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Tuesday, September 23, 2008

McCain Loses His Head

By George F. Will

"The queen had only one way of settling all difficulties, great or small. 'Off with his head!' she said without even looking around."

-- "Alice's Adventures in Wonderland"

Under the pressure of the financial crisis, one presidential candidate is behaving like a flustered rookie playing in a league too high. It is not Barack Obama.

Channeling his inner Queen of Hearts, John McCain furiously, and apparently without even looking around at facts, said Chris Cox, chairman of the Securities and Exchange Commission, should be decapitated. This childish reflex provoked the Wall Street Journal to editorialize that "McCain untethered" -- disconnected from knowledge and principle -- had made a "false and deeply unfair" attack on Cox that was "unpresidential" and demonstrated that McCain "doesn't understand what's happening on Wall Street any better than Barack Obama does."

To read the Journal's details about the depths of McCain's shallowness on the subject of Cox's chairmanship, see "McCain's Scapegoat" (Sept. 19, Page A22). Then consider McCain's characteristic accusation that Cox "has betrayed the public's trust."

Perhaps an old antagonism is involved in McCain's fact-free slander. His most conspicuous economic adviser is Douglas Holtz-Eakin, who previously headed the Congressional Budget Office. There he was an impediment to conservatives, including then-Rep. Cox, who, as chairman of the Republican Policy Committee, persistently tried and generally failed to enlist CBO support for "dynamic scoring" that would estimate the economic growth effects of proposed tax cuts.

In any case, McCain's smear -- that Cox "betrayed the public's trust" -- is a harbinger of a McCain presidency. For McCain, politics is always operatic, pitting people who agree with him against those who are "corrupt" or "betray the public's trust," two categories that seem to be exhaustive -- there are no other people. McCain's Manichaean worldview drove him to his signature legislative achievement, the McCain-Feingold law's restrictions on campaigning. Today, his campaign is creatively finding interstices in laws intended to restrict campaign giving and spending. (For details, see The Post of Sept. 17, Page A4; and the New York Times of Sept. 20, Page One.)

By a Gresham's Law of political discourse, McCain's Queen of Hearts intervention in the opaque financial crisis overshadowed a solid conservative complaint from the Republican Study Committee, chaired by Rep. Jeb Hensarling of Texas. In a letter to Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke, the RSC decried the improvised torrent of bailouts as a "dangerous and unmistakable precedent for the federal government both to be looked to and indeed relied upon to save private sector companies from the consequences of their poor economic decisions." This letter, listing just $650 billion of the perhaps more than $1 trillion in new federal exposures to risk, was sent while McCain's campaign, characteristically substituting vehemence for coherence, was airing an ad warning that Obama favors "massive government, billions in spending increases."

The political left always aims to expand the permeation of economic life by politics. Today, the efficient means to that end is government control of capital. So, is not McCain's party now conducting the most leftist administration in American history? The New Deal never acted so precipitously on such a scale. Treasury Secretary Paulson, asked about conservative complaints that his rescue program amounts to socialism, said, essentially: This is not socialism, this is necessary. That non sequitur might be politically necessary, but remember that government control of capital is government control of capitalism. Does McCain have qualms about this, or only quarrels?

On "60 Minutes" Sunday evening, McCain, saying "this may sound a little unusual," said that he would like to replace Cox with Andrew Cuomo, the Democratic attorney general of New York who is the son of former governor Mario Cuomo. McCain explained that Cuomo has "respect" and "prestige" and could "lend some bipartisanship." Conservatives have been warned.

Conservatives who insist that electing McCain is crucial usually start, and increasingly end, by saying he would make excellent judicial selections. But the more one sees of his impulsive, intensely personal reactions to people and events, the less confidence one has that he would select judges by calm reflection and clear principles, having neither patience nor aptitude for either.

It is arguable that, because of his inexperience, Obama is not ready for the presidency. It is arguable that McCain, because of his boiling moralism and bottomless reservoir of certitudes, is not suited to the presidency. Unreadiness can be corrected, although perhaps at great cost, by experience. Can a dismaying temperament be fixed?

Original here

McCain conference call BACKFIRES **UPDATED W/BONUS VIDEO**


Grampy McSame is angry. Really angry. You see apparently, they've had it up to here with the liberal media calling them liars, while at the same time giving Obama a free ride. So campaign strategists Steve Schmidt and Rick Davis convened a conference call to register their outrage at the MSM for this unfair treatment and to highlight their criticisms of Senators Obama and Biden, Problem is.....the media ain't buyin' it. At least not Ben Smith from Politico:

Sen. John McCain’s top campaign aides convened a conference call today to complain of being called “liars.” They pressed the media to scrutinize specific elements of Sen. Barack Obama’s record.

But the call was so rife with simple, often inexplicable misstatements of fact that it may have had the opposite effect: to deepen the perception, dangerous to McCain, that he and his aides have little regard for factual accuracy.

Follow me below for the details......

Camp McCain is mad as hell:

“Any time the Obama campaign is criticized at any level, the critics are immediately derided as liars,” Schmidt told reporters.

Hmmmmm...what's that they say about ducks and walking and talking and stuff?

But as he went on to list a series of stories he thought reporters should be writing about Obama and Biden, in almost every instance he got the details wrong.

What a surprise! Almost every instance! Schmidt goes on to list a series of discredited repug talking points:

• Biden's son was a lobbyist for the credit card and banking industry (he wasn't, he was a consultant for MBNA)

• Obama began his career raising money for William Ayers (not true and Ayers never contributed to Obama)

• Obama surrogate accused Sarah Palin of being a Nazi sympathizer (Robert Wexler called Pat Buchanan a Nazi sympathizer and said Palin endorsed Buchanan)

Asked about the series of errors, McCain aides could not provide evidence to back up Schmidt’s assertions.

Wow! Yet another surprise? Who woulda thunk it?

One McCain aide, Michael Goldfarb, said Politico was “quibbling with ridiculously small details when the basic things are completely right.”

Another, Brian Rogers, responded more directly:

“You are in the tank,” he e-mailed.

Ahhhh...yes. How perfect.

Grampy McSame Super Secret Strategy Revealed:

Lie

When called on your lies (finally!), accuse the media of being in the tank for your opponent

Lie some more

Hold conference call to complain about being called liars and to lie some more

When called on your lies (finally!), accuse the media of being in the tank for your opponent

Rinse. Repeat.

Is it November 4th yet?

UPDATE: EXTRA BONUS VIDEO

Original here

McCain Was For The NYT Before He Was Against It

For a party that rails against the New York Times, the Republicans sure depend on the Grey Lady to score political points.

Since the end of the primary, John McCain's campaign has sent at least 60 emails to its rapid response list that reference the New York Times. They have used the paper to repeatedly knock Obama for voting "present" in the Illinois State Senate. They have used it to defend McCain's record on Jack Abramoff, to accuse Obama of flip-flopping on Iraq, and to bolster the case for vice presidential pick Sarah Palin.

"New York Times: Governor Palin 'Took Intense Criticism From Members Of Her Own Party For Turning The Spotlight On The Failures Of Alaska Republicans,'" read one McCain campaign press release.

Moreover, since July 1, the RNC and the McCain campaign have sent out at least 38 press releases that reference the Times, while, since the end of July, the RNC has sent out at least 65 emails that quote the paper. Three days ago came a Times article with the heading, "Republicans Denounce Obama Fund-Raising Pic." A week before we had, "NYT - Campaign Says Biden Son Dropped Lobbying Clients." A day before that there was, "NYT - Those Awaiting Biden Gaffes Aren't Disappointed." And two days before then, the RNC emailed, "NYT - Obama Looks to Lessons From Chicago in His National Education Plan."

On Monday, however, aides to McCain needed a scapegoat, or at least a political whipping post. And so, when asked about an article from this morning, which illuminated the lobbying work campaign manager Rick Davis has done on behalf of Fannie Mae and Freddie Mac, senior strategist Steve Schmidt absolutely unloaded on the Times.

"Whatever the New York Times once was, it is today not by any standard a journalistic organization," he said. "It is a pro-Obama advocacy organization that every day attacks the McCain campaign, attacks Gov. Palin and excuses Sen. Obama.... This is an organization that is completely and totally 150 percent in the tank for the Democratic candidate."

Right. Keep in mind that it was just yesterday that McCain himself told CNBC that he welcomed the vetting of Davis "by anybody who wants to look at it."

Or, as Barack Obama's campaign quickly noted, that the Times has run more than 40 stories on his childhood, politics, time in the state senate, religion, family and friends.

Moreover, within hours of Schmidt ripping the paper, the Republican National Committee sent out an email to reporters that actually referenced an article that ran in the Times, highlighting the work of vice presidential candidate Joseph Biden's son.

For its part, the Times senior staff seem unaffected by Schmidt's attempt to tar their coverage. In a statement to Politico, executive editor Bill Keller wrote:

"The New York Times is committed to covering the candidates fully, fairly and aggressively. It's our job to ask hard questions, fact-check their statements and their advertising, examine their programs, positions, biographies and advisors. Candidates and their campaign operatives are not always comfortable with that level of scrutiny, but it's what our readers expect and deserve."

Original here

CNN Poll: GOP takes brunt of blame for economy, Obama gains

The nation's economic woes appear to be taking a toll on McCain.
The nation's economic woes appear to be taking a toll on McCain.

WASHINGTON (CNN) – A new CNN/Opinion Research Corporation Poll suggests that by a 2-to-1 margin, Americans blame Republicans over Democrats for the financial crisis that has swept across the country the past few weeks — one factor that may have contributed to an apparent increase in Barack Obama’s edge over John McCain in the race for the White House.

In the new survey, released Monday afternoon, 47 percent of registered voters questioned say Republicans are more responsible for the problems currently facing financial institutions and the stock market, with 24 percent saying Democrats are more responsible. One in five of those polled blame both parties equally, and 8 percent say neither party is to blame.

Watch: No 'blank check' for Wall Street Obama says

The poll also indicates that more Americans think Obama, the Democratic presidential nominee, would do a better job handling an economic crisis than McCain, the Republican presidential nominee. Forty-nine percent of those questioned say Obama would display good judgment in an economic crisis, 6 points higher than the number who said the same about McCain. And Obama has a 10 point lead over McCain on the question of who would better handle the economy overall.

Watch: McCain calls for oversight board

These numbers appear to be affecting the battle for the presidency. Fifty-one percent of registered voters are backing Obama, who now holds a 5 point edge over McCain, at 46 percent. McCain and Obama were tied at 48 percent apiece in the previous CNN/Opinion Research Corporation survey. Obama's advantage, while growing, is still within the poll's sampling error of plus or minus 3 percentage points.

Where did Obama make his gains?

"In two core McCain constituencies: Men, who now narrowly favor Obama. And seniors, who have also flipped from McCain to Obama," says CNN Senior Political Analyst Bill Schneider.

When including only those people most likely to vote, the results are pretty much the same: Among likely voters, Obama has a 4 point lead, 51 percent to 47 percent.

The new CNN poll of polls also shows Obama with a similar advantage — 49 percent for Obama to 44 percent for John McCain.

"The economy has always been considered John McCain's Achilles’ heel, and the CNN poll of polls started to show an Obama edge in the middle of last week — just as the financial crisis began to hit home for many Americans," said CNN Polling Director Keating Holland.

The poll also expands to include third party candidates. When included in the results, Obama has the backing of 48 percent of likely voters, three points ahead of McCain at 45 percent. Independent Ralph Nader has the support of 4 percent of those polled, with Libertarian candidate Bob Barr and Green Party candidate Cynthia McKinney each at one percent.

A couple of other factors in the survey appear to be contributing to Obama's slight rise and McCain's slight drop in the polls. Fifty-three percent of those questioned say McCain, if elected, will mostly carry out the policies of President George W. Bush, who remains extremely unpopular with most Americans. That's up 3 points from our previous poll.

The survey also indicates Obama's recaptured the advantage on "change": Just after the Republican convention, Obama's lead had shrunk to 8 points when voters were asked which candidate would be more likely to bring change. It's now up to 14 points in the new poll.

Another factor could be McCain's running mate, Alaska Governor Sarah Palin. Thirty-five percent of those questioned have an unfavorable opinion of her, up 8 points from our previous survey. And two-thirds believe she and her husband should testify in the Alaska investigation into her firing of a state official.

"Change has always been Obama's strong suit, but McCain and Palin clearly made inroads into that issue during the GOP convention," said Holland. "Palin, in particular, was seen as an agent of change when she made her first appearance on the national stage. That may be changing now."

The poll also sheds more light on how Americans feel about the financial crisis. Twenty-two percent say they are scared about the crisis, with two-thirds concerned. Eleven percent say they are not worried.

Most Americans think that the programs to deal with the financial crisis currently being worked on by Congress and the Bush administration will be unfair to U.S. Taxpayers — but they think those programs will ultimately help the economy.

In general, six in ten believe that federal government should step in and address the financial crisis; 37 percent say the government should stay out. But when it comes to last week's bailouts, support slips to 55 percent — and given the concerns about how future programs will affect taxpayers, it conceivable that public support for the plans that Congress and the administration are working on could fall even lower.

The survey comes out just four days before McCain and Obama face off in the first of three presidential debates. Will the debates make a difference? Probably, since the poll finds that 14 percent of Americans say they haven't made up their minds yet.

The CNN/Opinion Research Corporation poll was conducted Friday through Sunday, and included interviews of 1,020 Americans, including 909 registered voters and 697 likely voters.

Original here

McCain Lies: "I've Bought American Literally All My Life"

It seems John McCain's belief in "Country First" only goes so far.

Yesterday, we learned that not only does McCain own thirteen cars, but that the McCain fleet includes imports, a VW from Germany and a Honda from Japan. (His wife drives a Lexus, but that car is owned by her beer distributorship.)

And now it turns out that earlier this month he lied to Michigan voters about his car purchases, telling them "I've bought American literally all my life" during a September 7 interview with Detroit's WXYZ-TV. Earlier in the interview, he had told the interviewer "Cindy and I own an automobile that's American-made" which was about best an extremely misleading statement.

Let's face it -- the man is just a pathological liar.

Here's video:

The United Auto Workers pile on:

UAW President Ron Gettelfinger on Sunday once again accused John McCain of less-than-straight talk on the issue of buying American-made cars, after Newsweek magazine reported that the McCains own at least three foreign-made vehicles. [...]


"'Buy American' can't just be a slogan John McCain rolls out when he's in Michigan," Gettelfinger said Sunday. Americans are free to buy whatever they choose, Gettelfinger said, but he accused McCain of trying to mislead Midwestern voters about what vehicles he owns.

Original here

Obama, Not McCain, Shows Steady Hand in Crisis: Albert R. Hunt

Commentary by Albert R. Hunt

Sept. 22 (Bloomberg) -- For the first time since 1932 a presidential election is taking place in the midst of a genuine financial crisis. The reaction of the candidates was revealing.

John McCain, railing against the ``greed and corruption'' of Wall Street, won the first round of the sound-bite war. He came out with a television commercial on the ``crisis'' early on Monday of last week, and over the next three days gave more than a dozen broadcast interviews. He and running mate Sarah Palin would reform Wall Street and regulate the nefarious fat cats that caused this fiasco.

It was a great start. It then went downhill as he stumbled over his record of championing deregulation, claimed the economy was fundamentally strong, and flip-flopped over the government takeover of American International Group Inc.

For his part, Barack Obama didn't come across as passionately outraged and wasn't as omnipresent or as specific.

More revealing, though, was to whom both candidates turned on that panic-ridden morning of Sept. 15, and how the messages evolved before and after that day.

McCain called Martin Feldstein, the well-known Republican economist and Reagan administration adviser, John Taylor of Stanford University, who served in President George W. Bush's Treasury and Carly Fiorina, once the chief executive officer of Hewlett-Packard Co.

Obama called former Federal Reserve Chairman Paul Volcker, and former Treasury Secretaries Robert Rubin and Larry Summers.

It was a mismatch.

Towering Volcker

Feldstein, for all his intellect, was ineffective in the Reagan administration; then-White House deputy chief of staffDick Darman cut him out of important action. Volcker, first at the Treasury and then as chairman of the Federal Reserve, was a towering figure in every way.

Taylor is a well-regarded academic. In four years as undersecretary of the Treasury, he left few footprints. Summers, as both deputy secretary and secretary, left a lot.

Fiorina is smart and quick; to put it charitably, Rubin will forget more about financial markets than she'll ever know.

When it comes to governance, and either Democrat Obama or Republican McCain will inherit this miserable financial mess, the best guide is who they talked to, what they said, where they've been, and how knowledgeable they are.

Obama's record and earlier speeches belie some of his more populist rhetoric. Yet they also suggest, as do his advisers, a much more activist government role than is likely under a McCain-Palin administration.

Comfortable With Subject

Obama called for the overhaul of the financial-regulatory system and tougher enforcement well before this past week's traumas.

Detached observers who watched him last week, especially in a Bloomberg Television interview, were taken by how conversant and comfortable he was on the subject, despite his thin record. Few detached observers came away with that impression watching the Arizona senator.

Much of the re-regulatory fever focuses on the Federal Reserve and any new agencies created to clean up the fiasco. Central, however, will be a more vigorous Securities and Exchange Commission, or whatever holds that investor-protection function.

McCain displayed a sudden interest in the SEC last week when he demanded that Chairman Chris Cox be fired. When his campaign was asked if the senator had ever criticized the current commission's performance before, they failed to respond.

All For Obama

Tellingly, three former SEC chairmen, a Democrat, Arthur Levitt, and two Republicans, David Ruder and Bill Donaldson, have endorsed Obama. Levitt is a board member of Bloomberg LP, the parent company of Bloomberg News.

Donaldson, who was tapped by Bush to head the SEC, says Obama called him last year about the financial-regulatory problems. He has never heard from McCain.

``Obama has been talking about the need for better financial regulation well before this crisis hit and has done some real thinking about it,'' says Donaldson, a lifelong Republican. ``McCain comes across as someone who suddenly realized changes have to be made.''

There is a case for McCain: it's if you believe in less regulation, that the government should get out of the way and let the markets work their will.

No `Real Understanding'

``I don't think anyone who wants to increase the burden of government regulation and high taxes has any real understanding of economics,'' McCain said this spring at an Inez, Kentucky, town hall meeting, where he also declared ``the fundamentals of our economy are good.''

Until recently, he repeatedly invoked Ronald Reagan's calls for less regulation. He voted for the 2002 Sarbanes-Oxley corporate-governance regulations -- then last year said he regretted that vote.

McCain isn't averse to some regulations. He has strongly championed a greater federal role in campaign finance, tobacco and boxing. In each case, he saw a clear villain -- special- interest money, a tobacco product that puts profits ahead of lives, and unscrupulous boxing promoters.

There has been little evidence that prior to last week he ever put financial firms in this category. Although he assailed excessive corporate compensation last week, McCain has opposed a tepid House-passed bill that would give corporate shareholders the right to cast a non-binding vote on compensation of top executives.

Turning to Gramm

The person he has turned to most for counsel on such matters is his ex-Senate colleague Phil Gramm. Gramm is a political Gordon Gekko, a brainy economist with a Darwinian view of markets and public policy.

It's not easy to remember what the financial world looked like 10 days ago much less 10 months ago. Decisions that will be reached after this election will be the most important since the 1930s.

Obama, as more than a few Democrats are complaining, hasn't been as quick, sharp -- or demagogic -- as they would like. McCain has been beset by deeper difficulties: an inchoate and inconsistent message that seems to reflect political exigencies more than principled convictions.

On the financial crisis, last week belonged to Obama.

(Albert R. Hunt is the executive editor for Washington at Bloomberg News. The opinions expressed are his own.)

To contact the writer of this column: Albert R. Hunt in Washington at ahunt1@bloomberg.net

Original here

Dirty Secret Of The Bailout: Thirty-Two Words That None Dare Utter

A critical - and radical - component of the bailout package proposed by the Bush administration has thus far failed to garner the serious attention of anyone in the press. Section 8 (which ironically reminds one of the popular name of the portion of the 1937 Housing Act that paved the way for subsidized affordable housing ) of this legislation is just a single sentence of thirty-two words, but it represents a significant consolidation of power and an abdication of oversight authority that's so flat-out astounding that it ought to set one's hair on fire. It reads, in its entirety:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

In short, the so-called "mother of all bailouts," which will transfer $700 billion taxpayer dollars to purchase the distressed assets of several failed financial institutions, will be conducted in a manner unchallengeable by courts and ungovernable by the People's duly sworn representatives. All decision-making power will be consolidated into the Executive Branch - who, we remind you, will have the incentive to act upon this privilege as quickly as possible, before they leave office. The measure will run up the budget deficit by a significant amount, with no guarantee of recouping the outlay, and no fundamental means of holding those who fail to do so accountable.

Is this starting to sound familiar? Robert Kuttner cuts through much of the gloss in an article in today's American Prospect:

The deal proposed by Paulson is nothing short of outrageous. It includes no oversight of his own closed-door operations. It merely gives congressional blessing and funding to what he has already been doing, ad hoc. He plans to retain Wall Street firms as advisors to decide just how to cut deals to value and mop up Wall Street's dubious paper. There are to be no limits on executive compensation for the firms that get relief, and no equity share for the government in exchange for this massive infusion of capital. Both Obama and McCain have opposed the provision denying any judicial review of decisions made by Paulson -- a provision that evokes the Bush administration's suspension of normal constitutional safeguards in its conduct of foreign policy and national security. [...]


The differences between this proposed bailout and the three closest historical equivalents are immense. When the Reconstruction Finance Corporation of the 1930s pumped a total of $35 billion into U.S. corporations and financial institutions, there was close government supervision and quid pro quos at every step of the way. Much of the time, the RFC became a preferred shareholder, and often appointed board members. The Home Owners Loan Corporation, which eventually refinanced one in five mortgage loans, did not operate to bail out banks but to save homeowners. And the Resolution Trust Corporation of the 1980s, created to mop up the damage of the first speculative mortgage meltdown, the S&L collapse, did not pump in money to rescue bad investments; it sorted out good assets from bad after the fact, and made sure to purge bad executives as well as bad loans. And all three of these historic cases of public recapitalization were done without suspending judicial review.

Kuttner's opposition here is perhaps the strongest language I've seen used, pushing back on this piece of legislation, in any publication of repute, and even here, Section 8 is not cited by name or by content. McClatchy Newspapers also alludes to Section 8 with concern, citing the "unfettered authority" that Paulson would be granted, and noting that the "law also would preclude court review of steps Paulson might take, something Joshua Rosner, managing director of economic researcher Graham Fisher & Co. in New York, said could be used to mask previous illegal activity." Jack Balkin also gives the matter the sort of attention it deserves on his blog, Balkinization.

But elsewhere, the conversation is muted. The debate over whether Congress is going to pass the Paulson bailout package, or pass the Paulson bailout package really hard seems to have boiled down to a discussion of time and concessions. The White House has made it clear that they want this package passed yesterday. Congressional Democrats seem to be of different minds on the matter, with some pushing back hard, and others content to demand a small dollop of turd polish to make the package seem more aesthetically pleasing, at which point, they'll likely roll over and pass the bill. Neither candidate, John McCain or Barack Obama, seem all that amenable toward the bailout, but neither have either demonstrated that they are willing to risk their candidacies to do much more than exploit the issue for electoral purposes.

Sunday morning came and went, with Paulson traipsing dutifully from studio to studio, facing nary a question on Section 8. Front page articles in the New York Times, Washington Post, and the Wall Street Journal detail the wranglings, but make no mention of this section of the legislation. On TV, cable news networks are stuck in the fog of the ongoing presidential campaign.

Throughout the coverage, one catches a whiff of what seems like substantive pushback on this power grab, but it largely amounts to a facsimile of journalistic diligence. Most note, in general terms, that the bailout represents a set of "broad powers" that will be granted to the Department of the Treasury. Yet the coverage offsets these concerns through the constant hyping of the White House's overall message of "urgency."

But one cannot overstate this: Section 8 is a singularly transformative sentence of economic policy. It transfers a significant amount of power to the Executive Branch, while walling off any avenue for oversight, and offering no guarantees in return. And if the Democrats end up content with winning a few slight concessions, they risk not putting a stop-payment on the real "blank check" - the one in which they allow the erosion of their own powers.

Over in the Senate, Christopher Dodd has proposed a bailout legislation of his own, which critically calls for "an oversight board that not only includes the chairman of the Federal Reserve and the SEC, but congressionally appointed, non-governmental officials" and would require the President to appoint an "independent inspector general to investigate the Treasury asset program." In Dodd's legislation, Section 8 is effectively stripped from the bill.

Nevertheless, the fact that Section 8 of the Paulson plan seems to strike few as a de facto dealbreaker can and should astound. The failure of Congress to hold the line on this point would be truly embarrassing. But if we make it through this week with nobody in the press specifically informing the public about the implications of this single sentence - in the middle of a complicated bill, in the middle of a complicated time - then right there, you have the single largest media failure of this year.

Original here

Loan Titans Paid McCain Adviser Nearly $2 Million

By DAVID D. KIRKPATRICK and CHARLES DUHIGG

Andrew Councill for The New York Times

Rick Davis, Senator John McCain’s campaign manager, in 2007.

Senator John McCain’s campaign manager was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations, current and former officials say.

Mr. McCain, the Republican candidate for president, has recently begun campaigning as a critic of the two companies and the lobbying army that helped them evade greater regulation as they began buying riskier mortgages with implicit federal backing. He and his Democratic rival, Senator Barack Obama, have donors and advisers who are tied to the companies.

But last week the McCain campaign stepped up a running battle of guilt by association when it began broadcasting commercials trying to link Mr. Obama directly to the government bailout of the mortgage giants this month by charging that he takes advice from Fannie Mae’s former chief executive, Franklin Raines, an assertion both Mr. Raines and the Obama campaign dispute.

Incensed by the advertisements, several current and former executives of the companies came forward to discuss the role that Rick Davis, Mr. McCain’s campaign manager and longtime adviser, played in helping Fannie Mae and Freddie Mac beat back regulatory challenges when he served as president of their advocacy group, the Homeownership Alliance, formed in the summer of 2000. Some who came forward were Democrats, but Republicans, speaking on the condition of anonymity, confirmed their descriptions.

“The value that he brought to the relationship was the closeness to Senator McCain and the possibility that Senator McCain was going to run for president again,” said Robert McCarson, a former spokesman for Fannie Mae, who said that while he worked there from 2000 to 2002, Fannie Mae and Freddie Mac together paid Mr. Davis’s firm $35,000 a month. Mr. Davis “didn’t really do anything,” Mr. McCarson, a Democrat, said.

Mr. Davis’s role with the group has bubbled up as an issue in the campaign, but the extent of his compensation and the details of his role have not been reported previously.

Mr. McCain was never a leading critic or defender of the mortgage giants, although several former executives of the companies said Mr. Davis did draw Mr. McCain to a 2004 awards banquet that the companies’ Homeownership Alliance held in a Senate office building. The organization printed a photograph of Mr. McCain at the event in its 2004 annual report, bolstering its clout and credibility. The event honored several other elected officials, including at least two Democrats, Gov. Edward G. Rendell of Pennsylvania and Representative Artur Davis of Alabama.

In an interview Sunday night with CNBC and The New York Times, Mr. McCain noted that Mr. Davis was no longer working on behalf of the mortgage giants. He said Mr. Davis “has had nothing to do with it since, and I’ll be glad to have his record examined by anybody who wants to look at it.”

Asked about the reports of Mr. Davis’s role, a spokesman for Mr. McCain said that during the time when Mr. Davis ran the Homeownership Alliance, the senator had backed legislation to increase oversight of the mortgage companies’ accounting and executive compensation. The legislation, however, did not seek to change their anomalous structure as private companies with federal support.

The spokesman, Tucker Bounds, also noted that the Homeownership Alliance included nonprofit organizations like Habitat for Humanity and the Urban League. “It’s not controversial to promote homeownership and minority homeownership,” Mr. Bounds said. More than a half-dozen current and former executives, however, said the Homeownership Alliance was set up mainly to defend Fannie Mae and Freddie Mac by promoting their role in the housing market, and the two companies paid almost the entire cost of the group’s operations.

“They were financed largely, possibly exclusively, by Fannie and Freddie,” said William R. Maloni, a Democrat who is a former head of industry relations for Fannie Mae. “We thought it would be helpful to have someone who was a broadly recognized Republican to be the face of the organization, and that person became Rick Davis.” Mr. Maloni added, “Rick, for that purpose, turned out to be quite good.” (Several executives said Mr. Davis’s compensation was not unusual for the companies’ well-connected consultants.)

The federal bailout of the two mortgage giants has become an emblem of what critics say is the outdated or inadequate regulatory system that allowed the financial system to slide into crisis this summer.

At the time that Fannie Mae and Freddie Mac recruited Mr. Davis to run the Homeownership Alliance in 2000, they were under new pressure from private industry rivals and deregulation-minded Republicans who argued that the two companies’ federal sponsorship gave them an unfair advantage and put taxpayers at risk. Critics of the companies had formed their own Washington-based advocacy group, FM Watch. They were pushing for regulations that would deter the companies from expanding into new areas, including riskier and more profitable mortgages.

Mr. Davis had recently returned to his lobbying firm from running Mr. McCain’s unexpectedly strong 2000 Republican primary campaign, which elevated Mr. McCain’s profile as a legislator and Mr. Davis’s as a lobbyist.

“You can say what you want about free-market distortions, but people like the system because it gets them into houses cheap,” Mr. Davis said to Institutional Investor magazine in 2000, adding that he would run the advocacy group out of his Alexandria, Va., lobbying firm.

The organization also hired Public Strategies, a communications firm that included former Bush adviser Mark McKinnon. Mr. Davis wrote letters and gave speeches for the group. In April 2001, he sent out a press release headlined, “It’s Tax Day — Do You Know Where Your Deductions Are? For Most Americans, They’re in Your Home.”

But by the end of 2005, Fannie Mae and Freddie Mac were recovering from accounting problems and re-examining costs, former executives said. The companies decided the Homeownership Alliance had outlived its usefulness, and it disappeared.

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McCain Campaign Can't...Won't...Rule Out Gramm As Treasury Secretary

For those of you who have developed a fondness for Tucker Bounds-themed bondage and domination videos, here's another YouTube where David Shuster chortles his way through a segment in which Bounds cannot or will not bring himself to assure the American people that Phil Gramm - who recently called America a "nation of whiners" but who led the effort for the repeal of the Glass-Steagall Act that paved the way for the economic collapses of today - will not, under any circumstances, become Secretary of the Treasury in the McCain administration. If Bounds keeps at these sorts of "explanations," the world's supply of false equivalencies may run out by the first week of October.

[WATCH.]

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All the Candidates’ Cars

By Keith Naughton and Hilary Shenfeld

When you have seven homes, that's a lot of garages to fill. After the fuss over the number of residences owned by the two presidential nominees, NEWSWEEK looked into the candidates' cars. And based on public vehicle-registration records, here's the score. John and Cindy McCain: 13. Barack and Michelle Obama: one.

One vehicle in the McCain fleet has caused a small flap. United Auto Workers president Ron Gettelfinger, an Obama backer, accused McCain this month of "flip-flopping" on who bought daughter Meghan's foreign-made Toyota Prius. McCain said last year that he bought it, but then told a Detroit TV station on Sept. 7 that Meghan "bought it, I believe, herself." (The McCain campaign did not respond to multiple requests for comment.)

Obama's lone vehicle also is a green machine, a 2008 Ford Escape hybrid. He bought it last year to replace the family's Chrysler 300C, a Hemi-powered sedan. Obama ditched the 300C, once 50 Cent's preferred ride, after taking heat for driving a guzzler while haranguing Detroit about building more fuel-efficient cars.

McCain's personal ride, a 2004 Cadillac CTS, is no gas sipper, but it should make Detroit happy because it's made by General Motors. "I've bought American literally all my life and I'm proud," McCain said in the interview with Detroit's WXYZ-TV. But the rest of his fleet is not all-American. There's a 2005 Volkswagen convertible in the garage along with a 2001 Honda sedan. Otherwise, there's a 2007 half-ton Ford pickup truck, which might come in handy on the Sedona ranch; a vintage 1960 Willys Jeep; a 2008 Jeep Wrangler; a 2000 Lincoln; and a 2001 GMC SUV. The McCains also own three 2000 NEV Gem electric vehicles, which are bubble-shaped cars popular in retirement communities.

Only the Cadillac is registered in the candidate's name. Cindy McCain's name is on 11 vehicles, though not the one she actually drives. That car, a Lexus, is registered to her family's beer-distributor business and is outfitted with personalized plates that read MS BUD.

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Evangelical leader smacks McCain for lack of ‘principle’

By Cara Degette
Richard Cizik, the chief lobbyist for the National Association of Evangelicals, was named one of TIME's 100 most influential people.

Richard Cizik is one of the country’s most powerful and outspoken Christian evangelical leaders. He happens to be a Republican, and he has known the GOP’s presidential nominee for many years. “I thought John McCain was a principled person,” Cizik says. “But John McCain has backed off, not just on climate change but on torture and a sensible tax policy — in other words, he’s not the John McCain of 2000. … He seems to be waffling on issue after issue.

“It’s not illogical for someone to conclude that John McCain is going to be more like George Bush than John McCain is going to be like John McCain in 2000.”

Characterizing the GOP’s presidential nominee as an unprincipled waffler is strong stuff from the man who oversees governmental affairs and is the chief lobbyist of the 30-million-member Washington, D.C.-based National Association of Evangelicals. But Cizik — named this year by TIME magazine one of the world’s 100 most influential people — is no stranger to controversies that come from strong convictions.

Over the past several years, Cizik, whose organization represents 45,000 churches from 59 denominations, has emerged as a passionate leader in the Creation Care movement — efforts by Christian evangelicals to respond to the perils of global change.

Focus on the Family founder and president James Dobson has long been critical of Richard Cizik's 'Creation Care' approach to global warming. (Photo/Focus on the Family)

Focus on the Family founder and president James Dobson has long been critical of Richard Cizik's 'Creation Care' approach to global warming. (Photo/Focus on the Family)

Suffice to say, Cizik’s efforts have rocked much of his world — including the minds of Focus on the Family founder James Dobson and a phalanx of other old-guard evangelicals like Tony Perkins, Paul Weyrich and Gary Bauer who tried last year, unsuccessfully, to get Cizik fired from his job of 26 years for sounding the global warming alarm.

Dobson and the others, you see, would prefer to keep the evangelical focus on what they call “the great moral issues of our time,” specifically abortion, man-woman-only marriage and “the teaching of sexual abstinence and morality to our children.”

They have disparaged Cizik for having a “preoccupation” with global warming and other related issues, including poverty and overpopulation. In 2006 Dobson even head-butted Cizik in the press for supporting international regulations of emissions, calling his views “anti-capitalistic and [having] an underlying hatred for America.”

Cizik, who takes the long view of winning converts to the global warming battle though biblical truths and employing what he describes as a “winsome, non-argumentative spirit,” was in Colorado Springs last week for a two day speaking tour with an unlikely partner in crime, the populist commentator Jim Hightower (who has detailed Cizik’s work in his latest book, “Swim Against the Current: Even a Dead Fish Can Go Against the Flow”).

The first night the two addressed a crowd of 500 congregants of the Vanguard Christian Church and the next spoke to a crowd of hundreds of Colorado College students and environmental activists. And yes, during his speech Cizik made a joking reference to “people” who say he should be fired. He also expressed hope that Colorado Springs — headquarters to Dobson’s ministry and media empire Focus on the Family — would become ground zero for a renewed “focus on the Earth.”

“We live in the same world, but some people see through different glasses,” Cizik said of critics. “We have to move them.”

In an extensive Colorado Independent interview shortly after his Colorado stop, Cizik spoke more specifically about his views of the presidential election,including his thoughts on McCain’s pick of Sarah Palin — who rejects the science of human induced climate change — as his running mate.

Cizik tells of an encounter he had with McCain a year ago, after the candidate had been the target of loathing from evangelical leaders — most notably from the very same James Dobson who has gone after Cizik. In McCain’s case, Dobson let it be known in no uncertain terms: “I would not vote for John McCain under any circumstances … he’s not in favor of traditional marriage and I pray that we don’t get stuck with him.”

McCain, says Cizik, wanted to know what to make of these declarations. Cizik’s response? Where else are people like Dobson really going to go? Ultimately, he says, the criticism may have given old-guard leaders like Dobson leverage over McCain’s vice presidential choice. And lo and behold, since Palin was picked, Dobson has been gushing over the ticket, indicating he will in all likelihood “pull the lever” for Palin, er, McCain.

“It is pretty obvious that the Palin nomination plays to identity politics and cultural war issues,” says Cizik. “Her selection is more than an acknowledgment that evangelicals are an important part of the Republican base, and everyone knows that John McCain is not that exciting to religious conservatives.”

Palin, Cizik says, has certainly excited the Republican base, and picking her was certainly a deft, if cynical, political move by McCain — at least in the short term. However, in the longer view, his running mate may do just as much to energize the opposition and prove a turn-off to independents.

“Not everyone in the evangelical movement is fawning over Sarah Palin,” Cizik says.

Let’s review the conflicting messages: Just as hurricanes like Katrina and Rita and Ike have laid devastating wakes, McCain has selected a doubter of human-caused global warming as a running mate. Palin’s record as a drill-baby-drill-for-oil advocate, including in Alaska’s National Wildlife Reserve; supporting shooting wolves from low-flying airplanes; and de-listing bears as an endangered species doesn’t exactly resonate among evangelical Christians who have embraced a commitment to caring for God’s creation.

And, sending perhaps the most important signal of all, McCain himself has chosen not to not to speak out on the issue of climate change, Cizik notes. His campaign instead has opted to play identity and culture-war politics.

“He’s playing that card, and many of us thought he didn’t need to do it — it just polarizes the country,” Cizik says. “The irony of it is that John McCain can’t speak with an evangelical voice of faith — let’s face it, it’s just not his thing — so I guess the substitute is this other [Palin]. I guess that’s pretty cynical, but maybe his actions are cynical.

“The consequences of going to identity and culture-war politics is that experience is denigrated, authority is questioned and ignorance is strength,” Cizik says.

That said, come Nov. 4 does Cizik plan to cast his vote for Barack Obama? He doesn’t know.

“Obama doesn’t have the experience all of us would like,” Cizik says. “I’m not in Washington to be an advocate for the Republican or the Democratic Party; that’s not my calling. I’m not an ideologue. I do wish Obama had 10 years experience in the Senate and Sarah Palin had [more experience].

“I am a Republican, but I’m not comfortable with giving the Republicans four more years. I don’t see John McCain differing enough from the incumbent, and yet Obama is a work in progress, pretty much, so we’d be taking some risk with him. It’s a conundrum.”

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Bush Backs Unlimited Compensation For Disgraced CEOs: Now Is Not The Time For ‘Punitive Measures’

bushpb.jpg Today, the White House released a statement criticizing Congress’s potential plan to limit CEO compensation at the companies the federal government is bailing out, firmly standing against any “punitive measures”:

We certainly understand and are sympathetic to the sentiment regarding the pay of CEOs and senior management of these firms, but we have to focus on the problem, and the problem is that we need these firms to participate in the program and sell us this debt. Having punitive measures would provide a disincentive for firms to participate, and that would make the program much less likely to succeed.

CEO compensation and corporate governance in public companies are very important issues — especially when receiving taxpayer support — but we need to be focused on fixing this problem in our markets right now. We can and should return to those issues once we get this legislation passed.

President Bush also released another statement earlier today warning Congress against inserting any “unrelated provisions” — such as help for struggling homeowners — in the $700 billion Wall Street bailout.

The Bush administration’s position is unjustifiable. As ABC News reported:

In 2007, Wall Street’s five biggest firms — Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley — paid a record $39 billion in bonuses to themselves.

That’s $10 billion more than the $29 billion loan taxpayers are making to J.P. Morgan to save Bear Stearns.

Those 2007 bonuses were paid even though the shareholders in those firms last year collectively lost about $74 billion in stock declines — their worst year since 2002.

In short, the Bush administration wants zero punishment for these wreckless CEOs who lost shareholder money and are now costing each person in the United States $2,000. In return for $700 billion, the White House has yet to name any ways that it will hold these corporations accountable or institute safeguards to ensure that this irresponsible lending and borrowing won’t happen again.

Furthermore, the White House is demanding that Congress give up its oversight powers for this deal and “place no restrictions on the administration other than requiring semiannual reports to Congress, granting the Treasury secretary unprecedented power to buy and resell mortgage debt.”

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Obama Picks Up Phone on Economy

ABC's Sunlen Miller reports: Since yesterday, Sen. Barack Obama has spoken on the phone with House Speaker Nancy Pelosi, Senate Majority Leader Harry Reid, Senate Banking Committee chairman Chris Dodd, Rep. Barney Frank, Sen. Chuck Schumer, Rep. Ralph Emmanuel, former President Bill Clinton and Sen. Hillary Clinton about the economic situation and the plan for dealing with it.

Spokesperson Linda Douglass says that the conversations were about devising a "quick, bipartisan solution" to the economic crisis and they touched on the principles that Obama laid out in a speech in Charlotte, N.C., today.

"As of now, the Bush administration has only offered a concept with a staggering price tag, not a plan," Obama said. "Even if the U.S. Treasury recovers some or most of its investment over time, this initial outlay of up to $700 billion is sobering. And in return for their support, the American people must be assured that the deal reflects the basic principles of transparency, and fairness, and reform. We can’t allow this to happen again. They have run this government, they have run this economy into the ground. We’ve got to make sure that we lift if back up, but we’ve got to have some rules in place to make sure it doesn’t happen again."

Obama set out seven principles (several of which he has regularly mentioned on the campaign trail) for what he would like to see included in the government's bailout plan.


    • No blank check. If we grant the Treasury broad authority to address the immediate crisis, we must insist on independent accountability and oversight. Given the breach of trust we have seen and the magnitude of the taxpayer money involved, there can be no blank check.
    • Rescue requires mutual responsibility. As taxpayers are asked to take extraordinary steps to protect our financial system, it is only appropriate to expect those institutions that benefit to help protect American homeowners and the American economy. We cannot underwrite continued irresponsibility, where CEOs cash in and our regulators look the other way. We cannot abet and reward the unconscionable practices that triggered this crisis. We have to end them.
    • Taxpayers should be protected. This should not be a handout to Wall Street. It should be structured in a way that maximizes the ability of taxpayers to recoup their investment. Going forward, we need to make sure that the institutions that benefit from financial insurance also bear the cost of that insurance.
    • Help homeowners stay in their homes. This crisis started with homeowners and they bear the brunt of the nearly unprecedented collapse in housing prices. We cannot have a plan for Wall Street banks that does not help homeowners stay in their homes and help distressed communities.
    • A global response. As I said on Friday, this is a global financial crisis and it requires a global solution. The United States must lead, but we must also insist that other nations, who have a huge stake in the outcome, join us in helping to secure the financial markets.
    • Main Street, not just Wall Street. The American people need to know that we feel as great a sense of urgency about the emergency on Main Street as we do the emergency on Wall Street. That is why I call on Senator McCain, President Bush, Republicans and Democrats to join me in supporting an emergency economic plan for working families a plan that would help folks cope with rising gas and food prices, save one million jobs through rebuilding our schools and roads, help states and cities avoid painful budget cuts and tax increases, help homeowners stay in their homes, and provide retooling assistance to help ensure that the fuel-efficient cars of the future are built in America.
    • Build a regulatory structure for the 21st Century. While there is not time in a week to remake our regulatory structure to prevent abuses in the future, we should commit ourselves to the kind of reforms I have been advocating for several years. We need new rules of the road for the 21st Century economy, together with the means and willingness to enforce them.
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