Bailout Flop Brings Media Outrage

Just a glance at the NY Times’  Op-Ed page today shows you how deep is the shock over the failure of the bailout plan.  It’s ultra-rare when polar opposites like David Brooks and Bob Herbert agree on anything.
DAVID BROOKS
Revolt of the Nihilists

America’s political leaders have failed utterly to project any sense of authority and to give the world a reason to believe that this country is being governed

BOB HERBERT
When Madmen Reign

The question voters should be asking John McCain is whether he has stopped serving his party’s economic Kool-Aid and is ready to change his ways.

 

Reading Obama and McCain, Part 1

 

 

 Each month I lead a book review/discussion with a group of local business people. We usually read  big-pic think books (The World is Flat, The Tyranny of Choice) or business advice/self-help books like New Ideas From  Dead CEOs, Getting Things Done, and Mavericks at Work. This fall, however, we’re reading two  autobiographies: Barack Obama’s Dreams From My Father: A Story of Race and Inheritance and John McCain’s Faith of My Fathers: A Family Memoir.

It’s a great time to be reading these books, especially in sequence, though I now wish I’d read them a year ago. I’ll say this at the least: Based on these two books, whoever wins,  America is about to elect an interesting man as president. Interesting as in “May you live in interesting times”?  We’ll see.

Over the next month and maybe beyond, I’m going to pick out some passages from these books and discuss.  Obama’s up first.  Dreams From My Father was written in 1995, two years before he was elected to the Illinois state Senate.  

In  Chapter 14,   Obama, working as a  Chicago community organizer in the 80s, tells a streetwise colleague named Johnnie  that he has applied to law school at Harvard, Yale, and Stanford. (A few pages earlier, by the way, Obama learns about a “dynamic” pastor named Jeremiah Wright.) Johnnie, who is proud of his educated friend, teases him:  

“Harvard! Goddamn. I just hope you remember your friends when you up in that fancy office downtown.”

For some reason, Johnnie’s laughter had made me defensive. I insisted that I would be coming back to the neighborhood. I told him that I didn’t plan on being dazzled by the wealth and power that Harvard represented, and that he shouldn’t either. Johnnie put his hands up in mock surrender:

“Hey, you don’t need to be telling me all this. I ain’t the one going nowhere.”

(snip)

I lit a cigarette and tried to decipher the conversation with Johnnie. had he doubted my intentions? Or was it me that mistrusted myself? It seemed like I had gone over my decision a hundred times.

(snip)

 And I had things to learn in law school, things that would help me bring about real change. I would learn about interest rates, corporate mergers, the legislative process; about the way businesses and banks were put together; how real estate ventures succeeded or failed. I would learn power’s currency in all its intricacy and detail, knowledge that would have compromised me before coming to Chicago but that I could now bring back to where it was needed, back to Roseland, back to Altgeld; [depressed Chicago neighborhoods]  bring it back like Promethean fire.

Two points on this passage:

1. Considering the precarious state of the economy, we better hope he learned some of that stuff in law school, so he can take it to D. C. if he wins.

2. Throughout his book, Obama struggles with some of the issues that would continue to dog him as he ran for president 13 years later.  Was he black enough? Was he too black? How could he integrate the “white” and “black” parts of his mixed-race identity?  Where were his deepest roots?

In that connection, it’s interesting that O mentions bringing knowledge back to poor neighborhoods “like Promethean fire.”  Prometheus, of course, stole fire from the gods and gave it to humans;  he remains a symbol of man’s courageous reach for knowledge and light. Comparing himself to Prometheus may seem grandiose, and I’d be surprised if some 527 hadn’t already cooked up a whack-ad mocking this, but I think it perfectly captures a young man’s desire to lift his people out of ignorance, even if he’s not always sure they’re his people.

By the way, the Prometheus line reminded me of a passage in  Lorraine Hansberry’s great play A Raisin in the Sun, the story of a struggling black Chicago family in the late 50’s.  Walter Lee Younger,  wonderfully played  by Sidney Poitier in the movie version, feels trapped by his race, lack of education and poverty. In one scene he delivers a drunken rant about thwarted ambition and pride in front of his sister and her wealthy boyfriend George,  a pompous “assimilationist”  who’d be labeled an Oreo today. Walter Lee paints himself as a lonely fighter for a better life.  As the couple leaves the apartment, George turns back to Walter Lee and says sarcastically, “Good night, Prometheus.”

I’d be greatly surprised if Obama wasn’t familiar with Hansberry’s inspiring play. Wonder if her line might have influenced what he wrote?

Paul Newman, 1925–2008

 

 Of the many kind words being written and said about Paul Newman, all of them richly deserved, some of the nicest are in this piece by Slate writer Dahlia Lithwick, who worked as a counselor at one of Newman’s Hole in the Wall camps for kids with life-threatening diseases.  Key quote:

In an era in which nearly everyone feels entitled to celebrity and fortune, Newman was always suspicious of both. He used his fame to give away his fortune, and he did that from some unspoken Zen-like conviction that neither had ever really belonged to him in the first place.

Asked years ago why he founded the camps, Newman said this:

I wanted, I think, to acknowledge Luck: the chance of it, the benevolence of it in my life, and the brutality of it in the lives of others; made especially savage for children because they may not be allowed the good fortune of a lifetime to correct it.

If only more famous people left the world genuinely sad at their passing.

The full piece is here .

First Debate: McCain Battles as Palin Disaster Looms

Did something last night I’ve never done before. I got a pen and paper and actually tried to score the debate as it went along. I think there were 9 or 10 actual questions, though the “crosstalk” Lehrer kept encouraging sometimes spawned new mini-questions. So let’s call it 10.

In my reading, this debate was extremely close; in fact, I’d call five of the questions ties where both men acquited themselves well. Of the remaining five, I’d call two for Obama and three for McCain, giving McCain a very narrow “win” for the night. I was surprised to see that result, because I thought McCain’s first answer, to the question about the financial bailout/recovery efforts, was awful, almost incoherent, while the O Man crisply ticked off a fast to-do list.  I could see a terrible night for the Macster about to unfold. But he seemed to get himself under better control as the evening went on.

A few impressions and notes:

 *Can’t believe Lehrer didn’t start off by asking McCain just what he thought he accomplished by “suspending” his campaign and charging off to Washington.  I would have bet $50 he’d open with that one. Could have followed by asking McC whether he was disappointed that O wouldn’t go along with postponing the debate.

*Odd  that neither man flatly declared that Iran must be prevented from getting nuclear weapons. I know McCain has said it before, and I think Obama has said no option is off the table, but I didn’t hear that kind of clarity last night. Here, via the Dallas Morning News, is one more reason these folks don’t need nukes:

While Religions for Peace USA, a coalition of religious liberals, welcomed Iranian president Mahmoud Ahmadinejad to dinner and “dialogue” this week in New York, the Iranian parliament was putting the final touches on a bill that would impose the death penalty on any Muslim who leaves his religion. If it becomes law, the measure would put a number of Iranian religious minorities, who already face persecution in the Islamic republic, in danger of execution. Worse still, the Iranian bill grants the theocratic government the right to carry out death sentences on Islamic apostates anywhere in the world.

*I was also surprised that Obama waited so late–until his final couple of sentences–to promise to restore America’s Bush-bashed reputation.  Every poll I see shows that large majorities want to be loved again by the world, so he should have thumped that drum a few more times.

*McCain, for his part, should have done even more to separate himself from the Bushkin. He did have a strong moment when he listed his differences with GB–on climate change, torture, and more– but he should have repeated the list at least twice more, because the “Bush’s Third Term” theme is working against him. And did he ever use the “Country First” line that he’s been pushing since the convention?

*It was black-humor time when neither candidate, despite repeated probing by Lehrer, would admit to any change whatsoever in his spending plans as a result of the $700-billion bailout. Uh, hello, hasn’t the fiscal picture changed just a tad in the last week or so?

  *Not sure this matters much now, but I blinked when Obama charged that McCain said we’d be “greeted as liberators” if we invaded Iraq. Hmm.  Wasn’t that Cheney’s infamous line? So, diligent li’l fact gatherer that I am, I ran some Googles this morning and so far haven’t found a direct “liberators” prediction from McCain.  I did find this from Media Matters:

On the March 12, 2003 edition of MSNBC’s Hardball, host Chris Matthews asked McCain: “Do you believe that the people of Iraq or at least a large number of them will treat us as liberators?”  McCain answered: “Absolutely. Absolutely.”

Several days after the invasion, Matthews asked McCain a similar question, to which he answered: “There’s no doubt in my mind that we will prevail and there’s no doubt in my mind that, once these people are gone, that we will be welcomed as liberators.”

Not to split hairs, but there is a bit more nuance there than Obama implied. So much of this slips down the Memory Hole, but I seem to recall that our forces were in fact greeted happily by many Iraqis. Looking around, I found this from a former U. S. soldier who served in Iraq:

  We were greeted as liberators. Unlike the gathered savants on this blog, I was there, in what was then termed “Saddam City,” and enjoyed the outpouring of jubilation. If you don’t understand how the vast majority of Shi’i Iraqis and Sunni Kurds saw US troops in the first weeks of the invasion, then perhaps you have the skewed view of history. In Tikrit, we weren’t greeted as “liberators.” But elsewhere I went, we were. . . .

Posted by: Soldiernolongeriniraq | July 30, 2008 at 02:45 PM

Again, not sure how much ice this cuts one way or the other,  given that the war was so badly botched after the first few euphoric weeks. And that recalls what may have been Obama’s best line of the night, about McCain pretending that the war started in 2007 rather than 2003.

*Last point: With his final sally about Obama and the Surge, McCain tried and botched a diabolically smart move that a better debater might have pulled off. You may have missed it through his fumbles, but McCain was trying to say that Obama was in his own way as inflexible and dogmatic as the Bush/Cheney/Rumsfeld Axis of Error. Just as Bush et al couldn’t concoct Plan B or C after the war went bad, he was trying to say, Obama cannot broaden his thinking about the war beyond his early fixed position. Would have made a nice sound bite if McCain had made it work.

To sum up, McCain hit some solid doubles, as did Obama, but no long home runs, and because his Washington escapade didn’t help him shed the Herbert Hoover image I discussed the other day, I think he’s still slip-sliding away. Most importantly, he didn’t do enough to offset the looming Palin Disaster that could occur in Thursday’s Veep Debate.

I was fairly noncommital about Palin the first few weeks;  having no fixed prejudice against “her type,” I decided to wait a while and try to judge her on her own merits rather than rely on the kind of venomous, broad-brush denunciations that would bring cries of outrage if used against Blacks, gays, or handicapped people.

But now that I’ve seen her in action a few times. . . Jeez. This could be bad. Will she even be able to fill her two minutes with answers? Has she gone back and read McCain’s clips to find out why he’s considered a maverick reformer? Will she really try to brazen out the “Bridge to Nowhere” thing one more time? This could make Biden look dignified and perspicacious. This could make Dan Quayle look Churchillian.  Even with the usually gentle Gwen Iffel moderating, this  could be 90 minutes of pulling the wings off butterflies.

Unless Palin has some cards she hasn’t played yet in these early interviews, she–and the guy who picked her–could come off looking stupid. Syndcol Kathleen Parker may be right in calling for her immediate withdrawal from the ticket,  though even that might not bail out rescue the sinking McCain.  

Where the Financial Meltdown Began

Renegade financier and novelist Rich Crossland, who’s actually managing a sizeable portfolio through this fiscal storm,  sends a reminder that the many roots of the current crisis run long and deep. Prompted by his note, I went back and found the entire  New York Times article titled “Fannie Mae Eases Credit to Aid Mortgage Lending.” Note the date.   I’ve highlighted a couple of haunting graphs.  


September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.

”Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements,” said Franklin D. Raines, Fannie Mae’s chairman and chief executive officer. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.”

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison, a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

So the chickens, coming home to roost.  See the full piece here if you like.

“FDR” Obama Vs. “Hoover” McCain: Game Over

 

 

Remember my  claim that if the Dems didn’t finally regain the White House this year, handed every possible advantage by the Bush years,  there would never be another Dem president? Well, thanks to the fiscal meltdown, it’s time for Dems to lay in the champagne.

McCain may not feel that fork in his side, but he’s done.  We’ll now see endless TV and Web spots showing his anti-regulation quotes from the past 30 years. He’s suddenly on the wrong side of this earthquake. If the focus stays on the economy for the next 40 days–and barring some terrorist strike or more Russian aggression, it will–millions of frightened and confused voters will see Obama as the answer. Logic: We may not have seen Obama in action, but at least he believes in government action, whereas McCain is on record repeatedly saying that much government action (except against Big Tobacco and campaign fat cats) is a bad idea.

In addition, I see little way that McCain can be helped by these debates. I actually think postponing this one a few days is a good idea, assuming we’re serious about this financial disaster. Let them debate Tuesday or Wednesday. If you watched even 20 of the 456 primary debates, you know what they’ll say anyway.

But once they do debate,  the shrinking pool of undecideds will see McCain looking old, which he is, and tired, which he must be. Obama’s no-brainer argument–we can no longer spend billions in Iraq while our economy totters–will be almost irrefutable, and as for Obama getting it flat wrong on the Surge, well, what Surge? Nobody cares about that when you can’t get a car loan.

The debate may be over as soon as someone asks McCain what he meant by saying, a week ago,  that the “fundamentals” of the economy were sound.  I’d like to know what the “fundamentals” of the economy are, and I bet you would too, but I doubt he can explain them in a minute.

And what about  Obama’s tiny resume? Experience, shmexperience. Did FDR have an economics degree when he cooked up the New Deal? No. He had decent brains and energy and optimism, and Obama has even more of each.

So, barring a McMiracle,  Happy Days are here again for the Dems.