In other news...SOFA still not done.

We still do not have deal with Iraq that would put in place a new status of forces agreement. Without this we have no legal justification for being in Iraq. Negotiations are ongoing but there seems to have been very little progress as al-Maliki is holding fast to the one demand that is holding up negotiations, jurisdiction over US troops.

The most important hanging issue here is the immunity or the legal jurisdiction over the American troops because certain powers, political powers inside Iraq are getting ready to use this issue once it's — if it's — approved, as a vehicle to overthrow, to destabilize the entire political system in Iraq, to destabilize the government. They would use it as a vehicle to re-ignite public feelings inside the country.

We have proposed that the legal jurisdiction would be on one hand, on one side, with the Americans ... when the troops are performing military operations. When they are not performing a military operation, they are outside their camps, the legal jurisdiction would be in the hands of the Iraqi judiciary.

Kevin Drum proposed giving this to the Iraqis with the definition of military operation being so broad an vague as to make it impossible for the US troops to actually end up in Iraqi courts. I think that is probably going to be getting to cute. The iraqi's are holding out for a reason and will clearly be able to tell if they substantively receive the provision they are asking for. Trying a legal trick like that might not work in a country that does not respect legal formalism in that manner. I dont know that Iraq is such a place but it might be and i dont think the bushies are willing to take that chance.

Also i suspect Bush may have tried this already. This is the type of thing they did with torture. Say we dont torture but define it in such a way that nothing is actually torture under the definition. Faced with this type of construction a court could simply hold to the intent of the law and hold the soldiers totally liable. It is more than possible.

Not to mention that al-maliki has the leverage. He wants the troops gone by 2010 but was willing to play bushs political game. However he understands that with the financial crisis we might want to be cutting back on the whole foriegn war thing. Via Juan Cole

Al-Maliki, who wants a timetable for US withdrawal by the end of 2010, ended the interview with a clever appeal over Bush's head to the American public:

' "If I had enough funds to assist the American economy, I would do all that I can. But unfortunately Iraq cannot solve America's economic problems.

"But what Iraq can do is take up more responsibility security-wise here inside Iraq. And I have told the Americans repeatedly that we are ready to take up responsibility here in Iraq so there are less losses, a decreased number of American lives lost, and I am prepared to present this case before the American people. ...'

Given the current conditions with the election and the financial markets i have a hard time seeing a deal completed. Never say never though...

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On Representation and Leadership in Congress

Yesterday's failure to pass the bail out legislation should be considered a text book case study in the competing philosophies of Republican government. We saw in stark contrast the difference in the constituency service model and independent leadership model of government. The law makers who had to go home and face the voters voted overwhelmingly against the bill while safe law makers voted for it. Why? To answer that we need to look at what congress people think their job is.

There is a constant tug of war in congress members minds between acting on their own judgment about an issue and in responding to the demands of the constituency. Take the example of the bailout, the safe members who voted or the bill were not exempt from their constituents demands for a no vote. If reports are to be believed they were being hit at a no to yes ration of 30-1. In this case they ignored their constituents for what they believed was the good of the country. They utilized their own judgment about what was best based on their own knowledge of the situation and the consequences of action. What they did was exercise leadership when they must know that they will take a major hit from this. Many people believe that this is why we elect representatives to go and make the hard calls.

On the opposite side we have the nay voters from unsafe districts. These people totally relied on the demands of the voters back home. They simply performed the role of the mouthpiece. This is a fully recognized idea of how a representative should act. We petition leaders so that we may influence the decision. Would we do this if we were not supposed to have input? The question is whether these people have gone to far. Why elect them personally if all we need is a stand-in? We could vote over the internet on every bill and the representative would simply push the button yea or nay.

The question arises whether they were actually following their constituents out of an ideological belief that that is the right thing or out of a political cowardice that they would be voted out of office. If they really believed that this was the right thing to do and voted no to keep their jobs that is a problem in my mind. If you believe your job is to lead and make decisions for the people except when that might hurt you politically i cant respect that.

If you believe that we elect our congress people to lead and make decisions then sometimes they have a duty to do that. If that decision leads them to get voted out, fine. If they have a principle and they believe they were elected to follow those principles they should sacrifice their career for what is best for the country. others have sacrificed more than simply a job. i have a hard time believing that a representative who votes for an issue with the ability to defend why his vote was best for the country will get thrown out of office. Even if they do they should have no regrets.

What is lacking in the discussion of the bail out is that what should be done is what is best for the country, regardless of politics. If that bill that was put up was not the best bill for the country then it had no business being voted on. No one thought the bill that went before the congress was the best possible bill. The people understood this. The best bill needs to go up in a crisis and if republican members want to take a principled stand against it i think that is their right. I think if there was a bill that everyone actually thought would work and was not a cobbled together political band aid the american people would get behind it. it might not be perfect but good should be a worthy adjective. Then you would have no trouble with those people afraid of using their judgment.

I could be wrong though. There is always the idea that we elect members to make trivial regular decisions we cant be bothered with but that the important stuff should be left to the people. That might work. The problem i see with that is that people dont usually understand the important stuff any better than the trivial stuff. We should not just trust them or cede total decision making to legislators. Calls keep them honest and make sure that only on the most truly principled issues will they cross the voters lest they risk their jobs.

It is an unresolved question what is the job of a legislator, listen and follow the people or use your own judgment? Legislators like to have it both ways by building support for an issue but sometimes you have to make the call about what is best for the country without the benefit of popular support.

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Bail Out Down

Well the Bailout failed. Why? Enough people were feeling the heat from the people at home that they feared for their jobs. This is about the worst reason ever for a bill like this to fail. I was not a big fan of the bill as it was written because all the things dems fought for were so weak as to be mostly useless. The oversight and spending restrictions were a joke. However, that does not excuse people who voted against this for political reasons.

I wrote yesterday about the political implications of voting for this bill. The point of my article was not that people should vote against a bill if it comes up for a vote but that it should not have been put up. there is a major complicating factor in putting a bill like this up for a vote and having it fail. The failure destroys the confidence of the market. The market was holding based on the idea that something was coming down the pipe. No we have nothing. Putting it up for a failure was worse than putting up nothing and continuing to work.

The next step is fairly obvious, but it probably wont happen. Congress needs a swedish model bill that buys the equity stakes in the banks. Before they do this though they need to get the people on board with the bill. Look for a change in terminology and a major switch in marketing. The pols need to shift the media story line on this from something tax payers wont like but have to accept to something that portrays this as actually working for them. The biggest way is through some real punitive measures.

People will get on board with revenge in this case. Throwing the ibankers on their ass while helping Homeowners is a bill that could pass. Put together the best bill for homeowners possible, target it so that people feel like they are getting something in the bill and make the republicans vote against an overwhelmingly popular measure. If you want to destroy their political cover you need the public on your side.

Is this going to happen? No. I expect that they go back and throw more bones to the reoublicans, get a worse bill and get slaughtered in 2010 or even 2008.

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The Bailout dereves a 12(b)(6)

The federal rules of civil procedure has a motion that a defense attorney may make before a trial has begun. If granted this motion throws the suit out of court. It is referred to as a 12b6 or a "failure to state a claim for which relief may be granted". If the bailout does not meet that criteria i dont know what does.

Ok so it might be a slight mistake to say that the alleged collapse of the world financial market does not demand relief. Maybe i should have went with directed verdict. However my basic point is that the government, Bush-Paulson-Pelosi have failed to make their case to the American people on this thing. It is obvious that the general public believes, rightly so given what information we have, that this is a total giveaway. the congress clearly gets this that why they are having to scrounge for votes,

Republicans, under pressure from the democrats to deliver 70-100 votes from their side, were scouring the ranks and focusing on the two dozen Republicans who were retiring this year.
"It is a good number," said Representative Ray LaHood of Illionois, one of the Republicans leaving Congress this year.

Mr. LaHood said he had suggested to the leadership that they convene the departing members to get them to make the case to wavering Republicans.

Both parties were also scouring the political map to identify lawmakers who face little or no opposition for re-election in November, knowing the would be more willing to vote yes.

Democratic officials said that despite controlling both chamers in Congress, they were far from having a majority sufficient to pass the measure just from their ranks. And they also warned that Democrats in potentially tough races could not be counted on to provide the votes to put the package over the top when, and if, it reaches the floor.

One of the biggest problems with this is that congress is moving as fast as possible without taking the American people along with them. They are not even trying to make a case with real data and real experts to back it up. Instead you get people like Krugman and Roubini who either think this plan is barely above awful or just crap. How do you expect to get support with reviews like that?

As i wrote yesterday congress and the dems are going to be feeling this one for a long time and it more than likely wont be pretty.

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Why no Talk about Cuba?

February 7 1962, President Kennedy orders his Press Secretary and close friend Pierre Salinger to go out and to purchase him Cuban Petit Upmann cigars. Salinger managed to acquire 1200 of the cigars. The next day Kennedy signed into law a ban on all trade with Cuba, except for non-subsidized sale of foods and medicines. This story is both legendary and true. People like to credit Kennedy with initiating the ban but his was only an expansion of earlier legislation from the Eisenhower administration. Regardless of who exactly started it the isolation of Cuba has been one of the biggest and most glaring policy failures in US history.


Numerous polls have been conducted on the questions of ending the ban and reestablishing diplomatic relations with Cuba. Typically 60%+ would support reestablishing diplomatic ties. The public splits 40-40 on whether the embargo should end or continue. However people think American should be allowed to travel to Cuba based on responses to questions involving interest.

The point in bringing up Cuba is that it could be a potent electoral topic. It is a prime example of the failure of isolation and so has relevance to the current US foriegn policy debate.

Last night in the debate there was a section on the idea of preconditions. Obama came out in favor of meetings without preconditions and McCain continues to demand that we make people give up something before we condescend to talk to them. Here is the video its about 5 minutes long.



Obama focuses mostly on N Korea and on Iran. The debate deals with primarily with the possible meeting with mahmoud ahmadinejad. What is missing here is the use of Cuba as an example of what happens under McCain's foreign policy. Cuba has sat there and its people have suffered for 46 years now as we have isolated it. What has avoiding talks with Cuba produced? Nothing.

I use Cuba as an illustrative point because a change in policy is widely supported at least to the extent of reestablishing diplomatic relations. i suspect not to many people would be upset if we ended the embargo. The polls do not include a very important question that lets us understand how strongly people hold their views, "how upset would you feel if the opposite of your views happened? Very, some what or not at all upset".

People view Kennedy as the father of the embargo but fail to realize that it was actually Reagan who should be credited with the embargo in its current form. After being elected Reagan reestablished the travel ban -- it had been removed under Carter -- and prohibited U.S. citizens from spending money in Cuba, and allowed the 1977 fishing accord to lapse. He made sure to ban travel to the U.S. by Cuban government or Communist Party officials or their representatives and most students, scholars, and artists.

Many people believe that discussing this would be impossible because of the electoral implications in Florida. However the landscape has changed their as well. The changes were evident in the ex-pat communities response to the Elian Gonzalez incident of 2001.

In its aftermath, the Cuban American rightwing splintered. Its more hard-line members formed what is known as the Cuba Liberty Council (CLC) who are behind the Bush administration policy on Cuba - while the CANF has now become an advocate of a somewhat softer line. This split in the leadership of the Cuban American Florida community reflects the demographic change that is now directly affecting the presidential race...

...More significantly, within the Miami Dade Cuban community, the figures show a majority now supporting a re-establishment of diplomatic relations. A Florida International University poll of Miami Dade County residents conducted in February 2007 found that 57.2 per cent supported a restoration of diplomatic relations. 65 per cent of respondents said they would support a dialogue with Cuban government, (this compared with 55.6% in a similar poll in 2004). Although a majority of 57.5 per cent said they still support the embargo this figure had dropped from 66 per cent in 2004. Most importantly however, 64 per cent said they support a return to the policies governing travel and remittances that pertained in 2003 before the Bush administration tightened them.

With a majority in Miami Dade wanting a return to the travel policies of 2003, this has become a key element in the current election race because the Democrats have chosen to fight the current Congressional election on this issue (see, for example, Southern Political Report, 'Florida's Three Cuban Representatives Face Challenges' February 25, 2008). Two prominent Cuban Americans, the former head of the Cuban National Foundation and former head of the local Democratic Party, Joe García and the former Mayor of Hialeah, Raúl Martínez, are running against rightwing Cuban-American Republicans Lincoln and Mario Díaz-Balart respectively. A Colombian American Democrat, Annette Taddeo, is opposing Ileana Ros-Lehtinen. Speaking on BBC News 24 on February 19th about Fidel Castro's retirement, García said it was time for "a more pragmatic policy towards Cuba." This contest has now spilled over into the presidential race, making this the first election since the Cold War that the candidates will have contested over Cuba policy.

Obama has already started down the path of softening the US policy towards Cuba. He has made it clear that he intends to allow for increased travel for the Cuban-Americans to Cuba.

"There are no better ambassadors for freedom than Cuban Americans. That's why I will immediately allow unlimited family travel and remittances to the island. It's time to let Cuban Americans see their mothers and fathers, their sisters and brothers. It's time to let Cuban American money make their families less dependent upon the Castro regime."

McCain of course is totally committed to keeping the same decades old line in place with regards to Cuba. It just so happens that this is an issue where he is on the wrong side of the american people. People do not view Cuba as a threat. The American people see that we trade with China and Russia and Iran. We deal with plenty of people who are not our allys and yet we are hostile to a tiny island that represents the last vestiges of a failed ideology.

Cuba is a perfect case study for Obama to use in his argument that isolation is a failure. Our policy towards Cuba is one out of place in the world we currently live in. Obama has staked his campaign on the idea that the American people are not stupid. America is ready for a change regarding its cuba policy and it can be a home run for Obama.

For More information on the potential benefits of a relaxed US Cuba policy read this pdf , “The necessity of ending the economic, commercial and financial blockade imposed by the United States of America against Cuba”

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Palin's Family is apparently not off limits

There is an item over at TPM

In an election campaign notable for its surprises, Sarah Palin, the Republican vice- presidential candidate, may be about to spring a new one -- the wedding of her pregnant teenage daughter to her ice-hockey-playing fiancé before the November 4 election.

Inside John McCain's campaign the expectation is growing that there will be a popularity boosting pre-election wedding in Alaska between Bristol Palin, 17, and Levi Johnston, 18, her schoolmate and father of her baby. "It would be fantastic," said a McCain insider. "You would have every TV camera there. The entire country would be watching. It would shut down the race for a week."

If this is true then it would be a new low for the McCain campaign. I know McCain loves giant gimmicks but this would be truly outrageous. They are already pushing these two kids together for political purposes but now they want to use them as political props like nothing else in history. This is on top of repeated McCain campaign assertions that the family of Palin is off limits.

I dont advocate attacking the families of candidates but i do advocate attacking the mccai campaign over cynically exploiting children for public gain. I really do hope this is untrue but the fact that it cant be discounted is saying something...

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Give Away is the New AUMF

Andrew Sullivan promoted this from Pethokoukis, on his blog,

Newt Gingrich said voting for the bailout will break against candidates in 2010 and beyond when voters see how destructive it is to the economy. And that's the thing. While the bailout, if Paulson and Bernanke are to be believed, may prevent a financial meltdown, it will not by itself return America to prosperity. The labor market is clearly weakening, and is the last thing to turn around once an economy does regain momentum. So there's a good chance that a perturbed public, currently down on the bailout, will view it as an expensive flop by the time the midterm elections roll around. They will hold its supporters accountable.

The basic thinking here is that the give away becomes the AUMF vote. That 2010 will look very similar to 2006 when the country was so tired of the incredible violence in iraq that it revolted and severely punished the party in power. This is getting at something important that has been brewing in the liberal blogosphere since the inception of the Paulson Plan, Digby's THE TRAP. While Digby is applying this more towards the current election and the possibility of McCain running against the bail out to beat Obama the long term implications are there.

We will see the rebirth of the phony fiscal conservative image before our very eyes as our brave POW hero, John McCain, takes on the great malefactors of wealth while the soft, liberal elites behave like toadies to the rich. It's a neat trick for a man who owns seven houses and thirteen cars, but in America, you can be a multimillionaire and still be a man of the people as long as you drink a beer the right way.

Kilgore concludes that the Democrats must demand Republican votes in congress including John McCain's. But I don't see the mechanism for doing that. After the campaign he's run, I don't think we can rely on his "honor." So, the Dems can ask, but the Republicans will find a reason to do what they think will benefit them politically. And that is to sufficiently separate themselves from Bush and the congress that they can realistically be perceived as the real change agents.

The GOP and its ideology has failed in governance. Conservatives like to think Bush is not a real conservative but really he is just a natural extension of Reagan without the speaking skills. Given this problem what they need is a reset. They need a catalyst that can return them to their roots, a puritinization. The possibility exists that this bail out proposal could be that event.

The first thing to note is that it fits with preconceived notions about the worst of democratic party excess on spending. A traditional complaint that conservatives have against dems is that they spend too much money on the people who dont deserve it. If any one ever deserved to be bailed out less than the ibankers who knowingly too huge risks with instruments they could not even understand they probably committed a war crime. It looks like the dems are just throwing money at a problem, wasting it.

That no one actually seems to think this will work is also a problem. How can the dems line up behind something people said would not work? At least with iraq people were being told it would go great. Here it is all based on a "slap" mentality. Slap the markets and they calm down and somehow start to properly value their paper. People are not going to get behind that idea.

Opposing a big give away would be inline with traditional gop rhetoric. Ideologically the GOP should be against doing anything. Their position is that the free market is the best instrument to make economic decisions. The government should have a minimal role in the economy. 700 Billion is not a minimal role. Because it is so inline with traditional gop rhetoric it will not be a hard sell to the american people that the gop philosophy was the correct one. If the bail out flops it would be used as evidence that the republican ideology in its true form is right and that bush did indeed pervert it somehow. It would be seen as the republicans coming home to principle after the Bush years, they have seen the light etc. It worked for McCain with the Keating 5 right?

Another major point is that this is not the first time Dems are led into a disastrous policy by their own political cravenness. Iraq already happened. It is a classic case of fool me once shame on you foll me twice shame on me. Fool me three times and im an idiot. The country has an extremely low opinion of Bush. The country trusts him about as far as the distance between the nucleus of an atom and its valence shell. Still, the dems are willing to proceed in linking to him and following his dictates without revealing exactly what information they are acting on. The country will not tolerate that. In legal terms this is a minimum of negligent legislation. A reasonable person would know better.

When i say that the dems are linking themselves with Bush i should probably assert that they are also making this bill their own as much as they ca without scrapping it and starting over. They want to tack on all the provisions they can but the core is still the bush plan that pulled 700 billion out of nowhere. If you want to make it easy to run against you put your brand all over this bill.

The other consequence of this bill that is coming to light is that it should prevent any democratic agenda spending agenda should Obama win. That is the new media narrative that has begun to permeate the discourse. Much like '92 the dems are supposed to be the responsible ones and to hold off on the things like health care or education or SCHIP because the country just cant afford it. It is a perfect story for the GOP to run on should the dems actually try to do anything. Everything will be too expensive after the Dems irresponsibly spent all the money on the bail out.

The issues with this bail out are many and the up side is miniamal. given these conditions does it really even make sense to do this? I know the dems are trying to get some minimal cover from the GOP but really everyone will label them the driving force behind this in 2010.

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McCain displayed a lot of weakness

People have been talking about the lack of eye contact and acknowledgment John McCain gave to Barack Obama during the debate. I think this had a big impact on people who watched it. McCain's lack of direct dealing with Obama revealed him to be inflexible and made him look less confident and defensive during most of the debate.

McCain's inability to actually interact with Obama made it look like he had less confidence in his positions versus Obama. It looks like he was trying to run from Obama. McCain spent all of his time talking away from Obama in a way that made him look weaker than Obama as if he was appealing to people outside the debate instead of actually debating Obama. Obama was debating McCain and engaging him directly, putting his positions and his answers under fire. Instead of facing up to Obama he was turned away from him at all times.

It made it look like mccain was less confident because of his inflexibility. In the way he gave his answers he look rigid. He could not face Obama with his canned and fairly unoriginal answers. McCain would not be able to deviate from the preplanned script. Obama in contrast looked natural and more in command of the material. He was able to engage McCain directly and his answers had more weight behind them because they were addressed right to mccain. He put the pressure onto McCain and McCain did not handle it well.

McCain's repeated repetition that Obama was naive or lacked judgment were likely the talking points his campaign picked out for him. Instead of looking strong though it looked like McCain was a little desperate in trying to convince people that what Obama was saying was wrong. If he had adressed Obama directly looked him into the eyes and told him he did not get it the results would have been far different.

When i watch two people vying for leadership debate something i want to see that they can face the person and attack their arguments head on. McCains refusal to face up to obama made him look like the weaker of the two candidates. Many people have taken his refusal to face obama as contempt but i took it as fear. McCain knows he is floundering and he wa trying to run from that tonight and he failed.

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What is going on with polls

People on the dem side are getting really excited about the polls coming out. I council caution. For one thing many of these polls show big drops in support for mccain moving him from 46 down to 39. The reason for this is a big drop in indy support. Kos cites the Fox News/ opinion dynamics poll.

Opinion Dynamics for Fox News. 9/22-23. Registered voters. 3% (9/8-9 results)

McCain (R) 39 (45)
Obama (D) 45 (42)

Thirty nine? Really? Thirty-freaking-nine?

And this poll was conducted before McCain cut and run on the debates.

Update: Let's dig a bit into the internals (PDF).

Independents

McCain (R) 31 (46)
Obama (D) 36 (31)

That one's gotta hurt. That's a 20-point swing.

The clear trend here is not a massive move in support towards obama. it is the indys moving back into the undecided column. This indicates a softening for support towards mccain but it does not mean that these voters are unlikely to go right back to him in a couple of days or the coming weeks. One thing that makes me think this is possible is the Dkos tracking poll.

Date	McCain	Obama
09/24	44	48
09/23	43	49
09/22	43	49
09/21	42	49
09/20	42	50
09/19	42	49
09/18	43	49
09/17	44	48
09/16	44	48
09/15	45	48
09/14	45	47
09/13	47	47
09/12	46	47
09/11	45	47

The trend of this poll is not a sinking of the mccain candidacy but instead a tightnening race. It peaked at obama 50 on Saturday but has been coming back together since then even as mccain continues to fail and flail.vSo lets not get to giddy about the polling data right now. It is possible that his support outside the base is collapsing like some polls suggest but i have doubts.

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Media Takes Its Direction from Legal Process

I think it is often overlooked how interconnected the fields of law and journalism are. Both are, in theory, supposed to be about the search for the truth. In journalism that truth is supposed to be the events and the objective facts that apply in any given situation. In our legal system it is supposed to be about finding the truth as it relates both to equity and matters of fact. Namely what is the just out come of a case as dictated by law and society? Unfortunately the media has become reliant on a false interpretation of how the legal process works to find the truth.

The media commonly discusses the court of public opinion. they have set up our public discourse to reflect this. our current media works in an adversarial fashion with the 4 actors typical of any trial. We have the attorney's for the plaintiff and the defendant represented by the pundits from the two opposing sides. Then you have your judge, the media figure, who directs the case. Lastly we have the viewers at home acting as the jury. What the media likes to term fair and balanced is actually a bastardized version of our adversarial legal process.

The argument that the media advances is that they, like the judge in a legal case are not present to determine matters of fact. Decisions related to matters of fact are the domain of the jury. The judge is supposed to be the neutral arbiter of the case presented. The media tries to emulate this notion of neutrality, the removal of all bias from the process of getting to the truth. We know though that this is a sadly romanticized view of how things work in both the media and in the courts. there is also an important distinction that illustrates why the legal model does not translate well to the media.

The key is the rules of procedure that govern how the process operates. The court system operates along well defined, concrete rules of procedure that establish base requirements of the actors. One of these base requirements is the element of proof. At numerous points in a suit the defense may move to have a directed verdict that forces the judge to make a call on whether the prosecution has met it's burden of production or proof for its case. at this point the judge has to make a call about on the motion. this does not happen in the media. A debate taking place on tv lacks these features of procedure.

Something else that people fail to understand about the courts when translating the model to the media is that the facts of a case are not always the facts as they actually occur. They are rather found facts. Like the classic doll test of brown v board that the supreme court fully misinterpreted. The courts are bound by the facts available in the court room, the media should not be bound in this way. There is no limitation on the facts that the media could bring in. Any discussion should be conducted with a full agreement on the facts as they actually are not as they are assumed to be.

Something else that separates how the adversarial process works in the legal system and how it plays out on tv is that getting caught lying on tv carries little repercussions. getting caught lying in court comes with potential disbarment. It is true that there are lawyers out thee who lack the desired ethics but these people gain a reputation. The other lawyers and the judges and the clerks and the secretaries all know how they operate and they receive treatment and trust commensurate with their reputation. This is clearly not what happens in the media. People like jerome corsi and bill o'reilly and glenn beck and lou dobbs and sean hannity are allowed to go on tv and spew their views without censor. If tv was like the courts these people would be scoffed at and ridiculed by people like tom brokaw or even brian williams instead they are treated as serious opinion makers. what they said would have no merit to anyone.

In addition to this the criminal justice system has a big problem with favoring the big money players. The ability to hire the right lawyer for your case can be the difference between conviction and freedom. Money plays a role because only those with money can really afford to go to trial in many instances. The courts have serious issues when it comes to dealing with the poor and the indigent. The romantic image of a system where everyone gets their day in court is false.

We live in a litigious society and that is not a bad thing. having people take their problems to court rather than settling their problems vigilante style is fine. its even ok that many cases are settled out of court. Our society views courts and the rule of law as a forum for justice. We accord the images and trappings of this system with a certain deference and respect. It is natural to imagine that we could export the model we so admire to other areas of life, like the media. However, taking pieces of the process like the adversarial nature will not always succeed. This is the case with the traditional media.

Public discourse is not a trial. The public square is not a court room. we should not look to a gladiatorial style combat between adversarial pundits as the best method to find truth. There are not two sides to every issue and we should not force create them to satisfy the desire for a trial of the objective truth. If we are dead set on that path the very least we could do was put every tv pundit under oath. At least that way we can throw them in prison when they lie and subvert the debate.

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Bail Out is 100% Essential

The Bail Out is a fascinating political phenomenon for a number of reasons and i believe it will be studied in poli sci classes around the country. Here we have an apparently catastrophic crisis at the height of an election that could cripple the potential presidency of the next President and the bill proposed as a solution is designed swindle the american people. There does appear to be a case for Bush playing political games with this but that does not mean that it is not essential.

What is being asserted is that Bush and Paulson either let the crisis get out of hand in order to allow them to come to the rescue later or that there really is no crisis that will take down the entire banking world and with it the global economy. The reason for this is apparently two fold. One is to give all the us treasury to wall street bankers and to create an issue so big and so important that it can bury the democrats in this election and handicap them should they win the election. There is some evidence being put together out in the tubes to prove this. First is the assertion that the Bush people have been putting the plan together for months

Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.

This of course means that they were fully cognizant of the problem and were choosing not to deal with it for some reason. When would they have decided to put something like this together? Probably right after Bear Stearns was dragged down by the toxic mortgages and their capital problem back in march.

US Government offers $29 billion of credit in the form of guarantees for the toxic mortgage-backed debt held on the books of Bear Stearns. The credit was made available as part of a deal where JPMorgan Chase acquired its smaller rival. US Federal Reserve also extends the availability of cheap financing to investment banks as well as commercial banks

There is an example of the US stepping in to deal with the issue of toxic mortgage debt that was crippling a piece of the financial industry. Bear was an investment bank just like merril and just like lehman. It is not difficult to assume that the underlying cause that brought bear down would also be afflicting the other investment banks. There was even speculation at the time about what happens if the other investment banks start to go.

People knew that there was an issue with the system. So it is not unreasonable to think that the government began prepping at that point for what would happen if the investment banks started to fail. So the bail out plan is created. In order to make it politically effective and to take full advantage of the shock doctrine the pump needs to be primed. That means getting the public ok with a big bail out and making a demonstration of what happens when their is a failure. This is where Fannie Mae and Freddie Mac along with lehman come into play.

There is an issue here about why exactly this particular time frame would be used for a political play of this magnitude. The fact that Fannie Mae and Freddie Mac were taken over the rationale went out that they were too big to fail and that the consequences would be dire if they were not bailed out. We had to. So then lehman, who had been on the rocks since june, finally gave out. They were allowed to fail. The reason for this seems to be something of a mystery,

This might not have been needed, at least not now, if the Fed and Treasury had stuck to their own game plan in Bear Stearns, to bail out creditors but not shareholders. We need to learn who pressed to force Lehman to fail completely. That decision led directly to the run on money market funds and to panicked trading conditions for credit default swaps at other brokerage firms.

This created panic and induced the BofA purchase of Merril on the theory that the gov might let them fail too. Bam! Crisis initiated. Now people are freaked and they dont know whats going on.

At this point AIG gets nationalized. Now there are actually only two investment banks left, Goldman Sachs and Morgan Stanley. Surely they must be next on the fail list? So on September 18 we finally get the action that seems needed to save the entire banking industry from collapse. The Great Bail Out of 2008. 700 Billion.

The issue here seems to be the speed from 0-1 trillion. what is the rationale? The one given was the potential for a global credit seizure where no one could get capital for anything because banks could not tell when other banks were solvent. So it seemed like the sky was falling. The plan appeared to be working as Dems were getting behind this idea of a $700 Billion dollar bail out. Something strange began to happen though. People read the plan.

I think their first mistake was making it only three pages. It is hard to hide the massive power grabs in such a short document. i mean people actually have time to read the thing. The patriot act, now there is a proper power grab. So when people started to read the thing they began to have questions like, why isnt there any oversight? Why do you need 700 Billion, that seems like a lot of money? The Administration has done its best to steam roll through these questions on the fear generated by the collapse of Lehman and the nationalization of AIG. But they are like the boy who cried wolf, they dont have the credibility they had on Iraq. This has lead from the original questions about lack of oversight to bigger questions about the premise,

Ask this question -- are the credit markets really about to seize up?

If they are then lots of business owners should be eager to tell how their bank is calling their 90-day revolving loans, rejecting new loans and demanding more cash on deposit. I called businessmen I know yesterday and not one of them reported such problems. Indeed, Citibank offered yesterday to lend me tens of thousands of dollars on my signature at 2.99 percent, well below the nearly 5 percent inflation rate. That offer came after I said no last week to a 4.99 percent loan.

If the problem is toxic mortgages then how come they are still being offered all over the Internet? On the main page AOL generates for me there is an ad for a 1.9% loan (which means you pay that interest rate and the rest of the interest is added to your balance due.) Why oh why or why would taxpayers be bailing out banks that are continuing to sell these toxic loans?

How does the proposal help Joe and Mary Sixpack who can afford their current monthly payment, but not the increased interest rate that has been or soon will take effect? Every day bankers work out loans with customers -- so why are taxpayers being asked to act when banks are largely on strike, refusing to negotiate revised deals with many loan customers?

and Krugman

So the plan only helps the financial situation if Treasury pays prices well above market — that is, if it is in effect injecting capital into financial firms, at taxpayers’ expense.

What possible justification can there be for doing this without acquiring an equity stake?

No equity stake, no deal.

Then we get news that the deal applies to healthy banks too,

"With respect to executive pay, again, I'm not going to get into specific, point-by-point details on what our views are on that, other than the Secretary of Treasury said it would make more difficult to make this plan work and effective if you provide disincentives for companies and firms out there who are holding mortgage-backed securities and other securities from participating in the program. You have to remember, these are not all weak or troubled firms that own mortgage-backed securities. A lot of them are very successful banks and investment houses that have done very well, have been responsible, are holding performing assets that have value. They were not necessarily irresponsible players, and so you have to be careful about how you deal with them."

At this point the shit has really hit the fan for Paulson and crew. Their plan is being hammered and is very unpopular with the people. The worst of this though is that there is actually a need to do something. Thats right, there is a need. The entire way this has been handled has put the bail out in jeopardy. Here is an explanation of why this is such a problem.

Last week we were all sitting there watching the crisis progress from one institution to the next. Now that the blaze on the bottom floor is under control, people are like, “but we don’t know that it would have spread to the top floor!” And it’s not as if the threat has entirely diminished. Days after the bailout was announced, the spread between interbank lending rates and rates on loans from the government is some five times higher than it would be under normal circumstances. That’s huge. And it rose on Monday and Tuesday after falling over the weekend.

That’s one reason why time is of the essence. Confidence that a comprehensive solution is forthcoming has calmed markets for the moment, but if markets begin to doubt that a firewall against collapse is going to be there, then the downward spiral will begin again. Another reason is that jammed credit markets aren’t exactly healthy for the economy. Does this need to be done this week? No, but can it wait until January? Almost certainly not.

But what about the amount? How do we know that $700 billion is needed and not, say, $500 billion or $300 billion? Well, we don’t. But if that amount is off, then the correct amount is almost certainly higher. Read this to see the scope of the problem and the challenges involved. If Paulson didn’t request more, it’s probably because he thought this is the least he could get that would make a difference.

Get the oversight in there, please. Get a bipartisan team of experts involved. Get measures in there to ensure that taxpayers get a healthy share of whatever upside there is to the deal. Make the bill a good bill. But let’s not play around here. Healthy skepticism is healthy. Blind assessments of the situation as not dire, simply because you can still use your credit card are not.

and here is another explanation. Both Make it absolutely clear that something needs to be done. That Bush and Paulson put forth a proposal that was so bad when things are really on the line is just appalling. They have actually perpetuated the crisis by failing to put forth a bill that was even the least bit acceptable and failing to properly lay out the case for the american people.

The Democrats should not go along with the Paulson Plan but they need to get something together. What we appear to have is Bush playing politics and political games with something that is vital to the countries interest.

People have also been speculating on the political ramifications of passing the bill if rs all vote no. Well if the dems manage to construct a bill that helps from the bottom up as opposed to just the top then there is nothing to run against. Treat the underlying issue if you can and it will save election headaches. Can you imagine McCain and the other republicans voting against a bill that actually helps homeowners? Or middle class people? If the Dems cant win on something like that then they should just quit.

remember there is something does need to get done. We have lost time thanks to the Bush Admin's inability to let a chance to grab total power go by.


For a primer on the whole mess see here

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Read This

http://www.juancole.com/2008/09/nation-of-masochists.html

This is one righteous rant that covers the entire gambit of failed conservative ideology and tears the American people a new one. it really is a must read.

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Nader Still About the Ego

I think Ralph Nader only comes out of hiding so he can tell people it was not his fault gore lost.

“There were 19 independent variables, and each one would have put Gore in the White House” he said in an interview today, citing the Supreme Court decision and Mr. Gore’s loss of his home state of Tennessee among them."

His new rationale for being on a ballot is that he is taking votes away from McCain. No really.

And he called up The Caucus to boast that he seems to be draining votes from Senator John McCain, the Republican nominee, not Senator Barack Obama, the Democrat’s presidential candidate.

His evidence? He said polls show that when his name is added to the mix, Mr. McCain’s numbers go down.

He also pointed to the fact that the Democrats are not trying to bump him off the ballot in various states, as they tried to in 2004.

“Last time, the Democrats filed 24 lawsuits in 18 states in 12 weeks to get us off the ballot,” he said, but this year, they have not filed any. He is now on the ballot in 45 states.

This is just ridiculous. If you dont realize it Nader is never included on the ballot with just Obama, McCain and himself. There is always the fourth guy, Bob Barr. Barr is the one who pulls from McCain. No matter what nader might claim his numbers come from two groups. People who would not have voted except for him and dems. That is it. So if Nader costs us again i say we deport him.

He has no purpose in this race other than to serve his ego. He is trying to justify it any way he can but it is not working. Go home ralph, its just getting sad.

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N. Korea Is Closer to Restart of Nuclear Program

The new line of though about President Bush is that his two terms are very different. His first, according to budding cw, is marked by intense partisan ideology and a reliance on Cheney and neocons. The second term is supposed to have been more pragmatic than anything with a reduced role for cheney and the expulsion of most neocons from the bush inner circle. Cited as one of the more pragmatic and correct moves was GWB's diplomatic engagement of N. Korea eventually resulting in N. Korea giving up their New-clear (phonetically spelled) program. The NYT is reporting that this one single success in a long line of failure may be slipping away for Bush.

One of the hallmarks of the Bush administration is that they never finish anything. They are like kids gong from new toy to new toy each is the most important thing in the world for about 5 minutes. Rebuilding on the site of the twin towers, Afghanistan, N. Korea, Hurricanes Ike and Katrina, The Minneapolis Bridge Collapse, Iran and their Nuclear Program, Iraqi political reconciliation all of those were the most important thing in the world until they weren't. As a result all of them, except the bridge which was rebuilt in record time and under budget, have gone unfinished or unresolved.

The negotiations with the N. Koreans are complicated. Figuring out exactly why they take the actions they do is a big unresolved debate. It is possible that this is not Bush's fault at all and that it has everything to do with internal N. Korean Politics. We just don't know. That however does not make this look like less of a failure,

North Korea has “asked the agency’s inspectors to remove seals and surveillance equipment to enable them to carry out tests at the reprocessing plant, which they say will not involve nuclear material,” the agency’s director, Mohamed ElBaradei, said in a speech to the group’s 35-country board of governors.

He confirmed that the agency’s inspectors had observed the restoration of some equipment that North Korea had previously removed during the dismantling process.

As i have said there are numerous debates about exactly why they are making these moves. The stated reason of the N. Koreans is clear,

"Now that the United States' true colors have been brought to light, we neither wish nor expect to be delisted as a state sponsor of terrorism,"' the Foreign Ministry said in a statement carried by the country's official news agency, KCNA.

The agreement that was reached centered on a trade where N. Korea would give up the nuclear program and in exchange they would be taken off the state sponsor of terrorism list. Unfortunately the contract was not negotiated as far as it should have been because there is dispute over the terms. The United States contends that the N Koreans get delisted only after it permits inspectors to verify claims about its production of nuclear weapons.

If you really want to blame bush you have to believe the N. Koreans here. They contend that the work they have done so far should be enough to get them off the list, the US wants a step further. If that extra step was not part of the original agreement than maybe the N Koreans have a complaint. However the face issues are rarely the real issues and there are two highly probable possibilities for why this the N Koreans are pursuing this course.

1. Internal Power Struggle due to the Health of Kim Jong-il.
2. Hard Line negotiation tactic to push for concessions.

It has been widely speculated that Kim has been sick since reports surfaced from south korea in mid august that he suffered a stroke. It is always a precarious situation when the dictator of a country is incapacitated or reduced in function. It sets off a lot of internal political maneuvering and could institute a fight for control of the countries direction, including issues such as the nuclear talks. Kim has not been seen in public for months adding to the uncertainty over the situation.

It is possible that a kim illness led to a struggle where a harder line group seized control of the direction and has pulled back a bit in the talks. Although everything regarding the illness is speculation and innuendo.

The second reason that the N. Koreans may be going down this path is that they feel, for whatever reason, that they may extract a better deal with this tactic. They may be thinking that Bush is willing to give in and avoid losing his one success or that the economic situation in the US has altered our ability to pressure them. It is also possible they feel they could get a better deal from a new president. There seems to be some support for this theory

Liu Jiangyong, a professor at Tsinghua University, said Pyongyang's latest move does not mean the Six-Party Talks have failed. Pyongyang has taken the step in response to the changing international situation, he said. As both the U.S. and Japan are electing their new leaders, Pyongyang has decided to take a hard-line stance, Liu said.

This does not at all mean that they will be successful as i do not believe that either an Obama-BIden or McCain-Palin administration would be willing to back off the position staked by Bush on this one. We are asking for the ability to verify what the N Koreans have asserted as far as their nuclear program and that is hardly an unreasonable demand. McCain and Obama have both addressed the question and McCain was adamant about needing the verification, the sticking point.

“If we are unable to fully verify the declaration submitted today and if I am not satisfied with the verification mechanisms developed, I would not support the easing of sanctions on North Korea,” Mr. McCain said.

Obama also seemed to have some requirements about verification.

“This is a step forward, and there will be many more steps to take in the days ahead. Critical questions remain unanswered. We still have not verified the accuracy of the North Korean declaration. We must confirm the full extent of North Korea’s past plutonium production. We must also confirm its uranium enrichment activities, and get answers to disturbing questions about its proliferation activities with other countries, including Syria.

So it does not appear that a better deal is in the works for the N. Koreans if this is indeed a simple negotiating ploy.

As to how fast the N. Koreans would be able to get the program back on line The Times reports that,

The experts also say that the move by North Korea is dangerous because the reprocessing of nuclear fuel from spent fuel rods can begin within months. It would take years, by contrast, for North Korea to produce fresh nuclear fuel if it decided to restart its nuclear reactor, which is also at the complex at Yongbyon.

This may in some conflict with a report issued by International Institute for Strategic Studies (IISS) that reportedNorth Korea can put its nuclear programme back on track in less than a year. It depends on whether or not we consider turning the reactor back on to be the point of restart or simply dealing with the fuel rods.

The situation bears watching. The deal with N. Kore remains as possibly the only success on GWB resume as president. If the deal and the talks fall apart he has nothing. The level of uncertainty makes it hard to tell if it his fault for letting the N. Koreans believe he is distracted enough to let them have what they want. I tend to think that they plan to wait it out for the next administration.

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When Both Sides Hate Something

Then there are two interpretations. One is that whatever it is is good because it favors neither side. Two is that whatever it is is so bad that everyone agrees it is terrible. Which of these do you think the bail out is?

Conservatives also see the light.

"After reviewing the administration's proposed bailout plan, I believe it is completely unacceptable," [South Carolina Sen. Jim] DeMint, chairman of the Senate Republican Steering Committee, said in the statement. "This plan does nothing to address the misguided government policies that created this mess and it could make matters much worse by socializing an entire sector of the U.S. economy."

"This plan fails to oversee or regulate the government failures that led to this crisis," DeMint added.

Treasury Secretary Henry Paulson has pressured congressional leaders to approve the bailout as soon as possible to prevent panic from spreading across the U.S. and world financial markets.

But Paulson’s ambitious schedule may become derailed because of growing opposition from conservative Republicans and rank-and-file Democrats.

"This plan will not only cause our nation to fall off the debt cliff, it could send the value of the dollar into a free-fall as investors around the world question our ability to repay our debts," said DeMint. "It's also very likely that this plan will extend the cycle of bailouts, encouraging other companies to behave in reckless ways that create the need for even more bailouts, triggering an endless run on our treasury."

This is exactly what responsible dems are saying. That conservatives should think this was actually supposed to be a given because of their ideology but was uncertain because of the corporate ties. If people really dont like this plan it should not get passed in its current form. here is hoping that the dems get a spine and issue no blank chack. maybe they can get a spine from the fiscal conservatives?

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Water Saftey is More Regulation We Dont Need.

Many people think conservatism has failed. This is not true. They have succeeded brilliantly. They have accomplished more than they ever thought possible. It happens to illustrate the point that one should be careful of what they wish for. They have truly drown government in the bath water. I bring you another example of such behavior, clean water.

Via the WaPo

The Environmental Protection Agency, under pressure from the White House and the Pentagon, is poised to rule as early as today that it will not set a drinking-water safety standard for perchlorate, a component of rocket fuel that has been linked to thyroid problems in pregnant women, newborns and young children across the nation.

According to a near-final document obtained by The Washington Post, the EPA's "preliminary regulatory determination" -- which was extensively edited by White House officials -- marks the final step in a six-year-old battle between career EPA scientists who advocate regulating the chemical and White House and Pentagon officials who oppose it. The document estimates that up to 16.6 million Americans are exposed to perchlorate at a level many scientists consider unsafe; independent researchers, using federal and state data, put the number at 20 million to 40 million.

I wish i could say i was shocked. One of the things that needs to be highlighted for people who want to vote republican is that the presidency is about more than simply foriegn policy or vetoing bills or even the supreme court. The president appoints the head of all of these agencies and regulators. These are the people who are supposed to make sure that the American people dont end up being poisoned by our drinking water or our toys. Republicans feel that this type of regulation is not required. So when you read something about them editing the science to make sure they dont have to regulate it makes sense.

"They have distorted the science to such an extent that they can justify not regulating" the chemical, said Robert Zoeller, a University of Massachusetts professor who specializes in thyroid hormone and brain development and has a copy of the EPA proposal. "Infants and children will continue to be damaged, and that damage is significant."

Zoeller said scientific studies have shown that a small reduction in thyroid function in infants can translate into a loss of IQ and an increase in behavioral and perception problems. "It's absolutely irreversible," he said. "Even small changes in thyroid functions early on have impacts on functioning through high school and even into people's 20s."

A reference to those studies in the EPA's proposal was deleted by OMB officials.

This distortion of the research is par for the course. Bush has an amazing list of anti-environmental actions he has taken as president. Read that list, it is truly amazing how bad he has been. Bush has systematically gutted the epa's ability to regulate environmental abuses. Part of his strategy to do this is to muddy the waters on the science that backs regulation or taking action in some way so that people are confused about what to do. When that fails he has even gone so far as to make sure the states cant regulate to standards higher than his. Here he talks about vetoing california's more stringent car pollution standards.

The question is how to have an effective strategy. Is it more effective to let each state make a decision as to how to proceed in curbing greenhouse gases? Or is it more effective to have a national strategy? Director Johnson made a decision based upon the fact that we passed a piece of legislation that enables us to have a national strategy

Here is the why bush wants to make sure we have a national strategy on these types of things.

Federal, state and independent scientists have differed over the years as to what represents an acceptable dose of perchlorate in drinking water, though all have set the bar higher than the non-mandatory level in the EPA's new proposal. In January 2002, the EPA issued a draft risk assessment finding that 1 part per billion should be considered safe; in March 2006, the Massachusetts Department of Environmental Protection set a maximum contaminant level of 2 ppb; last year, California adopted a standard of 6 ppb.

See how in efficient that is? Those states are setting their standard too high. That is not in keeping with the idea of an efficient national strategy to avoid regulating these chemicals and to make sure the defense department does not have to pay for any clean up. That's what makes a national strategy so efficient, the federal government can assert its power to crush people trying to fix this problem.

Barbara Boxer (D-Calif.),

"Perchlorate has been a serious, persistent and widespread problem which threatens the health of our families, especially our children," Boxer said. "For the Bush EPA to walk away from this problem and shrug off this danger is, in my view, unforgivable and immoral."

You can take that quote and put a blank where EPA is and use it over and over again. "Why?", you might ask. Why would they want to put millions of babies and pregnant women and children at risk. What could be worth the damage to so many american lives?

Some perchlorate occurs naturally, but most perchlorate contamination in U.S. drinking water stems from improper disposal by rocket test sites, military bases and chemical plants. A nationwide cleanup could cost hundreds of millions, if not billions, of dollars, and several defense contractors have threatened to sue the Defense Department to help pay for it if one is required.

Yes, they dont want to have to pay for the clean up. They would rather put peoples lives at risk rather than shell out a couple billion dollars. Its not like a couple billion is very much, after all we are trying to give 700 billion to help out bankers. Preventing safe drinking water so that we dont have to pay for the clean up is just one more part of this war on the people bush has waged.

The government is not of the people, for the people or by the people. The government is against the people. The bush government will actively work against the people of this country when given any opportunity. Whether it is on clean water or building codes put in place after 9/11, or POW's recovering money from law suits against Iraq the government is spending your tax dollars against you.

This type of stuff happens in every bush agency. He has destroyed the government. Now we have a banking crisis where competent government is needed and we cant get it. We cant trust our government to work for us under republicans. We cant even trust the water we drink.

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Bail Out...Here Comes the Cave Again?

$700 billion. $.7 Trillion. It is a lot of money. It might be a little early but i suspect that this financial crisis will come to be one of the most important events in any presidential election. It will also have a major impact on America and the economy for the foreseeable future. Exactly how this bail out goes down will be crucial for everyone. From reading the reaction of people i trust around the net the current proposal looks like a major fail. Right now the proposal and its possible consequences are being reviewed in democratic offices and i cant think they like what they see.

There are several issues with the proposal in its current form. The biggest issue is that we are not getting anything for this. I mean that the tax payers are shouldering all the burden and receiving no potential upside. Krugman explains,

Here’s the thing: historically, financial system rescues have involved seizing the troubled institutions and guaranteeing their debts; only after that did the government try to repackage and sell their assets. The feds took over S&Ls first, protecting their depositors, then transferred their bad assets to the RTC. The Swedes took over troubled banks, again protecting their depositors, before transferring their assets to their equivalent institutions.

The Treasury plan, by contrast, looks like an attempt to restore confidence in the financial system — that is, convince creditors of troubled institutions that everything’s OK — simply by buying assets off these institutions. This will only work if the prices Treasury pays are much higher than current market prices; that, in turn, can only be true either if this is mainly a liquidity problem — which seems doubtful — or if Treasury is going to be paying a huge premium, in effect throwing taxpayers’ money at the financial world.

And there’s no quid pro quo here — nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving.

Do not reward the undeserving. That is the GOP line on every social program in existence. Cant help people who might not deserve it. With them, somehow it always ends up that no one deserves it. Now the roles are reversed as it is responsible liberals who want to make sure that the people who dont deserve it, the people in charge of the companies, are not rewarded by their massive failure.

Krugman is not the only economist who looks at this thing and gets major warning bells. Those bells are going off everywhere. Three other articles are available that think this is not the right way to go. One in the WaPo by Sebastian Mallaby, one by Douglas W. Elmendorf at the Brookings Institute, and one by Luigi Zingales and Robert C. Mc Cormack of the University of Chicago each are hounding on the point that this deal makes no sense for the tax payers.

The articles all say that we need to do this some way where the people who created this mess are not getting off free. Rajan and Zuniga,

The major players in the financial sector do not like it. It is much more appealing for the financial industry to be bailed out at taxpayers’ expense than to bear their share of pain. Forcing a debt-for-equity swap or a debt forgiveness would be no greater a violation of private property rights than a massive bailout, but it faces much stronger political opposition. The appeal of the Paulson solution is that it taxes the many and benefits the few. Since the many (we, the taxpayers) are dispersed, we cannot put up a good fight in Capitol Hill; while the financial industry is well represented at all the levels. It is enough to say that for 6 of the last 13 years, the Secretary of Treasury was a Goldman Sachs alumnus. But, as financial experts, this silence is also our responsibility. Just as it is difficult to find a doctor willing to testify against another doctor in a malpractice suit, no matter how egregious the case, finance experts in both political parties are too friendly to the industry they study and work in.

The decisions that will be made this weekend matter not just to the prospects of the U.S. economy in the year to come; they will shape the type of capitalism we will live in for the next fifty years. Do we want to live in a system where profits are private, but losses are socialized? Where taxpayer money is used to prop up failed firms? Or do we want to live in a system where people are held responsible for their decisions, where imprudent behavior is penalized and prudent behavior rewarded? For somebody like me who believes strongly in the free market system, the most serious risk of the current situation is that the interest of few financiers will undermine the fundamental workings of the capitalist system. The time has come to save capitalism from the capitalists.

That encapsulates it right there. These are people in the know and they think this deal sucks for america. I cant comment on how well their proposal to, "cram down a restructuring plan on creditors, where part of the debt is forgiven in exchange for some equity or some warrants". would work but it certainly makes more sense to a layman that the treasury plan does. The Elmendorf proposal is similar in that it focuses on a debt for equity swap as opposed to a straight buying of the debt.

An alternative to the government buying certain types of debt from financial institutions is for the government to make equity investments in a wide cross-section of such institutions. For concreteness, suppose that the government offered to make an equity investment in every firm regulated by a federal or state banking regulator equal to 10 percent of the market value of the company as of September 1st in exchange for a 10 percent equity stake in the company. (The 10 percent figure is illustrative. As with the first approach, a judgment about the appropriate total amount of government funds would need to be made.)

With this approach, the government would not need to determine the appropriate prices and quantities of individual mortgage-related securities, it would not be providing a greater reward to companies that have made the worst investments, and it would gain the opportunity for taxpayers to receive a higher return if the financial system recovers more strongly.

These proposals deal with the problem of the proposal of buying up the debts on its merits as an economic idea. They dont even address the other big problem that has been exposed with the proposal, unlimited power to the treasury secretary. Matt Yglesias summed it up,

To give the regulatory authorities who failed to prevent this crisis carte blanche to hand out money to the financial institutions who caused the crisis while doing nothing for ordinary people would be outrageous.

So the basic situation is that we have Bush and the GOP including John McCain who wants to create an institution to buy up the bad debt from the banks in just they way the economists oppose on one side. On the other side we have the dems and Obama and the economists. Obama has yet to make a strong statement for or against the proposal. Nancy Pelosi is on record with the insightful,

“Democrats will work with the administration to ensure that our response to events in the financial markets is swift, but we must insulate Main Street from Wall Street and keep people in their homes.”

Ms. Pelosi said Democrats would also insist on “enacting an economic recovery package that creates jobs and returns growth to our economy.”

I wrote a couple days ago that this occasion was the textbook occasion for the implementation of the shock doctrine. Either the dems could do it putting in place a policy that would reign in the excess and make sure that if the tax payers were asked to bear this burden they at least had the potential for some upside. I think this is still true. Opinions on the plan are in flux and the public has not been swayed one way or another on the the plan. Unfortunately the dems are now a step behind because the base proposal is gop style shock doctrine.

The public is not going to wait long for action on this thing. They understand that this could be very very bad and action needs to happen quickly. This puts the dems in a bad spot because the GOP will be taking every opportunity to claim they are playing politics with the relief effort. The dems have talked about taking on a lot of pork projects but imo that is a loser. fighting this battle on the merits of the proposal will be hard enough without handing the gop a weapon to use against the bill.

A fight is being set up here because the dems are going to have to work really hard to get this proposal to be anything other than a give away to the bankers. This gets me pretty worried because well, the dems have no spine. Even Obama has not shown a marked willingness to lead a battle on anything like this. He was not there when we needed him on fisa. Maybe this will turn out different.

What we really need is a concerted effort by everyone we can get to fight this an get something for the taxpayers. We need to get oversight, the elimination of golden parachutes and ridiculous ceo pay. this deal cannot stand as is.



Contact Your Senator
and your rep
Try a letter to the editor

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Honeymoon Baghdad

It is pretty surreal. You read stories about what is going on in Iraq and you have to just shake your head. This is the case in point. People are getting blown up in this country every day. Ethnic cleansing is not some rare phenomenon but an everyday practice. So when i read that someone wants to build a massive resort for tourists in the greenzone, i find it ridiculous.

Mr. Yakobi, the chairman of Iraq’s Board of Tourism, is charged with attracting foreign visitors to his beleaguered country. Jazirat A’aras, an island in the Tigris that is just across from the fortified Green Zone and the new American Embassy, is central to his plans. He is seeking investors who might want to spend $2.5 billion to $4.5 billion to build on the island, which was a honeymoon resort before it was bombed and looted in 2003 and then taken over by the Americans for use as a construction yard for the new embassy.

As Mr. Yakobi and his colleagues envision it, the development would include “a six-star hotel,” spas, a yacht club, an amusement park, a shopping center and luxury villas, built in the architectural style of the Ottoman Empire-era buildings in Old Baghdad. The complex would also have an 18-hole golf course, the “Tigris Woods Golf and Country Club,” as it is called in preliminary sketches prepared by the Tourism Board.

I am surprised Iraq even has a board of tourism. There are so many problems with this idea that i would be shocked if someone invests in it. How are people going to get there? Are we even allowed to book trips to Iraq? I tried plugging it into orbitz but they dont carry flights to baghdad. So not only is getting there an issue but there is always the threat of death upon arrival.

In fact, the State Department strongly warns Americans against travel to Iraq. “Despite recent security improvements, Iraq remains dangerous, volatile and unpredictable,” its Web site says, noting that bombings, kidnappings and mortar fire are common and that “such attacks can occur at any time.”

Sounds like a great vacation destination to me. You cant get around with out your own private security team and other than this still non-existant resort there is not a whole lot to see in terms of cultural sights that remain standing or available to visit.

Before the American invasion in 2003, Westerners wandering the capital with cameras were not an uncommon sight. A Bradt travel guide to Iraq published in 2002 noted that “Iraqis tend to be very friendly, hospitable people, but most will not discuss politics or controversial topics.”

It suggests, among other expeditions, a day trip from Baghdad to see the shrine at Samarra, which was bombed in 2006, setting off a wave of sectarian violence that brought Iraq to the brink of civil war; a visit to the Christian churches in Mosul, now emptied of most of their worshipers; and a stroll down the streets of the oil-rich city of Kirkuk, currently at the center of a struggle among Arabs, Kurds, Turkmens and other groups.

I have strong reservations about anyone investing in the tourist industry of iraq at this point in time. The people we have there want to come home. What will they think of next...

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Al Qaeda in the Islamic Maghreb

Al Qaeda in the Islamic Maghreb. Never herd of them? That is not surprising as their existence is probably something that the Bush administration would rather not talk about. Al Qaeda in the Islamic Maghreb (AQIM) is the Al Queda linked insurgent group that is operating in northern Africa. Their story is an important one because it addresses the apparent trend in intentional terrorism of franchising. John McCain would like people to believe that Iraq is the central front on a battle against the terrorists. This is becoming an even more dangerous belief to hold as evidence mounts that "the fly paper theory" he espouses is hopelessly flawed. Instead Iraq acts as a training and testing ground. Want to test something against a traditional military? Spend some time in Iraq testing and then go home to carry it out.

Think of Al Qeda as the parent corporation. Instead of profits their goal is asserting their brand of Islam over any one they can. To do this they crate franchises much like McDonalds or KFC might. They lend their name and their knowledge to local insurgent operators who wish to carry out attacks against government or American targets. Al Qaeda in the Islamic Maghreb is one of those franchises. Their story was covered in a July edition of the NYT.

Their nationalist battle against the Algerian military was faltering. “We didn’t have enough weapons,” recalled a former militant lieutenant, Mourad Khettab, 34. “The people didn’t want to join. And money, we didn’t have enough money.”

Then the leader of the group, a university mathematics graduate named Abdelmalek Droukdal, sent a secret message to Iraq in the fall of 2004. The recipient was Abu Musab al-Zarqawi, the leader of Al Qaeda in Mesopotamia, and the two men on opposite ends of the Arab world engaged in what one firsthand observer describes as a corporate merger.

Today, as Islamist violence wanes in some parts of the world, the Algerian militants — renamed Al Qaeda in the Islamic Maghreb — have grown into one of the most potent Osama bin Laden affiliates, reinvigorated with fresh recruits and a zeal for Western targets.

Just from this three paragraph quote several things are made clear. The first is that clearly fighting in Iraq did not reduce the potential for terrorists it increased it. AQI did not exist prior to our invasion and so it would not have been there in 2004 to help revive the nationalist insurgency in Algeria.

The Times makes clear that this insurgency was dying. There were a number of factors that were working against it including a lack of legitimacy among the Muslim clerics in Algeria. The government had almost defeated them. It was AQI who rescued them enabling them to recruit and to raise money. Now they are in a much stronger position,

Their gunfights with Algerian forces have evolved into suicide truck bombings of iconic sites like the United Nations offices in Algiers. They have kidnapped and killed European tourists as their reach expands throughout northern Africa.

Last month, they capped a string of attacks with an operation that evoked the horrors of Iraq: a pair of bombs outside a train station east of Algiers, the second one timed to hit emergency responders. A French engineer and his driver were killed by the first bomb; the second one failed to explode.

What is also apparent is that although these groups carry the name and the blessing of Al Queda they are much more autonomous. Killing the number three man under Bin Laden will do nothing to affect these groups. Body counts are not the way to measure these battles. Killing one person does nothing if you are not fighting the underlying causes of recruitment. This is apparent in the Algerian battle with AQIM.

The Algerian government killed or captured an estimated 1,100 militants last year — nearly double the number in 2006, according to the State Department. But the group has begun using sophisticated recruitment videos to replenish its ranks with a new generation of youth that the State Department says is “more hard-line.”

The AQ franchising is also occuring because of the way that the US conducts its war on terror. We have been lumping different terrorist and insurgent groups together. Part of the political strategy to gain support at home was to make it seem like they were all part of the same organization. This has apparently been a self fulfilling prophecy. As other groups felt the pressure there was a bandwagoning effect.

In his comments to The Times, Mr. Droukdal confirmed that Mr. Zarqawi played a “pivotal role” in the merger, along with other intermediaries. Mr. Droukdal explained his wrath toward the United States, saying: “We found ourselves on the blacklist of the U.S. administration, tagged with terrorism. Then we found America building military bases in the south of our country, and conducting military exercises, and plundering our oil and planning to get our gas.”

In the US versus THEM strategy where distinctions are erased between insurgents, nationalists, islamacists, and terrorists those groups are going to be pushed together to combat the US. We have homogenized them.

The other thing to understand about this group is that they are not unique. Their story is important because they are representative of the way AQ works now. The franchises are taking the tactics learned from the fighting in Iraq and are applying them elsewhere.

Led by Mr. Droukdal, 38, an explosives expert who joined the insurgency 12 years ago, the group has shifted to tactics “successfully employed by insurgents and terrorists in Iraq and Afghanistan,” according to the State Department.

In adopting these Qaeda-style tactics, it staged at least eight suicide bombings with vehicles last year, including two sets of attacks in central Algiers on the 11th of April and December, dates that now fill Algerians with dread. It dispatched the country’s first individual suicide bomber, who singled out President Abdelaziz Bouteflika of Algeria.

The group has also stepped up its use of remote-controlled roadside bombs, and there are increasingly deadly clashes with militias armed by the government to fight the militants.

The most recent evidence of this was just the other day with the embassy bombings in Yemen.

The use of two vehicle bombs — one to breach the perimeter of a compound, a second to drive inside and explode — is a tactic used by the Sunni insurgent group al-Qaeda in Iraq. [...]

He said a new, less-compromising generation of al-Qaeda leaders emerged, many of them moving into action after escaping from a Yemeni prison that year, he said.[...]

The Yemen bombings were just the latest high profile attack by a group trained and tested in Iraq. We have seen similar groups of Iraq trained fighters linked to AQ in Morocco, Jordan, Somalia and Afghanistan.

So what we have now really is a global war on terror and it is of our own making. Had we simply stayed in Afghanistan and finished the job there we would not have seen this Iraq blow back. Iraq is the central training ground for insurgents. The entire idea that we can gather all the terrorists in one place and kill them all was stupid. Terrorists can be trained and recruited and there numbers are not fixed.

While it is possible for the terrorists to cause a backlash and to turn the indigenous population against them i would not count on this being a frequent occurrence after the lesson learned in Iraq. We are seeing in Afghanistan that the neo-Taliban is able to shift the blame for the deaths of civilians onto the US by getting us to retaliate while they slipped away. It is like any sport, the second person is always called for the foul.

As a result of our actions in Iraq we have seen an evolution and increased sophistication in the way AQ works. They have become a bad infection that survived the first course of treatment and came out resistant. To combat it we need a new comprehensive strategy run by people not beholden to neocon ideas about the world. I doubt this will come from McCain. Ask yourself, given all this does the surge vindicate McCain's decision to launch the war?

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Part of Obama Strategy Demonstrably Wrong

Occasionally i like to do posts that deal with the Obama campaigns over all strategy for this election. Usually this focuses on the targeted ground game. This is an exceptionally important aspect of the election come voting time but until then the effects of this are speculative. The Obama campaign is on record as not caring about the national tracking polls or even about the media cycles. Back on August 28, the entire election strategy was laid out by David Plouffe.

Plouffe spent about the first 15 minutes talking about his field operation, and returned to the subject several times over the remaining 45 or so minutes. He said the campaign is focused on 18 states. They're especially concentrating on people he called "true undecideds" – people who aren't leaning one way or the other. The demographics of the true undecideds are favourable, he says: "We like where they are and who they are."

...He framed the contest as being about field operation vs. news cycle. "Their campaign," he said, referring to McCain's, "is all about winning the news cycle." He said his campaign's constant research shows that voters listen more to people in their communities they know and trust than they listen to attack ads or blowhards on television.

The crux of this is that the media and the news cycle are not particularly important. I think that the events of the last week have shown this to be demonstrably false. There are two pieces of evidence for this. One is the coverage of the economy and the rise of the Obama poll numbers, two is the rapid decline of sarah palin's favorables.

After the convention bounce and sarah palin selection McCain was riding high. There were many panicky stories popping up about how Obama was blowing it. McCain seemed to be winning every media cycle and he was holding his lead. The coverage was almost exclusively about Sarah Palin and McCain. The on Monday we saw a big change as the financial sector began to take some major hits with the collapse of Lehman and Merril and the Bankruptcy of AIG. These were big events and they changed the news cycle entirely.

The huge switch in the narrative of the campaign provided a big boost to Obama. As 538 revealed with updated polling.

Let's not equivocate too much here. Over the course of the past several days, there has been a rather dramatic shift in this election toward Barack Obama. Our trendline estimate, which is engineered to be fairly conservative, registers the swing as equaling roughly 4 points over the course of the past week.

Changes of this velocity are unusual outside of the convention periods and the debates, especially in close elections. It took John McCain about 60 days and tens of millions of advertising dollars to whittle Obama's lead down from roughly 5 points at its peak in early June, to the 1-point lead that Obama held heading into the conventions. Obama has swing the numbers that much in barely a week.

Of course, we never really were entirely outside of gravitational field of the conventions, and probably at least half of this bounceback for Obama is merely the more-or-less inevitable consequence of McCain's convention bounce ending. But the fact is that Obama is in a stronger position now than he was immediately before the conventions. We now have him winning the election 71.5 percent of the time, which is about as high as that number has been all year.

The election has continued to move towards Obama. Of course some of this reversal had to do with the typical deflation of a convention bounce. Usually bounces represent spikes in support that gradually fade over a period of several weeks. McCain's evaporated at a rate faster than originally predicted and Obama has come back almost to the high point of his convention. The reason for this must, in some way, e tied to the dramatic shift in media coverage. Ground game and word of mouth is just not going to produce this type of acceleration. It was media pressure hyping the crisis and the fact Obama was winning that coverage that helped drive the polls.

The second piece of evidence that demonstrates that the media cycle is important and not something that should be ignored is the precipitous decline of Sarah Palin's numbers.

Gov. Sarah Palin’s favorable/unfavorable ratings have suffered a stunning 21 point collapse in just one week, according to Research 2000 polling. Last week, 52% approved and 35% disapproved of the GOP vice presidential nominee (+17 net). This week, 42% approved and 46% disapprove (-4 net).

This has been driven mostly by media coverage of her positions and by her faied interview with charlie gibson. It has not been obama's doing but it does revel the power of the national media and the news cycle. maybe palin was always going to come down from such high favorable unfavorable numbers but this is such a steep slope that it is hard to imagine it coming without intense media exposure. If Palin was not losing the media cycle day after day then she might not be seeing her unfavorables eclipse her favorables.

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