The Notion

Obama's Missed Moment

By greider

My bottom line on Friday's debate: Barack Obama failed to step up to the historic moment. He made perfunctory remarks about the massive banking bailout facing the political system, but he decided not to speak to the American people with anything resembling forceful honesty and clarity. McCain wasn't any better. Both men faced a gut check in their campaign and both of them flinched.

The explanation, I suspect, is that Barack Obama and John McCain know they are going to wind up voting for this outrageous package, probably sometime next week, so why pretend to be thinking independently? McCain had flirted with the idea that he could speak for the public's anger and reap big benefits for his troubled candidacy. Someone advised him not to go down that road. He folded.

Obama has offered critical comments on how the bailout should be redesigned for greater equity, but it seems clear he won't press the point. Left-labor groups are pushing Democrats to address the burdens of indebted Americans and the swooning economy with substantive measures. But party leaders are resisting - reluctant to slow down the bankers' bonanza with complicating issues.

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September 27, 2008

The Silence of Lambs

By greider

The 2008 election has many unusual aspects, but none is more bizarre than the sorry spectacle of the bailout for Fannie Mae and Freddie Mac.

American voters are like the lambs being led to slaughter and at the very height of the presidential campaign. Yet not a peep of protest from John McCain and Barack Obama, not even a hint of the righteous anger injured taxpayers will rightly feel as they figure out the deal for themselves. The rescue of the two giant mortgage firms is another huge expenditure of the public's money--one or two hundred billion dollars this time--to reassure bankers and financiers the government stands by them in their troubles, whatever the costs.

Think about it. Candidates Obama and McCain are wagging their fingers at the governing system in Washington, both warning they intend to make big changes if elected. Meanwhile, business-as-usual doesn't wait for the next president. The financial system needs the capital right now, and so Treasury Secretary Henry Paulson has opened up the spigot. Obama and McCain meekly bless the deal. This sequence of events makes them look look the political goats, their grand talk of change pushed aside by what Wall Street demands. The 2008 election may be close, but it looks like the status quo has already won.

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September 8, 2008

McCain's Hail Mary Pass

By greider

The news was so stunning I refused to believe it until I saw John McCain on the TV screen announcing his pick for Vice President. There's no need to disparage Sarah Palin. She's seems like a smart, serious person. But what the choice reveals about McCain is devastating with a capital D for Desperation.

Within forty-eight hours, all America will be talking about her. What people will say is, "You mean, if John McCain croaks, she becomes our president?" Gasp, yes. That is what McCain has decided. So much for "experience" and wise judgment as a campaign issue.

The Senator was widely thought to be on the fifty-yard line, nose to nose with Barack Obama. But this selection reveals the Republican campaign strategists knew better. Picking the obscure and under-experienced governor from Alaska for veep means McCain and his people recognize they are in a very weak position for the fall campaign. So weak they decided to throw a forty-year Hail Mary pass and hope audaciously for a lucky catch.

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August 29, 2008

Wall Street's Great Deflation

By greider

Phil Gramm, the senator-banker who until recently advised John McCain's campaign, did get it right about a "nation of whiners," but he misidentified the faint-hearted. It's not the people or even the politicians. It is Wall Street--the financial titans and big-money bankers, the most important investors and worldwide creditors who are scared witless by events. These folks are in full-flight panic and screaming for mercy from Washington, Their cries were answered by the massive federal bailout of Fannie Mae and Freddy Mac, the endangered mortgage companies.

When the monied interests whined, they made themselves heard by dumping the stocks of these two quasi-public private corporations, threatening to collapse the two financial firms like the investor "run" that wiped out Bear Stearns in March. The real distress of the banks and brokerages and major investors is that they cannot unload the rotten mortgage securities packaged by Fannie Mae and banks sold worldwide. Wall Street's preferred solution: dump the bad paper on the rest of us, the unwitting American taxpayers.

The Bush crowd, always so reluctant to support federal aid for mere people, stepped up to the challenge and did as it was told. Treasury Secretary Paulson (ex-Goldman Sachs) and his sidekick, Federal Reserve Chairman Ben Bernanke, announced their bailout plan on Sunday to prevent another disastrous selloff on Monday when markets opened. Like the first-stage rescue of Wall Street's largest investment firms in March, this bold stroke was said to benefit all of us. The whole kingdom of American high finance would tumble down if government failed to act or made the financial guys pay for their own reckless delusions. Instead, dump the losses on the people.

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July 14, 2008

Hillary's Economic Plan

By greider

Okay, stop the complaints about Democratic presidential candidates who won't face up to the financial crisis bearing down the country. Hillary Clinton stood up and shook her finger at it, kind of like her husband does. Her response seems a little goofy and maybe a sign the boys in her "war room" are losing their grip. On the other hand, what she said is exactly what you would expect her to say.

Speaking at the University of Pennsylvania Monday [AP story by Charles Babington] Senator Clinton proposed the government provide mortgage companies with protection against lawsuits by other investors. Say what? Isn't that the old Republican chestnut called "tort reform?" Shouldn't she have saved this nugget until after she wins the nomination and starts moving to the right for the fall campaign?

Her logic is strictly from financial. "Many mortgage companies are reluctant to help families restructure their mortgages because they are afraid of being sued by the investment banks, the private equity firms and others who actually own the mortgage papers," Clinton explained. Good thought. Maybe she could send along a few security guards. I hear mortgage lenders are afraid of being tarred and feathered by those families who were conned into buying the sure-to-fail mortgages.

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March 24, 2008

Blues for Obama

By greider

Win or lose, whatever happens next, Barack Obama is now established as one of those rare, courageous teachers who leads the country onto new ground. He has given us a way to talk about race and our other differences with the clarity and honesty that politics does not normally tolerate. Whether this hurts or helps his presidential prospects is not yet clear, but he has done this for us and it will change the country, whatever the costs to him.

His words should discourage the media frenzy of fear-driven gotcha. His speech in Philadelphia on Tuesday may also make the Clintons re-think their unsubtle exploitation of racial tension. But nobody knows the depth or strength of the commonplace fears streaming through the underground of public feelings. No one can be sure of what people will hear in Obama's confident embrace, beckoning Americans in all their differences, leaving out no one, to a better understanding of themselves.

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March 19, 2008

No Straight Talk from McCain on Economics

By greider

The Straight Talker, who warned us he was weak on economics, blew a big hole in his presidential vessel the other day by talking straight on the subject with the Wall Street Journal. John McCain has already embraced George Bush's Hundred Year War in Iraq. Now McCain says he also wants to revive Bush's plan to privatize Social Security. And he wants to cut the corporate income tax by one-third, though it has already been eviscerated by Republican loop holes. And the Senator's goal for tax reform includes a "fairer, flatter tax" which can only mean more regressive tax-cutting in the Reagan tradition.

The country and campaign reporters are presently fixated on fine-print arguments between Obama and Clinton, but John McCain's bold declarations to the Journal's Bob Davis provide devastating material for the fall campaign. On one level, the Republican nominee seems to be correcting the record, getting his policy positions even more closely aligned with Bush and the Grover Norquist school of perennial tax-cutting.

Deliver more boodle to the corporates and high-end incomes, so the federal government will be starved for revenue. This is meant to reassure the money guys expected to finance his campaign, but it ought to alarm anyone who still sees McCain as a level-headed moderate who thinks independently. The media truth squad should have fun trying to make sense of the McCain agenda. His remarks will provide content for multiple sharp-edged attack ads.

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March 4, 2008

Slick Willie Rides Again

By greider

The Clintons play dirty when they feel threatened. But we knew that, didn't we?

The recent roughing-up of Barack Obama was in the trademark style of the Clinton years in the White House. High-minded and self-important on the surface, smarmily duplicitous underneath, meanwhile jabbing hard to the groin area. They are a slippery pair and come as a package. The nation is at fair risk of getting them back in the White House for four more years. The thought makes me queasy.

The problem is not Hillary Clinton per se or the sharp exchanges and personal accusations that squeamish political reporters deplore. That's what politics is always about. Tough, even nasty conflict is educational, also entertaining. Politics ain't beanbag, as Mark Shields likes to say.

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January 23, 2008

Recession Refocuses Campaign Strategies

By greider

When Goldman Sachs announces recession and the Federal Reserve chairman on the same day promises ready-to-go interest rate cuts, you can take it to the bank: the recession is official. The 2008 campaign's refreshing spirit--the chorus of "change, change, change"--is joined by a more traditional theme. "Jobs, jobs, jobs." Suddenly, everyone wants to sound like a Keynesian liberal, ready to prime the pump with federal spending.

My advice to Barack Obama: look through the John Edwards file--he got there first--and borrow freely from his sound ideas for economic stimulus. Then double or triple Edwards' numbers to show your sincerity. Do this fast. Hillary Clinton is already out of the box with a plan the New York Times describes as the first from any Democratic candidates.

Wrong. John Edwards was out front with aggressive anti-recession proposals in early December. Act now, he said, don't wait for the official announcement. First, Congress should put up at least $25 billion to stimulate job creation and be ready to spend another $75 billion as things get worse. Spend the money on "clean energy" infrastructure, the housing crisis, reform of unemployment insurance, aid programs to help families get through hard times and other wounds. Get the money out to the folks who will spend it right now and to public works projects that can create new jobs quickly.

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January 11, 2008

Peru Trade Bill: It's the Money, Stupid

By greider

In terms of economic consequences, the new trade agreement with Peru is trivial. In political terms, however, it delivers an ominous message. When faced with a choice between money and their own rank-and-file, the Democratic leaders in the House will go with the money, even if it requires them to pass legislation with Republican votes. Even if a majority of their own caucus is opposed. Even if it means handing the shrinking president, George W. Bush, a rare legislative victory.

Speaker Nancy Pelosi pulled it off today at considerable cost to her own reputation. How different are the new Dems in Congress? Not very, it seems. That is a reasonable interpretation of events and the Speaker is now stuck with the burden of disproving it.

Pelosi's lieutenants "whipped" the party caucus energetically and did better than expected--109 Dems voting for the Peru trade bill, 116 Dems against.

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November 8, 2007