Yeah, that figures - thx for pointing that out J! If only we could be like that at work. We'll boss, I'll try to get this project done by that deadline, but if I don't, we can just extend it and get more budget, right?
What did you think of Bush's speech and the recent bailout deal? I thought it was funny how Bush, while he was giving a brief timeline of how we got to this point, failed to mention that the weak US dollar (partially due to artificially low interests rates maintained by the Fed) also contributed to the massive spending spree by foreign banks. And he never really justified to the country why he needs $700B, and where the hell that number came from.
Of course Wall Street is jumping for joy over the news, but like every economist worth a damn out there is fretting, so that should tell us something.
Krugman: http://krugman.blogs.nytimes.com/2008/09/21/thinking-the-bailout-through/
http://www.statesman.com/business/content/business/stories/other/09/23/0923bailoutsider.html
(but there are also plenty of other news links in favor of the bailout)
Congress acts all skeptical and critical, especially because their offices are being flooded with angry constituents protesting the bailout. They might express their displeasure in statements to the press, but only after a week of limited debate they come up with a bill that is fairly similar to Bush's original proposal? Yes they added on pay limits for execs and some oversight, but the "bailout" part is unchanged. Everyone keeps saying that this is a bad idea, but the alternative is worse. Maybe that's true, but it's pure political show again. Wall Street companies give millions each election cycle to both parties' candidates, and now they're calling in a mondo favor. Same goes for the presidential hopefuls, where Lehman/Lynch employees and there families have given $10M to Obama and $7M to McCain so far (1st link below, but I guess all that money didn't save Lehman from its sins anyway). And I don't think that they're just generous, patriotic citizens. This should be a bigger deal to them, because the bailout will mean they have hundreds of billions of public funds less to implement their lofty proposals for health care reform, energy/environment, defense, and education (2nd link).
http://news.yahoo.com/s/bloomberg/20080916/pl_bloomberg/ambsgo09sxvo
http://news.yahoo.com/s/bloomberg/20080917/pl_bloomberg/a8zvtv0iunks
But I hate it how the Congressmen act all outraged that the "humble, honest taxpayer" has to mop up rich and/or irresponsible people's mistakes, but when the chips are down, they let it happen without much resistance at all. As you said about auto emissions, they try to have it both ways. They can tell their constituents that they protested and voiced the people's concerns, so if the bailout fails, then they blame lame duck Bush for forcing it through in the twilight of his presidency, using the panic over growing economic calamity to justify hasty action. No mention of their abandonment of their legislative check and balance duty of course. And if the bailout succeeds, then they take the credit for "saving the economy" and helping Main Street as well as Wall Street.
If Congress had real concerns with this proposal, and frankly there are many details yet to be ironed out, then what is the hurry really? 3 more months of falling housing prices and maybe another bank or two going under won't impact us much more than our current shitty predicament (we'd be dropping from a -9 to -10, big whoop). And it's not like by passing this bill tomorrow, suddenly the economy will rebound and credit will flow like the mighty Mississippi. This will really become President 44's problem. Lawmakers can think things through over the holidays, do more research, and present a better proposal to Congress and the president by then. The economy and markets will get a Christmas shopping bounce as always to tide us over, anyway.
Thursday, September 25, 2008
Wednesday, September 24, 2008
Congress earns its sub-20% approval rating
http://news.yahoo.com/s/ap/20080924/ap_on_go_co/congress_spending_10
From the AP:
The legislation came together in a remarkably secret process that concentrated decision-making power in the hands of a few lawmakers. They include House Appropriations Committee Chairman David Obey, D-Wis., and [House Speaker Nancy] Pelosi.
Republicans blasted the process by which the measure came before the House. Lawmakers had just a few hours to scrutinize the 357-page measure — along with 752 pages of accompanying explanations and tables of previously secret pet projects — before the vote. Debate lasted less than one hour.
The rush also ran counter to Democratic promises for more open disclosure of billions of dollars worth of home-state pet projects sought by most lawmakers.
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Pelosi and Co. played us for fools in 2006 when they promised to make Congressional spending more transparent. Ooh, they're more honest than the corrupt GOP because they *disclose* their pork now. Not to the public of course, but Congressmen had a few hours to read over 1,000+ pages (they probably didn't) and an hour of debate before passing the $630B spending bill 370-58. Talk about moral hazard, who cares if it's taxpayer dollars!?! And this bill doesn't help Main Street very much: some aid for flood/storm victims and heating subsidies, as well as insignificant increases to unemployment assistance/food stamps. During America's worst economic crisis in decades, they pushed through this new spending bill under the radar with 2,322 pet projects totaling $6.6B. We wouldn't even know about all this if it wasn't for Taxpayers for Common Sense (http://www.taxpayer.net/). Actually the timing is fortuitous for them, because everyone is buzzing about the Wall Street rescue plan, so the media might not pay much attention to this (well Congress adjourns next week ahead of the election anyway, so they were in a hurry). And if people were discussing the bill, it was probably regarding the lifting of the offshore oil drilling moratorium portion, even though that won't affect us until 2011 at the earliest.
Bush had vowed to veto such pork-laden bills, but now he's a lame duck and Congress was crafty enough to attach the earmarks to a defense spending bill. The Bushies got a record $488B for the Pentagon, including funding for 20 more futuristic F-22 Raptor fighter planes ABOVE the number requested by the Defense Dept. (which is probably sizeable). Each one costs $138M. That's like me declaring to the IRS that I am due $5,000 reimbursement on my 2007 tax return, and they decide to give me $10,000. Why? During this serious economy crisis, why doesn't the Pentagon have to scale back like the rest of us?
What, our current aircraft aren't killing enough Muslims? Has Al Qaeda upgraded so much that our present fleet is obsolete? The F-22 project is a Boeing/Lockheed boondoggle that has wasted over $60B since 1990. It's almost as bad as the missile shield. I know it pales in comparison to the proposed $700B financial bailout, but at least with the bailout Uncle Sam gets the rights to crappy mortgage securities that *might* turn profitable some day (they did in the case of the Japanese banking crash and bailout in 2002-2006, but not to say I'm a fan of the "Paulson God Mode" plan). Well, I guess we're hoping to sell the fighters to Israel and NATO allies some day, but most of the proceeds will probably go to the defense contractors.
And somehow the auto lobbyists conned Washington into securing $25B in low-interest-loans (read: free money) for Detroit, to give them yet more time to retool their anachronistic business models for the reality of $4 gas. Ordinary citizens with good credit can't get a mortgage to save their life, but Detroit gets $25B to research what everyone else already knows!?! Uh, it's not like this came as a surprise, and look what the competition has done. European companies developed more efficient diesel and constant-variable transmission, and Japan is pumping out new 30-mpg partial-zero-emission family sedans and hybrids every year. But Detroit gives us the Escalade Hybrid, new minivans (nothing mini about them though), and Ford Flex (20 MPG highway - whoopee!). We keep subsidizing these inept morons, yet funding for scientific research, college grants, disability assistance, and various social servies keeps shrinking?
Interesting link about the previous financial bailout in Japan, and it's near success (if it wasn't for the current housing bust):
http://news.bbc.co.uk/2/hi/business/7623779.stm
From the AP:
The legislation came together in a remarkably secret process that concentrated decision-making power in the hands of a few lawmakers. They include House Appropriations Committee Chairman David Obey, D-Wis., and [House Speaker Nancy] Pelosi.
Republicans blasted the process by which the measure came before the House. Lawmakers had just a few hours to scrutinize the 357-page measure — along with 752 pages of accompanying explanations and tables of previously secret pet projects — before the vote. Debate lasted less than one hour.
The rush also ran counter to Democratic promises for more open disclosure of billions of dollars worth of home-state pet projects sought by most lawmakers.
-------
Pelosi and Co. played us for fools in 2006 when they promised to make Congressional spending more transparent. Ooh, they're more honest than the corrupt GOP because they *disclose* their pork now. Not to the public of course, but Congressmen had a few hours to read over 1,000+ pages (they probably didn't) and an hour of debate before passing the $630B spending bill 370-58. Talk about moral hazard, who cares if it's taxpayer dollars!?! And this bill doesn't help Main Street very much: some aid for flood/storm victims and heating subsidies, as well as insignificant increases to unemployment assistance/food stamps. During America's worst economic crisis in decades, they pushed through this new spending bill under the radar with 2,322 pet projects totaling $6.6B. We wouldn't even know about all this if it wasn't for Taxpayers for Common Sense (http://www.taxpayer.net/). Actually the timing is fortuitous for them, because everyone is buzzing about the Wall Street rescue plan, so the media might not pay much attention to this (well Congress adjourns next week ahead of the election anyway, so they were in a hurry). And if people were discussing the bill, it was probably regarding the lifting of the offshore oil drilling moratorium portion, even though that won't affect us until 2011 at the earliest.
Bush had vowed to veto such pork-laden bills, but now he's a lame duck and Congress was crafty enough to attach the earmarks to a defense spending bill. The Bushies got a record $488B for the Pentagon, including funding for 20 more futuristic F-22 Raptor fighter planes ABOVE the number requested by the Defense Dept. (which is probably sizeable). Each one costs $138M. That's like me declaring to the IRS that I am due $5,000 reimbursement on my 2007 tax return, and they decide to give me $10,000. Why? During this serious economy crisis, why doesn't the Pentagon have to scale back like the rest of us?
What, our current aircraft aren't killing enough Muslims? Has Al Qaeda upgraded so much that our present fleet is obsolete? The F-22 project is a Boeing/Lockheed boondoggle that has wasted over $60B since 1990. It's almost as bad as the missile shield. I know it pales in comparison to the proposed $700B financial bailout, but at least with the bailout Uncle Sam gets the rights to crappy mortgage securities that *might* turn profitable some day (they did in the case of the Japanese banking crash and bailout in 2002-2006, but not to say I'm a fan of the "Paulson God Mode" plan). Well, I guess we're hoping to sell the fighters to Israel and NATO allies some day, but most of the proceeds will probably go to the defense contractors.
And somehow the auto lobbyists conned Washington into securing $25B in low-interest-loans (read: free money) for Detroit, to give them yet more time to retool their anachronistic business models for the reality of $4 gas. Ordinary citizens with good credit can't get a mortgage to save their life, but Detroit gets $25B to research what everyone else already knows!?! Uh, it's not like this came as a surprise, and look what the competition has done. European companies developed more efficient diesel and constant-variable transmission, and Japan is pumping out new 30-mpg partial-zero-emission family sedans and hybrids every year. But Detroit gives us the Escalade Hybrid, new minivans (nothing mini about them though), and Ford Flex (20 MPG highway - whoopee!). We keep subsidizing these inept morons, yet funding for scientific research, college grants, disability assistance, and various social servies keeps shrinking?
Interesting link about the previous financial bailout in Japan, and it's near success (if it wasn't for the current housing bust):
http://news.bbc.co.uk/2/hi/business/7623779.stm
Tuesday, September 23, 2008
The financial crisis and bailout
WHEN DOES A COMPANY QUALIFY FOR A BAILOUT?
http://www.newsweek.com/id/158615
Wall Street is consumed with the subject of bailouts. As analysts chewed over the implications of the government's decision to assume the debt of ailing mortgage giants Fannie Mae and Freddie Mac, traders (and their real-estate brokers) wondered whether erstwhile titans Lehman Brothers and Washington Mutual would be next in line for government assistance. Meanwhile, lobbyists for the big three automakers were refining their pitches for $25 billion in loan guarantees. It is sure to be another long weekend for Treasury Secretary Henry Paulson.
Bailouts—the government's stepping in and providing financial assistance or credit guarantees to private-sector companies—are a highly confusing subject. As policymakers hasten to save some companies from the ravages of creative destruction, they leave others to fail. Some 5,644 businesses went bankrupt in July, up 80 percent from July 2007. So are there some objective criteria we can use to determine whether the government will toss a lifeline to a particular company?
It's a truism that the bigger you are, and the more you owe, the more forbearance you're likely to get. In 1984, when Continential Illinois, whose reckless lending practices had catapulted it into the ranks of the nation's 10 largest banks, ran into trouble, the government bought some of its loans and provided extraordinary compensation to depositors. "We have a new kind of bank," complained Fernand St. Germain, a congressman from Rhode Island, "It is called too big to fail." (St. Germain, who shepherded the bill that deregulated the savings-and-loan industry, would be blamed in part for the record-setting bailout of S&Ls later that decade).
But these days, size alone doesn't matter. Earlier this decade, Enron, WorldCom, and Global Crossing, three gargantuan companies, went bust while the government looked the other way. Of course, when the aforementioned companies filed for Chapter 11, nobody lost electricity or was unable to make a phone call. "But if the government envisions that a failure will have a serious adverse consequence on the economy, it's going to step in," said Benton Gup, a professor of banking at the University of Alabama and editor of the collection Too Big To Fail: Policies and Practices in Government Bailouts.
For that reason, certain types of financial institutions are much more likely to be helped than others. A bank that lends to people with dodgy credit in California doesn't pose much of a threat to the Davos crowd. But financial intermediaries like Bear Stearns and the FM twins function like the heart of the global financial system. If they go into cardiac arrest, the whole body is in danger. Since Bear Stearns was a counterparty to (and guarantor of) trades and financial arrangements with the world's major financial players, its failure would have triggered a cascade of losses. In the same vein, huge quantities of the $5.4 trillion in debt issued and insured by Fannie Mae and Freddie Mac sit on the balance sheets of central banks and financial institutions around the globe. For the U.S. government simply to let this debt—which it had been implicitly backing for decades—go bad would have meant inflicting severe damage on America's most significant diplomatic and trading partners. Fannie Mae wasn't too big to fail, one Wall Street wag told me this week. It was too Chinese to fail.
To be eligible for a bailout, firms must also demonstrate a particular genius for screwing up. Before it went bust, Bear Stearns had a monstrous $33 of debt for every dollar of capital, and hedge funds it owned destroyed hundreds of millions of dollars of clients' cash. It got a bailout. Lehman Brothers, which has taken painful measures to reduce its risk, is perversely less likely to get direct government help. "The worst Lehman can do is destroy the firm," said Barry Ritholtz, CEO of Wall Street research firm FusionIQ and author of the forthcoming Bailout Nation. "Bear Stearns, on the other hand, set up the firm so that if they screwed up, they could threaten the entire financial system." That may explain why Treasury Secretary Paulson has thus far resisted providing federal succor to Lehman.
Finally, companies seeking the tender mercies of the taxpayer must have good timing. Nearly all the great corporate bailouts of modern times have come in election years. Congress enacted loan guarantees for Chrysler in January 1980, ensuring that a company that employed about 130,000 people, many of them in the swing state of Michigan, would not go bust on the eve of primary season. So, if your company is in trouble, what should you do? Double down. Establish links to other firms. Export your products with abandon. And hustle. There are only seven more weeks until the election.
PERSONAL NARRATIVES AND EMOTIONS IN ELECTION PSYCHOLOGY
http://www.newsweek.com/id/158749
Narratives have been used to attract voters at least since Lincoln's campaign managers cast him as the rugged rail-splitter from the country's frontier, not the prosperous railroad lawyer and sophisticated writer he was, notes historian Michael Beschloss: voters are drawn to someone they can relate to, and the way to make that happen is by offering them stories. (The human brain is wired so that we can follow a chain of events that have people doing things in chronological order more easily than we can follow abstractions.) But the power of the narrative has grown as party identification has weakened—putting more voters in play—and as the culture has changed. Television has made voters expect to, and think they can, "see into people's souls to take their measure," says Beschloss. To do that, "they need clues," and there are few clues so potent as the challenges a person has faced and how he or she has met them. "The feeling that we need to know who these people are has become so enormous that a good part of Sarah Palin's appeal is her life history, the choices she made, things that let voters form a bond with her," says Beschloss.
The outsized power of the personal narrative today compared with even a generation ago (in 1980, Ronald Reagan ran not on personal narrative, but on hope and the promise of change) reflects something that has become almost a cliché in political analysis—namely, that emotions, more than a dispassionate and rational analysis of candidates' records and positions, determine many voters' choice on election day. The emotion can be hope or fear, pride or disgust. And don't be too quick to pat yourself on the back for thinking you cast your vote based on a logical parsing of a candidate's positions. For all but the most wonkish wonks, what matters is how the prospect of pulling out of Iraq or expanding oil drilling or any other policy makes you feel, and not a pro-and-con analysis of its pluses and minuses, which few people can figure out.
All of this has been true for decades. What's new is that the circumstances of this election have conspired to push people away from the reason- and knowledge-based system of decision-making and more down the competing emotion-based one. The latter is more ancient and has, throughout the course of human evolution, "assured our survival and brought us to where we are," says neuroscientist Antonio Damasio of the University of Southern California, a pioneer in the study of human emotions and decision-making. ...One of the most salient circumstances of this campaign is the sheer amount of information voters are bombarded with, says Damasio. You can barely pass a screen (TV or computer) or overhear a radio without being pummeled with the latest brouhaha over lipstick-wearing pigs or which candidate was cozier with lobbyists for the failed mortgage giants. When FDR was making radio addresses, "people had the time needed for reflection, to mix emotion with facts and reason," says Damasio. "But now, with 24-hour cable news and the Web, you have a climate in which you don't have time to reflect. The amount and speed of information, combined with less time to analyze every new development, pushes us toward the emotion-based decision pathway." And not even emotions such as hope. Voters are being driven "by pure like and dislike, comfort or discomfort with a personality," says Damasio. "And voters judge that by a candidate's narrative."
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The bailout article is interesting, but to me that's mostly because it shows how shamelessly the media is fanning the flames here. The article implies a substantial moral hazard in finance - that management/employees are rewarded (get money) for doing the wrong thing (blowing up the economy). There's certainly some of that, primarily in compensation paid during the boom and liquidated (i.e. not kept in company stock). That's very hard to resolve post-facto (it would be illegal for the g't to take back money already paid, though they can regulate for future booms). But it's not nearly as bad as the article implies.
The bailouts we've seen this year have not been soft landings for the companies involved. They haven't been quite as "Old Testament" as I'd have liked, but they have done a pretty good job of wiping out management, employee and shareholder value. In the year preceding Fannie Mae's "bailout", the stock lost ~90% of its value (from mid-60's to ~6), and since the g't stepped in it's lost another ~95% (to 0.43); that blows up a lot of the moral hazard, particularly given how much company stock was owned by employees and management. Management was fired (and it's not like people are going to be lining up to hire those folks). AIG's stock took a similar path (from mid-60's a year ago to 2.3 today), management was fired, and the money the g't is loaning them is at 850 basis points over the LIBOR (which is to say, borderline usury). Nobody is intentionally going to drive their firm into the rocks in order to lose 99% of its value and get fired.
In terms of the value of the company and assets, the difference between bankruptcy and bailout seems semantic - I mean, that's roughly what happened to Lehman. The article suggests that companies would somehow *want* to set up their company to be so big and entangled that they would get a bailout. The results when they fail seem pretty similar, though. And the big difference is that Lehman had a much better chance of surviving, exactly because they worked to get untangled. Merrill took a similar approach, and managed to get bought, albeit at firesale prices - not an ideal situation, certainly, but better than either bankruptcy or bailout.
The other bit that seems totally over the top is the assertion that the GSE's were bailed out to help Chinese investors. In calendar year 2008, Fannie Mae and Freddie Mac financed 80% of new mortgage issues. If those two companies suddenly evaporated, it would be dramatically harder for people to get new mortgages ... which means fewer home sales, increased mortgage rates, lower housing prices, and generally a steel-toed kick in the balls for the whole housing market. China benefits as well, but the main beneficiary was the American homeowner. Again, I'm not thrilled about it - it's essentially a generational transfer of wealth, as our parents' generation gets bailed out and mails the bill to you and me 20 years from now, in the form of debt.
I mean, I'm not suggesting things are working well. I think the government should have gone further in fully nationalizing the GSE's and then made clear they were going to be completely dismantled and sold for parts. I think the government should also be more transparent in making these determinations. And I think Wall Street compensation should have a large component of long-term results so some of those financial profits could be pulled out of those folks' pockets as we discover years later just how they earned their money (being leveraged 33 times over, for example). At the same time, Paulson and Bernanke have an incredibly hard job which would be challenging to do even if they could see the future.
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Well, I don't think the article was suggesting that these companies deliberately screwed up huge in order to "merit" a bailout. I think the author was being facetious to say that ironically, the biggest greedy morons get more help than those who admitted fault and really tried to help themselves. Like the Prodigal's Son story.
I'm not quite sure what you mean by: They haven't been quite as "Old Testament" as I'd have liked, but they have done a pretty good job of wiping out management, employee and shareholder value.
Definitely upper management played a large role in the crisis, and they should be punished accordingly. Maybe they lost a lot of their assets when the stock's value tanked, but they have plenty of diversified savings left and will recover from this mess, much better than their underlings at least. They will also get hired again, despite this black mark on their CV (maybe not as officers, but definitely into powerful positions). There is plenty of historical precedent for that. But for the ordinary workers, this is a killer, like the telecom and energy trading meltdowns before. Especially because it wasn't really their fault, unless they could have "blown the whistle" to alert others to the unwise business practices taking place, but no one was listening anyway during the housing boom when people were blind with greed. As you said, their savings in company stock has evaporated, and it will be hard to get re-hired quickly, because competing companies are in similar messes, and suddenly thousands of desperate, qualified workers have just entered the job pool. 100,000 financial sector jobs have been lost (maybe only 5-10% of that is management?), so that's 1/6 of total US new unemployment in 2008. So yeah, it wasn't any leader's intent to destroy his or her company, but their decisions contributed to the crisis so they should be held accountable. I don't think companies structure their business plans to make them more desirable for bailout (I hope not at least). But like in law enforcement, it's more efficient and socially preferrable if we can discourage bad behavior before we have to punish it after the damage was done. I don't know how DC can do that effectively though, without major political-economic backlash and accusations of interference in the free market.
How do we mitigate problems so they don't have to reach the bankruptcy/bailout stage? In America, people and companies are free to succeed or fail. Companies can, do, and must fail at times. Even dominant companies like Standard Oil, AOL, and PanAm were destroyed, either by the government, world/economic events, or their own mistakes. So when is a company "too important" to fail? I agree with you that Fannie & Freddie qualify - without them the housing sector grinds to a halt. The American Dream was made possible to millions over the years because of the 30-year-fixed, which no other nation can provide to the masses (so then why the hell did so many people take variable-rate loans instead!?!). However, maybe America doesn't have to have a mortgage-based home ownership system. Other modern nations like South Korea don't give home loans. People pay for apartments and homes with cash. It's a huge upfront cost, but then it's your asset 100% and no more hassles. But America is a borrow & spend culture, so probably we could never accept a change.
Maybe it's in the government's interests to prevent companies in critical sectors from qualifying to be too big to fail. It's horrible precedent to bail out companies with tax dollars, or force rivals to "take one for the team" and absorb another company's debt. Freddie was only created to give Fannie some competition. So maybe more competition/customer choice will keep these companies more honest and risk conservative? There are 5 major i-banks (well, 2 now). Is that too many or too few? Who knows, but I'm leaning towards too few. Other industries like wireless, oil, and airlines are heading down that path with merger-mania.
Regarding the China comments, of course Washington doesn't base its bail-out decisions chiefly on foreign considerations. But at the same time, economic turmoil abroad hurts us at home in this globalized commercial system. It would be bad for everyone if our mortage/financial crisis spread to other continents, and it already has (Asian markets down 5% this week, Europe 3%). The housing bubble also burst in Spain and the UK. European banks have folded or needed rescue too (UK's biggest mortgage bank was just bailed out this week), since they bought up so many American SIVs too. Foreigners must be pissed at us because through no fault of their own, their savings have shrunk because too many dumb Yanks and dumb banks engaged in bad loans.
So a large, troubled American company with significant foreign investment is probably more qualifying of assistance than one without. I think it makes sense. Countrywide wasn't bailed out (unless BofA was "persuaded" to do so by the Feds), and neither were smaller, more regional mortgage banks like IndyMac.
Yeah I agree with you that Paulson, Bernanke, and president 44 will have a hell of a time cleaning up this mess. You really need balls of steel for those jobs, and as you said, even a crystal ball may not save you. That's why it's so idiotic and repugnant for the presidential candidates to claim that they "understand" the economy and know how to "fix" it.
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I guess the problem, is, though, how do you legislate that? Being incompetent isn't (generally) a crime - it's only clear that they were incompetent post-facto (as in, after they were awarded their bonuses, which is an incentive problem I wrote at earlier), so by what mechanism do you decide to take their money away? And how can you make it so that they can't get a well-paying job again? By throwing them in jail?
I think the government did about the best it could, in wiping out nearly 90-95% of many of these company executives' personal wealth, without getting into punishments that would deviate from due-process and legal-based actions. I think it's a generalized problem of American life where well-connected people "fail-upward," as President Bush did, but no amount of legislating, unfortunately, is ever going to stop that problem (short of a total makeover of how society works). It's the same reason that all these political retreads get cushy jobs as political commentators spouting stuff that any idiot on the internet could come up with.
But I think that we do need to come up with, as Obama put it, a way to help out people on Main Street as well as Wall Street. A package that extends unemployment benefits, increases availability of food stamps, extends COBRA programs for those who recently lost their jobs, etc. Krugman and other economists have made the point that average citizens generally aren't as susceptible to the moral hazard problem - after all, most people only buy a few houses in their lifetime and bailing them out once isn't going to radically change their behavior, as it might with banks.
So I hope that the new rescue plan put forward is sufficiently draconian on companies and their executives; some people are actually speculating that the government might make money off of all of this (because no one has the money to buy these assets, many of them have fallen well below their long-term price. So the government, with a good source of capital, can now snatch them up). Hopefully they can use that money to repay the costs of helping out those on Mainstreet...
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Thanks for the comments A, and I agree it's a sticky situation for the government to decide how much to intervene on these economic matters. As you said, it's difficult and controversial for a government to punish business incompetence after the fact, and probably a company's own board is better equipped to punish poorly performing executives instead (unless the executives appointed the board). What do you mean by the government took away 90-95% of the executives' wealth? Because they lost their bonuses and the value of the company stock tanked? Can the government revoke private sector pay for poor performance?
In terms of helping out Main Street, it's clear that economic stimulus checks aren't the long-term answer. Bush's recent effort had only a minor impact for about 2 months at best; a drop in the bucket at the cost of billions borrowed. Unemployment assistance is a good step, but I think Senate Republicans and Bush, while he's around, may try to block it at every turn (they said it was excessive spending, yet they spend 100s of billions on Wall Street "welfare"?). Finally the Dems had to attach unemployment assistance to a war supplemental for Bush to accept it. But maybe now the situation has gotten more dire, and with the election approaching, the GOP should try to shed the stereotype that they don't care about the troubles of the Average Joe (unless it's true).
http://seattletimes.nwsource.com/html/politics/2004469503_apjoblessbenefits.html
http://www.military.com/news/article/bush-threatens-veto-over-gi-bill-adds.html
Unemployment insurance, COBRA, etc. can keep some people afloat for a few more months, but I don't know how we can go about creating over 1M new jobs in the next 12 months (what would be needed to bring unemployment back down to 5%). And minimum-wage service jobs with scant benefits won't cut it. The new jobs from the "green economy" won't materialize as long as this recession persists, lending is tight, and government spending is curtailed by the wars and tax cuts. Gas and food will not get significantly cheaper, even if there is a global economic slowdown (which causes other problems too). GM and some airlines are so deep in the red they might ask for bailouts too (but won't get them). The dollar's gains in int'l money markets may mean that exports slow somewhat. Even China is showing signs of economic cool-off. I don't know how we can get people back to work quickly. It seems like companies are laying low, besides the financial sector snatching up bargains of course, as you said of government takeovers too (that raises another interesting question - what will the Feds do with these companies once they start becoming profitable again?). Everyone is waiting for peak foreclosures to pass and home prices to adjust to rock-bottom (for this cycle at least), so the growth curve can re-commence with restored lending fluidity and market confidence. But who knows when that will be? 6, 12, 24 months or longer?
I agree that citizens are not exposed to the moral hazard like company officers, but nevertheless they can and do make decisions to hurt themselves. In many cases, predatory lenders didn't even need to persuade customers to enter into suicidal mortgages. And some of the same people who didn't learn their lesson after the dot-bomb made the same greedy mistakes in the housing bubble. And they will F up again during the next boom/bust. It's endemic in this greedy society to a certain extent. Some people are just predisposed to gambling, ignoring warnings, and screwing themselves. What do we do about them? I know we can enact some laws to protect citizens from themselves, but how do we do that without adding a new layer of bureaucracy to the already unjust and convoluted lending industry? And it's not like Washington has had a good track record of regulating anything intelligently. What completely sucks is that some speculators obviously got away with it if their timing was right. And the people who played it safe and played by the rules still get screwed by the reckless to some degree, yet they are the ones who get the least reward/assistance for their good behavior, because their situations may not be as dire as the gamblers. Well, I guess "being good" is its own reward, and I doubt they would want to trade places with the desperate.
http://www.newsweek.com/id/158615
Wall Street is consumed with the subject of bailouts. As analysts chewed over the implications of the government's decision to assume the debt of ailing mortgage giants Fannie Mae and Freddie Mac, traders (and their real-estate brokers) wondered whether erstwhile titans Lehman Brothers and Washington Mutual would be next in line for government assistance. Meanwhile, lobbyists for the big three automakers were refining their pitches for $25 billion in loan guarantees. It is sure to be another long weekend for Treasury Secretary Henry Paulson.
Bailouts—the government's stepping in and providing financial assistance or credit guarantees to private-sector companies—are a highly confusing subject. As policymakers hasten to save some companies from the ravages of creative destruction, they leave others to fail. Some 5,644 businesses went bankrupt in July, up 80 percent from July 2007. So are there some objective criteria we can use to determine whether the government will toss a lifeline to a particular company?
It's a truism that the bigger you are, and the more you owe, the more forbearance you're likely to get. In 1984, when Continential Illinois, whose reckless lending practices had catapulted it into the ranks of the nation's 10 largest banks, ran into trouble, the government bought some of its loans and provided extraordinary compensation to depositors. "We have a new kind of bank," complained Fernand St. Germain, a congressman from Rhode Island, "It is called too big to fail." (St. Germain, who shepherded the bill that deregulated the savings-and-loan industry, would be blamed in part for the record-setting bailout of S&Ls later that decade).
But these days, size alone doesn't matter. Earlier this decade, Enron, WorldCom, and Global Crossing, three gargantuan companies, went bust while the government looked the other way. Of course, when the aforementioned companies filed for Chapter 11, nobody lost electricity or was unable to make a phone call. "But if the government envisions that a failure will have a serious adverse consequence on the economy, it's going to step in," said Benton Gup, a professor of banking at the University of Alabama and editor of the collection Too Big To Fail: Policies and Practices in Government Bailouts.
For that reason, certain types of financial institutions are much more likely to be helped than others. A bank that lends to people with dodgy credit in California doesn't pose much of a threat to the Davos crowd. But financial intermediaries like Bear Stearns and the FM twins function like the heart of the global financial system. If they go into cardiac arrest, the whole body is in danger. Since Bear Stearns was a counterparty to (and guarantor of) trades and financial arrangements with the world's major financial players, its failure would have triggered a cascade of losses. In the same vein, huge quantities of the $5.4 trillion in debt issued and insured by Fannie Mae and Freddie Mac sit on the balance sheets of central banks and financial institutions around the globe. For the U.S. government simply to let this debt—which it had been implicitly backing for decades—go bad would have meant inflicting severe damage on America's most significant diplomatic and trading partners. Fannie Mae wasn't too big to fail, one Wall Street wag told me this week. It was too Chinese to fail.
To be eligible for a bailout, firms must also demonstrate a particular genius for screwing up. Before it went bust, Bear Stearns had a monstrous $33 of debt for every dollar of capital, and hedge funds it owned destroyed hundreds of millions of dollars of clients' cash. It got a bailout. Lehman Brothers, which has taken painful measures to reduce its risk, is perversely less likely to get direct government help. "The worst Lehman can do is destroy the firm," said Barry Ritholtz, CEO of Wall Street research firm FusionIQ and author of the forthcoming Bailout Nation. "Bear Stearns, on the other hand, set up the firm so that if they screwed up, they could threaten the entire financial system." That may explain why Treasury Secretary Paulson has thus far resisted providing federal succor to Lehman.
Finally, companies seeking the tender mercies of the taxpayer must have good timing. Nearly all the great corporate bailouts of modern times have come in election years. Congress enacted loan guarantees for Chrysler in January 1980, ensuring that a company that employed about 130,000 people, many of them in the swing state of Michigan, would not go bust on the eve of primary season. So, if your company is in trouble, what should you do? Double down. Establish links to other firms. Export your products with abandon. And hustle. There are only seven more weeks until the election.
PERSONAL NARRATIVES AND EMOTIONS IN ELECTION PSYCHOLOGY
http://www.newsweek.com/id/158749
Narratives have been used to attract voters at least since Lincoln's campaign managers cast him as the rugged rail-splitter from the country's frontier, not the prosperous railroad lawyer and sophisticated writer he was, notes historian Michael Beschloss: voters are drawn to someone they can relate to, and the way to make that happen is by offering them stories. (The human brain is wired so that we can follow a chain of events that have people doing things in chronological order more easily than we can follow abstractions.) But the power of the narrative has grown as party identification has weakened—putting more voters in play—and as the culture has changed. Television has made voters expect to, and think they can, "see into people's souls to take their measure," says Beschloss. To do that, "they need clues," and there are few clues so potent as the challenges a person has faced and how he or she has met them. "The feeling that we need to know who these people are has become so enormous that a good part of Sarah Palin's appeal is her life history, the choices she made, things that let voters form a bond with her," says Beschloss.
The outsized power of the personal narrative today compared with even a generation ago (in 1980, Ronald Reagan ran not on personal narrative, but on hope and the promise of change) reflects something that has become almost a cliché in political analysis—namely, that emotions, more than a dispassionate and rational analysis of candidates' records and positions, determine many voters' choice on election day. The emotion can be hope or fear, pride or disgust. And don't be too quick to pat yourself on the back for thinking you cast your vote based on a logical parsing of a candidate's positions. For all but the most wonkish wonks, what matters is how the prospect of pulling out of Iraq or expanding oil drilling or any other policy makes you feel, and not a pro-and-con analysis of its pluses and minuses, which few people can figure out.
All of this has been true for decades. What's new is that the circumstances of this election have conspired to push people away from the reason- and knowledge-based system of decision-making and more down the competing emotion-based one. The latter is more ancient and has, throughout the course of human evolution, "assured our survival and brought us to where we are," says neuroscientist Antonio Damasio of the University of Southern California, a pioneer in the study of human emotions and decision-making. ...One of the most salient circumstances of this campaign is the sheer amount of information voters are bombarded with, says Damasio. You can barely pass a screen (TV or computer) or overhear a radio without being pummeled with the latest brouhaha over lipstick-wearing pigs or which candidate was cozier with lobbyists for the failed mortgage giants. When FDR was making radio addresses, "people had the time needed for reflection, to mix emotion with facts and reason," says Damasio. "But now, with 24-hour cable news and the Web, you have a climate in which you don't have time to reflect. The amount and speed of information, combined with less time to analyze every new development, pushes us toward the emotion-based decision pathway." And not even emotions such as hope. Voters are being driven "by pure like and dislike, comfort or discomfort with a personality," says Damasio. "And voters judge that by a candidate's narrative."
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The bailout article is interesting, but to me that's mostly because it shows how shamelessly the media is fanning the flames here. The article implies a substantial moral hazard in finance - that management/employees are rewarded (get money) for doing the wrong thing (blowing up the economy). There's certainly some of that, primarily in compensation paid during the boom and liquidated (i.e. not kept in company stock). That's very hard to resolve post-facto (it would be illegal for the g't to take back money already paid, though they can regulate for future booms). But it's not nearly as bad as the article implies.
The bailouts we've seen this year have not been soft landings for the companies involved. They haven't been quite as "Old Testament" as I'd have liked, but they have done a pretty good job of wiping out management, employee and shareholder value. In the year preceding Fannie Mae's "bailout", the stock lost ~90% of its value (from mid-60's to ~6), and since the g't stepped in it's lost another ~95% (to 0.43); that blows up a lot of the moral hazard, particularly given how much company stock was owned by employees and management. Management was fired (and it's not like people are going to be lining up to hire those folks). AIG's stock took a similar path (from mid-60's a year ago to 2.3 today), management was fired, and the money the g't is loaning them is at 850 basis points over the LIBOR (which is to say, borderline usury). Nobody is intentionally going to drive their firm into the rocks in order to lose 99% of its value and get fired.
In terms of the value of the company and assets, the difference between bankruptcy and bailout seems semantic - I mean, that's roughly what happened to Lehman. The article suggests that companies would somehow *want* to set up their company to be so big and entangled that they would get a bailout. The results when they fail seem pretty similar, though. And the big difference is that Lehman had a much better chance of surviving, exactly because they worked to get untangled. Merrill took a similar approach, and managed to get bought, albeit at firesale prices - not an ideal situation, certainly, but better than either bankruptcy or bailout.
The other bit that seems totally over the top is the assertion that the GSE's were bailed out to help Chinese investors. In calendar year 2008, Fannie Mae and Freddie Mac financed 80% of new mortgage issues. If those two companies suddenly evaporated, it would be dramatically harder for people to get new mortgages ... which means fewer home sales, increased mortgage rates, lower housing prices, and generally a steel-toed kick in the balls for the whole housing market. China benefits as well, but the main beneficiary was the American homeowner. Again, I'm not thrilled about it - it's essentially a generational transfer of wealth, as our parents' generation gets bailed out and mails the bill to you and me 20 years from now, in the form of debt.
I mean, I'm not suggesting things are working well. I think the government should have gone further in fully nationalizing the GSE's and then made clear they were going to be completely dismantled and sold for parts. I think the government should also be more transparent in making these determinations. And I think Wall Street compensation should have a large component of long-term results so some of those financial profits could be pulled out of those folks' pockets as we discover years later just how they earned their money (being leveraged 33 times over, for example). At the same time, Paulson and Bernanke have an incredibly hard job which would be challenging to do even if they could see the future.
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Well, I don't think the article was suggesting that these companies deliberately screwed up huge in order to "merit" a bailout. I think the author was being facetious to say that ironically, the biggest greedy morons get more help than those who admitted fault and really tried to help themselves. Like the Prodigal's Son story.
I'm not quite sure what you mean by: They haven't been quite as "Old Testament" as I'd have liked, but they have done a pretty good job of wiping out management, employee and shareholder value.
Definitely upper management played a large role in the crisis, and they should be punished accordingly. Maybe they lost a lot of their assets when the stock's value tanked, but they have plenty of diversified savings left and will recover from this mess, much better than their underlings at least. They will also get hired again, despite this black mark on their CV (maybe not as officers, but definitely into powerful positions). There is plenty of historical precedent for that. But for the ordinary workers, this is a killer, like the telecom and energy trading meltdowns before. Especially because it wasn't really their fault, unless they could have "blown the whistle" to alert others to the unwise business practices taking place, but no one was listening anyway during the housing boom when people were blind with greed. As you said, their savings in company stock has evaporated, and it will be hard to get re-hired quickly, because competing companies are in similar messes, and suddenly thousands of desperate, qualified workers have just entered the job pool. 100,000 financial sector jobs have been lost (maybe only 5-10% of that is management?), so that's 1/6 of total US new unemployment in 2008. So yeah, it wasn't any leader's intent to destroy his or her company, but their decisions contributed to the crisis so they should be held accountable. I don't think companies structure their business plans to make them more desirable for bailout (I hope not at least). But like in law enforcement, it's more efficient and socially preferrable if we can discourage bad behavior before we have to punish it after the damage was done. I don't know how DC can do that effectively though, without major political-economic backlash and accusations of interference in the free market.
How do we mitigate problems so they don't have to reach the bankruptcy/bailout stage? In America, people and companies are free to succeed or fail. Companies can, do, and must fail at times. Even dominant companies like Standard Oil, AOL, and PanAm were destroyed, either by the government, world/economic events, or their own mistakes. So when is a company "too important" to fail? I agree with you that Fannie & Freddie qualify - without them the housing sector grinds to a halt. The American Dream was made possible to millions over the years because of the 30-year-fixed, which no other nation can provide to the masses (so then why the hell did so many people take variable-rate loans instead!?!). However, maybe America doesn't have to have a mortgage-based home ownership system. Other modern nations like South Korea don't give home loans. People pay for apartments and homes with cash. It's a huge upfront cost, but then it's your asset 100% and no more hassles. But America is a borrow & spend culture, so probably we could never accept a change.
Maybe it's in the government's interests to prevent companies in critical sectors from qualifying to be too big to fail. It's horrible precedent to bail out companies with tax dollars, or force rivals to "take one for the team" and absorb another company's debt. Freddie was only created to give Fannie some competition. So maybe more competition/customer choice will keep these companies more honest and risk conservative? There are 5 major i-banks (well, 2 now). Is that too many or too few? Who knows, but I'm leaning towards too few. Other industries like wireless, oil, and airlines are heading down that path with merger-mania.
Regarding the China comments, of course Washington doesn't base its bail-out decisions chiefly on foreign considerations. But at the same time, economic turmoil abroad hurts us at home in this globalized commercial system. It would be bad for everyone if our mortage/financial crisis spread to other continents, and it already has (Asian markets down 5% this week, Europe 3%). The housing bubble also burst in Spain and the UK. European banks have folded or needed rescue too (UK's biggest mortgage bank was just bailed out this week), since they bought up so many American SIVs too. Foreigners must be pissed at us because through no fault of their own, their savings have shrunk because too many dumb Yanks and dumb banks engaged in bad loans.
So a large, troubled American company with significant foreign investment is probably more qualifying of assistance than one without. I think it makes sense. Countrywide wasn't bailed out (unless BofA was "persuaded" to do so by the Feds), and neither were smaller, more regional mortgage banks like IndyMac.
Yeah I agree with you that Paulson, Bernanke, and president 44 will have a hell of a time cleaning up this mess. You really need balls of steel for those jobs, and as you said, even a crystal ball may not save you. That's why it's so idiotic and repugnant for the presidential candidates to claim that they "understand" the economy and know how to "fix" it.
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I guess the problem, is, though, how do you legislate that? Being incompetent isn't (generally) a crime - it's only clear that they were incompetent post-facto (as in, after they were awarded their bonuses, which is an incentive problem I wrote at earlier), so by what mechanism do you decide to take their money away? And how can you make it so that they can't get a well-paying job again? By throwing them in jail?
I think the government did about the best it could, in wiping out nearly 90-95% of many of these company executives' personal wealth, without getting into punishments that would deviate from due-process and legal-based actions. I think it's a generalized problem of American life where well-connected people "fail-upward," as President Bush did, but no amount of legislating, unfortunately, is ever going to stop that problem (short of a total makeover of how society works). It's the same reason that all these political retreads get cushy jobs as political commentators spouting stuff that any idiot on the internet could come up with.
But I think that we do need to come up with, as Obama put it, a way to help out people on Main Street as well as Wall Street. A package that extends unemployment benefits, increases availability of food stamps, extends COBRA programs for those who recently lost their jobs, etc. Krugman and other economists have made the point that average citizens generally aren't as susceptible to the moral hazard problem - after all, most people only buy a few houses in their lifetime and bailing them out once isn't going to radically change their behavior, as it might with banks.
So I hope that the new rescue plan put forward is sufficiently draconian on companies and their executives; some people are actually speculating that the government might make money off of all of this (because no one has the money to buy these assets, many of them have fallen well below their long-term price. So the government, with a good source of capital, can now snatch them up). Hopefully they can use that money to repay the costs of helping out those on Mainstreet...
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Thanks for the comments A, and I agree it's a sticky situation for the government to decide how much to intervene on these economic matters. As you said, it's difficult and controversial for a government to punish business incompetence after the fact, and probably a company's own board is better equipped to punish poorly performing executives instead (unless the executives appointed the board). What do you mean by the government took away 90-95% of the executives' wealth? Because they lost their bonuses and the value of the company stock tanked? Can the government revoke private sector pay for poor performance?
In terms of helping out Main Street, it's clear that economic stimulus checks aren't the long-term answer. Bush's recent effort had only a minor impact for about 2 months at best; a drop in the bucket at the cost of billions borrowed. Unemployment assistance is a good step, but I think Senate Republicans and Bush, while he's around, may try to block it at every turn (they said it was excessive spending, yet they spend 100s of billions on Wall Street "welfare"?). Finally the Dems had to attach unemployment assistance to a war supplemental for Bush to accept it. But maybe now the situation has gotten more dire, and with the election approaching, the GOP should try to shed the stereotype that they don't care about the troubles of the Average Joe (unless it's true).
http://seattletimes.nwsource.com/html/politics/2004469503_apjoblessbenefits.html
http://www.military.com/news/article/bush-threatens-veto-over-gi-bill-adds.html
Unemployment insurance, COBRA, etc. can keep some people afloat for a few more months, but I don't know how we can go about creating over 1M new jobs in the next 12 months (what would be needed to bring unemployment back down to 5%). And minimum-wage service jobs with scant benefits won't cut it. The new jobs from the "green economy" won't materialize as long as this recession persists, lending is tight, and government spending is curtailed by the wars and tax cuts. Gas and food will not get significantly cheaper, even if there is a global economic slowdown (which causes other problems too). GM and some airlines are so deep in the red they might ask for bailouts too (but won't get them). The dollar's gains in int'l money markets may mean that exports slow somewhat. Even China is showing signs of economic cool-off. I don't know how we can get people back to work quickly. It seems like companies are laying low, besides the financial sector snatching up bargains of course, as you said of government takeovers too (that raises another interesting question - what will the Feds do with these companies once they start becoming profitable again?). Everyone is waiting for peak foreclosures to pass and home prices to adjust to rock-bottom (for this cycle at least), so the growth curve can re-commence with restored lending fluidity and market confidence. But who knows when that will be? 6, 12, 24 months or longer?
I agree that citizens are not exposed to the moral hazard like company officers, but nevertheless they can and do make decisions to hurt themselves. In many cases, predatory lenders didn't even need to persuade customers to enter into suicidal mortgages. And some of the same people who didn't learn their lesson after the dot-bomb made the same greedy mistakes in the housing bubble. And they will F up again during the next boom/bust. It's endemic in this greedy society to a certain extent. Some people are just predisposed to gambling, ignoring warnings, and screwing themselves. What do we do about them? I know we can enact some laws to protect citizens from themselves, but how do we do that without adding a new layer of bureaucracy to the already unjust and convoluted lending industry? And it's not like Washington has had a good track record of regulating anything intelligently. What completely sucks is that some speculators obviously got away with it if their timing was right. And the people who played it safe and played by the rules still get screwed by the reckless to some degree, yet they are the ones who get the least reward/assistance for their good behavior, because their situations may not be as dire as the gamblers. Well, I guess "being good" is its own reward, and I doubt they would want to trade places with the desperate.
Monday, September 22, 2008
New Yorker: Palin, Stevens, and AK politics
For the record, I don't know squat about AK politics and I don't think that this article is the singular, definitive authority (one source can never be). It's just a knowledgeable writer's viewpoint, but it presents an interesting story during this unique political period.
http://www.newyorker.com/reporting/2008/09/22/080922fa_fact_gourevitch
It's amazing how Palin's brief political career has already been well exposed and analyzed in the mainstream press, so really this article doesn't offer much new, but instead does a good job thematically piecing together what we know about Palin. It describes an interesting schizophrenia and conflict-of-message surrounding the GOP presidential ticket and Ted Stevens-style traditional Alaskan politics. That's like most other states and communities too of course. According to this source, AK society is torn between a fiercely libertarian independent, live-off-the-land frontiersman mentality at odds with the meddling federal government, and a literal dependence on playing the political game to secure federal dollars for the state's very survival (since it is one of the harshest climates in America). The author coined this cultural phenomenon as "subsidized subsistence".
So on one hand, you have 40-years-in-the-Senate Ted Stevens, who was voted "Alaskan of the Century" and proclaimed "Senator for life" (metaphorically) by his constituency. He is a "Rockefeller Republican" believing in fiscal conservatism and minimal federal interference in state's affairs. Yet every 6 years he is re-elected on a platform of "AK first", meaning that he will do everything in his power to secure as much resources for the impoverished state as possible, and being a former President Pro-Tem and senior member of the Appropriations Committee helps a lot. And to get things, we all know you have to give things. An FBI corruption probe of AK politicians' dealings with oil companies has already ended several careers since 2006, and Stevens is heading to trial this month. Combative McCain doesn't have a ton of friends in the Senate (GOP or otherwise), and is at odds with Stevens and others whom he views as "pork-peddlers", which puts Palin in an awkward position. Even if Stevens is found not guilty and wins re-election in November, business as usual will have to change. Some Alaskans really fear the post-Stevens and post-earmark-reform days ahead, where they feel that AK will be set on a starvation course.
25% of Alaskans are registered with the GOP, vs. 15% with the Dems, and many others do not choose to affiliate with a party. While the state could be labeled as "conservative" (it went red the last few elections and most of its top leaders are Republican), it also happens to be one of the most socialistic in America, with each Alaskan enjoying thousands of dollars in state dividend payments from collectively-owned natural resources (in good years or lean), as well as many protectionist laws for state workers and minorities. So I guess they try to have it both ways, and maybe it has to be. Much of AK is barren or Third World, and the cost of living can be quite expensive due to the need to import even basic goods. Although over a million barrels of crude a day flow from AK's soil to the lower 48, soaring energy costs have really hurt Alaskans who may need to drive 100 miles or even boat/plane to the nearest town, and heavily heat their homes when it's -50 degrees outside.
So where does that leave Sarah Palin? She is AK's favorite daughter now, but she was born in Idaho and actually her politics are very different than the AK norm. She has touted her anti-corruption and reform credentials on McCain's "Country first" ticket, yet her record suggests she has operated within the "AK first" political mindset. Most Alaskan conservatives are secular, pragmatic Rockefeller Republicans like pro-choice Stevens, yet Palin's dogma and views appear more "Bush-like" Southern conservative. So if Obama wants to paint McCain as "more of the same", actually he should start with Palin. Former sports journalist Palin became mayor of Wasila (part of Alaska's small evangelical "Bible Belt" in the Mat-Su Valley) by first rubbing elbows with the State GOP and getting on the city council. Gradually she booted out the other councilmen that she once sucked up to, and as mayor dismissed them as "good ol' boys". As mayor, she raised taxes, networked with the well-connected to secure millions in public-works earmarks for her community, while also driving Wasila into legal trouble and debt over an ill-conceived sports complex.
As governor, she wanted creationism to be taught alongside evolution in schools, but did not call for any anti-abortion legislation. She is pro-capital punishment, but did not try to overturn the state's no-dealth-penalty tradition. She has doubts that humans contribute to global warming, but now must back McCain's environmental policy. Well, McCain was originally against ANWR drilling (Palin and Stevens have always supported it), but now that gas is $4 and the Dems showed political weakness on energy, he pounced. So Palin has strong Southern Republican-esque beliefs, but as AK's youngest and first female government, she knew not to rock to boat too much and enjoyed an 80% approval rating (the highest of any current governor). So is she a reformer who took personal risks to challenge entrenched interests and the status quo, or not? Actually she feels that the highlight of her tenure in Juneau is delivering on a long-stalled new natural gas pipeline project. She claims that she thumbed her nose at Big Oil when they wanted their palms greased, and instead gave the contract to a Canadian firm with no kickbacks. This is another Palin half-truth, because currently the project is still stalled over $500M that the legislature can't come up with (administrative costs that the state promised to the Canadian firm before they break ground). And actually the upstream gas producers haven't even agreed to ship product through the pipeline yet, so the project won't do anyone any good if the pipe is empty. She may have to suck up to Big Oil after all. All political mavericks learn that in order to survive, you have to get along and go along sometimes. Change usually comes from the inside, and you can't force change down people's throats, especially powerful people who you still need to get things done. This has and will apply to Obama as well.
I thought this article did a good job of presenting the current headlines on Stevens and Palin (Troopergate, Bridge to Nowhere, etc.) within the context of the unique AK political mindset. I find it interesting that if McCain and Palin get the chance to make good on their promise of "cleaning up Washington", they may actually have to start with AK appropriations, even if many Alaskans depend of subsidy for survival. Something's gotta give. It's hard to be a true fiscal, or even social, conservative if you come from AK. But maybe that shows how rugged, independent AK is more representative of America than we might think. Maybe us in the "lower 48" have become too engrossed in party ideology and accepted this artificial, simplistic, binary political identity for too long. There is no such thing as being totally liberal or conservative, and anyone who is really scares me. Each voter is unique and each issue means different things to different people, depending on the circumstances - which can change constantly. That's why I think the political flip-flop argument is really laughable in most cases. Obviously AK's circumstances are much different than Washington's, and therefore that state produces singular leaders like Stevens and Palin.
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Some highlights of the article:
Many Alaskans enjoy being disconnected from the Lower Forty-eight, which is sometimes referred to as if it were a foreign country. There is pride in this sense of apartness, and that pride has been stung repeatedly since 2006, when the F.B.I. began raiding state lawmakers' offices in an ever-expanding anti-corruption campaign. There have been indictments and guilty pleas. Oil-industry executives who were caught on videotape in the Baranof Hotel, in Juneau, the state capital, giving cash handouts to a state legislator have coöperated in pointing out other state legislators who liked to get paid before voting on oil-industry tax rates. Last year, the F.B.I. hit the home of Ted Stevens, Alaska's six-term senator, and he became a favorite figure of ridicule on "The Daily Show": an angry little man, with an uncanny resemblance to Mr. Magoo, who had once made himself seem even older than his eighty-plus years by describing the Internet as "a series of tubes"; Jon Stewart called him a "coot," and portrayed him as a bully and a crook. As I travelled around Alaska in mid-August, Alaskans wanted me to understand that, sadly, he might well be all of that—and a very good thing for the state, too.
So Ted Stevens may have saved my life—and that was something a great many Alaskans could say as they looked about at the roads and bridges, the hospitals and flood-control systems, the satellite weather and global-positioning relay stations, the sprawling Army and Air Force bases, the rural landing strips and postal air-cargo flights that sustain existence in Alaska as it enters its fiftieth year of statehood. Much of this infrastructure was the result of Stevens's work on the Senate Appropriations and Armed Services Committees, and he made no apologies for his transactional approach to politics. On the contrary, as he brought Alaska the highest number of federal dollars per capita in the nation, he boasted that he was doing his job. Still, Stevens's decision to launch a reëlection campaign in the middle of a federal investigation required more than ordinary moxie.
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Ralph Seekins, a former state senator who runs the Ford dealership in Fairbanks and serves on the Republican National Committee, told me, "There's a natural suspicion among most Alaskans of the federal government, and the leader of the resistance against that federal government is Ted Stevens." It was a curious description of a man who had done more than any other to wring from the federal budget the funds to make Alaska thrive and grow toward self-sufficiency. But it made sense. Confronted with the choice between subsistence and subsidy, the Alaska patriot has traditionally favored the pragmatic compromise: subsidized subsistence.
...
Back in Bethel, I met a dentist, a man who ran a janitorial-supplies service, and a man who ran a fuel service. I asked them how they thought Bethel and the villages it supported would fare without Ted Stevens in the Senate, in a time without earmarks. The dentist said, "We're fucked," and the janitorial-supplies man said, "There will be ghost towns." The fuel-oil man pointed to a hard black, jagged, wedge-shaped object on his desk, and asked if I knew what kind of tooth it was. "Mastodon," he said.
------
"It's the most momentous political season I've lived through in Alaska," Pat Dougherty, the editor of the Anchorage Daily News, the state's largest newspaper, told me—and that was three weeks before the governor, Sarah Palin, became the human cannonball of the Presidential campaign and blasted into overlapping orbits of political and tabloid super-celebrity. Just about everyone in Alaska knew that Palin was on John McCain's list of potential running mates, but no one in the state's insular, Republican political world had seen any indication that the campaign was checking her background. That made sense to Dougherty. Palin was forty-four years old and had served only a year and a half as governor, and he said, "The idea of her as Vice-President is ridiculous. She'd be way in over her head."
Then again, two years ago Dougherty hadn't considered Palin ready to be governor, even after she prevailed in the Republican primary against the deeply unpopular incumbent, Frank Murkowski, who had previously spent twenty-two years as Alaska's junior senator. "We endorsed the Democrat in her race," he said. "We didn't think she had the experience." Looking back, Dougherty allowed that he had underestimated Palin. After twenty months in office, she enjoyed an eighty-per-cent approval rating—the highest in the nation—and although he said he wouldn't yet call himself an admirer, he described her performance as "great spectator sport." Dougherty was particularly impressed by her tough, you-deal-with-Alaska-on-Alaska's-terms attitude toward the big oil producers on whom the state's economy largely depends.
------
Palin's record as the mayor of Wasilla, a town forty miles north of Anchorage, told a somewhat different story. According to "Sarah," a biography by Kaylene Johnson, Palin had got into politics after she befriended the man who was then mayor and his police chief at a step-aerobics class. She made them her allies and ran for City Council. Then she challenged them for control of City Hall, and drove them out. As she purged her former friends and patrons, she denounced them as "good ol' boys," although her takeover of Wasilla had been aided from the start by Alaska's Republican Party establishment.
Palin's style of governing was unorthodox and at times impulsive. Although she boasts of a record as a fiscal conservative, she raised the sales tax while she was in office. She left the town saddled with millions of dollars in debt from the building of a new sports complex, and with legal fees, because she had failed to secure title to the land on which the complex was built. Casting herself in the Ted Stevens mold, however, she had proved herself skilled at collecting federal earmarks for Wasilla, bringing in twenty-seven million dollars for her small town in three years.
Palin's biggest difference with Alaska's Republican establishment, then, was not so much fiscal as it was social. Ted Stevens is one of the last of the Rockefeller Republicans—the real thing, as he supported Nelson Rockefeller over Barry Goldwater in the 1964 Presidential race. He is essentially secular and skeptical of government, and favors abortion rights—a common profile in Alaska, a state that attracts a strong streak of libertarians and rugged individualists. By contrast, Palin belongs to the state's small evangelical community, which is centered in the Mat-Su Valley, around Wasilla. She thinks that creationism should be taught in the public schools alongside Darwinian evolution, she was called the town's "first Christian mayor" by a local TV station, and she asked the town librarian about banning books, but did not follow through.
As governor, Palin has done nothing to impose her religious or social views. Alaska has no death penalty, and during the campaign she said that she would support one, but never made an issue of it; she opposed abortion even for pregnancies caused by rape, but this was a personal opinion, not a legislative cause. In fact, she refused requests to put abortion bills on the agenda during a special legislative session this summer, preferring to discuss the natural-gas pipeline, which she pursued in such a bipartisan manner that she ultimately won more solid support for it from Democrats than from Republicans. While Republicans hold most of the state's top political posts, only twenty-five per cent of Alaskan voters are registered Republicans. Fifteen per cent are Democrats, and three per cent belong to the Alaska Independence Party—the extremist states' rights, quasi-secessionist faction to which Todd Palin once pledged his allegiance. A solid majority of Alaska's electorate claims no party affiliation. Alaskans kept telling me that Alaskans vote for the person, not the party.
So it was startling to see Palin emerge in the last days of August as an icon of the evangelical base of the Republican Party, and as a fierce—often vituperative—partisan scourge, mocking Barack Obama's character and positions. It was startling, too, to hear her, in her début speech to the Republican National Convention, reading a script that consistently distorted her own record. She said that she had put her predecessor's jet for sale on eBay, which was true, except that this is how government property was often disposed of in Alaska, and the plane didn't sell online; it had to be unloaded through a private deal, at a loss of half a million dollars.
Palin also said that she told Congress "thanks but no thanks" for the notorious Bridge to Nowhere—a Ted Stevens and Don Young earmark project that had long been a target of John McCain's ridicule. (The bridge, which would have cost nearly four hundred million dollars, was intended to provide access from one island to an airport on a smaller island, with a population of fifty people.) In reality, Palin had supported the bridge in her gubernatorial race, even after Congress revoked the earmark, but abandoned it following the election and directed the money Alaska had received to other projects.
And, of course, Palin touted her gas-pipeline project. "I fought to bring about the largest private-sector infrastructure project in North American history," she said. "And, when that deal was struck, we began a nearly forty-billion-dollar natural-gas pipeline to help lead America to energy independence." That was not entirely accurate. She was still waiting for the state legislature to release the five hundred million dollars she'd promised the pipeline company to help pay for administrative costs. But the crowd loved it. Many of the delegates wore lapel buttons that said, "Coldest State, Hottest Governor."
That same week, Rick Davis, McCain's campaign manager, announced, "This election is not about issues." What mattered, he said, was the "composite view" that voters would form of the candidates. On a talk show, the Washington bureau chief of Time told Nicole Wallace, a McCain spokesperson, that it was still unclear whether Palin was ready "to answer tough questions about domestic policy, foreign policy." Wallace laughed. "Like from who? From you?" And she asked, "Who cares if she can talk to Time magazine?"
Attacking the press is nothing new in the playbook of political defense, but it took a bold twist when the McCain campaign contrived to transform a family problem—the pregnancy of Palin's unmarried seventeen-year-old daughter, Bristol—into a vindication of Palin's Christian family values. Surely, it had not been part of McCain's plan for his untested Vice-Presidential pick to start Day Four of her rollout by announcing Bristol's plans to marry the baby's father, Levi Johnston, who, as the Times reported, recently dropped out of high school. The campaign said that it was going public in order to quash offensive rumors that were circulating on the Internet: that Sarah Palin's five-month-old baby, Trig, who has Down syndrome, was not really hers but Bristol's, and that the Governor had faked her pregnancy in order to cover for her unwed daughter. This Faulknerian story had been making the rounds in Alaska for months—I heard versions of it in Anchorage and Juneau within twenty-four hours of arriving in each city—and it derived from the peculiar circumstances surrounding Trig's birth.
--------
Sarah Palin's makeover was just beginning, but the campaign had scored a critical victory: the press, in asking about the least-known potential President in recent memory, had been made to look contemptible. When, at last, Palin appeared at the Republican National Convention in St. Paul, most of the forty million Americans who watched her on TV were seeing her for the first time.
The control of Palin by the McCain campaign was one of many ways in which it transformed her into someone largely unrecognizable to people who knew her in Alaska, where she hadn't shown a great interest in national economic issues other than energy policy, or in international affairs, and where she was viewed as more often seeking the attention of the press than avoiding it. For her first two weeks on the Presidential ticket, Palin was kept cocooned by handlers, except at rallies, where she read an adumbrated version of her Convention speech over and over, even as many of its claims were being debunked. When a Fox News anchor demanded to know when she could be interviewed, Rick Davis explained that he would allow access only to reporters who showed "deference."
http://www.newyorker.com/reporting/2008/09/22/080922fa_fact_gourevitch
It's amazing how Palin's brief political career has already been well exposed and analyzed in the mainstream press, so really this article doesn't offer much new, but instead does a good job thematically piecing together what we know about Palin. It describes an interesting schizophrenia and conflict-of-message surrounding the GOP presidential ticket and Ted Stevens-style traditional Alaskan politics. That's like most other states and communities too of course. According to this source, AK society is torn between a fiercely libertarian independent, live-off-the-land frontiersman mentality at odds with the meddling federal government, and a literal dependence on playing the political game to secure federal dollars for the state's very survival (since it is one of the harshest climates in America). The author coined this cultural phenomenon as "subsidized subsistence".
So on one hand, you have 40-years-in-the-Senate Ted Stevens, who was voted "Alaskan of the Century" and proclaimed "Senator for life" (metaphorically) by his constituency. He is a "Rockefeller Republican" believing in fiscal conservatism and minimal federal interference in state's affairs. Yet every 6 years he is re-elected on a platform of "AK first", meaning that he will do everything in his power to secure as much resources for the impoverished state as possible, and being a former President Pro-Tem and senior member of the Appropriations Committee helps a lot. And to get things, we all know you have to give things. An FBI corruption probe of AK politicians' dealings with oil companies has already ended several careers since 2006, and Stevens is heading to trial this month. Combative McCain doesn't have a ton of friends in the Senate (GOP or otherwise), and is at odds with Stevens and others whom he views as "pork-peddlers", which puts Palin in an awkward position. Even if Stevens is found not guilty and wins re-election in November, business as usual will have to change. Some Alaskans really fear the post-Stevens and post-earmark-reform days ahead, where they feel that AK will be set on a starvation course.
25% of Alaskans are registered with the GOP, vs. 15% with the Dems, and many others do not choose to affiliate with a party. While the state could be labeled as "conservative" (it went red the last few elections and most of its top leaders are Republican), it also happens to be one of the most socialistic in America, with each Alaskan enjoying thousands of dollars in state dividend payments from collectively-owned natural resources (in good years or lean), as well as many protectionist laws for state workers and minorities. So I guess they try to have it both ways, and maybe it has to be. Much of AK is barren or Third World, and the cost of living can be quite expensive due to the need to import even basic goods. Although over a million barrels of crude a day flow from AK's soil to the lower 48, soaring energy costs have really hurt Alaskans who may need to drive 100 miles or even boat/plane to the nearest town, and heavily heat their homes when it's -50 degrees outside.
So where does that leave Sarah Palin? She is AK's favorite daughter now, but she was born in Idaho and actually her politics are very different than the AK norm. She has touted her anti-corruption and reform credentials on McCain's "Country first" ticket, yet her record suggests she has operated within the "AK first" political mindset. Most Alaskan conservatives are secular, pragmatic Rockefeller Republicans like pro-choice Stevens, yet Palin's dogma and views appear more "Bush-like" Southern conservative. So if Obama wants to paint McCain as "more of the same", actually he should start with Palin. Former sports journalist Palin became mayor of Wasila (part of Alaska's small evangelical "Bible Belt" in the Mat-Su Valley) by first rubbing elbows with the State GOP and getting on the city council. Gradually she booted out the other councilmen that she once sucked up to, and as mayor dismissed them as "good ol' boys". As mayor, she raised taxes, networked with the well-connected to secure millions in public-works earmarks for her community, while also driving Wasila into legal trouble and debt over an ill-conceived sports complex.
As governor, she wanted creationism to be taught alongside evolution in schools, but did not call for any anti-abortion legislation. She is pro-capital punishment, but did not try to overturn the state's no-dealth-penalty tradition. She has doubts that humans contribute to global warming, but now must back McCain's environmental policy. Well, McCain was originally against ANWR drilling (Palin and Stevens have always supported it), but now that gas is $4 and the Dems showed political weakness on energy, he pounced. So Palin has strong Southern Republican-esque beliefs, but as AK's youngest and first female government, she knew not to rock to boat too much and enjoyed an 80% approval rating (the highest of any current governor). So is she a reformer who took personal risks to challenge entrenched interests and the status quo, or not? Actually she feels that the highlight of her tenure in Juneau is delivering on a long-stalled new natural gas pipeline project. She claims that she thumbed her nose at Big Oil when they wanted their palms greased, and instead gave the contract to a Canadian firm with no kickbacks. This is another Palin half-truth, because currently the project is still stalled over $500M that the legislature can't come up with (administrative costs that the state promised to the Canadian firm before they break ground). And actually the upstream gas producers haven't even agreed to ship product through the pipeline yet, so the project won't do anyone any good if the pipe is empty. She may have to suck up to Big Oil after all. All political mavericks learn that in order to survive, you have to get along and go along sometimes. Change usually comes from the inside, and you can't force change down people's throats, especially powerful people who you still need to get things done. This has and will apply to Obama as well.
I thought this article did a good job of presenting the current headlines on Stevens and Palin (Troopergate, Bridge to Nowhere, etc.) within the context of the unique AK political mindset. I find it interesting that if McCain and Palin get the chance to make good on their promise of "cleaning up Washington", they may actually have to start with AK appropriations, even if many Alaskans depend of subsidy for survival. Something's gotta give. It's hard to be a true fiscal, or even social, conservative if you come from AK. But maybe that shows how rugged, independent AK is more representative of America than we might think. Maybe us in the "lower 48" have become too engrossed in party ideology and accepted this artificial, simplistic, binary political identity for too long. There is no such thing as being totally liberal or conservative, and anyone who is really scares me. Each voter is unique and each issue means different things to different people, depending on the circumstances - which can change constantly. That's why I think the political flip-flop argument is really laughable in most cases. Obviously AK's circumstances are much different than Washington's, and therefore that state produces singular leaders like Stevens and Palin.
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Some highlights of the article:
Many Alaskans enjoy being disconnected from the Lower Forty-eight, which is sometimes referred to as if it were a foreign country. There is pride in this sense of apartness, and that pride has been stung repeatedly since 2006, when the F.B.I. began raiding state lawmakers' offices in an ever-expanding anti-corruption campaign. There have been indictments and guilty pleas. Oil-industry executives who were caught on videotape in the Baranof Hotel, in Juneau, the state capital, giving cash handouts to a state legislator have coöperated in pointing out other state legislators who liked to get paid before voting on oil-industry tax rates. Last year, the F.B.I. hit the home of Ted Stevens, Alaska's six-term senator, and he became a favorite figure of ridicule on "The Daily Show": an angry little man, with an uncanny resemblance to Mr. Magoo, who had once made himself seem even older than his eighty-plus years by describing the Internet as "a series of tubes"; Jon Stewart called him a "coot," and portrayed him as a bully and a crook. As I travelled around Alaska in mid-August, Alaskans wanted me to understand that, sadly, he might well be all of that—and a very good thing for the state, too.
So Ted Stevens may have saved my life—and that was something a great many Alaskans could say as they looked about at the roads and bridges, the hospitals and flood-control systems, the satellite weather and global-positioning relay stations, the sprawling Army and Air Force bases, the rural landing strips and postal air-cargo flights that sustain existence in Alaska as it enters its fiftieth year of statehood. Much of this infrastructure was the result of Stevens's work on the Senate Appropriations and Armed Services Committees, and he made no apologies for his transactional approach to politics. On the contrary, as he brought Alaska the highest number of federal dollars per capita in the nation, he boasted that he was doing his job. Still, Stevens's decision to launch a reëlection campaign in the middle of a federal investigation required more than ordinary moxie.
...
Ralph Seekins, a former state senator who runs the Ford dealership in Fairbanks and serves on the Republican National Committee, told me, "There's a natural suspicion among most Alaskans of the federal government, and the leader of the resistance against that federal government is Ted Stevens." It was a curious description of a man who had done more than any other to wring from the federal budget the funds to make Alaska thrive and grow toward self-sufficiency. But it made sense. Confronted with the choice between subsistence and subsidy, the Alaska patriot has traditionally favored the pragmatic compromise: subsidized subsistence.
...
Back in Bethel, I met a dentist, a man who ran a janitorial-supplies service, and a man who ran a fuel service. I asked them how they thought Bethel and the villages it supported would fare without Ted Stevens in the Senate, in a time without earmarks. The dentist said, "We're fucked," and the janitorial-supplies man said, "There will be ghost towns." The fuel-oil man pointed to a hard black, jagged, wedge-shaped object on his desk, and asked if I knew what kind of tooth it was. "Mastodon," he said.
------
"It's the most momentous political season I've lived through in Alaska," Pat Dougherty, the editor of the Anchorage Daily News, the state's largest newspaper, told me—and that was three weeks before the governor, Sarah Palin, became the human cannonball of the Presidential campaign and blasted into overlapping orbits of political and tabloid super-celebrity. Just about everyone in Alaska knew that Palin was on John McCain's list of potential running mates, but no one in the state's insular, Republican political world had seen any indication that the campaign was checking her background. That made sense to Dougherty. Palin was forty-four years old and had served only a year and a half as governor, and he said, "The idea of her as Vice-President is ridiculous. She'd be way in over her head."
Then again, two years ago Dougherty hadn't considered Palin ready to be governor, even after she prevailed in the Republican primary against the deeply unpopular incumbent, Frank Murkowski, who had previously spent twenty-two years as Alaska's junior senator. "We endorsed the Democrat in her race," he said. "We didn't think she had the experience." Looking back, Dougherty allowed that he had underestimated Palin. After twenty months in office, she enjoyed an eighty-per-cent approval rating—the highest in the nation—and although he said he wouldn't yet call himself an admirer, he described her performance as "great spectator sport." Dougherty was particularly impressed by her tough, you-deal-with-Alaska-on-Alaska's-terms attitude toward the big oil producers on whom the state's economy largely depends.
------
Palin's record as the mayor of Wasilla, a town forty miles north of Anchorage, told a somewhat different story. According to "Sarah," a biography by Kaylene Johnson, Palin had got into politics after she befriended the man who was then mayor and his police chief at a step-aerobics class. She made them her allies and ran for City Council. Then she challenged them for control of City Hall, and drove them out. As she purged her former friends and patrons, she denounced them as "good ol' boys," although her takeover of Wasilla had been aided from the start by Alaska's Republican Party establishment.
Palin's style of governing was unorthodox and at times impulsive. Although she boasts of a record as a fiscal conservative, she raised the sales tax while she was in office. She left the town saddled with millions of dollars in debt from the building of a new sports complex, and with legal fees, because she had failed to secure title to the land on which the complex was built. Casting herself in the Ted Stevens mold, however, she had proved herself skilled at collecting federal earmarks for Wasilla, bringing in twenty-seven million dollars for her small town in three years.
Palin's biggest difference with Alaska's Republican establishment, then, was not so much fiscal as it was social. Ted Stevens is one of the last of the Rockefeller Republicans—the real thing, as he supported Nelson Rockefeller over Barry Goldwater in the 1964 Presidential race. He is essentially secular and skeptical of government, and favors abortion rights—a common profile in Alaska, a state that attracts a strong streak of libertarians and rugged individualists. By contrast, Palin belongs to the state's small evangelical community, which is centered in the Mat-Su Valley, around Wasilla. She thinks that creationism should be taught in the public schools alongside Darwinian evolution, she was called the town's "first Christian mayor" by a local TV station, and she asked the town librarian about banning books, but did not follow through.
As governor, Palin has done nothing to impose her religious or social views. Alaska has no death penalty, and during the campaign she said that she would support one, but never made an issue of it; she opposed abortion even for pregnancies caused by rape, but this was a personal opinion, not a legislative cause. In fact, she refused requests to put abortion bills on the agenda during a special legislative session this summer, preferring to discuss the natural-gas pipeline, which she pursued in such a bipartisan manner that she ultimately won more solid support for it from Democrats than from Republicans. While Republicans hold most of the state's top political posts, only twenty-five per cent of Alaskan voters are registered Republicans. Fifteen per cent are Democrats, and three per cent belong to the Alaska Independence Party—the extremist states' rights, quasi-secessionist faction to which Todd Palin once pledged his allegiance. A solid majority of Alaska's electorate claims no party affiliation. Alaskans kept telling me that Alaskans vote for the person, not the party.
So it was startling to see Palin emerge in the last days of August as an icon of the evangelical base of the Republican Party, and as a fierce—often vituperative—partisan scourge, mocking Barack Obama's character and positions. It was startling, too, to hear her, in her début speech to the Republican National Convention, reading a script that consistently distorted her own record. She said that she had put her predecessor's jet for sale on eBay, which was true, except that this is how government property was often disposed of in Alaska, and the plane didn't sell online; it had to be unloaded through a private deal, at a loss of half a million dollars.
Palin also said that she told Congress "thanks but no thanks" for the notorious Bridge to Nowhere—a Ted Stevens and Don Young earmark project that had long been a target of John McCain's ridicule. (The bridge, which would have cost nearly four hundred million dollars, was intended to provide access from one island to an airport on a smaller island, with a population of fifty people.) In reality, Palin had supported the bridge in her gubernatorial race, even after Congress revoked the earmark, but abandoned it following the election and directed the money Alaska had received to other projects.
And, of course, Palin touted her gas-pipeline project. "I fought to bring about the largest private-sector infrastructure project in North American history," she said. "And, when that deal was struck, we began a nearly forty-billion-dollar natural-gas pipeline to help lead America to energy independence." That was not entirely accurate. She was still waiting for the state legislature to release the five hundred million dollars she'd promised the pipeline company to help pay for administrative costs. But the crowd loved it. Many of the delegates wore lapel buttons that said, "Coldest State, Hottest Governor."
That same week, Rick Davis, McCain's campaign manager, announced, "This election is not about issues." What mattered, he said, was the "composite view" that voters would form of the candidates. On a talk show, the Washington bureau chief of Time told Nicole Wallace, a McCain spokesperson, that it was still unclear whether Palin was ready "to answer tough questions about domestic policy, foreign policy." Wallace laughed. "Like from who? From you?" And she asked, "Who cares if she can talk to Time magazine?"
Attacking the press is nothing new in the playbook of political defense, but it took a bold twist when the McCain campaign contrived to transform a family problem—the pregnancy of Palin's unmarried seventeen-year-old daughter, Bristol—into a vindication of Palin's Christian family values. Surely, it had not been part of McCain's plan for his untested Vice-Presidential pick to start Day Four of her rollout by announcing Bristol's plans to marry the baby's father, Levi Johnston, who, as the Times reported, recently dropped out of high school. The campaign said that it was going public in order to quash offensive rumors that were circulating on the Internet: that Sarah Palin's five-month-old baby, Trig, who has Down syndrome, was not really hers but Bristol's, and that the Governor had faked her pregnancy in order to cover for her unwed daughter. This Faulknerian story had been making the rounds in Alaska for months—I heard versions of it in Anchorage and Juneau within twenty-four hours of arriving in each city—and it derived from the peculiar circumstances surrounding Trig's birth.
--------
Sarah Palin's makeover was just beginning, but the campaign had scored a critical victory: the press, in asking about the least-known potential President in recent memory, had been made to look contemptible. When, at last, Palin appeared at the Republican National Convention in St. Paul, most of the forty million Americans who watched her on TV were seeing her for the first time.
The control of Palin by the McCain campaign was one of many ways in which it transformed her into someone largely unrecognizable to people who knew her in Alaska, where she hadn't shown a great interest in national economic issues other than energy policy, or in international affairs, and where she was viewed as more often seeking the attention of the press than avoiding it. For her first two weeks on the Presidential ticket, Palin was kept cocooned by handlers, except at rallies, where she read an adumbrated version of her Convention speech over and over, even as many of its claims were being debunked. When a Fox News anchor demanded to know when she could be interviewed, Rick Davis explained that he would allow access only to reporters who showed "deference."
Saturday, September 20, 2008
Newsweek comments about bailouts
WHEN DOES A COMPANY QUALIFY FOR A BAILOUT?
http://www.newsweek.com/id/158615
Wall Street is consumed with the subject of bailouts. As analysts chewed over the implications of the government's decision to assume the debt of ailing mortgage giants Fannie Mae and Freddie Mac, traders (and their real-estate brokers) wondered whether erstwhile titans Lehman Brothers and Washington Mutual would be next in line for government assistance. Meanwhile, lobbyists for the big three automakers were refining their pitches for $25 billion in loan guarantees. It is sure to be another long weekend for Treasury Secretary Henry Paulson.
Bailouts—the government's stepping in and providing financial assistance or credit guarantees to private-sector companies—are a highly confusing subject. As policymakers hasten to save some companies from the ravages of creative destruction, they leave others to fail. Some 5,644 businesses went bankrupt in July, up 80 percent from July 2007. So are there some objective criteria we can use to determine whether the government will toss a lifeline to a particular company?
It's a truism that the bigger you are, and the more you owe, the more forbearance you're likely to get. In 1984, when Continential Illinois, whose reckless lending practices had catapulted it into the ranks of the nation's 10 largest banks, ran into trouble, the government bought some of its loans and provided extraordinary compensation to depositors. "We have a new kind of bank," complained Fernand St. Germain, a congressman from Rhode Island, "It is called too big to fail." (St. Germain, who shepherded the bill that deregulated the savings-and-loan industry, would be blamed in part for the record-setting bailout of S&Ls later that decade).
But these days, size alone doesn't matter. Earlier this decade, Enron, WorldCom, and Global Crossing, three gargantuan companies, went bust while the government looked the other way. Of course, when the aforementioned companies filed for Chapter 11, nobody lost electricity or was unable to make a phone call. "But if the government envisions that a failure will have a serious adverse consequence on the economy, it's going to step in," said Benton Gup, a professor of banking at the University of Alabama and editor of the collection Too Big To Fail: Policies and Practices in Government Bailouts.
For that reason, certain types of financial institutions are much more likely to be helped than others. A bank that lends to people with dodgy credit in California doesn't pose much of a threat to the Davos crowd. But financial intermediaries like Bear Stearns and the FM twins function like the heart of the global financial system. If they go into cardiac arrest, the whole body is in danger. Since Bear Stearns was a counterparty to (and guarantor of) trades and financial arrangements with the world's major financial players, its failure would have triggered a cascade of losses. In the same vein, huge quantities of the $5.4 trillion in debt issued and insured by Fannie Mae and Freddie Mac sit on the balance sheets of central banks and financial institutions around the globe. For the U.S. government simply to let this debt—which it had been implicitly backing for decades—go bad would have meant inflicting severe damage on America's most significant diplomatic and trading partners. Fannie Mae wasn't too big to fail, one Wall Street wag told me this week. It was too Chinese to fail.
To be eligible for a bailout, firms must also demonstrate a particular genius for screwing up. Before it went bust, Bear Stearns had a monstrous $33 of debt for every dollar of capital, and hedge funds it owned destroyed hundreds of millions of dollars of clients' cash. It got a bailout. Lehman Brothers, which has taken painful measures to reduce its risk, is perversely less likely to get direct government help. "The worst Lehman can do is destroy the firm," said Barry Ritholtz, CEO of Wall Street research firm FusionIQ and author of the forthcoming Bailout Nation. "Bear Stearns, on the other hand, set up the firm so that if they screwed up, they could threaten the entire financial system." That may explain why Treasury Secretary Paulson has thus far resisted providing federal succor to Lehman.
Finally, companies seeking the tender mercies of the taxpayer must have good timing. Nearly all the great corporate bailouts of modern times have come in election years. Congress enacted loan guarantees for Chrysler in January 1980, ensuring that a company that employed about 130,000 people, many of them in the swing state of Michigan, would not go bust on the eve of primary season. So, if your company is in trouble, what should you do? Double down. Establish links to other firms. Export your products with abandon. And hustle. There are only seven more weeks until the election.
PERSONAL NARRATIVES AND EMOTIONS IN ELECTION PSYCHOLOGY
http://www.newsweek.com/id/158749
Narratives have been used to attract voters at least since Lincoln's campaign managers cast him as the rugged rail-splitter from the country's frontier, not the prosperous railroad lawyer and sophisticated writer he was, notes historian Michael Beschloss: voters are drawn to someone they can relate to, and the way to make that happen is by offering them stories. (The human brain is wired so that we can follow a chain of events that have people doing things in chronological order more easily than we can follow abstractions.) But the power of the narrative has grown as party identification has weakened—putting more voters in play—and as the culture has changed. Television has made voters expect to, and think they can, "see into people's souls to take their measure," says Beschloss. To do that, "they need clues," and there are few clues so potent as the challenges a person has faced and how he or she has met them. "The feeling that we need to know who these people are has become so enormous that a good part of Sarah Palin's appeal is her life history, the choices she made, things that let voters form a bond with her," says Beschloss.
The outsized power of the personal narrative today compared with even a generation ago (in 1980, Ronald Reagan ran not on personal narrative, but on hope and the promise of change) reflects something that has become almost a cliché in political analysis—namely, that emotions, more than a dispassionate and rational analysis of candidates' records and positions, determine many voters' choice on election day. The emotion can be hope or fear, pride or disgust. And don't be too quick to pat yourself on the back for thinking you cast your vote based on a logical parsing of a candidate's positions. For all but the most wonkish wonks, what matters is how the prospect of pulling out of Iraq or expanding oil drilling or any other policy makes you feel, and not a pro-and-con analysis of its pluses and minuses, which few people can figure out.
All of this has been true for decades. What's new is that the circumstances of this election have conspired to push people away from the reason- and knowledge-based system of decision-making and more down the competing emotion-based one. The latter is more ancient and has, throughout the course of human evolution, "assured our survival and brought us to where we are," says neuroscientist Antonio Damasio of the University of Southern California, a pioneer in the study of human emotions and decision-making. ...One of the most salient circumstances of this campaign is the sheer amount of information voters are bombarded with, says Damasio. You can barely pass a screen (TV or computer) or overhear a radio without being pummeled with the latest brouhaha over lipstick-wearing pigs or which candidate was cozier with lobbyists for the failed mortgage giants. When FDR was making radio addresses, "people had the time needed for reflection, to mix emotion with facts and reason," says Damasio. "But now, with 24-hour cable news and the Web, you have a climate in which you don't have time to reflect. The amount and speed of information, combined with less time to analyze every new development, pushes us toward the emotion-based decision pathway." And not even emotions such as hope. Voters are being driven "by pure like and dislike, comfort or discomfort with a personality," says Damasio. "And voters judge that by a candidate's narrative."
Friday, September 19, 2008
"The politics of fear" (not what you think)
http://sciencenow.sciencemag.org/cgi/content/full/2008/918/2
Researchers at the Univ. Nebraska did a study of 46 local middle-aged white people surveyed to have strong political beliefs. They subjected them to sudden, startling visual and auditory stimuli (such as loud static noise or violence-themed images), then measured skin conductivity due to finger perspiration and eye blinking amplitude, as estimates of fright/alarm.
They found that the more "skittish" people were also more likely to be politically conservative ("protective"). Those who had a stronger physiological reaction to the disturbing stimuli were more likely to favor typical GOP political views, such as anti-abortion/immigration and aggressive law enforcement/national security. I guess anthropologically speaking, it seems logical that individuals who are predisposed to panic from sudden threatening stimuli also favor policies that are ostensibly designed to neutralize threats to their perceived security, whether personal, social, or national. So there may be a biological element to political support for policies aimed to "protect" family/ideology/nation such as strict immigration control, strict interpretations of marriage, aggressive counterterrorism, and such. A person with a strong fear response might be inclined to favor a swift bombing of Afghanistan in retaliation for 9/11 and its associated emotional trauma, while a less fearful person might prefer to deliberate and analyze instead.
Of course this is not to say that people vote Republican because they're scaredy-cats. Maybe it applies to some, but on the flipside, you could also insinuate that Democrats are more naive or blase to the dangers of the world. Obviously, the middle ground is preferrable to an over-reaction or indifference to the many threats out there. Respond strongly to serious threats, but tolerate smaller or false threats. Nature and evolution function to improve survival fitness over time. It's not biologically advantageous for super-jittery organisms to freak out every time they feel the least bit alarmed (like a lapdog), nor to be indifferent to real threats (like a Dodo bird). And we see this in the social experiment of human civilization too. Warmongering, paranoid, fanatical nations destroy each other (Nazi Germany vs. USSR, The Crusades, Arab-Israeli Wars). And passive, complacent peoples get easily conquered (Native Americans, Chinese during the Colonial Era).
Maybe all of this seems brutally obvious, but it's interesting to see a controlled scientific study on the subject. Of course there are many limitations/flaws in their work, and correlation doesn't necessarily imply causation. Their sample size was very small and homogeneous. There are plenty of fearful liberals and relaxed conservatives. Hearing a sudden uncomfortable noise or seeing a picture of a bloodied man may elicit different levels of fear/discomfort in different people, depending on their personality and background. And probably political beliefs are more heavily molded by social influences than biological ones. But scientists have identified genes that predispose people to certain behaviors (violence, infidelity, obsessive traits, etc.), so it seems reasonable that our genes may affect some of our politics too. The amygdala region of the brain is active in both threat responses and political decisions via the epinephrine pathway. Maybe this study is an early step in explaining why political beliefs aren't very malleable and why political conflict seems so universal. My genes may not allow me to see the world as you do, and therefore I can't understand or agree with your views. But then again, I'd hope that our education, reason, communication, and tolerance can overcome humanity's genetic limitations.
Tuesday, September 16, 2008
A California budget "solution"
http://www.sacbee.com/111/story/1239210.html
"I know that we're not sending [Governor Arnold Schwarzenegger] the budget that he wanted," [Assembly Speaker Karen] Bass said. "But this isn't the budget that any of us wants."
Yet this is what we're getting!
The Dems and GOP can't agree on whether to raise taxes (in a state with some of the highest taxes in the US) and/or cut critical spending to public services to balance the $15B budget deficit, which caused the budget to be about 80 days late this year (a new record in tardiness for a state that has only passed 4 budgets on time). So what do they do instead? Borrow against future budgets of course! Arnold's billions of dollars of bonds did not sustainably fix CA's budget woes, as he promised when running to oust Gray Davis. Regardless, there have been some painful cuts, such as smaller doctor reimbursements for Medi-Cal, smaller or suspended cost-of-living increases for schools/seniors, cuts to disability/SSI, and many teachers/public workers laid off. Of course this mostly hurts the poorest and weakest of us, who don't really matter. At least they managed to close some tax loopholes on the rich and privileged (the famous yacht/RV deduction), or so they claim. But plenty of other holes remain.
So now the CA legislature (with a Congress-like 19% approval rating, compared to Bush and Arnold's 38%) has decided to play some accounting tricks to appear to balance the budget. I love the Sac Bee term for it: "employing accounting maneuvers". So basically CA will take 10% larger income tax witholdings in the first half of the calendar year, and then take less in the second half or give it back to us as reimbursement later (we can opt out of this though, but probably most people won't). By the way, tax reimbursements for archaic paper filers (such as idiots like myself) can take up to 6 months for delivery, according to the CA Franchise Tax Board. Well, I filed my 2007 return in February, and haven't got my meager reimbursement yet in September! I emailed, mailed, and called the FTB about it, and they said they didn't know why there was a delay, but would "flag" my file for fast action. That was 3 weeks ago, with no results. I can't stand how the state just decides to sit on your money (money that you could have invested to collect interest, or more like watch it evaoprate in the turbulent market!), and you just have to wait until they get around to returning the money you earned months ago back to you. So for them to seek to balance the budget by increasing income tax witholdings, I can just see our wages stagnating in Sacramento's coffers for months, if not years. And can you imagine the sea of confused filers and complaints that will flood the FTB, an agency that's not exactly known for outstanding customer service? Obviously Lehman and Fannie aren't the only financial institutions that are terribly mismanaged and make poor decisions that hurt themselves and their customers.
So the legislature will pick up the budget shortfall in year X by siphoning tax revenue from year X+1. But what happens when the budget for year X+2 comes around? Now you have to take even more money from the future pot to compensate for the money you withdrew last year. Pretty soon we'll be paying for the 2015 budget with 2030 money, which is like a no-interest bond for them! The state doesn't have to pay interest to the taxpayers that it borrows from without our consent. Of course this is just a stopgap measure to buy them some time in order to draft a "real" budget that could persist. Well considering their track record for cooperation and punctuality, I think it's more likely that we'll win the lottery!
Well speaking of that, come November the voters will get to decide whether we want to borrow from future lottery revenues to help balance the budget too. So buy more scratchers! But the lottery is just a sick social experiment. Critics say the CA lottery is terribly underperforming versus other states, needs to vastly improve marketing, and should be privatized. Well maybe so, but as we know, most gambling/lottery operations prey on and hurt lower income individuals the most. And those are the vulnerable people who depend on state services to literally stay alive. So they're getting the double-whammy in CA: cuts to their services, as well as greedy Wall Street involvement in the lottery. So for the few lucky winners, they'll get less money because some will be shipped off to investors. And of course the lottery causes many social problems that push more people into financial ruin, force more desperate families to file for state support, and have less spending money to infuse into the state's economy. Is it any sort of budget solution to promote the lottery - where sales tax dollars just become lottery revenues instead? That's like Enron accounting.
-------
why not just sue the estate of ken lay for the money enron stole from the state? i think it's around 16 billion? oh, that's right, arnie dropped any charges or possible lawsuits against him or enron. that's how he funded his recall.
Wow, he really gave them immunity?
Yep, it appears so! Davis-Bustamante were preparing a $9B suit/refund against Enron for the CA energy scam, but Arnold dropped it. Well $9B would have gone a long way to balancing our current budget.
http://baltimorechronicle.com/oct03_Palast.shtml
-------
I guess the last budget proposal was "j/k", and this is the real one:
http://www.sacbee.com/111/story/1249171.html
It's sad that it took 81 late days and state childcare/medical facilities scrambling for stopgap funding in the meantime (or just flat out closing their doors to the needy public) for the CA legislature to realize that they can increase revenues by actually getting corporations to pay their taxes! So instead of using private citizen taxpayers as "ATM machines" as Arnold said, they will scrap those short-sighted, disrespectful accounting gimmicks and instead collect more revenue by actually enforcing the corporate tax code. They will make late payment penalties larger, which will either net them more money in penalties or increase on-time payments. Wealthy persons and companies that owe more than $1M in back taxes will be penalized 20% instread of 10%, and some tax amnesties will be cancelled. Small companies are supposedly exempt.
Actually I have to give credit to Arnold for standing firm on this and not just signing the previous stupid budget to get it over with. It's more than I can say of the spineless Democrats and ideologue Republicans in the legislature. What if their salaries and benefits froze up for 81 fretful days, so they could see what it's like for lowly state workers and the clients who depend on them?
--------
Also... what do you think about the huge infusion of public cash into the money markets by the Feds? So much for small government and laissez-faire. Maybe such a drastic move is unavoidable at this point, to restore some lost confidence and rescue the financial sector. But it sends a dangerous message of course, like the market is the misbehaving spoiled teen, and the government is the rich father who will always pull major strings to bail the kid out of trouble. Maybe instead of rescuing greedy idiots every time they shoot themselves in the foot, we can overhaul the entire system so that our economy is not so dependent on overborrowing, overspending, and lusting for larger and larger profits? I must be smoking. Well, at least some people got their money back in the market with this "good news". The Dow swung from 11,300 to 10,600 to 11,400 in half a week, sheesh.
http://biz.yahoo.com/ap/080919/financial_meltdown.html
"I know that we're not sending [Governor Arnold Schwarzenegger] the budget that he wanted," [Assembly Speaker Karen] Bass said. "But this isn't the budget that any of us wants."
Yet this is what we're getting!
The Dems and GOP can't agree on whether to raise taxes (in a state with some of the highest taxes in the US) and/or cut critical spending to public services to balance the $15B budget deficit, which caused the budget to be about 80 days late this year (a new record in tardiness for a state that has only passed 4 budgets on time). So what do they do instead? Borrow against future budgets of course! Arnold's billions of dollars of bonds did not sustainably fix CA's budget woes, as he promised when running to oust Gray Davis. Regardless, there have been some painful cuts, such as smaller doctor reimbursements for Medi-Cal, smaller or suspended cost-of-living increases for schools/seniors, cuts to disability/SSI, and many teachers/public workers laid off. Of course this mostly hurts the poorest and weakest of us, who don't really matter. At least they managed to close some tax loopholes on the rich and privileged (the famous yacht/RV deduction), or so they claim. But plenty of other holes remain.
So now the CA legislature (with a Congress-like 19% approval rating, compared to Bush and Arnold's 38%) has decided to play some accounting tricks to appear to balance the budget. I love the Sac Bee term for it: "employing accounting maneuvers". So basically CA will take 10% larger income tax witholdings in the first half of the calendar year, and then take less in the second half or give it back to us as reimbursement later (we can opt out of this though, but probably most people won't). By the way, tax reimbursements for archaic paper filers (such as idiots like myself) can take up to 6 months for delivery, according to the CA Franchise Tax Board. Well, I filed my 2007 return in February, and haven't got my meager reimbursement yet in September! I emailed, mailed, and called the FTB about it, and they said they didn't know why there was a delay, but would "flag" my file for fast action. That was 3 weeks ago, with no results. I can't stand how the state just decides to sit on your money (money that you could have invested to collect interest, or more like watch it evaoprate in the turbulent market!), and you just have to wait until they get around to returning the money you earned months ago back to you. So for them to seek to balance the budget by increasing income tax witholdings, I can just see our wages stagnating in Sacramento's coffers for months, if not years. And can you imagine the sea of confused filers and complaints that will flood the FTB, an agency that's not exactly known for outstanding customer service? Obviously Lehman and Fannie aren't the only financial institutions that are terribly mismanaged and make poor decisions that hurt themselves and their customers.
So the legislature will pick up the budget shortfall in year X by siphoning tax revenue from year X+1. But what happens when the budget for year X+2 comes around? Now you have to take even more money from the future pot to compensate for the money you withdrew last year. Pretty soon we'll be paying for the 2015 budget with 2030 money, which is like a no-interest bond for them! The state doesn't have to pay interest to the taxpayers that it borrows from without our consent. Of course this is just a stopgap measure to buy them some time in order to draft a "real" budget that could persist. Well considering their track record for cooperation and punctuality, I think it's more likely that we'll win the lottery!
Well speaking of that, come November the voters will get to decide whether we want to borrow from future lottery revenues to help balance the budget too. So buy more scratchers! But the lottery is just a sick social experiment. Critics say the CA lottery is terribly underperforming versus other states, needs to vastly improve marketing, and should be privatized. Well maybe so, but as we know, most gambling/lottery operations prey on and hurt lower income individuals the most. And those are the vulnerable people who depend on state services to literally stay alive. So they're getting the double-whammy in CA: cuts to their services, as well as greedy Wall Street involvement in the lottery. So for the few lucky winners, they'll get less money because some will be shipped off to investors. And of course the lottery causes many social problems that push more people into financial ruin, force more desperate families to file for state support, and have less spending money to infuse into the state's economy. Is it any sort of budget solution to promote the lottery - where sales tax dollars just become lottery revenues instead? That's like Enron accounting.
-------
why not just sue the estate of ken lay for the money enron stole from the state? i think it's around 16 billion? oh, that's right, arnie dropped any charges or possible lawsuits against him or enron. that's how he funded his recall.
Wow, he really gave them immunity?
Yep, it appears so! Davis-Bustamante were preparing a $9B suit/refund against Enron for the CA energy scam, but Arnold dropped it. Well $9B would have gone a long way to balancing our current budget.
http://baltimorechronicle.com/oct03_Palast.shtml
-------
I guess the last budget proposal was "j/k", and this is the real one:
http://www.sacbee.com/111/story/1249171.html
It's sad that it took 81 late days and state childcare/medical facilities scrambling for stopgap funding in the meantime (or just flat out closing their doors to the needy public) for the CA legislature to realize that they can increase revenues by actually getting corporations to pay their taxes! So instead of using private citizen taxpayers as "ATM machines" as Arnold said, they will scrap those short-sighted, disrespectful accounting gimmicks and instead collect more revenue by actually enforcing the corporate tax code. They will make late payment penalties larger, which will either net them more money in penalties or increase on-time payments. Wealthy persons and companies that owe more than $1M in back taxes will be penalized 20% instread of 10%, and some tax amnesties will be cancelled. Small companies are supposedly exempt.
Actually I have to give credit to Arnold for standing firm on this and not just signing the previous stupid budget to get it over with. It's more than I can say of the spineless Democrats and ideologue Republicans in the legislature. What if their salaries and benefits froze up for 81 fretful days, so they could see what it's like for lowly state workers and the clients who depend on them?
--------
Also... what do you think about the huge infusion of public cash into the money markets by the Feds? So much for small government and laissez-faire. Maybe such a drastic move is unavoidable at this point, to restore some lost confidence and rescue the financial sector. But it sends a dangerous message of course, like the market is the misbehaving spoiled teen, and the government is the rich father who will always pull major strings to bail the kid out of trouble. Maybe instead of rescuing greedy idiots every time they shoot themselves in the foot, we can overhaul the entire system so that our economy is not so dependent on overborrowing, overspending, and lusting for larger and larger profits? I must be smoking. Well, at least some people got their money back in the market with this "good news". The Dow swung from 11,300 to 10,600 to 11,400 in half a week, sheesh.
http://biz.yahoo.com/ap/080919/financial_meltdown.html
Thursday, September 11, 2008
Living large at the Dept. of Interior
So you have federal employees tasked with collecting royalties from oil companies actually partying, accepting gifts, fornicating with, and doing drugs provided by those companies' representatives. And coincidentally or not, many feel that the government is getting shortchanged on resource royalties. Heh, who needs lobbyists when you can just bribe and dope up the tax collectors instead? This exact scandal happened not long ago (1990) at the same department, so obviously they haven't learned their lesson. Yet another consequence of toothless regulation and laissez-faire government.
http://www.presstelegram.com/ci_10437371?source=rss
Oil brokers sex scandal may affect drilling debate
By H. Joseph Herbert The Associated Press
Article Launched: 09/11/2008 10:05:03 AM PDT
WASHINGTON - A scandal involving sex, drugs and - uh, offshore oil drilling.
It's a strange mix, and it couldn't have come at a worse time for those in Congress pressing to expand oil and gas development off America's beaches while trying to stave off an election-year rush by Democrats to impose new taxes and royalties on the oil industry.
An Interior Department investigation describing a "culture of substance abuse and promiscuity" by workers at the agency that issues offshore drilling leases and collects royalties hit lawmakers Wednesday just as they prepared for votes next week on expanding offshore drilling.
"On the eve of Congress starting this big debate you've got a horror story of mismanagement and misconduct in programs that are going to be a key part of the discussion," Sen. Ron Wyden, D-Ore., said in an interview, adding that it can't help but influence the debate.
The two-year, $5.3 million investigation by Interior's inspector general found workers at the Minerals Management Service's royalty collection office in Denver partying, having sex, using drugs and accepting gifts and ski trips and golf outings from energy company representatives with whom they did government business. The investigations exposed "a culture of ethical failure" and an agency rife with conflicts of interest, Inspector General Earl E. Devaney said.
Between 2002 and 2006, 19 oil marketers - nearly a third of the Denver office staff
- received gifts and gratuities from oil and gas companies, including Chevron Corp., Shell, Hess Corp. and Denver-based Gary-Williams Energy Corp., the investigators found.
"Employees frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and natural gas company representatives" who referred to some of the government workers as the "MMS Chicks."
The director of the royalty program had a consulting job on the side for a company that paid him $30,000 for marketing its services to various oil and gas companies, the report said. MMS Director Randall Luthi said in an interview the agency was taking the report "extremely seriously" and would weigh taking appropriate action in coming months.
Interior Secretary Dirk Kempthorne in a statement released Thursday vowed to take swift action, saying that he was "outraged by the immoral behavior, illegal activities and appalling misconduct of several former and long-serving career employees."
"We must and we will eliminate any remaining negative elements in the Minerals Management Service," Kempthorne said.
"This IG report has it all - sex, drugs and the Bush administration officials once again in cahoots with Big Oil," said Sen. Charles Schumer, D-N.Y., whose Joint Economic Committee released a report last year claiming the Minerals Management Service has failed to collect millions of dollars in oil royalties.
Republicans and Democrats promised further scrutiny of the Interior Department agency which last year handled $4.3 billion in royalty-in-kind payments from energy companies drilling on federal lands. Under the program oil companies give the government oil in lieu of cash and the MMS office in turn sells the oil on the open market. Sen. Jeff Bingaman, D-N.M., chairman of the Senate Energy and Natural Resources Committee, said the IG report "raises very serious questions" about the royalty collection process, something especially troublesome "given the potential for expanded domestic drilling." He said some basic reforms in the royalty-in-kind program should be included in drilling legislation.
Wyden said the program should be suspended to "clean house" at the federal agency and "bring back the process of rigorous audits and accountability."
House Democrats on Wednesday offered a broader drilling proposal than they had floated previously. It would lift all moratoria on drilling 100 miles from shore and allow energy development beyond 50 miles from the coast if a state agrees. Waters closer than 50 miles would continue to be protected.
The drilling measure is part of a broader energy package that also would roll back tax breaks for the largest oil companies and require them to pay additional royalties, with the money to be used to spur renewable energy programs and conservation.
House Majority Leader Steny Hoyer, D-Md., called it "a strong bill that will increase responsible drilling and invest in renewable energy" and said those criticizing it would "rather have a political issue."
But House Republican leader John Boehner, R-Ohio, accused the Democrats of "trying to pull a hoax on the American people." He said the plan would result "in little or no new American energy production" because states would share no royalties and have little financial incentives to allow drilling.
The Senate, meanwhile, is expected next week to take up several drilling proposals, including one that would open waters off the Atlantic from Virginia to Georgia and the eastern Gulf off Florida to drilling but keep the bans in place elsewhere. That plan also would allow for a 50-mile coastal buffer.
---
Associated Press writer Dina Cappiello contributed to this report.
---
On the Net:
Office of the Inspector General: www.doioig.gov
http://www.presstelegram.com/ci_10437371?source=rss
Oil brokers sex scandal may affect drilling debate
By H. Joseph Herbert The Associated Press
Article Launched: 09/11/2008 10:05:03 AM PDT
WASHINGTON - A scandal involving sex, drugs and - uh, offshore oil drilling.
It's a strange mix, and it couldn't have come at a worse time for those in Congress pressing to expand oil and gas development off America's beaches while trying to stave off an election-year rush by Democrats to impose new taxes and royalties on the oil industry.
An Interior Department investigation describing a "culture of substance abuse and promiscuity" by workers at the agency that issues offshore drilling leases and collects royalties hit lawmakers Wednesday just as they prepared for votes next week on expanding offshore drilling.
"On the eve of Congress starting this big debate you've got a horror story of mismanagement and misconduct in programs that are going to be a key part of the discussion," Sen. Ron Wyden, D-Ore., said in an interview, adding that it can't help but influence the debate.
The two-year, $5.3 million investigation by Interior's inspector general found workers at the Minerals Management Service's royalty collection office in Denver partying, having sex, using drugs and accepting gifts and ski trips and golf outings from energy company representatives with whom they did government business. The investigations exposed "a culture of ethical failure" and an agency rife with conflicts of interest, Inspector General Earl E. Devaney said.
Between 2002 and 2006, 19 oil marketers - nearly a third of the Denver office staff
- received gifts and gratuities from oil and gas companies, including Chevron Corp., Shell, Hess Corp. and Denver-based Gary-Williams Energy Corp., the investigators found.
"Employees frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and natural gas company representatives" who referred to some of the government workers as the "MMS Chicks."
The director of the royalty program had a consulting job on the side for a company that paid him $30,000 for marketing its services to various oil and gas companies, the report said. MMS Director Randall Luthi said in an interview the agency was taking the report "extremely seriously" and would weigh taking appropriate action in coming months.
Interior Secretary Dirk Kempthorne in a statement released Thursday vowed to take swift action, saying that he was "outraged by the immoral behavior, illegal activities and appalling misconduct of several former and long-serving career employees."
"We must and we will eliminate any remaining negative elements in the Minerals Management Service," Kempthorne said.
"This IG report has it all - sex, drugs and the Bush administration officials once again in cahoots with Big Oil," said Sen. Charles Schumer, D-N.Y., whose Joint Economic Committee released a report last year claiming the Minerals Management Service has failed to collect millions of dollars in oil royalties.
Republicans and Democrats promised further scrutiny of the Interior Department agency which last year handled $4.3 billion in royalty-in-kind payments from energy companies drilling on federal lands. Under the program oil companies give the government oil in lieu of cash and the MMS office in turn sells the oil on the open market. Sen. Jeff Bingaman, D-N.M., chairman of the Senate Energy and Natural Resources Committee, said the IG report "raises very serious questions" about the royalty collection process, something especially troublesome "given the potential for expanded domestic drilling." He said some basic reforms in the royalty-in-kind program should be included in drilling legislation.
Wyden said the program should be suspended to "clean house" at the federal agency and "bring back the process of rigorous audits and accountability."
House Democrats on Wednesday offered a broader drilling proposal than they had floated previously. It would lift all moratoria on drilling 100 miles from shore and allow energy development beyond 50 miles from the coast if a state agrees. Waters closer than 50 miles would continue to be protected.
The drilling measure is part of a broader energy package that also would roll back tax breaks for the largest oil companies and require them to pay additional royalties, with the money to be used to spur renewable energy programs and conservation.
House Majority Leader Steny Hoyer, D-Md., called it "a strong bill that will increase responsible drilling and invest in renewable energy" and said those criticizing it would "rather have a political issue."
But House Republican leader John Boehner, R-Ohio, accused the Democrats of "trying to pull a hoax on the American people." He said the plan would result "in little or no new American energy production" because states would share no royalties and have little financial incentives to allow drilling.
The Senate, meanwhile, is expected next week to take up several drilling proposals, including one that would open waters off the Atlantic from Virginia to Georgia and the eastern Gulf off Florida to drilling but keep the bans in place elsewhere. That plan also would allow for a 50-mile coastal buffer.
---
Associated Press writer Dina Cappiello contributed to this report.
---
On the Net:
Office of the Inspector General: www.doioig.gov
Wednesday, September 10, 2008
Would Hillary have "Palin-proofed" Obama?
http://news.yahoo.com/s/politico/20080910/pl_politico/13317
Well, let's be honest - if Obama picked Hillary, Palin wouldn't even be on McCain's ticket. But JMac saw an opening and he took a big risk, which at least for now appears to be paying off. Even if she lies about the Bridge to Nowhere and may know less about foreign policy than us, it doesn't really matter because she has done what she was asked to do: "energize" the GOP, which is what they needed more than a boring veteran DC wonk like Biden.
But this ongoing (and clearly it is still ongoing) Hillary-Obama feud may continue to divide and hurt the party more than it already has. Sure the Clintons have enthusiastically endorsed Obama (publicly at least), and Obama has swallowed his pride to seek out advice from Wise Bill as his lead in the polls evaporated. Millions of Hillary supporters have been convinced and rallied behind Obama, but millions of others haven't, even though those two candidates' stances on the issues are 90% similar. For any of them to even consider McCain-Palin demonstrates that there's clearly a major personal rift that I don't think the Obama camp has sufficiently addressed. It's not enough to just say "Can't we all get along?" and stress party unity for the sake of beating the GOP. Anyone can say those things, but if Obama is truly a uniter and a transcender, then he needs to do more, personally, to heal the party and convince/reach out to hesitant or angry Hillary supporters. Is it that hard to figure out why they still dislike him and rectify it?
It made a lot of sense to get Hillary on the ticket, but the Obamaniacs ignored better judgment. If the objective in selecting a VP is getting someone who will give you the most help to win the election, then Hillary is the best choice by far (assuming Gore is retired). If the objective is to pick someone who will work well with you, then she's not so attractive (she can compliment him though). If the objective is to pick someone wise who can help the president craft policy, Hillary has some knowledge but clearly there are others more astute. But that is what a cabinet is for! Biden could be Sec. of State or whatnot. Those two were already colleagues and friends, so Biden would obviously do a lot to help an Obama presidency - he doesn't have to be VP. Clearly many Americans think Hillary can be a good president, but Obama has spent the last year trying to de-legitimize her (and the media haven't been "fair" with her either). Of course she and Bill have screwed themselves too. Maybe Obama wasn't ready to reverse course so drastically now and seek the help of a former enemy, which also might be seen a sign of weakness to the GOP (but as if they have an answer to the Dem's dream ticket!). But it could also be construed as a great sign of leadership, "change", and reconciliation that might play out well with independents and the white people that Palin is attracting.
I thought it was also interesting that on Day 1 of the DNC, before the Clintons' speeches, prominent Hillary-supporter and SF Mayor Gavin Newsome said that he and other Hillary supporters got a general feeling of disrespect from the Obama campaign leading up to and at the convention. This seems like a petty divorce court feud for the soul of the Dem Party. Are we the Clinton's party or Obama's? Neither of course! We're the people's party, and we're all just Americans. We should stop this cult rivaly crap before we lose the White House, and clearly it is the Dems' game to lose.
From L: http://www.huffingtonpost.com/adam-mckay/were-gonna-frickin-lose-t_b_124772.html
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Also from the Huffington Post that L sent me, advice for Obama:
3. Stop talking about Sarah Palin and rebutting her lies. NOBODY CARES WHAT THE FACTS ARE. They are influenced by her persona -- the impression they take away from her appearances. When you allow yourselves to become distracted and start serving as a Republican fact-checker, you come across as petty and self-congratulating. Same applies to McCain.
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Could Clinton have Palin-proofed Dems?
Glenn Thrush, Martin Kady II Wed Sep 10, 5:32 AM ET
Republican Rep. Candice S. Miller says Barack Obama had only one shot at Palin-proofing the Democratic ticket — and he missed it when he passed over Hillary Rodham Clinton as his running mate. "Every woman in America knows what Barack Obama did to Hillary Clinton: He looked at her and thought, 'There's no way I'm doing that,'" said Miller. "If Hillary was on the ticket, he'd be in a much better position to win women voters."
Sarah Palin's presence — coupled with Clinton's absence — may be altering one of the great verities of American politics: that women voters overwhelmingly favor Democrats. A Washington Post-ABC News poll released this week showed white women swinging hard against the Democratic ticket. Obama left Denver with an 8-point lead among white women; by the time John McCain pulled out of St. Paul, Minn., with Palin at his side, he had taken a 12-point lead.
Former Clinton strategist and pollster Mark Penn on Tuesday said that it's too soon to know where women will wind up in November, and he declined to engage in any "woulda, coulda, shoulda" speculation about how things might be different if Clinton were on the Democratic ticket. But another former Clinton adviser, speaking on the condition of anonymity, said that the "Obama people have got to be kicking themselves" for not putting choosing Clinton as his No. 2.
Julia Piscitelli of the American University's Women and Politics Institute agreed. "I don't think Palin would be seeing these kind of gains if Hillary was on the ticket," she said. "When Obama picked Biden, it gave Republicans an opening, and they are taking full advantage of it. ... The question is: How long will it last?"
The answer, some Democrats say, is not long. "I don't think this is a real swing [in the polls] until it's been a week, said Sen. Claire McCaskill (D-Mo.), one of Obama's busiest female surrogates. "We'll need to see whether Sarah Palin is willing to answer questions. ... No one will be a stronger advocate for Barack Obama and Joe Biden than Hillary Clinton."
Sen. Blanche L. Lincoln (D-Ark.) also sounded the Palin-will-wilt-in-the-spotlight theme. "Sarah Palin delivered a great speech, but we haven't heard anything else about what she's going to do," Lincoln said. "American women are smart, they're bright and this election isn't just about Sarah Palin. This is about what they want to do for the country."
The Obama campaign has denied that it has a serious problem with female voters. On Monday, campaign manager David Plouffe told a Washington Post reporter, "Your poll is wrong," adding, "We certainly are not seeing any movement like that. Polls, time to time, particularly on the demographic stuff, can have some pretty wild swings."
That view won support from two unlikely sources Tuesday: Penn and a Republican senator who backs the McCain-Palin ticket. Penn said that women are going to be "the absolute swing vote in this campaign, and it's not clear which direction they are going to go in. "I don't think it's a Hillary backlash we're seeing," he added. "With Palin on the ticket, we're going to be seeing this thing swing back and forth."
Sen. Lisa Murkowski (R-Alaska), who has had a strained relationship with her state's governor, downplayed Palin's power. "I find it difficult to believe that many of the Hillary supporters are going to come over just because of Sarah Palin," Murkowski said. "It should be about strength of positions" and policy.
But Sen. Susan Collins (R-Maine), who is locked in a tough race of her own, says several women — former Clinton supporters — have come up to her in Maine to say Palin gives them a reason to back McCain. "I have never seen such excitement in the Republican Party as we're seeing in response to Sarah Palin," Collins said. "I've had a lot of Democrats and independent women in Maine who say they're happy to see a woman on the ticket. Many of them saw an Obama-Clinton ticket as unbeatable. ... That is significant and remarkable."
Quinnipiac University Polling Institute Assistant Director Peter A. Brown said the Obama campaign is fooling itself if it discounts the importance of the problem. "This isn't about Hillary; it's about Obama's problem with white women voters," he said. "Hillary won about 10 million votes from women voters in the Democratic primaries — there are 52 million women voting in the general election."
Clinton has said she'll hit the road for Obama, but her team says she refuses to be an anti-Palin "attack dog." Further complicating matters for Obama, Hillaryland fundraiser Susie Tompkins Buell is leading a group that will fight media sexism against the Alaska governor.
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I have two complains with this email.
I think you are gravely OVER estimating how many Hillary supporters will actually vote for McCain. Especially now that Palin is on board. The latest poll I saw, which may have been before Palin was selected, had the VAST majority of Hilary supporters on board with Obama, 90/10 kind of vast. And with Palin on the ticket, with her extremely conservative pro-life views, it is hard to believe she will pick up many Hilary supporters.
I think that there are many problems with putting Hilary on the ticket as the VP. It may seem like appeasement to her voters but it also may seem like pity, or a superficial ploy. And were they to work together, it is hard to fathom Hilary taking a backseat by choice. And as we have seen with Cheney, a VP has more leeway than one might imagine for the easiest job in America. It is just too dangerous politically to let someone that powerful in Washington with that many backers be your running mate when she STILL wants your job. A lot of that is based on hypotheticals, but plausible in my opinion.
I think the best way to have done it was to have a pseudo offer to Hilary which she would gracefully decline. Maybe not a public rejection, but a press conference where Hilary or Obama mentions a private chat they had with the other concerning the VP spot and a graceful but firm no. Save face and show support. What Hilary folk seem to fear is that they are forgotten/not important to Obama, which I think that would have alleviated somewhat.
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Yeah I agree with that. I was not saying that Hillary's Dem supporters are flocking to the GOP - as you said, it's like 90-10 (though that "10" is still about two million passionate voters). But Hillary could have given Obama the full 100, plus swayed a lot of undecided, blue-collar types who may be disillusioned with the Republicans after the Bush years. Biden really means nothing to them (I refuse to believe that his humble upbringing in PA 50 years ago will win battleground states for the Dems). Now Palin is a gimmick who offers them an intriguing option.
Sometimes a VP is a blessing and a curse to a ticket, and there's no way around it (I don't know pre-WWII presidential history, but we have the LBJ, Agnew, Cheney, and Quayle examples at least). Hillary would get a lot of attention and maybe cause some rivalry/tension with Obama, but what is wrong with that? In European governments, the top leaders compete and feud with each other all the time, yet stuff still gets done. Maybe with Hillary and Obama to keep each other in check, we can actually make government cooperative/collaborative instead of being so caught up in who gets the credit and who is the visionary. They would be a dysfunctional ticket at times, but what else is new? It's not like Biden won't be a liability here and there.
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I think perhaps that I think more of Hilary’s ambition than you. I don’t think she would cause “minor” problems, I’m considering more of a purposefully undermining his presidency to give herself the next term, even that term if she is lucky. But that is not a reality at this point, so who can say. And I agree, Biden is a nothing VP choice, Obama is so magnetic and different that it is hard to be in his shadow on the national scene.
What I DO disagree with wholeheartedly is that Palin is an intriguing option. I was reading just today how she is claiming executive privilege on her emails (sound familiar) that were from A) her personal account (gov.sara@YAHOO.COM) and B) many of them were addressed to her husband. So…where is the executive privilege? Home account…to husband…I’m not seeing it. But it sounds like a whole lot more of the same. Just one of the many steps I have seen that takes Palin from a nobody who I can’t believe made the ticket to someone I am actively against having in office.
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I guess because she is an "executive" and backed by more lawyers that we are. Well, if she read her Yahoo! user agreement carefully, she really has no security, privacy, and "rights" to her public account.
I don't know if I'd rate Hillary's prospects as a statesman(woman) so poorly. I agree that she is a pure ambitious political animal, sometimes quite phony and self-serving. But for a VP to try to undermine her own president while in office is nearly unprecedented in Western politics and worse than The Sopranos (well, her campaign ad with Bill did make an allusion to that show!). Plus, what can a VP really do to help or hurt a president anyway? So if I read you right, you think that she would try to ruin Obama's first term, and then try to weasel her way to the head of the ticket when they're up for re-election? "Obama couldn't get it done, so for the good of America I must step in." I mean, it's possible, but no way the Dem Party or media would let her get away with that. Also remember that she didn't run for president in 2004 when she could have, and might have had a better chance than Kerry to beat Bush. She probably wanted to run, but was dissuaded by Party bosses or other factors. If she was 100% ambitious as you said, wouldn't she have taken her first chance then? I think part of her does love America more than herself and wants to do the right thing, but that part is buried deep inside her, like Darth Vader.
And for Palin - of course I'm not saying that she can be a great leader with what little I know of her. But you can't deny that she is captivating a lot of Americans and getting them more interested in politics, as Obama did for the left (though some of that is starting to wear off). Some Americans are intrigued by her, which is a boost to the GOP. Was McCain's big convention bounce (maybe 5-10 points) because of Rudy's speech? On The Daily Show they were interviewing GOP delegates as to why they liked Palin (to demonstrate that they don't really know why they like her), and one said, "Because she shows that anyone can be VP." Of course that was meant to mock her, but it is also amazing how quickly this previously anonymous politician has been embraced by the skeptical right as "one of us".
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Hillary's ideal scenario here is not to be VP. It's that Obama loses this election and in 4 years she's again the obvious Dem pick for President (and the Clintons regain control of the party). She can't be seen torpedoing Obama because that would get her shut out, so she presented a strong convention speech and all that. But her incentive is to hold back some of her support.
I don't know that the Palin pick is expected to go after the hardcore Hillary supporters, the people who go to caucuses and carry signs and all that - it would be hard to imagine politicians who have fewer policy points in common. Rather, it's aimed at the far larger group of independent female voters (and more casually-Democratic voters).
And the trap the GOP has set with Palin is actually more subtle and evil than just "Hey lady-voters, we've got someone on the ticket who has the same gender as you!" It makes it very easy for the GOP to cast people who oppose Palin as sexist. This is fairly cheap, but it's reasonably effective at galvanizing voters - the GOP can paint it that the Democrats are trying to keep women out of the White House, present it to women as an "us vs them", and so on. It's certainly hilarious to watch; I saw James Carville get caught out by this on some news-debate show a week ago, and then spend several minutes having to backpedal as the GOP congresswoman he was arguing with beat him about the head and shoulders with the sexism card. And I'd expect to see a lot more of this after the VP debates, charges that Biden bullies or talks down to Palin, etc.
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Thanks for your input J, we've missed you these last few months!
Yes I agree that VP is not necessarily in Hilly's best career interests, but if she cares about her party and cares about the country, it should be on her mind. She was interviewed about being Obama's VP, and said that she would take the offer if it was given (first link). Maybe it was just lip service, but she put it out there. The second link is another article further promoting the potential benefits of an Obama-Clinton ticket. But I guess big egos and especially big Dem egos have trouble playing team ball.
http://elections.foxnews.com/2008/06/03/ap-clinton-says-shes-open-to-being-obamas-vp-candidate/
http://www.huffingtonpost.com/kathleen-reardon/why-obama-and-clinton-wou_b_101603.html
Hillary's senate career is not promising (she's still Schumer's junior in NY and won't head a cmte. for years), so veep could have been better for her. Yes it does "work in her interests" if Obama loses (and then could chastise the Dems, "I told you so"), but as you said, it will come to haunt her if she is perceived as not having done everything in her power to get the Dems back to the White House this year. Already she didn't do much to promote Kerry/Edwards in 2004. I think many black Americans and hardcore Obamaniacs already feel that way and don't trust Clinton, which is a sad reflection on the party today. But still, there is sexism involved because people hold her to higher standards. Why does she have to be Obama's #1 champion, the man who stole her show and let down millions of American women who thought this was "their time"? Of course Clinton let them and herself down too. But where is the criticism about silenced Edwards not supporting Obama enough (he has his marriage to repair), or famous Clinton backers like Mayors Villeraigosa/Newsome, or even another female like Pelosi, who didn't take a side in the Obama-Clinton war? I guess Hillary wanted to be better than everyone else, and now she's got to deal with extra scrutiny.
Regarding what you said about the GOP Palin sexism trap, I totally agree and that was one of my first thoughts when McCain announced her as running mate a couple weeks ago. Biden already roughs up his male colleagues plenty, so I'm sure his handlers will shoot him up with valium before the debate with Palin. Of course the Dems and Obama camp are playing it safe, and only sending out fellow popular female governors Sebelius & Napolitano to badmouth Palin. Supposedly sexism-proof attack dogs? Clinton, however, said that she wouldn't go that far for Obama, and her people said that Obama has not asked her to do so, at least on the record. Though who the hell would admit to asking a popular feminist voice to badmouth a rival female politician? I think it's at least on their minds.
http://news.yahoo.com/s/politico/20080905/pl_politico/13193_1
http://www.cnn.com/2008/POLITICS/09/10/condon.palin/index.html?section=cnn_latest
As you said, I don't think anyone in the GOP are foolish enough to believe that Palin alone can sway the hardcore Hillary backers who are also hardcore feminists and liberals. She may have sway with the suburban moms and centrist undecideds, as you, M, and I said before. But even before the Palin VP pick was announced, millions of angry Hillary backers had already shunned the Obama alternative and started groups and blogs like "Hillary supporters for McCain" (some examples below). Of course this is just the Net, so not sure how representative such attitudes are of the Hillary Dems in general. As we previously discussed, 90% of them are behind Obama, but that number is a lot lower than it should be. Did disappointed Dean or Gephart supporters refuse to back Kerry in 2004? It's a sad personality feud, which is something that the Dems can't afford now or ever.
http://hillarysupportersformccain.blogspot.com/
http://www.cnn.com/2008/POLITICS/08/26/clinton.backers/
Well another boost that Hillary could bring to the ticket is money and influence. I know Obama has plenty of both (the former in record amounts, and no, it's not all from patriotic "small donors" online). Hillary's finances were a mess after the primaries, but she could connect Obama to her elite fundraising networks, famous fans, and other power players. Of course Obama supposedly wants to shun such campaign influences, but we all know he holds plenty of private VIP fundraisers and no-media-allowed exclusive events too. Well, maybe all this worrying is unneccesary because Obama still has a good chance to win without Hillary on his ticket.
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T wrote in his first email that Palin was picked to "energize" the GOP. To be specific, she was picked for the very traditional reason that all of her views are in line with the people who don't like McCain. McCain calls himself a maverick partly on this reasoning, there are a lot of people in the GOP (mostly traditional far right and religious types) who hate his guts. Palin offsets that. And I believe that is a very traditional common way to pick a vp, find someone to offset your weaknesses. The problem is that these far right types don't simply dislike McCain but actually pray for him to die in office.
http://toddalcott.livejournal.com/221089.html#cutid1
Warning: This guy is a hardcore left wing type. But he quotes another website that's amusing. Also it's probably immoral for me to copy and paste a whole page but people on the internet in general (me=guilty) tend not to go to links. So whatever.
"A few days ago, I posted a snarky little piece on Sarah Palin. In it, I suggested that McCain, in giving Palin the VP slot on the GOP ticket, was rallying the far-right base by dangling the very real possibility of his imminent death in front of their hateful, blood-thirsty little eyes. To the left, I suggested, Palin is a veiled threat, but to the right she's a coded promise.
The piece was intended as a kind of dark imagining of the far-right mind, satire, perhaps, if you will. Well, if there's anything the past 8 years have taught me, the morning's satire goes stale by lunchtime as the far right catches up to it and makes it news instead of comedy.
Jay Rogers, a real-life evangelical, has a website, The Forerunner, where he talks up Jesus. Part of the site is his weblog, where he talks about more political stuff. He's supporting someone named Chuck Baldwin for president, which is his right and good for him.
The other day he published a piece on Sarah Palin. His only problem with Palin, it seems, is that she's running for vice-president instead of president. If she were running for president, he'd toss his fave Chuck Baldwin overboard like week-old manna. Why does he like Palin? I'll let him talk: "She's pro-life and would work to overturn Roe v. Wade. She would lower taxes and return America to a supply-side free market in the philosophy of Adam Smith. She's a strong Christian who isn't afraid to confront moral issues and corruption in politics." Which, again, good for him. And, he seems to want to fuck her brains out. Which, okay, to each his own, I can think of worse reasons to vote for someone.
But, you know, there's a problem. Palin, that fine, foxy, hypocritical, corrupt, book-banning, oil-money-loving Christian babe is still anchored to that godless heathen McCain. What is a hateful, intolerant fundamentalist Christian to do? Luckily, Rogers has a "three point plan:"
1. Vote Constitution Party. (I vote my conscience and cannot support McCain even with Palin.)
2. Hope and pray for McCain/Palin to win. (I am an idealist, but also a realist!)
3. Pray for John McCain's salvation and pray specific imprecatory prayers if he fails to pro-actively defend the sanctity of human life.
Huh. Funny thing about those "imprecatory prayers." There's something a little threatening about that phrase. I wonder if there's another meaning behind it? In fact, I wonder if there's an earlier version of this column, posted but redacted, that might better clarify Rogers' position? What? There is?
Ah, there it is: "Pray for John McCain's salvation and speedy death." How very Christian.
I hate it when I'm right.
This original was, of course, scrubbed from Rogers's site within hours, but speedy hands were able to recover it.
I knew that McCain was eager to rid himself of any shred of dignity he possessed in order to win this election, but even I would have thought he'd stop short of promising his own death to get votes. It seems there is no underestimating the man.
(If you would like more bile, there's always Ixion, who goes so far as to stage an inspirational image of the assassination of John McCain. These are, seriously, the people McCain wants to vote for him -- the ones who want him dead by the end of January 2009.)"
So Palin being a woman probably factored into it, (as if they couldn't find a man with those values) but her views are the primary factor in her getting a vp nomination. On the positive side, I never imagined hardcore republicans wanting to get a woman into office so badly.
I don't have much to add on the Hilary being a vp thing other than that public perception is that they are not big fans of each other. Whether that is true or not (I'm pretty sure it is) its enough that I think an Obama/Hilary ticket would have been more harmful than helpful. I also agree that her ambition for the office would be transparent and harmful to the democratic party and all that other stuff others have mentioned.
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It's good that you brought up these points, Glarg. Of course with all the BS in the media about "culture wars", "true conservative", and whatnot, I think hatred for McCain by the religion right is ludicrous, and I don't envy him for having to work with them to try to become president. Is it just because he doesn't invoke Jesus every day to help us win our "crusade" against terror? Just because he called out extremists like Robertson and Falwell for what they are? Just because he won't kiss their born-again asses and pander for their support like Bush and others might? Huckabee, despite being a former minister, didn't sink that low either. Many old school conservatives feel that the hijacking of the GOP by the Christian Coalition/religious right is a bigger danger to their values and the future of their party than the Dems.
Is McCain a "maverick" because he tries to reform corrupt campaign finance, actually speaks to people on the other side of the aisle, and doesn't want to deport 12M undocumented workers overnight? I thought that was called being "reasonable". McCain's views vacillate when convenient like most politicians, but consistently he has been for small government, free trade, low taxes, ethics, anti-abortion, and ant-gay marriage. What's not to like there for a church-going conservative? Just because he doesn't publicly endorse creationism means he's not one of them? Bottom line, McCain was going to pick a "typical" modern conservative as his running mate, Palin, Pawlenty, Romney (despite his universal health care baggage), or otherwise. As you said, the veep should compliment the president. And to have it both ways, they're selling Palin as a true conservative who also happens to be a reformer (in their imagination at least).
Chopes and I were discussing how maybe JMac's old trusted friend Lieberman was his first choice, but obviously it would have angered a lot of GOPers and split the party with little political gains for them. Some Reps can't fathom a non-Rep on their ticket, especially one that used to run with Gore and Clinton, but is now a Dem pariah. And let's be honest, Lieberman only chose to distance himself from the Dems when they rejected him for his pro-Bush positions on Iraq and the War on Terror. They created the liability by running a "true liberal" against Joe in the CT Dem primary. If the war in Iraq was going well (or never happened), Lieberman would still be a Dem and Hillary would be our nominee now. But such hypotheticals don't really serve a purpose, so sorry for my digression!
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