"The action I am taking is no more than a radical measure to hasten the explosion of truth and justice. I have but one passion: to enlighten those who have been kept in the dark, in the name of humanity which has suffered so much and is entitled to happiness. My fiery protest is simply the cry of my very soul. Let them dare, then, to bring me before a court of law and let the enquiry take place in broad daylight!" - Emile Zola, J'accuse! (1898) -

Friday, September 26, 2008

McCain Bails Out Of The Debate Trying To Figure Out How He Can Get The Credit For Our Economic Bailout, About Which He Does Not Know A Damn Thing About.

I Suggest He Should Pull Out Of The presidential Race Altogether Because He Has Now Proven He Is Unfit To Serve!

At the University of Mississippi on Friday, Sen. Barack Obama (D-IL) and Sen. John McCain (R-AZ) are scheduled to engage in their first presidential debate. But that plan was thrown into doubt yesterday when McCain abruptly announced "that he would temporarily stop campaigning" in order to "return to Washington to help forge an agreement on a proposed $700 billion bailout of financial institutions before Congress." Obama, who will meet at the White House today with McCain, President Bush, and congressional leaders, responded to McCain's call for him to join him in suspending his campaign by arguing the debate should go on as planned because "it is going to be part of the president's job to deal with more than one thing at once.

" The McCain campaign, however, is insisting that "if there's no deal before the debate, McCain is staying in Washington, period." Both the University of Mississippi and the Commission on Presidential Debates plan to "move forward as though the debate is still going to happen." But Friday's debate might not be the only thing derailed by McCain's surprise decision to interject himself into the bailout negotiations. As the New York Times notes today, "McCain's actions not only cast doubt on whether the highly anticipated debate would come off, but also thrust an unpredictable new element into the negotiations for the bailout."

INJECTING PRESIDENTIAL POLITICS: In his announcement yesterday, McCain declared that "all we must do to achieve this is temporarily set politics aside, and I'm committed to doing so." But in reality, McCain's bailout gambit has resulted in "a highly charged, even dangerous political atmosphere," as Politico noted, ahead of the today's negotiations. Asked by reporters "if McCain's announcement is more about politics than a desire to help with the bailout plan,"

Rep. Tom Davis (R-VA) replied, "There is politics in everything you do."

Though some conservatives welcomed the political cover provided by McCain's move, others were not pleased at the thought of McCain's hand in the negotiations. "Asked by reporters if he wanted McCain sitting in blow-by-blow negotiations, Rep. Adam Putnam, the No. 3 House Republican, simply smirked, mute for 10 seconds as reporters laughed," writes Time's Jay Newton-Small. Democrats were even less pleased with McCain. "It would not be helpful at this time to have them come back during these negotiations and risk injecting presidential politics into this process," said Senate Majority Leader Harry Reid (D-NV).

Some felt that McCain was
seeking to steal credit for a deal that was already being worked out.

"All of a sudden, now that we're on the verge to make a deal, John McCain airdrops himself in to help us make a deal?," said House Financial Services Committee Chairman Barney Frank (D-MA).

PROGRESS BEING MADE: The Bush administration's bailout proposal, which called for Treasury Secretary Henry Paulson to be given unprecedented and unilateral authority to buy up $700 billion in souring mortgage assets from the very financial institutions that "engineered the current crisis," was initially greeted with great doubt by both lawmakers and economic experts. While the White House is still working to "line up support among lawmakers appalled by its cost, doubtful of its methods and outraged by the speed with which they were being pushed to act," negotiations on Capitol Hill have made progress this week.

For instance, in his address to the nation last night, Bush finally embraced putting "limits on executive compensation at companies that accept taxpayer money," saying that the legislation "should make certain that failed executives do not receive a windfall from your tax dollars." Over two days of testimony, Treasury Secretary Henry Paulson has "shown a greater openness to revisions in the plan to win needed votes," including a reluctant openness to phase in the $700 billion. After Bush's speech last night, Frank told reporters that there was now agreement between House and Senate Democrats on what should be in a rescue bill and they would be meeting with Republicans today.

A Democratic aide told The Hill last night that "not too many" issues remain unresolved between congressional Democrats and Republicans on key committees. Despite this progress, concerns still remain about whether the emerging plan will address the root problem of defaulted home loans and rising foreclosures that are putting the economy at risk. Any bailout will be fundamentally flawed if it doesn't allow the restructuring of underlying mortgages that are troubled, as the Center for American Progress has set forth.

FALSE CONSERVATIVE ALTERNATIVE: Though McCain's call to delay the debate in order for him and Obama to directly engage in the bailout negotiations has been met by widespread skepticism, it has been embraced by opponents of a direct federal intervention in the financial crisis.

Former House Speaker Newt Gingrich, who came out against the bailout earlier this week, whole-heartedly embraced McCain, claiming that he had "put everything on the line to try to put together a bipartisan sizable economic package to replace the failed Paulson bailout package." Gingrich is likely hoping that McCain will now embrace his unrelated claim that the crisis can be solved by suspending the capital gains tax.

As Center for American Progress Action Fund Vice President for Economic Policy Michael Ettlinger has pointed out, there are serious flaws in Gingrich's proposal. One of these flaws is that capital income wouldn't be drawn into the market because the money has to come from somewhere.

If the money were to come from "interest bearing accounts, the banks would be hurt by as much as Wall Street benefited. If it’s treasury bills, the cost of government borrowing will go up. And there’s nothing about a capital gains tax cut that brings back money invested overseas."

Cash for Trash - Paul Krugman, The NY Times

Paulson's Folly - Robert Kuttner, American Prospect

Goldman Sachs Socialism - William Greider, The Nation

The $700 Billion Questions - David Sirota, In These Times

The Bailout Plan: Welcome to Economic Shock and Awe - Arianna Huffington, Huffington Post