Category Archives: Bush Administration

McCain’s Bluff Has Been Called

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As of 8 AM today there is still no word whether John McCain will show up for tonight’s debate. However, in most media (I don’t count Faux News) there appears to be consensus that McCain’s skipping the debate would be a boneheaded move. Even Republicans are saying that, unless there are critical negotiations going on in the White House at the exact time the debate is scheduled, McCain had better haul his ass to Mississippi.

And it’s unlikely the Dems, who would have to agree to hold those critical negotiations, would give McCain an excuse not to be in Mississippi.

This morning a number of news stories say that McCain was a near non-participant in yesterday’s White House photo op meeting. Adam Nagourney and Elisabeth Bumiller write for the New York Times,

At the bipartisan White House meeting that Mr. McCain had called for a day earlier, he sat silently for more than 40 minutes, more observer than leader, and then offered only a vague sense of where he stood, said people in the meeting.

That was the “giving McCain the benefit of the doubt” version of the story. David Kurtz provides a little more detail:

During the late afternoon meeting at the White House (a meeting which was McCain’s idea), McCain sat silently at the table until nearly the end, according to a Hill source who was briefed on the meeting. At that point, I’m told, McCain vaguely brought up the proposal being pushed by the Republican Study Committee, the group of House conservatives that is bucking the GOP leadership. But McCain didn’t offer any specifics and didn’t necessarily advocate for the plan, according to the Hill source.

Responding to McCain, Treasury Secretary Paulson said that the RSC proposal was unworkable, my source says, at which point McCain didn’t really advocate for it or state his own position. The meeting adjourned soon after, amid confusion over where negotiations could go next.

There are other news stories that give different accounts of who introduced the RSC proposal. Marc Ambinder says other Republicans in the meeting brought it up. David Rogers of The Politico says Barack Obama brought it up first to squeeze the Republicans.

Whatever the details, all accounts agree on one point — McCain sat through most of the meeting silently, like a bump on a log, and made no substantive contribution.

In a column in which he reveals something that perhaps he didn’t intend, David Brooks writes about McCain in the past tense. The McCain of the past as described by Brooks is in no way the same man who showed up at yesterday’s White House meeting. Either Brooks’s views of past McCain were highly skewed (which is highly possible), or McCain is deteriorating before our eyes.

This morning Americans — the ones paying attention, anyway — are hearing the news that negotiations on a bailout deal fell apart after McCain got to Washington. Oh, and guess what? Here’s the biggest bank failure in U.S. history. Way to go!

It’s not clear to me what will happen if Obama shows up tonight and McCain doesn’t. However, I say again that unless some critical meetings or negotiations are taking place in Washington tonight, most Americans will assume McCain just plain ducked out. Not very heroic of him.

Also: A bold, fresh piece of pathology — listen to rightie “intelligentsia” eating its own. Revealing, but not in the way Allahpundit thinks it is.

Update:

W: The Movie

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Like many of you, my nerves are raw from the last eight years, and so this trailer is somewhat difficult to watch. It’s for Oliver Stone’s new movie, “W”, which opens Oct 17. The casting looks great, and the music in this trailer, IMO is spot on. "A devil in a white hat", indeed.

UPDATE: I don’t normally report name-calling, but it’s pretty significant when someone of Paul Begala’s stature calls Bush a “high-functioning moron” on CNN.

Anderson, speaking of Bush’s robotic delivery of his address to America on the economic crisis, said he “did not seem to be there,” and Ed Rollins chimed in with “it was not his words,” while Gloria Borger said he was “not comfortable,” but Begala drove the final nail in W’s coffin with the magic words.

Gloria Borger turned and gave Paul a look, but Republican strategist Rollins did not interject to protest or contest Begala’s remarks. Apparently, at long last, it is now a given that the emperor has no clothes.

If only we had a parliamentary form of government, this administration would have been driven out with a vote of no confidence several years ago. I hope we can hold on until January 20, 2009.

h/t abrauer

Good News/Bad News

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The good news is that yesterday House Republicans rebelled against Dick the Dick.

The vice president traveled to Capitol Hill on Tuesday to silence a chorus of GOP complaints about Treasury Secretary Henry Paulson’s $700 billion plan. But House Republicans who walked into a closed-door meeting with Cheney steaming over the plan walked out just as angry, and they described what happened in between as both “a bloodbath” and “an unmitigated disaster.”

The bad news is that House Republicans are going to play the partisan politics game with the financial crisis.

Republican leaders are now hoping Democrats load the legislation with unrelated measures that would give them the political cover to oppose it, members and aides said. At the same time, party leaders are using back channels in the business community to gauge member support for a “clean” bill.

Former House Speaker Newt Gingrich (R-Ga.) warned his former colleagues that they would pay a price in November for backing the bailout now — and that John McCain could ride to victory over Barack Obama by persuading voters that the bailout is really the “Obama-Bush plan.”

Maybe I haven’t had enough coffee yet, but I find it baffling that some Senate Democrats are waiting to see how McCain votes on the measure before they decide how they will vote. See also Digby.

Back to good news/bad news. The good news is that Obama has a clear lead over McCain in the latest Washington Post-NBC News poll. Much of this lead is coming from white women switching their preference from McCain to Obama. Obama now has a small lead among white women.

The bad news is that media are still going with the “white women don’t like Obama” story.

File this under “weird news.” Michelle Malkin blames illegal immigrants for the financial crisis. The girl belongs in a carnival freak show.

More weird news, although I’m not surprised. Pew Research says 57 percent of the public favors the Wall Street bailout. On the other hand, the latest Bloomberg/Los Angeles Times poll says 55 percent of the public is opposed to the Wall Street bailout.

The Pew poll told respondents that the government is “potentially investing billions to try and keep financial institutions and markets secure” and asked whether that’s the right thing to do. The Bloomberg/Los Angeles Times poll asked whether “the government should use taxpayers’ dollars to rescue ailing private financial firms whose collapse could have adverse effects on the economy and market, or is it not the government’s responsibility to bail out private companies with taxpayers’ dollars?”

I extrapolate from this that about two-thirds of the public doesn’t know what the hell is going on. Anyway, the good news/bad news I see here is that, politically, it doesn’t much matter what Congress does. All that matters is how it’s explained. This opens the door to the possibility that Congress could do the right thing without political penalty. It also opens the door to the possibility that Congress could do the wrong thing without political penalty.

Sort of bad news: The Right thinks the Fannie-Freddie issue can be blamed on Democrats.

The good news is that John McCain’s campaign manager has been on Freddie Mac’s payroll from the end of 2005 until last month.

Bring it on, righties.

Update: The McCain campaign is slamming the New York Times for running the story about the campaign manager’s ties to Freddie Mac. Not true, says Michael Goldfarb. Freddie Mac did pay a monthly retainer of $15,000 to Rick Davis’s firm, Davis Manafort, but Davis himself did not take any of that money.

For the record, the New York Times story published a statement from the McCain campaign saying David is not receiving income from his company. The Times also said, however, that Davis “as a partner and equity-holder continues to benefit from its income.”

Goldfarb is having one major hissy fit and complaining that the New York Times has not published any nasty investigations into whatever nefarious things David Axelrod, Obama’s campaign manager, is into. Press bias!

David Isikoff at Newsweek is biased also, apparently.

See also John Cole.

Dead Skunk in the Middle of the Road

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Emptywheel:

Hidden in an article reporting that Cheney’s going to go hunt up some support for the $700,000,000,000 bailout is this admission that the Bush Administration has been sitting on it for some time:

    Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough. [my emphasis]

So, for months the Administration has been telling everyone they’ve got the financial situation under control, then all of a sudden Congress has to pass a $700 billion giveaway to the financial sector right now don’t think about it just do it now now now. And Congress is warned that if it doesn’t act now now now and pass this bill as the Administration wrote it with no changes there will be terrible consequences and they would be Congress’s fault. And Congress can’t take any time to read the bill, even though it’s been sitting around in Cheney’s desk drawer for months.

Uh huh.

Is Anyone FOR the Bleeping Bailout?

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There seems to be nearly unanimous disapproval of Paulson’s $700 billion bailout, henceforth called “Plan B.”

The Wall Street Journal reports that “Liberal advocacy groups have mobilized to stop the financial bailout package, just as Bush administration officials are urging lawmakers to act quickly and decisively.” At Salon, Glenn Greenwald documents “Growing right-wing opposition to the Paulson plan.”

Righties opposed to Paulson include Little Lulu, who calls Paulson a “wrong-headed, ChiCom-promoting, liberal Democrat-installing, Gore global warming alarmist” (in keeping with Lulu’s understanding of political science — if she doesn’t like it, it must be liberal) and who wants a return to conservatives principles. Yes, I see the oxymoron, too.

One of Little Lulu’s readers responded to the question, “Will the real fiscal conservatives please stand up?” with “There aren’t any. Phil Gramm retired long ago.” They’re still willfully refusing to see that Phil Gramm and “conservative principles” caused the bloody mess to begin with. Oh, and a lot of Lulu’s readers seem to think illegal aliens are behind this, somehow.

But the point is that, wonder of wonders, the Right and the Left halves of the blogosphere are moving toward the same opinion, which is that Paulson’s plan must be stopped.

I’ve been surfing around for a respectable economist, i.e. one not on the Bush Administration’s or Republican Party’s payroll, who supports the plan. The only favorable comments I find are from last week, before details were announced. Now there is near unanimity among economists and finance experts that Plan B is a bad plan.

So, who’s for Plan B? Via Josh Marshall, the Wall Street Journal (behind firewall) says,

House Republican staffers met with roughly 15 lobbyists Friday afternoon, whose message to lawmakers was clear: Don’t load the legislation up with provisions not directly related to the crisis, or regulatory measures the industry has long opposed.

“We’re opposed to adding provisions that will affect [or] undermine the deal substantively,” said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, whose members include the nation’s largest banks, securities firms and insurers.

A deal killer for the group: a proposal that would grant bankruptcy judges new powers to lower the principal, interest rate or both on a mortgage as part of a bankruptcy proceeding.

So, says Josh, “finance industry lobbyists are already giving orders to Republican hill staffers not to allow any meaningful reforms or protections for taxpayers. So, just the money. No strings attached.”

(Don’t tell Lulu about not lowering principal or interest rates on mortgages in bankruptcy, or she might change her mind about the evilness of the Plan. Sticking it to the poor and distressed is what righties live for. It makes them feel superior.)

Some things don’t change —

President Bush this morning warned lawmakers against trying to make too many changes to the proposed financial bailout legislation, but Senate Democrats announced that they would add provisions to the plan that could spur opposition from the administration or congressional Republicans and bog down the measure.

In Bush World, Congress is redundant.

Dan Froomkin:

Does President Bush’s support for a radical financial bailout represent a reversal in his political ideology? Not likely.

For one, it seems to be less a reversal than a recusal. Bush appears ideologically spent, rather than transformed. He has for all intents and purposes become the bystander-in-chief, letting others in his administration do the heavy lifting.

Furthermore, the plan concocted by two Bush appointees features some distinctive characteristics of major Bush initiatives past: It would be spectacularly expensive, primarily benefit the very rich, and grant the executive branch unlimited power with no transparency or accountability.

Explained that way, one would think righties would like it. They supported just about every other plan like that that the Bushies have come up with.

See also Sean-Paul Kelley.

Beyond Meltdown

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Paul Krugman’s column explains Henry Paulson’s $700 billion rescue plan for the U.S. financial system. The title of the column provides a hint of Krugman’s opinion — “Cash for Trash.”

Basically, after having spent a year and a half telling everyone that things were under control, the Bush administration says that the sky is falling, and that to save the world we have to do exactly what it says now now now.

Once again, the Bush Administration and right-wingers in Congress are using a crisis to shift more wealth to the extremely wealthy. “Plan B” will reward the people who got us into this mess with a penalty-free bailout. Taxpayers and America in general will be the poorer for it.

Is there any reason outside avarice and corruption that the feds are pursuing this course? A conservative blogger (whose analysis of the crisis is reasonably sane) says,

Of course the almost hysterical urgency is partially because the locks on the coffers change in January. If Obama wins, so will the tax code. The administration’s preferred version of the bailout would be one last Wall Street giveaway before higher taxes and a tougher regulatory environment.

In other words, if Obama wins they’ll no longer be guarding the henhouse, so they’re making off with as many chickens as they can carry while they still can.

Dems in Congress are making noises about help for homeowners and caps on top executive compensation. Will they once again get railroaded into doing what the administration wants? Sean-Paul Kelley says there is room for hope. Very little room, I say. I don’t see what the Dems could lose by sticking to principles, and there is much they could gain, but we’ve been here too many times before, haven’t we?

Elsewhere: You know we’re approaching the End of Days when Sam Donaldson, George Will and Cokie Roberts trash a Republican and praise a Democrat. WTF? you say. My guess is that this trio lost a whole lot of money this week and realized that if they don’t want to be wiped out entirely they do not want to put John McCain in charge of the economy. “John McCain showed his personality this week,” Will said, “and made some of us fearful.” I know the feeling.

Meanwhile, most of the Right Blogosphere remains oblivious to the details of the financial crisis and the atrocity the feds are about to commit to “fix” it. Rather than concern themselves with understanding the issues, they’ve gone into hyper-blame mode. Clif give us his version of the shorter Right Blogosphere: “[T]he reason for the current financial crisis is that the Community Reinvestment Act passed by the Democrats forced banks to lend money to a bunch of shiftless darkies who couldn’t repay their loans.”

My version of the shorter Right Blogosphere: “The elitist Left is behind this. We hates them. We hates them, precious.”

Nothing much else to do but laugh.

Reverting to Type

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More information about the feds response to the financial crisis has been released, and Paul Krugman says it’s a bad plan (emphasis added).

Here’s the thing: historically, financial system rescues have involved seizing the troubled institutions and guaranteeing their debts; only after that did the government try to repackage and sell their assets. The feds took over S&Ls first, protecting their depositors, then transferred their bad assets to the RTC. The Swedes took over troubled banks, again protecting their depositors, before transferring their assets to their equivalent institutions.

The Treasury plan, by contrast, looks like an attempt to restore confidence in the financial system — that is, convince creditors of troubled institutions that everything’s OK — simply by buying assets off these institutions. This will only work if the prices Treasury pays are much higher than current market prices; that, in turn, can only be true either if this is mainly a liquidity problem — which seems doubtful — or if Treasury is going to be paying a huge premium, in effect throwing taxpayers’ money at the financial world.

And there’s no quid pro quo here — nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving.

Sebastian Mallaby:

With truly extraordinary speed, opinion has swung behind the radical idea that the government should commit hundreds of billions in taxpayer money to purchasing dud loans from banks that aren’t actually insolvent. As recently as a week ago, no public official had even mentioned this option. Now the Treasury, the Fed and congressional leaders are promising its enactment within days. The scheme has gone from invisibility to inevitability in the blink of an eye. This is extremely dangerous.

The plan is being marketed under false pretenses. Supporters have invoked the shining success of the Resolution Trust Corporation as justification and precedent. But the RTC, which was created in 1989 to clean up the wreckage of the savings-and-loan crisis, bears little resemblance to what is being contemplated now. The RTC collected and eventually sold off loans made by thrifts that had gone bust. The administration proposes to buy up bad loans before the lenders go bust. This difference raises several questions.

You can read the rest of the column for the questions.

As I understand it, the economic pundit guys had thought the feds would come up with a plan by which the taxpayers would get some value back eventually. Plan B pretty much guarantees we won’t. And why do I think the White House is pushing Plan B with all it’s got?

Speaking of which: The White House released a statement on “The Administration’s Unheeded Warnings About the Systemic Risk Posed by the GSEs [government-sponsored enterprises].” The Administration wants us to know that it saw the financial crisis coming. Yes, and we all appreciate the visible, robust and tireless efforts of President Bush to prevent the financial crisis … oh, wait …

I dimly remember that last Wednesday, John McCain blamed the financial crisis on overcompensated executives and their “golden parachutes.” The Dems tried to inject some language about compensation caps into Plan B, and Treasury Secretary Paulson rejected it as a “poison pill.” Let’s see if McCain has anything to say about that.

Some Dems also are trying to get some help for homeowners into Plan B. I’m not holding my breath.

Finally, if anyone wants to reflect on whatever Jeff G. is ranting about here, be my guest. It looks as if his hatred and resentment of all things “progressive” is overriding any concern he might have for, you know, the financial crisis, which somehow must be liberals’ fault.

Update: Sorry, I left out the link to Jeff G.

Quote of the Decade, and Other Stuff

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From an article written by John McCain and published in the current issue of the journal of the American Academy of Actuaries:

Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.

I’m starting to look forward to the debates.

At Salon, Joe Conason writes,

Now that we’re all about to take on hundreds of billions or perhaps a trillion dollars in new public debt to redeem the nation’s super-smart corporate financiers, there is one thing I hope we can expect in addition to postponing the apocalypse. Will they all please shut up about the wonders of the unfettered free market and the horrors of big government?

The die-hards will not shut up, of course. I just dropped by Lew Rockwell to see if there were any lights in the attic. Nope. They will all go to their graves believing that free markets solve everything.

Going by Memeorandum, right-wing bloggers aren’t saying much about the financial crisis. Today the leftie blogs are all over it. The top three concerns of rightie blogs are (1) Charlie Rangel said something nasty about Sarah Palin; (2) Sandra Bernhard said something nasty about Sarah Palin (she’s a standup comic, people! that’s what they do); (3) liberals hate God.

Yesterday there was some shrieking from the righties about the bailouts and how taxpayers (i.e., them) are getting soaked. There was not a glimmer of recognition from any of them that they had anything to do with what caused the financial crisis. They sounded like juveniles who had a party that trashed their parents’ house, and now Mom and Dad are telling them they have to clean it up and do without an allowance. Poor babies.

Speaking of Sarah Palin — Kos posts Palin’s favorability trajectory. Enjoy.

Democrats are better for the economy than Republicans. The record is clear. I especially liked …

The Ranking of the Last 13 Presidents by Job Creation (as of 2002)

1) Roosevelt (1933-45): +5.3%

2) Johnson (1963-69): +3.8%

3) Carter (1977-81): +3.1%

4) Truman: (1945-53): +2.5%

5) Kennedy (1961-63): +2.5%

6) Clinton (1993-2001): +2.4%

7) Nixon (1969-75): +2.2%

8) Reagan (1981-89): +2.1%

9) Ford (1975-77): +1.1%

10) Eisenhower (1953-61): +0.9%

11) Bush (1989-93): +0.6%

12) Bush (2001-present): -0.7%

13) Hoover (1929-33): -9.0%

Looks like a pattern to me.

The Last Vacation

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By now it’s obvious that George W. Bush, who never quite got the hang of his POTUS job, or what a job is for that matter, can barely be bothered to go through the motions. He had to be pried out of the White House yesterday to deliver two minutes of platitudes about the financial crisis, an appearance Chris Matthews compared to a cuckoo popping out of a clock.

BTW, this is how a real president speaks to the nation about a financial crisis.

Things Are Being Done, but there’s grumbling that they aren’t the right things. I think we’re seeing a lot of fingers poking into a lot of holes in the dyke.

John McCain’s response so far has been so bone-headed that even Sebastian Mallaby is shocked.

John McCain has just demonstrated his vulnerability as a presidential candidate. Speaking from prepared remarks at an Iowa rally today, he said that he would fire Chris Cox, the chairman of the Securities and Exchange Commission. This outburst demonstrates McCain’s ignorance, his impetuousness and his vindictive streak. Not bad for one remark. …

…McCain is a loner rather than a team player. He is a political brawler rather than a manager. The financial turmoil is raising questions about how he’d perform in a crisis.

Are you watching this, America?

Obama’s response:

The Illinois senator said he would be discussing the Fed-Treasury proposal with his top economic advisers on Friday morning. Among those who have been advising Obama on his response to the financial crisis are former Federal Reserve Chairman Paul Volcker and former U.S. Treasury secretaries Lawrence Summers and Robert Rubin.

“Given the gravity of this situation, and based on conversations I have had with both Secretary Paulson and Chairman Bernanke, I have asked my economic team to refrain from presenting a more detailed blue-print of how an immediate plan might be structured until the Treasury and the Federal Reserve have had an opportunity to present their proposal.”

Obama said it was critical that the markets and public have confidence in the Fed and Treasury’s efforts and that their work be “unimpeded by partisan wrangling.”

There’s a lot more to this statement; read at the link.

McCain’s surrogates on the cable television politics shows: “Taxes liberal taxes liberal boogaboogaboogabooga.”

McCain campaign: Barack Obama is black and will steal money from your sweet white grandmother.

Help.

Related links:

Sean-Paul Kelley, “The Day Capitalism Died”

Joseph Stiglitz, “The Fruit of Hypocrisy”

Paul Krugman, “Crisis Endgame”

Eugene Robinson, “Failing Econ 101”

Update: Why Lehman Brothers crashed.

Unbalanced

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Matt Yglesias makes an important point that’s not being discussed enough. Of the de-privatization of Fannie, Freddie and AIG, he says,

I’m a little surprised to learn that this is legal without some kind of legislation. It seems pretty far afield from the Fed’s traditional domain. I guess in a storm people don’t care about the niceties. … It seems to me that there this step has uncertain implications far beyond the world of high finance.

I’d like to see commentary on what the feds’ options were regarding AIG. In other words, what kind of ripple effect would we be looking at had it gone under? I honestly don’t know. Certain persons on the right blogosphere are screaming about “bailout-palooza,” and I agree that government takeover of the finance and insurance sectors is, um, way bad. I don’t like it at all. But given the circumstances, what alternatives were there?

Q. And who got us into this mess, anyway?

A. Reaganites and “small-government” conservatives who called for more and more deregulation in the name of “getting government off our backs.”

Nancy Pelosi denied that Democrats had anything to do with the financial crisis. I disagree with that. Plenty of Democrats went along with the deregulation craze without a murmur, and some actively bought into it.

But the mess originated on the Right, and it was the Right that made “regulation” a dirty word. You can argue that some Dems who probably knew better went along with deregulation because they would have lost elections otherwise. But essentially we’re looking at a mob mentality that began on the Right and spread throughout the land in all directions.

Can we, as a nation, learn anything from this? Um, wake me up when it happens. If real-world experience could have taught the “get government off our backs” crowd anything, it would have happened after the saving & loan crisis in the 1980s.

Granted, it probably was written last week, but George Will’s latest column in Newsweek is all about the beautiful natural balance of markets. “[The] point is that markets allow order to emerge without anyone imposing it. The ‘poetry of the possible’ is that things are organized without an organizer.” And there’s a lot of truth in that, especially if you’re talking about consumer goods. The overall experience of centrally planned Communist-style economies is that they are utterly dysfunctional. It is more efficient to allow supply and demand to determine how much bread to bake or how many flashlights to manufacture.

But the Right assumed that if one extreme is bad, the other extreme must be good. They insist that free market theories will somehow fix public schools and the health care crisis, even though competition, supply and demand for these services do not function the same way they function for consumer goods.

The fantasy is that “free markets” will always balance without human intervention, and problems will correct themselves. In a perfect world, that might be true. In this world, the forces of greed, hubris and just plain stupid will outweigh everything if not kept in check.

What we’re seeing now is how “natural balance” really works. Years of moving in one extreme direction — reckless deregulation and privatization — have created a crisis, causing the government to swing to the opposite extreme — nationalization — to correct it

Pursuing a middle way is more likely to keep one from swinging in extreme directions. This is essentially what us barking moonbat loony liberals and crackpot progressives have been saying for years, while the sensible and adult conservatives have been pushing us to extremes.

The other worrisome matter is that the executive branch is acting without even pretending to consult Congress. Like Matt, I question whether this is constitutional. It shows us that the Bush Administration, incompetent as it is, has done a heckofa job dismantling the Constitution and the checks and balances of the federal government.