls in the 2006 Tennessee Senate race. In that contest Harold Ford, a black, challenged white candidate Bob Corker. Ford trailed Corker by 4% in late campaign polls and ultimately lost by 3%.

Schaffner compared Ford's support with early deciders and late deciders. His conclusion?

[I]f you believe the comparison, then the experience from Tennessee in 2006 would suggest that there is little reason to expect late deciders to break against Obama because of his race. To the contrary, Ford actually did slightly better among late deciders in 2006, something that allowed him to finish a few points closer than pre-election polling had indicated. If a similar dynamic works for Obama, he may win by a larger, not smaller, margin than the current polling suggests.

Are Tennessee voters a representative sample from which we draw this conclusion? I don't have a reason to believe that they are any less racially sensitive than the nation at large. There's no unique Tennessee tradition of supporting black candidates for statewide office. Since Tennessee is marginally part of the old "South" one might argue that a black candidate is at a bigger disadvantage than in many other parts of the country. So it's not a giant leap to conclude that if race only had a negligible affect on late-deciding voters in the Tennessee senate race, it may not be a significant factor for late deciders in the 2008 presidential election.

Since Ford over-performed polls, the Tennessee precedent also discounts the impact of the Bradley Effect. It doesn't support the theory that voters told pollster they were voting for Ford, then voted for Corker.

It will be a positive turn in America if the election plays out this way--if Obama is not penalized because he is a black candidate. It's been my working assumption that Obama will under-perform late polls by about 2%, due to racial bias, inaccurate polling methodology, low young-voter turnout, or whatever. I hope I'm wrong.

Posted by Brian at 12:08 PM | Permalink

Andrew Lahde ran the small hedge fund Lahde Capital, which made its name last year when it made a whopping 866% return, thanks to its subprime trades. Lahde unexpectedly quit his one-year-old fund, distributing a letter to his investors. The Big Picture has the letter, which is an interesting read. Among the highlights:

Recently, on the front page of Section C of the Wall Street Journal, a hedge fund manager who was also closing up shop (a $300 million fund), was quoted as saying, "What I have learned about the hedge fund business is that I hate it." I could not agree more with that statement. I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.
. . .
On the issue of the U.S. Government, I would like to make a modest proposal. First, I point out the obvious flaws, whereby legislation was repeatedly brought forth to Congress over the past eight years, which would have reigned in the predatory lending practices of now mostly defunct institutions. These institutions regularly filled the coffers of both parties in return for voting down all of this legislation designed to protect the common citizen. This is an outrage, yet no one seems to know or care about it. Since Thomas Jefferson and Adam Smith passed, I would argue that there has been a dearth of worthy philosophers in this country, at least ones focused on improving government. Capitalism worked for two hundred years, but times change, and systems become corrupt.

That's a pretty sweeping indictment of the people Lahde believes got us into this financial mess.

Posted by Brian at 12:47 AM | Permalink

Atrios:

It's long been somewhat frustrating that while we all know that liberals are supposed hate America, it's actually Republicans who hate Americans. Lots of them. Anyone not of their tribe gets chucked out of the country.

Indeed. I've had it with politicians and pundits calling people, with whom they disagree, "anti-American." Or talking about "pro-America" areas of the country. Or saying particular parts of states are not "real."

It's the tired rightist tactic of dividing the electorate and portraying people in the other camp as being inferior. I wish big media would call this crap out in a meaningful and devastating way.

Posted by Brian at 1:51 AM | Permalink

Last month I credited Senator Harry Reid with making a candidly honest comment regarding the financial sector meltdown:

"No one knows what to do. We are in new territory here. This is a different game. We're not here playing soccer, basketball or football, this is a new game and we're going to have to figure out how to do it."

Since then it's become apparent that no one--not Congress, not the White House, not the Department of the Treasury, or the Federal Reserve--has a handle on the problem.

The most recent evidence of this is the Fed's announcement that it will inject capital into banks. This, as the Daily Show notes, comes just a couple weeks after Secretary Paulson dismissed that idea.

So after all of that Capitol Hill brouhaha regarding the huge bailout bill, we've basically been told after just a few days, "Never mind, that idea was off-track anyway. We've got a new plan."

Another way policymakers have gingerly discussed this concept is to talk of giving the Fed "a wide array of tools at its disposal." In other words, if we give enough things to try, perhaps it will eventually discover the correct wrench.

What's emerged is a picture of governments and central banks ad libbing because they don't have a handle on the problem. This weeks' market exuberance notwithstanding, I still don't think they do. Credit market indicators are still at distressed levels. And in the bigger picture, the economy is getting worse, not better. So I think the stock markets are ultimately headed down--likely breaking through last week's lows.

Posted by Brian at 10:03 AM | Permalink

Buried in a CNBC article entitled "Radical Measures May Be In The Wings" is a line which fairly well summarizes where world central banks stand today:

There's also a sense that the concept of moral hazard may have become something of a luxury item in the current meltdown.

In other words, so much for all the free markets rhetoric we've heard for years, the Fed is now in panic mode and will pull out all stops necessary in dealing with the financial crisis.

Earlier today there was a telling quote from the Italian prime minister:

Italy's Prime Minister said on Friday there is talk of suspending markets for a temporary period while the global financial crisis is sorted out, but there is nothing concrete in this idea yet.

Asked what European Union leaders might discuss if they meet in Paris this Sunday, Silvio Berlusconi told a news conference: "There is talk of suspending markets for the time needed to rewrite (international finance) rules."

Berlusconi subsequently reversed his comment and the White House has since denied this rumor, but I'm not buying it. I believe they do have contingency plans to shut down financial markets if things spiral further out of cotrol. Frankly, it would be irresponsible for them not to do such planning.

Posted by Brian at 2:38 PM | Permalink | Comments (0) | TrackBacks (0)

At this stage in an election campaign it's getting difficult for me to relate to "undecided" voters. Why can't they, or don't they, make up their minds? What are they waiting for?

As far as I can tell, there are two primary reasons. They are either:

• Extremely wishy washy and want to "open-minded" rather than make a commitment, or they


• Just don't care about politics in general, and don't want to invest much time or effort into making a decision

I was amused by a CNN segment I saw last night on undecided women voters. A reporter showed up as they had a debate-watching party.

"What are you looking to see, to help you decide?" the reporter asked.

A couple of women said they were looking for the candidates to offer specific proposals to help them with their problems, rather than general talking points.

After the debate several of the undecideds expressed disappointment because the candidates did not get "specific" enough.

I'm not sure why these women seemed surprised by this. The candidates talk in simplistic terms, among other reasons, because they are trying to appeal to voters who can't make up their minds. If they were to throw a boatload of statistics at a marginally-interested voter, the viewer would simply turn away in boredom.

Note to the undecided women: if you really want to know more details on what the candidates are proposing, you simply have to visit their websites. It's really not that difficult. Otherwise, stop blaming the candidates because you can't make up your mind.

Posted by Brian at 9:55 AM | Permalink | Comments (0) | TrackBacks (0)

As virtually everyone--even the holdouts on rightist radio--now recognizes, this election is about the economy. It's no coincidence that Senator McCain's poll numbers have been sinking as the stock market has been tanking.

Last night's debate was one of McCain's few remaining opportunities to change the dynamics of the race. But to do so, to use a baseball analogy, he had hit at least a double, if not more. I'm not even sure he even connected for a single. Here were McCain's three major economic talking points in coping with the recession:

• Earmarks
• Freezing government spending
• Some kind of mortgage bail-out plan

The first two of these are wild strikes, and the third is probably a foul off.

Earmarks: I assume that many, if not most, voters don't like wasteful pork barrel spending. However, it's not clear to me that this issue sways many votes, even during good times. Given how both parties indulge in earmarks, I suspect that many voters simply don't believe a presidential candidate who claims he or she will end the practice. And even if they are inclined to believe to believe it, how many actually care?

During bad economic times, as we are today, voters are even less concerned. People are scared about their personal finances. They are worried about their jobs, their health care coverage, their home's value, their retirement savings. During this time of duress, is a crusade against earmarks going to resonate? No.

Freezing government spending: A second tenant of McCain's economic "plan" is to freeze government spending. This point misses with voters for the same reason that earmarks fails--Americans are more worried about their own economic fortunes than they are about deficit spending. They want government to do more, not less.

Moreover, as an economic matter, it simply doesn't make sense to curtail government spending during a severe downturn. There's no driver for jobs in the private sector, apart from health care. Government spending is the last refuge we have to combat unemployment. It would be foolish to cut it now.

Mortgage bail-out plan: This is the only economic swing McCain launched that may have connected. He unveiled this idea early in the debate. However, he failed to follow up and elaborate on the proposal; instead, he reverted to his worn, ineffectual lines on earmarks and government spending. So, I can't comment on the merits of this idea, though my hunch is that it's not going to gain political traction.

Given conservative opposition to increased government involvement in the housing market, and given the mortgage provisions already included in recent bailouts this plan looks like a non-starter to revive the McCain campaign.

Drastic times call for drastic measures. Once again Senator McCain failed to demonstrate that he can cope with the severity of our economic crisis.

Posted by Brian at 10:21 AM | Permalink | Comments (0) | TrackBacks (0)

On NBC's Meet The Press yesterday Chuck Todd made a good point that the McCain campaign seems to be running on a series of tactics rather than following a comprehensive strategy. Almost every day, it seems, they throw new accusations out there, hoping to find something that sticks. The campaign talking points are driven by changing news headlines rather than a developing narrative.

A month from the election McCain is reportedly switching tactics again and now going after Senator Obama's character:

Sen. John McCain and his Republican allies are readying a newly aggressive assault on Sen. Barack Obama's character, believing that to win in November they must shift the conversation back to questions about the Democrat's judgment, honesty and personal associations, several top Republicans said.
. . .
"We're going to get a little tougher," a senior Republican operative said, indicating that a fresh batch of television ads is coming. "We've got to question this guy's associations. Very soon. There's no question that we have to change the subject here," said the operative, who was not authorized to discuss strategy and spoke on the condition of anonymity.

Change the subject from what, you may ask? The economy:

Mr. McCain's advisers said their hope was that the issue of the economy would recede somewhat from the public consciousness, now that Congress has passed a bailout plan, and open the way to try to turn the contest back into a referendum on Mr. Obama's credentials. They argued that given everything that had happened, Mr. McCain remained in easy distance of Mr. Obama, evidence of what they said were underlying problems with his appeal.

In a typical election year, McCain's fall back to cultural/character issues might have resonated. But this is not a typical year. The economy is literally imploding before our eyes. We are already approaching economic malaise not experienced in America since the 1991 recession, and it's getting worse.

Many voters are now receiving negative quarterly equity account statements, or pink slips. Good luck trying to sway their vote with William Ayers. For those voters, this Obama ad is right on target:

Posted by Brian at 9:44 AM | Permalink | Comments (0) | TrackBacks (0)

As the bailout bill issue has hovered of Capitol Hill the past couple weeks, I've thought that neither presidential candidate has stepped forward and shown strong leadership on the issue. We've had grandstanding, we've had hedging, but we really haven't had anyone show he has adequate command over what's happening.

That being the case, on C-SPAN I heard Simon Johnson make a good proposal. He suggests the presidential candidates have a debate solely focused on the current financial services crisis. There are three good reasons to do this:

• Provides an opportunity for the candidates to show leadership and articulate their philosophy on coping with the problem


• A debate would facilitate and enhance the national discussion on the crisis


• This issue is so critical that it will shape the first couple years of the next presidency. It's important that each candidate offer his vision on how he will manage it

I'd like to see a 90 minute or two hour debate just on this issue. It might not be a ratings winner on network TV, but I think the seriousness of this issue demands that the next president be given sufficient time to tackle it on national TV. This is a complicated matter which can't be settled with sound bytes.

Posted by Brian at 11:24 AM | Permalink | Comments (0) | TrackBacks (0)