Left In Lowell

Coming up in a few minutes (2:30pmEST), the live broadcast of Left Ahead where we will talk with Michael J. Widmer, who heads up the no-on-1 people. You can listen live (or catch the archive later at our website).

The Paulson bailout (warts and all) would have addressed the credit crunch - mostly by handing money hand over fist to Wall Street (with Paulson the Money King). The Congressional bill that failed was basically the Paulson bill with some restrictions and oversight, though it’s highly questionable that they really were either.

Though I harbor a secret hope that now we see a better bill, I still want to see a bill, ASAP. John of AMERICAblog runs down the reasons why this is still a crisis (hint: it’s not the volatile DOW). It’s that no one is lending. (Though memo to John, no one, not Kos or anyone else who opposed this bill says that it’s not a crisis, just that the severe lack of leadership from both sides on taking the turd Paulson handed to them and trying to polish it wasn’t the best practical or political or economic solution. And that we may not have much breathing space, but we sure as hell should still take a moment to breath, and think.)

Anyway. No matter how you slice this, it sucks. That’s my momentous insight for the day.

Hunter lays this out very well, I think.

Now that the first vote on the Paulson plan has failed, and barring alien invasion or other game-changer of planetary scope, it seems one of the following things will happen.
[…]
1. A Paulson Plan, But Miniaturized. It may be that a lot more people will sign off on a $200 billion dollar bailout than would sign onto a $700 billion dollar one. I’m not convinced that would actually work, however, and I’m presuming Paulson has been saying that too. The whole premise of the Paulson Plan is to ride in with so much freakin’ money that you can stabilize the entire mortgage-related marketplace: shock and awe for the financial sector. If you have much less money, it doesn’t follow that you’d stabilize squat. It might just create an initial rush, benefiting few, followed by the same systemic collapse when the initial money ran out.
[…]
2. Paulson Plan With Conservative Shift. The House can attempt to pass the bill by loading it up with things that the conservatives want, hoping to persuade them. This seems unlikely to work: if the Republicans really are against any bailout based on their (cough) conservative principles, that would seem a non-starter. And any substantive concession to them seems impossible, or at least deeply stupid: proposals like “suspend the capital gains tax” paint the conservatives as more interested in privateering for the rich than actually helping solve the situation.
[…]
3. Paulson Plan With Leftward Shift. The House can attempt to pass the Paulson bailout plan by “owning” it, including strong measures to help homeowners and the general public, and telling the Republicans to get bent. (You know, like many of us were urging them to do, to little substantive effect.) That’ll lose them most Republican support, but the premise would be that it would gain them more Democrats. The House could fundamentally alter the rules of the bailout in order to much more forcefully demand taxpayers be treated as investors in the companies benefiting from the plan: something akin to the 1992 Swedish plan.

This would have the benefit of, you know, actually working. Or at least being more likely to, since it is a more tested solution, and would by design discourage abuse of the program.
[…]
As far as actually demanding taxpayer equity in the afflicted companies, yes: some Republicans would indeed scream “nationalization,” primarily because they are dunderheads. But if your financial sector manages to collapse into a black hole of incompetence, book-cooking or generally irrational behavior, and furthermore manages to foul things up so badly that it is threatening to take the entire world economy with it, a short-term nationalization or whatever-you-want-to-call-it of collapsed companies hardly seems a surprising or outrageous intervention. It’s happened before, it’ll happen again. The CEO’s in question should instead thank heavens that this is the new millennium, and modern governments have no plan to place their severed heads on pikes as a warning to others. Viva progress!

The common assumption, however, is that Bush would veto any plan that either provided substantial economic stimulus or taxpayer equity. Quite possibly — though that’d be one hell of a gutsy veto, with the entire economy on the line. Certainly, if he vetoed it the Republicans would make sure the veto stuck, depression or no depression.

4) A New Damn Plan. The Congress can abandon the Paulson bailout plan entirely, and craft something different — radically different. A bottom-up economic stimulus plan coupled with some short-term liquidity boosts; a radical plan for failing financial companies; buying every American a puppy. Who knows.

What’s frustrating about this entire process is that it has been absolutely devoid of leadership. Bush is nothing but a paper doll standing in the background; nobody honestly expects he even understands the problem, much less has any confidence that he can rustle support for a workable plan. He has zero credibility left, even with his own party. Likewise, McCain has been, shall we say, unhelpful — jumping to and from positions like an over-caffeinated child who’s gotten into the coffee-flavored ice cream.
[…]
And Democrats? Well, the Democrats haven’t displayed anything resembling leadership either. They accepted the Paulson plan at face value, content to use it as the base upon which they could attach minor changes. There has been no substantive discussion of other possible plans. There has been no attempt to come up with a “Democratic” solution. No economists have been queried in order to find out what an alternate plan might even look like.

That is a failure of leadership — and in a financial crisis, no less. Bush, the Republicans, the Democrats — in all of Washington, there seems not one damn group worthy of confidence. Paulson deserves some credit for even coming up with a plan for people to shoot arrows into, given that it’s a hell of a lot more than anyone else in power has done.

… Time and time again, the Democrats have been content to let their opponents set the agenda, and have been reduced to constantly reacting to developments instead of controlling them. It is a dysfunction that seems in no hurry to self-correct; heaven help us, dealing with a financial crisis at a time when there seems nobody in the entire government up to the task.

This leads, alarmingly, to the fifth possibility for what’s next:

5) We Do Nothing. This seems the most likely of all the scenarios, and would be the most damaging one. As in, very, very bad. The financial sector does need an intervention: the only question is how it should be done. Given that a large segment of the Republican congress has absolutely no interest in such an intervention, it falls to everyone else to come up with one — and it’s not clear that, given the divisions, anything has the votes to pass.

That’s the key difficulty, here. I do not consider this first failure of the Paulson plan to be cause for alarm — far from it, it was a crappy bill, even with the “compromises” installed — but the dynamics surrounding the defeat may very well be alarming, because our capability for doing anything substantive has now run headlong into the functional and ideological divide that has paralyzed the Bush economy since Bush first seized control of it.
[…]
In short, every truly useful option seems impossible, and every expected source of leadership has come up painfully dry. We may be completely screwed — at least until January. And that is much, much too long.

Yup.

This is incredible. Matt Stoller (as seen on dkos) writes that some intrepid bloggers got onto a private (secret?) conference call between Wall St execs and Treasury officials.

The ‘Treasury boys’ on the call made it clear that “the tranching is a mere formality, and the Treasury boys as much as said so. They could take the $700 billion max as soon as the bill has passed.” That was always obvious.

And they admitted that “the exec comp provisions sound like a joke, They DO NOT affect existing contracts, they affect only contracts entered into during the two years of the authority of this program and then affect only golden parachutes.” Both of these provisions were ‘concessions’ sought by Democrats. Of course, no one could have predicted this bill’s ‘concessions’ to Democrats were farcical. No one at all.

Make no mistake. The bill as it stood was mostly Paulson’s blank check with some Caesar dressing. Unfortunately, there is a gun pointed at our heads to do something, anything, to restore confidence and credit flow to the market, even if it hoses the taxpayer and mortgages (the subprime kind) our future.

Bush-Cheney will go down as THE worst economic president in history. He already had that distinction on foreign policy, and his economics have sucked, but this rivals the mistakes made pre-Great Depression. Thanks, Republicans. Thanks, George W. Frak Me Bush.

I’m of two minds on this. On the one hand, something needs to be done. On the other, I’d rather it be from the bottom up, not rewarding from the top down, when those same people got us into this mess.

THIS is the opportunity of a lifetime, Democrats! I say let’s produce a bill that tries to help as many eligible (with caveats) homeowners, which will help those bad loans not go bad, vote to rescind the tax cuts for the very wealthy (not even the wealthy, just the very wealthy), and also reenact a tax on capital gains to pay for a second, more restrictive, smaller, less reward-the-thieves bailout.

I guarantee you Main Street will happily see taxes raise on the fat cats on Wall Street. Especially the ones who took their golden parachute out in the last year or so as the banks failed around them.

Update: Meteor Blades agrees, and elaborates:

Moreover, it’s easy to understand the bind the Democratic leaders were in. Most of them hated the Paulson plan but felt constrained in how much they could adjust and add to it and still get enough votes to pass it. They sought to reach a compromise in the bipartisan fashion that Republicans always say they want but rarely act on since GOPspeak for “bipartisan” roughly translates as “kowtow to us and shut your frakkin’ piehole.” And they had the added obstacle of John McCain fluttering around, mostly silent, while trying to figure out which side to come down on in order to take credit for whatever eventually would happen. As it turned out, McCain came down on both sides, proving once again what a two-faced, impulse-fueled jackass he is.

Ultimately, the compromise failed. Doesn’t matter whether you think that’s good or bad. It’s dead.
[…]
But the defeat offers the Democrats a chance to rethink this whole shebang, to look at some of the ideas from people who got ignored the first time around.
[…]
One of those so far unlistened to is economist Brad DeLong. Although he reluctantly supported the bailout version we saw go down today, as did Paul Krugman, he’s all along thought the 1992 Swedish plan makes more sense, as does Krugman.

Here’s what he had to say on the subject today:

Nationalization has the best chance of avoiding large losses and possibly even making money for the taxpayer. And it is the best way to deal with the moral hazard problem. […]

Someone else who should get some face time among the Democrats is economist Nouriel Roubini.

On Sunday, he explained that any systemic banking crisis requires recapitalization to avoid a massive contraction in credit. “But, purchasing toxic/illiquid assets of the financial system is not the most effective and efficient way to recapitalize the banking system.” He points out that a recent study by the International Monetary Fund of 42 banking crises found that in only seven instances did the governments in question buy the toxic assets.
[…]
He calls the now-defeated bailout “socialism for the rich, the well-connected and Wall Street. And it is a scandal that even Congressional Democrats have fallen for this Treasury scam that does little to resolve the debt burden of millions of distressed home owners.“

The post is quite long, I recommend you read it.

I hate polls. I love polls. Especially true for tracking polls (the three-day rolling daily polls that several outfits run). I hate them because it’s almost too much information - like a roller coaster ride you can’t get off even if you feel sick. I love them because they really gauge the direction of the elections, and within a few days of any one element (a debate, a suspension of a campaign for theatrics) you’ll know, in general, what the American people think about it. At least you know.

So for the past few days I’ve been getting that sick feeling again about the tracking polls. Not because Obama is sinking fast - but the opposite. Dailykos.com’s daily tracking poll crept up from 49, to 50, to 51% today for Obama, to McCain’s 42%. All the rest of the tracking polls are pretty much keeping pace with that advantage for Obama.

One thing I believe that is affecting the polls the most is the debate. I think there are a lot of undecideds who leaned Obama - or rather, were leaning heavily against McCain, after finding out the Sarah Palin decision was terrible, and post McCain-parachuting-into-D.C.-melodrama (which appears to have damaged the situation instead of helped). What these voters were looking for in Friday night’s debate was, “can I trust Obama? Is he presidential and worthy?” They wanted to think that he was, but hadn’t yet seen enough of him. On Friday night I was wincing about how many corrections to McCain’s fallacies Obama declined to make. But the undecided, less informed voter (let’s face it, we bloggers obsess about politics, most people do not) saw what they needed to. That Obama was a good alternative to McCain, perhaps even a great one. Every day, reading the tracking polls this weekend, I’ve hoped that it wasn’t an outlying anomaly. But it appears to be a genuine “bounce.”

Of course, these polls are national polls, and not much use, since the game is won in electoral votes and battleground states. And while you would think a 51%-42% Obama lead would ease my nervousness, I still am not breathing. After all, leads can turn on a dime, and they have. Still, the several points Obama gained on Mr. McGoo after a debate that was largely on McCain territory has me believing that the Obama campaign ship is in the right hands, making the right calls. Though my heart is in my throat watching the polls every morning, I at least know that much more than I did about Obama’s chances.

Only 37 more days of this…

The wheels are coming off in rapid pace now…

First for some background: McCain stated very clearly that he under no circumstances would violate the border of Pakistan in order to take out al Quada. However, this Saturday night, weak veep choice Sarah Palin (in a rare encounter with actual questions from a real American at a cheesesteak stop in Philly) said:

Sarah Palin told a customer at a Philadelphia restaurant on Saturday that the United States should “absolutely” launch cross-border attacks from Afghanistan into Pakistan in the event that it becomes necessary to “stop the terrorists from coming any further in,” a comment similar to the one John McCain condemned Barack Obama for making during last night’s presidential debate.

During Friday’s debate, Obama criticized the Bush administration for sending billions of dollars in aid to Pakistan without ridding the border region of terrorists.

“If the United States has al Qaeda, bin Laden, top-level lieutenants in our sights, and Pakistan is unable or unwilling to act, then we should take them out,” Obama added.

McCain fired back hard, arguing that newly elected Pakistani president Asif Ali Zardari has had his “hands full” and suggesting that Obama’s tough talk was naïve.

“You don’t say that out loud,” McCain said. “If you have to do things, you have to do things, and you work with the Pakistani government.”

Palin’s apparent disagreement with McCain’s position on Pakistan came as the Alaska governor was picking up a couple of cheesesteaks at Tony Luke’s in South Philadelphia. She was approached by a man wearing a Temple University t-shirt, who later identified himself as Michael Rovito.

So today, this from McCain:

Sen. John McCain retracted Sarah Palin’s stance on Pakistan Sunday morning, after the Alaska governor appeared to back Sen. Barack Obama’s support for unilateral strikes inside Pakistan against terrorists

“She would not…she understands and has stated repeatedly that we’re not going to do anything except in America’s national security interest,” McCain told ABC’s George Stephanopoulos of Palin. “In all due respect, people going around and… sticking a microphone while conversations are being held, and then all of a sudden that’s—that’s a person’s position… This is a free country, but I don’t think most Americans think that that’s a definitve policy statement made by Governor Palin.”

Can this get any, well, easier for us? My. God.

(Both items via AMERICAblog.)

It is going to be a year that the local commercial radio station, WCAP 980, was purchased by a local interest. Most people welcomed the move in the hope that the programming would serve as a balanced and positive outlet for local public policy discussion.

And our local newspaper has for the most part ignored the station. Well that is until this morning, when the Column commented to the low Arbitron ratings. According to the Sun, the “station has lost 83% of its original audience since new ownership took over.”

Well, as I have posted a few times on this blog, I want this station to succeed but I wish that they would tweak their programming; less happy talk; more, hard hitting political discussion. But I want to stress that I want that station to succeed. Lowell’s civic, cultural, economic and most importantly political life benefits from a media outlet wich is locally-owned and locally-focused. We do not need another golden oldies station.

Is the Sun concern that WCAP is fighting with them for the limited advertising dollar? Is that why it ignored the station? Instead of a paragraph on low ratings, a well-researched story on the difficulties of operating a small business in Lowell, such as this radio station would have been meaningful. There was too much schadenfreude in the tone of the comments in today’s paper.

A partnership between the paper and the radio station would help both; maybe some of the reporters can appear regularly and provide commentary and analysis. The paper’s policy of ignoring the station is not new; the programs under the previous ownership were also disregarded. That is except for Warren Shaw’s Saturday morning show. The Sun and the station share a mutual contributor, local businessman Ted Panos. Maybe he can be a conduit.

As much as I dislike many of the paper’s editorial policy and the heavy-handed approach to controlling the City’s political life, I do not want it to fold. On the contrary, I want that paper to continue to shed light ; o.k. so sometimes they use a flash light but it is nevertheless a light.

“Did she just slapshot the US Constitution?” “It’s just the Bill of Rights, Sir.”

Funniest Palin parody I have ever seen. And there’s been a LOT of funny Palin parodies out there on the interwebs.

From the not-so-way-back machine. Good judgment, thy name is not John McCain:

(Via Laurel, great find.)