• The evidence seems pretty strong that it wasn't just members of Congress with safe seats who voted for the bailout -- supporters of the bill also received 54 percent more campaign contributions from banks and securities firms. Meanwhile, an ABC News/Washington Post poll [PDF] finds that 44 percent of Americans blame the Republicans for the bailout failure (21 percent blame the Democrats) and there is near even division on whether the bailout plan should be passed at all, with 45 percent in favor, 47 percent against.
• Barack Obama is starting to take a more active role in finding a solution to the financial crisis, releasing a third two-minute ad where he talks directly to the public about what must be done and telling supporters in Nevada that he would expand FDIC to $250,000 (McCain has also taken this position).
• An unreleased clip of Katie Couric interviewing Sarah Palin continues to set expectations exceedingly low for the Alaska Governor in Thursday's debate. Asked whether she could name a SCOTUS decision other than Roe v. Wade, Palin responded with total silence. This comes as Palin's second Couric interview -- this time with McCain at Palin's side -- reveals that Palin considers questions about being asked a question by a voter "gotcha journalism." Finally, Rebecca Traister's excellent essay on Palin for Salon gets to the heart of the matter: Palin agreed to be John McCain's running mate, and if she can't handle it, that's her problem.
  
• VP debate moderator Gwen Ifill broke her ankle yesterday but isn't suspending the debate. Meanwhile a Marist poll finds that while more voters find Palin likable than Joe Biden, they expect him to win the debate.
• John McCain showed off his geography skills at an economic forum today, observing that real energy security means not being "dependent on oil from people like Hugo Chavez or other parts of the Middle East which is, we know, could be destabilized under certain sets of circumstances."
• Barack Obama makes Keith Olbermann's "World's Worst" list for getting the year of his wedding to Michelle Obama incorrect. For shame.
• Newt Gingrich knows how to fix the financial crisis: set up a "website for ideas." Oh Newtie, America needs your brilliance now more than ever.
• Is Sen. McCain going to suspend his campaign again? The Maverick Gambler implies it might be necessary.

--Mori Dinauer

Ambinder sez: "In any event, both Obama and McCain seem to have settled into a bipartisan groove, working, separately, but -- finally -- in the same direction."

Er, finally? If you check their public statements, neither candidate has ever really disagreed about the bill. In fact, both candidates offered the same criticisms of the bailout bill. When McCain dramatically swept into Washington, he didn't have anything to say at the conference table because he had the same concerns as the Dems. For better or worse, Obama has resisted the urge to follow his more liberal inclinations to make this bill more progressive by addressing the foreclosures at the root of the problem and offering a adjunct stimulus package, and McCain has resisted the urge to follow his rightward inclinations by outwardly opposing the bill, like the conservative House GOP. McCain's grandstanding, however, gave the House Republicans traction to defeat the bill yesterday, making him look a silly in retrospect. That's why his attacks against Obama and the Democrats have fallen so flat today.

Nonetheless, both candidates have been on the same page on the bailout bill for a while, which is part of why the economics portions of last week's debate was so tepid -- I recall Obama at one point saying something like, "we haven't seen the text yet," a bipartisan excuse not to be specific. The two candidates have different overall economic narratives, both about what the economy needs in the long term and why the crisis is happening, but neither one has moved much beyond beltway CW in terms of the immediate response to the financial crisis.

--Tim Fernholz

Economics, media studies, and globalization all make cameo appearances in this week's very special episode of Think Tank Round-Up.

• States Feeling main street's pain. According to a Center on Budget and Policy Priorities report, 15 states and the District of Columbia have developed enormous budget gaps, mirroring the magnitude of budgetary imbalance seen during the 2001 recession. The report calls for federal aid through Medicaid contributions and general grants based on each state's population and notes that the federal government would do well to act earlier to ameliorate such crises. Doesn't this sound familiar? -- SW
• Laissez-Faire losers. Increases in agricultural trade thanks to liberalization policies throughout Latin America have imperiled small farms, according to a report by the Washington Office on Latin America and Tufts University. Looking at El Salvador, the soybean boom in Brazil, Argentina, and Bolivia, and at Mexico after fourteen years under NAFTA, researchers find that low-priced imports, part and parcel of liberalized economies, commandeer domestic markets and threaten rural livelihoods. Washington Consensus policies inspired this widespread trade in Latin America, but failed to promote sustainable rural development -- the ultimate goal. -- CP
• European Exceptionalism.[PDF] An impressive multilateral coalition has issued a report observing that Europe has warmed more than the global average (1.0 and 1.2° C, respectively) since pre-industrial times, and projecting that this asymmetrical trend will continue. -- DH
• New Media, stop exaggerating! Brookings concedes that the immigration debate is inherently tough to solve, but finds that New Media, like cable TV, talk radio, and the Internet (as opposed to daily newspapers and broadcast network evening news programs) have increased public anxiety about the issue. It all boils down to competition for audience shares. New Media took distinct and severe tacks on immigration to out-crisis rivaling media outlets, which inspired viewers towards factionalism. Compromise in congress, the report seems to say, would have been easier thirty years ago. -- CP
• I Promise I Won't Get Mad, Now Tell Me What You Did. In a Carnegie Endowment policy brief titled, "Iran Says "No." Now What?" George Perkovich outlines precisely how the next president should address Iran. Notably, he points out that the international community has not made it clear how it would react to Iran actually admitting steps it has taken towards weaponization. The Iranians will be reticent about "coming clean" until they know they may do so without further increased sanctions and punishment. However, Perkovich also notes that if Iranian intransigence continues for too long, harsher approaches will be necessary -- SW
• After the bailout. Assuming Congress passes some kind of bill to try and halt the financial crisis, the question of how to deal with the structural problems within the financial system will remain, likely for the new administration. With that in mind, two Brookings fellows offer a brief guide to their suggested changes, which, unsurprisingly, emphasize regulation, focusing on disclosure, transparency, and limiting leverage, among other things. A useful primer on future economic debates. -- TF

-- TAP Staff

Previous Round-Ups
9/23/08
9/16/08

Jonathan Martin reports that the Obama campaign was looking to recruit a rape survivor to appear in an ad.

Kiersten Steward, director of public policy at the Family Violence Prevention Fund, served as a conduit between the campaign and victims and women's advocates.

"Obviously, this is a big ask and I haven't seen a script but presumably it will be a brief 'this is what happened to me, we need someone who will fight for women like me, these are the guys to do it,'" Steward wrote in a Sept. 15 e-mail. "Again, that's just my assumption, given how these things usually go."

So it raises the question: Is this exploitative? Or is it simply a compelling way to draw attention to a very serious issue?

My gut reaction was similar to Megan's on Jezebel:

While I'm all for bringing more attention to the issue of sexual assault, I am more than a little disturbed that the Obama camp would be asking a victim to share her story (and likely be attacked by conservatives) in order to score some political points. It's one thing to go to them and offer to share her story, but it's another thing for them to come to her and ask.

But that's not the side I ultimately end up on. Political and issue-based campaigns frequently recruit people with first-hand experience to speak publicly and in ads. I wondered, would my reaction be so strong if the Obama campaign was seeking a laid-off autoworker to discuss his economic policies? Decidedly not.

All too often rape survivors are seen as objects of pity, rather than as people who have agency and a powerful voice. At a basic level, it's good to have real women (not actresses playing survivors, Lifetime-movie-style) stand up and speak to this issue from experience. The major caveat, of course, is that there cannot be any coercion involved. And it doesn't look like there was. Politico quoted one woman who was asked to appear:

Mikele Shelton-Knight declined to do so, but said in an interview that she was glad the Obama campaign was seeking to highlight the issue.

"The more discussion about this the better," said Shelton-Knight, a full-time victims advocate in the Richmond area.

While I'm sure conservatives will peg the Obama campaign's recruitment of rape survivors as crass, I agree with Shelton-Knight. I'm glad the candidates' policies on sexual violence are an issue in this campaign. And it's a good thing to hear directly from a person who was affected (or would have been affected) by the policies in question. Yes, even when that person is a survivor of sexual violence.

--Ann Friedman

As of now, the US Navy has surrounded a Ukrainian ship supposedly delivering T-72 tanks to Kenya. Pirates seized the vessel several days ago, buying themselves a heap of trouble. The pirates aren't the only ones in trouble, however; questions are now being asked about where the tanks were headed. Kenya insists that it purchased the weapons, but they don't match Kenya's Western-supplied Army. The United States is concerned that the weapons are intended for Somalia or Sudan, either of which would be both bad and in violation of international embargoes.

The pirates, for their part, seem to think that the weapons were headed for Sudan. They also insist that they were merely enforcing Somalian maritime rights, and ... uh, robbing people. Things probably aren't going to go well for the pirates, but it could get messy if they try to use the weapons on board (which includes small arms and RPGs, as well as the aforementioned tanks). David Axe gives some indication of how a seizure might play out.

--Robert Farley

Robert Kuttner examines what we have -- and haven't -- learned from the Great Depression:

But the other lesson was the one "we" forgot -- not to let banks and other financial institutions turn themselves into casinos. It is helpful, in the spirit of Tonto's historic interrogatory to the Lone Ranger -- "What you mean, we?" -- to unpack that "we." The "we" who forgot the lessons included first and foremost Republican ideology -- deregulate everything and let markets run wild; secondly Bush administration regulatory officials who disdained even the regulations on the books; and third, the Wall Street Democrats who were de-regulation's willing enablers.

And Paul Waldman writes that the current confusion in the Republican party about what to do about the bailout is a sign of future divisions in the party:

Not that anyone much cares what the Republican Study Committee thinks. But its desperate attempt to head off government intervention into the smoothly humming operation of the free market, comical though it might be, tells us something about what our politics will look like after this election. The conservative movement that has dominated American politics for the last three decades is sputtering toward the end of its relevance. Its various factions, so willing in the past to put their differences aside in service of the goal of obtaining and holding power, are heading for a civil war. Whether the movement can remake itself will determine whether progressives are beginning their own long period of ideological supremacy.

Subscribe to our RSS feed to receive our articles as soon as they’re published.

—The Editors

A key reason for the failure of the bailout plan to gain enough votes was constituent pressure against it, both from progressives and conservatives. That's because credible sources have done a poor job of convincing the public of the connection between the financial crisis on Wall Street and its far-reaching consequences for all Americans. I spoke with Dr. Robert Shapiro, an economist and former Clinton administration official, about the crisis and the bailout bill today, and he made this point succinctly:

"Members of Congress are very scared of their constituents right now, for whom the plan has not been well explained. If it had, it would get a lot more public support. The possibility of a total meltdown of the financial system in which credit flows stop -- this is not just U.S. but global -- is significant enough that it warrants very serious measures. ... Who is the first sufferer? Wall Street is not sympathetic. [But] It doesn't stop there. The economy runs on credit. All of our jobs depend on flows of credit."

Shapiro, like most economists, doesn't like the bailout bill even in its current iteration but still thinks it ought to be passed, ideally, he says, with much stronger measures to address the underyling cause of the crisis: foreclosures. But, he says, "I don't think you can take this apart and redo the basic structure of the deal right now ... We're way too far down this road to say, oh, we're going to do something entirely new. I've spent hours over the last week with members of congress trying to explain how this works. You come up with a new approach and you've got to start the education all over. I think we take a big risk waiting another two weeks to do that. We do need to limit the amount [of money used in the bailout] so we can come back and correct later."

The response of the two presidential candidates has been revealing. Today, Barack Obama gave a speech (excerpted after the jump) making the case for the rescue. And John McCain has a new advertisment out blaming Democrats and Fannie Mae/Freddie Mac for causing the housing bubble. It's not true, especially since homeownership policy has been a bipartisan enterprise, and Fannie Mae and Freddie Mac were both victims of the crisis, not it's cause. What's needed to fix the economy now is a constructive effort to build support for legislation that will fix it. That's what McCain said yesterday, before he started pointing the finger.

--Tim Fernholz

Barack Obama Speech, Sept. 30. Key section in bold.

This morning – like so many others over the last few months – we woke up to some very sobering news about our economy. Over the course of a few hours, the failure to pass the economic rescue plan in Washington led to the single largest decline of the stock market in two decades.

Over one trillion dollars of wealth was lost by the time the markets closed on Monday. And it wasn’t just the wealth of a few CEOs or Wall Street executives. The 401Ks and retirement accounts that millions count on for their family’s future are now smaller. The state pension funds of teachers and government employees lost billions upon billions of dollars. Hardworking Americans who invested their nest egg to watch it grow are now watching it disappear.

But that’s not what it means. What it means is that if we do not act, it will be harder for you to get a mortgage for your home or the loans you need to buy a car or send your children to college. What it means is that businesses won’t be able to get the loans they need to open new factories, or hire more workers, or make payroll for the workers they have. What it means is that thousands of businesses could close. Millions of jobs could be lost. A long and painful recession could follow.

Let me be perfectly clear. The fact that we are in this mess is an outrage. It’s an outrage because we did not get here by accident. This was not a normal part of the business cycle. This was not the actions of a few bad apples.

This financial crisis is a direct result of the greed and irresponsibility that has dominated Washington and Wall Street for years. It’s the result of speculators who gamed the system, regulators who looked the other way, and lobbyists who bought their way into our government. It’s the result of an economic philosophy that says we should give more and more to those with the most and hope that prosperity trickles down to everyone else; a philosophy that views even the most common-sense regulations as unwise and unnecessary. And this economic catastrophe is the final verdict on this failed philosophy – a philosophy that we cannot afford to continue.

But while there is plenty of blame to go around and many in Washington and on Wall Street who deserve it, all of us now have a responsibility to solve this crisis because it affects the financial well-being of every single American. There will be time to punish those who set this fire, but now is the moment for us to come together and put the fire out.

This is one of those defining moments when the American people are looking to Washington for leadership. It is not a time for politics. It is not a time for partisanship. It is not a time to figure out how to take credit or where to lay blame. It is not a time for politicians to concern themselves with the next election. It is a time for all of us to concern ourselves with the future of the country we love. This is a time for action.

I know that many of you are feeling anxiety right now – about your jobs, about your homes, about your life savings. But I also know this – I know that we can steer ourselves out of this crisis. Because that’s who we are. Because this is the United States of America. This is a nation that has faced down war and depression; great challenges and great threats. And at each and every moment, we have risen to meet these challenges – not as Democrats, not as Republicans, but as Americans. With resolve. With confidence. With that fundamental belief that here in America, our destiny is not written for us, but by us. That’s who we are, and that’s the country we need to be right now.

This is no longer just a Wall Street crisis – it’s an American crisis, and it’s the American economy that needs this rescue plan. I understand why people would be skeptical when this President asks for a blank check to solve a problem. I’ve spent most of my time in Washington being skeptical of this Administration, and this time was no different. That’s why over a week ago, I demanded that this plan include specific proposals to protect American taxpayer – protections that the Administration eventually agreed to, as well as Democrats and Republicans in Congress.

First, I said we needed an independent board to provide oversight and accountability for how and where this money is spent at every step of the way.

Second, I said that we cannot help banks on Wall Street without helping the millions of innocent homeowners who are struggling to stay in their homes. They deserve a plan too.

Third, I said that I would not allow this plan to become a welfare program for the Wall Street executives whose greed and irresponsibility got us into this mess.

And finally, I said that if American taxpayers are financing this solution, then you should be treated like investors – you should get every penny of your tax dollars back once this economy recovers.

This last part is important, because it’s been the most misunderstood and poorly communicated aspect of this entire plan. This is not a plan to just hand over $700 billion of your money to a few banks on Wall Street. If this is executed the right way, then the government will temporarily purchase the bad assets of our financial institutions so that they can start lending again, and then sell those assets once the markets settle down and the economy recovers. If this is managed correctly, we will hopefully get most or all of our money back, or possibly even turn a profit on the government’s investment – every penny of which will go directly back to you, the investor. And if we do have losses, I’ve proposed to institute a Financial Stability Fee on the entire financial services industry so that Wall Street foots the bill – not the American taxpayer. I’ve also said that if I’m President, I will review the entire plan on the day I take office to make sure that it is working to save our economy and that you are getting your money back.

Even with all these taxpayer protections, I know that this plan is not perfect or fool-proof. No matter how well we manage the government’s investments under this plan, we are still putting taxpayer dollars at risk. I know that there are Democrats and Republicans in Congress who have legitimate concerns about this, and I know there are many Americans who share those concerns.

But I also know that we can’t afford not to act. Both parties are close to accepting this plan, and over the next few hours and days, we should seek out any new ideas that might get this done. This morning, I proposed one such idea that might increase bipartisan support for this plan and shore up our economy at the same time: expanding federal deposit insurance for families and small businesses across America who have invested their money in our banks.

The majority of American families should rest assured that the deposits they have in our banks of up to $100,000 are still guaranteed by the federal government. That guarantee is more than adequate for most families, but it is insufficient for many small businesses to meet their payroll, buy their supplies, and create new jobs. The current insurance limit of $100,000 was set 28 years ago and has not been adjusted for inflation. I’ve proposed raising the FDIC limit to $250,000 – a step that would boost small businesses, make our banking system more secure, and help restore confidence by reassuring families that their money is safe.

That’s one idea. If there are others that can help shore up support for this plan and shore up our economy, I encourage Democrats and Republicans to offer them. But we must act and we must act now. We cannot have another day like yesterday. We cannot risk another week or another month where American businesses are afraid to extend credit and lend money. That is not an option for this country.

For the rest of today and as long as it takes, I will continue to reach out to leaders in both parties and do whatever I can to help pass a rescue plan. To the Democrats and Republicans who opposed this plan yesterday, I say – step up to the plate and do what’s right for this country. And to all Americans, I say this – if I am President of the United States, this rescue plan will not be the end of what we do to strengthen this economy – it will only be the beginning.

People have asked whether the size of this plan, together with the weakening economy, means that the next President will have to scale back his agenda and some of his proposals. The answer is both yes and no. With less money flowing into the Treasury, it is likely that some useful programs or policies that I’ve proposed on the campaign trail may need to be delayed. And I’ve said that as President, I will go through the federal budget, line by line, eliminating programs that no longer work and making the ones we do need work better and cost less.

But there are certain investments in our future that we cannot delay precisely because our economy is in turmoil. You can always put off giving your house a new paint job or renovating your kitchen, but when your roof is crumbling or your heater goes, you realize that these are long-term investments you need to make right away.

The same is true of our economy. We cannot wait to help Americans keep up with rising costs and shrinking paychecks by giving our workers a middle-class tax cut. We cannot wait to relieve the burden of crushing health care costs on families, businesses, and our entire economy. We cannot wait to create millions of new jobs by rebuilding our roads and our bridges and investing in the renewable sources of energy that will stop us from sending $700 billion a year to tyrants and dictators for their oil. And we cannot wait to educate the next generation of Americans with the skills and knowledge they need to compete with any workers, anywhere in the world. Those are the priorities we cannot delay.

As soon as we pass this rescue plan, we need to move with the same sense of urgency to rescue the families on Main Street who are struggling every day to pay their bills and keep their jobs. I’ve said it before and I’ll say it again: we need to pass an economic stimulus plan that will help folks cope with rising food and gas prices, save one million jobs by rebuilding our schools and roads, and help states and cities avoid budget cuts and tax increases. A plan that would extend expiring unemployment benefits for those Americans who’ve lost their jobs and cannot find new ones.

Beyond this immediate stimulus that I’ve called on both parties and the President to pass, we need an economic agenda to restore opportunity for Americans and prosperity to America. We need policies that will grow this economy from Main Street to Wall Street and everywhere in between – so that the 21st century is another American century. So that we’re not borrowing debt from China and buying oil from Saudi Arabia. So that the jobs of the future don’t go to better-educated workers in India and the cars of the future aren’t made in Japan. So that we can leave a legacy of greater opportunity to our children and their children. That is how we will emerge from this crisis stronger and more prosperous than we were before, and that is what I will do as President of the United States.

I will begin by reforming our tax code so that it doesn’t reward the lobbyists who wrote it, but the American workers and small businesses who deserve it. I will eliminate capital gains taxes for small businesses and start-ups, so that we can grow our economy and create the high-wage, high-tech jobs of tomorrow.

I will cut taxes – cut taxes – for 95% of all workers and their families. And if you make less than $250,000 a year, you will not see your taxes increase one single dime – because in an economy like this, the last thing we should do is raise taxes on the middle-class.

I will reform our health care system to relieve families, businesses, and the entire economy from the crushing cost of health care by investing in new technology and preventative care. If you have health care, my plan will lower your premiums. If you don’t, you’ll be able to get the same kind of coverage that members of Congress give themselves. And I will stop insurance companies from discriminating against those who are sick and need care the most.

To create new jobs, I’ll invest in rebuilding our crumbling infrastructure – our roads, schools, and bridges. We’ll rebuild our outdated electricity grid and build new broadband lines to connect America. And I’ll create the jobs of the future by transforming our energy economy. We’ll tap our natural gas reserves, invest in clean coal technology, and find ways to safely harness nuclear power. I’ll help our auto companies re-tool so that the fuel-efficient cars of the future are built right here the United States of America. I’ll make it easier for the American people to afford these new cars. And I’ll invest 150 billion dollars over the next decade in affordable, renewable sources of energy – wind power and solar power and the next generation of biofuels; an investment that will lead to new industries and five million new jobs that pay well and can’t ever be outsourced

And if I am President, I will meet our moral obligation to provide every child a world-class education, because it will take nothing less to compete in the global economy. I’ll invest in early childhood education. I’ll recruit an army of new teachers, and pay them higher salaries and give them more support. But in exchange, I will ask for higher standards and more accountability. And we will keep our promise to every young American – if you commit to serving your community or your country, we will make sure you can afford a college education.

Finally, I will modernize our outdated financial regulations and put in the place the common-sense rules of the road I’ve been calling for since March – rules that will keep our market free, fair, and honest; rules that will make sure Wall Street can never get away with the stunts that caused this crisis again. And I will take power away from the corporate lobbyists who think they can stand in the way of these reforms. I’ve done it in Illinois, I’ve done it Washington, and I will do it again as President.

These are the changes and reforms that we need. Bottom-up growth that will create opportunity for every American. Investments in the technology and innovation that will restore prosperity and lead to new jobs and a new economy for the 21st century. Common-sense regulations for our financial system that will prevent a crisis like this from ever happening again.

I won’t pretend this will be easy or come without cost. We will all need to sacrifice and we will all need to pull our weight because now more than ever, we are all in this together. What this crisis has taught us is that at the end of the day, there is no real separation between Main Street and Wall Street. There is only the road we’re traveling on as Americans – and we will rise or fall on that journey as one nation; as one people.

This country and the dream it represents are being tested in a way that we haven’t seen in nearly a century. And future generations will judge ours by how we respond to this test. Will they say that this was a time when America lost its way and its purpose? When we allowed our own petty differences and broken politics to plunge this country into a dark and painful recession?

Or will they say that this was another one of those moments when America overcame? When we battled back from adversity by recognizing that common stake that we have in each other’s success?

I believe that this is one of those moments. I know that many of you are anxious about your future and the future of this country. I realize that you are cynical and fed up with politics. I understand that you are disappointed and even angry with your leaders. You have every right to be. But despite all of this, I ask you to believe – believe in this country and your ability to change it. I ask you what has been asked of the American people in times of trial and turmoil throughout our history – what was asked at the beginning of the greatest financial crisis this nation has ever endured. In his first fireside chat, Franklin Roosevelt told his fellow Americans that “..there is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people themselves. Confidence and courage are the essentials of success in carrying out our plan. Let us unite in banishing fear. Together, we cannot fail.”

America, together, we cannot fail. Not now. Not when we have a crisis to solve and an economy to save. Not when there are so many Americans without jobs and without homes. Not when there are families who can’t afford to see a doctor, or send their child to college, or pay their bills at the end of the month. Not when there is a generation that is counting on us to give them the same opportunities and the same chances that we had for ourselves. Now is the time to make them proud of what we did here. Let’s give our children the future they deserve, and let’s act with confidence and courage to show the world that at this moment, in this election, the United States of America is still the last, best hope of Earth. Thank you Nevada, God bless you, and may God bless America.

###

John McCain Campaign Ad, September 30.

This isn't close to being as important as the bailout, and it's coming about a century too late, but mad props to Republicans Peter King and John McCain for their efforts to posthumously pardon boxer Jack Johnson last Friday:

The House resolution, passed by voice, states that Johnson paved the way for black athletes to participate and succeed in integrated professional sports and that he was "wronged by a racially motivated conviction prompted by his success in the boxing ring and his relationships with white women."

It urged the president to grant Johnson, who died in 1946, a posthumous pardon.

McCain has authored a companion resolution for the Senate.

Johnson's crime, in case it isn't clear, was kicking the tar out of white boxers and making public his predilections for sleeping with white women. Both made journalists at the time, including author Jack London, apoplectic. But if lawmakers are concerned with correcting the legacy of racism in reaction to Johnson, they might consider adding language that apologizes for the race riots that followed Johnson's whooping Jim Jeffries in 1910. Enraged whites, suffering an existential crisis as a result of the crumbling foundation of white supremacy in the wake of Jeffries' defeat, injured and killed black folks all across the country in response. The racism Johnson faced was bad, but at least he wasn't killed for being black at the wrong place at the wrong time.

--A. Serwer

In John McCain and Sarah Palin's parent teacher conference interview with Katie Couric, both candidates implicitly say that they would cross the border into Pakistan to pursue terrorist targets; they just say you shouldn't talk about it.

U.S. forces have engaged in cross-border raids on militants inside Pakistan in recent weeks which have prompted a violent response from Pakistani armed forces. According to The Economist, even the recent Marriot bombing has failed to turn public opinion against Islamic militants -- most Pakistanis place blame on "government, for its pro-American policies, on India or on America itself." The raids further destabilize the already weak civilian government. Former Lt. Gen. Talat Masood of Pakistan, in an interview with Foreign Policy, pointed out that U.S. raids into Pakistan give the militants there legitimacy by allowing them to claim that they are "resisting a foreign power."

Daniel Larison and others have criticized Obama for pursuing a "Bush-like" policy in Pakistan, and while they're right to raise concerns, I'm not positive that Obama and Bush are following the same path -- although it's not clear that they aren't. Obama has been careful to use the phrase "high value terrorist targets" in justifying the idea of military strikes inside Pakistan, and has often used Osama bin Laden as an example -- a choice that may be for rhetorical purposes or may be an important distinction between Obama's policy and Bush's. It hasn't been clear from the press reports that the targets the U.S. military has pursued into Pakistan have been worth the response.

So it would seem that this approach has some pretty serious drawbacks, if not disqualifying factors. It may be counterproductive, or given certain circumstances, it may even be necessary, but Obama should be clear about whether or not he supports the policy as being pursued by Bush right now, which Blake Hounshell calls "folly."

--A. Serwer

As Adam pointed out yesterday, even taken at face value John Boehner's attempt to use whining to deflect responsibility from his inability to secure the votes he promised for the bailout bill is embarrassing. Even worse, as Jonathan Zasloff notes, is that the story is plainly false. The speech was hardly some partisan stemwinder and, moreover, specifically exempted House Republicans from any criticism. Boehner had already lost the votes before Pelosi said anything.

(It's hard to simultaneously argue that George Bush's policies should be entirely exempt from criticism and that the policy he's strongly supporting should be rejected, but logic can't be considered a strong suit among people who think that suspending the capital gains tax will solve a problem based on people having investments that lost money.)  And, of course, none of the small number of Republican representatives who actually heard Pelosi's speech seemed to find it objectionable in real time.

So, to summarize, John Boehner failed to deliver the votes he promised, potentially putting the country in substantial economic peril, lied about the reasons to cover up his ineptitude, and the lie actually makes him and his colleagues look worse. In other words, your classic Bush-era Republican.

--Scott Lemieux

Education Week, the paper of record for the edu-wonk community, reports today on fears that education funding will be slashed because of the likely Wall Street bailout. Education lobbyists and advocates are planning on arguing that better education for children will boost the economy in the long-run. (Experts actually disagree about whether schooling can or has ever been a primary driver of American economic growth.) And as James Horney, director of federal fiscal policy at the Center for Budget and Policy Priorities, told Ed Week:

It may be hard for some lawmakers to say no to increases for schools after pumping hundreds of billions of dollars into the financial sector. Imagining what advocates might ask, Mr. Horney said: “ ‘How dare you not be able to invest a measly [few] billion in these domestic programs that help real people, not Wall Street?’ ”

As I wrote yesterday, it would be disastrous for Congress or the executive branch to develop a fear of spending just as we enter a probable recession in which, as we know from economic history, deficit spending can help to create jobs and stabilize people's lives through crucial social services. Let's review the basics: President Bush squandered a surplus during a relatively strong economy on the Iraq War and tax cuts for the rich. If the federal government became a budget hawk now, as Wall Street collapses, it would compound the problem, not reverse it. There is a time for balanced budgets at all costs and a time for reinvesting in infrastructure and social programs. This is the latter.

--Dana Goldstein

The House doesn't meet again until Thursday, so the question now is: What do the markets do? (I write this minutes before they open.) If they continue to fall, or at least not to post any improvements, then I think Matt's scenario is right: We'll probably see a new vote on a substantially similar bill to the one that failed yesterday. One option that is talked about -- and supported by Barack Obama in a statement today -- is raising the FDIC insurance limit from $100,000 to $250,000 to help protect the deposits of individuals and small businesses. The statements says Obama will be urging Congressional leaders to include the provision in the legislation; the Democratic candidate also has a new ad out touting his economic plan. It's not a specific response to the crisis but it sounds like he is finally hitting on the narrative so many progressives have been crying out for.

Meanwhile, Steve Benen has some ideas about where the legislation is going, although he is correct that there aren't too many people in D.C. or anywhere else with a clear idea about what's next. While he's right that passing a more progressive bill with the Democratic majority sounds nice, the politics don't look easy, as Ezra discusses here: There are simply too many Blue Dogs and Dems in shaky districts who wouldn't vote for such a bill to get you a majority.

For McCain, the politics are extremely tricky. This AP analysis is devastating:

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

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

Within hours, however, the measure died in the House mainly at the hands of McCain's own Republicans.

On a conference call last night and in public statements, his campaign has been blaming Obama for the failure of the bill (not, interestingly, a charge the Obama campaign has made in reverse). It's not a narrative that makes very much sense, even by the very loose standards of the Republican campaign, and the media doesn't seem to be buying it. In a statement this morning, he said, "It was 95 Democrats that voted against it." Uh, what? 133 Republicans voted against the bill, nearly 67 percent of the caucus -- especially galling after the GOP promised that they would provide 90 votes and failed to come through. Blaming the Democrats for this loss is such a ridiculous lie that, well, hell, I'm not surprised at all McCain would say it.

Today, he joined Obama in expressing support for increasing the FDIC insurance limit to $250,000.  McCain also called on the Treasury to immediately begin spending money to purchase toxic assets, using $250 billion from the exchange stability fund or $1 trillion from ... somewhere. (I'm going to have to find out where that $1 trillion is coming from, and why Paulson didn't use it in the first place.) He's still claiming some kind of success -- "Though we failed yesterday, even though I went back and was able to get more Republicans on board or help get more Republicans on board, we will go back to this" -- but is doubling down on supporting Paulson's unilateral authority to purchase these assets, apparently without Congressional oversight. It's an interesting decision in light of the revolt of conservative Republicans against precisely this idea yesterday.

The final question: What if the bailout doesn't turn out to be needed, or at least not as fast as Congress had been asked to believe? If the markets don't collapse, if we don't see a credit crunch, and the government can inject liquidity into the market through the Fed, then the rationale for the emergency bailout will lose a lot of steam, and may hurt its proponents politically. David Cay Johnston continues to raise this question, suggesting that that politicians and the media have created too much fear and demanding a new process. Most economists, however, seem to think some action is still necessary.

-- Tim Fernholz

It is the Campbell Soup Company, which also manufactures Pepperidge Farm cookies and crackers, V8 juice, Swanson chicken products, and Prego pasta sauce.

—Dana Goldstein

As the markets plummet, Creative Loafing, the company that owns some of the better city alternative weeklies in this age of Village Voice Media conglomeration, has filed for bankruptcy. Good luck to our friends at Washington City Paper...

--Dana Goldstein

• William Kristol, more a surrogate than an opinion columnist, advises the McCain campaign to "liberate" Sarah Palin in preparation for her debate with Joe Biden on Thursday, in order "to use her political talents and to communicate in her own voice." The McCain campaign is largely following this advice, intensively prepping Palin down in Sedona but encouraging her to give answers in her own words and avoid obvious talking points. Yet it's clear that McCain doesn't think it's fair for reporters to record comments made by his running mate in public, and, according to Howard Kurtz, reporters have been censoring themselves to avoid the impression of "piling on" the hapless veep candidate.
• With the bailout plan failing in the House today, the markets tanking, and Republicans whining their heads off about that meanie Pelosi, the question we have to ask ourselves, as a nation, is "what is John McCain going to do?" Delay Palin's debate so he can send her to Washington? Phone it in himself? Maybe continue the bizarre crusade against The New York Times? Continue to have no comment whatsoever? With the Maverick, you just never know (though he has allready blamed Democrats).
  
• Conservatives criticized Barack Obama over the weekend for bringing up his bracelet during Friday's foreign policy debate, apparently unwilling to acknowledge that it was McCain who opened the door to the off-topic discussion of which candidate military families love more. But it turns out the criticism -- that Obama had made reference to the bracelet against the wishes of the family of the fallen soldier -- is bogus, according to the mother of the soldier.
• It's pretty astonishing that so few newspapers have come out with official endorsements of either presidential candidate.
• Freedom's Watch, which boasting an essentially endless warchest courtesy of billionaire Sheldon Adelson, has been quietly targeting select ad markets. Chris Cillizza has the details.
• Danny Funderburk, mayor of Fort Hill, South Carolina, has a serious public policy question: Is Barack Obama the antichrist? We might also want to ask Sarah Palin whether she really believes humans and dinosaurs walked the earth together 6,000 years ago.

--Mori Dinauer

The Bailout of All Bailouts just got voted down, 228 to 205. There’s the expected partisan finger-pointing but House leaders will schedule another vote as soon as they can convince twelve of the nay-sayers, from either party, to approve.

Wild card: angry voters who go to the polls in five weeks. Conservatives don’t want government to take over the free market. Liberals don’t want Wall Street fat-cats to get a free ride. And the more the public focuses on the bill, the angrier they become. (Polls show about a third of Americans in favor, a third opposed, and a third undecided; the percent in favor is growing slightly, but the percent against is growing even faster.)

Wild card on the other side: The Dow is dropping precipitously. Roughly half of all American families have some retirement money in the stock market. And even if they don’t own shares of stock, an increasing number are feeling the pinch of an economy gradually grinding to a halt. (This week’s employment report will not be very encouraging.)

Don’t expect easier sailing in the Senate. Fewer than a third of the Senate is up for reelection on November 4, but they’re all hearing from angry constituents.

Prediction: A scaled-down bill will be enacted by the end of the week. It will provide the Treasury with a first installment of $150 billion. Treasury can use it to back Wall Street’s bad debts with lend no-interest loans of up to two years, until the housing market rebounds. Or to invest in Wall Street houses directly, in exchange for stocks and stock warrants. There will be strict oversight. Congressional leaders will promise further installments, but with conditions calling for limits on salaries and relief to distressed homeowners.

--Robert Reich

Originally posted on Robert Reich's Blog

Robert Kuttner ponders the consequences of the bailout bill's failure and suggests that maybe, just maybe, it could allow a better bill to be passed:

What now?

First, we will face the inevitable round of recriminations. But the record is pretty clear. The Democrats were prepared to step up and take a politically difficult vote. The Republicans weren't -- and were willing to play Russian roulette with fragile financial markets.

Second, Republicans will face huge pressure from Wall Street to try again. But the moment for this bill may have passed. Pelosi was also facing growing rebellion in Democratic ranks.

Third, both parties will now go back to the drawing board --- and it is here that Republican calculations may have backfired, big time. For while many Republican legislators are posturing populist, they really don't have anything up their sleeves that is true to rightwing ideology, that will please angry taxpayers, and that will fix the problem. Vote No is not a program, and as the crisis deepens the vote will look increasingly cynical and opportunist.

--The Editors

Nothing says "Country First" like a fervent dedication to do the right thing by it, unless of course someone hurts your feelings. That's Minority Leader John Boehner's explanation for his failure to deliver Republican votes on the bailout bill this afternoon:

Republicans said Pelosi may have lost votes with a floor speech they considered too partisan. "We could have gotten it if it were not for this partisan speech that Speaker Pelosi gave,” Boehner said.

Added Rep. Chris Shays, a Connecticut Republican who also voted for the bill: “Nancy blew it.”

These are some real tough guys. Of course, Boehner has a reputation for crying on the floor of the House, so Pelosi really should have taken his sensitivity into account. This was Pelosi's response:

"That is an absurd accusation at a time when our country is in deep economic distress," a Pelosi spokesman fired back.

"You don't vote on a speech, you vote on a bill."

As to Tim’s wondering why John Conyers and Xavier Becerra didn’t vote for the bailout: A cursory look at the vote makes clear that a large number of Democratic members of Congress from majority African American or Latino districts opposed the bailout, though these are entirely safe districts. Plainly, it’s the judgment of these members that bailing out Wall Street has no support whatever among their constituents. Maybe if the bill is rewritten to include a stimulus package or add a stock-transaction tax as a chief funding mechanism, it would pick up their support – though we don’t know how well it will do with Republicans.

And that’s the choice before the Democratic leadership (which I assume includes Barack Obama) just now. Do they try to get a revote on the existing package, or do they include more progressive elements, including specifying some regulation of now-unregulated financial institutions, devices and transactions? This latter course would solidify their own party’s support and in effect would dare the Senate Republicans to filibuster and Paulson to oppose. (Although whipping up regulatory specifics in a couple of days sounds daunting.)

--Harold Meyerson

Democratic House Leadership team, you are on notice. Basically no one in D.C., from the House to the Senate to the campaign committees, has any idea what the next moves are now that the first vote has failed. It looks like the House leadership is pushing for a re-vote, hopefully after they figure out where everyone stands. One initial thought: McCain's suspension gambit looks like it derailed the bill by unleashing House Republicans. More to come as we figure out what's going on.

UPDATE: Here's the roll call vote. A lot of endangered Dems voted no (Gillibrand, Cazayoux, Shea-Porter) and a lot of non-endangered Dems as well (Hodes and Shuler). But Conyers? Becerra? Really, guys, you couldn't vote for this one? On the GOP side, it's a mix of their own endangered incumbents (Ros-Letinhen, Shays, Don Young) and the hard-core conservatives (Pence, Flake, McHenry). It does raise hope, however, that the two parties' leadership can do some paired-up vote switching (either progressive-conservative, or endangered incumbent-endangered incumbent) to get the needed votes.

--Tim Fernholz

Politico's Jim Vandehei and Mike Allen wonder today whether Obama will have to scale back his health plan or McCain will have to give up on cutting taxes for the wealthy because of the budgetary impact of the bailout. This has become a dominant new meme in this election; the idea is that the candidates aren't being honest if they don't admit that their platforms need a radical overhaul in light of the crisis on Wall Street. Prepare to hear more and more calls for cutbacks on social spending, especially health care and education.

But although $700 billion is a ginormous number, it isn't necessarily a budget-breaking one -- even if the bailout ends up costing that much, which, as Tim writes, it probably won't. Here's what former Treasury Secretary Larry Summers wrote in the Post today, and it's worth keeping in mind:

The idea seems to have taken hold that the nation will have to scale back its aspirations in areas such as health care, energy, education and tax relief. This is more wrong than right. We have here the unusual case where economic analysis suggests that dismal conclusions are unwarranted and recent events suggest that in the near term, government should do more, not less. ...

Since Keynes we have recognized that it is appropriate to allow government deficits to rise as the economy turns down if there is also a commitment to reduce deficits in good times. After using the economic expansion of the 1990s to bring down government indebtedness, the United States made a serious error in allowing deficits to rise over the past eight years. But it would compound this error to override what economists call "automatic stabilizers" by seeking to reduce deficits in the near term.

--Dana Goldstein

On Friday, two men attacked a Mosque in Dayton, Ohio, with some kind of chemical irritant. The victims were the Muslims worshiping peacefully inside, and the perpetrators have yet to be apprehended. Luckily, no one was seriously hurt, but this kind of bigotry is simply unacceptable and is symptomatic of the stigma surrounding American Muslims that surrounds our post-9/11 elections -- see the ridiculous accusations that Barack Obama is a Muslim, and the political imperative he has to deny the charge as loudly as he can while defending Muslims as quietly as possible.

While there seems to be no direct evidence of a connection, one news report about the attack noted plans that weekend for an inter-faith group to discusss the controversial movie Obsession, which I blogged about here last week. One local Christian pastor said the movie "fan[s] the flames of fear and prejudice against Muslims, with the potential to inspire hate crimes."

--Tim Fernholz

Robert Kuttner argues that we should, but that the plan still has serious problems:

But what about the plan itself? Ever since the plan was unveiled, I have been urging that critics of it not festoon it with more benefits for homeowners and more limits on executive compensation -- but offer a whole other approach. The road not taken included direct government refinancing for homeowners instead of government mopping up of junk securities. With that approach, stability trickles up. The money markets get the same relief. But it's far more just to ordinary people and far better politics. The Democrats, alas, were not able to add more than modest additional homeowner help to the package.

The second basic difference in the alternative approach is the idea that government should become a part or full owner in failing financial institutions. Variants of this have been proposed by Jamie Galbraith, former Soros associate Rob Johnson, and Douglas Elmendorf of the Brookings Institution.

But Congress did not follow this path. So is the package worth voting for? It is, in my view, but just barely and only as a stopgap. Congress did add tighter controls, and does not permit Paulson to go out and spend the whole $700 billion at once.

James Galbraith considers how much the plan will cost and whether it will work:

Whatever happens, if my analysis is correct, even if the bill is passed the issues will not go away. The $700 billion will permit parts of the banking system to be reorganized. I doubt it will cure an underlying problem of illiquid securities many times larger than that. I believe that as banking consolidation proceeds, alongside the decline and fall of the "shadow banking system," the fact that deposit insurance, regulation, disposition of bad assets and enforcement are the sensible way forward will become increasingly apparent. In short, I would do these things now if I could. But if they are not done now, they will still have to be done later, even if this bill is passed.

And Courtney Martin writes that it's refreshing to see politicians actually discussing the economic challenges faced by average Americans:

A $700 billion bailout for the country's richest is being framed by Treasury Secretary Henry Paulson as a gift for the country's most average. The middle class, he and the Republican fear-peddlers argue, will have to suffer the slings and arrows of a desolate economy if the big banks aren't restored to royalty. True, credit must be repaired so that students and small business owners can take out loans, but let's be honest, there are no superheroes for the middle class here. We've already been thrown on the tracks.

Subscribe to our RSS feed to receive our articles as soon as they’re published.

—The Editors

Over at his blog, CBO Director Peter Orzag has a cost breakdown of the bailout bill or, as the cool kids now call it, the Emergency Economic Stabilization Act of 2008.The most important point is that the bailout will not actually end up costing $700 billion:

"The ultimate cost to the government on the transactions would not be the total amount spent to purchase assets -- limited to $700 billion outstanding at any one time -- but rather the difference between the amount spent by the government and the amount received in earnings and sales proceeds when all of the assets are finally sold, presumably some years from now. That net cost is likely to be substantially less than $700 billion but is more likely than not to be greater than zero."

The fact that this will cost "substantially less" than $700 billion should give some breathing room for those folks who don't believe now, or rather, next January, is a great time for fiscal austerity. The key to maximizing the value of the government's investment, and thus minimizing how much the bailout costs taxpayers, is going to be improving the economy as a whole, so that whatever assets are bought by the government can be sold as profitably as possible. This is likely to mean deficit spending, as Larry Summers argues here.

The consensus view of the bill seems to be that it's better than the original, not as good as it could be, but good enough to vote yes on. It includes provisions that direct the Treasury to support, among other things, investments that affect low-income people, particularly homeowners, and pension and retirement plan investments. The bill also prioritizes the refinancing of troubled mortgages, which is key to controlling this crisis at the ground level, though it doesn't go as far as some legislators had wanted, as Dana discusses. The bill also provides for substantial oversight, including the appointment of a special inspector general. Finally, it allows the government to gain an equity stake in firms that it purchases securities from at lower-than-market prices.

It meets all of the criteria I had hoped for except dealing with the underlying regulatory crisis -- that task will have to await a new administration. For now, we wait for the House vote.

--Tim Fernholz

Now that there is a final bailout plan to be voted upon, we can assess how the negotiations went for progressive public policy. In other words, how focused on "Main Street" is this bill, really? Will it help prevent foreclosures and provide assistance to the millions of Americans taken in by deceptive marketing offering them credit they couldn't afford to pay back?

The good news is that the bill strengthens the Hope for Homeowners Act, which was introduced by Sen. Chris Dodd and signed into law by President Bush earlier this year. That law, which comes into affect on Oct. 1, allows the Federal Housing Authority to work with HUD-approved lenders to refinance sub-prime mortgages into traditional, 30-year fixed-rate mortgages. If the bailout proposal passes, more homeowners with higher debt burdens will be eligible for the program.

Sprinkled throughout is language requiring Secretary Paulson to work with HUD to avoid foreclosures through other means, as well. But there are few specifics as to how he might do so.

What was lost in the negotiations was a provision, supported by some Democrats, that would have allowed judges to restructure sub-prime mortgages into traditional ones built around an individual's ability to pay. During the Depression, an entire federal agency was created to keep people in their homes through means like this, the Homeowners' Loan Corporation.

--Dana Goldstein

Roger Lowenstein had a piece this weekend that succinctly explained why American capitalism needs regulation to survive:

This is not to say that Washington is the main culprit. Markets were incredibly foolish. The dubious mortgages that were written, the credit ratings that blessed them and the trust that banks put in them were speculative and stupid. But we know that people do foolish things. Markets almost demand it. If you are Lehman Brothers and you do not borrow, you do not earn as much as your peers; then your stock falls and you get taken over. So you borrow. Only regulation can check this instinct. Investment banks should be subject to limits on leverage; hedge funds need scrutiny; and more. Alan Blinder, the former Fed vice chairman, says the next president and Congress will have to redraw the entire regulatory map, because “it’s been shown to be wanting.” Amen.

Which is why, as many folks are observing today, even if the bailout bill is passed by Wednesday, the next administration is going to have to take a good, long look at how we ensure the smooth functioning of our financial system, and then do something about it.

--Tim Fernholz

I really shouldn't be shocked by now at the willingness of conservatives to blame minorities for their problems, beyond all reason. But there's still something surprising about a sitting member of Congress blaming the credit crisis on people of color, even if it's Michelle Bachmann.

This argument is simply empirically wrong. What caused the crisis was bad mortgages being integrated into the global financial system through their sale as securities. The CRA wasn't responsible for most sub-prime loans and, as Steven Bainbridge points out, most sub-prime loans went to whites. Bainbridge adds that people like Bachmann make him "embarrassed to be a conservative." That's good to hear, but I can't help but wonder why conservatives want to keep discrediting themselves by employing racism as a simple answer to complicated questions.

--A. Serwer

There are already ads featuring Obama's former pastor, the Rev. Jeremiah Wright on the air in Michigan through an independent Republican group. But as McCain's numbers seem to slip, it's easy to wonder whether he will employ the only thing that has really slowed Obama down this year. In the past, McCain said Wright wouldn't be a part of the election, and much has been made of his thoughts regarding honor. Jonathan Chait had an interesting take on McCain and honor last week:

The pattern here is perfectly clear. McCain has contempt for anybody who stands between him and the presidency. McCain views himself as the ultimate patriot. He loves his country so much that he cannot let it fall into the hands of an unworthy rival. (They all turn out to be unworthy.) Viewed in this way, doing whatever it takes to win is not an act of selfishness but an act of patriotism. McCain tells lies every day and authorizes lying on his behalf, and he probably knows it. But I would guess--and, again, guessing is all we can do--that in his mind he is acting honorably. As he might put it, there is a bigger truth out there.

Honor is a romanticized concept. It is essentially a moral code governing the just use of force, in which the greatest sin is not defeat but submission. Honor holds that the weak must be protected, but paradoxically the dishonorable are also weak (which is why they have to be dishonorable) so honor itself is something of a paradox, since honor justifies force against the dishonorable. What honor really does is say when certain levels of force are appropriate under what circumstances. In politics, it refers to what lengths one will go to defeat one's opponent.

Chait has already pointed out that McCain does not respect Obama, that he sees him as unworthy. We all saw this contempt on display during the debate, when McCain would not even look Obama in the eye. While defeat by an equal is not dishonorable, defeat by a lesser is. Viewed in this light, I believe McCain will eventually see not using Wright against Obama as a kind of submission. Given that the country is at stake, as Chait describes above, and that McCain himself has a heroism complex in which he believes himself the only one capable of "saving" the country. That's why I think McCain will eventually employ Wright as a weapon against Obama, given that not only doing so is a form of submission towards an unworthy opponent, but an inexcusable one given that he sees the fate of the nation as being at stake.

--A. Serwer

Anyone watching the presidential debate as closely as I was, and my colleagues who were simultaneously blogging and IM'ing, surely saw dozens of missed opportunities for Senator Obama to take a point or knock down Senator McCain. Why concede that McCain achieved anything on torture? (The CIA is torturing people today.) Why let the economic discussion be diverted into nonsense on earmarks? Why not call out McCain's absurdly Manichean view of the Russia-Georgia conflict? Why let the idea that we've all but won already in Iraq pass unchallenged? Why say, "John is right"? Why not jump on McCain's call for a spending freeze, and its real-life consequences?

Passing up those opportunities might have been a mistake, but it was not an oversight. Obama had plainly made a decision to project the actual knowledge and insight he has on foreign policy (which throughout the campaign has actually seemed to come more naturally to him than domestic and economic policy). The only way to do that is to resist, resist, resist the temptation to take every opportunity for the kill. Obama had a game plan and he executed it. The result is that voters who had not yet appreciated that Obama understood foreign policy, who assumed that McCain was the military/security guy and Obama the domestic, mommy-party candidate, had a chance to recognize that he more than knew what he was talking about -- that he had what sounded like a coherent, responsible, and not-weak vision.

The deep message is similar to that of Obama's two-minute economic ad earlier in the week. It's not to say any particular thing but just to show that you can talk at some length, and assume the voters' intelligence, in a way that inspires general confidence.

After the crazy week, McCain's cancel-the-debate ploy, and his swing-for-the-fences tactics (or is it strategy?), McCain's simple ability to stand calmly and think on his feet was almost surprising. But it shouldn't have been. McCain after all survived two previous meltdowns in his own campaign, without money, and he did it just by being able to think on his feet, and outclass Mitt Romney and Rudy Giuliani. No, he didn't suddenly start talking like Sarah Palin. The moments when he can't decide if Spain is a good country or a bad country (there are no others) are rare.

McCain's line of the day, "he doesn't understand" was a good unifying thread, but most of the time the specific point wasn't really persuasive. And since Obama didn't say anything that fueled the idea that he doesn't understand the world, it seemed more slogan than charge. When you go into a debate with a catchphrase, like Reagan's "There you go again," it helps to save it for the moment when it really applies, not just repeat it all the time.

Obama had a phrase too, although he only used it twice (I thought it was more until I checked the transcript): "21st century," as in "We did not set up a 21st-century regulatory framework to deal with" the economy, or brilliantly deriding Russia for trying to be a 20th-century superpower. That sense of a more modern, advanced, next-generation, but still solid, nuanced vision of America's role in the world was all Obama was trying to convey. And judging from the instant polls, with all their caveats, he did so.

He could have gone for the kill, but it would have been a very different debate and he might have squandered the much more basic, modest goal that he needed to achieve.

--Mark Schmitt.

If there is one exchange in tonight's debate that just might have long-term consequences for the campaign, it is this innocuous-seeming one, in response to Jim Lehrer's annoying insistence that the candidates explain what they would do to finance the Wall Street bailout:

MCCAIN: How about a spending freeze on everything but defense, veteran affairs and entitlement programs.

LEHRER: Spending freeze?

MCCAIN: I think we ought to seriously consider with the exceptions the caring of veterans, national defense and several other vital issues.

Here's why it might matter: McCain has always talked about reducing spending, but has safely dodged almost all specifics on actual spending cuts, other than "earmarks" (which are not cuts at all, whatever the percent of the budget) and some defense systems like "Future Combat Systems," and some vague nonsense about savings from "victory" in Iraq. A spending freeze, on the other hand, is a very specific thing -- some programs will be in the freeze, some out. In a recession, programs that would normally cost more automatically -- like Food Stamps or Unemployment Insurance -- will be unable to respond.

Over the next few weeks, Obama (as well as the press, if it's not to much to ask) should pound relentlessly on the spending freeze: What's frozen, and what's "several other vital issues"? In a recession, are Food Stamps frozen? Student loans? Unemployment benefits? Pell Grants? S-CHIP? Low-Income Home Energy Assistance (LIHEAP)? The list is long, and different states and constituencies naturally have their own programs that they would like to know whether McCain would freeze them or not.

And wherever McCain's answer is yes, that program would be part of the freeze, numbers can usually be put to it quickly. For example, freezing LIHEAP would leave X million seniors without heat this winter. Freezing Pell Grants would mean X million students couldn't go to college.

At the end, McCain will be in one of two boxes: Either he's a guy who is willing to slash every domestic program, leave seniors in the dark and kids blocked from college, while dumping hundreds of billions of dollars into Wall Street and Baghdad, plus his tax cuts. Or his "spending freeze" is just another vacuous gimmick.

-- Mark Schmitt.

Obama should not have given McCain any credit on torture. McCain flip-flopped on the issue and voted against a ban on waterboarding.

--A. Serwer

This is obviously a pre-thought of line, and it's working very well. McCain's laundry list of credentials wasn't as effective, but I think he drew a meaningful contrast over the issue of empathizing with the troops. Obama doesn't seem to have a similar message, despite all the hype about "erratic" this afternoon, which is too bad for him.

--A. Serwer

McCain just said Pakistan was a failed state before Musharraf. It wasn't. That is all.

--Sam Boyd

On Iraq, it seemed that McCain got the better of Obama because the Democratic nominee failed to present some of his best arguments about the future of Iraq, instead choosing to focus on his correct judgement call at the start of the war. Some facts worth mentioning: Iraqi Prime Minister Nouri al-Maliki supports Obama's withdrawal plan; McCain does not have an exit strategy or even a vision of what an end-state in Iraq looks like; the Surge has not succeeded inasmuch as there has been no real political reconciliation in the country -- the electoral law that McCain briefly mentioned passed only because the Iraqis set aside some of the most contentious issues in the law, including the role of the Kurds.

--Tim Fernholz

Obama needs to figure out how to do something other than agree with his opponent.

--A. Serwer

McCain told his bear story, and set up his earmark hit against Senator Obama, blaming earmarks for the financial crisis. The candidates got into a back and forth over earmarks and government spending, but the fact is that this has nothing to do with the collapse on Wall Street. This is however, where McCain feels most comfortable. Obama needs to change the subject.

--A. Serwer

The debate opens, predictably enough, with a discussion of the bailout plan. Neither candidate makes a particularly definitive stand -- not too suprising given that the final details of the bill have yet to be determined -- but at least Obama is making some sense, and going right to the root cause of the financial crisis with his discussion of deregulation. John McCain, on the other hand, is changing the narrative of what happened in somewhat crazy ways-- "It was the House Republicans who decided they would be part of the solution to this problem" -- and somehow tying the financial crisis into Ike Eisenhower and World War II in order to make an argument about accountability. But after 26 years in Washington, is McCain going to be held accountable for helping create the regulatory system that led to the current economic crisis?

-- Tim Fernholz

P.S. Is Jim Lehrer's attitude towards the candidates addresing each other charming or weird?

Via Ben Smith and Bob Barnett, the debate format:

The debate, he said, will be split into nine nine-minute segments. The first four minutes of each will be taken up with a question to each of the candidates; the remaining five minutes will take different forms, up to the moderator, Jim Lehrer's discretion, and one of those options is to let the candidates address one another and interact on the subject in question.

• Despite bailout negotiations being still very much up in the air, John McCain is de-suspending his campaign -- contradicting his Wednesday promise to stay in Washington until a deal was reached.
• The Obama campaign is playing the expectations game for tonight, raising the bar quite high for McCain ("If he slips up, makes a mistake, or fails to deliver a game-changing performance, it will be a serious blow to his campaign") and lowering them considerably for Obama ("Debates are not a good format for Obama"). Meanwhile, TNR assembles McCain and Obama's best debate moments, Time recalls ten memorable debate moments from the past, and C-SPAN is to presidential debate archives what the Alexandria library was to the ancient world.
• In addition to Ilan Goldenberg's debate scorecard in today's Prospect, Max Bergmann has a very thoroughly-explored list of "10 claims John McCain will make in tonight's debate."
• Things just keep getting worse for Sarah Palin. First, Kathleen Parker urges in her column -- distributed in about 300 papers nationwide -- for Palin to step down as vice-presidential candidate for the good of the country (ouch). Then Palin insinuates that Henry Kissinger is "naive" about foreign policy (wow) and thinks traveling abroad is a sign of elitism (make it stop). Finally, NBC has hundreds of letters written by Palin, many unflattering, including one where the Wasilla mayor channeled her inner Heston and excoriated a California federal court for upholding the removal of 'under God' from the Pledge of Allegiance: "San Francisco judges forbidding our Pledge of Allegiance? They will take the phrase ‘under God’ away from me when my cold, dead lips can no longer utter those words." Just like the Founders intended, right?
  
• Slate predicts the next 10 McCain campaign stunts. It's supposed to be humorous, but some of them actually seem plausible at this point.
• Remember Mike Huckabee? The Huckabee who ran for president? The Huckabee who won Iowa? Founder of HuckPAC? Well, he's got his own show now, and it's called -- get ready -- "Huckabee." Premiere is Saturday.
• For poll nerds only: Pollster has nifty new Flash-based trendline charts that allow you to filter, modify and embed customized charts for the battleground states and the national polls.

--Mori Dinauer

Mark Schmitt says Republicans may now be becoming hostile to Wall Street:

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

There was some speculation during the day that the revolt of the House Republicans was a delaying tactic to make sure that there was still something to be brokered by the time McCain ambled over from lunch. That theory was bolstered by Kevin Smith, an aide to House Republican leader John Boehner, who The New York Times paraphrased as saying that "Republicans revolted, in part, because they were chafing at what they saw as an attempt by Democrats to jam through an agreement on the bailout early Thursday and deny Mr. McCain an opportunity to participate in the agreement."

--The Editors

... even Hugh Hewitt, a conservative if there ever was one, is urging them to sign on to the amended Paulson bailout plan. While I don't agree with his ends (elect a new conservative majority in the future) his argument in favor of the plan is pretty much the bare bones don't-wanna-but-I-hafta approach a lot of people are taking.

--Tim Fernholz

Well golly gee. Conservative syndicated columnist Kathleen Parker, once a Sarah Palin enthusiast, turns on the Republican V.P. nominee today, saying she's unqualified and in over her head.

McCain can’t repudiate his choice for running mate. He not only risks the wrath of the GOP’s unforgiving base, but he invites others to second-guess his executive decision-making ability. Barack Obama faces the same problem with Biden.

Only Palin can save McCain, her party, and the country she loves. She can bow out for personal reasons, perhaps because she wants to spend more time with her newborn. No one would criticize a mother who puts her family first.

I wonder if this idea will pick up some steam within GOP circles or the McCain campaign itself. The only thing that's ridiculous about this is the suggestion that Joe Biden implying FDR was president during the stock market crash is equal to the level of ignorance of current events we've seen from Palin. This isn't a tit-for-tat situation. Barack Obama made a quite fine choice of a running mate. John McCain did not.

--Dana Goldstein

Walking that fine line between horrified fascination and sheer exhaustion this election season? Yup, us here at TAP Online, too. (Just when we think we've calmed Adam down, a new poll will be released.)

But I, trusty Web editor, have come up with a fix for our office malaise: The Election Day Advent Calendar. This lushly illustrated, full-color calendar allows you to count down the remaining days until the election while learning fun democracy-related facts. (If you're really looking to kill time this afternoon, there's a video.) Note, there is, as Sam has loudly objected, no chocolate involved, but that's easily remedied by a bowl of candy underneath.

(Full disclosure, it's put out by two good friends in Chicago, and back in my freelance days, I helped fact check an early iteration. But I swear -- I'm not the only one heaping praise.)

--Phoebe Connelly

Via Glenn Greenwald, on National Review Online, Mark Krikorian posts a press release from the recently collapsed Washington Mutual touting the diversity of their staff and asks "Cause and Effect?" as if to say that the bank's demise was caused by having an excessively diverse work force.

Which raises a couple of questions. Is it Krikorian's belief that National Review remains an influential conservative publication because of or in spite of the presence of Ramesh Ponnuru and Kathryn Jean Lopez? Or are they two of "the good ones?" Will they continue to publish the writings of Thomas Sowell, or will this lead to the demise of the magazine as surely as WaMu was brought down by its nonwhite staff? Is it his belief that the Iraq War was not mishandled by President Bush or Donald Rumsfeld, but rather was doomed from the beginning because of Colin Powell and Condoleeza Rice? Is the reason conservatives are desperate for more conservative justices on the Supreme Court because Clarence Thomas has hopelessly dragged down the SCOTUS with his mere presence?

Moreover, how exactly, given this theory, does Krikorian explain the relative success of other companies on the list, such as Comcast or Kraft? Or are these companies merely bolstered by secretly staffing themselves with genetically engineered caucasian supergeniuses?

--A. Serwer

He supports a big bailout. Here's what the British prime minister said at the Clinton Global Initiative today:

I've got no doubt ... that this program to bring liquidity into the American system ... whatever the details ... is in principle not only the right thing to do, but is the essential thing to do in order to restore confidence. ... I've spoken to people from all over the world ... and they all want that liquidity injected into the system.

--Dana Goldstein

In one of my first pieces for TAP, I tried to explain the cultural and political forces between the arbitrary and often contradictory standards set for Barack Obama as a black candidate. The New York Times obliges with another example of the double standard set merely because of race.

However forceful and passionate Mr. Obama can be, his speeches and public appearances this week have underscored how he is sometimes out of sync with the visceral anger of Americans who are losing their jobs and homes. He often talks about growing up on food stamps and about having paid off his student loans only recently, yet his tone and volume, body language, facial expressions and words convey a certain distance from the ache that many voters feel.

As Jamison Foser points out at County Fair, this analysis is contradicted by all available polling information. Foser also accuses the Times of "injecting race" into an article where it doesn't belong with this paragraph:

For Mr. Obama, the financial crisis poses different risks. He wants to appear fired up over the economy, but he has written before about wanting to avoid appearing like a stereotypical angry black man. Unlike Jesse Jackson, the Rev. Al Sharpton and other black leaders whose fulminations could scare white voters, Mr. Obama is not from and of New York, Detroit, or the segregated South; he grew up in Hawaii and Indonesia. To some degree Mr. Obama faces the opposite challenge from fiery black leaders who came before him: Is he too cool for a crisis like this one?

This isn't injecting race into the article, because race is the very reason this article was written. This is an example of journalism reinforcing the very trends it purports to examine. It's what can be called "Goldilocks Racism" -- the idea that black people are always too hot or too cold and only white people can be just right. If Obama were showing a great deal of populist anger on the stump, we would be treated to reams of analysis about how he is "too hot," regardless of what the polls said.

We've been down this road before. In the beginning of the campaign, Obama was too professorial. Later, there was too much high-flying rhetoric. Is he too smart? Is he a lightweight? Too black? Not black enough? While one candidate is acting increasingly erratic and reckless, the Times runs an article about the calm and collected temperament of his rival, but as a flaw. This isn't a problem with Obama; this is a problem with us.

--A. Serwer

I took up the challenge over at Frontpage. My bit:

I found it impossible to engage with this work as serious scholarship, and impossible to take it seriously as polemic.

Robert Farley is incapable of understanding our argument, let alone answering it.

--Robert Farley

After yesterday's events, the relevant political question is determining how some kind of financial-crisis bill comes out of Congress -- specifically, out of the House, where Minority Leader John Boehner is holding up an otherwise straightforward compromise. While the House GOP's free-market conservatives are refusing to commit, the reason negotiations collapsed is John McCain, whose decision to come to Washington without either presenting an alternative or announcing his support for the bill delivered by congressional leaders yesterday -- which seems to meet all the requirements that both he and Obama agreed upon yesterday -- gave House Republicans the cover they needed to detonate the negotiations.

Now, McCain has released a statement (after the jump) saying that he suspended his campaign (false), that before his arrival there was no bipartisan agreement (false), and calling Obama's decision to participate in the leadership summit "political posturing." McCain says he "listened to all sides," but isn't that what he criticized Obama for earlier in the week? He even has the mendacity to say the Democrats opposed taxpayer protections when Democratic legislators spent the entire week securing taxpayer protections that McCain himself supported. He's trying to rewrite history, but really he came to break the bill so he could try and pick up the pieces -- a truly reckless move.

Talking to a Democratic political operative unconnected with the presidential campaign, it's clear from polling that the public's negative reaction to the bailout will require Republican votes to ensure that whatever bill comes out of the House can't be a campaign issue. Even more depressing, polling reveals that most people don't sympathize with foreclosed homeowners and don't want to see them get help from the government. While I'd agree that many foreclosed homeowners don't necessarily deserve sympathy (victims of predatory loans and poor government housing policy aside), keeping them in their homes is at the root of solving this crisis, which is entirely based on the capital value of those homes and their associated mortgage payments.

Democrats worry, rightly, that House Republicans will vote against any bill that comes up (unless it involves tax cuts that will have no effect on the crisis) and then demagogue it on the campaign trail. I argued earlier that the key is passing a much more progressive bill and campaigning on the merits. It's either that or get McCain to publicly support the bill (a bill that he, in theory, already supports) to give House Dems enough political cover. If the Republican nominee can take that route, it will ensure he gets some undeserved credit for passing the bill -- the political equivalent of choking someone and then, upon releasing them, declaring that you saved them from asphyxiation. I can't see the House GOP crumbling for any reason; they are in a situation where they're damned if they support it (no campaign issue, betrayal of free-market principles) and damned if they don't (either Dems take credit for a bill or the economy collapses and they are blamed). Hope I'm wrong!

See also Chris Hayes on the same issue.

--Tim Fernholz

Related posts:
The Politics of the Financial Crisis
How John McCain Will Try To Take Credit for the Bailout Bill

ARLINGTON, VA -- U.S. Senator John McCain's presidential campaign today released the following statement on negotiations:

"John McCain's decision to suspend his campaign was made in the hopes that politics could be set aside to address our economic crisis.

"In response, Americans saw a familiar spectacle in Washington. At a moment of crisis that threatened the economic security of American families, Washington played the blame game rather than work together to find a solution that would avert a collapse of financial markets without squandering hundreds of billions of taxpayers' money to bailout bankers and brokers who bet their fortunes on unsafe lending practices.

"Both parties in both houses of Congress and the administration needed to come together to find a solution that would deserve the trust of the American people. And while there were attempts to do that, much of yesterday was spent fighting over who would get the credit for a deal and who would get the blame for failure. There was no deal or offer yesterday that had a majority of support in Congress. There was no deal yesterday that included adequate protections for the taxpayers. It is not enough to cut deals behind closed doors and then try to force it on the rest of Congress -- especially when it amounts to thousands of dollars for every American family.

"The difference between Barack Obama and John McCain was apparent during the White House meeting yesterday where Barack Obama's priority was political posturing in his opening monologue defending the package as it stands. John McCain listened to all sides so he could help focus the debate on finding a bipartisan resolution that is in the interest of taxpayers and homeowners. The Democratic interests stood together in opposition to an agreement that would accommodate additional taxpayer protections.

"Senator McCain has spent the morning talking to members of the Administration, members of the Senate, and members of the House. He is optimistic that there has been significant progress toward a bipartisan agreement now that there is a framework for all parties to be represented in negotiations, including Representative Blunt as a designated negotiator for House Republicans. The McCain campaign is resuming all activities and the Senator will travel to the debate this afternoon. Following the debate, he will return to Washington to ensure that all voices and interests are represented in the final agreement, especially those of taxpayers and homeowners."

###

Ilan Goldenberg explains what we should expect in tonight's debate:

The economy isn't the central issue of this debate, but it is the issue most on voters' minds, which will certainly not escape the notice of moderator Jim Lehrer. Watch how the candidates link foreign policy to the economy and how they respond to questions about the financial crisis. Voters may have less appetite for John McCain's more aggressive military-focused approach than they had only two weeks ago. This is not to say that the American public is ready to return to isolationism. But given the current environment, spending $10 billion per month in Iraq or growing the military by 150,000 troops, as Sen. McCain has suggested, becomes much less appealing. The economic crisis of the past two weeks may cause voters to reject a foreign policy that in anyway resembles the costly adventurism of George W. Bush, and that could spell trouble for Sen. McCain.

And Gershom Gorenberg writes about a mosque in Cape Town and how it shows that change in Islam may come from the religion's periphery, not its center.

Claremont Main Road Mosque is tucked between auto dealerships, bargain electronics emporiums, and fast-food joints in the southern suburbs of Cape Town. The street is gritty, four lanes wide, awash with engine noise from the minivans that provide public transportation between Cape Town and the townships around it. The mosque, 150 years old, predates all this. My cab driver drove past it twice. I found it by the Islamic green of its high, peaked roof.

Being out of place is the mosque's pride. During apartheid, the government designated the Claremont area as whites-only. Cape Muslims, mostly descendants of slaves brought by the Dutch from Southeast Asia, were officially "colored" and were expelled to townships. In quiet protest, they continued coming to their mosque. By the 1980s, it was a center for young anti-apartheid activists and for a bubbling mix of Islam and questioning, progressive politics. That blend still sets it apart from most of local Islam, and much more so from the stereotype of Islam in the Western media.

Subscribe to our RSS feed to receive our articles as soon as they’re published.

—The Editors

For decades, starting with Jimmy Carter's Community Reinvestment Act of 1977, there has been bipartisan agreement to use government power to expand homeownership to people who had been shut out for economic reasons or, sometimes, because of racial and ethnic discrimination. What could be a more worthy cause? But it led to tremendous pressure on Fannie Mae and Freddie Mac -- which in turn pressured banks and other lenders -- to extend mortgages to people who were borrowing over their heads. That's called subprime lending. It lies at the root of our current calamity.

Most important, the lenders subject to CRA have engaged in less, not more, of the most dangerous lending. Janet Yellen, president of the San Francisco Federal Reserve, offers the killer statistic: Independent mortgage companies, which are not covered by CRA, made high-priced loans at more than twice the rate of the banks and thrifts. With this in mind, Yellen specifically rejects the "tendency to conflate the current problems in the sub-prime market with CRA-motivated lending." CRA, Yellen says, "has increased the volume of responsible lending to low- and moderate-income households."

The Russians have decided to do something useful with their Navy:

Russia will soon join international efforts to fight piracy off the Somalia coast, but will conduct its operations independently, the Navy commander said on Tuesday.

Pirates are increasingly active in the waters off Somalia, which has no effective government and no navy to police its coastline. The International Maritime Bureau said more than 30 incidents of piracy were registered in the region in 2007. According to UN data, 26 attacks have been committed so far this year off the coast of the East African nation.

"We are planning to participate in international efforts to fight piracy off the Somalia coast, but the Russian warships will conduct operations on their own," Adm. Vladimir Vysotsky said.

If, as now seems likely, a foreign-policy debate does happen tonight, "What is your policy toward piracy off Somalia?" might not be such a bad question.

--Robert Farley

John McCain will debate Obama tonight, despite previously claiming he'd only do so if a bailout deal had been reached. If he caves this easily, how can we trust him to stand up to the terrorists?

--Sam Boyd

One of the strangest things about the past two weeks is the complete absence of the president. I don't solely mean in terms of him making his presence known during a crisis, I mean that in the midst of discussing the credit crisis, we all seem to be talking around him. It's as if he isn't even really president.

But if anyone could have stopped this spectacle of John McCain riding into Washington at 4 PM to do absolutely nothing after pretending to "suspend" his campaign, it was President Bush. He is the man in charge. He could have ended this farce at any time. All he had to do was tell McCain to win his own election, and that the situation was too serious to endanger by politicizing it. Instead, he went on TV and told everyone to panic, before acquiescing to McCain's lunatic impulses. What's worse, none of us expected him to do anything else, because we've become accustomed to Bush failing every test of leadership that has ever been put before him.

I had a strange realization last night that there are no adults running this country. Paul Krugman came to the same, much better articulated conclusion. The Bush administration has been running this country like a bunch of teenagers joyriding in a stolen car. Their great victory, and the tragedy for the country, is that we have become so used to it we don't even think about it much anymore. We don't even expect the president to do his job.

--A. Serwer

I'd rather lose the economy than lose an election.

--Tim Fernholz

An essay by Megan Garber in the Columbia Journalism Review suggests that NBC/MSNBC pull Andrea Mitchell off the financial crisis beat because of her marriage to Alan Greenspan. Mitchell might be overly concerned, Garber suggests, with protecting and enhancing her husband's legacy as Fed chairman in light of the current meltdown. And sources could be hesitant to tell Mitchell what they really believe about the roots of the current crisis for fear of insulting her husband; Greenspan has admitted himself that he was late to awake to the problems of sub-prime mortgages, and most observers see his encouragement of easy credit as a factor in today's troubles.

This assumes, though, that Mitchell does real interviewing and reporting. In fact, she is more often distilling conventional wisdom from op-ed pages, like most cable news personalities. That's not to say she has never made an argument convenient to her husband in her role as a pundit. In fact, she is using the same "blame Congress" line Bill Clinton has pulled out to justify his own actions during the 1990s, claiming that congressional leaders of both parties pushed Fannie Mae and Freddie Mac to get more and more embroiled in sub-primes as a way to fulfill their mission of creating low-income housing.

I'm not sure if NBC should pull Mitchell from the air on financial stories; after all, that would make it very difficult for her to do any work at all during this time. But how about Mitchell disclosing on air who her husband is and how close to the action she actually was during the 1990s? Most viewers are completely unaware of the Mitchell-Greenspan connection.

Update: Tim reminds me that Mitchell does do more reporting than the typical cable news personality: She often calls into the campaign conference calls.

--Dana Goldstein

This New York Times story on the bailout breakdown is an absolute must-read. As a friend remarked to me, it's like a movie -- Paulson kneeling in front of Pelosi, begging for a bill, then conceding that the House GOP is holding up the bill? Jeez. But look at John McCain's behavior -- he swoops in for this meeting and says nothing. In so doing, he likely derailed a moment of real, pragmatic bipartisan action.

"Mr. Boehner pressed an alternative that involved a smaller role for the government, and Mr. McCain, whose support of the deal is critical if fellow Republicans are to sign on, declined to take a stand. ... Participants said Mr. Obama peppered Mr. Paulson with questions, while Mr. McCain said little."

This isn't leadership, and it sure isn't Country First. Let's remind ourselves of the coalition in support of the bailout bill, which seems to be moving along according to progressive concerns: the Bush administration and Senate Republicans (the "Scared Straight" crowd), Senate Democrats, House Democrats, some House Republicans. Those against: John McCain (the "waffler" contingent) and the majority of House Republicans. McCain has got to make clear his views on this bill -- either support it and bring the House GOP with you, or oppose it and have a debate. But McCain apparently lacks either the courage of his convictions or any convictions at all.

What is Congress' next step? I tend to agree with Matt: Democrats control the majority. Pass an even more progressive bill, and campaign on it. It's time to lead.

--Tim Fernholz

The bailout, however it eventually ends up passing, will have repercussions for the next president's agenda that each campaign and voter ought to consider. Time magazine's David von Drehle does everyone an odd sort of service by writing an article that explains how not to go about this task. Drehle mocks the real concerns both candidates have about the bill without considering why they have those concerns or what the bill would look like without them. Drehle argues that neither candidate took enough action, despite the fact that right now it's the job of the Fed, the Department of Treasury, and appropriate congressional leaders to solve this problem.

But leave all that behind for a moment. The really strange part is when the article deals with the potential consequences of the bailout for each candidate's potential presidency. While admitting that Barack Obama's economic policies would be better in the long term, Drehle argues that it will be impossible to fulfill any of them because of the bailout -- at least until the country is taught "thrift." (Presumably, the classic president as home ec teacher role.) And the article doesn't mention any of the policies that Obama has put forward on dealing with the lending problems that underlie this crisis and seem to make up the root of the thrift concept.

Drehle also somehow thinks that McCain's panicky week of economic flip-flops was more attractive than Obama's cool response. He also thinks that McCain's corporate tax cut actually gets at the root of the crisis -- it doesn't. Corporate tax rates have almost nothing to do with the crisis, which comes from, as I'm sure readers of this blog are tired of hearing, the over-leveraging of dubious financial instruments that deregulation made possible. I'm not even sure that McCain himself is marketing his tax cuts as the solution to this crisis.

The author's main concern is that neither candidate plans on deficit reduction! Oh noes! Boss of bosses Bob Kuttner pointed to the welcome lack of emphasis on deficit reduction in the bailout debate in his piece yesterday, but apparently there are still some hold-outs. It's clear that it will be more difficult for either candidate to push through as ambitious a policy agenda as they'd like, but to focus on cutting the deficit as we are entering, or experiencing, a recession is not an economically sound policy. McCain's tax cuts would have little effect on the economy and balloon the deficit. Obama's economic plan, which lowers the taxes for a majority of Americans but raises them for people who make more than $600,000 a year, will hopefully allow for wise spending that will improve the economy.

--Tim Fernholz

Robert Kuttner takes McCain to task for doing all of the politicking but none of the heavy legislative lifting on the bailout bill.

At the level of presidential politics, this signals severe disarray both in the McCain camp and in the Republican Party. The House Republicans are deserting both their president and their Senate colleagues. McCain is all over the map. Bush's feeble attempt at leadership failed. He couldn't even hold the Republicans. At the White House meeting, Obama was engaged, asking plenty of respectful and substantive questions, while McCain sat like a stump.

But what about the substance of the legislation and the fate of the country? The Republicans have abdicated. The question now is whether the Democrats have the wit, the nerve, and the unity to do this right. As the politics stand today, the eventual plan may well pass Congress mostly with Democratic votes, with most Republicans voting no, but signed by a Republican president. If the plan works, the Democrats are heroes. If it fails, they are goats. It had damned well better work.

The emerging House Republican plan for a "private-sector solution" (backed by more government insurance and tax benefits) is pathetic. It's not really private at all, and it won't solve the problem. But what will solve the problem?

Read the rest here.

--The Editors

• President Bush met with candidates Barack Obama and John McCain at the White House today to discuss the bailout deal that is crystallizing in Congress. Meanwhile, McCain's "suspended" campaign continues to chug along, with surrogates remaining on the offense on the cable networks and the candidate himself giving a speech at the Clinton Global Initiative in New York.
  
• Has Sarah Palin been suspended as well? So far she has given a baffling, utterly incoherent interview to Katie Couric, held a press conference near Ground Zero, and been sexually harassed by the president of Pakistan.
• McCain continues to insist that, unless a bailout deal is agreed upon by Friday, the debate will be delayed. To put things in perspective, the Obama campaign released a helpful list of major events and crises that nevertheless failed to derail presidential debates over the last 48 years.
• Obama has cut another minute-long ad in which he directly addresses the public about the financial crisis. The ad doesn't mention McCain, which makes sense because it seems like there's only one serious candidate in the race at this point.
• Sam Stein has a useful timeline detailing John McCain's response -- or lack thereof -- to the financial crisis. The Hill looks at the success rate of McCain-introduced banking legislation (0 percent). And the Obama campaign is circulating video footage of McCain's admission that he hadn't bothered to read the Paulson plan -- the one he is dropping everything to "work on" in Washington.
• Commenting on early voting, Time's Amy Sullivan writes that "it boggles the mind to think that almost one-third of the country could start voting before Obama and McCain have had the chance to engage directly with each other." Well, yes, debates are important. But is it really that hard to understand that a good number of people have already made up their mind on who to vote for? Barring something extraordinary, a debate is only going to sway the undecided.
• The good people of Alaska, wise in their way, recognize that Joe Biden is a more qualified vice president than home-state hero Sarah Palin.

--Mori Dinauer

Pastor Dan has a great riff on God's Profits, showing how Kenyan preacher Thomas Muthee's expression of the prosperity-gospel message through his prayer over Sarah Palin shows that John McCain can't run or hide from the theology of his ex-friends John Hagee and Rod Parsley. As I wrote in God's Profits, and as Pastor Dan highlights, the prosperity message is a perfect fit with Republican free-market dogma: If you don't prosper, it's your own damn fault.

Muthee's prosperity prayer, in which he calls for Christian men and women to take over and run the economy, is a standard dominionist command -- the same basic ideology that underlies the Christian right's efforts to get its candidates elected, its judges appointed, and install "godly" men and women into media, law, and other professions.

Just for good measure, Muthee throws in a bit of philo-Semitism as well -- very common, in my reporting, among adherents to the prosperity gospel. "If you look at the Israelites, that's how they work. And that's how they are, even today." (If the Jews are all rich, you see, they must be doing something right.)

Part of Pastor Dan's point is that McCain can't seem to get away from these religious extremists, whether it's Hagee or Parsley or Palin's circle of pastor friends. That's because, for the past three decades, the Republican Party has validated countless scandalous religious figures -- generals, as Family Research Council's Tony Perkins referred to Parsley -- for the purpose of marching their troops to the voting booth.

Back in George W. Bush's heyday of consolidating the religious-right vote, McCain was calling the granddaddies of the religious-right agents of intolerance. Now that he's realized that without them, winning the presidency is impossible, he's embraced Palin, a home-grown product of the movement that was just getting underway when she was a teenager.

I'm not sure McCain realizes the many varieties of theology -- like exorcisms, faith healings, and prophecies about battling Satan by self-appointed prophets and apostles -- swirling around in the Pentecostal/charismatic circles of the religious right. All that stuff would shock and embarrass the rest of the Republican base, no doubt. But that's obviously of no consequence to the flailing McCain. If voters believe that government is run by godless bureaucrats and that what we need is a Christian government that has vanquished those satanic regulators, who is he to argue? It's not like he has a better plan.

--Sarah Posner

Many people think Jews are good with money. They think that even if they don't actually think that Jews are greedy or evil, or even if they find this quality terribly impressive. Take Tommy Thompson who, while speaking to a group of Jewish activists last year, memorably said that "earning money is sort of part of the Jewish tradition." He made everyone very uncomfortable by invoking an anti-Semitic stereotype, even though he probably didn't mean anything by it.

So, if you ask me, the most relevant part of the Sarah Palin "witchhunter" story (and I'm not sure the obvious racial double standard that would make this a huge story if we were talking about Obama qualities since there are a million of those in this campaign) is the minister's invocation of those money-makin' "Israelites."

The second area whereby God wants us, wants to penetrate in our society is in the economic area. The Bible says that the wealth of the wicked is stored up for the righteous. It's high time that we have top Christian businessmen, businesswomen, bankers, you know, who are men and women of integrity running the economics of our nations. That's what we are waiting for. That's part and parcel of transformation. If you look at the -- you know -- if you look at the Israelites, that's how they work. And that's how they are, even today.

One of the things people forget about history is that Jews were traditionally forced into roles as merchants and moneylenders in Christian nations because they weren't allowed to own land. The anti-Semitism that forced Jews in these roles lives on as stereotypes about Jews and money. But since Jewish folks have famously long memories regarding our own persecution, this kind of remark is taken as anti-Semitic. We haven't forgotten the circumstances that forced our ancestors into those roles, (Hebrew School, baby) or the easy way in which "positive" stereotypes reinforce what are essentially negative ideas about Jews and money.

They don't originally come from a place of admiration, but instead from very focused and lengthy persecution. Bishop Thomas Muthee takes this a step beyond vaguely anti-Semitic admiration (Tommy Thompson) into straightforward anti-Semitism when he says "Israelites...run the economics of our nations." That's creepy, because the logical extension of that thought is that Jews have a disproportionate influence on global affairs, or that we exercise some shadow influence over major powers.

Does Sarah Palin believe some of these things? I have no idea. But it probably will matter to many of the folks down in Florida who are deciding which ticket to vote for, given the very real possibility of Palin succeeding McCain as president.

--A. Serwer

It's hard for me to believe that McCain couldn't have made a better pick than Palin after watching this projectile nonsense (see Ezra for a fuller analysis):

Bobby Jindal might not have generated quite as big an initial bump as Palin, for example, but he certainly would have generated public interest and pleased the base just as much as Palin -- plus he's capable of speaking in complete sentences.

--Sam Boyd

Robert Reich explains why we should be wary about the just-announced bailout deal:

But the devil is in the details. From what I've heard, the kinds of limits being discussed could easily be cosmetic, such as limits on golden parachutes or limits on net increases in direct salaries during the duration of the bailout. Public equity could also vaporize into conditional warrants, giving taxpayers (and the Treasury) the option to cash in on certain classes of stock or applying only where firms get direct government aid rather than where they fob off their bad debts on the public.

There will be some skirmishing over whether homeowners in danger of losing their homes should be given some breaks, but here too it's important to watch the details. Wall Street doesn't want any provision that allows distressed homeowners to wiggle out of their mortgage obligations, even though Wall Street is wiggling out of its own bad debts.

Congress knows the public is furious. That's why it's insisting on the above-mentioned provisions. But Congress, the Administration, and Wall Street also know that the public -- and the media -- can easily be hoodwinked into believing that certain limits and protections have been built into the deal when, on closer inspection, they haven't. Wall Street is masterful at creating the appearances of value when there's no value there, and many of our representatives in Congress are well-versed in the art of creating the appearances of public gains when the gains are mostly private. So the media has to dig hard and look at the details of this deal.

--The Editors

I'm baffled by this quasi-rationalization of McCain's reprehensible campaign from erstwhile McCain-lover Jon Chait:

Any attempt to determine McCain's true motives is necessarily pure speculation. It's possible that McCain has convinced himself to actually believe the lies he has been telling. But here's a more likely explanation: All this dishonesty can be understood not as a betrayal of McCain's sense of honor but, in an odd way, as a fulfillment of it.

McCain's deep investment in his own honor can drive him to do honorable things, but it can also allow him to believe that anything he does must be honorable. Thus the moralistic, crusading tone McCain brings to almost every cause he joins. In 2000 and afterward, McCain came to despise George W. Bush and Karl Rove. During his more recent primary campaign, McCain thought the same of front-runner Mitt Romney. Not surprisingly, Romney was the target of McCain's most unfair primary attack--an inaccurate claim that he favored a withdrawal timetable in Iraq.

[...]

The pattern here is perfectly clear. McCain has contempt for anybody who stands between him and the presidency. McCain views himself as the ultimate patriot. He loves his country so much that he cannot let it fall into the hands of an unworthy rival. (They all turn out to be unworthy.) Viewed in this way, doing whatever it takes to win is not an act of selfishness but an act of patriotism. McCain tells lies every day and authorizes lying on his behalf, and he probably knows it. But I would guess--and, again, guessing is all we can do--that in his mind he is acting honorably. As he might put it, there is a bigger truth out there.

The bigger problem here is that when Chait notes that the press has an extensive history of "portraying [McCain] as a uniquely honorable figure," he never seems to consider the fact that this portrayal was completely unjustified. In reality, that McCain was always both a political flyweight with little grasp of his own ostensible policy positions and willing to relentlessly lie about his opponents was evident during his 2000 campaign if you bothered to look. It's just that his genuine military heroism and remarkable ability to suck up to the press caused these things to be ignored. The question about McCain is not why he has changed; it's why it took so many reporters (including some liberals) so long to figure out what he always was.

--Scott Lemieux

Harold Meyerson looks at the last time one man solved a financial crisis:

It was there, 101 years ago, that J.P. Morgan -- in part through the sheer force of his own character, not to mention his intellect and his economic clout -- summoned New York's other major bankers, locked the doors, and did not let them go until they sifted through the balance sheets of failing banks, decided which to bail out and which to let die, and put up the money to make it all happen. (It was 4:45 a.m. on the night in question when his fellow bankers succumbed to his pressure and Morgan finally unlocked the doors.) Thus was the Panic of 1907 abated.

Robert Kuttner wonders why deficit hawks are suddenly dovish:

On this issue, the only difference between the two parties was that the Republican deficit-phobes wanted to reduce the red ink by cutting social programs while the Democrats wanted to raise taxes on rich people. I wrote about the danger that deficit-obsession would pose to an Obama administration in a recent Prospect piece, and in my book Obama's Challenge.

But that was then. All of sudden, an administration that can't find a spare nickel for children's health, repair of decrepit infrastructure, education aid, green energy, and other useful outlays is proposing to increase the deficit by more than four percentage points of GDP, because Wall Street made some bad bets. And Treasury Secretary Henry Paulson blithely explains that this gargantuan increase in the deficit is no biggie, because some of it may even be paid back. What a difference a meltdown makes.

And Robert Reich considers whether the bailout will work:

Bottom line: Unless Americans on Main Street have more money in their pockets, Wall Street’s bad debts will continue to rise -- which means the Bailout of All Bailouts grows even larger, which means taxpayers take on even more risk and cost.

Subscribe to our RSS feed to receive our articles as soon as they’re published.

—The Editors

Today we were treated to the truly surreal spectacle of the media reporting that John McCain would suspend his campaign to work on the bailout bill, but only after he made his high-profile appearance at the Clinton Global Initiative conference. And yet, despite McCain's claim that the economic crisis was so urgent that it required an immediate suspension of campaign activities, he was in New York making a political speech instead of in Washington working on the bill. As CNN broadcast McCain's remarks at CGI, the chyron beneath the image read:

MCCAIN SUSPENDS CAMPAIGN

The economic crisis was important enough for McCain to suspend his campaign ... just after he makes his big speech. Country First, right? Yet the timing of his announcement, the fact that he hadn't even read the bill before Tuesday, and even his refusal to clear important events from his schedule, should make us all pretty skeptical. Some print outlets, like The New York Times and even The Wall Street Journal have questioned the circumstances of McCain's decision. Many Broadcast outlets have taken it almost at face value.

It's very clear that how it plays depends a great deal on whether or not reporters choose to report on what's happening rather than on simply what they've been told. Some in the political press are, reflexively, doing the former rather than the latter. We have comedians like Joy Behar and David Letterman calling McCain on his dishonesty, rather than the people who make millions of dollars a year ostensibly holding politicians accountable in the public interest.

--A. Serwer

Here's a video of McCain two days ago, saying he hadn't read the Paulson plan yet. Paulson released his three-page long proposal Friday, five days before this interview. Perhaps if McCain had read the plan then, he would have had time to take some action without "suspending" his campaign. (Note: Despite his claims, McCain's surrogates have continued to make appearances, his ads are still on the air, and Sarah Palin will be holding a rally.)

-- Tim Fernholz

The Clinton Global Initiative is an opportunity for the world's wealthy to make philanthropic commitments, and in that spirit, Obama used his appearance by satellite today to make his own four "commitments" on the Clinton Foundation's priorities of climate, poverty, education, and global health:

1. An 80 percent reduction in greenhouse gas emissions by 2050, with a cap and trade program. A $150 billion investment over 10 years in alternative energy. "We need to do more than drill."

2. Embrace Millennium Development goals that aim to cut extreme poverty in half by 2015.

3. Work to erase the global primary education gap by 2015. Establish a $2 billion global education fund. Sign Hillary Clinton's "Education for All" act.

4. Continue to support and step up PEPFAR, President Bush's AIDS program. End all deaths from malaria by 2015 through a focus on prevention on treatment. Meet the demand for $730 million bed nets and invest in research for new vaccines. Make low-cost drugs available everywhere.

--Dana Goldstein

Amid complaints that he hasn't been publicly enthusiastic enough about Barack Obama, Bill Clinton gave the Democratic nominee a poignant introduction today at CGI, and one that seemed in direct response to claims that McCain is doing more to stop business-as-usual to deal with the financial crisis. Relating their meeting in Harlem on Sept. 11, Clinton said:

As you might imagine, he's pretty popular in Harlem. And he declined to do more than go outside and wave to people because he thought it was wrong to campaign on 9/11. We talked for an hour and a half, and I'm not exaggerating, 80 percent of the conversation had nothing to do with politics and had everything to do with the responsibilities of the next president for the welfare of the citizens of the United States and the rest of the world.

Clinton then said Obama asked him a question that he himself would never have thought to ask in 1992: How can the United States better use its soft power to help people around the world? "He's the first candidate for president ever to ask a former president that question out of the box, and it's a very good thing to do. Unfortunately for him," Clinton joked, "I had a very long-winded answer."

--Dana Goldstein

Let me game this out for you. First of all, we know that the deal is already close to coming together -- we knew that yesterday, and the AP says it today. But today John McCain says, " It has become clear that no consensus has developed to support the administration's proposal to meet the crisis. I do not believe that the plan on the table will pass as it currently stands, and we are running out of time." False!

The next step is going to be for McCain to pretend that he changed the bill in some meaningful way. Yesterday, when the two candidates released a joint statement that basically said nothing, Obama's campaign also released a list of five principles that the bill should include (after the jump) which the McCain camp had refused to add to the joint statement. As Dana reports, today, at the Clinton Global Initiative, John McCain discussed five principles (also after the jump) that he thinks should be included in the bill. Surprise! Four of the five are the same, down to duplicating Obama's language: "no Wall Street executive should profit from taxpayer dollars" and a "path for taxpayers to recover" their money.

The difference between the two statements? McCain has a principle stressing transparency in the creation of the legislation (good, yes, but since most of it's discussion has taken place at open hearings, not a huge issue) while Obama has a principle saying that "We cannot bail out Wall Street without helping millions of families facing foreclosure on Main Street." Hear, hear.

Why wouldn't the McCain campaign agree to at least the four principles they already have in common with the Obama camp? Because at least four of those principles are already likely to be included in the negotiated bill (oversight, an equity stake for taxpayers, no earmarks, no profit for executives). When it is eventually passed, no doubt McCain will point to his arrival as the reason the bill was amended. (Too cynical?) But if he does, don't believe it. Rep. Barney Frank, one of the people actually crafting the bill, probably has the best take on McCain's decision to return to Washington:

"We're going to have to interrupt a negotiating session tomorrow between the Democrats and Republicans on a bill where I think we are getting pretty close, and troop down to the White House for their photo op. I wish they'd checked with us."

-- Tim Fernholz

Speaking for himself, Senator Obama outlined the following principles that he calls on Senator McCain to support [8:29 p.m. Wednesday]:

I believe that several core principles should guide this legislation.

First, there must be oversight. We should not hand over a blank check to the discretion of one man. We support an independent, bipartisan board to ensure accountability and complete transparency.

Second, we need to protect taxpayers. There should be a path for taxpayers to recover their money, and to turn a profit if Wall Street prospers.

Third, no Wall Street executive should profit from taxpayer dollars. This plan cannot be a welfare program for CEOs whose greed and irresponsibility has contributed to this crisis.

Fourth, we must help families who are struggling to stay in their homes. We cannot bail out Wall Street without helping millions of families facing foreclosure on Main Street.

Fifth, we both agree that this financial rescue package should move on its own without any earmarks or other measures. We have different views about the need for other action, but this must be a clean bill.

This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe. This is not a Democratic problem or a Republican problem – this is an American problem. Now, we must find an American solution.

McCain CGI Speech, 8:45 a.m. Thursday:

First, there must be greater accountability included in the bill. I have suggested a bipartisan board to provide oversight for the rescue. We will not solve a problem caused by poor oversight with a plan that has no oversight. Never before in the history of our nation has so much power and money been concentrated in the hands of one person, and there must be protections and oversight in place.

Second, as a part of that oversight, there must be a path for taxpayers to recover the money that is put into this fund. When we're talking about 700 billion taxpayer dollars, that money cannot simply go into a black hole of bad debt with no means of recovering any of the funds.

Third, there must be complete transparency in the review of this legislation and in the implementation of any legislation. This cannot be thrown together behind closed doors. The American people have the right to know which businesses will be helped, what that selection will be based on and how much that help will cost. All the details should all be made available online and elsewhere for open public scrutiny.

Fourth, it is completely unacceptable for any kind of earmarks to be included in this bill. It would be outrageous for legislators and lobbyists to pack this rescue plan with even more taxpayer money for favored companies. And frankly, members of Congress who would attempt such a thing are scarcely better than the most reckless operators on Wall Street.

Fifth and finally, no Wall Street executives should profit from taxpayer dollars. Let me put it this way: I would rather build a bridge to nowhere -- and put it square in the middle of Sedona, Arizona -- than take money from teachers and farmers and small business owners to line the pockets of the Wall Street crowd that got us here in the first place. And I can assure you: if I have anything to say about the matter, it's not going to happen.

John McCain just spoke to the Clinton Global Initiative in New York, where he reiterated that he was suspending his campaign. "The debate right now is taking place at the United States Capitol and I intend to join it. Senator Obama will do the same," he said. McCain then laid out five improvements that must be made to the bailout plan in order for him to support it:

1. Greater accountability through a bipartisan oversight board. “We won’t solve a problem caused by poor oversight with a plan that has no oversight."
2. A path for taxpayers to recover the money put into the fund.
3. Complete transparency as to which businesses will be helped and how much it will cost.
4. A bill with no earmarks whatsoever.
5. No Wall Street executive should profit from the bailout.

This last point was greeted with tepid, obligatory applause by the potential donors gathered here, many of whom made their millions and billions on Wall Street. McCain made no mention of providing help for struggling homeowners, though he did speak about launching an American-led fight against tuberculosis and malaria if he is elected.

--Dana Goldstein

Max Blumenthal has the goods on the Kenyan preacher Thomas Muthee (who claims to have chased down a witch and cast out the spirit of witchcraft from his village) who laid hands on Sarah Palin at the Wasilla Assembly of God church, apparently before she ran for governor. He prayed for the casting out of witchcraft, and for her financial and political success. This past weekend, Blumenthal himself filmed additional footage of Muthee preaching at the church, which he says he will post in a short documentary soon.

The footage Blumenthal posted yesterday at The Nation, along with the footage from Palin's 2008 speech to the church's "Masters Commission," is the best, and to my knowledge only, video of Palin in her church environment. She even referred to Muthee prophesying her political success in her 2008 speech, in which she also discussed her proposed gas pipeline as "God's will," and in which other church pastors referred to Alaska as an "end-times refuge" for believers.

In talking about the proposed pipeline, which I discussed in last week's FundamentaList, she told her audience that there was only so much she could do as governor to make it happen, and therefore they should pray that it, God's will, be done.

So we're getting a better outline of Palin's belief system -- and why the McCain campaign denied from the outset that she's a Pentecostal. Non-Pentecostals find Pentecostalism kooky. But 5 percent of Americans belong to Pentecostal denominations and another 18 percent are charismatic, part of a religious movement that shares antecedents and features with Pentecostalism, such as speaking in tongues, prophesying, and faith healing. Leah Daughtry, who was the chair of the Democratic National Convention, is a Pentecostal minister and is known to believe in faith healing. Top religious outreach staff at the Obama campaign are Pentecostal.

According to a seminal 2006 Pew Forum on Religion and Public Life survey, 62 percent of all Pentecostals claim to have witnessed divine healings, 54 percent claimed to have received direct revelations from God, and 34 percent claimed to have experienced or witnessed exorcisms. Those numbers are higher than among charismatics (46, 39, and 22 percent) and than those among all Christians (29, 26, and 11 percent). The Muthee-Palin scene is fringy, but it's part of a pretty big fringe.

So is it the Pentecostalism itself that's kooky, or is it that Palin puts more stock in prophecy and revelation than in governing?

In her scant media interviews, Palin hasn't talked about revelations and prophecy, of course. But she hasn't talked about policy either, and has in fact shown herself to be completely ignorant, even of her party's long record of its own wing and a prayer, deregulation. She insisted to Katie Couric that McCain pushed to regulate the financial industry -- although she was characteristically devoid of substance to back up that preposterous claim.

If Palin were an eminently qualified candidate, steeped in policy and capable of addressing the intricacies of the current economic crisis, I would probably focus on her religion to the extent that she believes it should be fused with government, whether end-times beliefs inform her foreign policy (if she has one), how she might bring creationism-loving political appointees to the Department of Education, or push pro-abstinence-only, anti-choice regulations to the Department of Health and Human Services, for example.

But Palin's vacuousness on any substantive questions point to a more -- pun intended -- fundamental concern. Given that many of her followers believe Palin is anointed by God, and she said in her 2008 Wasilla Assembly of God speech that she believes in the spirit of prophecy and revelation, you've got to wonder how much that, in her mind, is a substitute for facts, analysis, and policy-making. It might very well explain why she acts so confident despite her utter lack of preparation to be vice president of the United States. And that is one hell of a scary faith-based initiative.

--Sarah Posner

As the country discusses the Wall Street bailout, Robert Kuttner remarks on the mysterious absence of concern about the federal deficit from former fiscal fear-mongers:

One thing that we haven't heard much about lately is the federal deficit. Not very long ago, a broad and bipartisan assortment of Cassandras was warning that the greatest menace to the Republic was the deficit.

These worthies ranged from Democrat Bob Rubin, to the Blue Dog caucus of Wall Street-afflicted Democrats in Congress, to Republican billionaires like Pete Peterson. And they were joined by legions of economists.

On this issue, the only difference between the two parties was that the Republican deficit-phobes wanted to reduce the red ink by cutting social programs while the Democrats wanted to raise taxes on rich people. I wrote about the danger that deficit-obsession would pose to an Obama administration in a recent Prospect piece, and in my book Obama's Challenge.

But that was then. All of sudden, an administration that can't find a spare nickel for children's health, repair of decrepit infrastructure, education aid, green energy, and other useful outlays is proposing to increase the deficit by more than four percentage points of GDP, because Wall Street made some bad bets. And Treasury Secretary Henry Paulson blithely explains that this gargantuan increase in the deficit is no biggie, because some of it may even be paid back. What a difference a meltdown makes.

Read the rest here.

--The Editors

• Apparently John McCain doesn't believe multitasking is a particularly strong skill for a president to have, as he calls off Friday's foreign-policy debate, "suspends" his campaign, and invites Barack Obama to return to Washington with him to "come together to solve this problem." Meanwhile, the Obama campaign has indicated that it expects the debate to proceed as scheduled. Obama himself said, "Presidents are going to have to deal with more than one thing at a time. It’s not necessary for us to think that we can only do one thing and suspend everything else." And finally, faster than a Wikipedia update, demandthedebate2008.com is live and taking your signatures.
• The groundwork for positioning McCain as the indispensable man was laid yesterday, when George Stephanopoulos reported that if McCain didn't vote for the $700 billion bailout, congressional Republicans would reject the measure. Yet one wonders why it took McCain 10 days to insist on this bold action and why this legislatin' machine hasn't cast a vote in the Senate since April.
• Conservatives have an idea: Let Sarah Palin debate in McCain's stead. Seriously. Methinks the McCain campaign won't let her come out to play. Meanwhile, that scary NBC/Wall Street Journal poll that showed Obama cracking 50 percent and beating McCain by nine points -- the one the campaign insists is faulty -- finds that 49 percent of Americans say Palin is unqualified to be president.
• Can a president with a 19 percent approval rating use the bully pulpit to push his agenda? I guess we'll find out tonight when W goes on the air to implore his fellow Americans to support, without further delay, socialism for the rich.
• Pew might have the latest definitive word on polling cell phone-only voters. Their analysis, confirming the work of others, suggests a couple more points for Barack Obama, as the cell-only crowd tends to favor the Democratic candidate by at least 55 percent.
• Sarah Palin might have had some interesting religious affiliations in the past, but here at TAPPED we like to talk serious public policy. In that spirit, let's discuss Rep. John LaBruzzo's (R-LA) desire to study a "plan to pay poor women $1,000 to have their Fallopian tubes tied" and "tax incentives for college-educated, higher-income people to have more children."
• Surrogates John McCain doesn't need: Condoleezza Rice who observes that the "fundamentals of the U.S. economy are strong" and Laura Bush who opines that "of course" Sarah Palin doesn't have enough foreign-policy experience.
• Ballot malfunction shenanigans, West Palm Beach County edition: "With 41 days to go before the presidential election, election officials and political operatives in this heavily populated Florida county -- famous for overvotes, undervotes, butterfly ballots and hanging chads -- are worried about a repeat performance of the chaos that clouded the outcome of the 2000 presidential race."

--Mori Dinauer

...Republican Minority leaders Mitch McConnell in the Senate and John Boehner in the House. These guys are dealing with a party platform that explicitly opposes any kind of bailout, a lame-duck president whose administration is wildly unpopular, and a presidential nominee whose actions are completely unpredictable. They can't please conservatives with any kind of bail out, they don't want to be tied to the Bush administration on any kind of bill that could go wrong, and who knows what kind of political machinations John McCain will insert into the debate about the financial crisis when he swoops into Washington. Incidentally, it's worth noting that McCain isn't on any of the relevant committees to this legislation and isn't in his party's congressional leadership; it's as if Sen. Patty Murray announced she were coming in to craft a compromise.

--Tim Fernholz

Obsession, a controversial movie about terrorism funded by a right-wing organization, is now being distributed in swing-states to perhaps millions of voters. Muslim groups are calling for an investigation to determine if this is being done to influence the election. Short answer: It probably is.

I've only seen the first ten minutes of the movie (which is also available on YouTube), and from what I've seen the critics are right: it's drivel. I'm not sure yet that it's anti-Muslim, per se, as it begins with a disclaimer that most Muslims are not terrorists (doye!). But that same disclaimer might be an example of them protesting too much -- without the disclaimer I'd certainly characterize the film as anti-Muslim. What I can say for certain is that the movie is obviously designed to increase people's fear and fill their heads with wrong ideas about how to fight terror. The film, such that I've seen, combines slow-mo footage of terrorist attacks and chanting terrorists with terrible analysis.

For instance, it conflates every vaguely related radical Islamist terrorist attack into one unitary war -- suggesting, for instance, the Beslan massacre in Russia was somehow connected to 9/11. And I thought we'd gotten past the idiotic monolithic theory of terrorism. Apparently the film goes on to suggest the roots of Islamic extremism lie in Nazi ideology, which is just completely wrong; if Nazism did have a tangible influence on radical Islamists it was negligible at best.

Here's what we need to know: Radical Islam is not monolithic. It is not a clear and existential threat to the future of the United States of America. It is a threat to our interests and to our allies abroad. We need to engage with radical Islam and defeat it, but we need to do so in a way that doesn't alienate the billion Muslims in the world, or rather, that unites Muslims and the rest of the world to fight against a pernicious ideology that we all despise. My radical belief is this: We shouldn't fear radical Islam. We should take it seriously. The U.S. and its allies have the tools to defeat the practitioners of terror, and we will. Engaging in fear-mongering to win an election isn't just unfortunate, it is a set back in the real fight against radical Islamist ideologies.

--Tim Fernholz

P.S. I'll try to watch the rest of Obsession when I have a chance, and offer a full critique.

Breaking news! John McCain wants to postpone the debates to go back to Washington and work on the economic crisis. It's an interesting gambit for McCain, especially after a rough forty-eight hours in which, as Ben Smith notes, nothing has changed except public polling numbers (down for McCain), Joe Biden's blistering foreign policy speech this morning, and the new revelations about McCain campaign manager Rick Davis' work for Fannie Mae. (Davis has canceled his public appearances since the announcement.)

The decision to postpone the campaign is a purely political stunt -- both candidates are going to be doing debate prep in the next few days anyway, not hitting the hustings. McCain has nothing to add to debates about the bailout that he can't offer from the campaign trail, and Obama and McCain had already planned to jointly release a set of principles for the bailout today. It's also been made clear by Senate leadership that no bill will pass without McCain's yea vote, so the only reason to go back to Washington is to engage in some good old-fashioned bipartisan grandstanding.

Keep in mind that McCain's campaign has been, weirdly, raising expectations for him in the debate over the past few weeks -- for instance, here's Deputy RNC Chair Frank Donatelli saying, "Senator McCain is much better at giving answers off the cuff, and Obama has some trouble when he doesn't have his teleprompter." They seem to be regretting that now.

What is Obama's next move? Apparently he's not refraining from campaigning, and he wants the debates to go forward as scheduled. Calling McCain's bluff is the right decision; the president of the United States has to be able to do more than one thing at a time, after all. The McCain campaign is afraid to debate, but if he wants to go to the White House he has to go through the people first.

UPDATE: An e-mail from the Obama campaign points out that their candidate called McCain this morning at 8:30 a.m. to arrange for a joint statement on the economy. They did not mention it to the press. This afternoon, McCain announces his bipartisan leadership. Typical. 

--Tim Fernholz

Mark Schmitt debates National Review's Byron York. Here's a section on the financial crisis where Mark explains the ongoing moral-hazard problem of the Treasury Department's bailout plan:

And here's the whole thing:

--The Editors

This post has been edited from its original version.

John McCain's latest effort to ensure that the campaign becomes a narrative of his personal heroism, rather than a referendum on the issues, is to "suspend" campaigning and postpone Friday's debate ostensibly to deal with the economic crisis. This is like a student caught cheating who demands that class be interrupted so he can finish the homework that was assigned yesterday, given that he hadn't bothered to read the bill as of yesterday. His call to put "Country First" just happens to occur a day after unfavorable polling and the revelation that his campaign manager Rick Davis has been apparently engaged in undisclosed lobbying on behalf of one of the very mortgage giants McCain identified as being part of "the culture of corruption and influence" in Washington. Most disconcerting is the idea that this is how McCain would run his administration. The American people cannot stop what they're doing whenever John McCain feels like he needs a time out. It's the president's job to be able to concentrate on more than one thing at a time without having a panic attack.

This is a transparent example of McCain putting his campaign before his country. And it isn't the first. It is no coincidence that whatever McCain believes to be America's interest is also in his own.

--A. Serwer

This is a very serious Rush Limbaugh post. This is not a post where I'm going to mention his incredible girth, or the odd circumstances in which he was caught coming home from one of the world's most infamous sex tourism destinations with an illegal viagra prescription. I'm not going to talk about his being fired from ESPN for being an idiot, or that time he asked "what's [Obama] got in his pants?" No, I'm not going to mention any of those things.

I'm just going to point out that Limbaugh, far from losing his mind as I initially believed, seems to be deliberately trying to get the media's attention by describing Barack Obama as "an Arab," deliberately misquoting a newspaper article to do so.

This is a typical Limbaugh strategy -- he says something outrageous in order to get the media's attention, spreading whatever ugly smear he's concocted. Then, once the media bites, he merely says he was doing it to "tweak the drive-bys" and was just "illustrating absurdity by being absurd" or that it's "satire." He then informs his audience that by paying attention to Limbaugh's ugliness, the media have proved that they are in fact what he was pretending to be. His listeners seem unaware that (false) irony is not the same thing as satire, or that saying what you really mean and then calling it a joke is actually one of the more transparent forms of rhetorical cowardice, or that the above game gets old for most people before they hit puberty.

Will the media bite? Probably, they seem intent on injecting race into the race when it isn't there and ignoring it when it is. But don't be surprised when Limbaugh claims he was just trying to teach us all a lesson.

--A. Serwer

At an event last night, Karl Rove had this to say about Sarah Palin:

A Toronto businessman asked him if he thought Sarah Palin would make a good President. “I don’t know,” said Rove.

--A. Serwer

Steven Pearlstein makes a good point: Why should we trust Paulson and Co. with an enormous amount of taxpayer money when they haven't admitted that they made mistakes in the past, much less explained what they've learned from them? Keep in mind that Paulson soft-pedaled the potential crisis for months (see Matt's handy graph here) and thus far hasn't really expressed an understanding for what most economists identify as the fundamental problem underlying the crisis: the practice of allowing investors to over-leverage capital resources on bad bets, made worse by compromised bond-rating agencies. Krugman notes that Treasury officials haven't even explained what their theory of the intervention is!

Tonight President Bush makes a speech on the issue; Congress should demonstrate some backbone and not give in to what will surely be the demand: Cash up front, please.

--Tim Fernholz

"I am angry as can be. I'm disgusted. It should have been over by now," MacPhail's mother, Anneliese MacPhail, told CNN. "Nobody thinks about what the victims' family has gone through again and again. I was hoping it would be over today," she said. Earlier, she said, "There is no possibility he's innocent, not according to what's been said in court."

North Korea has barred international inspectors from a nuclear reprocessing plant that produces weapons-grade plutonium and intends to restart activity there in a week, the International Atomic Energy Agency said Wednesday. The decision by North Korea came as the Vienna-based nuclear agency also announced it had completed the removal of all seals and surveillance cameras from the plant, one of several sites at its vast Yongbyon nuclear complex, which processes spent nuclear fuel rods for plutonium. The removal was carried out following a formal request to the agency by the North two days ago. The reprocessing of nuclear fuel from spent fuel rods could begin within months, according to arms control experts.

--Robert Farley

I have mad respect for Prometheus 6, who Liza Sabater accurately described as "the godfather of the black blogosphere," and who threw me one of my first links back when I was a rookie blogger. P6 didn't like my recent piece on Obama's fatherhood agenda because:

The American Prospect is the DLC organ that has always felt the best way to handle the Southern Strategy is to pretend there are no Black people. An article in that magazine that cites John McWhorter and Charles Murray (Charles F*cking Murray!) of The Bell Curve fame (The F*cking Bell Curve!) makes me want to have a problem with it.

I understand, but do not share, P6's visceral dislike of McWhorter, who in the past has veered into what I see as extremely paternalistic language when discussing black issues. Likewise, I find the conclusions of The Bell Curve to be racist, but I felt it was important to get the perspective of a prominent conservative who has written about marriage and poverty. He simply wasn't that reductive in his interview with me. But the purpose of quoting two right leaning individuals was to gauge Obama's success in putting a liberal policy agenda into a conservative frame. I can honestly say I don't know whether it works or not, but ultimately it might: most people are closer to McWhorter on these issues than Murray.

Ultimately, the goal of the piece was to get beyond the culture war aspects of Obama's rhetoric on fatherhood, and to deal with its policy implications, which have been all but ignored, mostly because of the collective news judgment of our predominantly white press. But this may be more a feature than a bug; by telling white folks what they want to hear, Obama may have given himself a freer hand to deal with problems in the black community. At the same time, it's frustrating that every election year, black folks become a foil for Democrats trying to reassure white voters.

On another note, it was not my intention to suggest that marriage is a "cure-all" for black folks in poverty. It isn't. Persistent discrimination, an economy that serves the wealthy but not workers, a terribly destructive approach to criminal justice, lack of health care coverage, and a lingering indifference to inequities in public education mean that it is still difficult for black people to have the same advantages and opportunities white people have. But if there's anything I can be accused of since joining TAP, pretending black people don't exist is not one of them.

--A. Serwer

In an article from our last print issue, Sam Boyd writes that Rachel Maddow has succeeded because she has found a uniquely liberal way to deliver a liberal message:

"I think I have a fear in general about whether being a pundit is a worthwhile thing to be," Rachel Maddow tells me over dinner at a Latin restaurant in lower Manhattan. It's more than the ordinary self-deprecation of someone who just got her own cable commentary show. It's an insecurity essential to the on-air style that's powered the 35-year-old's rapid rise from a wacky morning radio show in western Massachusetts to the liberal radio network Air America and now to her own prime-time show on MSNBC. [...]

She has succeeded as an avowed liberal on television precisely because she is not a liberal version of conservatives like Sean Hannity and Glenn Beck. Unlike so many progressive media figures who sought to replicate the on-air habits of the aggressive shock jocks of the right, she stumbled upon a workable style for the left. She is liberal without apology or embarrassment, bases her authority on a deep comprehension of policy rather than the culture warrior's claim to authenticity, and does it all with a light, even slightly mocking, touch. She proves that liberals can attract viewers on television when they actually act like, well, liberals.

And Sarah Posner has the latest on the religous right:

With McCain's conservative-coalitions director Robert Heckman looking on, and at one point chiming in that Obama's recent faith and values outreach was a "colossal flop," Obama was portrayed by speakers as a figure of evil and doom. No one came right out and called him the Antichrist, but the apocalyptic message was clear.

Bernie Reese, the octogenarian founder of the Reese Roundtable, said, "I grew up during [the] days of Hitler; we've almost got a blueprint to what brought Hitler to power. He rode in on an economic crisis and promised the moon to the middle class. He was a man who had glittering rhetoric; he could sit in the room and have his audience in his hand." Alveda King, niece of the civil-rights icon and an adviser to Priests for Life, the militant anti-abortion group, said abortion in the African American community had been done "deliberately, by genocide." We're "beyond chastisement," she went on. "We're in judgment."

Subscribe to our RSS feed to receive our articles as soon as they’re published.

—The Editors

As John McCain launches ridiculous attacks (but not an actual denial) against the Times for reporting that his campaign manager's lobbying firm was paid by Fannie Mae until last month, I wanted to take issue with an argument that both McCain and Ezra have made: that the media's refusal to pay attention to McCain's early-campaign attempts to offer a constructive, policy-based debate forced McCain into the negative, smear-based campaign we've come to know and hate. Jon Chait reminds us why that's wrong in his story this week on McCain's dishonest campaign:

McCain tried to run a high-road campaign, but was ignored by the press and rebuffed by Obama. McCain, complained his former aide, Dan Schnur, "had a poverty tour and nobody covered it." (McCain's tour did get some coverage, but not the commanding attention McCain hoped for, possibly because he had no actual poverty proposals to accompany it.)

This is exactly right. If McCain had offered a policy that differed substantiavely from those of the Bush administration, or even said anything about the subject that strayed from conservative conventional wisdom, there would likely have been more coverage. But McCain's decision to essentially use the poor as campaign props doesn't really make me sympathetic about his complaint. Here's some reporting from the tour:

Mr. McCain has seemed alternately moved and awkward this week, and at times defensive about his background. At each stop he offered mostly himself. Substantively, he had little to offer other than general outlines of programs for job training, better Internet access for isolated areas and government partnerships with private enterprise for a faster response to natural disasters.

Hmm. Let's not change the record so that poor John's poverty tour would have been an actual gesture toward addressing the issue of poverty, if only the mean press had let him. Yes, the press likes conflict, but they can also recognize a phony, and that, combined with the on-going Democratic primary, is what resulted in the lack of attention.

John McCain is responsible for his own campaign. He can say that Barack Obama's decision not to join him for debates is the reason he's sunk to such a low level, but at the end of the day he's doing what he thinks will gain him the White House, damn the consequences.

--Tim Fernholz

Hank Paulson claims that Congress has to act now or the whole financial system will collapse. But, Robert Kuttner points out, it's better to do this overhaul right -- from the bottom up rather than from the top down -- than to do it in great haste:

Paulson's tactic of demanding instant action because impending catastrophe recalls how the same Bush Administration rushed through the USA PATRIOT Act. But there are two key differences. After 9/11, American citizens were terrified and willing to give the Bush administration whatever it wanted. And Congress totally caved. This time, citizens are frightened -- but not gulled. Congress is hearing from constituents that the Paulson plan is an outrage. The easy vote is to oppose it.

So let's stipulate that Democrats get the other major provisions that the public interest requires. These include:

• Limits on executive compensation
• A companion economic stimulus package
• More help for distressed homeowners
• An option for government to get some stock in companies it helps
• An oversight panel to approve Paulson's proposed deals

But what about the core of the Paulson plan itself? Here, Congress needs to think outside the box. Paulson's basic idea is to have government buy up $700 billion worth of dubious mortgaged-backed securities, hold them for a time until normal markets resume functioning -- is both necessary and sufficient. The plan has three larger purposes: recapitalize banks; get bad paper out of the system; and restore confidence generally so that the downward spiral ceases and the frozen credit markets unlock.

Kuttner goes on to explain what a good alternative plan would look like. Read the rest here.

--The Editors

"It's extraordinary to me that the United States can find $7 $700 billion to save Wall Street and the entire G8 can't find $25 billion dollars to saved 25,000 children who die every day from preventable diseases."

--Dana Goldstein

In a conversation with Queen Rania of Jordan, Bill Clinton says private sector involvement is key to progress in education. One of the most encouraging developments in New Orleans since Katrina is "the growth of what we call charter schools," he said. "About half the New Orleans public schools now that have been reopened are charter schools. It's changed the whole sense of the community, from a sense of hopelessness to a sense of empowerment, not that miracles have been performed."

--Dana Goldstein

This post has been edited for clarity.

John McCain has made a really big deal about Obama's associations with Fannie Mae, accusing Obama of being "square in the middle" of Washington's "culture of lobbying and influence peddling." Of course, with 83 lobbyists on his campaign with ties to the finance industry running his campaign, no one would appear to be at the center of a "culture of lobbying and influence" more than John McCain.

McCain overstated Obama's ties to Fannie and Freddie when making his original claim. But since then, The New York Times quoted a former employee at Fannie who said that McCain's campaign manager Rick Davis' lobbying firm was hired because of Davis' "closeness to Senator McCain and the possibility that Senator McCain was going to run for president again." Then, yesterday, Bloomberg reported that the man in charge of McCain's presidential transition team, William Timmons Sr., had been registered to lobby on behalf of Freddie Mac right up until this month.

But wait, there's more! Roll Call reported yesterday that Davis Manafort, Rick Davis' lobbying firm, is still getting money from Freddie Mac, while a Times story reports that payment ended last month. No one knows what the firm is being paid for because all lobbying activity was supposed to have stopped as a result of the federal takeover. Previous reporting by the Times has suggested that Davis' value to Freddie Mac was his closeness to McCain. According to Roll Call, the McCain campaign maintains that "while Davis still owns a partial stake in Davis Manafort, he does not receive income from the firm." But according to the Times, "Davis took a leave from Davis & Manafort for the duration of the campaign, but as a partner and equity-holder continues to share in its profits." Meanwhile, McCain himself told CNBC last Sunday that Davis has had "nothing to do" with Freddie Mac since 2005, which obviously isn't true.

While excoriating Obama, McCain attacking Obama's ties to Fannie Mae, said that "Senator Obama may be taking their advice and he may be taking their money, but in a McCain-Palin administration, there will be no seat for these people at the policy-making table." But McCain is taking advice from their former employees. His campaign staff has taken their money. And they won't need to ask for a seat at the policy table, because if McCain wins, they're moving in lock, stock and barrel.

It's true that Obama has raised slightly more money ($25 million) than McCain ($22 million) from the finance industry. But it's unclear to me how, given McCain's own strong ties to the two mortgage giants, he still seems to think mere association is enough to accuse his opponent of corruption. It's worse than hypocrisy, McCain simply sees himself as above the rules he demands that everyone else follow.

--A. Serwer

He'd have to overturn New York City's term limit laws, but Mayor Mike Bloomberg at the Clinton Global Initiative today used Lance Armstrong's announcement that he will race in the Tour de France again to make a quip about running again himself: "I did like your comments about coming and doing it again but that's another issue," Bloomberg said.

--Dana Goldstein

Should this Colorado fifth-grader have been suspended from school?

I say no -- I'm a First Amendment absolutist. It looks to me like a good opportunity for a class discussion.

--Dana Goldstein

This post has been edited from its original version.

Republican 527s are running racist ads in Michigan, with the intent of exploiting racial anxiety to the benefit of John McCain.

One links Senator Barack Obama to the former mayor of Detroit, Kwame M. Kilpatrick, an African-American whose political career unraveled in scandal. The other features Mr. Obama’s former pastor, the Rev. Jeremiah A Wright Jr., also black, and his now infamous sermon marked by the words “God damn America.”

Maybe they just want to make sure to turn out the black vote.

Obama's links to Kilpatrick are practically nonexistent, and one group intends to run ads associating Obama with Kenyan Prime Minister Raila Odinga. Why? They belong to the same ethnic group, which is kind of like associating John McCain with KKK murderer Edgar Ray Killen because they're both white and originally from northern Europe.

Brent Staples had an underappreciated Op-Ed for The New York Times recently where he dispassionately laid out the racial undertones of the McCain campaign's recent ads and the language used by congressional Republicans to describe Obama. Words like "uppity" have a very specific and violent history that despite the weak denials of some Southern Republican lawmakers, are terribly obvious to those of us who happen to be African American.

The theory behind lingering racism in America is not that white people are evil. It's that after four hundred years of treating black people like animals, and another hundred of violence, discrimination and second-class citizenship, the social mechanisms used to rationalize racial hatred still remain, even if they are eroding. This isn't conscious; it's simply the legacy of America's ugly racial history. If racism were conscious, if we had to think about racism to engage in racial prejudice, it simply wouldn't be very powerful. And it's not as though it only affects white people; I can recall being in classes in high school and being scolded by black teachers who told us that if we were white, we would know how to behave, even though kids of all backgrounds like to chat and pass notes when class is boring. One of the terrible truths about racism is that even its targets are capable of internalizing the lies at its core.

But the conscious manipulation of such things is inexcusable. And the efforts of Republicans to exploit the worst of American history to meet their political goals will continue to discredit their party in the eyes of most black folks. I would be surprised if many, many white people didn't feel the same way.

--A. Serwer

Clinton’s basic argument was that the crisis was one of an overleveraged Wall Street system which emphasized the volume of transactions, and in which people were rewarded for chasing risky deals, and in which there were too few good investment opportunities. Money ended up being funneled into real estate that shouldn’t have been. Clinton furthermore argued that if there had been a real clean energy policy, it would have created alternative investment opportunities in dealing with climate change -- because there wasn’t such a policy, the money was ‘misspent.’ This last bit of the argument doesn’t seem entirely plausible to me -- would there really have been enough investment opportunities generated by clean energy to suck up the loose cash sloshing around? -- but I’ll leave it to those with more specific expertise to evaluate properly.

• John McCain lays out his "bailout principles" in Michigan today, while Barack Obama describes "four conditions" that should accompany the bailout. Meanwhile, Rasmussen finds that only 35 percent of the public thinks the bailout will help the economy, and that 49 percent trust McCain more, to Obama's 43 percent. Pew, on the other hand, reports that 57 percent said the government was doing the right thing, and Obama is preferred over McCain on the issue, 47-35 percent.
  
• Palin isn't just ruffling feathers in Alaska. Annoyed by the McCain campaign's extensive control over media access to Palin as she meets with select world leaders in New York today, CNN threatened to pull its cameras from the event -- the only ones that would have covered it. Don't fear, though, 29 dazzling seconds of Palin talking to Afghanistan President Hamid Karzai about their kids is now available.
• Stanley Kurtz, who has been agitating for months to get access to "internal records" at the Chicago Annenberg Challenge in order to find a link between Barack Obama and '60s radical Bill Ayers, finally delivers the goods in The Wall Street Journal. Check out this revelation: "Yet the archives show that, along with Ms. Leff and Ms. Graham, Mr. Ayers was one of a working group of five who assembled the initial board in 1994. Mr. Ayers founded CAC and was its guiding spirit. No one would have been appointed the CAC chairman without his approval." So, the only way Obama would have gotten on that board would be to share Ayer's views, right? Is that what Kurtz is implying? I don't know, because the title of the piece is "Obama and Ayers Pushed Radicalism on Schools," but the article doesn't go into Obama's supposed radicalism. He only says, "As CAC chairman, Mr. Obama was lending moral and financial support to Mr. Ayers and his radical circle."
  
• Joe Biden, who the press never tire of reminding us is "gaffe-prone," calls the Obama campaign's ad featuring McCain's computer illiteracy "terrible."
• Questioning Bill Clinton's commitment to the Obama campaign is the pundit's favorite pastime. But regardless of Clinton's enthusiasm, it's worth noting that the former president is campaigning for Obama in key swing states and hosting fundraisers next week.
• Daniel McCarthy reports in The American Conservative that the Bob Barr campaign has "imploded." Huh, who would have known? In other third-party news, Ralph Nader claims his presence on the ballot actually takes votes away from McCain, not Obama.
• Brian Schaffner -- in lieu of data on new voter-registration party affiliation -- breaks down which counties new voters hail from in Virginia.
• In a recent interview, Iraqi Prime Minister Nouri al-Maliki cited the "political circumstances related to the [U.S] domestic situation" as the reason for Bush's change of dates for withdrawal from Iraq. Think Progress cites a source who claims the "White House communications staff were concerned that Maliki’s endorsement of the 2010 time line would damage Sen. John McCain’s (R-AZ) presidential campaign."

--Mori Dinauer

Speaking with WIRED, comics writer Ed Brubaker ruminates on the political identity of Captain America.

I think what makes Captain America work in the modern age isn't so much him reflecting where America's at, but in showing where it should be. In my series, I've had Cap quote Abraham Lincoln, Thomas Paine and Dwight Eisenhower, because Captain America isn't some partisan tool. His history as a character since the mid-'60s shows that. He can call a lie a lie, and he doesn't care which side the liar is on. I think the United States really needs an icon without those partisan blinders on right now, more than ever. But you know, with Cap what we've also done is make it feel more like a modern high-tech espionage comic, in many ways. Cap's military/government background is part of what keeps him relevant, too.

I think Brubaker's description of Captain America as "not having partisan blinders" is essentially a giveaway that Captain America is in fact an America-hating liberal, since that's the kind of thing you usually hear liberals say. Conservative comic book lovers would probably also not be comforted by Brubaker's later statement that he really wants Obama to win.

The original Captain America was famously assassinated last year on the steps of a courthouse after a titanic battle with Iron Man over the "Superhero Registration Act," essentially the Patriot Act of the comic book world, which held that superheroes should be registered as agents of the government and confined to specific rules of conduct. Captain America dissented, seeing the law as violating civil liberties and led a group of heroes against Iron Man (the storyline was called "Civil War").

So on the one hand, you could argue that Captain America was taking a traditionally conservative/libertarian position about government intervention. It's also easy to see liberals opposing superheroes in real life and demanding they be regulated; one of the most realistic things about Alan Moore's Watchmen is that masked crimefighters remain heroes essentially only to the right-wing fringe. But if you see Captain America as an avatar of American freedom and ideology, the fact that he takes what could be described as the liberal/left/Democratic position on one of the defining issues of our time suggests Captain America has actually been quite partisan of late. As Julian Sanchez wrote last year, the two major comic book publishers have engaged the current political climate with strident left-leaning critiques of the erosion of civil liberties led by the Republican Party.

If you see Captain America's death as a metaphor for the death of civil liberties in the wake of the Bush administration's support of torture and warrantless wiretapping, then his demise is infused with partisan meaning. At least from the point of view of people who support those kinds of things. It's hard to see Captain America wanting anything to do with the wholesale violations of individual rights we've seen recently, which is why someone like me enjoys reading his comics.

--A. Serwer

Health-care wonkery, the end of GSEs (and the SATS?), new ideas about Sudan, plus a little polling at the end, all in this week's Think Tank Roundup.

• More health-care plan analysis. The Urban Institute has recently conducted a comparative analysis of the pros and cons of the McCain and Obama health-care plans. Obama's plan would dramatically increase health-insurance coverage, substantially increase access to affordable and adequate coverage for those with the highest needs, significantly increase the affordability of care for the low-income, and reduce the growth in health spending. On the downside, his cost estimate might be somewhat low, his plan would leave 6 percent uninsured (necessitating the maintenance of the current inefficient safety-net system), and his employer mandate may engender significant political opposition. McCain's plan, by comparison, "represents a philosophical advance" in its methodology but seems to be heavily problematic in that his proposal would change how many obtain insurance, make coverage less accessible for those with health problems, have a high budget cost, and have little effect on the number of uninsured. -- ZA
• A man, a plan, Sudan. The ENOUGH anti-genocide coalition has released a new report on how to approach the humanitarian crisis in Sudan. John Prendergast and Colin Thoomas-Jensen argue that the ICC indictment of Sudanese leader Omar al-Bashir gives the next U.S. president more leverage in the conflict; both McCain and Obama have indicated a stronger stand and discussed using NATO to enforce a no-fly zone over the country. The report suggests that the next president should use that leverage to begin a new peace process built around Sudanese elections scheduled in 2009 and 2011. -- TF

• Damaging "duopolies". In a Cato Institute briefing, Arnold Kling excoriates the practice of government-sponsored enterprise (GSE), notably focusing on Fannie Mae and Freddy Mac. Kling laments that homeownership has been over-encouraged, allowing the Fannie-Freddie "duopoly" to enjoy government subsidy rather than spreading debt across a wider range. His primary suggestion is that regulators freeze the mortgage purchasing abilities of GSE's while simultaneously easing restrictions on smaller banks to hold low-risk mortagates.-- SW
• The end of the SAT? A report released by a commission of higher education experts recommends that admissions departments within colleges and universities should lessen their reliance on traditional standardized tests, and instead focus on exams more closely tied to high school curriculum and achievement. Many schools are already ahead of the curve, and more should follow suit -- this would encourage high schools to broaden and improve their curricula and give students an incentive to focus on their high school course material instead of on test prep courses. -- DH
• White knuckles go pink -- for Dems. Progressive group NDN recently released polls from swing states Florida, Colorado, New Mexico, and Nevada that show solid support for (NDN's interpretation of) Comprehensive Immigration Reform. Within the 50 pages of multicolored bar graphs, the polls bare a voting public that faults the federal government, rather than undocumented immigrants, for our immigration system's problems; and Obama, voters say, is the man for the job. If it seems trifling, NDN boldly suggests, "Given how close the election is, this [issue] may determine the outcome of the Presidential race itself." -- CP
  

-- TAP STAFF

Past Roundups:
9/16/08
9/9/08

We've already covered some of the problems with this bailout, but there is also the question of whether a bailout is the right approach at all. Should our response instead be more limited on Wall Street and more expansive on Main Street? Today, NDN's Simon Rosenberg stopped by to chat with our staff and made the point that no matter how the government addresses the problems of over-leveraged investment firms and bad paper, the only solution to the problem lies in the actual troubled assets themselves: homes. It's critical that the response to the crisis addresses these issues by keeping people in these homes, both because that is the right thing to do and because homeowners need to continue repaying their loans. (See the NDN's longer explanation here).

Two more data-points: Pulitzer-Prize-winning finance reporter David Cay-Johnston raises the question of whether there is, in fact, a credit crisis that requires a bailout. His argument is persuasive -- we haven't seen business-operating loans turned down, mortgages denied, or the end of credit-card offers. Combine that with this quote from White House spokesman Tony Fratto, on why the Bush administration opposes limiting CEO pay: "You have to remember, these are not all weak or troubled firms that own mortgage-backed securities. A lot of them are very successful banks and investment houses that have done very well, have been responsible, are holding performing assets that have value. They were not necessarily irresponsible players, and so you have to be careful about how you deal with them." Whoa, whoa, whoa, if they're so successful, why do they need the U.S. government to buy their bad paper at higher-than-market prices? This is why Congress needs to ensure that either this program is only for bankrupt companies or that taxpayers obtain an equity stake in any company bailed out.

The good news is that a lot of members of Congress were asking smart questions at today's hearing with the administration's financial leadership. The bad news is that it will continue to be hard, with the market tanking, to write responsible legislation. The key here is probably adaptability and a short sunset provision. But progressives should consider this bill a failure if it doesn't help homeowners stay in their homes, guarantee that the government isn't simply purchasing toxic assets from any firm that comes calling without gaining something in return, and directly address the regulatory issues that underlie the crisis.

Further reading: This CAP report on the mechanisms of a bailout; this Nation article by James Galbraith and William Black.

--Tim Fernholz

The Guttmacher Institute has released a fascinating new report looking at 30 years of data on abortion in America. Here are some of the key findings:

• The abortion rate is currently at its lowest since Roe v. Wade was decided in 1973. Most of the change is due to declining abortion rates among women aged 20 to 24 since 1989. Experts disagree on the cause of this shift, with some pointing toward easier access to contraceptives, and others citing state laws that require parental notification for minors' abortions. Minors, however, account for only 7 percent of all abortions.

• Since 1989, the only group whose abortion rate has increased is women over 40. It is likely that genetic screening for diseases such as Down Syndrome accounts for this increase. A large majority of expectant parents who receive a Down Syndrome diagnosis are now choosing to terminate the pregnancy.

• Though all races have experienced a decline in abortion rates, there are still large disparities between the percentage of white, black, and Hispanic women accessing abortion. One percent of all white women had an abortion in 2004, compared to 3 percent of Hispanic women and 5 percent of black women. Much of the difference is attributable to socioeconomic status, with poor women less able to access birth control and other reproductive health care, and less aware of their contraceptive options. About 70 percent of all pregnancies among African-American women are unintended, compared with 48 percent of pregnancies across other racial groups.

• The proportion of women accessing abortion who've already had an abortion is falling. In the words of Guttmacher, "There is no evidence that abortion is being used as a primary method of birth control."

• Sixty percent of women who access abortion already have children.

For more, check out the National Partnership's analysis of the report's findings.

--Dana Goldstein

Last week, John McCain urged us all to be very concerned about Barack Obama's tenuous links to former Fannie Mae executive Franklin Raines and even cut a commercial drawing an association between the two. John McCain also said, "He put Fannie Mae's CEO who helped create this disaster in charge of finding his Vice President. Fannie's former General Counsel is a senior adviser to his campaign. Whose side do you think he is on?" Jim Johnson, who was appointed head of Obama's Veep vetting committee, was fired very early in the process.

But it turns out that John McCain, despite associating Fannie Mae and Freddie Mac with a culture of corruption, was perfectly happy placing a lobbyist who worked on behalf of Fannie Mae as recently as this month in charge of his transition team.

Sept. 23 (Bloomberg) -- The lobbying firm of the man Republicans say John McCain has chosen to begin planning a presidential transition earned more than a quarter of a million dollars this year representing Freddie Mac, one of the companies McCain blames for the nation's financial crisis.

Timmons & Co., whose founder and chairman emeritus is William Timmons Sr., was registered to lobby for Freddie Mac from 2000 through this month, when the federal government took over both Freddie Mac and Fannie Mae.

--A. Serwer

Adam Serwer explains how Democrats, led by Obama, are addressing black poverty by confronting the problems of fatherhood:

For years, conservatives have shrugged off public-policy solutions to black poverty, arguing that cultural problems with marriage and fatherhood are primarily to blame. Liberals, hobbled by a desire to avoid alienating black voters, failed to acknowledge their own public-policy failures and ensuing cultural problems as contributors to black poverty. In short, conservatives blame the breakdown of the black family, and liberals blame the breakdown of the system.

Neither explanation adequately explains the dilemma or provides for a solution, but together they effected a stalemate on an issue that remains a low priority in the minds of most lawmakers. John McWhorter, a self-identified centrist and fellow at the Manhattan Institute who sees fatherlessness as one of the causes of lingering poverty in the black community, was glad Obama gave the speech. "The sad fact is that fatherlessness does not stand out in the popular imagination as an emergency in the way that, say, poverty or Jim Crow did in the '60s," McWhorter says. No matter what the reaction, Obama's speech brought fatherlessness to the forefront of public debate.

Tim Fernholz reports on conservatives who are trying to grab onto Obama's coattails:

Last spring, at the height of a national obsession with Barack Obama, some Republican elected officials weren't sleeping soundly at night.

Not the hardcore conservatives; they knew their base and their districts. It was the moderate Republicans -- the ones who make a habit of working across the aisle, whose districts often contain more independent and Democratic voters than Republicans and will likely go for Obama -- who were concerned. While the presidential contest remains close, signs around the country point toward Democratic success at the congressional level. How better to stave off this challenge than by featuring Obama himself in your political advertisement?

And Paul Waldman writes that the current economic crisis provides an opportunity to permanently shift the nation's ideological direction:

As the economic meltdown of 2008 continues, some are hearing echoes of the Great Depression. And if this is another 1929, the next president could well be another Franklin Roosevelt. That's what Barack Obama seemed to be aiming for when he said last Friday, "This is not a time for fear. It's not a time for panic. It's a time for resolve and a time for leadership. I know we can steer ourselves out of this crisis, because we have done it before. That's what we do as Americans."

Subscribe to our RSS feed to receive our articles as soon as they’re published.

—The Editors

When I asked Bill Clinton last night what he would've done differently as president to help prevent today's financial crisis, he said he would have pushed harder late in his second term to reign in Fannie Mae and Freddie Mac. But, via Mark Thoma, here's a Washington Post article that explains how the Clinton administration was partly responsible for the mortgage giant's out-of-control growth in the first place:

The Clinton administration wanted to expand the share of Americans who owned homes, which had stagnated below 65 percent throughout the 1980s. Encouraging the growth of the two companies was a key part of that plan.

"We began to stress homeownership as an explicit goal for this period of American history," said Henry Cisneros, then Secretary of Housing and Urban Development. "Fannie and Freddie became part of that equation."

The result was a period of unrestrained growth for the companies. They had pioneered the business of selling bundled mortgage loans to investors and now, as demand from investors soared, so did their profits.

By the time Treasury Secretary Lawrence Summers warned that Fannie and Freddie needed to be brought under control, it was too late. The lenders had become so politically powerful that they successfully resisted reform efforts, aided by politicians of both parties who wanted to share the credit for growing home ownership rates. Ironically, we now know that renting can actually be very smart for both family and national economics. That's a message, though, that's been lost in the kerfuffle of the past few weeks.

--Dana Goldstein

Ingrid Robeyns has a summary of progress (or lack thereof) on the formation of a Belgian governing coalition, as well as some background on the issues of dispute. Long story short, conflict between the Flemish and French-speaking portions of the Belgian body-politic have come to a head, with the result that forming a federal government has been difficult, and resolving the political and economic disputes that have become part of the linguistic conflict nearly impossible.

There are two points that I find particularly interesting. The first is the role played by the King. The Belgian monarchy is one of the only institutions in the country committed to Belgian unity; most of the rest of the political actors are beholden to constituencies in one or another regions of the country. As such, it appears that the King has taken a more-active-than-usual role in trying to put and keep a governing coalition together. I find this interesting because I'm a bit of a monarchy junkie, but also because I'm curious about what effect institutions like the monarchy have on national identity.

The second point is that the existence of the European Union substantially reduces the impact that this crisis will have on European politics. If worst comes to worst and Belgium disintegrates into two different linguistically based states, then life for former Belgians and their neighbors will ... not change very much. National governments retain considerable importance in Europe (as noted, economic and political disputes accompany the linguistic disputes in Belgium), but whatever new constellation of governments succeeds, Belgium will still operate under the rubric of the European Union, which sets key limits on the ability of member governments to undertake radical domestic policy. We're not to the point where nationalist irredentism doesn't matter in Europe, but certainly the EU softens nationalist conflict by making borders less relevant.

--Robert Farley

Both Tim and Ezra have weighed in on George Will's column about McCain's worldview and temperament, but what's frightening to me is McCain's tendency to believe himself at the center of pivotal conflicts in which he represents the ultimate good. Will says McCain sees politics as "operatic," but really he sees everything as operatic. After Russia rope-a-doped Georgia, McCain proclaimed that this was "the first major conflict since the Cold War," just weeks after declaring the war in Iraq "the first major conflict since 9/11." That's because the only major conflicts are the ones he can place himself at the center of.

What does this mean? Well it considerably raises the stakes for any international problems, ostensibly the area of McCain's expertise. It means that any quarrel he has necessarily takes the form an epic battle between good and evil, at which point whatever action McCain takes to resolve the conflict, no matter how extreme, is justified. We see this in the campaign. When confronted with his dishonesty, McCain often mutters that "this is a tough campaign," meaning that all's fair in war. And McCain is always at war.

--A. Serwer

John McCain's communications team delves into a world of surrealism, wherein nothing is as it seems! The advertisement claims that "McCain and his Congressional allies led" while "Obama and his liberal allies [were] Mum on the market crisis."

Well, Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke led, producing the first draft of the bailout plan. Obama's liberal allies, Rep. Barney Frank and Sen. Chris Dodd, are now putting provisions in the bill to do all the things that McCain says he would do -- "Tough rules on Wall Street. ... Stop CEO rip-offs. ... Protect your savings and pensions" -- while McCain's congressional allies try to figure out if they can square the circle of supporting a huge market intervention. Question: Do the claims in this ad mean the largest socialist intervention in history was John McCain's idea?

As to his accusation that Obama was mum on the issue, as we saw last week, Obama issued a statement of principles that continues to be relevant as lawmakers debate the bailout, while McCain proposed a new agency that ... no one took seriously and isn't even part of the debate. Which one of these scenarios could be described as "no leadership"?

--Tim Fernholz

George Will has some bad news for John McCain today: You aren't fit to be president -- mainly because you aren't conservative enough! It's one part disgust with McCain's campaign, one part disgust with the bailout. While the whole thing is worth reading, the section about McCain's decision to throw out Andrew Cuomo as a potential SEC chairman is fascinating because it includes McCain's prediction that he could "lend some bipartisanship." This sheds some light on McCain's approach to working across the aisle: it's not a tactic you employ to achieve policy goals; it's something you use to make your approach look nicer. I'm going to have to walk over to AEI (right around the corner) and see if they want to lend me some bipartisanship in time for our next office party.

--Tim Fernholz

El Rushbo seems to be losing his mind. Last week, Limbaugh insisted that Barack Obama was a "Chicago Thug" before he wrote an op-ed describing Obama as a segregationist like George Wallace. Before that, Limbaugh was arguing that Obama should "renounce his race and become white" before deciding that Obama has "disowned his white half." Now, Limbaugh has declared that Obama is an "Arab" because he's from "an Arab part of Africa."

These polls on how one-third of blue-collar white Democrats won't vote for Obama because he's black, and -- but he's not black. Do you know he has not one shred of African-American blood? He doesn't have any African -- that's why when they asked whether he was authentic, whether he's down for the struggle. He's Arab. You know, he's from Africa. He's from Arab parts of Africa. He's not -- his father was -- he's not African-American. The last thing that he is is African-American.

Well, Barack Obama Sr. was from Kenya, which is in East Africa. The CIA Factbook has a summary of ethnic groups in Kenya, broken down by percentages:

Kikuyu 22%, Luhya 14%, Luo 13%, Kalenjin 12%, Kamba 11%, Kisii 6%, Meru 6%, other African 15%, non-African (Asian, European, and Arab) 1%

At a meeting with progressive bloggers and journalists at the Sheraton New York Monday night, Bill Clinton, preparing for the opening of his Clinton Global Initiative conference, spoke freely about the financial crisis, and re-examined his own administration's economic legacy in light of the meltdown.

"I have thought about that," Clinton told me when I asked whether he was reconsidering any of the deregulatory economic policies his administration pursued under Treasury Secretary Robert Rubin. Earlier this year, Rubin downplayed the extent of the mortgage crisis, and implied more of the blame could be placed on American consumers than on the excesses of Wall Street. But Clinton's assessment was quite different.

"I actually called Bob Rubin," Clinton said, relaying their recent conversation about what could or should have been done differently during the 1990s to help prevent today's crisis. Clinton said he has two regrets: First, not pursuing more aggressively an aborted attempt to provide stricter oversight of Fannie Mae and Freddie Mac. According to Clinton, the move was stymied by Democratic and Republican members of Congress and by mayors, who saw the lending giants as "the New Jerusalem" and "pure" because of their role in increasing homeownership to historic levels. But "it just didn't feel good," Clinton said of Fannie and Freddie's outsized political influence.

Clinton also said he should have subjected derivative trading to more public oversight. "We would have failed, but at least we could've sounded the alarm."

One policy Clinton said he doesn't regret is his 1999 repeal of the Glass-Steagall Act, which, for the first time since the Depression, allowed commercial banks to engage in investment-banking activities. Clinton said the commercial banks were an important moderating force on the risk-taking of the big investment firms that collapsed this week. "In the case of the current crisis, I believe the bill I signed allowed Bank of America to take over Merrill Lynch," he said.

Also during the interview, Clinton urged congressional Democrats to work quickly to pass a bailout package for Wall Street, but said Democrats must lobby in the current weeks to pass a comprehensive package of "Main Street" economic measures, including a moratorium on foreclosures, and should create a homeowners' loan corporation similar to the one active during the Depression. Such an agency would refinance sub-prime mortgages into traditional ones but should do so only for borrowers with steady incomes, Clinton said. During the Democratic primary campaign, his wife, Sen. Hillary Clinton, supported similar measures.

The former president mentioned his wife frequently during the meeting, sharing her thoughts on how the economic crisis was playing differently in her home state, New York, than in Kentucky, where she recently traveled to campaign for Democrat Bruce Lunsford, who is hoping to unseat Senate Minority Leader Mitch McConnell. "Hillary called and said it's really interesting how this is going down [in Kentucky]," Clinton said. "She said, out here, they don't yet see it as a big crisis requiring an urgent response, because they've been in trouble for years."

That is why, Clinton reiterated, Democrats must sell the bail-out of Wall Street as an investment in regular Americans' retirement savings and the security of their mortgages.

--Dana Goldstein

• Over the weekend the magnitude of the Bush/Paulson $700 billion blank check bailout plan sunk in, with a number of economists and financial commentators coming out strongly against it. Unsurprisingly, the Bush plan was the product of intense lobbying by the financial sector, leading Barack Obama and Nancy Pelosi to come out against the bailout and demand that the final legislation protect taxpayers, provide oversight and regulation, and offer more punitive measures for those responsible for the crisis. John Boener, speaking for the GOP House leadership, seemed to think that enough had already been done for Main Street, and not enough for Wall Street. John McCain appears to be against the bill in its current form but hasn't provided any specifics about what should be done instead. For more recent commentary on the politics of the bailout, see James Ridgeway on the Democrats' past timidity in confronting Wall Street, Jake Tapper on how much the CEOs of the big five investment houses were pulling down in bonuses last year, and Think Progress on Bush's legacy of squandering taxpayer money. [EDIT: Democrats, led by Chris Dodd, appear to be rejecting Paulson's plan, offering up much better legislation (full text here [PDF]).]
• The New York Times reports on the finalized debate formats for the candidates, including the McCain campaign's request for a more tightly controlled debate format for the relatively inexperienced Sarah Palin when she faces Joe Biden on Oct. 2. The Times pieces goes on to note that Barack Obama and John McCain were largely in agreement with having Friday's debate focus on foreign policy -- originally scheduled as the final debate. Meanwhile, University of Wisconsin-Milwaukee political scientist Tom Holbrook argues that, historically, debates have provided little in the way of bounces for candidates.
• John McCain raised over $47 million in August, a campaign record, including over $6 million on August 30, the day after the Sarah Palin announcement. In other numbers, the Obama campaign spent $55 million last month, including $33 million in advertising. McCain spent $41 million, with $23 million going toward advertising expenses.
• The McCain campaign has consistently denied that it would be a third term of George Bush, but according to this profile in The Washington Post, the campaign is absolutely packed with Bush alums.
• Steve Schmidt complains in a conference call that The New York Times article about Rick Davis' long and lucrative career with Freddie Mac and Fannie Mae proves the Gray Lady is a "pro-Obama organization," and whines the Paper of Record hasn't spent nearly as much time as it should covering Hunter Biden's lobbyist ties. Marc Ambinder points out that Biden has been covered by the Times before, twice in fact, and Ben Smith fact-checks the rest of Schmidt's accusations at his Politico blog.
• Over the weekend, Paul Krugman flagged an article written by John McCain for the current issue of Contingencies, the magazine of the American Academy of Actuaries, in which the senator observes that "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." Douglas Holtz-Eakin argued that McCain was only referring to deregulation within individual states, not at the federal level, but Jonathan Cohn isn't biting, pointing to the numerous examples of fraud that have resulted from in-state deregulation, leaving the sick holding the bag for medical expenses they thought they were insured for.
• Barack Obama, realizing that his 50-state strategy probably isn't the wisest move with 43 days left on the election calendar, pulls his staff from North Dakota and moves them to Minnesota and Wisconsin.
• Demonstrating his unmatched expertise in military affairs, John McCain confuses the National Guard with the U.S. Army, telling supporters in Michigan that "I also know, if I might remind you, that she [Palin] is commander of the Alaska National Guard. In fact, you may know that on Sept. 11 a large contingent of the Alaska Guard deployed to Iraq and her son happened to be one of them. So I think she understands our national security challenges." In fact, as Moira Whelan observes, Palin's son is in the Army, not the Guard.
  
• And finally, the McCain campaign sues the Ohio secretary of state for unlawfully rejecting absentee-ballot requests. The reason? "The forms, printed by the McCain campaign, had something extra -- a box that asked voters to verify that 'I am a qualified elector and would like to receive an Absentee Ballot for the November 4, 2008 General Election.'"

--Mori Dinauer

Over on his blog Ezra rounds up the 5 biggest problems with the bailout:

The Imperial Treasury: The bailout plan, as currently designed, gives Hank Paulson almost unlimited power with virtually no oversight. The bill says, "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." You almost wonder if they included that line as a gag, or if it was originally a hyperlink that got you RickRolled. As Yves Smith writes, "This puts the Treasury's actions beyond the rule of law. This is a financial coup d'etat, with the only limitation the $700 billion balance sheet figure. The measure already gives the Treasury the authority not simply to buy dud mortgage paper but other assets as it deems fit. There is no accountability beyond a report (contents undefined) to Congress three months into the program and semiannually thereafter. The Treasury could via incompetence or venality grossly overpay for assets and advisory services, and fail to exclude consultants with conflicts of interest, and there would be no recourse." It makes Hank Paulson the country's economic czar, and fairly few of us were even aware that was an open position.

At What Price?: "Within hours of the Treasury announcement Friday," wrote Sebastian Mallaby, "economists had proposed preferable alternatives. Their core insight is that it is better to boost the banking system by increasing its capital than by reducing its loans." Buying the bad assets is an odd strategy: It requires paying much more than the market currently thinks they're worth, but hoping that the amount you paid is less than they eventually will be worth. But no one knows how to price these assets. Mallaby continues: "Bad loans are weighing down the financial system precisely because private-sector experts can't determine their worth. The government would have no better handle on the problem. In practice this means the government would make subjective choices about which bad loans to buy, and it would pay more than fair value."

Read the rest here.

--The Editors

It is a sad commentary on the current lack of esteem accorded to our president that he has not, as the financial system collapses, appeared on national television to make a prime-time address easing people's fears and making the case for his bailout proposal. Guess Bush figures that given how unpopular he is, he might as well stay out of the spotlight and let Paulson do his bidding -- the treasury secretary has the benefit of having been, until this week, almost completely unknown to the American people.

--Dana Goldstein

Last week, Stuart Taylor admonished newspaper reporters for reporting the facts, because they have a liberal bias, and demanded that they put their thumb on the scale to make sure that the wholesale lies of the McCain campaign be balanced by elevating the distortions of Obama's ads on immigration to the same level. A new CW was being born. Today, Ruth Marcus obliges:

But a series of new Obama attacks requires a rebalancing of the scales: Obama has descended to similarly scurrilous tactics on the stump and on the air. On immigration, Obama is running a Spanish-language ad that unfairly lumps McCain together with Rush Limbaugh -- and quotes Limbaugh out of context. On health care, Obama misleadingly accuses McCain of wanting to impose a $3.6 trillion tax hike on employer-provided insurance.

Both campaigns are distorting their opponent's positions in those 30-second ads, but Marcus is distorting a bit to make her point.

As Ezra points out, the 3.6 trillion dollar number comes from the McCain campaign, but Marcus was too busy being fair and balanced to sort that out. Of course, she may simply be confused because they keep offering different numbers. Moreover, the tax credit McCain provides would cover less and less as time goes on because the credit increases at a slower rate than premiums do. Marcus also decries "privatization" as "incendiary" language but it's only incendiary because people really hated the idea of privatizing social security, since that's exactly what it was called before Bush figured out people didn't want their benefits privatized.

Judging by Mark Halperin, John McCain's tire swing is going to get crowded again pretty fast. The focus on ads rather than actual statements by the candidates ignores the whoppers McCain and Palin continue to offer on the campaign trail, but it allows pundits to draw an equivalence and appear "balanced."

--A. Serwer

On this morning's conference call, one reporter asked if John McCain's vote in favor of the controversial 2005 bankruptcy bill had any relevance to the current debate. The question wasn't really addressed, but the debate over the bill illustrates the the difference between the way the government treats financially troubled people and financially troubled corporations.

The bankruptcy bill made it harder for people saddled with debt to declare bankruptcy so that credit card companies could continue to extract money from them by, for instance, taking their homes. If the government had taken the same approach to the bankruptcy bill as it has to the bailout, then it would be offering to refinance individuals' debt and purchase their depreciated assets for above-market prices, not making it easier for credit card companies to squeeze them dry. Barack Obama voted against the bankruptcy bill, and John McCain voted for it. (Joe Biden also voted for the bill, much to his discredit.)

Obviously, the repercussions of bankruptcy on Wall Street are much more far ranging than bankruptcy on Main Street, and require a different prescription. But it's time that legislators started evening their approach to the two groups, since we've come to the point of basing public policy affecting individuals with debt on radically different standards of responsibility than financially burdened corporations.

--Tim Fernholz

Sure, it's a reflexive conservative technique, but it's tried and true, and after all, there is a black guy running for president. The easiest way, after all, to obscure the fact that conservative deregulation policies are at the heart of the credit crisis is to blame black folks, and doing so has the added advantage of making the guy running on the other ticket the reason for the meltdown. Investors' Business Daily sets the tone:

To hear today's Democrats, you'd think all this started in the last couple years. But the crisis began much earlier. The Carter-era Community Reinvestment Act forced banks to lend to uncreditworthy borrowers, mostly in minority areas.

Age-old standards of banking prudence got thrown out the window. In their place came harsh new regulations requiring banks not only to lend to uncreditworthy borrowers, but to do so on the basis of race.

But never underestimate the dedication of conservatives to using white resentment as a political tool, or the resolve of the party of personal responsibility in blaming everyone else for their problems. Never mind that those who got rich off of selling the bad debt will remain rich, while the people who will lose their homes are not rich and may end up quite poor.

--A. Serwer

James Ledbetter joins the chorus pointing out that the massive bailout proposed by Treasury Secretary Paulson last week is basically socialism. In fact, Ledbetter says, it's the biggest socialist investment anywhere in the world ever. But in reality the plan has a lot more in common with post-USSR crony capitalism than socialism -- it's government nationalizing industry for the sake of ... industrialists. (Obviously it's not so clear cut, since even Paulson's terrible first draft will have some benefit to the overall economy.) Proper socialism would, of course, involve nationalizing industry for the sake of the proles. Ideally, Congress will insert provisions into the bailout bill that will actually benefit Main Street as well as Wall Street, and ensure that the government gets a fair shake of the profit after it stakes out the chastened capitalists of Manhattan. Thus, profit as well as risk would be socialized.

Ledbetter offers a preview of conservative rhetoric on the take-over, which will likely -- and unfortunately -- not involve questioning how their basic assumptions about the economy apply to the current crisis, but will instead continue a long conservative tradition of using socialism as a political bludgeon. Republicans have been deploying lassez-faire ideology so much for so long that this failure of the market leaves them divorced from reality, and this new plan has no place in their vocabulary. But it looks like market intervention is resurgent, and necessarily, so perhaps there will be a movement left on the "acceptable for public discourse" spectrum when it comes to talking about economic issues.

--Tim Fernholz

Robert Kuttner explains what Treasury Secretary Henry Paulson is doing wrong:

Thus, the stage is set for an epic game of chicken against a very tight deadline. Will the Democrats insist on some serious help for Main Street and constraints on Wall Street as the price of a deal? Nothing would better highlight the differences between the two parties, or better strengthen Obama's hand. Or will Paulson reject anything other than his own approach -- possibly leaving both candidates to vote against the deal?

And in a piece for our last print issue he profiles Timothy Geithner, who will most likely be treasury secretary in the next administration -- Democratic or Republican:

One weekend last March, Timothy F. Geithner, president of the Federal Reserve Bank of New York, fielded a panicked phone call from Bear Stearns CEO Alan Schwartz. Bear was nearly out of cash, owing some $80 billion, mostly in short-term loans, to 5,000 firms across Wall Street. Geithner, joined by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, had less than 24 hours, before markets opened on the next Monday, to decide whether to advance Bear a $29 billion credit line until a buyout could be arranged--or play roulette with the entire financial system. Geithner ended up taking heat for some details of the rescue, but nearly all observers now conclude that it had to be done.

And, in another piece from our last print issue, Paul Starr writes that the reason Obama and McCain have failed to moderate the tone of our political debate is that they each represent culturally polarized camps:

What is really at the root of party polarization is social tensions. Sociologically as well as ideologically, the two parties have become a stark contrast. The delegates to the Republican Convention were nearly all white (only 1.5 percent black and 5 percent Hispanic). Their hearts would not have been in a centrist campaign. What got them excited were the old denunciations of the liberal media and "Eastern elites" by speakers who tried to reignite the culture wars. With a more socially and culturally diverse base, the Democrats seek to downplay polarization, while the more homogeneous Republicans cannot resist trying to inflame it.

Subscribe to our RSS feed to receive our articles as soon as they’re published.

—The Editors

The Obama campaign released a plan today that talks about all kinds of good government initiatives related, and unrelated, to the financial crisis: "STOP WASTEFUL SPENDING AND CURB INFLUENCE OF SPECIAL INTERESTS SO GOVERNMENT CAN TACKLE OUR GREAT CHALLENGES." [PDF] Catchy, right? At first I assumed this would be silly, but there are a few good-sounding ideas in here alongside a lot of promises that might be much harder to keep ("Barack Obama will reform federal contracting and reduce the number of contractors, saving $40 billion a year"). Some points of interest:

• "Barack Obama will require his appointees who lead the Executive Branch departments and rulemaking agencies to conduct the significant business of the agency in public, so that any citizen can see in person or watch on the Internet as the agencies debate and deliberate the issues that affect American society. Videos of meetings will be archived on the web, and the transcript will be available to the public." If -- and it's a big if -- they actually did this, it would be fascinating. (Well, to policy nerds).
• "Ending federal subsidies to student loan providers and instead using the Direct Loan program, saving $4 billion a year." If, again, they actually did this, it would have wide-ranging positive implications for student-lending programs, and be bitterly opposed by private student-loan providers. See this old article I wrote on the subject.
• "In light of the now widespread valuation problems of complex financial instruments such as many of the mortgage-backed securities, Senator Obama believes it is crucial that capital requirements are reexamined and strengthened. He supports the development and rigorous application of new standards for managing liquidity risk. And Obama supports an immediate investigation into the ratings agencies and their relationships to securities’ issuers, similar to the investigation the European Union has recently announced." This signals an understanding of the fundamental systemic problem that underlies the financial crisis itself.
• "Earmarks grew from $7.8 billion in 1994 to $29 billion in 2006. In the past two years, the Democratic Congress has cut earmarks nearly in half, to $17.2 billion in 2008. However this amount is still too much. ... Obama is committed to returning earmarks to less than $7.8 billion a year, the level they were at before 1994, when the Republicans took control of Congress and the level of earmarks began increasing dramatically." A little more realistic than McCain's plan, but this will be a difficult fight.
  

Politico has a run-down too. Thoughts?

-- Tim Fernholz

Opposition to the California proposition that would eliminate the right of same-sex couples to marry and return them to second-class citizenship continues to grow, with 55 percent planning to vote no and just 38 percent supporting it (a very bad position for an initiative). [HT: Roger Ailes.] Why, I'm beginning to wonder if predictions that the California courts will hand the state to McCain may not pan out!

I've long wondered how opponents of same-sex marriage will manage to portray a grant of rights favored by California's elected legislature, its elected governor, its tyrants in black robes elected courts, and the public in a referendum as "undemocratic." The answer, based on the article, seems to be that it will entail whining about the description of the initiative's purpose in the summary language: California Attorney General Jerry Brown wanted an accurate description, while supporters wanted a vague one. It is true, of course, that the wording of initiatives and their summaries can affect vote totals. But, of course, this is true of any initiative; and precisely for this reason an initiative isn't some completely accurate measure of a transcendent popular will. And this includes the initiative that created the unconstitutional same-sex marriage ban in the first place. The current status quo and the wording of an initiative matter; it's just these background factors are considered natural when they support traditional exclusionary policies.

The almost certain failure of Prop 8 further suggests that claims that the California courts will instigate a backlash because they overturned the "popular will" remain highly questionable. The "popular will" isn't static, and there's no entirely reliable way of measuring it, but if Prop 8 supporters want to complain about that, remember that it's equally applicable of initiatives they previously supported, too.

--Scott Lemieux

"[The Obama campaign has] called us liars. We are amazed that they have gone to this extent." -- Rick Davis, McCain campaign manager, on a conference call today presenting his new attack ad.

Update: Here is some good commentary on new advertisements from both campaigns. 

--Tim Fernholz

For a long time, conservatives allowed their quest for greater influence on college campuses to be discredited by monomaniacal, controversy-baiting spokesmen like David Horowitz and Jason Mattera. But the movement in favor of "intellectual diversity" in education can be quite a good one -- when it truly is about exposing students to the canon of conservative and liberal thought, not about censoring professors' viewpoints or trying to ban books like Nickel and Dimed.

So it's heartening to learn from this New York Times story that the Olin Foundation and other conservative organizations are shifting their focus away from the David Horowitz model of vilifying academia and toward a new model of supporting programs that actually expose students to conservative ideas through intellectual engagement. Some of the new programs do teach a triumphalist version of American history intended to explicitly counter more identity-based, postmodern historical narratives. But others are simply providing discussion forums for texts conservatives believe should be in wider circulation. At the University of Colorado-Colorado Springs, a donation from the Veritas Fund for Higher Education (founded by the conservative Manhattan Institute) funded a reading assignment and discussion series for incoming freshmen. The texts included were Plato's "Apology" and Martin Luther King Jr.'s "Letter from a Birmingham Jail." Even liberal professors reported that they were impressed with the non-ideological tenor of the discussions that ensued.

This seems like a pretty good thing to me. Though "intellectual diversity" has become a catchword associated with the right, there's actually nothing wrong with the concept -- as long as the goal really is diversity, not the censorship of left historical and political interpretations.

--Dana Goldstein

I always thought it was funny when friends who worked in banking would refer to a risky bet on the market as a "huge position." Now I'm less amused, but huge positions are exactly what the problem was in the market. A big reason that there are no longer any independent investment banks is that the SEC eased its rules in 2005 to let just five of them borrow money at a 30 or 40-1 ratio of debts to assets (the typical spread is 10 or 12-1). Those five are now either collapsed or, in the case of Goldman Sachs and Morgan Stanley, have become bank holding companies, submitting to additional regulation in order to accept deposits that would provide them with a base of solid capital. Their decision represents a voluntary return to the mechanisms of the New Deal.

But now the federal government wants to take a huge position, offering $700 billion to companies to buy their bad assets. This isn't a good plan, as you can see from these commentators -- I recommend this essay as well [PDF]. The government's offer to buy up bad assets at what will effectively be higher than market value while obtaining no value for taxpayers is ridiculous. It's a bad bet -- unless Congress demands that companies go into bankruptcy when selling their bad assets, or ensures the government a share of future profits through a capital injection, as Paul Krugman argues. Making this bill fair in the face of Bush administration and public pressure for a quick solution will be a big test for the Democratic leadership in the House and Senate.

Now the big joke is asking for bailouts of your own. But your position isn't huge enough; the new rule is "the more you screw up, the less you pay." Only when you become irresponsible on a grand scale do you get to walk away from your mistakes without paying the price. Some friends of mine think the people responsible for this mess should go to jail, but there are probably all too many of them. They should not, however, be allowed to walk away without paying the market price for their poor business decisions.

--Tim Fernholz

Look, if Republicans want to go to the mat for executives who think that they deserve multimillion-dollar payouts for running venerable, profitable companies completely into the ground -- "It's the unassailable product of the Free Market! Now how about that $700 billion in taxpayer money to buy out worthless assets? Gimme Gimme Gimme!" -- by all means let them. I know what side I want to be on politically.

In addition, conditional restrictions on executive pay aren't simply about punishing inept executives who get massive compensation based on an insulated, mutual-backscratching system largely insulated from market forces. Rather, the most important problem with a bailout -- even if there's a plan that, unlike the one Paulson wants, is defensible -- is the moral-hazard problem. Setting a precedent that, if your firm is big enough, you can expect profits to be yours but major losses to be public is obviously problematic. If executives have to worry that coming to the government Tiffany cup and ivory backscratcher in hand will cost them their golden parachutes, it provides some incentives to act more responsibly.

--Scott Lemieux

RFS Pyotr Velikiy and its entourage set sail for Venezuela yesterday. The ship has broken down during exercises before, and I suspect that part of the point of the voyage is to demonstrate that major Russian naval units can operate distant from Russian bases. In related news, Russia is apparently stepping up aid offers to Bolivia. I'll confess that I don't really get this; what's the point of antagonizing the United States in Latin America, when the United States can antagonize Russia in the Caucasus to much greater effect?

The Russians may be thinking that exposing U.S. vulnerability in Latin America will deter the U.S. from mucking about in Georgia and Ukraine, but I suspect the opposite is much more likely. Moreover, Russia is considerably more vulnerable to U.S. antagonism in its Near Abroad than the U.S. is to Russian antagonism in Latin America. But it will be interesting to watch as the game plays out.

--Robert Farley

Follow-up is one of the peskier problems in journalism; so often we write a story about a social or political trend when the news is either very good or very bad, and by the time things stabilize and a more comprehensive picture is available of what's really going on, we've moved on to 12 other topics, and never think to check back. So in the spirit of updating some reporting I did in July on the claimed successes of the Bush administration's homelessness policy, I wanted to highlight last week's AP report on tent cities rising up across the country. It turns out that homelessness, contrary to the earlier, optimistic report, is actually expanding this year.

The problem with the numbers released in July appears to be that individuals living in motel rooms, campgrounds, or with relatives for more than a week were not counted as homeless. So much for finding at least one Bush administration progressive success.

Here are the key paragraphs from the AP story:

From Seattle to Athens, Ga., homeless advocacy groups and city agencies are reporting the most visible rise in homeless encampments in a generation.

Nearly 61 percent of local and state homeless coalitions say they've experienced a rise in homelessness since the foreclosure crisis began in 2007, according to a report by the National Coalition for the Homeless. The group says the problem has worsened since the report's release in April, with foreclosures mounting, gas and food prices rising and the job market tightening. ...

The relatively tony city of Santa Barbara has given over a parking lot to people who sleep in cars and vans. The city of Fresno, Calif., is trying to manage several proliferating tent cities, including an encampment where people have made shelters out of scrap wood. In Portland, Ore., and Seattle, homeless advocacy groups have paired with nonprofits or faith-based groups to manage tent cities as outdoor shelters. Other cities where tent cities have either appeared or expanded include include Chattanooga, Tenn., San Diego, and Columbus, Ohio.

--Dana Goldstein

So the bailout plan is out, and not too many people are happy about it, except for maybe the guys who get to keep three of their houses and their most precious "overhead."

Paul Krugman says "No Deal."

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.

I hope I’m wrong about this. But let me say it again: Treasury needs to explain why this is supposed to work — not try to panic Congress into giving it a blank check. Otherwise, no deal.

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.

Robert Reich writing at TPMCafe says:

The public doesn't like a blank check. They think this whole bailout idea is nuts. They see fat cats on Wall Street who have raked in zillions for years, now extorting in effect $2,000 to $5,000 from every American family to make up for their own nonfeasance, malfeasance, greed, and just plain stupidity. Wall Street's request for a blank check comes at the same time most of the public is worried about their jobs and declining wages, and having enough money to pay for gas and food and health insurance, meet their car payments and mortgage payments, and save for their retirement and childrens' college education. And so the public is asking: Why should Wall Street get bailed out by me when I'm getting screwed?

So if you are a member of Congress, you just might be in a position to demand from Wall Street certain conditions in return for the blank check.

John Boehner, speaking on ABC's This Week, thinks homeowners already got bailed out. What?

But we’ve already dealt with that, when we passed the housing bill last summer. I didn’t vote for it because of the $300 billion bailout for scam artists, and speculators, and others around the housing industry. But there are a lot of tools in there to help the Federal Housing Administration deal with the foreclosures problems that’s out there. We need to rise above partisan politics…and deal with this as adults.

Mr. Obama warned that the bailout should not be a “blank check” and called for tighter regulation of the financial industry, suggesting he would support imposing federal capital requirements on investment firms. He also emphasized that the plan would have to include more relief for homeowners and distressed communities, a demand being made by Democrats in Congress.

“Regardless of how we got there,” he said, “we now have a situation where people’s jobs, people’s savings, people’s retirement accounts, their job security, all that is at risk. And so we’ve got to take some firm and decisive steps.”

And John McCain is sounding like...John McCain:

Mr. McCain has struck a notably populist tone in addressing the crisis, and in the interview, he set a specific limit on compensation for executives at firms that receive federal assistance. “But the major point,” he said, “is that no C.E.O. of any corporation or business that is bailed out by us, that is rescued by American tax dollars, should receive any more than the highest paid person in the federal government.”

--A. Serwer

• At the time of the Palin VP pick, a few of us wondered whether it might backfire on McCain. Then a couple weeks went by as Palin-mania grew. Now, as Sam summarizes below, it does appear to have been a high-risk, high-reward pick, consolidating the conservative base and turning just about everyone else off. 
• Ezra refers to the "creeping Cheneyism" in Todd Palin's decision to blow off a subpoena over the state trooper-firing legislative probe in Alaska, but I'm a bit more concerned about Sarah's inability to answer what branch of government the vice president is in. At any rate, the lead investigator in Alaska assures us that a report will be filed before Election Day, regardless of whether any of the thirteen principles who have ignored subpoenas appear before the legislature.
• Speaking of government transparency, Sarah Palin has a novel idea: Put the federal government's spending online for all to see. Yeah, just one problem: It's already been done, and the man responsible for the Federal Funding Accountability and Transparency Act? Barack Obama (with Tom Coburn co-sponsoring).
• This Time story on early voting in 36 out of 50 states does make one bizarre observation: "In years past, candidates stayed on alert for an 'October surprise' that could alter the race at the last minute. In the brave new world of accelerated elections, any October surprise would come too late." Actually, no. Those who are voting early are those who are engaged with politics and have already made up their minds. It is undecided -- my favorite euphemism from the political science literature is "low information voters" -- voters who are most likely to be swayed by an October surprise, but they're not voting early, so I'm not sure what point the article is trying to make.
• Amid the fallout in the financial markets, what's a conservative think-tank fellow to do? Marc Ambinder displays the angst in e-mail form.
• Joe Biden, who admirably refuses to back down from his "taxing the rich is patriotic" comments (see Jonathan Cohn for more on this), gets in a zinger at his upcoming debate opponent. Asked by CBS News how he's preparing to face Sarah Palin, Biden responded, "It's hard to prepare because I don't know what she thinks."
• News you can Use: an AP/Yahoo News poll finds that a bare majority of respondents (50-47) would rather watch football with Barack Obama than John McCain. Now normally, I hope and expect news to educate, but did we really expect the opposite of this line? "Obama roots for the NFL's Chicago Bears, McCain for the Arizona Cardinals." Seems a bit like political suicide not to root for the home team, no?
• Nate Silver has a great post on "Bad Math and the Bradley Effect," observing that The Next Right's Sean Oxendine "purports to find evidence of a Bradley Effect in the Democratic primaries, something which I also looked for and did not find. The difference between my study and his is that I include all the states, whereas he excludes those which do not fit his argument."
• And finally, maybe McCain was onto something when snubbing our Spanish NATO allies. If this Onion piece is reliable -- and I'm sure it is -- then the Spanish Armada is poised to "Once Again Decimate Population Of New World." ¡Ay caramba!

--Mori Dinauer