stem the bleeding, stabilize the patient

Like most people, I am trying to get my head around this economic crisis. I get the credit squeeze and its potential effect on ordinary Americans. I get the partisan politics in Washington. I don't like it but I get it. There's a lot on the line with an election 35 days away and there's a lot of contention and frustration about how we got into this mess in the first place and, therefore, how to fix it.

But here's what I'm struggling to grasp: if we don't pass the bailout plan, is this the beginning of the next Great Depression? How is this situation like that one? How is it not? Like any 21st century citizen would do (except maybe John McCain), I Wiki'ed it. Sadly, I found, history is not necessarily our teacher:

Scholars have not agreed on the exact causes (of the Great Depression) and their relative importance. The search for causes is closely connected to the question of how to avoid a future depression, and so the political and policy viewpoints of scholars are mixed into the analysis of historic events eight decades ago. The (overriding) question is whether it was largely a failure on the part of free markets or largely a failure on the part of governments to curtail widespread bank failures, the resulting panics, and reduction in the money supply. Those who believe in a large role for governments in the economy believe it was mostly a failure of the free markets and those who believe in free markets believe it was mostly a failure of government that compounded the problem(1).

This provided some insight but didn't make me feel better:

Debt is seen as one of the causes of the Great Depression, particularly in the United States. Macroeconomists including Ben Bernanke, the current chairman of the U.S. Federal Reserve Bank, have revived the debt-deflation view of the Great Depression: in the 1920s, American consumers and businesses relied on cheap credit, the former to purchase consumer goods such as automobiles and furniture, and the latter for capital investment to increase production. This fueled strong short-term growth but created consumer and commercial debt. People and businesses who were deeply in debt when price deflation occurred or demand for their product decreased often risked default.

Isn’t this what’s happening in the housing market? There's a school of thought that says, "(a) key cause of the Depression was the expansion of the money supply in the 1920s that led to an unsustainable credit-driven boom." David Brook's writes today in The New York Times, "We’re living in an age when a vast excess of capital sloshes around the world fueling cycles of bubble and bust. When the capital floods into a sector or economy, it washes away sober business practices, and habits of discipline and self-denial. Then the money managers panic and it sloshes out, punishing the just and unjust alike." So the money sloshed into the housing market creating a credit-driven boom and now it's sloshed out. Okay, I'm catching on.

The good news is that it seems we have learned one important lesson from the Great Depression - that closing ranks (e.g., tightening money supplies or limiting trade) doesn't work, as most people agree on one thing - the market needs a massive injection of capital to offset the slosh-out, as it were. Which essentially means that we agree that not providing the necessary capital would lead to a serious downward spiral. Free market types would just prefer that capital come from the private sector versus the US taxpayers - a commendable viewpoint, but hey, there's a kink in the IV line and that private capital ain't flowing!

Whatever you see as the underlying cause or the fix, think of the bailout as patient stabilization at the scene of an accident. It's a bandaid to stem the bleeding, followed by a bumpy ride, until the surgeons can more fully assess and address the problem. And even then, it's a wait and see game until the patient is on his feet again, with some tinkering to get the meds right or fight off infection.

Maybe after this, we'll all think a lot more about preventative care.


(1)All references, except where noted, are from http://en.wikipedia.org/wiki/Great_Depression

holy shit

why the pundits lost the match... again

Saturday morning, Maureen Dowd lamented, "(Obama) willfully refuses to accept what debates are about. It’s not a lecture hall; it’s a joust." John Dickerson of Slate opined, "I can imagine Obama fans were frustrated their man didn't throw a few big punches." The sports analogies continued, "There were no knockout blows in the first presidential debate" bemoaned David Broder at the Washington Post.

The blows, the homeruns, the slam dunks may well resonate with first-stringers on the red or blue teams, but they're not the candidates' audience right now. It's the swing voters, stupid. You remember them, the ones who are tired of the endless bickering, the us vs. them? The ones looking for some real bipartisan problem-solving, not more left hooks and upper cuts? They're looking for civility, and yes, from time to time, for someone who agrees with his opponent's point-of-view or at least sees it. To them, and to me, Senator Obama won the first presidential debate hands down.

Here's what one New York Times blogger had to say about John McCain's performance, "Last night, he was condescending, arrogant, and childish. He has a lot of experience but he didn’t act Presidential. As a regular, white working stiff, I put a lot of stock in how someone treats another person. McCain was rude and offensive and acted like someone who takes his toys home if you disagree with him. I was an undecided Independent until last night. . . " It seems continually calling your opponent inexperienced and naive when he didn't sound inexperienced and naive backfired.

In the CBS poll of uncommitted voters who watched the debate 39% said Obama won, versus 24% for McCain, with the remainder calling it a tie. (Uncommitted voters may have a preference for one candidate but could change their minds.) The poll also indicated that while both candidates benefited from their performances, 46% said their opinion of Obama improved, while only 32% said the same of McCain. And tellingly, 21% had a lower opinion of McCain following the debate versus just 8% for Obama.

Women polled by CNN overwhelmingly chose Obama as the winner, 59%to 31%. That's because, Dowd aside, most women don't respond to the incessant sports analogy framework - horse races, boxing matches, mud wrestling - the presidential race is pinned into but rather merely tolerate it. And our tolerance is stretched with commentaries like Broder's, "Whether viewers caught the verbal and body-language signs that Obama seemed to accept McCain as the alpha male on the stage in Mississippi, I do not know." Seriously? Is this a contest for top gladiator or top statesman? I'm in it for the latter, and again Obama won in this category.

He was clearly in command of his facts with a depth and understanding of the issues that goes beyond the memorized soundbite. Both candidates outlined their positions and contested the other's. The lack of barbs and jabs in my book meant viewers could focus on serious issues discussed by serious candidates and not on the usually chicanery.

That seems to have worked in Obama's favor. Fully two-thirds of those in the CBS poll walked away believing they knew what both candidates would do as president - double the number that walked in - and 60% now believe Obama is prepared to be president, up from 44% before the debate. McCain, who actually lost a point here, but still ended up with 78%, did not have to clear this hurdle. His was on the economy and following the debate he trailed Obama by 24 points on whether voters believe he would make the right decisions about the economy.

One last word about political strategy and the drubbing President Clinton took in the media this week over his praising of Senator McCain: again, let's try to remember the audience. Uncommitted voters see value in both candidates. The practice of chiding one to gain points for the other may work well with the partisan crowd, but it tends to alienate the undecideds. Clinton, in the role of elder statesman, praised McCain but steadfastly sided with Obama. Given that Clinton is widely considered the best politician of his generation, and Obama, that first-term senator with a funny name who is currently ahead in the polls, is giving him a run for his money on that title, maybe we should trust that these guys are on to something.

governor palin, you are no Hillary Clinton

My transition to supporting Senator Obama has happened in three stages:

Stage One: a reluctant attempt to fulfill a promise I made to myself and my Obama-supporting friends. This stage was accompanied by much sighing and thoughts of, "Okay, at least he's not McCain."

Stage Two: a cathartic re-mourning for my candidate after her speech and floor actions at the DNC, followed by an emotional release. Stage Two was characterized by some misty moments, but a sense of relief that she wanted me to support Obama. (Shoot me. I'm a girl.)

Stage Three: Sarah Palin. Are you kidding me? I sent my first donation to the Obama campaign immediately following her speech at the Republican National Convention.

My immediate, visceral reaction to the announcement of Governor Palin as Senator McCain's running mate was, "he's pandering to women voters." Is there any doubt in anyone's mind that had Obama chosen Clinton as his running mate, McCain would have chosen a white man to counteract a culturally progressive ticket?

Rest assured, my Obama-loving friends, I'm not one of those Hillary supporters who believed Obama would or should have picked Clinton. Get real. He would have spent the whole time competing with the Clinton legacy (the good, the bad, and the ugly). Clinton knew that. I knew that. And I don't blame him one bit.

Instead he chose the person he thought would give him the best council, challenge his views and assumptions, and, for the political side of things, shore up support among a constituency Obama struggles to connect with - white-skinned, blue-collared men.

McCain, on the other hand, made a stunningly political choice. A choice intended to win an election, not to govern a nation.

In her announcement speech, she (and her scriptwriters) brazingly sent a shout out to disenfranchised Hillary supporters to try to bring them into the McCain fold. She repeated the effort in her interview with Charlie Gibson.

Well, I am here to tell you that Sarah Palin is no Hillary Clinton.

Policies aside, as they are diametrically opposed on nearly everything from stem cell research to drilling in ANWR to energy policy to tax policy to you name it, Hillary Clinton was eminently more qualified to serve as president than Ms. Palin is to serve as Vice President.

What Clinton understands, and Palin does not, is that experience, knowledge and qualifications matter. That is why she did not seek to run in 2004 after only 4 years in the US Senate. Instead, she sought out positions on the Senate Armed Services Committee to balance out her social services expertise with foreign policy and national security expertise. She doubled down on delivering on her promises to her constituents in upstate New York's small towns and rural communities. In 2006, she won re-election to the Senate with an overwhelming 67% of the vote.

Clinton began her career serving on the staff of the House Judiciary Committee considering the impeachment of Richard Nixon in the early 1970s, and later worked with the Children's Defense Fund, ran a legal aid clinic while teaching law at the University of Arkansas, and led an ambitious and successful reform effort in Arkansas schools as First Lady there.

She took an earnest stab at trying to get us national health insurance. Her years as First Lady of the United States also gave her unparalled access to world leaders and the world stage. Her speech at the United Nations 4th World Conference on Women in Beijing in 1995 is still heralded as a turning point in American policy towards women in the developing world as well as on world views towards women.

Sarah Palin says her 2007 trip to Kuwait and Germany to visit Alaskan National Guardsmen, shortly after getting her first passport, was "life changing." Great. How about going on a backpacking trip around Europe and leaving the governing of the most powerful nation on earth during one of the most dangerous times in world history to those who know what they are doing.

Women cannot and should not be satisfied with the token nomination of Sarah Palin.

what the world needs now

Don't share this with your red state friends (it could sink Obama), but the rest of the world is really counting on us to elect Obama. The funny thing about how many Americans view France (as a bunch of wine-sipping, intellectual elitists; actually they are not really off about that and most French would agree) is that the French are actually too conservative to elect a bi-racial president.

Obama has stirred an excitement around the globe unmatched by any American politician in living memory. Polling in Germany, France, Britain and Russia shows that Obama would win by whopping majorities, with the pattern repeated in Africa, Asia, the Middle East and Latin America. If November 4 were a global ballot, Obama would win it handsomely. If the free world could choose its leader, it would be Barack Obama.

The crowd of 200,000 that rallied to hear him in Berlin in July did so not only because of his charisma, but also because they know he, like the majority of the world's population, opposed the Iraq war. McCain supported it, peddling the lie that Saddam was linked to 9/11. Non-Americans sense that Obama will not ride roughshod over the international system but will treat alliances and global institutions seriously: McCain wants to bypass the United Nations in favour of a US-friendly League of Democracies. McCain might talk a good game on climate change, but a repeated floor chant at the Republican convention was "Drill, baby, drill!", as if the solution to global warming were not a radical rethink of the US's entire energy system but more offshore oil rigs.

If Americans choose McCain, they will be turning their back on the rest of the world, choosing to show us four more years of the Bush-Cheney finger. And I predict a deeply unpleasant shift.

Until now, anti-Americanism has been exaggerated and much misunderstood: outside a leftist hardcore, it has mostly been anti-Bushism, opposition to this specific administration. But if McCain wins in November, that might well change. Suddenly Europeans and others will conclude that their dispute is with not only one ruling clique, but Americans themselves. For it will have been the American people, not the politicians, who will have passed up a once-in-a-generation chance for a fresh start - a fresh start the world is yearning for.

And the manner of that decision will matter, too. If it is deemed to have been about race - that Obama was rejected because of his colour - the world's verdict will be harsh. In that circumstance, Slate's Jacob Weisberg wrote recently, international opinion would conclude that "the United States had its day, but in the end couldn't put its own self-interest ahead of its crazy irrationality over race".

Even if it's not ethnic prejudice, but some other aspect of the culture wars, that proves decisive, the point still holds. For America to make a decision as grave as this one - while the planet boils and with the US fighting two wars - on the trivial basis that a hockey mom is likable and seems down to earth, would be to convey a lack of seriousness, a fleeing from reality, that does indeed suggest a nation in, to quote Weisberg, "historical decline". Let's not forget, McCain's campaign manager boasts that this election is "not about the issues."

Of course I know that even to mention Obama's support around the world is to hurt him. Incredibly, that large Berlin crowd damaged Obama at home, branding him the "candidate of Europe" and making him seem less of a patriotic American. But what does that say about today's America, that the world's esteem is now unwanted? If Americans reject Obama, they will be sending the clearest possible message to the rest of us - and, make no mistake, we shall hear it.

Jonathan Freedland, The Guardian (UK)

i'm over it

Hillary Clinton lost the Democratic Primary. Like many of her supporters, I hoped until the last vote was counted that she would somehow prevail. I even hoped for some juicy bit of information to come out about Obama that would take his campaign down. Sorry, but if we're going to move forward together, I feel the need to be honest.

But now I'm over it, and she helped me get there. Senator Clinton's speech at the Democratic National Convention was outstanding. She and her husband said what they needed to say to convince me and many others that they are putting their party, and indeed their country, first by supporting the candidacy of her opponent with whom she and I share many points of view, and that I need to do the same.

But more remarkable than her speech was her action on the convention floor the next day when she asked the speaker to halt the roll call and call for a vote by acclamation for Senator Obama to be our nominee. I could not have been more proud. What she did was above and beyond the call of duty for the candidate not chosen and it demonstrated enormous personal fortitude and humility. I have heard of no male candidate doing the same in any previous convention, and I am endlessly proud that this is what women can bring to politics.

Unfortunately, there are those who don't think she went far enough to flatter Obama in her speech. Yet had she done that, I believe, it would have come across as disingenuous, even if it weren't. There are those who say she is supporting him only in an effort to boost her own 2012 prospects should he not prevail this November. Some are even expected to blame her if he loses. For me, I believe she is doing far more than one can even expect of someone in her position and she's doing it out of a genuine concern for the future of our country. At this point, if Obama loses (perish the thought), it will be on his shoulders and our shoulders, not hers.

It's not an easy transition from one candidate to another. Yes, there was sexism in the race that went unchecked. Yes, when reminded, I am still irked that the Obama campaign took many opportunities to paint the Clintons as racists, but as a wise friend told me, you've got to leave it on the campaign trail. So I will.

It also helped to read an account of how the two campaigns were run during the primary here. Obama won because he ran a more strategic, better planned, and better staffed campaign than my candidate did. This alone gives me the confidence to now fully support Barack Obama as my candidate as it bodes very well for an Obama presidency that he surrounds himself with experts, has an overall strategic vision, and plans for contingencies. Hmmm... we could have used that in Iraq.