At this pace, by the time Obama takes office, the Stock Market just might hit 2000.
Talk amongst yourselves, but whatever you do, don’t check your retirement portfolios.
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Two stories today illustrate just how bad it’s going to get before things get better. First, via Calculated Risk, the story of one company and its sales in 3Q 2008 versus 3Q 2007:
[T]ruckmaker Volvo admitted demand across the [European] Continent has crashed by 99.7 percent as it took orders for just 115 new lorries in the last three months. That compares to orders totalling 41,970 in the third quarter of 2007.
Just to be clear, this is sales of semis in Europe. But look at those numbers again: 42,000 in 2007 and 115 in 2008. That’s beyond ugly.
The second story, from today’s Washington Post, describes conditions in Cleveland as a result of the subprime mortgage crisis and the subsequent collapse (and sale to PNC ) of National City Bank:
By 2003. . . property values began to soar. Wood-frame houses built nearly a century ago were fetching $70,000, $80,000 and even $90,000 — multiples of their previous peaks. Tax revenue accelerated, punctuating Cleveland’s claim as a comeback city. National City got in on what turned out to be a national boom, as it rapidly expanded its mortgage business into the fast-growing Sun Belt and ventured deeply into the subprime lending market. For a time, the strategy was wildly profitable, as the bank reported profit of more than $13 billion from 2000 to 2006.
And then the boom fizzled, leaving both the bank and its home town faltering. Overall, nearly 10 percent of the city’s properties have gone into foreclosure. National City has lost more than 80 percent of its market value this year. On Tuesday, chief executive Peter E. Raskind said 4,000 positions would be eliminated from its overall workforce of 29,000 over the next three years. The bank slashed 3,400 jobs a year earlier. . . .
Much of that money, from National City and other banks, found its way to Slavic Village, the childhood home of Rep. Dennis J. Kucinich (D), which local officials call ground zero for the foreclosure crisis. For decades, the neighborhood, which abuts a steel mill in the city’s southeast, was a struggling working-class community with an aging population and few new residents. But Slavic Village underwent a dramatic change beginning in the late 1990s as the tide of mortgage money flooded the area with new homeowners, lifting prices to unprecedented heights. Thousands of the neighborhood’s small wooden homes turned over, with investors selling to new buyers at multiples of their purchase price, sometimes within months, and often after making only cosmetic repairs.
“The deals became toxic immediately,” said City Council member Anthony Brancatelli, who for 17 years headed the Slavic Village Development Corp. “What should have been $20,000 or $30,000 homes became $80,000 or $90,000 homes with toxic loans.” The result has been a rush of foreclosures. The number of foreclosure sales in the five-square-mile neighborhood swelled from 114 in 2001 to 840 last year. In the first six months of this year, 316 Slavic Village properties have been through foreclosure, according to figures compiled by the development corporation.
This is the dark side of the crisis that most Americans really aren’t thinking about yet. It’s a vicious cycle: mortgages become toxic, jobs in sectors like banking and technology start to disappear, property values fall, the tax base erodes, and city revenues start to decline.
The bailout isn’t going to make any of this go away tomorrow, nor is it going to convince European companies to start buying semis.
I was in Cleveland last spring, and came away quite impressed with its dynamic central business district and its residents’ optimism that they were coming back from the worst of the seventies and eighties. Molly and I even talked (briefly) about moving there, given the relatively cheap mortgages (even at $90,000 the homes looked cheap to someone used to DC house prices) and its proximity to her mom in Michigan.
Sad to say, we made the right decision. It’s going to be a while before Cleveland rocks again.
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Let me acknowledge up-front that this is a bit off-topic for me. I’ve tried to stay away from this whole Joe the Plumber nonsense (other than in my live blogging of the debate), but I think the following is worth passing along.
From a guest op-ed by John Phillips that ran in today’s Sarasota Herald-Tribune:
I own a small company in Sarasota - John Phillips Plumbing Service.
I have been in business more than eleven years and, by any standard, I have been successful for most of those years. But, in response to the questions posed to Barack Obama by “Joe the Plumber,” and mentioned repeatedly in the presidential debate Wednesday night, I have to say [that] paying higher taxes is the least of my worries right now — because people won’t owe taxes if they are not making any money.
In the last couple of years — as a result of mismanagement, lack of oversight and rampant greed in the greater economy — my business has gone from eight employees to having one employee part-time. My sales are off by 70 percent. For the first time in eleven years, I am having a hard time paying my fixed overhead — things like fuel, rent, electricity and insurance.
All the material I buy for my business has skyrocketed in cost, with no end in sight. I am going to have to downsize my shop because I have no need for 3,000 square feet. I have already cut my employee’s pay by 25 percent. I can’t offer medical benefits any longer, and it is getting harder to pay for vacations and holidays.
Phillips does not endorse Obama (or McCain), and he goes on to make some arguments that I don’t necessarily agree with (such as suggesting that illegal immigration is one of the reasons for his woes). But his outlook certainly represents a much more realistic portrayal of the challenges facing small businesses than those of that other plumber guy.
What’s particularly interesting about Phillips’ piece is that he’s appears to be writing from the perspective of what’s happening on the ground before he has felt the impact of the current economic crisis. For him, and thousands of other small business owners like him, the drying up of credit may prove to be a tipping point. If, as John McCain likes to say, small businesses are the engine that drives our economy, it’s about to seize up and throw a rod.
Hat tip: Undip reader Dad
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Unless something unexpected happens in the next nineteen days, the American people will elect Barack Obama to be the next President of the United States, and will do so by a large enough margin for him to have a mandate to address the numerous problems caused by that disaster known as the Bush Administration.
The challenges will be immense. And should Obama stumble, Sarah Palin will be waiting in the wings.
Palin already is laying the groundwork for a run in 2012. And given her actions over the past two months, it is a safe bet that she will do anything and everything in her power to win.
The key question is not whether she will challenge Obama in four years, but rather what kind of race she will run. Is Palin merely another ambitious politician willing to say and do anything to get elected, or are we witnessing the emergence of a genuinely anti-democratic populist — a successor to such notorious figures as Charles Lindbergh, Father Charles Coughlin, Huey Long, Strom Thurmond, Senator Joseph McCarthy, and George Wallace?
If the past two months are prologue, Palin represents a significant threat. She favors demagoguery over democracy. She celebrates her own lack of judgment and experience as her best qualifications for the office she seeks. She slanders Obama and other opponents, suggesting that they are willing to sell out America. She uses her supposedly folksy background to attack the media and elites as out of touch with average Americans. And she plays to the mob, appealing to and encouraging the most reactionary, angry, hateful, and racist elements of our society.
These are Palin’s people, the worst angels of our nature. They are ready, willing, and determined to follow her regardless of what happens on Election Day. The Palinistas are far less interested in electing McCain than they are in putting the Sarahnator one step away from the White House (and, they hope, in it soon). They will never accept an Obama presidency, and should McCain somehow pull off a miracle, they will count the days until Palin is able to push him aside and assume power herself.
It would be easy to suggest that Palin is little more than a demagogue, that she would not move the United States away from its democratic traditions. And in fairness, we are still too early in Palin’s career to determine whether she is a genuine threat.
But do we really want to take the chance?
If Palin really does represent a move toward anti-democratic populism, she already is far more dangerous than any earlier demagogue. She’s not merely some nutjob with a radio following, or a regional figure who failed to move onto the national stage. She’s the Republican nominee for Vice President of the United States.
No previous anti-democratic figure — not even Strom Thurmond in 1948 or George Wallace in 1968 — ever had a serious chance of getting elected. Palin does. And given McCain’s medical history, there is a real chance she would be President before the next election came around.
Change genders, and Palin is a modern day evocation of Senator Berzelius “Buzz” Windrup, the anti-hero of It Can’t Happen Here, Sinclair Lewis’s alternate history of America under a fascist dictatorship:
Oh, he was common enough. He had every prejudice and aspiration of every American Common Man. He believed in the desirability and therefore the sanctity of thick buckwheat cakes with adulterated maple syrup, in rubber trays for the ice cubes in his electric refrigerator, in the especial nobility of dogs, . . .in being chummy with all waitresses at all junction lunch rooms. . .and the superiority of anyone who possessed a million dollars. He regarded spats, walking sticks, caviar, titles, tea-drinking, poetry not syndicated in newspapers, and all foreigners, possibly excepting the British, as degenerate.
But he was the Common Man twenty-times-magnified by his oratory, so that while the other Commoners could understand his every purpose, which was exactly the same as their own, they saw him towering among them, and they raised hands to him in worship. . . .
That’s Sarah Palin: fake small-town rhetoric combined with an unquenchable thirst for power. And like Windrup, she has attracted a cabal of back-room intellectuals who intend to use her to achieve their own ends. What’s not clear is whether Palin is, like Windrup, little more than a figurehead, or if she actually has the ruthlessness to manage those who would make her queen.
Given the fact that we still do not know how bad things will get over the next few years (and even though they are unlikely to be as bad as the Great Depression, they surely will be worse than anything most of us have ever seen), there is a very real possibility that an Obama Administration may not reverse the disastrous situation that Bush has left us. That is the premise of Lewis’s novel — that Roosevelt’s best efforts weren’t enough and things were much worse at the end of his first term.
If history does not repeat itself — if Obama is not able to tackle the problems we face — then hope, change, logic, and cool will not be enough to sustain him. Again, Lewis:
The conspicuous fault of the Jeffersonian Party. . . was that it represented integrity and reason, in a year when the electorate hungered for frisky emotions, for the peppery sensations associated, usually, not with monetary systems and taxation rates but with baptism by immersion in the creek, young love under the elms, straight whisky, angelic orchestras heard soaring down from the full moon, fear of death when an automobile teeters above a canyon, thirst in a desert and quenching it with spring water–all the primitive sensations which they thought they found in the screaming of Buzz Windrip.
Sarah Palin is ready. Should things get worse over the next four years, her folksiness and rhetoric may start appealing to more than just the far right. If she turns out to be all that I fear, then John McCain may be remembered best not for his own career, but for his role as an American Paul von Hindenburg.
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This was McCain’s strongest debate. I don’t think he “won” in the way that he needed to. No game-changer. Obama was steady, strong, Presidential. McCain was angry, nasty, often mean-spirited. As the debate went on, he got angrier and angrier. Lots of mugging for the camera. He really came off as a cross between Grandpa Simpson and the Hulk.
The key exchange was on the tone and tenor of the campaign. McCain responded with more negative attacks, while Obama was gracious but firm. And Obama was smart to avoid discussing Palin.
Obama really didn’t make any mistakes. McCain didn’t land any hard blows.
Advantage Obama.
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Okay, here we go. The last debate.
Thank. God.
I hear that McCain’s going to talk about “divided government.” The Republicans already have the Supreme Court. What more do they want?
McCain was actually polite at the intros.
BTW, no times tonight. Thought I’d try something different.
First question is about economy.
Damn I didn’t take hurting and angry in my drinking game tonight. McCain leads off with Fannie and Freddie talking point and then talks about his $300 billion home plan.
Who are McCain’s friends? Inquiring minds want to know.
Obama and McCain agree that this is the worst financial crisis since the Depression. Dur.
Obama mentions the middle class first. I win the over/under. Why is McCain so afraid of those words? Obama, unlike McCain, highlights differences between the two plans.
Okay, mistake by McCain — he refuses to engage Obama.
McCain is going to help this Joe the plumber guy start a business! Will he help my blog? Ka-ching!
McCain told Obama that he wanted the spread the wealth around and then said he would help spread the wealth.
If I hear anymore about Joe the Plumber I’m gonna hurl.
McCain seems to think that his best shot at winning the debate is to focus on small business owners.
Next question: deficit.
Obama says bailout must be structured to help Americans get their money back. Talks about pay-go. Do people know what that means? Says he will cut subsidies of insurance companies, but then switches to health care, energy, infrastructure. Key words: ethic of responsibility.
When McCain talks about the Great Depression, he sounds like he was there. McCain largely avoids the question, only promising an across the board spending freeze.
McCain opposes subsidies for ethanol. Guess he’s given up on Iowa.
Back to earmarks. Meh.
When he looks at Obama,
McCain looks like a bobblehead doll on crystal meth.
Why is McCain such a planetarium hater?
McCain: I’m not Bush, if you wanted Bush, you should have run four years ago. That’s a zinger? Obama’s going to smush him. Senator Obama, I know George Bush. George Bush is a friend of mine. Senator Obama, I am no President Bush.
McCain asks Obama what he’s stood up to the leaders on his party. When Obama answers, McCain shows contempt for the first time.
ACKKKKK! CREEPY FACE! CREEEPY FACE!
I’m waiting for McCain, like LBJ, to actually show us his scars. Oooh not convincing! What a comeback.
Schieffer asks the hard question about negativity. McCain blames it on Obama’s refusal to do town hall meetings. That seems like a weasel to me. McCain: I regret the negative aspects of both campaigns. Attacks John Lewis not in anger but in sorrow. McCain is setting up Obama to talk about Ayers. Claims that he is running a truthful campaign. Hits Obama on campaign finance issues.
Obama: cites CBS/NYT poll that 2/3rds of Americans think McCain is running a negative campaign. Obama refuses to take the bait on Ayers. Says politics as usual can’t work.
McCain claims that an attack on his health care plan, immigration plan are attack ads. No they’re not.
Grandpa Simpson and Joe the Plumber ‘08!
Obama comes back and talks about Palin rallies. In a competition between John Lewis and Palin for outrageousness, most Americans think Palin is worse.
McCain just snorted like Gore. McCain is getting snippy. That’s not good for him. McCain: I’m proud of those who come to my rallies, suggest that people like vets are who Obama is talking about.
McCain hasn’t repudiated Palin, though has he?
McCain needs to get his open contempt under control.
McCain brings up Ayers first, and ACORN. Opens up full attack. Isn’t that contrary to the intent of the question?
Obama answers Ayers and ACORN. Will it be enough? Good comeback on who associates with.
Given that a majority of Americans think McCain is too negative, how does being negative help him?
Next question: running mates. Obama first. Softball question to Obama, 120 mph fastball question to McCain. Obama is smart to talk about Biden, not Palin. McCain: Americans have gotten to know Sarah Palin. Friend: “And we hate her.”
Every minute McCain talks about Palin, he loses. McCain on Palin: Noun. Verb. Trig.
Obama: Question of whether Palin is qualified is up to the American people. Smart.
McCain: Joe Biden is wrong on many national security issues.
Most Americans have never heard of the word cockamamie.
Next question: energy and climate change. Unfortunately, the way Schieffer framed the question, it leads to talking points.
McCain: Obama hates Canada!
Obama: energy is the most important issue we’re going to face in the future.
Obama’s looking at the camera right now makes him look Presidential.
So far, McCain is attacking, Obama is ducking. Angry man v. smiling cool guy. McCain is winning some points, but he is coming across as nasty and angry. Which will people see?
When they show the split screen, Obama is looking at McCain, McCain is looking at Schieffer.
When McCain talked about Obama never having gone south of the border, he did the 538.com tongue tell.
Obama’s response: I understand it very well. Calm, cool, factual.
Good thing I had Peru in my drinking game.
Will Obama’s comments about Detroit dragging its feet on green tech hurt him in Michigan? I don’t think so.
McCain just rolled his eyes.
Does McCain really believe that people care about Hugo Chavez? Do most Americans even know who he is?
Is it me or is Schieffer letting McCain have the last word on every question?
Next question: health care.
Obama discusses his plan. Looks into the camera again. McCain talks about minutiae — though Molly liked the fact he raised childhood obesity. Seventh mention of Joe the Plumber. I think he has that guy’s vote.
So let me get this straight — McCain says Canada is good for energy, bad for health care. Hater.
Prediction: SNL’s skit this weekend will involve Joe the Plumber. Maybe as moderator? Which MSM outlet will get the first interview?
Poor Joe the Plumber: Obama will tax his income and McCain will tax his health care. Maybe he should vote for Bob Barr.
Advice to Obama: stop talking about Joe the Plumber.
I’m trying to figure out how we’ve had three debates and Peru has been mentioned more often than China. And Joe the plumber has been mentioned more than all countries in the world save Iraq, Pakistan, and Afghanistan.
Senator Government? You can bet that the McCain campaign will claim that was intentional tomorrow.
Next question: abortion. I recognize people feel strongly about this, but we know the positions of both. It’s a base issue, not one that is going to affect the election. That said, both candidates focused on judicial appointments, which is a crucial question.
Obama brings up Lily Ledbetter case, uses it as an example of how court decisions affect “real people.” Good for him. McCain calls the case a trial lawyer’s dream and blows it off.
Hey Senator McCain, what if Jo the plumber wants an abortion? Will you still like her?
McCain is playing to his base right now when talking about abortion. It will help him with them, but not with “mainstream America.”
Obama talks common ground and McCain snorts. A friend just pointed out that Obama basically just told people to turn off their TVs. Heh.
Our friend Matt just pointed out that they haven’t talked about the economy in a loooooooong time.
Last question: education. Obama: more money v. reform is a false dichotomy: “we need both.” McCain: it’s the civil rights issue for the 21st century. That’s code for vouchers. So is choice.
I always find it amusing that Republicans talk about choice as a bad thing re abortion and a good thing re school.
Aside: want to bet McCain sticks around and works the room tonight?
When McCain stares at Obama, he looks like an elderly Norman Bates. Or Charles Manson. Not sure which. Molly thinks he looks like a reptile, our friend Jen thinks he looks like Casper the ghost.
McCain: “Cindy and your wife, Mrs. That One.”
McCain keeps looking at the camera briefly, nervously, but not engaging the crowd — except Joe the plumber, of course.
Precious children. My precious. We likes the children. THAT’s who he looks like.
Do the American people really give a crap whether Michelle Rhee favors vouchers or charters? I bet Joe the plumber does.
Closing statements.
McCain: My friends. New direction. Bush bad. Reform. MAVERICK! But a careful steward. Make health care “avoidable.” (Whoopsie!) Trust. Another mention of careful stewards. Hope. Future. Joe the Plumber Joe’s gonna be sad that he didn’t get a mention in McCain’s closing statement. McCain didn’t mention the economy in his closing statement!
Obama: Economy. Economy. Economy. Hope. Invest in American people. Health care. Education. Energy. Middle Class. Middle Class. Not easy or quick. All must come together. Will work tirelessly.
McCain is pointing like Palin.
Final analysis coming soon.
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My dad, James P. Brown, is a regular columnist for The Sarasota Herald-Tribune, writing mainly on local politics. He spent most of his career in newspapers, and later went into politics, serving four terms as Mayor of Longboat Key, Florida. His column this week looks at the differences between 1929 and 2008, particularly in terms of press coverage. I thought it worth sharing with readers of Undiplomatic.
Way back in my early newspaper days I did a lot of jobs for The Jackson [Michigan] Citizen Patriot, among them handling special promotions. One project was setting up a booth at the County Fair. What brings this up now is the queasy feeling I’ve been getting these last few weeks reading all the ‘negative’ headlines and stories about the economy.
Why do we have to write all this stuff? Even as a newspaper man I couldn’t help asking this. Are we just making things worse, feeding fear, generating further downtrends in the market? Can’t we focus on the positive?
That’s what took me back to that 1950s Jackson County Fair booth. I had decided to paper its walls with copies of headlines and front pages of the century’s biggest stories. One of these, I decided, was the Wall Street crash of 1929.
Over and over I went through the paper’s files for 1929. I couldn’t find a single headline that even hinted at the collapse of the stock market that was to shake the world. Not a one! As the days progressed, though, there were plenty of stories about “Things looking up” or “Buying surge predicted.”
It was a different age, for newspapers as well as the world. Editors were “responsible” people; many felt it was their job to build up the economy, not proclaim its weakness; to decide what was “good for readers”, not necessarily what they needed to know.
The obvious moral: sticking your head in the sand doesn’t work for the purveyors of news any more than it does for everyday citizens. To try to hide what’s happening, to sugar-coat, will if anything make the situation worse.
All of which stirs another memory – the famous putdown of Dan Quayle in a vice-presidential debate when he compared his career to the late President Kennedy’s: “Believe me, Senator,” said Lloyd Bentsen, his opponent, “I knew Jack Kennedy and you are no Jack Kennedy.”
Well, I’m old enough to have lived through the Great Depression and, believe me, what’s happening in this country is bad, yes, but it isn’t even close to what the 1930s were like.
There was no social security then, no Medicare, no employer financed retirement and health insurance. A fifth of the population that often was forced to live on the charity of others. Today, their children have a pretty darned good life. We didn’t have nearly as many foreclosures because very, very few could afford to buy a home. And, prior to 1933, we operated under a government that truly stuck its head in the sand and lived on the promise that “prosperity is just around the corner.”
Unemployment officially was 25 percent; in the real world it was closer to 50 percent. What is it today, 6 percent? Then thousands of men roamed the country in boxcars looking for work. No one had ever heard of insurance for bank accounts and, as failures piled one on top of the other, millions of families lost what little savings they had. It’s a crime the way today’s stock market found its way around regulation, but then, there essentially was none. Margin buying wiped out hundreds of thousands of people. Broken men leaping out of skyscraper windows became a symbol of the times.
My family – five of us — lived in a two-room cabin in a tourist court with community shower and bath, subsisting on what my mother earned setting hair for 25 cents for a finger wave – and felt lucky to have that much.
And month after month all that was reported in thousands of newspapers was “Things Looking Up” or “Buying Surge Predicted.”
As grim as today’s headlines make you feel, in news as in life maybe honesty really is the best policy.
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Why isn’t John McCain (or Barack Obama or anyone else for that matter) demanding that President Bush fire Henry “Captain Crisismaker” Paulson? Or for the resignation of Ben “Wingman” Bernanke?
Christopher Cox may have been culpable in helping create the conditions for this mess, but given the fact that we’re facing a crisis of confidence in liquidity, not liquidity, most of the blame falls on the Bailout Twins.
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If you haven’t seen it yet, take the time to watch this extraordinarily sobering report on the impact of foreclosures on one part of Southern California.
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My earlier post on Iowa got me thinking about the McCain’s strategy and tactics.
According to press reports, the McCain campaign has adopted a defensive stance, more intent on defending Bush-2004 states than winning over Kerry-2004 states. This is problematic because, right now, they are so far behind in a half-dozen Bush-2004 that it’s going to be hard for them to defend them all successfully. Without a significant pick-up — such as Michigan would have been or Pennsylvania still could be — McCain really has no chance of winning.
One thing this approach does explain is the campaign’s turn toward hateful rhetoric. If they think the only way they can win is by rallying the base in Bush-2004 states, then the best way to make it happen is to scare the s**t out of rally the base. The problem with this approach is that fear only works if it’s the biggest fear out there. And right now, fear of an economic meltdown is trumping fear of an African American man with an Arab name. McCain may be able to move a few voters, but I haven’t run across a single sane member of the commentariat — not even on the right — who think that three weeks of venom can win this thing for him.
So given these facts, and given the assumption that McCain still thinks he can win, what are we missing here? Occam’s Razor says that the simplest solution is usually the right one (and yes, philosphy majors, I am oversimplifying it a bit). The answer is, of course, that McCain believes this is his only path to winning.
But winning what? That’s the question no one is asking.
I think the most plausible answer is that he thinks he can win in the electoral college even if he loses the popular vote. This has him winning enough of the Bush-2004 states plus New Hampshire and/or Pennsylvania to eke out a win. This would explain both the defensive posture and the rhetoric. If he can whip up the base enough in these states (plus Pennsylvania and New Hampshire), he might be able to keep Obama from winning over the one, two, or three states he needs to secure a win.
The only other possible explanation is that McCain has decided that if he can’t win, he must do everything he can to deny Obama a mandate, even if it means worsening the divides that have made governance so difficult over the past forty years. Clearly he is absolutely convinced of his righteousness, meaning anything he says or does is merely speaking truth to terrorists power.
As I’ve said earlier, he’s moving onto very thin ice here. Another blogger — I no longer can find the post — said earlier today that McCain is moving into territory which only George Wallace has chosen to go — open appeals to racism. Rick Perlstein has pointed out, correctly, that both Goldwater and Nixon resorted to similar tactics: “This is how conservatives roll.”
I think Perlstein is right, but I think he and others miss something important here. Contrary to expectations, we once again are having a referendum on the 1960s. Except this time it’s not about Vietnam, it’s about civil rights. And it’s not the Democrats who are wallowing in hippie wish-fulfillment but rather Republicans wallowing in what can only be called reactionary nostalgia.
The fundamental problem with the Republicans fighting the 1960s over again is that most Americans don’t give a rat’s ass anymore, especially given the current economic crisis. And those that do — those that remain unhappy about the triumphs of Parks, King, Abernathy, Lewis, Young, and other heroes of the civil rights movement — decided not to vote for Obama a long time ago.
So where does that leave McCain?
He’s riling up a reactionary base (to call it racist ignores the reality that only some of these folks are racist) in such a way as to guarantee that undecideds and independents are more likely to vote for Obama. To put it another way, the more he appeals to the worst instincts in Americans, the more Americans will want to demonstrate the content of their character. At the same time, he’s leaving a residue of hatred and distrust that’s going to make it much harder for Obama to govern.
McCain only needs to look at the state of this year’s Senate races to see that this election is much more about the economy than it is about Obama or himself. The Republicans are losing ground so rapidly that pollsters are having trouble keeping up with the collapse. Although a sixty-seat majority still appears unlikely, it is more of a possibility than it was even a week ago. Should that trend continue, we be witnessing the biggest collapse of a major party in the United States since 1932.
And that, my friends, is change we can believe in. For others, like those in the video above, it is change they will never accept.
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Bloomberg is going to have to update its TED spread graphic, on which the y axis only goes up to four.
They might want to replace it with one that goes to eleven.
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Don’t know why I didn’t think of this one before. I mean it works on two levels: the name of the song and the name of the movie from which this version comes.
A question: why does the MSM continue to insist on calling it the subprime crisis? I mean, yes, that’s what started it, but does anyone think that the housing meltdown isn’t hurting those without subprime loans?
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Here we go. Will McCain actually look at Obama tonight?
9:00 I really can’t stand Wolf Blitzer. But we don’t get MSNBC in high def. On second thought, I hate the CNN trackers — going to MSNBC.
9:02 I really hate this format. It’s bogus. No real discussion and no real debate.
9:03 McCain passes first hurdle: smiles and looks Obama in the eye.
9:04 First question: how do we bail out average folks? Obama: we are in the worst financial crisis since the Great Depression. This is the final verdict on the past eight years of economic policy, supported by McCain. Keys: strong oversight of rescue package, crackdown on CEOs’ compensation. Middle class needs a rescue package: tax help, mortgage relief, infrastructure, health care, green energy.
9:06 McCain opens with a shot at Obama about this being the first town hall meeting. McCain just lost the election: the answer to the economic crisis is energy independence. He’s throwing numbers around and I don’t think people will listen. McCain promising to buy up bad mortgages and renegotiate at diminished value — going to be expensive, he admits. Glad I have “my friends” in tonight’s drinking game.
9:08 Question is who to appoint Secretary of Treasury. McCain: first criteria is somebody who Americans identify with and support. Suggests Warren Buffett who supports Obama. Meg Whitman.
9:09 Obama: Buffett would be a good choice, there are other folks out there. Key is that next Sec Treas realizes that it’s not enough just to help those at top. Reminds folks that McCain said fundamentals of economy is strong. First “McCain is right.”
9:11 Next question: what in the bailout is actually going to help?
9:11 McCain: It’s a rescue, not a bailout. Claims that he suspended campaign in order to ensure good oversight. HAHAHAHAHAHAHAHAHAHAHAHA. Oh man you’re killing me. Can’t believe that McCain is talking about Fannie and Freddie, given the fact that 2/3rds of his staff were lobbyists for them. Obama is smiling like he knows he’s about to nail McCain. McCain blaming everything on Fannie and Freddie. What a crock.
9:13 Obama: Credit markets are frozen up, means business can’t get loans, make payroll, shut down. That’s why bailout necessary. Then goes on to correct McCain “not surprisingly.” Biggest problem is deregulation of financial system, which McCain has championed. In contrast, Obama wrote a letter two years ago, went to Wall St. a year ago while McCain talked about regulation.
Here we go — Obama goes after McCain on Fannnie and Freddie but then deftly brushes it aside by saying you’re not interested in politicians fighting over who did what.
9:16 Brokaw: Is it going to get worse? Obama: No. Politically expedient but wrong answer.
McCain: It depends on what we do. Focuses on buying up bad loans. We can fix our economy. American workers are the best in the world.
So it looks like McCain’s first Hail Mary is buying up bad home loans and renegotiating them.
Next question: How can we trust either of you with our money when both parties got us into this mess? Good question.
9:19 Obama: You’re right to ask that question. What you do isn’t what Washington does. Reminds people that when Bush came into office, we had surpluses and he’s doubled the national deficit. Biggest increases in deficit spending and national debt in history. McCain voted for 4 out of 5 of those budgets. Repeats basic points of his plan, but includes college affordability. Goes jujitsu on spending, says he’s going to cut more than he adds.
9:21 McCain: System is broken, I have reached across the aisle, a clear record on bipartisanship. Obama never taken on his party. So apparently bipartisanship is a solution to both parties being responsible? McCain trots out the L word for the first time.
Obama answers the question by blaming Washington business as usual. McCain answers the question by blaming Obama.
Is it me or does McCain look tired?
9:24 Healthcare, entitlement reform, energy — which first? McCain says all three. McCain is repeating talking points that didn’t work in the first debate: entitlements, bipartisanship, drilling, etc.
9:25 Obama agrees that we’re going to have to prioritize just like a family (good frame): 1. energy — sets a specific goal and how much it’s going to cost. Compares it to JFK/Moon. 2. Health care — broken health care is bad. 3. Education — so our young people have the opportunity. Hits McCain on tax cuts for the wealthy. Need to prioritize not just spending but tax policy.
9:28 Next question: what sacrifices will you ask Americans to make? Good question.
9:28 McCain: we’re going to have to eliminate programs that aren’t working. How is that a sacrifice for average Americans? McCain seems to think that the “overhead projector” for the planetarium is a winning line. I don’t think it is. He really isn’t answering the question. I think there’s an opening here for Obama.
9:30 Obama goes straight to 9/11 and how we were not asked to sacrifice. I think this is really going to resonate. Brings up shopping! Acknowledges that we need to start thinking about how we use energy — says that we have to think how we all can do better. Still, he really doesn’t answer the question.
9:33 Brokaw: how do you end all these credit binges?
9:33 Start with Washington: we have to show we have good habits. It means looking at both spending and revenue. Earmarks account for about $18 billion in budget, but his tax cuts for CEOs don’t involve sharing the burden. People don’t feel the rich are sharing the burden with other folks. All of us are going to have to make sacrifices, but we have to be sure that those who need help get help.
9:35 McCain brings out the jello bomb! Did McCain just try to suggest that Obama was Herbert Hoover? Most Americans are going to say WTF? Is it me, or do folks agree that most Americans are going to find the tax cuts mantra stale? McCain now talking about the specifics of his policies.
9:37 Brokaw is doing his damnedest to prevent real debate. Next question: reform social security and medicare?
Obama: We’re going to have to take on entitlements, maybe not in the next two years, but in first term. “Straight talk express lost a wheel.” Obama wants to provide a tax cut for 95 percent of Americans. McCain wants to give a $200 billion tax cut to corporations and $100 billion to CEOs.
9:40 McCain claims that he will answer the question. Repeats for the second time tonight the Reagan-O’Neill analogy. Medicare will be tougher than social security. McCain uses a Bush talking point: up or down vote.
Next question: environment.
9:43 McCain: tough economic times do not mean we can’t address environmental issues. “I’ve traveled all over the world looking at greenhouse emissions.” Didn’t that involve jet flight, which creates greenhouse gases?
9:45 Obama: environment is one of biggest challenges of our time. But it’s also an opportunity. Green economy can create 5 million new jobs. Environment is part of our national security. Did Obama just come out in favor of nuke power? We have 3 percent of oil reserves and use 25 percent of the world’s oil. We can’t drill out of the problem, and using more fossil fuels just means more global warming.
9:47 McCain says he’ll look at Brokaw. At least he’s looking at somebody. Brokaw follow-up: manhattan project-. . .
THAT ONE? What, is Obama an inanimate object?
Sorry, I just lost track of the discussion because of McCain’s reference to Obama as “that one.”
9:49 Next question: health care is profitable. Do you believe health care should be treated as a commodity? Talk about a message in Obama’s wheelhouse.
Obama: uh, duh, no. I know he didn’t say that, but that was the essence of his answer. He’s giving a wonky, technical answer, but I think that’s what people want to hear right now.
Obama’s performance tonight is reminding me of Clinton’s best performances in 92 — wonky but compassionate.
Offhand thought: I bet this has a lower rating than the first debate, which means McCain isn’t going to be helped by the size of the audience. Means a lot of people will determine who won by word of mouth.
9:53 McCain: fundamental difference b/t me and Obama is that he focuses on government. “Senator Obama will find you.” What, is he the bogeyman. Oh wait — he is to McCain. Too bad for McCain the horror movie is his campaign.
McCain: “Gold plated cadillac policies” — racist code? And WTF was that reference to hair plugs?
9:55 Brokaw: health care privilege, responsibility or right? McCain: responsibility Obama: right.
9:57 Obama repeating core message of his health care, refutes McCain’s claims. McCain crosses arms — classic defensive body language. Obama: McCain voted against S-CHIP.
In a debate over who is responsible for health care, government or insurance companies, the person who is blaming insurance companies will win. Uh oh — Obama just opened a door for McCain by mentioning Delaware and credit cards.
9:59 How will the US act as a peacemaker given economic constraints?
McCain: strong military, strong economy. Criticism of America’s foreign policy is justified, but America just rocks and don’t you forget it. Question of when to go to war can only be answered by someone who has experience making bad decisions on Iraq. Okay, he really didn’t say that, but it sure sounds like it.
Obama: I don’t understand how we invaded a country that had nothing to do with 9/11 while igoring Osama. Don’t understand how McCain could have supported Iraq. Iraq has put a huge strain on our budget. Just happens that we’ve spent $700 billion so far. We need that money here in the United States.
I agree with McCain alert — we are the greatest force for good in the world. But there’s never been a country in the world that has seen its economy decline and maintained its military might. We don’t have the resources or allies to do what we need to do, but only if we change the McCain-Bush foreign policy.
If you haven’t yet taken time to watch the Obama campaign’s mini-documentary on the Keating Five scandal, it’s worth the thirteen minutes of your day.
What I find most damning is not McCain’s unethical behavior, but rather his clear disinterest in the impact of his actions on the lives of average Americans. The notion that this man somehow has the knowledge and experience to oversee the steps necessary to get us out of our current mess is simply mind-boggling. By constantly advocating for deregulation over the past twenty-five years, he has embodied the no-rules, anything-go-go-goes economy that has brought us to the brink of ruin.
The ultimate irony of his claim that he doesn’t really understand economics is that he has nonetheless managed to help make a huge mess of things. And now he wants to be President?
John McCain often says that only he has the experience to be President. He likes to highlight Obama’s lack thereof, and his campaign delights in highlighting the contrast between the two through commercials that can only be described as character assassination.
But when that experience demonstrates a consistent and clear record of bad judgment, what good is it?
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I probably should not speak with such certitude, but Nate Silver over at 538 had a post this weekend that makes a pretty compelling case that going negative makes it nearly impossible for McCain-Palin to win:
[T]he fact that McCain is resorting to these sorts of attacks are an indication of just how much his brand has been damaged. They certainly aren’t likely to help him to repair it.
The reason, as Silver notes, is that negative attacks usually work only when the candidate making the attack has a reservoir of positive feeling — or, to put it in statistical terms, a strong net favorability rating. For those, like me, who are not statistics geeks, what this means is that a significantly larger number of people think positively of you than who think negatively of you.
In that context, take a look at the graph that Silver put together:
As the graph above shows, McCain’s previous efforts to damage Obama — the so-called “celebrity” campaign of late July and early August and the sex-ed/lipstick campaigns of Septemver — did cause Obama’s favorability rating to decline — but it also led to a similar, albeit less steep drop in McCain’s as well. That demonstrates pretty clearly the risks involved in McCain’s current approach.
Over the past week, Obama’s net favorability rating has surged while McCain’s has crashed and burned. To make matters worse, the drop in McCain’s numbers is a product not of negative advertising by the Obama campaign, but rather McCain’s own actions:
All of this has created a dilemma for McCain. Silver:
[W]ith the exception of the past couple of weeks, McCain’s and Obama’s ratings have been fairly strongly correlated, tending to rise and fall together. This is not to say that negative campaigning doesn’t work — it sometimes does — but it works at diminished efficiency, because you may be giving back 50 cents on the dollar by harming your own approval scores.
Negative campaigns work best when the candidate making the attack is leading in net favorability, or at the very least has a significant balance of positive favorability from which he can “withdraw.” In addition, the most successful negative campaigns in recent years have come from the candidate already ahead in the polls.
So McCain faces a number of significant disadvantages here: his net favorability rating is already cratering (as is, for that matter, Sarah Palin’s); he is behind; and people don’t want to hear about character, they want to hear who has the better economic plan. Or to put it another way, McCain can throw turds at Obama, but it won’t help him if the electorate continues to regard him as the (angry and bitter) pig, lipstick or no.
I encourage you to read Silver’s entire piece.
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Ayers, Wright, Rezko
McCain-Palin have no shame
Wallowing in poo
;
Bailout not working
Can we have our money back?
Main Street not Wall Street
;
Keating Five Scandal
McCain guilty and corrupt
S&L bagman
;
Palin makes no sense
Tina doesn’t need writers
Truth is the best joke
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In honor of the continuing meltdown.
This is one of the great power pop tunes of the 1980s. To this day, I still don’t know why these guys never got big. I strongly recommend their first two albums.
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If the bailout isn’t working, can we have our money back now?
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John McCain, in Albuquerque today, opens up a can of angry, mean, and crotchety ol’ whoop-ass on Barack Obama:
In less than a month, the American people will make a choice on where they want this country to go, and who they trust to lead us in a time of war and economic crisis. The time for debating and electioneering is drawing to a close. Soon it will be the time for choosing.
Today we have seen a reminder of the importance of that choice. The action Congress took last week to address our financial crisis was a tourniquet, but not a permanent solution. Today we are seeing the stock market fall, and the credit crisis spread to other parts of the world. Our economy is still hurting — working families are worried about the price of groceries, the price of gas, keeping their jobs and paying their mortgage — further action is needed. We need to restore confidence in our economy and in our government.
Washington is still on the wrong track and we still need change. The status quo is not on the ballot. We are going to see change in Washington. The question is: in what direction will we go? Will our country be a better place under the leadership of the next president — a more secure, prosperous, and just society? Will you be better off, in the jobs you hold now and in the opportunities you hope for? Will your sons and daughters grow up in the kind of country you wish for them, rising in the world and finding in their own lives the best of America? And which candidate’s experience — in government and in life — makes him a more reliable leader for our country and commander in chief for our troops? Who is ready to lead? In a time of trouble and danger for our country, who will put our country first?
I set out on my own campaign for president many months ago. I promised at the beginning to be straight with the American people, knowing that even those who don’t agree with me on everything would expect at least that much. I didn’t just show up out of nowhere, after all — America knows me. You know my strengths and my faults. You know my story and my convictions. And though familiarity in politics can be both helpful to a candidate, or not so helpful, it does at least fill out the picture and answer the essential questions.
You need to know who you’re putting in the White House — where the candidate came from and what he or she believes. And you need to know now, before it is time to choose.
In 21 months, during hundreds of speeches, town halls and debates, I have kept my promise to level with you about my plans to reform Washington and get this country moving again. As a senator, I’ve seen the corrupt ways of Washington in wasteful spending and other abuses of power, and as president I’m going to end them — whatever it takes.
I’m tempted to deconstruct the speech, highlighting where it goes wrong, which lies it contains, and how McCain constructs a reality that is about as far from the truth as you can get and not be writing for Pravda in the Soviet era.
Instead, I’m going to boil it down for you. Only three words in this speech matter. Three little words. They’re included in the part I excerpted above. They summarize the McCain central argument, his current tactics, and his best hope for getting elected.
What are they? You can find them after the jump.
| posted in global economy, politics | 1 Comment
So stocks are down and the TED spread is going to hit 4 today. Did the bailout help? Ehhh, not so much.
Have to earn a living today. Back later.
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So the bailout passed. Can’t say I’m thrilled. Congress did not exactly cover itself in glory here, and they’ve given far too much away both to Paulson and Wall Street. I’m still not sure why an interim $150 billion dollar package would not have made just as much sense.
Judging by the reports coming out of Sacramento and Detroit, this is only the end of the beginning. And the TED Spread went up today, higher than it’s ever been. Unless the credit crunch begins to ease, things aren’t going to get better anytime soon.
In terms of politics, I doubt that this will help the McCain campaign. First, it reminds people of the mess we’re in. Second, it takes attention away from last night’s debate. Third and most importantly, it reminds everyone of how ineptly he handled things during the first bailout vote, and highlights that this got done even though he did not suspend his campaign.
Barack Obama probably should benefit, both in terms of his willingness to step forward and push for the bailout, and his role in convincing a number of Democrats to switch their vote. Given the polls showing that Biden won last night, it’s going to take a major meltdown or an unexpected foreign policy crisis for Obama to lose at this point.
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So John McCain sat down with the Des Moines Register editorial board. You can watch/listen to the whole thing here, if you have the time.
The first thing that struck me while watching this is that McCain looks pretty unhappy and even angry throughout the interview. He’s prickly, often confrontational, and occasionally mean-spirited. It’s not a pretty sight. Clearly, the events of the past two weeks has gotten to him, and he can’t believe he’s not only behind, but falling further behind by the day.
Even if you don’t have time for the full hour, take a moment to watch the following clips. They’re downright scary.
First McCain jokes (at least I think he’s joking) that he has always wanted to be a dictator. It’s about 35 seconds into his comment on the current economic situation.