Hey, hey, one of my stocks went up today!
That would be my play-money bet on Obama to win the election on Rasmussen Markets.com.
And, since that's the one I'm cashing in sooner (Nov. 4), I may end up ahead on the day.
As for the American people, we didn't invest $700 billion, but we did lose $1.2 trillion on the stock market.
If we were in a parliamentary democracy, the government would immediately have fallen, and the Head of State would have turned to the Democrats' head of party, Barack Obama, to form a government. Either that, or, if the HoS were a Republican, he might have given the first shot to the leader of the Republicans' dissident faction (Eric Cantor!?)
Sigh. At least we can be happy that this total fiasco occurs so close to the end of the current Administration, and not in, say, February, 2007.
This defeat was a very public repudiation of the Bush Administration, and essentially also of Boehner & Blunt (Republican leadership, who urged its passage), and finally of John McCain. I will give the House Repo Men credit for listening to their constituents, but that's about all. This "mark-to-market" red herring is just promoting squishy accounting, which, after their squishy records of fiscal responsibility, doesn't convince anyone. The Republican House members don't like this approach, wish it were something else, but it isn't. Same thoughts expressed as those who supported it.
Now, the game should be on. The target date should be Thursday, and the contest should be to see who can turn more Reps in favor of the bill (slightly modified), Obama or McCain.
The vote is not a real no-confidence result on Pelosi, Frank, and the House leadership, though it does put into question either their good faith or their strategic approach. If they really wanted the bailout to pass today, they would have put more effort into the count, and into manipulating the count a few votes toward ensuring a safe outcome. I get that the tactic was to put the bill out and then vote fast, before opinion out here could consolidate against it, but the impression was one of haste, which as we all think we know, makes waste.
I saw some of the debate, and I was struck by the number and identities of some of the Democratic Representatives who said they would vote against. It appears clear to me that many of them would vote for it if: they got minor concessions, or were properly "whipped" by their leadership, or Barack Obama asked them to do it for the good of the nation and of his administration.
McCain should feel equally challenged on his side. Minority leader Boehner was supposed to deliver 50% of his votes for the measure; 45% would have been enough. They got 34%. He's either got to convince his backbenchers to come around, or let them convince him to do something different (which, by the way, doesn't have a chance of happening, either now or in the next session of Congress).
I had to go to work on voter registration and so did not hear the results until an hour or so after the scheduled vote. I was shocked by that, and worried: I had thought they had thrown their best shot. On calmer reflection, though, close attention to some of the Reps who had a close call but voted against will turn up some minor adjustments to get the necessary votes.
The problem will be if the public opinion remains strongly against the bill and it sends some of the wavering supporters over the side. Otherwise, this should pass comfortably on Thursday, picking up 15-20 votes on each side of the aisle. The oversight provisions could be strengthened and FDIC insurance broadened (as marginal changes which will help with both sides), but this is not such a bad bill. People are just scared by the potential price tag, which pales in comparison with the real price tag they will pay if it all continues to slide downward.
Monday, September 29, 2008
Friday, September 26, 2008
Sealing the Deal
It's not over, but Barack Obama passed a critical hurdle tonight. In a debate centered on John McCain's area of strength, foreign policy, he fully held his own.
I tip my hat to both candidates for their preparation on the foreign policy questions. McCain scored more points on the foreign policy areas, especially toward the end, but Obama was never outclassed. I would say Obama won on style points (pleasant demeanor vs. crotchety and contemptuous). McCain's digs brought out the well-schooled debater in Obama, who got his points in consistently.
Although Obama frequently said, "You're absolutely right, John", and McCain often said, "You're mistaken, Senator Obama" (or the equivalent), that doesn't mean that John was always right and Sen. Obama was always mistaken, and I think the American people actually saw that. Obama's giving credit to his opponent is a debating tactic that sometimes throws them off, but it didn't particularly do so tonight. I think he should shift to a different, but similarly off-putting approach for the next one (like completely ignoring the last thing McCain says, whatever it is), whereas McCain will try a different style as well, one less confrontational (because the hard-edged style hurts more than it helps with undecided voters).
In the opening section on the bailout and on domestic priorities, Obama edged McCain also--basically because the whole discussion was tilted to his advantage--though neither candidate seemed fully prepared to argue the questions. In particular, Jim Lehrer's frustration with both on the parts of their plans they would be willing to defer was somewhat justified. To me, the correct answer that neither came up with is the following:
No one approached the question that way at all. But, no matter. Maybe they'll come up it with when they think about it some more.
In terms of flash polls, Obama seems to have gained with undecided voters and in terms of the general public's perception of "who won". That remains to be seen, and seeing the result fully may take until the eve of the next "event"--the VP debate next week. (For which, I can announce, I've made my coverage plan: I will not watch it, but have my wife and 9-year-old daughter watch it and tell me what they think.) In terms of secondary, tertiary, and quarternary analysis, Rasmussen's market had moved from 51-49 a couple of weeks ago to 57-42 Obama going into the debate. I'd guess it's back to 60-40, where it's been most of the last five months. As for the CNN, from the usual 65-35 Obama, it had gone down to about 58-42; before the debate it was close to 70-30, beyond which I don't think it will go much further for the time being. I'll put actual updates on those two as comments.
Finally, two technical points that were not uncovered regarding the interminable discussion (during and after) of Iran and meeting with Ahmadinejad:
1) Obama correctly pointed out that Ahmadinejad would not be the most appropriate person for him to meet directly (as A. is not the most powerful political individual in Iran and thus a suitable counterpart--that would be Supreme Leader Khamenei); and
2) CNN showed the original question about meeting the leaders from an early Dem primary debate. The names of the leaders were not specifically given; the question was whether Obama would meet the leaders of certain named countries.
I tip my hat to both candidates for their preparation on the foreign policy questions. McCain scored more points on the foreign policy areas, especially toward the end, but Obama was never outclassed. I would say Obama won on style points (pleasant demeanor vs. crotchety and contemptuous). McCain's digs brought out the well-schooled debater in Obama, who got his points in consistently.
Although Obama frequently said, "You're absolutely right, John", and McCain often said, "You're mistaken, Senator Obama" (or the equivalent), that doesn't mean that John was always right and Sen. Obama was always mistaken, and I think the American people actually saw that. Obama's giving credit to his opponent is a debating tactic that sometimes throws them off, but it didn't particularly do so tonight. I think he should shift to a different, but similarly off-putting approach for the next one (like completely ignoring the last thing McCain says, whatever it is), whereas McCain will try a different style as well, one less confrontational (because the hard-edged style hurts more than it helps with undecided voters).
In the opening section on the bailout and on domestic priorities, Obama edged McCain also--basically because the whole discussion was tilted to his advantage--though neither candidate seemed fully prepared to argue the questions. In particular, Jim Lehrer's frustration with both on the parts of their plans they would be willing to defer was somewhat justified. To me, the correct answer that neither came up with is the following:
The bailout (or substitute your favorite euphemism) is a one-time event (I'll make sure of that!), possibly a one-year event from a budgetary perspective. Even a large budgetary deficit, if limited to a single year, would do relatively little harm to our economy. Therefore, the degree to which my long-term priorities should be permanently dislodged by it is limited. What would change the ability to achieve them would be if the crisis persisted: therefore we must move to complete the deal, change the confidence level in the financial markets, and contain the cost. Then we can move on all these areas which require changes more confidently.
No one approached the question that way at all. But, no matter. Maybe they'll come up it with when they think about it some more.
In terms of flash polls, Obama seems to have gained with undecided voters and in terms of the general public's perception of "who won". That remains to be seen, and seeing the result fully may take until the eve of the next "event"--the VP debate next week. (For which, I can announce, I've made my coverage plan: I will not watch it, but have my wife and 9-year-old daughter watch it and tell me what they think.) In terms of secondary, tertiary, and quarternary analysis, Rasmussen's market had moved from 51-49 a couple of weeks ago to 57-42 Obama going into the debate. I'd guess it's back to 60-40, where it's been most of the last five months. As for the CNN, from the usual 65-35 Obama, it had gone down to about 58-42; before the debate it was close to 70-30, beyond which I don't think it will go much further for the time being. I'll put actual updates on those two as comments.
Finally, two technical points that were not uncovered regarding the interminable discussion (during and after) of Iran and meeting with Ahmadinejad:
1) Obama correctly pointed out that Ahmadinejad would not be the most appropriate person for him to meet directly (as A. is not the most powerful political individual in Iran and thus a suitable counterpart--that would be Supreme Leader Khamenei); and
2) CNN showed the original question about meeting the leaders from an early Dem primary debate. The names of the leaders were not specifically given; the question was whether Obama would meet the leaders of certain named countries.
Tuesday, September 23, 2008
Bailout FAQ
I apologize if it seems false advertising, but there are really only three frequently asked questions so far:
1) Who is to blame for this mess?
2) What should be done to keep from blowing the taxpayers' huge investment?
3) What legislation should be passed right now?
I omit Question Zero: "Can't we just say 'no'"? I start from the premise that inaction (meaning, from the current session of Congress) is unacceptable . Those who argue otherwise simply don't perceive the scale of the current danger, or are totally unfeeling. Implications range from a total collapse of the dollar to rampant inflation to decimation of all savings, retirements, and current investments.
This is a true Black Swan (as coined by Nassim Nicholas Taleb for the title of his book)--an unexpected outcome which throws off all of our mundane calculations. This is not to say that no one saw this coming--I'm sure Taleb did, for example, that's probably why he wrote it--or even warned the world or tried to take action. It's just that the risk of this event did not filter down into the activities of our many marketplaces.
The current symptom of our Institutional Disease--the inability of our marketplace to value with confidence the masses of Collateralized Debt Obligations and derivatives thereof on the books of all the major financial institutions--can be remedied with Paulson's Bailout Elixir, but taking it straight would risk the "successful operation, but the patient died" outcome. Only more radical procedures can bring back some health to the patient, who, by the way, is completely willing and able to make major "co-payment".
1) Who is to blame for this mess?
The underlying problem for the mortgage-backed securities business that has emerged fully in these dire days is that the risk management was insufficiently robust. Mortgage risk models did not protect sufficiently from credit losses, because the mindset under which they were created was not one that considered the possibility of a widespread drop in domestic property values. Blame for this problem goes pretty wide.
Remember that in the classic mortgage--the one where the bank keeps the loan on its books--credit losses only result when both the borrower can't pay and the underlying asset value (the collateral) is insufficient. The provisions for these CDO's and their ilk were/are based on historical default rates and historical appreciation rates for property values, i.e., they were too low. This was basic greed on the part of the "originators" (institutions offering the mortgages), but one that was legitimized by the system that developed.
Originators had to follow a formulaic approach to packaging mortgages; if they checked all the boxes, they'd get Triple-A from the credit rating agencies (which was an absolute requirement for the buyers of the loans). For the most part, originators became just that, neither holding any of their loans nor, often, even servicing the ones they originated. They took their cut (front-end fees helped), pushed the product, and washed their hands. Instead of keeping low-return assets on their books, they got them off forthwith and pocketed their fees, allowing them to churn out vast quantities.
The rating agencies deserve a huge amount of the blame, because they failed to make the distinctions of risk within the mortgage packages. They all came out with the same rating, and not much background. For example: where were the audits of underwriting procedures reviewed critically for those downstream? How about some documentation going with the loans, showing their locations, the degree of equity present, especially when considering various appraisal methods (replacement value, market valuation sensitivity)? Rating agencies will now need to be instruments of government financial policy, or be abolished and replaced directly by a government agency. They'll probably choose the former if they can.
Originators ran their loans through impressively-complicated "legal vehicles"--money-laundering entities. The standard was a "conduit" to a Cayman Islands-incorporated Potemkin-village financial institution. The purpose was to put a stone wall between the originators and any dissatisfied buyers.
What came out the other side was a Triple-A rated debt instrument, suitable for purchase by the investment houses. They sliced and diced up the original loan packages--mixing institutions, loan vintages (time since booked), areas of origination, underwriting standards, etc.--in the interest of providing "diversification", but all oriented toward the goal of providing high yield at low risk (so, inherently, it was a cheat). The investment shops didn't give anything along the lines of direct guarantees on quality of cash flow or underlying credit in their offerings--they could, with some cynical justification, point to the rating. They also didn't reserve capital against this off-balance-sheet business, which also allowed them to churn out vast quantities. They didn't really want to know about the loans, and they made it as hard as possible for anyone further downstream to know, either.
Which brings us to the consumers of these instruments, which will be where most of us feel the pain. Our agents out there purchased these "bonds" in (cynical) good faith, and put them in the investment portfolios that all Americans have been encouraged to buy into, one way or the other. Even those who only save in FDIC-insured bank accounts (you losers!): when the banks can't churn vast quantities of mortgages anymore, they'll pay squat for your savings and live off service fees. Plenty of local banks already do that for you.
And all you folks chasing that extra 20 basis points (0.20%) of return should be able to share in the credit for the collapse of the investment principal you're currently experiencing ("my loss was only 24.8% while the S&P lost 25%!")
2) What should be done to keep from blowing the taxpayers' huge investment?
Let's work backward from the consumers and taxpayers. What we can and should expect from this exercise is that there will be a functioning market for this stuff, that it will be priced properly for its risk and that the risk will be better understood. We can expect that the most egregious actions will be punished, and that our initiatives will make a recurrence impossible and that the Bile Bubble will not simply be pushed onto the next weak spot in the financial industry. We can not expect the government to protect our investments in these dogs (and I've heard virtually no one argue otherwise).
We start by dumping the Triple-A ratings for all this stuff; this is really just recognizing the obvious--in the end, those ratings by themselves didn't protect anyone. An intense process to evaluate this industry and develop better risk ratings is the second step: the rating agency personnel, who know something about where the skeletons are buried (in spite of the seeming blindness of their agencies' ultimate rating values) would be drafted to work alongside the sharpest analytical minds the government can recruit, for high-pay, high-security jobs (these people will be needed for as long as they are willing to stay on). A three-part testing process--of knowledge, of ability to learn both quickly and thoroughly, and of ethics--should be required of all new hires. We're not going to be running any moles, here.
Rather than overpaying for these debt instruments, thus re-capitalizing the fallen industry giants, the emphasis will be on the government's buying low and selling high. The financial industry's capital will be enhanced by the fact that their stock valuations have been protected from becoming worthless through the government intervention, and that should be enough.
In terms of using their stake, the government agency should start with the most homogeneous, transparent CDO's--ones where they can actually figure out where the loans are from, how they were made, and how they are performing--paying the minimum amount possible for them, and then work down from there. The idea is to have a robust market for various types of securitized debt, and the financial houses will figure out the game very quickly (the ones that want to survive, anyway), doing their own research and analysis. We can offer them some bounty if they can expose upstream fraudulence.
Longer term policy considerations: In a market where opacity is punished, the recourse to legal vehicles will be more carefully considered, and it may ultimately wither and die. Originators must be held accountable--a start would be a requirement to increase the credit enhancement put into every one of these loan warehouses. This is something that even those other industrialized nations which don't want to fund this exercise can do. Similarly, healthy (i.e., painful) reserve requirements for these off-balance sheet businesses can be established internationally.
Finally, we get back to the originators. The initial response--of all the banks--to the housing/mortgage crisis which started 18 months ago was to make more precise cookies with our cookie-cutter approach. Documents multiplied, processes slowed, asses were attempted to be covered. Alas, we were still being mooned!
The mortgage industry's risk management needs to be thoroughly upgraded. For example, riddle me this: how important is the famous 38% ratio (mortgage payment to income) when job stability is so low? How does one weigh that against self-employment income (more dynamic, less secure), against credit bureau score, and against unpledged assets that borrowers have? How are we going to give seniors, young independents, and small businesses long-term credit in the new world that is emerging?
The biggest revolution in the industry's risk management will come from improved methods of property valuation. There are already a couple of values that come out of today's appraisals: the bank takes the lowest one (as they would the lowest credit bureau score from the three bureaus), uses that, and calls it "conservative". I don't see any evidence of real market sensitivity being considered: what is the property's potential for losing its value over the time horizon of the loan (and the upside, too, for that matter, when it comes to more marginal credit)?
If we make originators who pass on loans responsible for the credit quality, they might have to get more involved with how the property is maintained over time. That may sound too intrusive, but consider the fact that you don't really "own" your home until it's free and clear. At the end of the day, better (more robust) credit models are long overdue for the mortgage industry, and they must be forced to emerge from both the origination process and the loan servicing business.
The government has the opportunity, and the need, to stick its nose into all these tents--as long as originators don't intend to hold onto all their mortgages for their duration. If they want to do that, they would indeed be subject to less regulation.
3) What legislation should be passed right now?
I've heard a lot of talk about "$700 billion" but not about where that number came from, and what it will pay for. Let's proceed for argument's sake on the assumption--which should be studied closely for its merit--that it's a good figure for the total amount the government can and should be allowed either to spend, or to have at risk, at any one time.
Right now, Congress should allocate much less: enough to get the operation started. Hire the new people (credit agencies will have to provide assistance at their expense, or die), develop the initial models, create a facility to trade the stuff, and buy, at bargain-basement prices, some of the best stuff they can identify. Make sure it is clear they will stop buying if they don't have demand-side participation from the banks who provide the stuff in.
Congress should only authorize a portion of the funds for the period from now until Jan. 20, 2009. The appropriation should be: $100 billion (say) for setting up the agency and for its direct expenses for a year, and a $200 billion line as the initial stake. When the agency shows success in its initial tasks (establish initial risk categories, success with first, well-documented purchases, functioning market for the higher-quality CDO's), then it can get access to another $100 billion of the $600 billion credit line ultimately planned with Treasury (but not sooner than next year). The line will need to increase because, as they move down the pyramid from the peaks in quality toward the swamp, it gets wider and broader.
After a year or so, the program needs to pay for its own operations from its proceeds. Perhaps, if it needs to be expanded, it can be funded off the proceeds from the AIG steal (a great deal for the government, which bought a hugely-profitable business enterprise for the cost of a bridge loan).
The real bottom line, and we simply have to get partisan here: we can't let the Bushites have access to the whole pile, or they will simply bail out their buddies, they'll all walk away scot-free, and they'll consider it a done deal, regardless of whether the markets are preserved (the Reagan-Bush I escapade). By the time the tax increases come through, they'll be long gone with their ill-gotten gains. The short-term expectations for the CEO's (yes, control their packages!) and shareholders should be only loss of income.
Background and disclaimer: I worked on the "production" side for securitized receivables at the end of the last decade and beginning of this one--for mortgages peddled on through a Fannie Mae-like organization in Hong Kong (HKMA), and for credit card receivables produced and securitized domestically. In this sense, I came to the borders of the main event (already in progress), had to learn the rules and business framework quickly to survive, and was totally appalled at and admiring of the processes' leveraging powers. Then I left. I've been watching this Bushite Recovery (2003-2007) from the sidelines, never truly believing in the solidity of the growth which has allegedly been attained.
As a side note, the credit card securitizations I worked on should be better protected from variations in credit performance, because they considered credit losses to be a major part of the economic model, so the credit reserves (called "credit enhancements") were significant and, more importantly, dynamic. Only a generalized depression should bring them down.
1) Who is to blame for this mess?
2) What should be done to keep from blowing the taxpayers' huge investment?
3) What legislation should be passed right now?
I omit Question Zero: "Can't we just say 'no'"? I start from the premise that inaction (meaning, from the current session of Congress) is unacceptable . Those who argue otherwise simply don't perceive the scale of the current danger, or are totally unfeeling. Implications range from a total collapse of the dollar to rampant inflation to decimation of all savings, retirements, and current investments.
This is a true Black Swan (as coined by Nassim Nicholas Taleb for the title of his book)--an unexpected outcome which throws off all of our mundane calculations. This is not to say that no one saw this coming--I'm sure Taleb did, for example, that's probably why he wrote it--or even warned the world or tried to take action. It's just that the risk of this event did not filter down into the activities of our many marketplaces.
The current symptom of our Institutional Disease--the inability of our marketplace to value with confidence the masses of Collateralized Debt Obligations and derivatives thereof on the books of all the major financial institutions--can be remedied with Paulson's Bailout Elixir, but taking it straight would risk the "successful operation, but the patient died" outcome. Only more radical procedures can bring back some health to the patient, who, by the way, is completely willing and able to make major "co-payment".
1) Who is to blame for this mess?
The underlying problem for the mortgage-backed securities business that has emerged fully in these dire days is that the risk management was insufficiently robust. Mortgage risk models did not protect sufficiently from credit losses, because the mindset under which they were created was not one that considered the possibility of a widespread drop in domestic property values. Blame for this problem goes pretty wide.
Remember that in the classic mortgage--the one where the bank keeps the loan on its books--credit losses only result when both the borrower can't pay and the underlying asset value (the collateral) is insufficient. The provisions for these CDO's and their ilk were/are based on historical default rates and historical appreciation rates for property values, i.e., they were too low. This was basic greed on the part of the "originators" (institutions offering the mortgages), but one that was legitimized by the system that developed.
Originators had to follow a formulaic approach to packaging mortgages; if they checked all the boxes, they'd get Triple-A from the credit rating agencies (which was an absolute requirement for the buyers of the loans). For the most part, originators became just that, neither holding any of their loans nor, often, even servicing the ones they originated. They took their cut (front-end fees helped), pushed the product, and washed their hands. Instead of keeping low-return assets on their books, they got them off forthwith and pocketed their fees, allowing them to churn out vast quantities.
The rating agencies deserve a huge amount of the blame, because they failed to make the distinctions of risk within the mortgage packages. They all came out with the same rating, and not much background. For example: where were the audits of underwriting procedures reviewed critically for those downstream? How about some documentation going with the loans, showing their locations, the degree of equity present, especially when considering various appraisal methods (replacement value, market valuation sensitivity)? Rating agencies will now need to be instruments of government financial policy, or be abolished and replaced directly by a government agency. They'll probably choose the former if they can.
Originators ran their loans through impressively-complicated "legal vehicles"--money-laundering entities. The standard was a "conduit" to a Cayman Islands-incorporated Potemkin-village financial institution. The purpose was to put a stone wall between the originators and any dissatisfied buyers.
What came out the other side was a Triple-A rated debt instrument, suitable for purchase by the investment houses. They sliced and diced up the original loan packages--mixing institutions, loan vintages (time since booked), areas of origination, underwriting standards, etc.--in the interest of providing "diversification", but all oriented toward the goal of providing high yield at low risk (so, inherently, it was a cheat). The investment shops didn't give anything along the lines of direct guarantees on quality of cash flow or underlying credit in their offerings--they could, with some cynical justification, point to the rating. They also didn't reserve capital against this off-balance-sheet business, which also allowed them to churn out vast quantities. They didn't really want to know about the loans, and they made it as hard as possible for anyone further downstream to know, either.
Which brings us to the consumers of these instruments, which will be where most of us feel the pain. Our agents out there purchased these "bonds" in (cynical) good faith, and put them in the investment portfolios that all Americans have been encouraged to buy into, one way or the other. Even those who only save in FDIC-insured bank accounts (you losers!): when the banks can't churn vast quantities of mortgages anymore, they'll pay squat for your savings and live off service fees. Plenty of local banks already do that for you.
And all you folks chasing that extra 20 basis points (0.20%) of return should be able to share in the credit for the collapse of the investment principal you're currently experiencing ("my loss was only 24.8% while the S&P lost 25%!")
2) What should be done to keep from blowing the taxpayers' huge investment?
Let's work backward from the consumers and taxpayers. What we can and should expect from this exercise is that there will be a functioning market for this stuff, that it will be priced properly for its risk and that the risk will be better understood. We can expect that the most egregious actions will be punished, and that our initiatives will make a recurrence impossible and that the Bile Bubble will not simply be pushed onto the next weak spot in the financial industry. We can not expect the government to protect our investments in these dogs (and I've heard virtually no one argue otherwise).
We start by dumping the Triple-A ratings for all this stuff; this is really just recognizing the obvious--in the end, those ratings by themselves didn't protect anyone. An intense process to evaluate this industry and develop better risk ratings is the second step: the rating agency personnel, who know something about where the skeletons are buried (in spite of the seeming blindness of their agencies' ultimate rating values) would be drafted to work alongside the sharpest analytical minds the government can recruit, for high-pay, high-security jobs (these people will be needed for as long as they are willing to stay on). A three-part testing process--of knowledge, of ability to learn both quickly and thoroughly, and of ethics--should be required of all new hires. We're not going to be running any moles, here.
Rather than overpaying for these debt instruments, thus re-capitalizing the fallen industry giants, the emphasis will be on the government's buying low and selling high. The financial industry's capital will be enhanced by the fact that their stock valuations have been protected from becoming worthless through the government intervention, and that should be enough.
In terms of using their stake, the government agency should start with the most homogeneous, transparent CDO's--ones where they can actually figure out where the loans are from, how they were made, and how they are performing--paying the minimum amount possible for them, and then work down from there. The idea is to have a robust market for various types of securitized debt, and the financial houses will figure out the game very quickly (the ones that want to survive, anyway), doing their own research and analysis. We can offer them some bounty if they can expose upstream fraudulence.
Longer term policy considerations: In a market where opacity is punished, the recourse to legal vehicles will be more carefully considered, and it may ultimately wither and die. Originators must be held accountable--a start would be a requirement to increase the credit enhancement put into every one of these loan warehouses. This is something that even those other industrialized nations which don't want to fund this exercise can do. Similarly, healthy (i.e., painful) reserve requirements for these off-balance sheet businesses can be established internationally.
Finally, we get back to the originators. The initial response--of all the banks--to the housing/mortgage crisis which started 18 months ago was to make more precise cookies with our cookie-cutter approach. Documents multiplied, processes slowed, asses were attempted to be covered. Alas, we were still being mooned!
The mortgage industry's risk management needs to be thoroughly upgraded. For example, riddle me this: how important is the famous 38% ratio (mortgage payment to income) when job stability is so low? How does one weigh that against self-employment income (more dynamic, less secure), against credit bureau score, and against unpledged assets that borrowers have? How are we going to give seniors, young independents, and small businesses long-term credit in the new world that is emerging?
The biggest revolution in the industry's risk management will come from improved methods of property valuation. There are already a couple of values that come out of today's appraisals: the bank takes the lowest one (as they would the lowest credit bureau score from the three bureaus), uses that, and calls it "conservative". I don't see any evidence of real market sensitivity being considered: what is the property's potential for losing its value over the time horizon of the loan (and the upside, too, for that matter, when it comes to more marginal credit)?
If we make originators who pass on loans responsible for the credit quality, they might have to get more involved with how the property is maintained over time. That may sound too intrusive, but consider the fact that you don't really "own" your home until it's free and clear. At the end of the day, better (more robust) credit models are long overdue for the mortgage industry, and they must be forced to emerge from both the origination process and the loan servicing business.
The government has the opportunity, and the need, to stick its nose into all these tents--as long as originators don't intend to hold onto all their mortgages for their duration. If they want to do that, they would indeed be subject to less regulation.
3) What legislation should be passed right now?
I've heard a lot of talk about "$700 billion" but not about where that number came from, and what it will pay for. Let's proceed for argument's sake on the assumption--which should be studied closely for its merit--that it's a good figure for the total amount the government can and should be allowed either to spend, or to have at risk, at any one time.
Right now, Congress should allocate much less: enough to get the operation started. Hire the new people (credit agencies will have to provide assistance at their expense, or die), develop the initial models, create a facility to trade the stuff, and buy, at bargain-basement prices, some of the best stuff they can identify. Make sure it is clear they will stop buying if they don't have demand-side participation from the banks who provide the stuff in.
Congress should only authorize a portion of the funds for the period from now until Jan. 20, 2009. The appropriation should be: $100 billion (say) for setting up the agency and for its direct expenses for a year, and a $200 billion line as the initial stake. When the agency shows success in its initial tasks (establish initial risk categories, success with first, well-documented purchases, functioning market for the higher-quality CDO's), then it can get access to another $100 billion of the $600 billion credit line ultimately planned with Treasury (but not sooner than next year). The line will need to increase because, as they move down the pyramid from the peaks in quality toward the swamp, it gets wider and broader.
After a year or so, the program needs to pay for its own operations from its proceeds. Perhaps, if it needs to be expanded, it can be funded off the proceeds from the AIG steal (a great deal for the government, which bought a hugely-profitable business enterprise for the cost of a bridge loan).
The real bottom line, and we simply have to get partisan here: we can't let the Bushites have access to the whole pile, or they will simply bail out their buddies, they'll all walk away scot-free, and they'll consider it a done deal, regardless of whether the markets are preserved (the Reagan-Bush I escapade). By the time the tax increases come through, they'll be long gone with their ill-gotten gains. The short-term expectations for the CEO's (yes, control their packages!) and shareholders should be only loss of income.
Background and disclaimer: I worked on the "production" side for securitized receivables at the end of the last decade and beginning of this one--for mortgages peddled on through a Fannie Mae-like organization in Hong Kong (HKMA), and for credit card receivables produced and securitized domestically. In this sense, I came to the borders of the main event (already in progress), had to learn the rules and business framework quickly to survive, and was totally appalled at and admiring of the processes' leveraging powers. Then I left. I've been watching this Bushite Recovery (2003-2007) from the sidelines, never truly believing in the solidity of the growth which has allegedly been attained.
As a side note, the credit card securitizations I worked on should be better protected from variations in credit performance, because they considered credit losses to be a major part of the economic model, so the credit reserves (called "credit enhancements") were significant and, more importantly, dynamic. Only a generalized depression should bring them down.
Thursday, September 18, 2008
Obama in Espanola, NM
My wife, sister-in-law, and I made the trip down to Espanola (the 'enye' is important) to see the Obama rally today. I'm pretty sure this will be as close to us as Obama will get in the general election campaign, and I was frustrated in my attempt to see him in Santa Fe during the primary campaign.
Atmospherics: Attending an Obama campaign rally is a fairly grueling ordeal. Got in line about 10 ("doors open at 10:30"), got in about 12:15. Technically, you need a ticket, but nobody cared too much. The screening was fairly thorough: cameras, plastic water bottles OK; fold-up chairs, glass were not. The site, the town's plaza, had about one gazebo, a distant rack of bleachers, and the showpiece crowd in the backdrop bleachers, on a field of well-kept grass. It was sunny, tending towards hot (80 or so), with a wind that started up during the rally, freshening but eventually bringing in grit from the dry neighborhoods nearby. The rally ended at 2:30, so it was four-plus hours in the sun, with nowhere to sit. I got a significant sunburn outlining the neckline of the shirt I wore: I am currently, literally, a redneck.
I was on a relative high point in the mosh pit, twenty-five yards away from the podium. The rally started shortly after 12:30 with these warm-up speakers: mayor of Espanola, Congressional candidate Ben Ray Lujan (he's a shoo-in), Jill Cooper Udall (the wife of our current Congressman and future Senator--Tom couldn't make it as Congress is in session), the Obama campaign field organizer for this district and the woman who heads up Women for Obama for the state. Then, about 45 minutes of music--playing some of the same songs two and three times. There was a bit of a delay, clearly.
The main event was opened by Gov. Bill Richardson, who's beard is now well-trimmed, and looks trim in a black shirt, bolo tie, and blue jeans. Bill gave a short, high-quality speech and stepped aside for our candidate.
Barack seemed in good spirits, not overly tired, smiling, white shirt with sleeves rolled up and no tie (making lapel pin question moot).
His speaking characteristics were laudable for a student of forensics: despite the presence of TelePrompter, he made great eye contact forward and across the crowd, speaking forcefully without shouting.
Context: Espanola is at the heart of a relatively-highly populated swath through the center of Northern New Mexico. The area as a whole has a high-percentage of both Hispanics and Native Americans. Santa Fe is the only real city in the region, separated by a two-day death march (on foot; 45 minutes, on the new light rail system nearing completion) from the state's only metropolis, Albuquerque.
Espanola is a relatively backward town, traditional and unassuming. Also, poor--like Taos in its low wages and lack of sizable, stable employment (but unlike Santa Fe with its government jobs). It's somehow not even the county seat of its county, Rio Arriba (for the High Rio Grande running through town)--that's a dinky hamlet called Tierra Amarilla 30 miles to the northwest.
It is the voting history, and the inconsistent turnout, of this swath here--2-to-1 or better in each of the three communities' counties for both Gore and Kerry--which have led the Obama campaign to target this region as the key area for their success in the state. While they've made an impressive effort to organize throughout the state, they've recognized that there's a huge opportunity here, if they can register more voters and get them to turn out. Thus Obama's call to roll up our sleeves and appeal to Hispanics and Native Americans "to vote your numbers".
The Meat and Potatoes:
Obama's address went entirely to economic issues, except for a passing reference to getting us out of Iraq. The news of the morning was the bizarre call from McCain for the firing of SEC Commissioner Christopher Cox (yeah, like that's going to get us through the crisis, John!) I really can't figure that one: apart from the fact the analysts caught that he technically doesn't fire the SEC Commissioner, Cox is far from the foremost scapegoat, and he is a loyal Republican--probably endorsed John McCain, even.
Obama used it well, in the best improvisation of the day: (and I quote loosely, from memory)
It's all well and good to fire him. But we have a chance in November to fire the whole on-your-own, trickle-down, look-the-other-way bunch of them.
I like the combative spirit--I hope he brings it to the debate, and that he makes the attacks necessary to show that McCain is the erratic, unsound choice in this election.
Takeaway: My highlight for the day is the call to action in pseudo-Spanish: Obamanos! (upside-down exclamation point and accent on the first 'a' missing). It's a good play on words: first, for Vamonos! (let's go!); but also, a more subtle one on the newly-coined verb "obamar"--if not coined yet, I'm doing it--meaning "toObama" or "Obamacize"--meaning to get organized from the ground up to get things done. In that sense, it would mean "Obama-cize us!"
Like Jimi Hendrix' call to get "psychedelicized".
Atmospherics: Attending an Obama campaign rally is a fairly grueling ordeal. Got in line about 10 ("doors open at 10:30"), got in about 12:15. Technically, you need a ticket, but nobody cared too much. The screening was fairly thorough: cameras, plastic water bottles OK; fold-up chairs, glass were not. The site, the town's plaza, had about one gazebo, a distant rack of bleachers, and the showpiece crowd in the backdrop bleachers, on a field of well-kept grass. It was sunny, tending towards hot (80 or so), with a wind that started up during the rally, freshening but eventually bringing in grit from the dry neighborhoods nearby. The rally ended at 2:30, so it was four-plus hours in the sun, with nowhere to sit. I got a significant sunburn outlining the neckline of the shirt I wore: I am currently, literally, a redneck.
I was on a relative high point in the mosh pit, twenty-five yards away from the podium. The rally started shortly after 12:30 with these warm-up speakers: mayor of Espanola, Congressional candidate Ben Ray Lujan (he's a shoo-in), Jill Cooper Udall (the wife of our current Congressman and future Senator--Tom couldn't make it as Congress is in session), the Obama campaign field organizer for this district and the woman who heads up Women for Obama for the state. Then, about 45 minutes of music--playing some of the same songs two and three times. There was a bit of a delay, clearly.
The main event was opened by Gov. Bill Richardson, who's beard is now well-trimmed, and looks trim in a black shirt, bolo tie, and blue jeans. Bill gave a short, high-quality speech and stepped aside for our candidate.
Barack seemed in good spirits, not overly tired, smiling, white shirt with sleeves rolled up and no tie (making lapel pin question moot).
His speaking characteristics were laudable for a student of forensics: despite the presence of TelePrompter, he made great eye contact forward and across the crowd, speaking forcefully without shouting.
Context: Espanola is at the heart of a relatively-highly populated swath through the center of Northern New Mexico. The area as a whole has a high-percentage of both Hispanics and Native Americans. Santa Fe is the only real city in the region, separated by a two-day death march (on foot; 45 minutes, on the new light rail system nearing completion) from the state's only metropolis, Albuquerque.
Espanola is a relatively backward town, traditional and unassuming. Also, poor--like Taos in its low wages and lack of sizable, stable employment (but unlike Santa Fe with its government jobs). It's somehow not even the county seat of its county, Rio Arriba (for the High Rio Grande running through town)--that's a dinky hamlet called Tierra Amarilla 30 miles to the northwest.
It is the voting history, and the inconsistent turnout, of this swath here--2-to-1 or better in each of the three communities' counties for both Gore and Kerry--which have led the Obama campaign to target this region as the key area for their success in the state. While they've made an impressive effort to organize throughout the state, they've recognized that there's a huge opportunity here, if they can register more voters and get them to turn out. Thus Obama's call to roll up our sleeves and appeal to Hispanics and Native Americans "to vote your numbers".
The Meat and Potatoes:
Obama's address went entirely to economic issues, except for a passing reference to getting us out of Iraq. The news of the morning was the bizarre call from McCain for the firing of SEC Commissioner Christopher Cox (yeah, like that's going to get us through the crisis, John!) I really can't figure that one: apart from the fact the analysts caught that he technically doesn't fire the SEC Commissioner, Cox is far from the foremost scapegoat, and he is a loyal Republican--probably endorsed John McCain, even.
Obama used it well, in the best improvisation of the day: (and I quote loosely, from memory)
It's all well and good to fire him. But we have a chance in November to fire the whole on-your-own, trickle-down, look-the-other-way bunch of them.
I like the combative spirit--I hope he brings it to the debate, and that he makes the attacks necessary to show that McCain is the erratic, unsound choice in this election.
Takeaway: My highlight for the day is the call to action in pseudo-Spanish: Obamanos! (upside-down exclamation point and accent on the first 'a' missing). It's a good play on words: first, for Vamonos! (let's go!); but also, a more subtle one on the newly-coined verb "obamar"--if not coined yet, I'm doing it--meaning "toObama" or "Obamacize"--meaning to get organized from the ground up to get things done. In that sense, it would mean "Obama-cize us!"
Like Jimi Hendrix' call to get "psychedelicized".
TV Highlight
Harold Ford, Jr. on MSNBC. He's shown as "NBC Analyst", so I assume he's being extremely well-paid.
He made a bold statement tonight, which serves NBC so well. He opined that the outcome of the election itself will come directly from the first debate (in Mississippi, on foreign policy): If Obama showed the mastery of foreign policy and confidence in expressing it which Ford knows that Obama has, then he will win the election. If not, "he will find himself in a tough spot".
This was in response to a well-prepared question from David Gregory on the challenge, arising from polls, of Obama to gain parity in perceived leadership.
TV Lowlight: Gregory showed "The Wolves" ad as an example of the excellence of ads from the 2004 campaign, asking why none of the Obama ads are memorable like this one.
Yes, it was memorable. No, it didn't make an impact that was noted at the time. There was also the message from Osama bin Laden to upset the national security voters' nerves.
This reference was a personally felt stab, as I had complained at the time--in the last week prior to the Election--that this ad was coming from none other than The Boy Who Cried Wolf. (As in, Iraq!) No one listened. If John Kerry had somehow come up with that one, he would've won the election, I think.
He made a bold statement tonight, which serves NBC so well. He opined that the outcome of the election itself will come directly from the first debate (in Mississippi, on foreign policy): If Obama showed the mastery of foreign policy and confidence in expressing it which Ford knows that Obama has, then he will win the election. If not, "he will find himself in a tough spot".
This was in response to a well-prepared question from David Gregory on the challenge, arising from polls, of Obama to gain parity in perceived leadership.
TV Lowlight: Gregory showed "The Wolves" ad as an example of the excellence of ads from the 2004 campaign, asking why none of the Obama ads are memorable like this one.
Yes, it was memorable. No, it didn't make an impact that was noted at the time. There was also the message from Osama bin Laden to upset the national security voters' nerves.
This reference was a personally felt stab, as I had complained at the time--in the last week prior to the Election--that this ad was coming from none other than The Boy Who Cried Wolf. (As in, Iraq!) No one listened. If John Kerry had somehow come up with that one, he would've won the election, I think.
Tuesday, September 16, 2008
Clocking Troopergate, and The Lady V.
The switch of Alaska State Government officials to an uncooperative posture toward the legislative investigation of possible improper influence by Gov. Palin in the Troopergate case makes it plain that McPalin & McCampaign will play to run out the clock on this one: rather than seeking Palin's exoneration, they will seek to make sure nothing comes out of the investigation until after Election Day.
I am not particularly interested in this petty provincial squabble, particularly since it doesn't appear it's going to deliver us from having Mooseburgers around, at least, not anytime soon. I was struck, though, with a feeling of deja vu. This time of year in 2004, the Bush-Cheney ticket was successfully sitting on the investigation of who had outed our favorite ex-covert agent, Valerie Plame Wilson (or as I call her, after Pynchon, "The Lady V.")
That was a much more important clocking exercise conducted by the Bushites, but there a couple of common threads. Contempt of authorized investigatory processes, executive authority trumping other branches, abuse of power, and the position of the Vice President of the United States (in Palin's case, aspiring towards it). The main common thread is fear that cooperating with a politically-embarrassing investigation could harm the Republicans' national political chances.
I am not particularly interested in this petty provincial squabble, particularly since it doesn't appear it's going to deliver us from having Mooseburgers around, at least, not anytime soon. I was struck, though, with a feeling of deja vu. This time of year in 2004, the Bush-Cheney ticket was successfully sitting on the investigation of who had outed our favorite ex-covert agent, Valerie Plame Wilson (or as I call her, after Pynchon, "The Lady V.")
That was a much more important clocking exercise conducted by the Bushites, but there a couple of common threads. Contempt of authorized investigatory processes, executive authority trumping other branches, abuse of power, and the position of the Vice President of the United States (in Palin's case, aspiring towards it). The main common thread is fear that cooperating with a politically-embarrassing investigation could harm the Republicans' national political chances.
Baseball
The regular season is wrapping up this weekend, and hardly anyone is noticing. It's been a season marked once again by parity (read: mediocrity) of teams, but there have been some outstanding individual performances.
It's my obligation to this blog to review my prediction performance.
I did have the Rays as the answer to the WSJ preview game question,
"Which team will improve its record by the most games?".
Generally, though, my performance on it looks pretty weak (I'd fallen
in love with the Reds', Tigers', Rockies' starters--they were not
worthy of it). I did have Mets & Phillies in the playoffs, and
Phillies-BoTox in the Series, and those picks look as good as any
other at this point, but I lacked a coherent scenario.
I think the negative story of Yanks '08 is secondary in the big
picture (as was that of Mets '07), with the primary one being the
feel-good parity stories of the Rays/Cubs in '08 and the Rockies in
'07, and the strategic issue of the superiority of the AL. And Barry
Bonds as the player story of the year--last's year's Cliff Lee, but
more offbeat.
Even the Yanks are entitled to an off-year once or twice a decade. I'm
not worried they won't be back.
My bummer of the year award goes to Aaron Harang. It's because of him that the Reds tanked early, bailed ineffectively, and are back to the drawing board. Five more years!
It's my obligation to this blog to review my prediction performance.
I did have the Rays as the answer to the WSJ preview game question,
"Which team will improve its record by the most games?".
Generally, though, my performance on it looks pretty weak (I'd fallen
in love with the Reds', Tigers', Rockies' starters--they were not
worthy of it). I did have Mets & Phillies in the playoffs, and
Phillies-BoTox in the Series, and those picks look as good as any
other at this point, but I lacked a coherent scenario.
I think the negative story of Yanks '08 is secondary in the big
picture (as was that of Mets '07), with the primary one being the
feel-good parity stories of the Rays/Cubs in '08 and the Rockies in
'07, and the strategic issue of the superiority of the AL. And Barry
Bonds as the player story of the year--last's year's Cliff Lee, but
more offbeat.
Even the Yanks are entitled to an off-year once or twice a decade. I'm
not worried they won't be back.
My bummer of the year award goes to Aaron Harang. It's because of him that the Reds tanked early, bailed ineffectively, and are back to the drawing board. Five more years!
Big Ticket Diary, Pt. II
Sept. 16--How Sane, Integrated Foreign/Military Policies will Save Us $$$
Bringing our troops home is, unfortunately, the endgame rather than the beginning; there will need to be redeployment of units from Iraq toward the Afghan-Pakistan theater, especially the border area. NATO forces from major heroin-consuming nations (other than the US) will need to take on the task of working with the Afghan government to reduce opium production.
Diplomacy will become a tool for saving us money. By making an accommodation, then working closely in coordination with the Pakistani elected government, an Obama administration will move to close off the lawless border areas, then go on the attack. There is a successful outcome that one can envision which would bring an end to the central leadership of Al Qaeda, though splinter cells could survive and make sporadic attacks for some time in some countries. The threat of terrorism will never go away, not when excessive violent capabilities are so easily possessed.
Rather than antagonizing the Russians, challenging their manhood, and provoking a Cold War sequel, Obama will show he can listen and act. The folly of efforts to increase Russian encirclement with NATO members will end, and another means will be developed which can give former Soviet republics the chance to resist Russian bullying. A mutual trade-and-support association of some kind, focused initially on energy deliverables.
Sept. 15--It's gone beyond "Tax the Bushites!"
though that is still part of the economic game plan. Without mortgages, the American economy as we know it will implode. And mortgages have gotten really, really hard to get.
It's all about bureaucracy and CYA now, for the banks. There's a feeling that extensive loan documentation will save them. So they stall and drag you along, then pull out at the last minute. Blue Balls Banking!
From lawsuits, maybe, but there's nothing in this world that can save them if home values continue to drop and homeowners get squeezed too much. Most often, this occurs through a combination of, on the one hand, circumstances beyond their control, like divorce, medical bills, or loss of job, but on the other, some things they could have controlled, like spending beyond their means.
There is an analogy from the family microeconomy and its problems to our nation, the Federal debt, and public policy. I like what Ed Schultz is saying, that America has to start paying its bills. He's talking about trade deficit and the resulting growth in our foreign indebtedness--and don't think our creditors abroad aren't watching this fiasco on Wall Street!--but I am more interested in our current accounts at home, for now and for our future.
We need to rebalance our investment toward domestic policy goals. What this means is cutting back on GWOT expenditures--slicing and dicing Homeland Security would be a good start, followed immediately by extensive military weapons systems reductions.
Bringing our troops home is, unfortunately, the endgame rather than the beginning; there will need to be redeployment of units from Iraq toward the Afghan-Pakistan theater, especially the border area. NATO forces from major heroin-consuming nations (other than the US) will need to take on the task of working with the Afghan government to reduce opium production.
Diplomacy will become a tool for saving us money. By making an accommodation, then working closely in coordination with the Pakistani elected government, an Obama administration will move to close off the lawless border areas, then go on the attack. There is a successful outcome that one can envision which would bring an end to the central leadership of Al Qaeda, though splinter cells could survive and make sporadic attacks for some time in some countries. The threat of terrorism will never go away, not when excessive violent capabilities are so easily possessed.
Rather than antagonizing the Russians, challenging their manhood, and provoking a Cold War sequel, Obama will show he can listen and act. The folly of efforts to increase Russian encirclement with NATO members will end, and another means will be developed which can give former Soviet republics the chance to resist Russian bullying. A mutual trade-and-support association of some kind, focused initially on energy deliverables.
Sept. 15--It's gone beyond "Tax the Bushites!"
though that is still part of the economic game plan. Without mortgages, the American economy as we know it will implode. And mortgages have gotten really, really hard to get.
It's all about bureaucracy and CYA now, for the banks. There's a feeling that extensive loan documentation will save them. So they stall and drag you along, then pull out at the last minute. Blue Balls Banking!
From lawsuits, maybe, but there's nothing in this world that can save them if home values continue to drop and homeowners get squeezed too much. Most often, this occurs through a combination of, on the one hand, circumstances beyond their control, like divorce, medical bills, or loss of job, but on the other, some things they could have controlled, like spending beyond their means.
There is an analogy from the family microeconomy and its problems to our nation, the Federal debt, and public policy. I like what Ed Schultz is saying, that America has to start paying its bills. He's talking about trade deficit and the resulting growth in our foreign indebtedness--and don't think our creditors abroad aren't watching this fiasco on Wall Street!--but I am more interested in our current accounts at home, for now and for our future.
We need to rebalance our investment toward domestic policy goals. What this means is cutting back on GWOT expenditures--slicing and dicing Homeland Security would be a good start, followed immediately by extensive military weapons systems reductions.
Sunday, September 14, 2008
A Shyfte in the Publick Humours
I prescribe extensive blood-letting.
The key finding in post-convention poll research is a substantial increase in those willing to identify themselves as Republicans. This party self-identification figure is one of the important benchmarks the pollsters use to validate their samples, or even to drive the sample selection.
This number--people willing to own up to their preference for the party of Bushite Misrule, and now, of the McPalin brand--has gone up about 6% in a month. It's a major development: If sustained, and if then fully reflected in November, it will have implications that are significant, though not necessarily determinant, in the Presidential election. It will also affect the Congressional races, limiting the damage to Republicans.
I would argue there are implications that go beyond this election.
Until this Bump, the Republicans were heading for the Great Elephant Graveyard, somewhere near where the bones of the Federalists and Whigs lie. Very simply, Sarah Palin has given demoralized Republican sympathizers a sense that the party still has a future, just when it was starting to look like it had none.
For most of the last eight years, the party has been Unified Bushite. McCain's unorthodoxy from 2000 was thoroughly rejected after Bush defeated him in the primaries and successfully rallied the team for Congressional parity and two narrow victories in Presidential general elections. 2006 changed things, though, and the party has been on the run, its followers hounded and embarrassed.
As with Bushite policy disasters, Republican rank-and-file activists rallied around McCain this year because they simply had no other choice. But John McCain is an aging reed to buttress the party. With another drubbing due in Congressional elections, one could hope for Permanent Minority Status--Rove's ideal inverted.
This was certainly my fondest dream. Look, I have no doubt--after 10-12 years of hegemonic rule and massive systemic change, the Democrats would certainly have split, probably around differing views of the success of the Obama programs for energy independence and for long-term financial stability through health cost control and revised taxation policies. But so much for progress like that--in 2020, we may still have to deal with these incompetent, insolvent, but ever-so-confident con artists.
Palin's most important characteristic is actually not her gender, but her youth. Here was someone that could give hope for the party's future to discouraged Republicans--of all ages, actually.
Now, it remains to be seen whether this Young Turk will survive, beyond a fringe group of passionate admirers. Everyone will desert her if she fails to fulfill her promise, either by crook, or because her performance eventually gets the hook. If she gets relegated to the Alaskan Deep Freeze, the party will once again have to find someone who can represent some vision for the future. There's also a real good chance, if the worst should happen this year, that the huge challenges of 2009-2012 will prove once again insoluble to tired Republican nostrums and, after four more years of impasse, the party may once again be on the run.
In the meantime, though, that vista of green fields and global progress has been blocked. We're getting out the machete, as it's going to be hacking through the tangle of lies and distortion from now until November, without much thought of what may lie beyond.
The key finding in post-convention poll research is a substantial increase in those willing to identify themselves as Republicans. This party self-identification figure is one of the important benchmarks the pollsters use to validate their samples, or even to drive the sample selection.
This number--people willing to own up to their preference for the party of Bushite Misrule, and now, of the McPalin brand--has gone up about 6% in a month. It's a major development: If sustained, and if then fully reflected in November, it will have implications that are significant, though not necessarily determinant, in the Presidential election. It will also affect the Congressional races, limiting the damage to Republicans.
I would argue there are implications that go beyond this election.
Until this Bump, the Republicans were heading for the Great Elephant Graveyard, somewhere near where the bones of the Federalists and Whigs lie. Very simply, Sarah Palin has given demoralized Republican sympathizers a sense that the party still has a future, just when it was starting to look like it had none.
For most of the last eight years, the party has been Unified Bushite. McCain's unorthodoxy from 2000 was thoroughly rejected after Bush defeated him in the primaries and successfully rallied the team for Congressional parity and two narrow victories in Presidential general elections. 2006 changed things, though, and the party has been on the run, its followers hounded and embarrassed.
As with Bushite policy disasters, Republican rank-and-file activists rallied around McCain this year because they simply had no other choice. But John McCain is an aging reed to buttress the party. With another drubbing due in Congressional elections, one could hope for Permanent Minority Status--Rove's ideal inverted.
This was certainly my fondest dream. Look, I have no doubt--after 10-12 years of hegemonic rule and massive systemic change, the Democrats would certainly have split, probably around differing views of the success of the Obama programs for energy independence and for long-term financial stability through health cost control and revised taxation policies. But so much for progress like that--in 2020, we may still have to deal with these incompetent, insolvent, but ever-so-confident con artists.
Palin's most important characteristic is actually not her gender, but her youth. Here was someone that could give hope for the party's future to discouraged Republicans--of all ages, actually.
Now, it remains to be seen whether this Young Turk will survive, beyond a fringe group of passionate admirers. Everyone will desert her if she fails to fulfill her promise, either by crook, or because her performance eventually gets the hook. If she gets relegated to the Alaskan Deep Freeze, the party will once again have to find someone who can represent some vision for the future. There's also a real good chance, if the worst should happen this year, that the huge challenges of 2009-2012 will prove once again insoluble to tired Republican nostrums and, after four more years of impasse, the party may once again be on the run.
In the meantime, though, that vista of green fields and global progress has been blocked. We're getting out the machete, as it's going to be hacking through the tangle of lies and distortion from now until November, without much thought of what may lie beyond.
We're on Plan D
as in, Defense. But not going on Defense, but Attack them on Defense issues!
It's a total jujitsu-type strategy, but it provides the best hope for victory.
Plan A was what I labeled "ABB" back in '06: that McCain was "All But Bush". I later opined that Obama would go with Plan A, but would need recourse to the winning line--a succinct economic argument--which I have given the shorthand slogans, "Tax the Bushites!" (not for public consumption, I guess) and "It's the microeconomy, stupid!" (for Obama campaigners). It's Plan B--for Bushites, the targets of the tax reforms Obama should propose.
Somehow, this doesn't seem to be working; Obama has not come up with the proper soundbite to get across this proposal, which would actually do very well if polished up properly. Pundits are still asking for the proper formulation of this from Obama, and I feel it may never quite come out. It seems reasonable--now more than ever--to ensure that the wealth of America is not siphoned off to support the golden parachutes of Bushite adventurers and failed manipulators. Yes, these CEO's and so forth have employment contracts, approved by their loyal boards, who have given them what they wanted in case of early departure. But that doesn't mean we shouldn't tax these excess earnings! Same goes for the oil companies.
Plan C, for Corruption, might have worked with a different VP candidate. In format, it's the attack on McCampaign's lobbyist core, and Obama has certainly tried it. McPalin can brush off the attack, though, because Palin "went after corruption in her own party", or some such nonsense. Let's see if she dares to snub Ted Stevens, her Alaskan homey and one-time earmark benefactor, in the fight of his life. Anyway, Plan C has worked, arguably, once in modern national political history--1976. While Bushite Misrule might be right up there on a level with Nixon-Agnew's, the chain of responsibility (which helped to sink Ford) doesn't link McCain tightly enough into it. He was there, he voted as the Administration wanted, he even tried to make peace (to help get through Republican judicial nominees), but that was not enough to have made him appear Bushite. Until this year's campaign.
The argument I advocate for the rest of Obama's campaign is to attack the notion that we can sleep more safely with McPalin in there than with Obama-Biden. It's really just the national security issue, which McCain is winning by a huge margin. We must wreak havoc and create fear among voters who go with their gut, rather than the issues.
As I suggested to davefromqueens on dailykos, in response to his Lakoff-based analysis:
Poll Results
On a lighter note, here are the results of two recent polls I posted with diaries on Dailykos (with the "McPalin and the Electoral Map" and "Snarky Attack Fish" posts, respectively):
| 119 votes
| 64 votes
It's a total jujitsu-type strategy, but it provides the best hope for victory.
Plan A was what I labeled "ABB" back in '06: that McCain was "All But Bush". I later opined that Obama would go with Plan A, but would need recourse to the winning line--a succinct economic argument--which I have given the shorthand slogans, "Tax the Bushites!" (not for public consumption, I guess) and "It's the microeconomy, stupid!" (for Obama campaigners). It's Plan B--for Bushites, the targets of the tax reforms Obama should propose.
Somehow, this doesn't seem to be working; Obama has not come up with the proper soundbite to get across this proposal, which would actually do very well if polished up properly. Pundits are still asking for the proper formulation of this from Obama, and I feel it may never quite come out. It seems reasonable--now more than ever--to ensure that the wealth of America is not siphoned off to support the golden parachutes of Bushite adventurers and failed manipulators. Yes, these CEO's and so forth have employment contracts, approved by their loyal boards, who have given them what they wanted in case of early departure. But that doesn't mean we shouldn't tax these excess earnings! Same goes for the oil companies.
Plan C, for Corruption, might have worked with a different VP candidate. In format, it's the attack on McCampaign's lobbyist core, and Obama has certainly tried it. McPalin can brush off the attack, though, because Palin "went after corruption in her own party", or some such nonsense. Let's see if she dares to snub Ted Stevens, her Alaskan homey and one-time earmark benefactor, in the fight of his life. Anyway, Plan C has worked, arguably, once in modern national political history--1976. While Bushite Misrule might be right up there on a level with Nixon-Agnew's, the chain of responsibility (which helped to sink Ford) doesn't link McCain tightly enough into it. He was there, he voted as the Administration wanted, he even tried to make peace (to help get through Republican judicial nominees), but that was not enough to have made him appear Bushite. Until this year's campaign.
The argument I advocate for the rest of Obama's campaign is to attack the notion that we can sleep more safely with McPalin in there than with Obama-Biden. It's really just the national security issue, which McCain is winning by a huge margin. We must wreak havoc and create fear among voters who go with their gut, rather than the issues.
As I suggested to davefromqueens on dailykos, in response to his Lakoff-based analysis:
Surely that's an emotion that fits somewhere in Lakoff's scheme.
Fear is what we are lacking in the attack so far:
If we can generate that fear in more people, we will close the "national security" gap and win the election.
Fear is what we are lacking in the attack so far:
- --fear that John McCain's erratic, hotheaded, impulsive nature will get us into another war ("after all, what's wrong with the ones we got?")
- --fear that McCain's impulse with regard to policy toward Russia is to return to the comfortable days of the Cold War (!?)
- --fear that he'll croak or become incapacitated and turn it over to this overhyped, neophyte stranger.
If we can generate that fear in more people, we will close the "national security" gap and win the election.
Poll Results
On a lighter note, here are the results of two recent polls I posted with diaries on Dailykos (with the "McPalin and the Electoral Map" and "Snarky Attack Fish" posts, respectively):
What do YOU mean when you say "Maverick"?
| 2% | 3 votes |
| 0% | 1 votes |
| 0% | 0 votes |
| 0% | 0 votes |
| 15% | 19 votes |
| 33% | 40 votes |
| 47% | 56 votes |
Where will Sarah Palin be in February, 2009?
| 14% | 9 votes |
| 26% | 17 votes |
| 17% | 11 votes |
| 20% | 13 votes |
| 21% | 14 votes |
Wednesday, September 10, 2008
"Seeing Red about Lipstick"
...as in, "on a Pig".
To John McCain: You can polish a turd all you want, but you've still got the Bushite Administration. And you can't run away and pretend its not yours. The stink follows.
To John McCain: You can polish a turd all you want, but you've still got the Bushite Administration. And you can't run away and pretend its not yours. The stink follows.
Saturday, September 06, 2008
McPalin and the Electoral Map
Now that the conventions are over, the dust will settle in a few days, and we can see where we really are with regard to the Presidential contest, and most importantly, to the key state races.
The national tracking polls have re-adjusted to the Republican rebound coming out of its convention--they have the race back to a statistically-insignificant one-or-two-point lead for Obama (down from 6-8 in midweek)-- but the state-level polls largely have not. Thus they are showing a large lead--too large--for Obama. For example, 538.com, which works off a percentage probability outcome for each state and Monte Carlo simulation of results, is showing Obama up 310-228, and electoral-vote.com has Obama up 301-224 (with Virginia a tie).
When the state polls fully reflect a return to "normality"--or more accurately, the real starting point for the 60-day general election campaign--they will not end up back at the starting point before the conventions, which I would argue is where the national polls are right now. There will be some shifts due to the naming of the VP's and the course of the two conventions. For example, Delaware is more a lock than ever because of Biden, and Alaska (which had actually been showing itself quite close) should now be written off by Obama. Those are obvious, but there are some shifts, particularly reflecting the Republicans' adoption of scorched-earth attacks on Obama (except by McCain himself) and the McCain-Palin ticket (or McPalin, for short) as it emerges from the convention.
McPalin is a brand: it's feisty like McCain would like to be, if he hadn't squandered all his useful positions of distinction from the Bushites in the primary contest; it's warlike, down-home, it worships traditional values but is hugely vague on religious stance and ethical practice. It has no new initiatives but a fierce desire to define its legacy through opposition. It's at the same time feminist and sexist.
In general terms, McPalin will make the Republicans more competitive in the West and North Central. Biden and Palin will probably be a wash in the key states of Pennsylvania and Ohio. I have the feeling Palin will be a net liability in Florida and, more broadly, in New England and the Middle-Atlantic.
The Democrats didn't really do much in their convention to change the map. They strengthened and unified their own party, and made a credible play for undecided moderates and independents. McPalin did, too, as long as you exclude any of those undecided and independents who actually pay attention to policy positions.
McPalin and stoner(: The Blog)
I will make some revision in my base prediction, previously announced in The Wisdom of Two-forty-five. I hate to do it, because I am still backing that philosophy--get a reasonable route to just over 270 votes without Ohio, then work like the devil to get Ohio, too. In my view, it's what Campaign Obama still has as its basic strategy. However, the realities have moved, and my calls a little, too.
What I'm really predicting here is what the polls will be indicating going into Election Day. There are two or three big uncertainties which the polls will not have in them: 1) due to the "likely voter" approach of polling organizations, there may well be some underweighting of first-time and sporadic voters; 2) their use of landline phones--almost exclusively--will mean that cell phone users' without landlines will not be represented in polling results; and 3) the dreaded "David Duke Effect" (DDE), in which white racist sentiments will not be fully reflected in poll results due to concealment--intentional or unintentional--of those sentiments. 1) and 2) will tend to cancel out 3), but, like the conventions' effect, not evenly throughout the country. I should try to account for these better in my final pre-Election forecast.
The base-case prediction I had before was 293-245 Obama, with Obama picking up all states Kerry won, plus these states Kerry did not: Iowa, New Mexico, Colorado, and Ohio, The long and short of the following discussion is: move CO and OH to undecided, and bring Nevada (NV) over to Obama. That makes it 269-240, with 29 expected to be still up for grabs on Election Day. Two-sixty-nine, of course, is one vote short of Electoral College victory, so if McCain ended up winning CO and OH, and all the electors on both sides "kept faith", it would end up a tie and go to the House of Representatives, where Obama would win (he will have more states' House-member majorities in any reasonable scenario). A win, still, though an extremely nervous one.
Down to Cases
These are ranked in order of the greatest-likelihood of a switch in party from the 2004 outcomes, and color-coded for Bush-Kerry result.
1) Iowa (IA)--Obama's successful prototype organization from the primaries is still flying.
2) New Mexico (NM)--Hispanics have already come home, giving Obama a slight edge, so it's down to turnout and Albuquerque. McPalin will help on the margins with right-wing turnout; any edge to the Republicans from the large military vote (heavy in Albuquerque, but also in other parts of the state) was already in McCain's count before. This is not to say that McCain gets all the military vote.
3) Nevada (NV)--Palin's rudeness to Sen. Majority Leader Harry Reid (even worse, she botched the reading of the preface identifying Reid, as if to say "I don't even know what his title is, he's so insignificant") has been taken personally. So has McCain's advocacy of dumping all the "new-clear" waste in his neighboring state's Yucca Mountain. These look to negate a slight natural advantage--see also the comment regarding Hispanics under NM.
4) Ohio (OH)--My basic starting point is the observation that the Democrats gained electoral control of the state in 2006, so the question is whether McPalin & McCampaign can win it back. At this point, it's very much an open question; apparently, the state Republican organization has rallied around its cause.
5) Colorado (CO)--McPalin will revive flagging interest among the large evangelical community in the Colorado Springs area, which will counter the huge Obama organizational bump coming out of having the DNC there. It will be a turnout war, and the outcome at this point is uncertain.
6) New Hampshire (NH)--The only really strong McCain state in the Northeast, and thus McCain's best chance to pick up a Kerry '04 state. I don't think McPalin will help that much--most of the state's population lies outside the Mooseburger Effect Zone (MEZ--see below). It will be close, but Hillary will go to bat here for Obama with positive effect.
7) Virginia (VA)--The Democrats have the trendline in their favor, and I think Biden will help more than Palin in this state. The DDE may be small--Virginians of that mindset tend to wear their racism on their sleeve, rather than concealing it.
8) Michigan (MI)--McCampaign's big target for an upset, and one can certainly see reasons why, starting with Obama's snub of their unsanctioned primary and ending with Kwame Kilpatrick's sentencing. On the other hand, McPalin has largely given up on contesting the economic issue, except for promising handouts to car companies (but two can play that game!)
9) Florida (FL)--I am somewhat surprised to say it, but Florida is back in play. Charlie Crist didn't get the nod (I think it might have clinched the state for McCain), and I think Palin will turn off more security-conscious voters wondering which ticket is really more risky, than she will gain among confused soccer-mom undecideds (not much hockey down there). Florida will be tilted toward McPalin all the way but polls will remain Too Close To Call through Election Day. DDE may tip things to McPalin in the end.
10) Wisconsin (WI)--I don't know why this state is so close, but it is. So be it (as I suck up my courage and say): McPalin will try hard there, but fall short. As did Dubya, both times.
11) Missouri (MO)--Probably out of reach for Obama.
12) Pennsylvania (PA)--Obama has done everything right to put this state in his column. Republicans will be heartbroken again if they put heavy resources into winning it.
13) Minnesota (MN)--Was close, then Obama was pulling away. McPalin may cut it down (don't forget that the original home of Bullwinkle is Frostbite Falls, Minnesota!), but it still looks like a 5-7 point win for Obama.
14) - 16) Montana and the Dakotas (MT, ND, SD)--If one had an ESPNation-style poll on the question: "Mooseburgers--Sounds Like Food?" these would be among the contested states which could win a majority for "Yes". The polls were getting very close in these states (some had Obama ahead) prior to Palin's nomination, but I see the Republicans rallying to win these states in the Mooseburger Effect Zone. Also in the MEZ are Idaho, Wyoming, Nebraska, and Maine, but none of these are close enough for MEZ to make a difference.
17) - 19) North Carolina, Georgia, Indiana (NC, GA, IN)--These are close states for which DDE may end up being decisive. I wouldn't urge Obama to invest much in these states, except as a feint, over which I don't think will cause McCampaign to lose too much sleep. If they get any (from what I can see of the Obama campaign, they never do).
None of the other 31 states have more than a 1-2% chance of switching sides, in my view.
(This post's title links to 538.com, which along with electoral-vote.com and a piece by archdaemon Karl Rove in Newsweek, are references for some of the points in this one.)
The national tracking polls have re-adjusted to the Republican rebound coming out of its convention--they have the race back to a statistically-insignificant one-or-two-point lead for Obama (down from 6-8 in midweek)-- but the state-level polls largely have not. Thus they are showing a large lead--too large--for Obama. For example, 538.com, which works off a percentage probability outcome for each state and Monte Carlo simulation of results, is showing Obama up 310-228, and electoral-vote.com has Obama up 301-224 (with Virginia a tie).
When the state polls fully reflect a return to "normality"--or more accurately, the real starting point for the 60-day general election campaign--they will not end up back at the starting point before the conventions, which I would argue is where the national polls are right now. There will be some shifts due to the naming of the VP's and the course of the two conventions. For example, Delaware is more a lock than ever because of Biden, and Alaska (which had actually been showing itself quite close) should now be written off by Obama. Those are obvious, but there are some shifts, particularly reflecting the Republicans' adoption of scorched-earth attacks on Obama (except by McCain himself) and the McCain-Palin ticket (or McPalin, for short) as it emerges from the convention.
McPalin is a brand: it's feisty like McCain would like to be, if he hadn't squandered all his useful positions of distinction from the Bushites in the primary contest; it's warlike, down-home, it worships traditional values but is hugely vague on religious stance and ethical practice. It has no new initiatives but a fierce desire to define its legacy through opposition. It's at the same time feminist and sexist.
In general terms, McPalin will make the Republicans more competitive in the West and North Central. Biden and Palin will probably be a wash in the key states of Pennsylvania and Ohio. I have the feeling Palin will be a net liability in Florida and, more broadly, in New England and the Middle-Atlantic.
The Democrats didn't really do much in their convention to change the map. They strengthened and unified their own party, and made a credible play for undecided moderates and independents. McPalin did, too, as long as you exclude any of those undecided and independents who actually pay attention to policy positions.
McPalin and stoner(: The Blog)
I will make some revision in my base prediction, previously announced in The Wisdom of Two-forty-five. I hate to do it, because I am still backing that philosophy--get a reasonable route to just over 270 votes without Ohio, then work like the devil to get Ohio, too. In my view, it's what Campaign Obama still has as its basic strategy. However, the realities have moved, and my calls a little, too.
What I'm really predicting here is what the polls will be indicating going into Election Day. There are two or three big uncertainties which the polls will not have in them: 1) due to the "likely voter" approach of polling organizations, there may well be some underweighting of first-time and sporadic voters; 2) their use of landline phones--almost exclusively--will mean that cell phone users' without landlines will not be represented in polling results; and 3) the dreaded "David Duke Effect" (DDE), in which white racist sentiments will not be fully reflected in poll results due to concealment--intentional or unintentional--of those sentiments. 1) and 2) will tend to cancel out 3), but, like the conventions' effect, not evenly throughout the country. I should try to account for these better in my final pre-Election forecast.
The base-case prediction I had before was 293-245 Obama, with Obama picking up all states Kerry won, plus these states Kerry did not: Iowa, New Mexico, Colorado, and Ohio, The long and short of the following discussion is: move CO and OH to undecided, and bring Nevada (NV) over to Obama. That makes it 269-240, with 29 expected to be still up for grabs on Election Day. Two-sixty-nine, of course, is one vote short of Electoral College victory, so if McCain ended up winning CO and OH, and all the electors on both sides "kept faith", it would end up a tie and go to the House of Representatives, where Obama would win (he will have more states' House-member majorities in any reasonable scenario). A win, still, though an extremely nervous one.
Down to Cases
These are ranked in order of the greatest-likelihood of a switch in party from the 2004 outcomes, and color-coded for Bush-Kerry result.
1) Iowa (IA)--Obama's successful prototype organization from the primaries is still flying.
2) New Mexico (NM)--Hispanics have already come home, giving Obama a slight edge, so it's down to turnout and Albuquerque. McPalin will help on the margins with right-wing turnout; any edge to the Republicans from the large military vote (heavy in Albuquerque, but also in other parts of the state) was already in McCain's count before. This is not to say that McCain gets all the military vote.
3) Nevada (NV)--Palin's rudeness to Sen. Majority Leader Harry Reid (even worse, she botched the reading of the preface identifying Reid, as if to say "I don't even know what his title is, he's so insignificant") has been taken personally. So has McCain's advocacy of dumping all the "new-clear" waste in his neighboring state's Yucca Mountain. These look to negate a slight natural advantage--see also the comment regarding Hispanics under NM.
4) Ohio (OH)--My basic starting point is the observation that the Democrats gained electoral control of the state in 2006, so the question is whether McPalin & McCampaign can win it back. At this point, it's very much an open question; apparently, the state Republican organization has rallied around its cause.
5) Colorado (CO)--McPalin will revive flagging interest among the large evangelical community in the Colorado Springs area, which will counter the huge Obama organizational bump coming out of having the DNC there. It will be a turnout war, and the outcome at this point is uncertain.
6) New Hampshire (NH)--The only really strong McCain state in the Northeast, and thus McCain's best chance to pick up a Kerry '04 state. I don't think McPalin will help that much--most of the state's population lies outside the Mooseburger Effect Zone (MEZ--see below). It will be close, but Hillary will go to bat here for Obama with positive effect.
7) Virginia (VA)--The Democrats have the trendline in their favor, and I think Biden will help more than Palin in this state. The DDE may be small--Virginians of that mindset tend to wear their racism on their sleeve, rather than concealing it.
8) Michigan (MI)--McCampaign's big target for an upset, and one can certainly see reasons why, starting with Obama's snub of their unsanctioned primary and ending with Kwame Kilpatrick's sentencing. On the other hand, McPalin has largely given up on contesting the economic issue, except for promising handouts to car companies (but two can play that game!)
9) Florida (FL)--I am somewhat surprised to say it, but Florida is back in play. Charlie Crist didn't get the nod (I think it might have clinched the state for McCain), and I think Palin will turn off more security-conscious voters wondering which ticket is really more risky, than she will gain among confused soccer-mom undecideds (not much hockey down there). Florida will be tilted toward McPalin all the way but polls will remain Too Close To Call through Election Day. DDE may tip things to McPalin in the end.
10) Wisconsin (WI)--I don't know why this state is so close, but it is. So be it (as I suck up my courage and say): McPalin will try hard there, but fall short. As did Dubya, both times.
11) Missouri (MO)--Probably out of reach for Obama.
12) Pennsylvania (PA)--Obama has done everything right to put this state in his column. Republicans will be heartbroken again if they put heavy resources into winning it.
13) Minnesota (MN)--Was close, then Obama was pulling away. McPalin may cut it down (don't forget that the original home of Bullwinkle is Frostbite Falls, Minnesota!), but it still looks like a 5-7 point win for Obama.
14) - 16) Montana and the Dakotas (MT, ND, SD)--If one had an ESPNation-style poll on the question: "Mooseburgers--Sounds Like Food?" these would be among the contested states which could win a majority for "Yes". The polls were getting very close in these states (some had Obama ahead) prior to Palin's nomination, but I see the Republicans rallying to win these states in the Mooseburger Effect Zone. Also in the MEZ are Idaho, Wyoming, Nebraska, and Maine, but none of these are close enough for MEZ to make a difference.
17) - 19) North Carolina, Georgia, Indiana (NC, GA, IN)--These are close states for which DDE may end up being decisive. I wouldn't urge Obama to invest much in these states, except as a feint, over which I don't think will cause McCampaign to lose too much sleep. If they get any (from what I can see of the Obama campaign, they never do).
None of the other 31 states have more than a 1-2% chance of switching sides, in my view.
(This post's title links to 538.com, which along with electoral-vote.com and a piece by archdaemon Karl Rove in Newsweek, are references for some of the points in this one.)
Thursday, September 04, 2008
McCain: I Work For You!
...and the RNC crowd applauds.
Interpretations of that statement may vary, but I know he's not talking to me.
Interpretations of that statement may vary, but I know he's not talking to me.
Sarah Palin: Snarky Attack Fish
Gov. Sarah Palin's speech last night was not in any way historic. She's not, of course, the first woman nominated on the ticket of a major party (Geraldine Ferraro--1984); she didn't have anything new, or interesting, or exciting, or useful to say.
She was very effective in delivering her speech, which had two major points: 1) we must idolize John McCain; and 2) Sen. Obama is less cool than me. She had this cute little wrinkle of her nose at times, and she made good eye contact with the cameras. For the most part, she read her TelePrompter accurately. She reminded me of someone--later, I thought of it: it's Julia Roberts. A similar tone of voice, good with the needle, brunette, similar facial features (a little wider face, but that's OK). Julia would wear Palin's geeky glasses, but not the hairstyle.
Sen. Harry Reid responded to her attacks by calling her speech "shrill"--or at least, his press flack did. This provoked sexism charges from crypto-Bushite Campbell Brown at CNN--"shrill" is a word one uses to denounce females only, it seems (though I'd say Rudy Giuliani fits the bill). At least her tsk-tsking was denounced by Paul Begala, in one of his better interventions, who advised against listening to the "far right political correctness thought police". Reid was justified in being angry: Palin crowed that Reid's saying "I can't stand" McCain was "the highest accolade he has received all week". Which isn't saying much for the efforts of those many Repubs who have tried to praise him to the skies.
Actually, though, "shrill" would not be the word I would use to describe Palin's speech. "Snarky", "snide", and "shallow" would be the alliterative adjectives I would choose.
She saved her most snide remarks for Sen. Obama. I am not sure why she (or her speechwriters) felt that she had to denigrate the profession of political organizer, but she went out of her way to do so.
Based on what I've seen so far, I'd call her a dangerous opponent whom we want to send back to the deep freeze of Alaska as soon as possible. Clearly, the only way to do so would be a comprehensive Obama-Biden victory in November (it worked that way for Ferraro's career); even that might not be enough, given the far-right's prevailing love for her.
The good news is that McCain-Palin has thrown itself fully into the extremist right of the ideological spectrum, for which national support is fading. It's unclear at this point if Sarah Barracuda's partisan attacks will strike a positive or negative chord nationally, but it should be clear that the middle is available for Democrats to grab this year. Further, that the Republican ticket--riverboat gambler McCain and extremist stranger Palin--is actually the risky handle to pull in November.
She was very effective in delivering her speech, which had two major points: 1) we must idolize John McCain; and 2) Sen. Obama is less cool than me. She had this cute little wrinkle of her nose at times, and she made good eye contact with the cameras. For the most part, she read her TelePrompter accurately. She reminded me of someone--later, I thought of it: it's Julia Roberts. A similar tone of voice, good with the needle, brunette, similar facial features (a little wider face, but that's OK). Julia would wear Palin's geeky glasses, but not the hairstyle.
Sen. Harry Reid responded to her attacks by calling her speech "shrill"--or at least, his press flack did. This provoked sexism charges from crypto-Bushite Campbell Brown at CNN--"shrill" is a word one uses to denounce females only, it seems (though I'd say Rudy Giuliani fits the bill). At least her tsk-tsking was denounced by Paul Begala, in one of his better interventions, who advised against listening to the "far right political correctness thought police". Reid was justified in being angry: Palin crowed that Reid's saying "I can't stand" McCain was "the highest accolade he has received all week". Which isn't saying much for the efforts of those many Repubs who have tried to praise him to the skies.
Actually, though, "shrill" would not be the word I would use to describe Palin's speech. "Snarky", "snide", and "shallow" would be the alliterative adjectives I would choose.
She saved her most snide remarks for Sen. Obama. I am not sure why she (or her speechwriters) felt that she had to denigrate the profession of political organizer, but she went out of her way to do so.
Based on what I've seen so far, I'd call her a dangerous opponent whom we want to send back to the deep freeze of Alaska as soon as possible. Clearly, the only way to do so would be a comprehensive Obama-Biden victory in November (it worked that way for Ferraro's career); even that might not be enough, given the far-right's prevailing love for her.
The good news is that McCain-Palin has thrown itself fully into the extremist right of the ideological spectrum, for which national support is fading. It's unclear at this point if Sarah Barracuda's partisan attacks will strike a positive or negative chord nationally, but it should be clear that the middle is available for Democrats to grab this year. Further, that the Republican ticket--riverboat gambler McCain and extremist stranger Palin--is actually the risky handle to pull in November.
Tuesday, September 02, 2008
Big Ticket Diary, Pt. I
Sept. 5: TV Highlight of the Week
I just saw it (1 a.m. EDT).
Larry King just had, for the last segment of his program, a trio of Mario Cuomo, Arianna Huffington, and Katrina Vanden Heuvel of The Nation.
Vanden Heuvel was hugely effective, with specific, fluent enunciations/denunciations of McCain, his party, and Palin's selection. Cuomo was eloquent on the validity of Obama as the choice for our government's leader. Huffington was direct and specific as she identified the full nature of the role of Palin as a planned distraction from serious consideration of the issues, or even just from the comparison of candidates.
I think I need to plan my own distraction, for the night of VP debates (moderated by Gwen Ifill). It should be amusing but inconsequential, but if distracts from the focus of the Presidential campaign for a week it could be "a game-changer", as they say.
Sept. 4: Pre-Ops
I think that's what are called the pre-operative procedures before surgery. That's what I call this series of speeches (Ridge, Graham, Cindy McCain)--because what follows is going to be ugly.
Tom Ridge: "the challenge of our time is to...leave nothing to chance". Huh? This is someone from the Bushite Administration talking?
He says McCain "speaks truth to power". An interesting assertion we should examine.
Earlier, Bill Bennett challenged Roland Martin to "Name Three Things John McCain Has Changed" (in order to get elected). Martin promptly nailed him with 1) offshore drilling; 2) Bushite tax cuts; and 3) Illegal Immigration. Bennett could only object--weakly--to the third, and basically was left mumbling about changing "due to circumstances", which somehow he distinguishes from changing for political opportunity.
Bravo, Roland!
McCain the aging warrior--does he have any vision of the future? Donna Brazile hit this one on the head in her comment.
The commentators have raised an expectation of McCain somehow explaining his economic policies, which is certain to be disappointed. McCain has already lost the economic issue; he needs to build up his margin on the national security issue, both for men and for women. That's why they're giving so much time to this stuff.
What is Sarah Palin wearing?
Cindy: mentions Abe Lincoln, and the convention is uncertain if it's an applause line (only because he was a Republican).
She had one really good line: We must decide whether to give more importance to: "What will others say of us? or What will our forefathers and our children say of us?" Barack Obama need not fear that question, rather he should welcome it, but I give the author of it credit for an incisive thought.
A lot of inappropriate applause tonight--that must be because they've actually started paying attention out there.
McCain's about to go on, but I finish with Palin's dress: Fancy black jacket, low cut, with high collar. Some diaphanous thing underneath, just visible? And, as she turns gracefully a full 360 and waves, we notice: she's got the thing under her jacket! That famous thing Dubya wore for the debate!
I suspect it's a mike the Secret Service places but doesn't want that known. Check that: I don't suspect it for a moment.
Sept. 2: Is There Any Reason to Watch?
This is the big question regarding the Republican National Convention. Is there anything at all we need to hear; something we can gain from listening to them?
The only real item of interest for the convention in general is the question of Bushism, or more likely, of crypto-Bushism (no one apart from actual family members will dare to admit full-throated support for the philosophy and execution of policy which the Bush Administration has "achieved"). Will people dare to speak the name of President George W. Bush, and if they do, will it be to praise him or denounce him? Will they somehow be able to distinguish McCain from Bush without mentioning Dubya's name?
If anyone dare make the argument, well, what's so bad about the Bush Administration? (i.e., How about that Bushite Misrule?), then I turn that individual off. I have no more time to waste listening to that person; though there appear to be 25-30% of Americans who will own up to such sentiments in opinion polls. However, crypto-Bushites do not praise or even talk about Bush or his Misrule; one need merely advocate policies which are exactly a continuation of the existing ones, or to emphasize only the policy areas in which one agrees with Bush.
Tonight's speakers that I've seen so far--Fred Thompson and Joe Lieberman--pose the question constantly in very dire terms. Thompson, I have to say, showed his skills in line-reading which he has spent years in Hollywood perfecting. His lines were red meat for the red state redneck elite. No reason to have watched, really; somehow the current administration didn't come up.
Lieberman, though, has given me renewed pause to consider the existential dilemma posed above. One thing that I should be thrilled about is that I don't have to listen to Lieberman's inducements to snooze, since he's gone over.
With Lieberman--who is still claiming to be a Democrat--I do have an additional area of interest: how can he--a Democrat-- justify his disregard to the danger that will occur through Supreme Court appointments if a Democrat does not win this time? Very soon, there are going to be 2-3 appointments to replace rapidly aging "Democratic" justices (there are 4 "Democrats", 4 "Republicans", and one "Independent"--Anthony Kennedy--this not based on who nominated the justices, but which side they take on politically controversial cases.) A replacement for one of the Republicans is nowhere in sight. A Democratic President is needed in the 2009-2013 term just to keep the precarious see-saw where it is today.
So far, based on these two, there will be references to Bush, but not by name. A distinction between the administration of The Nameless One and the one we can expect from POW McCain will be drawn. No specific complaints about Bushite Misrule. There is an assumption that what we just got wasn't good enough, but there is no need to go into those details.
The speeches of the nominees themselves have also more intrinsic interest. Palin, out of pure curiosity--what does the circus have to show us today? As for Pappy Mac himself, the interest will come down to amusement at his screw-ups in delivery and looking to see how much crypto-Bushism he allows to creep into his lines.
I just saw it (1 a.m. EDT).
Larry King just had, for the last segment of his program, a trio of Mario Cuomo, Arianna Huffington, and Katrina Vanden Heuvel of The Nation.
Vanden Heuvel was hugely effective, with specific, fluent enunciations/denunciations of McCain, his party, and Palin's selection. Cuomo was eloquent on the validity of Obama as the choice for our government's leader. Huffington was direct and specific as she identified the full nature of the role of Palin as a planned distraction from serious consideration of the issues, or even just from the comparison of candidates.
I think I need to plan my own distraction, for the night of VP debates (moderated by Gwen Ifill). It should be amusing but inconsequential, but if distracts from the focus of the Presidential campaign for a week it could be "a game-changer", as they say.
Sept. 4: Pre-Ops
I think that's what are called the pre-operative procedures before surgery. That's what I call this series of speeches (Ridge, Graham, Cindy McCain)--because what follows is going to be ugly.
Tom Ridge: "the challenge of our time is to...leave nothing to chance". Huh? This is someone from the Bushite Administration talking?
He says McCain "speaks truth to power". An interesting assertion we should examine.
Earlier, Bill Bennett challenged Roland Martin to "Name Three Things John McCain Has Changed" (in order to get elected). Martin promptly nailed him with 1) offshore drilling; 2) Bushite tax cuts; and 3) Illegal Immigration. Bennett could only object--weakly--to the third, and basically was left mumbling about changing "due to circumstances", which somehow he distinguishes from changing for political opportunity.
Bravo, Roland!
McCain the aging warrior--does he have any vision of the future? Donna Brazile hit this one on the head in her comment.
The commentators have raised an expectation of McCain somehow explaining his economic policies, which is certain to be disappointed. McCain has already lost the economic issue; he needs to build up his margin on the national security issue, both for men and for women. That's why they're giving so much time to this stuff.
What is Sarah Palin wearing?
Cindy: mentions Abe Lincoln, and the convention is uncertain if it's an applause line (only because he was a Republican).
She had one really good line: We must decide whether to give more importance to: "What will others say of us? or What will our forefathers and our children say of us?" Barack Obama need not fear that question, rather he should welcome it, but I give the author of it credit for an incisive thought.
A lot of inappropriate applause tonight--that must be because they've actually started paying attention out there.
McCain's about to go on, but I finish with Palin's dress: Fancy black jacket, low cut, with high collar. Some diaphanous thing underneath, just visible? And, as she turns gracefully a full 360 and waves, we notice: she's got the thing under her jacket! That famous thing Dubya wore for the debate!
I suspect it's a mike the Secret Service places but doesn't want that known. Check that: I don't suspect it for a moment.
Sept. 2: Is There Any Reason to Watch?
This is the big question regarding the Republican National Convention. Is there anything at all we need to hear; something we can gain from listening to them?
The only real item of interest for the convention in general is the question of Bushism, or more likely, of crypto-Bushism (no one apart from actual family members will dare to admit full-throated support for the philosophy and execution of policy which the Bush Administration has "achieved"). Will people dare to speak the name of President George W. Bush, and if they do, will it be to praise him or denounce him? Will they somehow be able to distinguish McCain from Bush without mentioning Dubya's name?
If anyone dare make the argument, well, what's so bad about the Bush Administration? (i.e., How about that Bushite Misrule?), then I turn that individual off. I have no more time to waste listening to that person; though there appear to be 25-30% of Americans who will own up to such sentiments in opinion polls. However, crypto-Bushites do not praise or even talk about Bush or his Misrule; one need merely advocate policies which are exactly a continuation of the existing ones, or to emphasize only the policy areas in which one agrees with Bush.
Tonight's speakers that I've seen so far--Fred Thompson and Joe Lieberman--pose the question constantly in very dire terms. Thompson, I have to say, showed his skills in line-reading which he has spent years in Hollywood perfecting. His lines were red meat for the red state redneck elite. No reason to have watched, really; somehow the current administration didn't come up.
Lieberman, though, has given me renewed pause to consider the existential dilemma posed above. One thing that I should be thrilled about is that I don't have to listen to Lieberman's inducements to snooze, since he's gone over.
With Lieberman--who is still claiming to be a Democrat--I do have an additional area of interest: how can he--a Democrat-- justify his disregard to the danger that will occur through Supreme Court appointments if a Democrat does not win this time? Very soon, there are going to be 2-3 appointments to replace rapidly aging "Democratic" justices (there are 4 "Democrats", 4 "Republicans", and one "Independent"--Anthony Kennedy--this not based on who nominated the justices, but which side they take on politically controversial cases.) A replacement for one of the Republicans is nowhere in sight. A Democratic President is needed in the 2009-2013 term just to keep the precarious see-saw where it is today.
So far, based on these two, there will be references to Bush, but not by name. A distinction between the administration of The Nameless One and the one we can expect from POW McCain will be drawn. No specific complaints about Bushite Misrule. There is an assumption that what we just got wasn't good enough, but there is no need to go into those details.
The speeches of the nominees themselves have also more intrinsic interest. Palin, out of pure curiosity--what does the circus have to show us today? As for Pappy Mac himself, the interest will come down to amusement at his screw-ups in delivery and looking to see how much crypto-Bushism he allows to creep into his lines.
Monday, September 01, 2008
America's Next President!
In this week's episode of this incredible new reality program, Sarah has to make a speech (before a rabidly supportive crowd) with a TelePrompter, speaking to TV cameras. McCampaign will write down all the words for her.
Sarah wants to thank all of you for voting for her with your text messages so she could get through to the second round!
Off-stage, but not off-camera, she and hubby deal with the inconvenient daughter-teenage-pregnancy challenge.
I hate to repeat myself, but I don't think the message has gotten through yet!
Sarah wants to thank all of you for voting for her with your text messages so she could get through to the second round!
Off-stage, but not off-camera, she and hubby deal with the inconvenient daughter-teenage-pregnancy challenge.
I hate to repeat myself, but I don't think the message has gotten through yet!
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