Cut, Kill, Dig, Drill (Jonathan Raban, 10/09/08, London Review of Books)
Sarah Palin has put a new face and voice to the long-standing, powerful, but inchoate movement in US political life that one might see as a mutant variety of Poujadism, inflected with a modern American accent. There are echoes of the Poujadist agenda of 1950s France in its contempt for metropolitan elites, fuelling the resentment of the provinces towards the capital and the countryside towards the city, in its xenophobic strain of nationalism, sturdy, paysan resistance to taxation, hostility to big business, and conviction that politicians are out to exploit the common man. In 1980, Ronald Reagan profitably tapped the movement with his promises of states’ rights, low taxes and a shrunken government in Washington; the ‘Reagan Democrats’ who crossed party lines to vote for him are still the most targeted demographic in the country. In 1992, Ross ‘Clean out the Barn’ Perot and his United We Stand America followers looked for a while as if they were going to up-end the two-party system, with Perot leading George H.W. Bush and Bill Clinton in the midsummer polls. In 1996, Pat Buchanan (‘The peasants are coming with pitchforks’) appealed to the same bloc of voters with a programme that was militantly Christian, white, nativist, provincial, protectionist and anti-Washington. In 2000, Karl Rove cleverly enrolled this quasi-Poujadist faction in his grand alliance of libertarians, born-agains and corporate interests. It’s worth remembering that in 2004 every American city with a population of more than 500,000 voted for Kerry, and that the election was won for Bush in the outer suburbs, exurbia and the countryside – peasants with pitchforks territory. For an organisation so wedded to its big-city corporate clients, the Republican Party has been hugely successful in mopping up the votes of low-income, lightly educated rural and exurban residents.[...]Until now, the political leaders who’ve used the movement to their electoral advantage have come to it as outsiders. Reagan the Hollywood actor, Perot the data-processing billionaire, Buchanan the DC journalist, and George W. Bush the energy-industry scion and owner of a merely recreational ranch in Crawford, Texas, have had very little in common with their rural and exurban constituents, and their gestures at farmyard, strip-mall or cowboy-boot cred have tended to come across as phoney and embarrassing. Photographed inside J.C. Penney’s or Costco or Safeway, they’ve looked hardly less exotic than poor Michael Dukakis did on board his ill-advised tank. But the moment that Sarah Palin stepped up to the mike at the Republican Convention in St Paul, and began talking in her homely, mezzo-soprano, Far Western twang, she showed herself to be incontestably the real thing. Americans, starved of völkisch authenticity in their national politicians, thrilled to her presence on the stage. Forty million people watched her speech on television. When she said, ‘Difference between a hockey mom and a pitbull? Lipstick!’ even in the liberal redoubt of Seattle I thought I heard a roar of delighted recognition coming from my neighbours on the hill. Palin doesn’t need to say what Poujade used to tell his listeners, ‘Look me in the eye, and you will see yourself,’ and ‘I’m just le petit Poujade, an ordinary Frenchman like you’: all she needed was her trademark blink from behind her librarian glasses, and to turn on her pert, wrinkle-nosed smile, in order to convince a crucial sector of the American electorate, male and female, that it sees in her a looking-glass reflection, suitably flattering in both form and content, of itself. Sarah, c’est moi.
Just got this email from Fidelity:
Insight on Government Rescue Plan (Dirk Hofschire, CFA, September 29, 2008, Fidelity Investors Weekly)
The first lesson learned throughout the history of financial crises is that when financial markets simply stop working on their own, the government may be the only backstop available to prevent a systemic financial collapse that jeopardizes the entire economy. That is the stage in which the U.S. government finds itself now. During the past few days, Washington Mutual bank became the largest corporate bankruptcy in U.S. history. Despite the Federal Reserve providing billions of dollars of liquidity, short-term credit markets have been in complete distress, with inter-bank lending rates spiking to all-time highs compared to safe Treasury yields (see exhibit 1, below). The psychological crisis of confidence has paralyzed the financial system, which threatens to spill over to the already ailing real economy in the form of sharply tighter credit for households and businesses.In the extreme, the government's powers are theoretically limitless, so it can go to great lengths to nationalize banks, provide blanket government guarantees to financial entities, or do anything that is necessary to prevent a systemic crash. However, for a financial system to sow the seeds of recovery, it must purge itself of the bad loans or assets that caused the crisis in the first place, so that surviving institutions can recapitalize and be unencumbered in future lending. There are historical examples of governments that prolonged financial crises into decade-long economic catastrophes (e.g. Japan in the 1990s) by allowing bad debts to fester on the balance sheets of financial institutions. In contrast, government-led financial rescues that have been regarded as more successful (such as Sweden in the 1990s and the U.S. Resolution Trust Corporation during the S&L crisis) were marked by relatively swift disposal of bad assets. (A detailed discussion of lessons from history is found in MARE's September 15 article, U.S. Financial Crisis Enters New, But Perhaps Necessary Phase.)
Despite the intense negotiations that preceded the proposed legislation, the two key provisions of the plan's centerpiece -- the Troubled Asset Relief Program (TARP) -- remain largely unchanged. First, the program is designed to remove impaired assets from the balance sheets of U.S. lending institutions. Second, it provides massive resources -- $700 billion -- to accomplish this task and facilitate a recapitalization of the financial system. Therefore, the broad objectives of the plan -- replacing troubled assets with an enormous infusion of money in the financial system -- are consistent with the essential ingredients of past successful crisis-response programs.
Senate Approves Nuclear-Energy Pact With India (LOUISE RADNOFSKY, 10/01/08, wall Street Journal)
India's power-generation capacity is lagging far behind the country's expanding energy needs. The economy has grown an average of 8.7% each year over the past five years. That trend, combined with rising incomes, has lifted electricity demand by 9% a year.Other countries have expressed interest in getting into the Indian market, and France concluded its own civilian-nuclear deal with India on Tuesday.
For U.S. companies, the deal will open a multibillion-dollar market for the sale of everything from power-transmission equipment to airplanes. Suppliers of technology and equipment, including General Electric Co. and Westinghouse Electric Co., a unit of Toshiba Corp., hope to benefit from India's nuclear-power plans.
General Electric built nuclear power plants in India in the 1960s and is interested in building new reactors there, as well as providing fuel and other services for new and existing reactors. General Electric said it has had "limited" discussions with Indian officials about the country's energy plans.
Westinghouse Electric, based outside Pittsburgh, plans to build up to eight reactors in India for $5 billion to $7 billion each. It stepped up meetings with government and industry officials in India this year in anticipation of an agreement.
Boeing Co. and Lockheed Martin Corp. have bid to sell 126 fighter jets to the Indian government, in a deal valued at $8 billion to $10 billion.
No:
Allard, Barrasso, Brownback, Bunning, Cantwell, Cochran, Crapo, DeMint, Dole, Dorgan, Enzi, Feingold, Inhofe, Johnson, Landrieu, Nelson (FL), Roberts, Sanders, Sessions, Shelby, Stabenow, Tester, Vitter, Wicker, Wyden
74-25 is the Final vote.
MORE:
Senate bailout vote pressures House (Mark Silva, 10/01/08, The Swamp)
So it is the Senate that goes first with the bailout -- some call it rescue -- of the nation's bad-mortgage-clogged banking institutions, with a vote tonight of 74-25.The Senate's strong and bipartisan approval of a $700-billion rescue of the nation's struggling financial institutions, frosted with added new sweeteners for bank depositors and taxpayers, should help revive this historic attempt at righting the American economy in a resistant House.
The Senate vote tonight, with many Republicans voting for the plan and some Democrats against it, set the stage for a new run this week -- probably Friday -- at winning House approval of a federal intervention in the economy unseen since the Great Depression. [...]
Rep. Rahm Emanuel (D-Ill.), the House Democratic Caucus chairman and a key negotiator on the package, said he expected the tax cuts and bank protections added to the bill would probably help it pass the House: "It's a guess,'' he said. "I think we'll learn a lot on Friday."
The greatest obstacle for leaders remains wooing just a few members of the party of the president who is pushing the plan. House Republicans voted two-to-one against the Bush administration's plan to authorize the Treasury to purchase as much as $700 billion in bad mortgage-related assets from banks and other financial institutions, in an attempt to avert a freeze in credit for consumers and businesses alike.
Give me liberty and give me death: As one's mortality swings into view, be thankful for life -- and whiskey. (P.J. O'Rourke, September 28, 2008, LA Times)
I looked death in the face. All right, I didn't. I glimpsed him in a crowd. I've been diagnosed with cancer, of a very treatable kind. I'm told I have a 95% chance of survival. Come to think of it -- as a drinking, smoking, saturated-fat hound -- my chance of survival has been improved by cancer.I still cursed God, as we all do when we get bad news and pain. Not even the most faith-impaired among us shouts: "Damn quantum mechanics!" "Damn organic chemistry!" "Damn chaos and coincidence!"
I believe in God. God created the world. Obviously pain had to be included in God's plan. Otherwise we'd never learn that our actions have consequences. Our cave-person ancestors, finding fire warm, would conclude that curling up to sleep in the middle of the flames would be even warmer. Cave bears would dine on roast ancestor, and we'd never get any bad news and pain because we wouldn't be here.
But God, Sir, in Your manner of teaching us about life's consequential nature, isn't death a bit ... um ... extreme, pedagogically speaking? I know the lesson that we're studying is difficult. But dying is more homework than I was counting on.
McCain a runaway favourite ... among Israelis (OAKLAND ROSS, 10/01/08, Toronto Star)
A poll conducted in late July, around the time Obama visited here, showed McCain enjoying the support of 75 per cent of Israelis."The results were so clear-cut," said Tamar Hermann, director of the Tami Steinmetz Center for Peace Research, "that we haven't bothered to put this question again."
Israelis' clear preference for McCain stems mainly from the impression he would deal more firmly with this country's enemies than Obama would, especially the perceived threat from Iran.
Iranian President Mahmoud Ahmadinejad has mused more than once about the eradication of Israel, and his country is widely believed to be pursuing the capacity to build nuclear weapons.
Obama has declared his willingness to hold talks with Iran's rulers, as well as the leaders of other so-called rogue states, without preconditions – a position scorned by McCain and by most Israelis.
"This is the kind of talk Israelis can't stand, either from their own leaders or anyone else," said Hermann. "Obama's words on Iran are not perceived as tough enough."
McCaskill takes swipe at Bond and Biden, too (Deirdre Shesgreen, 9/30/08, St. Louis Post-Dispatch)
Of Biden, [Sen. Claire ] McCaskill said, he “has a tendency to talk forever and sometimes say things that are kind of stupid.”Asked to elaborate on fears she has about Biden’s penchant for gaffes, McCaskill tried to put the best light on her remarks.
“He a regular guy and … he doesn’t parse his words and he’s not hyper-careful,” she said. “He’s very authentic,” McCaskill added, before seeming to regret her own candor. “I was probably having a Joe Biden moment myself,” she said of her initial remarks.
Municipal Bonds Freeze Up: Interest payments soar for cities and counties, some of which loaded up on complex derivative deals similar to ones that swamped many banks (Nanette Byrnes, 10/01/08, Business Week)
Like other credit markets, municipal bonds are nearly frozen. During the week of Sept. 22, three significant bond deals were done. Normally the tally would be about 100. Those that are getting done—like New York City's Sept. 29 deal—are high-priced.What's worse, untold dangers may lurk just beneath the forbidding surface of the muni market. Some locales set up complicated derivatives deals with the now-defunct Lehman Brothers and other troubled New York banks. Shedding those investments can be costly and complicated.
Even before the tumultuous past few weeks, many municipalities were facing fundamental problems: quickly rising pension costs, aging roads, and large drop-offs in income and real estate tax revenue. A lot of governments had moved away from safer, fixed-rate bond issues, leaving them vulnerable to a sharp rise in those rates over the past two weeks. These factors could add up to serious trouble for scores of communities.
India: A Land on the March (Edwin Feulner, 9/30/08, Real Clear Politics)
As The Heritage Foundation's "Index of Economic Freedom" shows each year, more economic freedom (an open economy operating under the rule of law) generates more economic growth. That, in turn, means a higher income for the average person. This is exactly what's happening in India.No, I wasn't dazzled by the high-tech centers of Hyderabad and Bangalore because I didn't have time to even visit them. But I did hear from private bankers, business leaders, educators and government officials. Their universal commitment to pushing reforms and investing further in the Indian economic miracle impressed me. For half a dozen years now, India has had a 7 percent to 9 percent real economic growth rate.
Yes, India faces daunting challenges. Almost half the population still relies on subsistence farming for its livelihood. Grinding poverty still afflicts the majority of its citizens. The caste system remains. But plenty of articulate, able and principled parliamentarians are shaking up the system.
India is a better place to do business than China, says U.S. Ambassador David Milford. It's true that the notorious Indian bureaucracy remains a stumbling block. But continuing reforms and the rule of law is making the country more business friendly and supportive of individual rights.
Those are just a few reasons why the United States is now India's largest trading partner ($42 billion last year alone) and the largest foreign investor in India. Meanwhile, Indian firms are now becoming worldwide companies.
It's pretty hard to watch Cool Hand Luke without realizing it's imitation of Christ, but one of the nicer touches is the inverse Last Supper.
‘A Fight To The Death’: In the battle against militants, President Zardari is increasingly isolated and besieged. (Fasih Ahmed, 10/01/08, Newsweek)
So far Zardari, who was elected president earlier this month, has managed to face down the lawyers' movement that weakened predecessor Pervez Musharraf's hold on power, and keep a step ahead of former Prime Minister Nawaz Sharif, his big political rival. But he is increasingly isolated and besieged. He faces a hostile local media, jittery allies and an increasingly unhappy population roiled by inflation and power outages and deeply distrustful of the United States. Zardari's visit to New York last week to attend the United Nations General Assembly—particularly his meeting with Republican vice presidential candidate Sarah Palin—has been assailed by politicians and pundits as evidence of some unholy alliance with the U.S. political establishment.All this has weakened whatever meager support Zardari might have had for resisting an increasingly emboldened militancy. Former Prime Minister Nawaz Sharif remains conspicuously non-committal to the war against terrorism. Speaking to reporters before leaving for Saudi Arabia two days after the attack, Sharif skirted the issue, instead calling on the government to address his party's constitutional concerns. Sharif's party has called for closer ties with Tehran and for rejection of international economic support, which many fear could be linked to anti-terrorism efforts. For Sharif, that fear is personal: he has received death threats from the militants, according to Pakistan's Ministry of Interior. "Pakistani politicians and media have become apologists for terrorists, not because they believe all this is right but because they hate America and because they fear themselves being targeted," Mansoor Hussain, a columnist for the Daily Times, told NEWSWEEK. "They do not want to admit or understand that this is a fight to the death for us as a nation."
Tory Party Conference: Superb David Cameron speaks up for Conservative values (Simon Heffer, 01 Oct 2008, Daily Telegraph)
David Cameron made a superb speech at Birmingham. It cast Gordon Brown's laboured effort at Manchester eight days earlier into the shade in terms of delivery, content and credibility. If Labour thought it was having a bounce, it may now find that gravity takes over again.
It was, however, a speech of contradictions. Mr Cameron said his party had changed; but he won over his audience, and will have been well-received in the country, precisely because he spoke up for traditional Tory values. His support for marriage and the family, his promise of a referendum on the Treaty of Lisbon to help safeguard our sovereignty, his contempt for the bureaucracy in health and safety fascism, his desire to reform public services, his opposition to the "something for nothing" culture in welfare and above all his commitment to rein in borrowing and to cut taxes would all have worked in a conference speech by Lady Thatcher – who also had a laudatory name check. The Tories plainly no longer fear being "the nasty party".Mr Cameron also said he was not "ideological": yet when it suits him he can do a fine impersonation of an ideologue. The ideological theme running through his speech was of the unsatisfactory nature of state intervention in our lives, of the problems when the state removes responsibility from individuals, and of how bureaucracy feeds on itself. That Mr Cameron is no longer afraid to enunciate such things should give some heart to genuine Conservatives, like rain after a drought.
His recital of a letter from Alan Johnson, the Health Secretary, robotically explaining the redress available to a man widowed thanks to the shocking neglect of his wife by the NHS, was devastating. Mr Cameron had clearly given some thought to the implications of the case before putting it in his speech.
In honor of our 10th birthday, we've brought back our oldest available index. Take a look back at Google in January 2001.
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Senate offers sugar with bailout rx (DAVID ROGERS, 10/1/08, Politico)
The Senate hopes to revive Treasury’s $700 billion financial rescue plan Wednesday night by packaging it together with more than $100 billion in popular tax breaks as well as aid to rural schools important to House Republicans.To calm voters fearful of bank failures, the $100,000 cap on federal insurance for deposits would also be raised to $250,000—a concession backed by both parties but also aimed at community banks who can be helpful in building small town support for the larger bill.
VP Debate Moderator Writing Obama Book (960WRC, October 1, 2008)
In the book Ifill, who is African-American, reportedly says that the black political structure of the civil rights movement has cleared the way for post-racial politicians to ascend to new heights.The book is scheduled to be released around the inauguration.
Poll: McCain has suburban-voter edge over Obama (KARLA SCHUSTER, September 30, 2008, newsday.com)
Republican presidential nominee John McCain has a slight edge over Democratic rival Barack Obama among suburban voters, drawing his strongest support from men and affluent married couples with children, according to a new poll released yesterday.Overall, 48 percent of suburban voters said they supported McCain, compared with 42 percent for Obama, according to the poll conducted for Hofstra's National Center for Suburban Studies.
The spiraling economic decline ranked as their chief concern in the presidential election and their personal lives: 46 percent said it is the issue they most want to hear the candidates discuss, while 49 percent reported that they or someone they know has lost a job in the past year.
So even as the economic crisis cuts into McCain's poll numbers nationally, his slim support among suburban voters suggests "that he very much has a fighting chance" in November, said Lawrence Levy, director of the Suburban Studies center.
Biden gaffes leave Democrats with mixed emotions: Some worry about missteps in Palin debate (Lisa Wangsness, October 1, 2008, Boston Globe)
Even for a politician in a fiercely competitive campaign, Biden has an overdeveloped sense of hyperbole. He speaks sotto voce about the gravity of the historical moment, dispenses hard-luck father's cheer to the downtrodden with a lusty growl - "Get up!" - and at times weeps at the mention of his wife and infant daughter's deaths in a car accident 36 years ago.He thunders outrage at John McCain's philosophy on healthcare and describes the foreign policy consequences of another Republican victory in near-apocalyptic terms, telling donors in Kentucky the other day that relations with Russia could spin "literally, literally, literally beyond our control for the better part of a generation." (He also uses the word "literally" with almost felonious frequency.)
His enthusiasm can also lead him into politically hazardous territory.
At an intimate, $2 million fund-raiser put on by a group of trial lawyers in a private home in Washington, D.C. last week, he boasted that he had "done more than any other senator" for trial lawyers. There are "two groups that stand between us and the barbarians at the gate," he professed. "It's you and organized labor."
And even though few would question his long experience in foreign affairs, he can sometimes sound as if he's straining a bit too hard to prove his importance on the world stage.
"When Russia invaded Georgia, I got a call from Misha Saakashvili. He said, 'Joe, will you come over? Will you come?' " Biden said, in a foreign policy speech in Cincinnati last week. "I went to see him in Tblisi. I sat there while Russian tanks were still on the outskirts of the city. And we laid out a specific proposal. We made it crystal clear what Barack and I would do . . . to preserve the territorial integrity of Georgia."
AUDIO: Sarah Palin on Hugh Hewitt (9/30/08)
Revolt of the Nihilists (DAVID BROOKS, 10/01/08, NY Times)
[L]et us recognize above all the 228 who voted no — the authors of this revolt of the nihilists. They showed the world how much they detest their own leaders and the collected expertise of the Treasury and Fed. They did the momentarily popular thing, and if the country slides into a deep recession, they will have the time and leisure to watch public opinion shift against them.House Republicans led the way and will get most of the blame. It has been interesting to watch them on their single-minded mission to destroy the Republican Party. Not long ago, they led an anti-immigration crusade that drove away Hispanic support. Then, too, they listened to the loudest and angriest voices in their party, oblivious to the complicated anxieties that lurk in most American minds.
Now they have once again confused talk radio with reality. If this economy slides, they will go down in history as the Smoot-Hawleys of the 21st century. With this vote, they’ve taken responsibility for this economy, and they will be held accountable. The short-term blows will fall on John McCain, the long-term stress on the existence of the G.O.P. as we know it.
It makes for a fascinating, often amusing, psycho-drama, but it's odd that they think the rest of us should suffer for their perceived sins.
Syria's unlikely shepherd (Jim Lobe, 10/02/08, Asia Times)
Still, some observers voiced skepticism that the meetings signaled a major shift in Washington's willingness to seriously engage Damascus in the nearly four months before Bush leaves office."It's clearly time for a rethink of [Syria] policy, and I think Rice and others in the administration are trying to shepherd it forward," said Joshua Landis, a Syria specialist at the University of Oklahoma who publishes the widely read blog ww.syriacomment.com. "Rice is definitely open to it - and the whole Department of Defense has been kicking for this for a long time - but she can't get it past the White House."
He noted that Bush himself had referred to Syria as a ''sponsor of terrorism'' in his speech to the General Assembly just last week.
As with Iran and North Korea, the split between administration hawks and realists over Syria is a familiar one. While Rice's predecessor, former secretary of state Colin Powell, argued for engaging with Damascus both before and after the March 2003 US invasion of Iraq, the hawks - then led by Cheney and Pentagon chief Donald Rumsfeld - favored a policy of ''regime change'' against the government President Bashir al-Assad.