economy » Undiplomatic

24 September 2008 Charles J. Brown
08:45 am

The Perfect Metaphor for the Administration’s Bailout Proposal

Morning Buzz: Bubble Bubble Bubble

Via Steve Clemons, a little song for the current crisis:

Thought for the Day

I appreciate Congress’s skepticism on the bailout plan, and I’m glad that there appears to be considerable bipartisan skepticism regarding the speed demanded by the Administration.

But where were these guys before this week? They — Democrats and Republicans — are as culpable as the Administration.

Tape-Delayed Blogging the Senate Banking Committee Hearing

Okay, not really. But if you, like me, did not have the chance to watch today’s Senate Banking Committee hearing, C-SPAN 2 is showing them right now.

Not only is it a must see, it’s compelling — far better than anything else on the tee vee right now. At the moment, Richard Shelby — Richard Shelby! — is ripping Barnanke, et. al. to shreds.

George Will and John McCain

A bunch of people have emailed me and asked me what I thought of George Will’s column today. If you haven’t seen it, you can find it here. Money quote:

For McCain, politics is always operatic, pitting people who agree with him against those who are “corrupt” or “betray the public’s trust,” two categories that seem to be exhaustive — there are no other people. . . .

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

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

I wonder if Steve Schmidt will now say that Will is in the tank for Obama? Heh.

Althought I share my readers’ schadenfreude in seeing Will opening up a can of whoop-ass on “intemperate” John McCain, not one of my correspondents seems to have noticed why Will is unhappy with McCain: because he’s not acting like a conservative. Sure, Will says that he’s not suited for the presidentcy, but that’s code for “not adhering to conservative principles.”

So put away the party favors, please. George Will is unlikely to sway a single vote — it’s not as if the troglodytes now running the Republican Party read him anymore. And he is no more our friend today than he was yesterday.

The Margin Call

Is it me, or is the proposed bailout (whether the Paulson plan, the Dodd plan, a hybrid, or another version we don’t know about yet) sound increasingly like a really, really bad idea? I’m getting this queasy feeling in the pit of my stomach, like nobody — not Paulson or Bernanke, not Bush or Dodd or Frank or Shelby, not even McCain or Obama have any freaking clue what to do.

Lindsay Beyerstein over at Majikthise has many of the same doubts I’ve been having.

I’m troubled by the instant bipartisan consensus that the the government must bail out the investment banks. It reminds me of the run-up to the Iraq war when every discussion was framed in terms what should be allowed to happen before we invaded, not whether overthrowing Saddam Hussein could solve anything.

Remember that the Democrats are just as beholden to the financial services sector as the Republicans. It’s not coincidental that the options on the table all involve bailing out these companies. At this point, the Democrats are arguing for a bailout, plus executive pay controls, mortgage-related bankruptcy reforms, and maybe an economic stimulus package.

My question is this: What if the government were to take the $700 billion to $1.5 trillion set aside for the bailout and put that money into programs to help those hardest-hit by the meltdown and Americans in general[?]

For example, progressives often note that pension plans would be decimated without a bailout. If that’s the worry, why not invest in retirement security for our people directly? An extra $700 billion in the Social Security trust fund would cushion a lot of retirements.

These are our tax dollars. We can either invest them for our future, or we can buy a lot of worthless paper to bail out reckless banks. Ultimately, bailouts just set us up for more crises by proving, once again, that the government will cover the losses of big business. Maybe a bailout is necessary, but I troubled that no one seems to be articulating the case explicitly or considering alternative options.

I don’t want this country’s economy to collapse, but do we have any guarantees that the bailout will prevent that? Yesterday we had some indication of what might happen if the bailout does go through — oil had it’s biggest one-day jump ever, gold also went up significantly, and the dollar declined to a level close to its all-time low against the Euro.

If I’m not mistaken, those numbers were not the product not of jitters over a bailout not happening, but rather over fears that a bailout will happen. If we print $1 trillion in new money to fund the Paulson plan (and let’s not kid ourselves, that’s what we’re talking about here), we would seriously cut into the value of the dollar. That in turn means that the price of commodities would skyrocket. In other words, serious inflation.

But if we don’t pursue a bailout, the economy collapses, credit disappears, and, I presume, trillions of dollars of value disappear overnight. That probably will bring on massive deflation, a run on banks, and the biggest economic crisis since the 1930s.

But wouldn’t the latter option at least leave us with the capital to try to restore the system? Wouldn’t that $1 trillion then be available to fix the systemic problems in a way that dropping it into the black hole we’re calling the bailout can’t?

We have no guarantees that the bailout will solve the problems we face. The people telling us it will are the same ones who, six months ago, went on national television and assured people, post-Bear Stearns, that the economy was sound.

I had hoped today to attend a meeting put together by Steve Clemons that is looking at these questions. Unfortunately, some obligations on the consulting side of my life prevented me from doing so. One of the people I wanted to hear was my friend Leo Hindery, one of the smarter guys around on these issues and an economic advisor to the Obama campaign. Yesterday, Steve released a portion of what Leo plans to say today:

As we all know, the Bush administration is asking Congress to let the government buy $700 billion in troubled mortgages, which would raise the statutory limit on the national debt to $11.3 trillion from $10.6 trillion. This $700 billion is over and above the $85 billion already committed to AIG, the $29 billion related to Bear Stearns, and the very conservative $25 billion associated with the bailouts of Fannie Mae and Freddie Mac.

The solutions being proposed are the most expensive combined bailout in the nation’s history and will sharply curtail the ability of the next president to push for tax cuts or new spending. And yet I believe they are not nearly enough, since they do not adequately cover the exposure associated with leveraged loans and, especially, the credit-default swaps market which has ballooned to a nearly unimaginable $45.5 trillion, from $900 billion in 2001.

This credit-default swaps market, which was developed by financiers who hired the best lobbyists they could to keep regulators away, is essentially nothing more than insurance on debt, but because there are now many more credit-default swaps outstanding than there are bonds for them to cover, it could potentially be a black hole of distress at least as large as the sub-prime mortgage crisis. Tens of trillions of dollars ago these swaps became nothing more than a way to gamble with almost no money down.

Leo clearly thinks that $1 trillion is little more than a shot in the dark We’re standing on the edge of a cliff, throwing a rope over the edge, and hoping that it’s long enough to get us to the bottom. But we really have no idea whether that’s true.

About eighteen months ago, I had dinner with Leo, Steve and a few others. I told Leo that, sooner or later, we as a nation were going to face the equivalent of another margin call — some event that would demonstrate just how much trouble we were in. Here’s a good short description of what that meant in 1929:

Margin calls played a role in the Great Depression. Speculators used leverage to play the market. They borrowed money, bought stocks, and put the stocks up as collateral. This only works when the stocks do not lose in value, so their price better go up. If it goes down, the value of the collateral will eventually fall below that of the loan. This is when the bank gets worried and sends you a margin call so that you close the gap.

Sound familiar?

Eighteen months ago I said that something would happen to produce a similar result. I didn’t know what it was going to be — an end to the real estate buble, a collapse of the dollar, another terrorist attack, China calling in its marker — but something was going to catch up with us and we would face real trouble when it did.

I think we’re there. This is our margin call. Not literally, of course, but the impact on the economy is going to be essentially no different from what happened in 1929.

If Paulson and Bernanke are wrong — again — and Hindrey is right, dropping $1 trillion now isn’t going to make a difference. We would still have a meltdown, except we won’t have that $1 trillion available to fix the underlying structural problems that have caused this mess.

In addition, we would have a dollar worth considerably less than it is now. We would still be dependent on foreign oil that now will cost much more than it does now. We would still be stuck paying for a war in Iraq that is in the process of sucking an additional $1 trillion out of the economy. And we have no money to fix all the other problems we face — like a crumbling infrastructure, health care, a failing educational system, and social security and medicare insolvency, to name just four.

In other words, if the bailout fails to prevent the crisis, we would face an even worse scenario than what we do now: massive inflation, a collapsing economy, and no way to fix it. We’re talking Zimbabwe, Argentina, Germany in the 1920s. That way lies madness and most likely dictatorship.

I’m not an economist, but it sure seems like we’re between a rock and a hard place here. Tell me I’m wrong.

Tell me that these guys — the same guys who got us into this mess — know what they’re doing.

Tell me that we’re better off bailing these crooks out than we would be putting the money into saving social security and pension funds, investing in clean energy, fixing our infrastructure, developing a better health care system, and all the other things that are going to fall by the wayside if we use this good money to chase after bad.

Tell me.

I’ll try to believe you.

Photo: via Wikipedia, photo in the public domain

Henry Paulson Is As Big A Liar as John McCain

Bet you don’t remember Chip Diller. Maybe this will help:

That’s Kevin Bacon as Chip Diller in Animal House (sorry for only a screenshot — I couldn’t find a clip anywhere). Bacon’s most famous line, delivered while screaming hysterically, was

REMAIN CALM! ALL IS WELL!

These days, there are thousands of Chip Dillers walking around. They’re the people who continue to insist that everything is okay even when they know it’s not the case. To put it another way, they aggressively deny reality. Or you could just call them Bush Administration officials.

Take, for example our new fearless leader lender, Henry Paulson.

REMAIN CALM!! ALL IS WELL!!

Kudos to Chris Wallace (of all people) for pushing Paulson on this. But go back and listen again. Paulson admits that they knew six months ago, at the time of the Bear Stears bailout, that this was coming. But he didn’t think that they could get Congress to agree to a bigger bailout, so they didn’t even try.

There is no way we could have gone to Congress and got the authority to inject capital into the banking system by buying illiquid assets unless there was a clear and urgent and obvious need. So although many of us looking at it said it could come to something like this, we [were] hoping to avoid it. The key here was the speed of the housing price correction.

So let me get this straight.

Paulson, among others, knew six months ago this was coming. And he knew what it would take to fix it.

And he (they) did nothing — nothing! — to prevent it. They bailed out Bear Stearns, sat back, and crossed their fingers and maybe their toes. They waited, hoping — hoping! — that things wouldn’t go to hell.

Knowing what he knew, Paulson also went on national television and lied:

WALLACE: Are more Wall Street firms in danger, at risk of going under?

PAULSON: Chris, I’ve got great confidence in our financial markets, our financial institutions, our markets are resilient, they’re flexible. Our institutions, our banks, our investment banks are strong.

That’s not a fudge, a misstatement, or a misunderstanding. It’s a flat out John-McCain-in-full-campaign-mode lie.

Just remember. . .

REMAIN CALM! ALL IS WELL!

And now we’re supposed to reward this guy by giving him dictatorial control over the economy?

I have a better idea. Let’s impeach him instead.

Chip Diller, white courtesy phone please.

Hat tip: Think Progress

19 Percent

That’s Bush’s approval rating in the new American Research Group poll, down from 30 percent a month ago.

Nineteen percent.

Wow.

Nineteen percent of the American people still think he’s doing a good job?

I’m amazed.

Of course, 0 percent think the economy is going in the wrong direction. That sounds about right.

Bush still has about four months to go — he still could get to that magic number as well.

Real World, Bailout Edition

If you want to get a sense of the on-the-ground reality of what’s at stake right now, take a moment to watch this slideshow on how Fort Meyers, Florida is coping with more than 700 abandoned and foreclosed homes.

To paraphrase Stalin, billions in bailout money is a statistic, but the death of a family’s dreams is a tragedy.

Today’s Political Haikus

Economy Stinks
But McCain doesn’t care
More attack ads please!

;

McCain advisor
Davis paid by Fannie Mae
Who’s the hypocrite?

;

Hank Paulson’s rule
Would be dictatorial
Drop Article 8

Where’s Colin Powell When You Need Him?

Heh.

Hat tip: Marginal Revolution

Torture, Bailouts, and the Theory of a Unitary Executive

I just finished Jane Mayer’s The Dark Side. I’ve blogged a bit on it already, and if I have the time, will try to offer some additional observations later this week. In the meantime, Alan Jacobs over at The American Scene wonders why conservative media outlets have chosen to ignore the book:

[I]f you. . .see the book only as an anthology of information in the public record — newspaper articles, interviews with named figures, books by former Bush administration officials, government documents, and so on — it’s still a convincing demonstration of how certain high-ranking leaders ignored international law and overturned decades (even centuries) of American practices towards enemy combatants.

Yet I have seen almost no response to this book in the conservative press. What’s up with that? The Dark Side has been reviewed in most major newspapers and magazines, but not from any of the conservative organs I’ve seen. Have I missed something? And if not, what are we to make of this silence?

Do conservatives think Mayer’s book is so bad that it’s unworthy of response? (If so, they’re wrong.) Are they just trying to avoid acknowledging uncomfortable truths, and would prefer not to think about what the Bush administration has done in prosecuting its war on terror? Or — perhaps the most interesting possibility — do they agree that Mayer has accurately described the administration’s actions but simply judge those actions very differently, as necessary and even commendable responses to the Islamist threat?

Keep in mind that Jacobs himself is a conservative, so he is not looking for an excuse attack his movement colleagues. If his last thesis is the correct one, then conventional conservativism no longer regards civil liberties and the rule of law as important as national security.

I do find it interesting that many of the conservative voices now arguing that the Paulson-Bernanke bailout plan as an unconscionable expansion of government power didn’t seem to have a problem with government overreach when it involved torture, rendition, and other abuses. Their acquiesence then helped lay the groundwork for a similar expansion today.

To put it another way, conservatives had no problem with the Administration’s application of the theory of a unitary executive when it involved war powers. So why are they suddenly surprised that the Administration now wants to take a similar approach toward the economy?

What conservatives have consistently failed to understand is that this is one of the least conservative Presidencies on record. It has overseen the single greatest expansion of government authority in history — not merely in terms of war powers, but also with the creation of the Department of Homeland Security, the expansion of wiretapping and other forms of intrusion into the lives of average Americans, and the unchecked growth of government spending. No previous Administration — Republican or Democrat — comes close.

In fact, the only field where government authority retreated was regulation. From the environment to the economy, this Administration has loosened existing controls over big business. The end result, of course, is the Great Crash we’re facing today. And the Bush Administration’s solution? Extend executive authority in order to bail out its friends. It is consistent with their past policies of imperial overreach.

The Administration’s actions are both disgraceful and fundamentally unconservative.

Since it’s going to take us decades to clean up this mess, it might be a good idea to slow down a little and make sure that the decisions our leaders make over the next week don’t end up doing more harm than good.

A Modest Proposal**

This Friday is the first Presidential debate; the candidates are set to discuss foreign policy. So what are the candidates doing? Getting ready to talk about foreign policy.

With less than a week to go until the first general election presidential debate, the candidates will be preparing over the next few days for their first major face-off on Friday in Oxford, Mississippi. Both campaigns know it could be a pivotal moment in the race for the White House.

Let me be clear about something here. I’m a foreign policy guy. Americans need to hear what both candidates have to say about these issues — and to see the fundamental differences in the way they look at the world.

But this week is not the time for that debate. Right now, the American people want to know what the Obama and McCain are going to do about the current mess we’re in. Holding a foreign policy debate in the middle of an economic crisis will only will distract the candidates at a critical moment. It also may anger or alienate those Americans who are much more concerned about their pocketbooks than peace in the Middle East.

Permit me to offer a modest proposal: the Commission on Presidential Debates should announce that Friday’s event will focus on economic issues, particularly the steps each candidate would take to address the current crisis. If that is not possible, then the Commission should reschedule the debate.

Right now, there is no foreign policy issue — not Iraq, Iran, China, Russia-Georgia, Osama, al Qaeda, human rights, Zimbabwe, Darfur, the United Nations, Israel-Palestine, Burma, democracy, the Bush doctrine, foreign aid, the world food crisis, or Pakistan — none of them — will matter if the U.S. economy implodes.

**with apologies to Jonathan Swift.

Evening Political Haikus: The Great Crash

Great Crash of 08
The dominoes are lined up
Who is next to fall?

;

Sovereign wealth funds
Do not like us anymore.
Goodbye investors.

Thought for the Day

The U.S. Government’s massive bailout of Wall Street took place on “Act Like a Pirate Day.”

Heh.

The Decline of American Power, Iraq Edition, Part 356

This morning, The Washington Postdated confirms that yesterday’s attack on the U.S. Embassy in Baghdad was the work of a group known as the Soldiers’ Brigade of Yemen, an affiliate of al Qaeda, using techniques that they may have learned while fighting in Iraq:

[T]he first vehicle exploded near a guard post. Cameras then recorded attackers taking positions nearby, until a second vehicle packed with explosives detonated near a sidewalk. . . . The use of two vehicle bombs — one to breach the perimeter of a compound, a second to drive inside and explode — is a tactic used by the Sunni insurgent group al-Qaeda in Iraq.

Matt Duss over at Think Progress demonstrates how this blows away yet another justification for the Iraq war — the “we’re fighting them over there so that we don’t have to fight them over here” idea, also known as the flypaper theory:

Those who have been following the Iraq debate might remember “flypaper theory,” which was one of the earliest exponents of the “incoherent post hoc justifications for the Iraq war” genre. The idea was that there was some limited number of terrorists in the Middle East, and the presence of an occupying U.S. army would lure them to Iraq, whereupon they could all be conveniently killed, presumably as soon as they stepped off the bus.

This plan was prevented from working only by the fact that it was staggeringly dumb. The U.S. occupation radicalized scores of young Muslims, many of whom traveled to Iraq, where they learned terror warfare and were galvanized in the global jihad. And now they’ve begun returning home, to share the tactics and technology developed in a laboratory we provided for them by invading Iraq.

Of course, that doesn’t even take into account the role of torture, Guantanamo, Abu Ghraib and other such obscenities in helping to radicalize Muslims as well.

To put it another way, the Bush Administration have spent billions upon billions of dollars on the Iraq War, largely based on the bankrupt theory that we are building an island of democracy that will de-radicalize the Middle East. In reality, we have made things far worse than they would have been had we never invaded, so much so that we have unthinkingly created another generation of terrorists, in the process weakening ourselves to such a degree that we may not be able to fight back the next time the come “over here.”

Imagine how bad things would be if Bush had taken a similar approach to the economy.

Oh. Wait.

Never mind.

Hat tip: Obsidian Wings

The Decline of American Power, Part 216

Not to go all Paul Kennedy on y’all, but I was struck by the last three paragraphs in a story in the Washington Postdated this morning:

Analysts said one of the biggest impacts of the crisis is to undo the long-held image of the United States as a fail-safe place to invest money. Hundreds of billions of investment dollars have poured into the United States in recent years, much of it from Asian economies where a powerful culture of individual savings contrasts with the earn-and-spend philosophy of the United States.

Many of those Asian investors were feeling burned by the failure of U.S. institutions once promoted as the safest of bets. Though Asian and Middle Eastern sovereign wealth funds lavished rescue money on U.S. lenders earlier this year, those funds appeared to be showing increasing caution.

“The big risk for the United States is that people will begin to feel that we really don’t know what we’re doing and lose complete confidence in the Federal Reserve, the Treasury and the U.S. financial system,” said Edwin M. Truman, senior fellow at the Peterson Institute and a former Treasury assistant secretary. “That hasn’t happened yet, but it is a risk.”

Talk about burying your lede. The big story isn’t that governments around the world are moving to “stanch panic,” as the Post headlines the story, but rather that other governments — and perhaps more importantly, investors — no longer view the United States as a “fail-safe place to invest money.”

Contrary The Post’s assessment that investors have yet to give up on the U.S., The International Herald-Tribune is reporting that Asian investors may already be losing faith in the United States:

Tremors from Wall Street are rattling Asian confidence, leading many investors to question the wisdom of being invested in the United States to the tune of trillions of dollars.

Asian investors were starting to show hesitation even before the financial earthquake of the last week. Now, a wariness toward the United States is setting in that is unprecedented in recent memory, reaching from central banks to industrial corporations, from hedge funds to the individuals who lined up here to withdraw money from the American International Group on Wednesday.

Asian savings have, in essence, bankrolled American spending for decades, and an Asian loss of confidence in American financial institutions and assets would have dire consequences for the U.S. government and American taxpayers.

Damn straight it would.

But individual Asian investors are not the only ones who have kept the good times rolling in the United States. As you may or may not know, one of the biggest sources of capital flowing into the United States over the past few are sovereign wealth funds — state-owned investment funds created by governments when they have budgetary surpluses. Think of them as a government’s rainy day fund, designed to help avoid boom and bust cycles.

Guess where may sovereign wealth funds have been investing? In the American banking sector, including Morgan Stanley and Merrill Lynch. As Inspector Clouseau once said in one of the Pink Panther movies, not anymore.

As the American investment banking industry seems to teeter, many investors are asking why the sovereign wealth funds from the Middle East have not stepped up.

Less than a year ago, the funds spent billions of dollars for minority stakes in Wall Street banks. As oil prices peaked near $145 a barrel this year, the Middle East sovereign wealth funds amassed even more cash. Still, even as the values of banks like Goldman Sachs and Morgan Stanley are swooning, Middle East funds are not biting.

The explanation is simple, bankers in the region say. Plenty of other, more attractive assets are out there right now. With markets having been hit by the global downturn, compelling, value-priced deals are numerous — from sports teams in Britain and publicly traded companies in Russia to deals closer to home, like Middle East infrastructure buys, Youssef Nasr, chief executive of HSBC Bank Middle East, said.

When investors decide that their money would be safer in a British soccer team than in an American bank, I think we can take that as a pretty good sign that we’re in serious trouble.

For far too many years, Americans have been able to sustain our lifestyles in large part because Middle Eastern and Asian investors saw it in their best interests to prop up the American economy. They’ve bankrolled the consumer boom and the real estate bubble, blithely confident that investing in the United States was the safest possible bet.

Right now they’re feeling burned. The big question is whether that’s a temporary phenomenon or a permanent shift. If it’s the latter, and you’re wondering what the consequences for the U.S. economy will be, think Lehman Brothers on a national scale.

My country ’tis of thee, sweet land of penury.

Diplospeak Translator: Understatement of the Day

Time for a condensed version of the Diplospeak Translator!

President Bush during his Hooveresque press conference today:

There will be ample opportunity to debate the origins of this problem. Now is the time to solve it.

DIPLOSPEAK TRANSLATOR: Oh man am I screwed. As if Iraq wasn’t bad enough. Now I’m being compared to a vacuum cleaner. At least Krauthammer still thinks I’m Truman.

Well in one sense he is — we haven’t had this much nationalization since Truman tried to take over the steel industry.

Wasn’t it Ross Perot who used to talk about a giant sucking sound?

More about this mess soon.

BREAKING: I Agree with John McCain!!!

Today, John McCain called for the resignation of the Chairman of the Federal Elections Commission:

Much to my shock, I agree with Senator Grouchy McGrouchypants. I also think FEC Chairman Donald McGahn should resign, largely because of the FEC’s recent failure to investigate your own skirting of federal campaign finance law.

But I’m pretty sure that you meant to say, the Chairman of the SEC — as in Securities and Exchange Commission — not the FEC.

I know, we all make mistakes, right? And it’s been, oh, I don’t know, 24 hours since you made one — when you said you would fire Christopher Cox, the Chairman of the SEC, even thought a President doesn’t have the authority to fire heads of independent regulatory agencies. And it’s been a full two days since you mistook Spanish Prime Minister Jose Luis Rodriguez Zapatero for Commandante Marcos of the Zapatista National Liberation Front. So maybe we should cut you some slack. After all, you did finally figure out that the FEC SEC chairman can’t be fired, so that’s somewhat of an improvement.

I have just one question for Senator McCain about this whole SEC chair firing/resignation thing: if Christopher Cox does resign, doesn’t that mean that President Bush gets to appoint a new one? And didn’t Bush pick Cox in the first place? So won’t we be virtually guaranteed the same freaking problems we have now?

Actually I have a second question for him. When the Senate confirmed Cox on July 29, 2005, it was by acclamation. In other words, unanimously. That means both you and Barack Obama, if you were on the floor of the Senate at the time, supported him. But Obama isn’t (yet) calling for Cox’s removal.

And as John Nichols over at the Nation notes,

Cox’s nomination to serve was considered by the Senate in the summer of 2005, at a time when McCain was positioned, as chair of the Senate Commerce Committee, to raise any concerns he might have had — and even to hold hearings — about the selection. As McCain, himself, bragged this week: “I understand the economy. I was chairman of the Commerce Committee that oversights every part of our economy.”

While that statement was a bit of a stretch, it is reasonable to suggest that the Commerce Committee chair could have identified an opening (perhaps through the committee’s responsibility for overseeing interstate commerce) to hold a hearing and raise concerns about Cox.

Instead, McCain made no complaint and ceded responsibility for reviewing the Cox nomination to the Banking Committee, which has primary responsibility for reviewing SEC nominations. The Banking Committee gave Cox a predictable free ride from the Wall Street-friendly Republicans and Democrats who pack the panel.

Does that mean that you were for Cox before you were against him?

Oh, and that makes me think of yet another question. Wasn’t Cox rumored to be on your shortlist for VP?

I think Christopher Cox will make an excellent choice as McCain’s VP based on a lot of the information I gleaned from here and here. Some are going to tell me that the problem with Chris Cox is that he is not former Gov. Mitt Romney or current Gov. Tim Pawlenty. The argument that Romney can help McCain in Michigan and Pawlenty can help McCain in Minnesota. My purpose is not to make a case against a VP pick, and I do not have anything against them. I just think that there is a good case for a Minnesota born pro-life Chris Cox to be a help and not a hindrance as his VP.

So maybe you were for Christopher Cox before you were really for him before you were conveniently against him.

This isn’t flip-flopping. It’s crass opportunism.

Joltin’ Joe

Another great point from the only VP candidate actually qualified to hold the job:

COURIC: Your vice presidential rival, Governor Palin, said “To the rest of America, that’s not patriotism. Raising taxes is about killing jobs and hurting small businesses and making things worse.”

BIDEN: How many small businessmen are making one million, four hundred thousand–average in the top 1 percent. Give me a break.

I remind my friend, John McCain, what he said–when Bush called for war and tax cuts–he said, it was immoral, immoral, to take a nation to war and not have anybody pay for it. I am so sick and tired of this phoniness.

The truth of the matter is that we are in trouble. And the people who do not need a new tax cut should be willing, as patriotic Americans, to understand the way to get this economy back up on their feet is to give middle class taxpayers a break. We take the tax cut they’re getting and we give it to the middle class.

Pow! Bam! Zing!

Thought of the Evening

A question.

If there was a significant sector of the U.S. economy that was bleeding red ink, doing serious damage to the savings of individual citizens preventing American businesses from being competitive, and genrally dragging things down, you’d want the government to take action, right?

Sure you would.

Okay, a second question, then.

If it’s okay for Republicans to prevent the banking and insurance industries from melting down, why is it socialism when Democrats urge similar action on health care?

Just asking.

Obama’s New Commercial

Two minutes long. Thoughtful, realistic, comprehensive, and hard-hitting. The framing works.

Two observations.

1. The only thing missing are bullet points highlighting the key points in the plan. I think that would have been more effective than keeping the web address up the whole time.

2. The big question is whether people are willing to spend two minutes watching this.

Ironically, given my critique of Gerson’s column earlier today, this is exactly what Gerson suggested he do. But I still don’t think that this precludes him from also hitting back. And I remain convinced that Gerson is shifting the blame by arguing that it is somehow Obama’s fault that McCain has become a lying liar who lies about lies.

Thought for the Day

Too bad Henry Paulson and Ben Barnanke weren’t around when Carly Fiorina ran Hewlett-Packard, because the American people could have taken control of HP for a song.

Morning Buzz: Silliness amidst the Ruins

Two hurricanes hit in the past week — Ike in Texas and Lehman Brothers in New York. Both are deeply serious situations affecting the lives of thousands of Americans.

And yet there are those who cannot help but see an opportunity for mischief. First New York:

Now Galveston:

Just wait until AIG fails — I’m betting we’ll see gay bears.

Hat tips:

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