In its lead editorial today, the New York Timesasks a simple but super important question - why should we trust this Administration to understand what is happening now to our financial markets, offer the right solution and then manage the coming difficult process ahead?
With two days of Senate and House testimony ahead, our financial future takes center stage in Congress, as it appropriate given what the American people are being asked to do, and who is doing the asking.
As I wrote over the weekend, I, like many, worry about what this means for the agenda of the next President. Through the twin disasters of Iraq and the financial bailout, we will have little money now to tackle other urgent national priorities - modernizing our schools, improving the skills of our workers, investing in clean and traditional infrastructure, helping move our nation to a low-carbon future, radically improving our health care system, managing the coming retirement of the Baby Boomers, protecting our homeland, keeping people in their homes? Will cleaning up the terrible messes of this disappointing era overwhelm the need to build our 21st century economy and sap our collective capacity to tackle the necessary and tough challenges ahead?
Congress must stand firm and ask the tough questions. The most important being will this investment of what will be more than $1 trillion actually stop the meltdown? Rob and I offered our thoughts on this last Wednesday, and argue that without an effort to keep people in their homes, any moves by the the government are unlikely to do what we need them to do.
It is more important now for Congress to do the right thing than the expedient thing.
Senator Obama released a detailed statement of principles that will be guiding his involvement i n the coming efforts to stop a full blown financial meltdown in the US. It includes something NDN feels very strongly about - a plan to keep people in their homes.
"The era of greed and irresponsibility on Wall Street and in Washington has led to a financial crisis as profound as any we have faced since the Great Depression.
"But regardless of how we got here, the circumstances we face require decisive action because the jobs, savings, and economic security of millions of Americans are now at risk.
"We must work quickly in a bipartisan fashion to resolve this crisis and restore our financial sector so capital is flowing again and we can avert an even broader economic catastrophe. We also should recognize that economic recovery requires that we act, not just to address the crisis on Wall Street, but also the crisis on Main Street and around kitchen tables across America.
"But thus far, the Administration has only offered a concept with a staggering price tag, not a plan.
"Even if the Treasury recovers some or most of its investment over time, this initial outlay of up to $700 billion is sobering. And in return for their support, the American people must be assured that the deal reflects some basic principles.
No blank check. If we grant the Treasury broad authority to address the immediate crisis, we must insist on independent accountability and oversight. Given the breach of trust we have seen and the magnitude of the taxpayer money involved, there can be no blank check.
Rescue requires mutual responsibility. As taxpayers are asked to take extraordinary steps to protect our financial system, it is only appropriate to expect those institutions that benefit to help protect American homeowners and the American economy. We cannot underwrite continued irresponsibility, where CEOs cash in and our regulators look the other way. We cannot abet and reward the unconscionable practices that triggered this crisis. We have to end them.
Taxpayers should be protected. This should not be a handout to Wall Street. It should be structured in a way that maximizes the ability of taxpayers to recoup their investment. Going forward, we need to make sure that the institutions that benefit from financial insurance also bear the cost of that insurance.
Help homeowners stay in their homes. This crisis started with homeowners and they bear the brunt of the nearly unprecedented collapse in housing prices. We cannot have a plan for Wall Street banks that does not help homeowners stay in their homes and help distressed communities.
A global response. As I said on Friday, this is a global financial crisis and it requires a global solution. The United States must lead, but we must also insist that other nations, who have a huge stake in the outcome, join us in helping to secure the financial markets.
Main Street, not just Wall Street. The American people need to know that we feel as great a sense of urgency about the emergency on Main Street as we do the emergency on Wall Street. That is why I call on Senator McCain, President Bush, Republicans and Democrats to join me in supporting an emergency economic plan for working families - a plan that would help folks cope with rising gas and food prices, save one million jobs through rebuilding our schools and roads, help states and cities avoid painful budget cuts and tax increases, help homeowners stay in their homes, and provide retooling assistance to help ensure that the fuel-efficient cars of the future are built in America.
Build a regulatory structure for the 21st Century. While there is not time in a week to remake our regulatory structure to prevent abuses in the future, we should commit ourselves to the kind of reforms I have been advocating for several years. We need new rules of the road for the 21st Century economy, together with the means and willingness to enforce them.
"The bottom line is that we must change the economic policies that led us down this dangerous path in the first place. For the last eight years, we've had an "on your own-anything goes" philosophy in Washington and on Wall Street that lavished tax cuts on the wealthy and big corporations; that viewed even common-sense regulation and oversight as unwise and unnecessary; and that shredded consumer protections and loosened the rules of the road. Ordinary Americans are now paying the price. The events of this week have rendered a final verdict on that failed philosophy, and it is a philosophy I will end as President of the United States," said Senator Barack Obama.
$1 trillion bailout. Government takeover off some of the largest companies in America. Warnings of more bad news to come.
It is critical that as part of this emerging financial bailout package, our Congress ensures that Americans facing foreclosure are also bailed out and allowed to stay in their homes. This is not only the right thing to do, but as Rob Shapiro argued earlier this week, it is one of the best ways to stop the carnage on Wall Street.
Update, Sat 7:15am - Joe Nocera of the New York Times takes a hard look at the emerging financial bailout plan, and doesn't find much to like.
After the fiscal mismanagement of the Bush era, are the American people really being asked to spend a trillion dollars bailing out failed financial institutions controlled by very rich people? Will this rush to bailout prevent the next Administration from making critical investments needed to advance the national interest - in traditional and clean infrastructure, in our schools and teachers, in the skills of our workers, in health care, in reforming our immigration system, in securing our homeland? Will the next era of American politics be one of cleaning up the two great messes of the Bush age - Iraq and our financial and fiscal disasters? And not about embracing a new era of investment, of opportunity and 21st century prosperity? Of dreams deferred and sights lowered?
The failure of conservative government in the Bush-DeLay-Abramoff era has been so epic, so profound and so terribly costly to the national interest and the American people themselves. Bush and his team have been very much like a political hurricane, leaving behind unimaginable wreckage in their wake. Perhaps it will be Katrina that becomes the symbol of this failed conservative era, the image that will be evoked in our collective minds eye for generations to come.
Right on the heels of Senator McCain's latest foreign policy gaffe, his side-kick/Vice Presidential running mate decided to take a crack at dispelling these "attacks" about her lack of foreign policy experience. Just to put this in context: in the past week a bomb was detonated at the U.S. Embassy in Yemen, two U.S. ambassadors were expelled from Latin American countries, and the ambassadors from those nations were similarly recalled from the U.S. (not to mention the ongoing conflicts in Afghanistan and Iraq, of course). The importance of the actual knowledge - not just "experience" travelling - and understanding of these complex international relationships by Presidential candidates cannot be understated. It is anything but unfair to demand that the persons running for the highest seat in the land possess higher than average knowledge and understanding of the different regions in the world and our interest in each.
In this town hall meeting Gov. Palin basically says that we shouldn't fear because she and her running mate might not be ready now, but they will be ready "on January 20", "God willing". And she explains her credentials in the area of foreign policy: she'll be ready because she "has that readiness"...she's "ready to serve". "You can even play stump the candidate if you want to" by asking her "specifics, with specific policy or countries."
Dr. Robert Shapiro, Chair of NDN's Globalization Initiative, and Simon Rosenberg, NDN President, today released the following statement:
The current financial crisis was caused by the persistent failure of the current Administration and the Federal Reserve to appreciate how our financial markets have been rapidly changing or to take minimal care to ensure that those changes did not put the American economy at serious risk. The Treasury and the Fed now are using nearly $1 trillion of Americans' money to bail out financial institutions whose reckless mismanagement they tolerated or ignored. The Congress must put at least as much effort into containing the crisis at one of its critical origins, by helping people keep their homes so the housing market and the derivative instruments based on it can stabilize.
Before Congress leaves, it should enact legislation that allows struggling Americans to renegotiate their mortgages, starting with the huge portfolio the government now holds through Fannie Mae and Freddie Mac. It should not be acceptable for our government to use taxpayers to bail out huge, mismanaged banks and insurance companies that speculated in mortgage-backed securities while allowing many of those same taxpayers to be tossed from the homes that backed up those securities. When Congress returns, it also should turn to the serious business of applying strict and appropriate transparency, capital and other regulatory standards to all significant financial institutions, including investment banks and hedge funds. And the politicians who hailed the hands-off attitude that enabled this crisis to fester and break out, and now blame greed instead of their own negligence, should be held accountable.
It is clear that John McCain would rather lose his integrity than lose this election.After a series of lies and mischaracterizations that have been chronicled by numerous news sources, U.S. Sen. John McCain released an attack ad today about Barack Obama's record on immigration. Having participated in the immigration debate during 2007 as a Hill staffer as it was happening, and having delved into the dozens of amendments thrown at the bill per minute by those who would try to block immigration reform, and having had to sort through all the "poison pill" amendments, I feel a responsibility to distinguish between truth and fiction in regards to an issue as important as immigration reform. The truth is that Senator Obama proposed an amendment to the section on a temporary worker program in order to ensure that those workers are a paid a prevailaing wage - i.e., to help push wages up. It is disturbing to see this attempt to misinform Hispanic voters, as members of the Democratic leadership are accused in this ad for having halted immigration reform, when they were the ones who presented the legislation to the floor and fought to have the issue voted on and passed - not once, but twice. The reason immigration even came to a vote twice is that many Republicans - including President George W. Bush - also recognize the dire need to fix the broken immigration system, and there was thought to be enough support at the time for reform. What really happened: there were insufficient votes to close debate and move to vote on immigration reform because the Republicans who had pledged to support the legislation caved to the anti-immigrant rhetoric and voted against cloture. The truth is John McCain changed his position and did not participate in the 2007 debate to provide the necessary political leadership to pass reform. And that could have made a difference - one could argue that it was John McCain's absence and lack of leadership on this issue that led to its demise. I'll refer you to our Hispanics Risingreport, where we track the immigration debate and John McCain's abandonment of his own reform legislation. The truth is, John McCain abandoned the reform he had once promoted because he feared the political ramifications. As reported by the Washington Post (see Hispanics Rising), John McCain told his party "I got the message", immigration reform was not popular. Sadly, it remains very necessary.
Here is the translation of the ad, called "Which Side Are They On":
ANNCR:Obama and his Congressional allies say they are on the side of immigrants. But are they?
The press reports that their efforts were 'poison pills' that made immigration reform fail. The result:
No guest worker program.
No path to citizenship.
No secure borders.
Is that being on our side?
Obama and his Congressional allies ready to block immigration reform, but not ready to lead.
JOHN MCCAIN: I'm John McCain and I approve this message.
ANNCR: Paid for by McCain-Palin 2008 and the Republican National Committee. Approved by McCain-Palin 2008.
I must say, this ad insultsmy intelligence, and it is a shame because John McCain was the first to come out promising to keep this campaign "clean", and to not reach for baseless attacks like this one. You will see below, McCain said, "Do we have to go to the lowest common denominator? I don't think so". Well Mr. McCain, you already have - this is just another example of how low you can go. Is lying to voters putting "country first"? I don't think so.
Last night, House Leadership came together on a package that dramatically expands both offshore drilling and renewable energy. The bill is designed, as NDN Green Project Director Michael Moynihan writes, to be palatable to Republicans, as it gives them almost all of what they want on drilling.
The comprehensive package, as described by the E&E Daily (subscription required):
The drilling provisions are part of a broad package that includes a repeal of oil industry tax breaks for major companies, new renewable energy mandates and investments, a new fund to speed deployment of carbon control technology, and many other measures.
Have no doubts, this is a moment of truth for Republicans in the House. (Next week, Republicans in the Senate will likely get a similar opportunity.) If Republicans truly are for an "all of the above" energy solution, this package is their chance to vote for one.
If Republicans continue their obstructionism on actually achieving anything on energy by nitpicking at this legislation, they, and not the Democratic Congress, will be responsible for failing to lower energy prices, failing to break America’s dependence on foreign energy, failing to confront climate change, and failing to harness the clean energy economic opportunity.
Today, NDN released polls conducted among all voters in four key battleground states - Florida, Colorado, New Mexico and Nevada - that show strong support for comprehensive immigration reform. As Simon and Courtney mentioned, the poll was conducted in key swing states that also have a large Hispanic Population. Additionally, the states in question are reflective of the cross-section of Hispanics in the United States, with Florida's Hispanic population consisting mainly of foreign-born Hispanics from the Caribbean and South America, Nevada with mostly foreign-born Hispanics from Mexico, and New Mexico and Colorado with largely native-born Hispanics.
For an in-depth look at how the public views the immigration debate in these four states, please view our full Immigration Survey Report here.
As stated in the Executive Summary, our findings indicate that in each of these four states, voters:
Overwhelmingly support Comprehensive Immigration Reform as:
Strengthening border security
Strengthening interior enforcement through an employer verification plan
New visa program for 200,000 workers annually
Increasing the number of family visas available
Path to earned citizenship for the undocumented once they meet certain requirements.
Have a positive view of undocumented immigrants, believing that they have come here to work and seek a better life, are not taking jobs from American citizens and are not interested in receiving public handouts.
Blame the federal government and businesses - not immigrants - for the broken immigration system. This tells us that the anti-immigrant message of the Lou Dobbs and Rush Limbaughs of the world actually doesn't resonate with the large majority of voters.
The data also shows:
The issue of immigration remains an important issue to voters, particularly Hispanics, and Democrats and Barack Obama are more trusted to handle the immigration issue than U.S. Sen. John McCain and the Republican Party.
The dramatic swing of Hispanic voters to Senator Obama in Florida, Colorado, New Mexico and Nevada - with a total of 46 electoral votes - has helped turn these previously red states, which were critical to Bush's narrow victory in 2004, into competitive swing states this year.
But in each state, 14 percent to 20 percent of the Hispanic electorate remains undecided, which translates into a two percent to six percent of the statewide vote in each state - a percentage significant enough to tip dead-even states into one camp or the other.
The Hispanic vote may very well determine the Presidential winner in these four states. Given how close the election is, this may determine the outcome of the Presidential race itself.
Therefore, the data proves that the paranoia over the prospect of dealing with the broken immigration system due to the emotional nature of the debate as framed by anti-immigrant activists is unfounded. An overhaul of our current immigration system is not only the right thing to do, there is an urgent need for it and the data demonstrates that there is overwhelming support to enact it. Enforcement-only is not an immigration policy. We need to fix the entire broken system. Just this morning, USA TODAY's Emily Bazar wrote a story reporting how the higher application fees at ICE are actually discouraging immigrants from seeking citizenship. Even Mark Krikorian, Executive Director of the research center for a series of anti-immigrant hate groups, CIS, which calls for reduced immigration agrees fees are, "probably too high" and should reflect only processing costs.
When it comes to immigration reform, our data matches the data from the many polls conducted on this issue for the last three years: politically, immigration is actually a positive and not a negative because voters want action, and from a policy standpoint there is a consensus to enact it.
The price of what are called “credit default swaps” for U.S. Treasury debt is rising sharply.Credit default swaps are financial instruments by which one investor holdingdebt pays another investor to guarantee that if that debt defaults, he will make the first investor whole.
This week, the Treasury assumed responsibility for $5.2 trillion in outstanding debts held by Fannie Mae and Freddie Mac.A modest but significant share of that is headed for default, and the Treasury will have to absorb the losses.And the result is a rising price for credit default swaps on the U.S. Government:It now costs $18,000 to insure $10 million of U.S. Treasury debt.The market sees a very small - but not negligible - prospect that the U.S. Government would actually default on its debt, which would be, well, the end of the American and global economies as we know them.That’s how bad it is.
Credit default swaps for subprime mortgage based securities, of course, have played a significant role in the current unraveling in the financial markets.But conservative/Republican disdain for normal regulation of those markets has played the larger, underlying role.Such regulation isn’t intended to “manage” those markets, but to ensure that the rest of us are protected from serious repercussions when problematic choices by financial market players (for example, to double down on subprime mortgages or their derivatives) collide with adverse conditions that make those problematic choices very reckless.
That’s the essential meaning of the Fannie Mae and Freddie Mac regulatory bailouts.Setting aside the many years of astonishingly reckless and self-interested management at Fannie Mae and Freddie Mac, the mortgage market would freeze up if these two institutions suddenly couldn’t operate. Here’s a brief course in why that’s so: there’s always plenty of credit for new mortgages, because those creating the mortgages promptly sell them, in bundles, to investors, so that the credit can cycle back to finance more mortgages.
Fannie Mae and Freddie Mac both create and buy trillions of dollars in these mortgage-backed securities, and there’s no financial institution that could step in if they were taken out of the picture.That’s why we need to keep them operating, even if it requires a bailout. By the way, the other major holders of these securities include U.S. banks – expect a line of them to go belly-up in the next six months – and foreign central banks.
The potential unpleasant fallout for our relations with other countries if their holdings went bust is the other reason that the Bush Administration has taken the largest interventionist step in U.S. financial markets since the Great Depression.Once again, the Bush Administration is moved to act not by what’s happening to Americans, but by the implications for our relations with other countries
A few hours ago, I got off the phone with my Dad who was driving by Franklin and Marshall College in Lancaster, PA. Seeing the large crowds and commotion, he asked if I had heard whether "anyone big" was visiting. He said he thought U.S. Sen. John McCain and Alaska Gov. Sarah Palin were making a stop there, so I looked it up and confirmed to him that he was right, prompting him to react with what seems to be the prevailing assessment surrounding the GOP ticket: everyone was there to see Palin.
McCain, who was quick to label U.S. Sen. Barack Obama as a celebrity, now embraces, perhaps even encourages, the glamorous reception with which his running mate is met. It seems like he was right to do so in the short-term, as the focus of the election, as Simon has mentioned, has shifted to Palin. Though that's not really surprising, given that the timing of her introduction left us either amazed by her acceptance speech or wondering who she is and what she believes.
Yet while the scramble for information over Palin was especially hurried after she was chosen as McCain's running mate, the dust has since settled from her speech in St. Paul. And with the clearing comes more information - from her understanding of institutions like Fannie Mae and Freddie Mac to her conduct as Governor. What little we are learning about Palin comes from her interactions with regular citizens since she has been absent from the talk shows, as well as through close friends who speak well of her personally but seem mixed when the subject turns to politics.
All of this unravels before our eyes, gets us caught up in Alaska drama, and deflects attention away from McCain towards Palin. Recognizing this, and maybe trusting the media and the American people to do its due diligence on Palin, the Obama campaign is bringing the focus back to the GOP nominee and his Party's record. Its latest ads, "No Maverick" and "Naked Lies", as well as his speech on education are good examples of this strategy.
Meanwhile, McCain continues to tout Palin - whose speech is the only one from the GOP Convention that is highlighted on McCain's YouTube channel - and that maverick nature of theirs. As mentioned above, plenty of people have and will sift through Sarah Palin's past and credentials, which frees us up to focus on the notion of the maverick.
One definition from Princeton shows that, as a noun, "maverick" has two meanings: First, a rebel; and second, an unbranded rage animal that belongs to the first person who puts a brand on it. An adjective for the term: irregular.
While the bit about the "rage animal" seems to align itself with one of McCain's purported problems, I must acknowledge that the term maverick does connote a positive image in the "independent in behavior or thought" sense. We're familiar with that image. It's what defined the John McCain of yesteryear and won him public admiration from all sides. Yet things changed for him when he was branded the GOP nominee and started marching to the beat of a different drum, avoiding or outright fleeing from his once admirable stance on a whole slew of issues. Instead of sticking to his guns, he gave into the brush-clearing tactics of his predecessors.
It's almost tragic, really. The glorified way in which he painted his maverick image is now broken, and in its place we are left with an all-too-familiar ideal that begs for real change we can believe in.
Update: The Huffington Post is chronicling the news sources that are speaking out about the McCain campaign's recent tactics, which seem to evoke the irregular nature of the maverick.
Update II: Reuters shows how McCain finds the campaign trail to be more hostile when Palin's deference-deserving persona isn't with him on the trail.
Update III: Brave New PAC weighs in on the maverick's campaign in the video below:
(Note: You are now free from my random musings and long and tedious '08 Updates, as I have left NDN. Unless a new Kanye West video comes out and I can relate it to the work of the NDNBlog champions, it's safe to say that I will be appearing much less in the months ahead. I do look forward to returning occasionally, and hope to see you all soon! Thanks for putting up with me for so long...)