We Fight on that Lie

9 10 2008

Ta-Nehisi Coates sums up John McCain’s posture on Iraq in very stark terms.

There is no sense here that one may have other reasons, short of cowardice, for wanting out of Iraq. But this is like being back on the block. Your man tells you that he got jumped by some cats from across the tracks, so you and him go to war. The beef lasts for months, and then you find out he never got jumped to begin with. But when you pull out, he calls you a chump.

This reminds me of a scene in The Wire when Slim Charles shares some of his wisdom on the Art of War with Avon Barksdale. Charles wanted to retaliate against a rival gangster Marlo Stansfield for the latter’s presumed involvement in murdering a close associate of the Barksdale set.  Even when Barksdale the righleader informs him Marlo had nothing to do with the murder Charles still presses the point. “It don’t matter who did what to who at this point. And now there ain’t no going back. Once you in it you in it. If its a lie, then we fight on that lie. But we gotta fight,” implores Charles.

Check it.

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Regulation Chatter

17 09 2008

In a post entitled, “Obama’s Faulty Logic” Sebastian Mallaby at the WaPo’s blog Post-Partisan apparently has grown tired of the regulation versus deregulation soundbites on the campaign trail have devolved into an “appealingly simple” rhetorical trope. The UK economist takes issue with how the Obama campaign tried to draw “link between the Wall Street blow-ups and a lack of regulation,” and suggesting that the conventional wisdom regarding deregulation was somehow unique to Bush, McCain and his advisers.

Malaby tells us that:

Embarrassingly for Obama, the principal piece of financial deregulation over the past decade was the reform of Glass-Steagall, the law that separated investment banks from deposit-taking ones. This reform was sponsored by McCain’s friend, former Republican Senator Phil Gramm, but ending the division between the two types of bank was a policy that the Clinton team also supported, which does not fit the Obama narrative.

Mallaby fails to point out, however, that even after the push for deregulation of financial markets and other areas of our economy including telecom and elsewhere was not only met with deep skepticism within the Democratic party, but was widely considered an long term strategy for generating economic growth.  Yes, the Washington consensus of the Clinton years erred on the side of deregulation as a means of harnessing the power of the market, but few thought the federal government should permanently abdicate its role as a regulator or overseer of the market.

To the contrary, one of the great lessons of the late 90s, particularly after the financial contagion crisis, is that that government does have a role to play in world where capital – and the shocks associated with it – moves at the speed of a few clicks on a mouse.

But the Bush administration was wedded to the notion that the market will solve its own problems even if industries experience such dramatic change that they necessarily merit regulation and oversight. Consider mortgage lending. Mortgage lending has changed dramatically during the last several years. According to the Pew Center on the States, “10,000 lending institutions were in business 20 years ago; today, just a few dozen lenders dominate.” But once the source of capital went for home loans went from mainly small lenders to primarily bonds underwritten by the financial markets, the evaluation of the loans themselves changed. Put simply, they were less likely to be valued on the basis of their performance than they were on their size and terms.

This evolution of the lending market also coincided with another change. By incorporating the use of data metrics, such as credit scoring and consumer data, credit became much more accessible. As a result, the subprime lending sector expanded as the creditor market overall began to grow.

In order to keep up with the proliferation of loans in a market with increasingly lax lending standards many resorted to a less rigorous computerized underwriting. This imprecise method of rating the creditworthiness of borrowers often led to many people being offered subprime loans despite qualifying for more conventional loans.

Subprime loans are high cost loan products often, but not always, sold to borrowers are low-income or have a modest savings, or with less than pristine credit. By contrast, prime loans are sold at market rate to people with solid credit scores at competitive low interest rates. To hedge against the lending to borrowers with “higher credit risks,” subprime borrowers are charged higher rates. According to the Center for Responsible Lending, more than 80 percent of those loans came with adjustable interest rates as opposed to a 30 or 40 year fix rate mortgage loan.

To be sure, when done responsibly subprime lending can lead to opportunities for many people who might otherwise never own a home or obtain credit civil rights advocates have an interest in preserving the subprime market. But during the past few years, we have witnessed an explosion in risky mortgage products and a rapid decline in the use of sensible lending practices.

Congress should have stepped up their efforts in calling hearings to shine a light on the most egregious violators of fair housing laws and place pressure on federal agencies to go after these so-called independent brookers who are exploiting borrowers and find out why there was such an incentive from wall street investors to get as many loans on the books as possible.

A little oversight would have revealed the inefficiencies withing the market and the looming burst of the bubble was near.

As Obama rightly noted in his speech at Cooper Union in New York earlier this year:

Under Republican and Democratic administrations, we’ve failed to guard against practices that all too often rewarded financial manipulation instead of productivity and sound business practice. We let the special interests put their thumbs on the economic scales. The result has been a distorted market that creates bubbles instead of steady, sustainable growth; a market that favors Wall Street over Main Street, but ends up hurting both.

Nor is this trend new. The concentrations of economic power and the failures of our political system to protect the American economy and American consumers from its worst excesses have been a staple of our past: most famously in the 1920s, when such excesses ultimately plunged the country into the Great Depression. That is when government stepped in to create a series of regulatory structures, from FDIC to the Glass-Steagall Act, to serve as a corrective, to protect the American people and American business.





Campaigning through the Mud

15 09 2008

In what seems like ages ago, the McCain campaign and GOP at large were concerned about a potential backlash against attacking Obama unfairly.  In a February article in the Jack Kemp, albeit not your typical Republican, told the Politico, “You can’t run against Barack Obama the way you could run against Bill Clinton, Al Gore or John Kerry” because it would highlight how much a “all white country club party” the Republican party truly is.

“You can’t allow the party to be Macaca-ed,” one operative noted, “The P.C. [politically correct] police will be out and the standards will be very narrow,” said another strategist. Senator McCain even defended Senator Obama after hearing Bill Cunningham, one of the more vile radio talk show hosts on the extreme right, disparage the Illinois Senator in a rant in which the McCain supporter invoked the now Democratic  Presidential nominee’s middle name three times.

According to the New York Times, McCain took the stage at the fundraiser and told the crowd there:

It’s my understanding that before I came in here a person who was on the program before I spoke made some disparaging remarks about my two colleagues in the Senate, Senator Obama and Senator Clinton. I have repeatedly stated my respect for Senator Obama and Senator Clinton, that I will treat them with respect. I will call them Senator. We will have a respectful debate, as I have said on hundreds of occasions. I regret any comments that may have been made about these two individuals who are honorable Americans.

My how times have changed. I wonder where that guy is today? And surprise surprise the so-called PC police aren’t as strong or intimidating as Republicans said they were.

Maybe I am just waking up to the fact that its mud season. And its been that way for some time.





Narrative Dissonance

7 09 2008

On Wednesday, Peggy Noon railed against the presumed ineffectiveness of promoting narratives as a campaign device for Republican candidates running for high office in her opinion piece in the WSJ by saying:

I don’t like the idea of The Narrative. I think it is … a barnyard epithet. And, oddly enough, it is something that Republicans are not very good at, because it’s not where they live, it’s not what they’re about, it’s too fancy. To the extent the McCain campaign was thinking in these terms, I don’t like that either. I do like Mrs. Palin, because I like the things she espouses. And because, frankly, I met her once and liked her. I suspect, as I say further in here, that her candidacy will be either dramatically successful or a dramatically not; it won’t be something in between.

Not something they are good at? Not where they live? To fancy? That’s a little hard to believe. In 2000, the Bush campaign pushed a narrative of the then-Governor Bush as a one time lost soul who felt so out of place among the country club elites and overshadowed by his father’s achievements he tried to drink his sense of inadequacies away only to be redeemed by the power and grace of evangelical Christianity. All of which resonated very well with the Republican base and many other religious folk who felt that W. knew family values and understood them best.

Even David Frum recently gave a nod to the success of such narrative spinning on his blog at the NRO:

George W. Bush had very slight executive experience before becoming president. His views were not well known. He won the nomination exactly in the same way that Palin has won the hearts of so many conservatives: by sending cultural cues to convince them that he was one of them, understood them, sympathized with them. So that made everything else irrelevant in 2000 – as it seems again to be doing in 2008. [snip] But he lacked other important aspects of leadership which is how we got into the mess from which he needed to rescue the country and himself.

Amen to that.

To me, this is not only proof that not all Republicans think alike, but also some are a lot more honest with themselves than others, at least on certain topics. That said, on most days I’d rather read Peggy Noonan’s sweeping insights packaged in her crisp prose than sift through David Frum’s endless banter and pontification.





Obama on GOP Attacks: “This is What they Do”

4 09 2008

Earlier today Senator Barack Obama met with reporters to respond to some of the Republican attacks last night at the GOP convention. The Democratic Presidential nominee minced no words. He told journalists “This is what they do” when “they don’t have an agenda to run on.” He then coyly asked those same reporters if they were surprised to hear such negative criticisms from Republicans during their convention.

And when asked why has he not gone on the offensive against Senator John McCain’s running mate Governor Sarah Palin after fierce and snide jabs at him last night, Obama told the press corp “Because John McCain’s running for President and I am running against John McCain and as far as I can tell Governor Palin does not have any ideas that are different from John McCain’s and that speech she delivered was on behalf of John McCain.”

Watch it.

But of course, Obama could not let the community organizing jab slide either. For those of you who did not get a chance to see the speech last night Governor Palin said:

Before I became governor of the great state of Alaska, I was mayor of my hometown. And since our opponents in this presidential election seem to look down on that experience, let me explain to them what the job involved. I guess — I guess a small-town mayor is sort of like a community organizer, except that you have actual responsibilities.

A reporter in the clip below ask Obama to respond by saying “They are talking about work I did right out of college” and asked “Why would that work be ridiculous?” and “Who are they fighting for?” and maybe they are out of touch and don’t get it because they (McCain and Palin) have not been working on behalf of those folks.

Watch it.

(H/T: Jed Report)





Obama’s Post Convention Bump Hits 50 Percent

3 09 2008

With Governor Sarah Palin’s vetting stories soaking up so much of the media oxygen few have bothered to notice Senator Barack Obama’s post convention bump this past weekend.  According to the most recent Gallup daily tracking poll, Obama has a 50 to 42 percent advantage over Senator John McCain. Though this is not the largest lead Illinois Senator has held over McCain (a July Gallup found 49 compared to 40 percent of all registered voters favored Obama over the Arizona Senator), its an important milestone nonetheless since it the first time that half of all voters now favor the hope machine than they do McSame.

Obviously, McCain and company will eat into the lead here, but with the truncated and thus far lackluster GOP convention, and Gov. Palin’s Prego-gate and Trooper-gate dominated news coverage at the expense of a McCain’s overall message coming out of the Twin Cities this week, I doubt it will even this up any time soon.

In fact, I predict that by next week the Obama-Biden ticket will still have a solid 5 point lead over McCain-Palin campaign. Or at the very least it will be beyond the margin of error.





Its More than Just the Economy

26 08 2008

Andrea Batista Schlesinger at DMI blog has grown weary and skeptical of the attention paid on the foreign policy portion of Senator Joe Biden’s resume in assessing whether or not the Delaware lawmaker is a well matched running mate for Senator Barack Obama.

Enough with the talk about filling in the foreign affairs gap. This just accepts that we are going to live out yet ANOTHER campaign the way the right wants us to — on their turf. The most pressing issues to America’s middle class are economic, economic, and ECONOMIC, so let’s learn a little bit more about where Senator Joseph Biden stood when it came to voting for legislation that matter to the pocketbooks of middle-class Americans.

http://themiddleclass.org/legislator/joseph-biden-412

Aside from the fact, that as Samantha Power has noted, the Democrats should use this election year as in part an opportunity to define themselves the better party on national security, its also clear that ceding ground to the Republicans on security issues by not discussing them they also hamstring their efforts to get their message out on the economy and other issues.

Each time the Obama does not answer forcefully or not all to some absurd charge about some fabricated ties to Hamas or imagined sympathies for the Iranians or is naive about the gravity of certain authoritarian rouge regimes because he says he is open to negotiation under certain circumstances, those stories linger in the press for days or even weeks. One asset Senator Biden does bring to the campaign is his ability to aggressively push back on those issues to make sure those charges don’t go unchallenged and get them off the front pages as Obama pitches his plan to modernize our economy and make it greener, generate job growth, and create a more sensible and equitable tax system.

Stressing Joe Biden’s foreign policy resume is like letting the opposition know you have a good deterrent that you plan to use regularly once campaigning turns into much more of a contact sport.

Its rarely just the economy stupid.