John McCain is full of shit (again)

After the House GOP killed the bailout bill, John McCain was out in front of any TV camera he could find, blaming that failure on Obama and the Dems saying,

"Senator Obama and his allies in Congress infused unnecessary partisanship into the process. Now is not the time to fix the blame. It's time to fix the problem".

OK, let's put aside the fact that 1) Senator Obama has no vote in the House and 2) two thirds of the House GOP voted against the bill despite McCain's alleged arm-twisting. Ben Smith at Politico is reporting that the Republican National Committee choreographed this bit of political kabuki for the sake of providing as issue on which vulnerable Republicans could run.

The Republican National Committee's new advertisement critical of the the Wall Street "bailout" was produced and sent to television stations in key states before the package failed [emphasis mine], officials at two stations said.

"Wall Street Squanders our money. And Washington is forced to bail them out with -- you guessed it -- our money. Can it get any worse?" asks the ad's narrator, as the words "BAILOUT WITH OUR MONEY" cross the screen. (The answer: Obama's plans would make it worse.)

The ad, however, seems to assume that it can safely attack a successful plan. And the reason may be the timing: Though it started airing this morning, the spot was released to stations yesterday morning, ad executives at stations in Michigan and Pennsylvania said.

Kae Buck of WLNS in Lansing said her station received the at at 7:55 a.m. Monday. Luanne Russell of Pittsburgh's WTAE said her station received it at 10:49 Monday morning.

The ad taps into deep resentment of the plan, but it comes at a time when the candidate it supports, John McCain, is urging its package, and asking that it not be referred to as a "bailout," but a "rescue."

It seems the plan was to get just enough GOP support from safe seats to pass the bailout as a Democratic effort and then run against it. Let’s think about that for a moment. The GOP is willing to play Russian roulette with the economy in a cynical ploy to retain power. Reckless, stupid, unpatriotic, mind numbingly irresponsible – call this what you will but what you cannot call it is uncoordinated. Are we to believe that John McCain, their Presidential candidate, knew nothing of this? Not bloody likely, especially when McCain flack Brad Todd claims the ad’s focus was Obama’s spending priorities; also a pack of lies given the ad's content but proof that McCain and his people knew the ad was coming. His campaign had to have been a party to this tactic. They just didn’t count on McCain being an ineffective whip on the House GOP such that the bill failed, adding the sin of incompetence, both McCain’s and the RNC’s, to the mix as well.

And yet yesterday we had the straight talkin’ Maverick, full of invented bluster and faux-indignation, trying to lay this whole mess at the feet of Obama and the Democrats. Like I said, John McCain is full of shit. Furthermore, somebody ought to sue his campaign to drop its “Country First” slogan on the grounds that it is false advertising.

2008 could be a very special year

As a die-hard Cubs fan (feel our pain here), I would be remiss in my duties if I didn’t mention that the Cubbies open their playoff season tomorrow night with a very real chance to win their first World Series in one hundred years.

As a believer in superstition in general, and the Billy Goat Curse in particular, this is probably the only time I will bring it up.

Go Cubs.

Strategery

So after Johnny Drama (a moniker I am lifting shamelessly from John Cole at Balloon Juice) “suspends” his campaign to rescue the bailout bill and sets himself up as the Messiah of the Republic, how bad does it look that McCain could not even persuade his party’s House members to back the legislation? The answer of course is really, really bad. Especially for a guy that brags endlessly and pedantically about his ability to work across party lines. One would think such an awesome bipartisan legislator would be more effective in bringing along his own team.

As a totally unbiased observer (just kidding, J. has taken to shouting out O-bam-a, O-bam-a randomly and at high volume), I want the individual that dreamed up this truly excellent scheme to be promoted. And if this line of attack is McCain’s, well, that just speaks to how well and truly fucked we would be if he won.

Epic bitch-slap

Yet another reason to love Barney Frank...



(hat tip to TPM)

All in a days’ work

The House Republicans killed the bailout bill and the markets cratered – Dow down 500, oil off 9%, S&P off 6%. Not sure where Congress can go from here but it is pretty clear that Wall Street is hitting the panic button and running for cover.

Wachovia bites the dust

Citigroup has agreed to take over troubled Wachovia Bank. I worked at Wachovia for a few years in the Nineties (pre-First Union buyout) and I remember the institution as competent, conservative in both its business and culture, and stable, if a bit staid and humorless. In other words, I cannot imagine the old Wachovia doing something as foolish as this:

Its current problems stem largely from its acquisition of mortgage lender Golden West Financial Corp. in 2006 for roughly $25 billion at the height of the nation's housing boom. With that purchase, Wachovia inherited a deteriorating $122 billion portfolio of Pick-A-Payment loans, Golden West's specialty, which let borrowers skip some payments.

Really, who in their right mind makes a $150 billion bet, as the bubble was popping mind you, on something called “Pick-A-Payment”? It sounds like a game on the Price Is Right for goodness sake. Oh well, times change I suppose…

Today’s required reading

In his piece today, Frank Rich positively UNLOADS on John McCain and not without good reason.

WHAT we learned last week is that the man who always puts his “country first” will take the country down with him if that’s what it takes to get to the White House.

For all the focus on Friday night’s deadlocked debate, it still can’t obscure what preceded it: When John McCain gratuitously parachuted into Washington on Thursday, he didn’t care if his grandstanding might precipitate an even deeper economic collapse. All he cared about was whether he might save his campaign. George Bush put more deliberation into invading Iraq than McCain did into his own reckless invasion of the delicate Congressional negotiations on the bailout plan.

Oh. Hell. Yeah.

More funnies

Get Your War On takes on the bailout.

Comic relief

Oh how I love the Onion, so funny and so very wrong.

McCain sacks up

The debate is on. Boy, I wish I knew what they were thinking but threatening to cancel. What a childish move…

Kathleen Parker goes waaaaay off message

Parker has been a reliable conservative shill since forever but even for her, Palin is a bridge too far (hat tip to DailyKos).

Ms. Palin's recent interviews with Charles Gibson, Sean Hannity and now Katie Couric have all revealed an attractive, earnest, confident candidate. Who Is Clearly Out Of Her League.

No one hates saying that more than I do. Like so many women, I've been pulling for Ms. Palin, wishing her the best, hoping she will perform brilliantly. I've also noticed that I watch her interviews with the held breath of an anxious parent, my finger poised over the mute button in case it gets too painful. Unfortunately, it often does. My cringe reflex is exhausted.

[Snip]

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

Do it for your country.

Ouch – that is pretty freaking harsh coming from a friendly audience. I can’t say I don’t agree with her but damn.

Bad faith

In a turn that should shock no one, it appears that all of the bailout negotiations were really just an attempt to salvage the McCain campaign.

Friday morning, on CBS’s “The Early Show,” Representative Barney Frank of Massachusetts, the lead Democratic negotiator, said the bailout had been derailed by internal Republican politics.

“I didn’t know I was going to be the referee for an internal G.O.P. ideological civil war,” Mr. Frank said, according to The A.P.Thursday, in the Roosevelt Room after the session, the Treasury secretary, Henry M. Paulson Jr., literally bent down on one knee as he pleaded with Nancy Pelosi, the House Speaker, not to “blow it up” by withdrawing her party’s support for the package over what Ms. Pelosi derided as a Republican betrayal.

“I didn’t know you were Catholic,” Ms. Pelosi said, a wry reference to Mr. Paulson’s kneeling, according to someone who observed the exchange. She went on: “It’s not me blowing this up, it’s the Republicans.”

Mr. Paulson sighed. “I know. I know.”

It was the very outcome the White House had said it intended to avoid, with partisan presidential politics appearing to trample what had been exceedingly delicate Congressional negotiations.

Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Senate banking committee, denounced the session as “a rescue plan for John McCain,” and proclaimed it a waste of precious hours that could have been spent negotiating.

Ok, you may be thinking to yourself, “Hey Joe – this is just the Democrats bitching and taking potshots at the Republican’s candidate”. To be honest, I wouldn’t blame you if you did because I was thinking the same thing until I read the very next paragraph.

But a top aide to Mr. Boehner said it was Democrats who had done the political posturing. The aide, Kevin Smith, said Republicans revolted, in part, because they were chafing at what they saw as an attempt by Democrats to jam through an agreement on the bailout early Thursday and deny Mr. McCain an opportunity to participate in the agreement [emphasis mine].

And that is what this was all about – getting McCain’s name on whatever passed so that he could claim it. Now I need to take a minute to let the rage subside…

OK look, I have no idea whether or not the economy is sliding towards another depression but I do know that things are really, really bad. Washington Mutual’s failure last night merely highlights our economic problems. In fact, the state of the economy may actually be bad enough that the sort of government intervention being discussed here is necessary. So if we are to assume that the stakes are really this big, motherfuckers like Boehner and the House GOP are doing us a monumental disservice by scuttling the talks and sacrificing our economic wellbeing at the altar of McCain’s Presidential aspirations, while McCain, motherfucker-in-chief, urges them on. That is not only reckless as Hell but utterly disgraceful, “Country First” indeed. And if the economy tanks, what does McCain care; he has houses like you and I have bills.

If you are looking for an excuse to vote Democratic this cycle, the Republicans just handed you one helluva good one. Those bastards aren’t there to serve you or me or this nation, they are serving themselves; so fuck the lot of 'em.

A quick Q&A

Josh Marshall asks some interesting questions over at TMP:

My two cents.

Marshall: This is the suspension?
Joe: No - this is a stunt.

Marshall: What did I miss?
Joe: Nothing – this is just how they operate. Say one thing, do another. Wash, rinse, repeat.

Marshall: At what point do his friends need to start discussing an intervention?
Joe: The hiring of Steve Schmidt should have set off some alarm bells but the appointment of Sarah Palin, well that, my friends, was a cry for help.

Looks like a deal will get done

Politico is saying that Congress is close on a bailout plan but offers very little in the way of details.

Top congressional negotiators have announced that they have a "fundamental agreement" on a government bailout of the nation's financial system, granting extraordinary powers to the secretary of Treasury to purchase hundreds of billions in bad debt while attempting to stem foreclosures for homeowners struggling on Main Street.

Time to pony up boys and girls...

McCain calls for a time out - no word on a nap

John McCain is suspending his campaign (and likely Friday’s debate), thus allowing him to rush back to D.C. and, using his tremendous power of Maverickness, singlehandedly cobble together a super-awesome bailout plan, thereby saving the Republic from economic collapse or something. Anyway, it is going to be so fucking sweet…

Or complete bullshit, depending on whether or not you are a sucker. I think Barney Frank described this new strategy best saying,

"It's the longest Hail Mary pass in the history of either football or Marys."

Pure and simple, McCain is trying a desperate, high-risk, high-reward stunt that may, if it works, accomplish a few things at a shot.

First, McCain looked completely clueless when he stated that the fundamentals of the economy were sound at the very same time Lehman Bros. was failing and this latest round of upheaval started. Obama has been beating the shit out of him for it since. McCain has to revamp his economic profile from oblivious neophyte to Decisive Man of Action or Obama stands to bury him. In fact, polling in the battleground states has clearly swung in Obama’s favor and McCain needs to do something dramatic to change the subject. So he is attempting to steal the limelight, rewrite the media narrative, and demonstrate to the country that he is “doing something” on the economy.

Second, this looks like a bank shot to overcome the Palin Problem, namely that Joe Biden is going to mop the floor with her in a debate. After her dismal performance with Katie Couric yesterday, it is abundantly clear Palin can’t even handle herself with the soft touch news anchor types. Team McCain cannot afford to have a tough as nails policy wonk like Biden pillory their VP candidate for 90 minutes on national TV. Sideshow Sarah has become enough of a drag already. So to avoid that very public flogging, McCain’s campaign wants to cancel Friday’s debate, use the VP debate slot as a substitute and offer the “reschedule” the VP debate. I think it is pretty obvious that by reschedule they mean never, ever see the light of day again and thus spare Palin and themselves a humiliating ass whipping.

Last but not least, this was a trap for Obama that he has thus far avoided. If McCain had succeeded in getting Obama to agree to reschedule the debate, he would have begun to dictate terms in the race and establish an aura of dominance over the younger Obama. Thankfully, Obama has stuck to his guns and not rolled over on this point. In fact his response was just about perfect.

Explaining his decision to reject Mr. McCain’s call to postpone their debate in Oxford, Miss., Mr. Obama cited the gravity of the nation’s financial crisis.

“It is my belief that this is exactly the time when the American people need to hear from the person who, in approximately 40 days, will be responsible for dealing with this mess,” Mr. Obama said. “It is going to be part of the president’s job to deal with more than one thing at once.”

[Snip]

Mr. Obama stopped short of suggesting that Mr. McCain was playing politics by calling for a delay in their first presidential debate, and he continued with the same low-key tone he has employed throughout the financial crisis. But Mr. Obama did say with a glint of humor that both he and Mr. McCain were capable of engaging in the debate and negotiations in Congress at the same time.

“If it turns out that we need to be in Washington, we’ve both got big planes — we’ve painted our slogans on the sides of them,” Mr. Obama said. “They can get us from Washington, D.C., to Mississippi fairly quickly.”

Ka-pow. Score that round for Obama.

So where does this leave us? To be honest, I am not sure. If Congress manages to work out a plan or appears to be close even, I think McCain has to debate and most of this is mute. If there is no deal and no real prospect of one, I don’t see how McCain can debate without looking like a wishy-washy sap. One thing I am sure of; this isn’t a football game. Presidents do not get to call time out and neither do campaigns. To assume one can is ridiculous, unrealistic, and unpresidential. David Letterman brought that point home last night.

"What are you going to do if you're elected and things get tough? Suspend being president? We've got a guy like that now!"

Indeed we do.

The Abridged Bush Speech

“America, Wall Street backed a ton of irresponsible loans to you and they want their money back or else”.

As my father in law likes to say…

…this is not worth the powder to blow it to Hell.

Bush to carpet-bomb nation with bullshit at 9 PM

From MSNBC:

WASHINGTON - President Bush readied a prime time speech to the nation and Treasury Secretary Henry Paulson accepted a major change in legislation for a $700 billion bailout of the financial industry on Wednesday as the administration scrambled to prevent further deterioration in the economy.

[Snip]

Press secretary Dana Perino said the president wants to tell the American people how the crisis affects them and help them understand the depth of the problem.

The Not-So-Great Communicator is going to help us understand why bailing out his buddies on Wall Street is going to help us? This ought to be a laugh.

PS - anyone want to bet that tomorrow, on the heels of our lesson from Professor Bush, the markets tank like W's approval ratings?

The Silencing of Sarah Palin

It is not by accident that the McCain campaign has Sarah Palin running from any media event that they do not control. No press conferences, no casual sit downs while traveling, hell, she won’t even allow her media pool to do anything but take pictures. And given how awful McCain’s response has been on the Wall Street bailout, can you imagine how much worse Palin must be that she has said nothing at all on the topic? That silence is deafening…

On another note though, that strategy strikes me as sexist as hell. Here is this attractive woman that the McCain camp swears is a qualified candidate of substance, hand to God and cross their collective heart. And yet, she is being straight-jacketed into stage-managed events where, if she speaks at all, it is to deliver her standard stump speech followed by a fast exit before the press can take a crack at her. That tells me the campaign has so little confidence in Palin’s ability to think on her feet that they are only willing to employ her as a pretty novelty act. If I was Sideshow Sarah, I would be pissed…

Yet another failure

North Korea has booted nuclear (or nukular if you must) inspectors and has pledged to the restart their plutonium processing. This is quite obviously a Very Bad Thing in and of itself but I think it sets a rather damning milestone for the Bush Presidency. That agreement with North Korea (to shudder their nuclear program) was the last, and I mean dead last, Administration effort that I could count as a success. If there exists another achievement on which Bush could defend his utterly disastrous term in office, then I must plead ignorance.

His record of failure is singular in its depth and breadth; economy – Great Depression fail, Iraq and Afghanistan –improving fail and getting worse fail; energy – expensive fail, National Security – 9/11 fail, and general governing competence – Katrina fail. Simply stunning...

Once again, Worst. President. Ever.

Lobbying for a handout

Um, screw these people and their economic blackmail. This bitching and moaning reminds me of a kid that gets a million presents for Christmas and then throws a tantrum because he WANTS MORE. Beggars cannot be choosers.

A way out

Senator Bernie Sanders (I-VT) is one of the only politicians that I explicitly trust. He is beholden to no one, smart as hell, and truly believes that government should serve its citizens before all else. I may not agree with everything that the guy believes but when he says something, I never suspect that he has ulterior motives. That is why his plan for fixing our fiscal mess is much more compelling than the bullshit sop to Wall Street that Paulson is peddling right now. He is looking out for you and me.

I have proposed a four part plan to accomplish that goal which includes a five-year, 10 percent surtax on the income of individuals above $500,000 a year, and $1 million a year for couples; a requirement that the price the government pays for any mortgage assets are discounted appropriately so that government can recover the amount it paid for them; and, finally, the government should receive equity in the companies it bails out so that when the stock of these companies rises after the bailout, taxpayers also have the opportunity to share in the resulting windfall. Taken together, these measures would provide the best guarantee that at the end of five years, the government will have gotten back the money it put out.

Second, in addition to protecting the average American from being saddled with the cost, any serious proposal has to include reforms so that we end the type of behavior that led to this crisis in the first place. Much of this activity can be traced to specific legislation that broke down regulatory safety walls in the financial sector and allowed banks and others to engage in new types of risky transactions that are at the heart of this crisis. That deregulation needs to be repealed. Wall Street has shown it cannot be trusted to police itself. We need to reinstate a strong regulatory system that protects our economy.

Third, we need to address the needs of working families in this country who are today facing very difficult times. If we can bail out Wall Street, we need to respond with equal vigor to their plight. That means, for example, creating millions of jobs through major investments in rebuilding our crumbling infrastructure and creating a new renewable energy system. We must also make certain that the most vulnerable Americans don't freeze in the winter or die because they lack access to primary health care.

Finally, we need to protect ourselves from being at the mercy of giant companies that are "too big to fail," that is, companies who are so large that their failure would cause systemic harm to the economy. We need to assess which companies fall into this category and insist they are broken up. Otherwise, the American taxpayer will continue to be on the financial hook for the risky behavior, the mismanagement, and even the illegal conduct of these companies' executives.
People, we are about to receive the rogering of a lifetime. Something along the lines of what Sanders is proposing is the only way we can guarantee that you and I and our kids don’t end up paying for a boondoggle we didn’t create. Wall Street is already into us for billions with damn little for us to show for it. It is time those fuckers start paying their own freight and if that means we buy a stake Goldman, et al., so be it. At least we stand a reasonable chance of breaking even down the road.

The Big Plan goes global

Since the government is preparing to dump a shitload of taxpayer money on US banks, foreign banks want in on the action (of course).

PARIS — The financial crisis that began in the United States spread to many corners of the globe. Now, the American bailout looks as if it is going global, too, a move that could raise its cost and intensify scrutiny by Congress and critics.

Foreign banks, which were initially excluded from the plan, lobbied successfully over the weekend to be able to sell the toxic American mortgage debt owned by their American units to the Treasury, getting the same treatment as United States banks.

On Sunday, the Treasury secretary, Henry M. Paulson Jr., indicated in a series of appearances on morning talk shows that an original proposal introduced on Saturday had been widened. “It’s a distinction without a difference whether it’s a foreign or a U.S. one,” he said in an interview with Fox News.

Really Mr. Paulson? I would say if I am writing the check, it is a big goddamn difference. What a complete clusterfuck this is going to be…

Joe is pissed

So Secretary Treasurer Paulson’s Big Plan to save the economy basically entails you and me buying up all of the banks’ bad paper at inflated prices. Furthermore, the plan specifies that Treasury’s activities are beyond review and makes no provision for expanded oversight or regulation of the industry. Essentially, Paulson is telling us we need to hand over a huge pile of cash to the geniuses that got us into this mess and then walk away. Well, fuck that.

Krugman has a more refined explanation of why this is exactly wrong.

The logic of the crisis seems to call for an intervention, not at step 4, but at step 2: the financial system needs more capital. And if the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to — a share in ownership, so that all the gains if the rescue plan works don’t go to the people who made the mess in the first place.

That’s what happened in the savings and loan crisis: the feds took over ownership of the bad banks, not just their bad assets. It’s also what happened with Fannie and Freddie. (And by the way, that rescue has done what it was supposed to. Mortgage interest rates have come down sharply since the federal takeover.)

But Mr. Paulson insists that he wants a “clean” plan. “Clean,” in this context, means a taxpayer-financed bailout with no strings attached — no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Mr. Paulson is also demanding dictatorial authority, plus immunity from review “by any court of law or any administrative agency,” and this adds up to an unacceptable proposal.

I’m aware that Congress is under enormous pressure to agree to the Paulson plan in the next few days, with at most a few modifications that make it slightly less bad. Basically, after having spent a year and a half telling everyone that things were under control, the Bush administration says that the sky is falling, and that to save the world we have to do exactly what it says now now now.

But I’d urge Congress to pause for a minute, take a deep breath, and try to seriously rework the structure of the plan, making it a plan that addresses the real problem. Don’t let yourself be railroaded — if this plan goes through in anything like its current form, we’ll all be very sorry in the not-too-distant future.

This plan is profoundly stupid, fantastically expensive, and eviscerates any notion of a free market. Privatize the profit and socialize the loss, protect the wealthy shareholders and fuck the taxpayers – welcome to the new American Capitalism.

Momentum

Coming off of the Republican Convention, the McCain campaign was rolling. Palin was drawing big crowds, enthusiasm for the ticket was reaching new heights and people started asking if maybe McCain, against some stiff odds, could pull this thing out. And then the wheels came off.

The campaign trail has knocked some of the shine off of Palin’s halo, as has the looming “Troopergate” scandal and the “not ready for primetime” exposition of her wafer thin grasp of foreign policy. The silly lies and demonstrably false statements about everything from Palin’s faux opposition to the Bridge to Nowhere to exaggerating the size of crowds at their rallies has devastated McCain’s well cultivated image of the straight talking maverick [Ed. Note – Joe Klein’s Time piece is must read stuff]. In the span of a couple weeks, the mainstream media’s tone shifted from his biggest cheerleader to that of a jilted ex-lover mourning the changes in the man they once loved (see Cohen, Richard). And following all of this bad news, McCain’s reaction to Wall Street’s convulsions has been at turns, out of touch , weak, and utterly contradictory , demonstrating once again that he is not the guy we need running the economy. In short, it has been one helluva couple weeks for Team McCain. Combined with the fact that Obama has started to throw some rhetorical elbows to make his case, I believe that the tide of the race is beginning to turn against McCain and a whole bunch of new polling supports that.

CNN / TIME / ORC has Florida tied and Obama +4 if Nader, Barr, and McKinney (NBM) are included, Indiana at McCain +6 and +5 with NBM, North Carolina at McCain +1 either way, Ohio +2 for Obama both ways, and Wisconsin with Obama +3 and +4 with NBM.

Indianapolis Star / Selzer & Co has Obama up by three in Indiana, a state Bush won handily in 2004.

SUSA has Obama at 52% in New Mexico.

Allstate / National Journal finds Obama +1 in Colorado, +7 in New Mexico, even in Florida, McCain +1 in Ohio and +7 in Virginia.

This thing is tight but it would seem that the Big Mo is now with Obama.

Today’s required reading

Gail Collins offered up a heaping pile of hilarious sarcasm this morning, mocking John McCain’s ever mutable persona for everything it is worth. Hell, even her use of exclamation points made me laugh. If this doesn’t at least make you chuckle a bit, you are either dead or a Republican.

“The people of Ohio are the most productive in the world!” yelled John McCain at a rally outside of Youngstown on Tuesday. Present company perhaps excluded, since the crowd was made up entirely of people who were at liberty in the middle of a workday.

Folks were wildly enthusiastic as the event began. That was partly because Sarah Palin was also on the bill. (With Todd!) And when McCain took the center stage, they were itching to cheer the war hero and boo all references to pork-barrel spenders.

Nobody had warned them that he had just morphed into a new persona — a raging populist demanding more regulation of the nation’s financial system. And since McCain’s willingness to make speeches that have nothing to do with his actual beliefs is not matched by an ability to give them, he wound up sounding like Bob Dole impersonating Huey Long.

I don’t care who you are, that’s funny.

Unspeakably bad

Yet another horrendous Chinese export problem.

BEIJING, China (CNN) -- A third baby has died after drinking tainted formula and more than 6,000 children have been made ill, Chinese officials said Wednesday.

China's largest producer of milk, Mengniu Dairy Group, announced the recall of three batches of formula made in January after tests showed they were contaminated.

More than 6,200 babies have been sickened by milk powder now found to be tainted with the chemical melamine, said Li Changjiang, China's director of quarantine and inspection, up from about 1,200 on Tuesday.

This is just evil...

YouTube fun

Green Day stretching Minority to an insane eight minutes and thirty four seconds.

The Feds throw AIG a lifeline

And buy an 80% stake in AIG. For those keeping score at home – Wall Street 3, Moral Hazard 1.

Today’s required reading

Over the years, the Inside-the-Beltway journalist class has been head over heels in love with John McCain. Seriously, that crowd happily contributed to the mythification of McCain such that he was transformed, in their eyes at least, from mortal politician to their own straight talkin’ personal Jesus. After the “shocking” revelation that McCain is running a nasty and dishonorable race, Richard Cohen, a fixture on the WaPo editorial page and Beltway journo in good standing, may have seen the light.

Following his loss to George W. Bush in the 2000 South Carolina primary, John McCain did something extraordinary: He confessed to lying about how he felt about the Confederate battle flag, which he actually abhorred. "I broke my promise to always tell the truth," McCain said. Now he has broken that promise so completely that the John McCain of old is unrecognizable. He has become the sort of politician he once despised.

Ka-pow. Really, you ought to read the whole thing.

The economy finally trumps pigs and lipstick

Yesterday morning, as the US financial markets went into meltdown and Lehman collapsed, John McCain stated that “the fundamentals of our economy are strong”, proving yet again that he is a disconnected rich guy that doesn’t understand economics. It is a bravura performance of obliviousness reminiscent of Monty Python’s Black Knight (“It’s merely a flesh wound!”).

The Obama campaign, to its credit, quickly released this terrific ad lambasting McCain with his own words. Look, barring some unforeseen development overseas, the economy is going to be the issue from here on out and one that Obama should dominate, if for no other reason than damn near everything McCain thinks about economics is wrong.

It is not for nothing that Phil Gramm, the architect of much of the bank deregulation that got us into this fix, is one of McCai’s closest economic advisors and the leading candidate for Secretary of the Treasury in a McCain Administration (I shudder at the thought). McCain is a true believer in Gramm’s vision of a deregulated banking market, the flaming wreckage of which was evidenced by the images of a steady stream of former Lehman employees toting out the contents of the desks in cardboard boxes. McCain’s call for a high-level commission to study the problem only reinforces the notion that he does not get it. I mean really, is that the best the guy can muster? For goodness sake, did the campaign decide that “the blue ribbon panel” was just too hackneyed?

The bottom line is that people like Gramm, McCain, et al. are not just wrong but recklessly so and clueless to boot. The more Obama can successfully illustrate that point, the better. McCain’s miserable performance yesterday has opened up a huge opportunity for the Democrats to make their case and now that we are back on issues and off the lipstick, Obama and Biden can really start throwing some punches. This is their moment to take back the momentum.

Hanging by a thread

From NYTimes:

Major credit ratings agencies downgraded the American International Group late Monday, worsening its financial health, as Federal Reserve officials and two leading investment banks were in urgent talks to put together a $75 billion line of credit to stave off a crisis at the company.

The credit downgrades are likely to force the company to turn over billions of dollars in collateral to its derivatives trading partners.

Without the financing, which was being arranged by Goldman Sachs and JPMorgan Chase in talks with the Federal Reserve officials, A.I.G. might be forced to declare bankruptcy, according to two people briefed on the situation.

[Snip]

“It’s not just the failure of one company,” said Julie A. Grandstaff, vice president and managing director of StanCorp Investment Advisers. “It’s the ripple effect of the disappearance of counterparties” that was spurring urgent efforts to bolster A.I.G.

A large counterparty to derivatives contracts has not declared bankruptcy since the market grew to such enormous size, so Lehman will be a test. Financial officials fear another failure of a big counterparty could start a chain reaction.

It AIG fails, hold onto your hats kids. Not gonna be pretty.

"And nobody knows what will happen next"

Krugman on Lehman:

Will the U.S. financial system collapse today, or maybe over the next few days? I don’t think so — but I’m nowhere near certain. You see, Lehman Brothers, a major investment bank, is apparently about to go under. And nobody knows what will happen next.

Oh boy

I saw two things this weekend that proved to me that this country has both macro and micro economic problems and kind of freaked me out. On the micro side, I saw for the first time in my memory, a run on gas stations. The family was in Greensboro, NC this weekend when rumor got out that Hurricane Ike was going to cause a gasoline shortage. As we pulled into town Friday evening, every gas station we saw (at least a dozen) had lines out the parking lot and into the streets. Gas was a dollar more expensive there than it was at noon in Norfolk. By the time we left this morning, every station on the way out of town was dry. That problem was not limited to Greensboro either. A few stations in South Hill, VA, (the crossroads of I-85 and US-58) were out as well.

I am sure that in a few days most of those stations will be up and running but even that disruption is going to be tough on owners, consumers, etc. The larger issue is that those runs were caused merely by fears that there would be a shortage. By most accounts, the damage to the oil extraction and refining infrastructure is not terribly severe and the likelihood of a disruption in gasoline distribution small. But faced with the possibility of a disruption, our energy supply system proved totally incapable of dealing with it. That should scare the hell out of you if you consider what the situation would have been had Ike done some real damage. Put another way, what would happen if no one could get gas for a week, two weeks, etc.? Scary.

On the macro side of the equation, the imminent demise of Lehman Bros. has the potential to start a run on all sorts of other financial institutions. Much of our banking system operates on faith; faith that a high enough percentage of loans will be repaid and thus lending will be profitable, faith that asset values are knowable and realistic, and finally, faith that when you try to withdrawal money from your bank, the bank can make good. Due to rising foreclosures, the proliferation and securitization of questionable mortgages, and the lack of regulation of non-bank financial institutions (like Bear, Lehman, Goldman Sachs, Merrill Lynch, etc.) respectively, that faith is no longer well founded. Indeed, this whole house of cards is looking shaky as hell, prompting the Feds to step in and act as the lender (and guarantor) of last resort.

When the Fed bailed out Bears Sterns in the spring and Fannie Mae and Freddie Mac last week, the theory was that each of these institutions was too large to fail and that their collapse would cause wider, systemic problems throughout the economy. So in various ways, the Socialists that run Treasury put you and me on the hook for the underperforming assets at each company. That intervention forestalled a more severe crisis but created a condition of moral hazard (the idea that if the government subsidizes failure or irresponsible investment, investors are incentivized to behave even more irresponsibly). Facing the prospect of Lehman going down, Treasury has decided, at least for now anyway, that the moral hazard outweighs the risk of the bank’s collapse. As such, and unless something changes, Lehman is done come Monday, doomed to be liquidated by its creditors. If that happens, the Feds are sending an unmistakable signal to Wall Street, namely that Wall Street is on its own from here on out. Without Treasury backstopping these institutions, the faith that greases the system is all but gone and anyone with liquidity issues (that includes most of the big non-bank financials and even some like Citi with big commercial presences) is going to face some tough questions from shareholders and creditors. If you thought mortgage markets are tight now, just wait. Lehman might be the first in a series of dominoes to fall and if we drop into worst case scenario territory, even the commercial banks that hold your checking accounts could get caught short. Not to say it is likely but the US now faces the real possibility of the first straight up bank run since the Great Depression.

Ike is a beast

Houston, Galveston, et al. – good luck. From the looks of this storm, y’all are going to need it.

Mired in the muck

I am amazed at the depths to which the McCain campaign has so quickly sunk. Really, its descent into blatant deceit, wedge politics, false victimhood and frivolity has been dizzying. Plainly put, both McCain and Palin are lying their asses off one on hand and bitching that the press is unfair to them on the other. The bullshit Lipstick on a Pig episode is but the latest example. It is one hell of a trick and, despite the nasty tone of their message, it might just be working. At least it appears that the press is finally willing to call them out on this nonsense, which is better than nothing. From the WaPo:

IT'S HARD to think of a presidential campaign with a wider chasm between the seriousness of the issues confronting the country and the triviality, so far anyway, of the political discourse. On a day when the Congressional Budget Office warned of looming deficits and a grim economic outlook, when the stock market faltered even in the wake of the government's rescue of Fannie Mae and Freddie Mac, when President Bush discussed the road ahead in Iraq and Afghanistan, on what did the campaign of Sen. John McCain spend its energy? A conference call to denounce Sen. Barack Obama for using the phrase "lipstick on a pig" and a new television ad accusing the Democrat of wanting to teach kindergartners about sex before they learn to read.

[Snip]

John McCain is a serious man who promised to wage a serious campaign. Win or lose, will he be able to look back on this one with pride? Right now, it's hard to see how.

I would totally agree except for the “serious” remark; the Palin choice revealed the incredible shallowness and ego of John McCain. Anyone that would choose someone so manifestly unqualified or operate such a foul campaign can be called many things (nefarious, dishonest, self-serving, fill in the blank...) but serious is not one of them. Promises be damned.

Profiles in courage cowardice

MSNBC has demoted Chris Matthews and Keith Olbermann for not displaying proper fealty and deference to the GOP’s talking points. This is why conservatives continue to work the refs by espousing the ridiculous claims of liberal media bias; because they know NBC will fold like a cheap card table.

If they don’t like the message, they will kill the messenger (see Donahue, Phil).

The Dept. of Treasury takes over Fannie Mae and Freddie Mac

Look out boys and girls, your free market loving Republican government just put you, me and everyone else on the hook for who knows how many billions of dollars because the two failing mortgage giants are deemed too big to fail.

Treasury Secretary Henry Paulson is betting that providing fresh capital to the two firms will eventually lead to lower mortgage rates, spur homebuying demand and slow the plunge in home prices that has ravaged many areas of the country.

The huge potential liabilities facing each company, as a result of soaring mortgage defaults, could cost taxpayers tens of billions of dollars, but Paulson stressed that the financial impacts if the two companies had been allowed to fail would be far more serious.

Privatize profit and socialize loss – this is going to be so awesome, I can’t wait to see how the bet turns out.

Palin Watch

If Sarah Plain is so damn great, then why has she waited until now to give anyone, even Fox, an interview? Seriously, she is supposed to be the Second Coming of Reagan, why keep her off T V for so long?

The answer is she isn’t even ready for Katie Couric on day one, she has no business being VP, the McCain campaign now knows it, and they needed to stash her off for a crash course in method acting.

Bizarro McCain

What an inane and quite frankly boring speech McCain gave last night. Seriously, it had all of the hallmarks of Saint John’s textbook delivery; lime green background – check, total lack of substance and voice modulation – check, acute overuse of the phrase “my friends” – check, out of touch, warmed-over conservative rhetoric – big time check, yet another rehash of his POW story but really folks, he doesn’t like to talk about it – Oh My God check, check, check. People, it was as painful to watch as it was silly and at times, completely at odds with reality, his Party, and his record.

In fact, this was not so much an Acceptance speech as it was a con job with high production values. So when McCain said,

“The constant partisan rancor that stops us from solving these problems isn't a cause, it's a symptom. It's what happens when people go to Washington to work for themselves and not you.

Again and again, I've worked with members of both parties to fix problems that need to be fixed. That's how I will govern as President. I will reach out my hand to anyone to help me get this country moving again.”

not only did it ring hollow, it was, once again, more bullshit. Pretty much every speech I have read or see at the GOP Convention was either an attempt to tear down Obama or scare the shit out of voters. It therefore strikes me as extremely disingenuous for Mr. Maverick to promulgate this nonsense that he is so willing work across the aisle while the surrogates that preceded him essentially spent their time talking shit about the Democrats. Furthermore, one cannot support Bush 90% of the time and be bipartisan – these are mutually exclusive terms.

When he said:

“I fight to restore the pride and principles of our party. We were elected to change Washington, and we let Washington change us. We lost the trust of the American people when some Republicans gave in to the temptations of corruption. We lost their trust when rather than reform government, both parties made it bigger. We lost their trust when instead of freeing ourselves from a dangerous dependence on foreign oil, both parties and Senator Obama passed another corporate welfare bill for oil companies. We lost their trust, when we valued our power over our principles.”

he is asking us to forget that his Party and his President have caused this mess, that he is a co-conspirator, and that his fingerprints are all over it. McCain will not run this race on his record, because is too busy running from it.

And when he said:

“And let me offer an advance warning to the old, big spending, do nothing, me first, country second Washington crowd: change is coming.”

He is asking us to believe the Washington Insider with 25 plus years in Congress is an agent of change. What he really meant was, elect me and expect more of the same.

John Bush is his own man

Tom Ridge brings the funny.

Just a thought but…

Isn’t it a bit disingenuous for McCain to harp on his independence from special interests when he ditched from VP consideration Joe Lieberman and Tom Ridge, both pro-choice, for anti-choice Sarah Palin at the behest of the Bible thumpers? I mean, aren’t their interests kind of special?
I call Bullshit.

Appalling

I have thus far avoided most of the Republican Convention due to Lo’s addiction to garbage TV (the viewing schedule the past few days has been the truly awful 90210 redux, America’s Next Top Model and tonight’s TiVo fare, Project Runway – God help me people), but I did happen to catch the completely disgusting 9/11 panderfest video that was played tonight. I cannot remember a more blatant and revolting appeal to humanity’s lesser impulses. Look, I understand that the GOP is going to play the fear card for all it is worth because essentially, that’s all they have. But to incorporate footage of the plane crashing into the World Trade Center; people, that is not merely beyond the pale, it is fucking disgusting, awful and sick.

Think about this for a moment. The Republican brain trust just compelled us to watch the murder of hundreds of Americans at a purely political event for purely political gain. People were being burned alive and the GOP saw fit to use that very moment to fire up their base. For that bit of vulgarity, they deserve our wholehearted scorn rather than our votes. And, irony of ironies, the Party that claims to protect us and yet failed dramatically to do so on that day had the motherfucking balls to exploit that tragedy for their ends (again). Simply despicable. 9/11 was one of those truly dark days; it should be treated with reverence and its victims with respect. That custom had been more or less observed until tonight. Instead, the GOP used it in an act of grotesque exploitation and I hope the backlash is swift, severe, and enduring. Those fuckers have earned nothing less.

Damn near the whole world reacted with shock and revulsion when those planes careened into the WTC. And in the aftermath of the disaster, the rest of the civilized world stood in solidarity with us, to fight against terror and to honor the innocents that lost their lives when the planes hit and the buildings came crashing down. The memory of that horror belongs to the families that lost loved ones in its wake. It most certainly does not belong to the amoral opportunists that would mine their grief to get elected. Catastrophe and death should not be a backdrop for a political campaign.

It is time to reject the gutter tactics of the Karl Rove Era and return decency to the White House. We can do it by electing Barack Obama. Yes we can.

Sometimes the truth hurts

Gail Collins is a master of the backhanded compliment.

For all her great skills at presentation, many people, including some Republicans who think the microphone is off, believe that Sarah Palin is a terrible choice for running mate. But you have to remember who the other options were.

Ouch…

Blunderful news

In picking Sarah Palin, John McCain has made one of the most egregious political “own goals” in the last couple of decades. Think Dan Quayle misspelling potato or George H.W. Bush’s befuddlement at the supermarket checkout counter (boy, their 1992 campaign was dreadful). Even when cast against those major bungles, the Palin pick as VP is epically bad. Her appointment was all about politics and nothing about who could best do the job. The McCain camp seems to think that her selection serves two purposes; first, she will help shore up the base and second, peel off some of the Hillary vote that is dissatisfied with Obama. They are probably correct on the first point but fantastically wrong on the second. I am really kind of amazed that they are even trying that tact, given that Palin’s politics are the polar opposite of Hillary’s. Palin is a gun-loving, anti-choice creationist, policy lightweight, and a darling of the conservative movement. Now I ask you dear readers, how is the hell is that profile going to appeal to Hillary supporters? It seems to me that McCain is making the rather misogynistic bet that Palin will draw support from women because she is a woman. That, IMHO, takes a pretty dim view of female voters in general and Clinton supports in particular.

The second strike against this decision is that Palin is, by any honest accounting, a strident yet inexperienced ideologue and something less than a policy wonk (which is to say she is William Kristol in a skirt). The sum total of her experience in office is six years as mayor of a town of 9,000 and a year and a half as Governor of Alaska. Her resume is so thin that some rightwing cheerleaders are touting Alaska’s proximity to Russia as credible foreign policy experience and I shudder to think about the savage beatdown she will receive in a debate with eminently more qualified Joe Biden. Furthermore, Palin, standard bearer for the corrupt as hell Alaskan GOP, has her own abuse of power scandal brewing right now. Those facts ought to have disqualified her outright. That should go double when one considers that McCain is 72 and had several bouts of cancer. This is not someone we need a heartbeat away from the Presidency.

Finally, this choice undercuts one of the McCain campaign’s best arguments: that Obama is too inexperienced to lead. Put plainly, anyone that tells you that Obama lacks the experience to be Commander in Chief but that Palin is up to the job is lying to you. If Palin passes the VP test, then so does Obama. Period

The McCain campaign has been something of a rolling disaster from the start. The lack of depth in the GOP field pretty much made him the candidate by default. McCain was swimming against a stiff current before he picked Palin. Now, her candidacy has lent the already nasty and dishonest campaign the foul air of desperation as well. If this move is any indication of how low McCain will go in this election, we are going to need a ladder to reach the gutter.