The Obfuscation Report

Using the McCain campaigns new standard: Anyone who's ever worked at Sidley and Austin in Chicago "might have" a connection to Bill Ayers and is therefore connected to Terrorists.

Shit. Now I'm a terrorist.

McCain Campaign Now Attacks Michelle Obama Over Ayers

The McCain campaign is now broadening their attack on Obama's past association with William Ayers to include Michelle Obama -- even though McCain has repeatedly said spouses should be off limits during the campaign.

The attack? Bernardine Dohrn, Ayers' wife and fellow former Weatherman, went to work in 1984 for the major Chicago-based national law firm of Sidley & Austin, and three years later, Michelle joined the mega-firm as well.

That's the entire attack. We wish we were joking. But we aren't.

In launching this latest, McCain is ditching yet another formerly-claimed principle as he faces the growing likelihood of defeat. In a statement back in June, the McCain campaign said: "Senator McCain agrees with Senator Obama that spouses should not be an issue in this campaign, and he has stated that position frequently."

The attack on Michelle came on a McCain conference call with reporters this afternoon featuring John Murtagh, who has been hitting Obama over the Weather Underground's attack on his family's home back in 1970. Murtagh noted that Dohrn and Michelle Obama had both worked at the firm starting in the late 1980s.

The firm's Chicago office currently employs more than 500 lawyers.

Murtagh didn't even bother alleging that the two even knew each other, instead suggesting that they might have. If so, he said, the Obamas have known the two longer than suspected.

"If it is true" that the two women knew each other, Murtagh said, "the relationship is almost a decade older than Senator Obama has acknowledged. And that can very easily be resolved by Senator Obama, by Mrs. Obama, by Mr. Ayers and by Ms. Dohrn."

"And incidentally, I would emphasize that we've all been focusing on Senator Obama," said Murtagh. "I think we need to speak to his wife."

Keep in mind that this wasn't any surrogate speaking off the cuff. He was on a call organized by the McCain campaign, and he was apparently reading from a prepared statement, which would of course have been vetted by McCain aides. And so another once-cherished McCain principle gets junked in the service of self-parody.

Here's the audio of the call:

Click To Play

Late Update: To clarify, we don't know that the McCain campaign vetted Murtagh's statement attacking. But it was made on a campaign conference call, and it constitutes the McCain campaign's official position until the McCain campaign says otherwise.

McCain's attacks fuel dangerous hatred

By Frank Schaeffer

October 10, 2008

You have changed. You have a choice: Go down in history as a decent senator and an honorable military man with many successes, or go down in history as the latest abettor of right-wing extremist hate.

John McCain, you are no fool, and you understand the depths of hatred that surround the issue of race in this country. You also know that, post-9/11, to call someone a friend of a terrorist is a very serious matter. You also know we are a bitterly divided country on many other issues. You know that, sadly, in America, violence is always just a moment away. You know that there are plenty of crazy people out there.

Stop! Think! Your rallies are beginning to look, sound, feel and smell like lynch mobs.

John McCain, you're walking a perilous line. If you do not stand up for all that is good in America and declare that Senator Obama is a patriot, fit for office, and denounce your hate-filled supporters when they scream out "Terrorist" or "Kill him," history will hold you responsible for all that follows.

John McCain and Sarah Palin, you are playing with fire, and you know it. You are unleashing the monster of American hatred and prejudice, to the peril of all of us. You are doing this in wartime. You are doing this as our economy collapses. You are doing this in a country with a history of assassinations.

Change the atmosphere of your campaign. Talk about the issues at hand. Make your case. But stop stirring up the lunatic fringe of haters, or risk suffering the judgment of history and the loathing of the American people - forever.

We will hold you responsible.

Frank Schaeffer is the author of "Crazy for God: How I Grew Up as One of the Elect, Helped Found the Religious Right, and Lived to Take All (or Almost All) of It Back." His e-mail is frankaschaeffer@aol.com.

McCain Defends His Rabid Crowds

Sam Stein at HuffPo October 10, 2008

The McCain campaign is defending crowd members at its recent rallies who have called Obama a terrorist, accused him of treason and even screamed "kill him" when his association with former Weather Underground member Bill Ayers has been broached.

"Barack Obama's attacks on Americans who support John McCain reveal far more about him than they do about John McCain. It is clear that Barack Obama just doesn't understand regular people and the issues they care about. He dismisses hardworking middle class Americans as clinging to guns and religion, while at the same time attacking average Americans at McCain rallies who are angry at Washington, Wall Street and the status quo," reads a statement from spokesman Brian Rogers. "Even worse, he attacks anyone who dares to question his readiness to serve as their commander in chief in chief. Raising legitimate questions about record, character and judgment are a vital part of the Democratic process, and Barack Obama's effort to silence and shame those who seek answers should make everyone wonder exactly what he is hiding."

Rogers' remarks are a deliberate attempt to simplify and obscure some of the rhetoric that has recently come from McCain supporters. Videos taken of people heading into McCain-Palin rallies have shown individuals who label Barack Obama as a terrorist, a communist and a threat to the well-being of the country. At a town hall meeting in Wisconsin on Thursday, several attendees urged the Republican nominee to attack his opponent on the Ayers issue and Reverend Jeremiah Wright, who McCain himself has said should be off limits.

The rabid nature of the scene has startled longtime political observers and even former associates of McCain himself.

John Weaver, the Senator's former top strategist, has said McCain is making a tactical mistake by letting abusive hecklers have their voices heard during his forums. David Gergen, a longtime Washington strategist, has warned that the rhetoric from these attendees could "lead to some violence."

Veteran Republican Congressman Ray LaHood criticized Sarah Palin in particular, saying her rhetoric did not "befit the office she's running for."

AFL-CIO President John Sweeney denounced the recent campaign stops as dangerous and expressed alarm that the top of the Republican ticket would not protest the crowd's language.

"Sen. John McCain, Gov. Sarah Palin and the leadership of the Republican party have a fundamental moral responsibility to denounce the violent rhetoric that has pervaded recent McCain and Palin political rallies. When rally attendees shout out such attacks as "terrorist" or "kill him" about Sen. Barack Obama, when they are cheered on by crowds incited by McCain-Palin rhetoric -- it is chilling that McCain and Palin do nothing to object."

Veteran reporter Dan Balz has opined that "McCain's tactics are over the line, with no restraint in sight, and threaten to provoke reactions among partisans on both sides that will continue to escalate."

And Frank Schaeffer penned a solemn and critical column (first published in the Baltimore Sun) personally addressed to McCain himself: "If your campaign does not stop equating Sen. Barack Obama with terrorism, questioning his patriotism and portraying Mr. Obama as "not one of us," I accuse you of deliberately feeding the most unhinged elements of our society the red meat of hate, and therefore of potentially instigating violence."

McCain, through Rogers' statement, is gambling that the voices of caution don't matter as much as the sentiments of the people. But he is also implicitly arguing that even the vilest rhetoric sent Obama's way is fair game when chalked up to concerns about the Illinois Democrat's past associations and judgments. And he's acknowledging that he won't lift a finger to dissuade the raging tempers.

You heard it here first. 9:30 Am Eastern Time.

Taking Hard New Look at a Greenspan Legacy

By PETER S. GOODMAN

“Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient.” — Alan Greenspan in 2004

George Soros, the prominent financier, avoids using the financial contracts known as derivatives “because we don’t really understand how they work.” Felix G. Rohatyn, the investment banker who saved New York from financial catastrophe in the 1970s, described derivatives as potential “hydrogen bombs.”

And Warren E. Buffett presciently observed five years ago that derivatives were “financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”

One prominent financial figure, however, has long thought otherwise. And his views held the greatest sway in debates about the regulation and use of derivatives — exotic contracts that promised to protect investors from losses, thereby stimulating riskier practices that led to the financial crisis. For more than a decade, the former Federal Reserve Chairman Alan Greenspan has fiercely objected whenever derivatives have come under scrutiny in Congress or on Wall Street. “What we have found over the years in the marketplace is that derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn’t be taking it to those who are willing to and are capable of doing so,” Mr. Greenspan told the Senate Banking Committee in 2003. “We think it would be a mistake” to more deeply regulate the contracts, he added.

Today, with the world caught in an economic tempest that Mr. Greenspan recently described as “the type of wrenching financial crisis that comes along only once in a century,” his faith in derivatives remains unshaken.

The problem is not that the contracts failed, he says. Rather, the people using them got greedy. A lack of integrity spawned the crisis, he argued in a speech a week ago at Georgetown University, intimating that those peddling derivatives were not as reliable as “the pharmacist who fills the prescription ordered by our physician.”

But others hold a starkly different view of how global markets unwound, and the role that Mr. Greenspan played in setting up this unrest.

“Clearly, derivatives are a centerpiece of the crisis, and he was the leading proponent of the deregulation of derivatives,” said Frank Partnoy, a law professor at the University of San Diego and an expert on financial regulation.

The derivatives market is $531 trillion, up from $106 trillion in 2002 and a relative pittance just two decades ago. Theoretically intended to limit risk and ward off financial problems, the contracts instead have stoked uncertainty and actually spread risk amid doubts about how companies value them.

If Mr. Greenspan had acted differently during his tenure as Federal Reserve chairman from 1987 to 2006, many economists say, the current crisis might have been averted or muted.

Over the years, Mr. Greenspan helped enable an ambitious American experiment in letting market forces run free. Now, the nation is confronting the consequences.

Derivatives were created to soften — or in the argot of Wall Street, “hedge” — investment losses. For example, some of the contracts protect debt holders against losses on mortgage securities. (Their name comes from the fact that their value “derives” from underlying assets like stocks, bonds and commodities.) Many individuals own a common derivative: the insurance contract on their homes.

On a grander scale, such contracts allow financial services firms and corporations to take more complex risks that they might otherwise avoid — for example, issuing more mortgages or corporate debt. And the contracts can be traded, further limiting risk but also increasing the number of parties exposed if problems occur.

Throughout the 1990s, some argued that derivatives had become so vast, intertwined and inscrutable that they required federal oversight to protect the financial system. In meetings with federal officials, celebrated appearances on Capitol Hill and heavily attended speeches, Mr. Greenspan banked on the good will of Wall Street to self-regulate as he fended off restrictions.

Ever since housing began to collapse, Mr. Greenspan’s record has been up for revision. Economists from across the ideological spectrum have criticized his decision to let the nation’s real estate market continue to boom with cheap credit, courtesy of low interest rates, rather than snuffing out price increases with higher rates. Others have criticized Mr. Greenspan for not disciplining institutions that lent indiscriminately.

But whatever history ends up saying about those decisions, Mr. Greenspan’s legacy may ultimately rest on a more deeply embedded and much less scrutinized phenomenon: the spectacular boom and calamitous bust in derivatives trading.

Faith in the System

Some analysts say it is unfair to blame Mr. Greenspan because the crisis is so sprawling. “The notion that Greenspan could have generated a totally different outcome is naïve,” said Robert E. Hall, an economist at the conservative Hoover Institution, a research group at Stanford.

Mr. Greenspan declined requests for an interview. His spokeswoman referred questions about his record to his memoir, “The Age of Turbulence,” in which he outlines his beliefs.

“It seems superfluous to constrain trading in some of the newer derivatives and other innovative financial contracts of the past decade,” Mr. Greenspan writes. “The worst have failed; investors no longer fund them and are not likely to in the future.”

In his Georgetown speech, he entertained no talk of regulation, describing the financial turmoil as the failure of Wall Street to behave honorably.

“In a market system based on trust, reputation has a significant economic value,” Mr. Greenspan told the audience. “I am therefore distressed at how far we have let concerns for reputation slip in recent years.”

As the long-serving chairman of the Fed, the nation’s most powerful economic policy maker, Mr. Greenspan preached the transcendent, wealth-creating powers of the market.

A professed libertarian, he counted among his formative influences the novelist Ayn Rand, who portrayed collective power as an evil force set against the enlightened self-interest of individuals. In turn, he showed a resolute faith that those participating in financial markets would act responsibly.

An examination of more than two decades of Mr. Greenspan’s record on financial regulation and derivatives in particular reveals the degree to which he tethered the health of the nation’s economy to that faith.

As the nascent derivatives market took hold in the early 1990s, and in subsequent years, critics denounced an absence of rules forcing institutions to disclose their positions and set aside funds as a reserve against bad bets.

Time and again, Mr. Greenspan — a revered figure affectionately nicknamed the Oracle — proclaimed that risks could be handled by the markets themselves.

“Proposals to bring even minimalist regulation were basically rebuffed by Greenspan and various people in the Treasury,” recalled Alan S. Blinder, a former Federal Reserve board member and an economist at Princeton University. “I think of him as consistently cheerleading on derivatives.”

Arthur Levitt Jr., a former chairman of the Securities and Exchange Commission, says Mr. Greenspan opposes regulating derivatives because of a fundamental disdain for government.

Mr. Levitt said that Mr. Greenspan’s authority and grasp of global finance consistently persuaded less financially sophisticated lawmakers to follow his lead.

“I always felt that the titans of our legislature didn’t want to reveal their own inability to understand some of the concepts that Mr. Greenspan was setting forth,” Mr. Levitt said. “I don’t recall anyone ever saying, ‘What do you mean by that, Alan?’ ”

Still, over a long stretch of time, some did pose questions. In 1992, Edward J. Markey, a Democrat from Massachusetts who led the House subcommittee on telecommunications and finance, asked what was then the General Accounting Office to study derivatives risks.

Two years later, the office released its report, identifying “significant gaps and weaknesses” in the regulatory oversight of derivatives.

“The sudden failure or abrupt withdrawal from trading of any of these large U.S. dealers could cause liquidity problems in the markets and could also pose risks to others, including federally insured banks and the financial system as a whole,” Charles A. Bowsher, head of the accounting office, said when he testified before Mr. Markey’s committee in 1994. “In some cases intervention has and could result in a financial bailout paid for or guaranteed by taxpayers.”

In his testimony at the time, Mr. Greenspan was reassuring. “Risks in financial markets, including derivatives markets, are being regulated by private parties,” he said.

“There is nothing involved in federal regulation per se which makes it superior to market regulation.”

Mr. Greenspan warned that derivatives could amplify crises because they tied together the fortunes of many seemingly independent institutions. “The very efficiency that is involved here means that if a crisis were to occur, that that crisis is transmitted at a far faster pace and with some greater virulence,” he said.

But he called that possibility “extremely remote,” adding that “risk is part of life.”

Later that year, Mr. Markey introduced a bill requiring greater derivatives regulation. It never passed.

Resistance to Warnings

In 1997, the Commodity Futures Trading Commission, a federal agency that regulates options and futures trading, began exploring derivatives regulation. The commission, then led by a lawyer named Brooksley E. Born, invited comments about how best to oversee certain derivatives.

Ms. Born was concerned that unfettered, opaque trading could “threaten our regulated markets or, indeed, our economy without any federal agency knowing about it,” she said in Congressional testimony. She called for greater disclosure of trades and reserves to cushion against losses.

Ms. Born’s views incited fierce opposition from Mr. Greenspan and Robert E. Rubin, the Treasury secretary then. Treasury lawyers concluded that merely discussing new rules threatened the derivatives market. Mr. Greenspan warned that too many rules would damage Wall Street, prompting traders to take their business overseas.

“Greenspan told Brooksley that she essentially didn’t know what she was doing and she’d cause a financial crisis,” said Michael Greenberger, who was a senior director at the commission. “Brooksley was this woman who was not playing tennis with these guys and not having lunch with these guys. There was a little bit of the feeling that this woman was not of Wall Street.”

Ms. Born declined to comment. Mr. Rubin, now a senior executive at the banking giant Citigroup, says that he favored regulating derivatives — particularly increasing potential loss reserves — but that he saw no way of doing so while he was running the Treasury.

“All of the forces in the system were arrayed against it,” he said. “The industry certainly didn’t want any increase in these requirements. There was no potential for mobilizing public opinion.”

Mr. Greenberger asserts that the political climate would have been different had Mr. Rubin called for regulation.

In early 1998, Mr. Rubin’s deputy, Lawrence H. Summers, called Ms. Born and chastised her for taking steps he said would lead to a financial crisis, according to Mr. Greenberger. Mr. Summers said he could not recall the conversation but agreed with Mr. Greenspan and Mr. Rubin that Ms. Born’s proposal was “highly problematic.”

On April 21, 1998, senior federal financial regulators convened in a wood-paneled conference room at the Treasury to discuss Ms. Born’s proposal. Mr. Rubin and Mr. Greenspan implored her to reconsider, according to both Mr. Greenberger and Mr. Levitt.

Ms. Born pushed ahead. On June 5, 1998, Mr. Greenspan, Mr. Rubin and Mr. Levitt called on Congress to prevent Ms. Born from acting until more senior regulators developed their own recommendations. Mr. Levitt says he now regrets that decision. Mr. Greenspan and Mr. Rubin were “joined at the hip on this,” he said. “They were certainly very fiercely opposed to this and persuaded me that this would cause chaos.”

Ms. Born soon gained a potent example. In the fall of 1998, the hedge fund Long Term Capital Management nearly collapsed, dragged down by disastrous bets on, among other things, derivatives. More than a dozen banks pooled $3.6 billion for a private rescue to prevent the fund from slipping into bankruptcy and endangering other firms.

Despite that event, Congress froze the Commodity Futures Trading Commission’s regulatory authority for six months. The following year, Ms. Born departed.

In November 1999, senior regulators — including Mr. Greenspan and Mr. Rubin — recommended that Congress permanently strip the C.F.T.C. of regulatory authority over derivatives.

Mr. Greenspan, according to lawmakers, then used his prestige to make sure Congress followed through. “Alan was held in very high regard,” said Jim Leach, an Iowa Republican who led the House Banking and Financial Services Committee at the time. “You’ve got an area of judgment in which members of Congress have nonexistent expertise.”

As the stock market roared forward on the heels of a historic bull market, the dominant view was that the good times largely stemmed from Mr. Greenspan’s steady hand at the Fed.

“You will go down as the greatest chairman in the history of the Federal Reserve Bank,” declared Senator Phil Gramm, the Texas Republican who was chairman of the Senate Banking Committee when Mr. Greenspan appeared there in February 1999.

Mr. Greenspan’s credentials and confidence reinforced his reputation — helping him to persuade Congress to repeal Depression-era laws that separated commercial and investment banking in order to reduce overall risk in the financial system.

“He had a way of speaking that made you think he knew exactly what he was talking about at all times,” said Senator Tom Harkin, a Democrat from Iowa. “He was able to say things in a way that made people not want to question him on anything, like he knew it all. He was the Oracle, and who were you to question him?”

In 2000, Mr. Harkin asked what might happen if Congress weakened the C.F.T.C.’s authority.

“If you have this exclusion and something unforeseen happens, who does something about it?” he asked Mr. Greenspan in a hearing.

Mr. Greenspan said that Wall Street could be trusted. “There is a very fundamental trade-off of what type of economy you wish to have,” he said. “You can have huge amounts of regulation and I will guarantee nothing will go wrong, but nothing will go right either,” he said.

Later that year, at a Congressional hearing on the merger boom, he argued that Wall Street had tamed risk.

“Aren’t you concerned with such a growing concentration of wealth that if one of these huge institutions fails that it will have a horrendous impact on the national and global economy?” asked Representative Bernard Sanders, an independent from Vermont.

“No, I’m not,” Mr. Greenspan replied. “I believe that the general growth in large institutions have occurred in the context of an underlying structure of markets in which many of the larger risks are dramatically — I should say, fully — hedged.”

The House overwhelmingly passed the bill that kept derivatives clear of C.F.T.C. oversight. Senator Gramm attached a rider limiting the C.F.T.C.’s authority to an 11,000-page appropriations bill. The Senate passed it. President Clinton signed it into law.

Pressing Forward

Still, savvy investors like Mr. Buffett continued to raise alarms about derivatives, as he did in 2003, in his annual letter to shareholders of his company, Berkshire Hathaway.

“Large amounts of risk, particularly credit risk, have become concentrated in the hands of relatively few derivatives dealers,” he wrote. “The troubles of one could quickly infect the others.”

But business continued.

And when Mr. Greenspan began to hear of a housing bubble, he dismissed the threat. Wall Street was using derivatives, he said in a 2004 speech, to share risks with other firms.

Shared risk has since evolved from a source of comfort into a virus. As the housing crisis grew and mortgages went bad, derivatives actually magnified the downturn.

The Wall Street debacle that swallowed firms like Bear Stearns and Lehman Brothers, and imperiled the insurance giant American International Group, has been driven by the fact that they and their customers were linked to one another by derivatives.

In recent months, as the financial crisis has gathered momentum, Mr. Greenspan’s public appearances have become less frequent.

His memoir was released in the middle of 2007, as the disaster was unfolding, and his book tour suddenly became a referendum on his policies. When the paperback version came out this year, Mr. Greenspan wrote an epilogue that offers a rebuttal of sorts.

“Risk management can never achieve perfection,” he wrote. The villains, he wrote, were the bankers whose self-interest he had once bet upon.

“They gambled that they could keep adding to their risky positions and still sell them out before the deluge,” he wrote. “Most were wrong.”

No federal intervention was marshaled to try to stop them, but Mr. Greenspan has no regrets.

“Governments and central banks,” he wrote, “could not have altered the course of the boom.”

Analysis: The end of American capitalism?

WASHINGTON - The worst financial crisis since the Great Depression is claiming another casualty: American-style capitalism.

Since the 1930s, U.S. banks were the flagships of American economic might, and emulation by other nations of the fiercely free-market financial system in the United States was expected and encouraged. But the market turmoil that is draining the nation's wealth and has upended Wall Street now threatens to put the banks at the heart of the U.S. financial system at least partly in the hands of the government.

The Bush administration is considering a partial nationalization of some banks, buying up a portion of their shares to shore them up and restore confidence as part of the $700 billion government bailout. The notion of government ownership in the financial sector, even as a minority stakeholder, goes against what market purists say they see as the foundation of the American system.

Yet the administration may feel it has no choice. Credit, the lifeblood of capitalism, ceased to flow. An economy based on the free market cannot function that way.

The government's about-face goes beyond the banking industry. It is reasserting itself in the lives of citizens in ways that were unthinkable in the era of market-knows-best thinking. With the recent takeovers of major lenders Fannie Mae and Freddie Mac and the bailout of AIG, the U.S. government is now effectively responsible for providing home mortgages and life insurance to tens of millions of Americans. Many economists are asking whether it remains a free market if the government is so deeply enmeshed in the financial system.

Given that the United States has held itself up as a global economic model, the change could shift the balance of how governments around the globe conduct free enterprise. Over the past three decades, the United States led the crusade to persuade much of the world, especially developing countries, to lift the heavy hand of government from finance and industry.

Toxic investments
But the hands-off brand of capitalism in the United States is now being blamed for the easy credit that sickened the housing market and allowed a freewheeling Wall Street to create a pool of toxic investments that has infected the global financial system. Heavy intervention by the government, critics say, is further robbing Washington of the moral authority to spread the gospel of laissez-faire capitalism.

The government could launch a targeted program in which it takes a minority stake in troubled banks, or a broader program aimed at the larger banking system. In either case, however, the move could be seen as evidence that Washington remains a slave to Wall Street. The plan, for instance, may not compel participating firms to give their chief executives the salary haircuts that some in Congress intended. But if the plan didn't work, the government might have to take bigger stakes.

"People around the world once admired us for our economy, and we told them if you wanted to be like us, here's what you have to do — hand over power to the market," said Joseph Stiglitz, the Nobel Prize-winning economist at Columbia University. "The point now is that no one has respect for that kind of model anymore given this crisis. And of course it raises questions about our credibility. Everyone feels they are suffering now because of us."

'Casino gambling'
In Seoul, many see American excess as a warning. At the same time, anger is mounting over the global spillover effect of the U.S. crisis. The Korean currency, the won, has fallen sharply in recent days as corporations there struggle to find dollars in the heat of a global credit crunch.

"Derivatives and hedge funds are like casino gambling," said South Korean Finance Minister Kang Man-soo. "A lot of Koreans are asking, how can the United States be so weak?"

Other than a few fringe heads of state and quixotic headlines, no one is talking about the death of capitalism. The embrace of free-market theories, particularly in Asia, has helped lift hundreds of millions out of poverty in recent decades. But resentment is growing over America's brand of capitalism, which in contrast to, say, Germany's, spurns regulations and venerates risk.

In South Korea, rising criticism that the government is sticking too close to the U.S. model has roused opposition to privatizing the massive, state-owned Korea Development Bank. South Korea is among those countries that have benefited the most from adopting free-market principles, emerging from the ashes of the Korean War to become one of the world's biggest economies. It has distinguished itself from North Korea, an impoverished country hobbled by an outdated communist system and authoritarian leadership.

But the repercussions of crisis that began in the United States are global. In Britain, where Prime Minister Margaret Thatcher joined with President Ronald Reagan in the 1980s to herald capitalism's promise, the government this week moved to partly nationalize the ailing banking system. Across the English Channel, European leaders who are no strangers to regulation are piling on Washington for gradually pulling the government watchdogs off the world's largest financial sector. Led by French President Nicolas Sarkozy, they are calling for broad new international codes to impose scrutiny on global finance.

To some degree, those calls are even being echoed by the International Monetary Fund, an institution charged with the promotion of free markets overseas and that preached that less government was good government during the economic crises in Asia and Latin America in the 1990s. Now, it is talking about the need for regulation and oversight.

"Obviously the crisis comes from an important regulatory and supervisory failure in advanced countries . . . and a failure in market discipline mechanisms," Dominique Strauss-Kahn, the IMF's managing director, said yesterday before the fund's annual meeting in Washington.

In a slideshow presentation, Strauss-Kahn illustrated the global impact of the financial crisis. Countries in Africa, including many of those with some of the lowest levels of market and financial integration and openness, are now set to weather the crisis with the least amount of turbulence.

Shortly afterward, World Bank President Robert Zoellick was questioned by reporters about the "confusion" in the developing world over whether to continue embracing the free-market model. He replied, "I think people have been confused not only in developing countries, but in developed countries, by these shocking events."

Exotic investments
In much of the developing world, financial systems still remain far more governed by the state, despite pressure from the United States for those countries to shift power to the private sector and create freer financial markets. They may stay that way for some time.

China had been resisting calls from Washington and Wall Street to introduce a broad range of exotic investments, including many of the once-red-hot derivatives now being blamed for magnifying the crisis in the West. In recent weeks, Beijing has made that position more clear, saying it would not permit an expansion of complex financial instruments.

With the U.S. government's current push toward intervention and the soul-searching over the role of deregulation in the crisis, the stage appears to be at least temporarily set for a more restrained model of free enterprise, particularly in financial markets.

"If you look around the world, China is doing pretty good right now, and the U.S. isn't," said C. Fred Bergsten, director of the Peterson Institute for International Economics. "You may see a push back from globalization in the financial markets."

Staff writers Blaine Harden in Seoul and Ariana Cha in Washington contributed to this report.

Somebody destroyed my Obama yard sign last night. They left my Yarmuth and Lunsford alone. Racist fuckwits.

October 7, 2008

John McCain: The Mount Vesuvius of Mud (Brent Budowsky)

Equity markets collapse. Credit markets are strangled. Economic pain skyrockets. Global markets shake. And John McCain campaigns on Paris Hilton, Britney Spears, pit bulls with lipstick, slanders, smears, falsehoods, lies and fear — a Mount Vesuvius of mud that will drag Republicans to defeat.

Americans endure a crisis of economic pain while McCain suffers a crisis of his own identity. The McCain who ran in 2000 would be scandalized by the McCain who runs in 2008. And McCain and Sarah Palin hit bottom with the last refuge of dying campaigns, suggesting Obama is not a real American, questioning his patriotism, with warm-up acts invoking his middle name when what voters want to hear is how the candidates can make their lives better and more secure.

Voters need raincoats and boots as John McCain closes his failed campaign dishing dirt in political panic. McCain's staff tells reporters he cannot discuss the economy because he will lose. Palin's staff tells her what newspapers she reads in the morning. Rather than offering intelligent solutions to an economy in crisis, McCain and Palin dump sludge on voters who hunger for leadership and despise the Bush-like politics that is the new McCain brand.

John McCain and Sarah Palin have reached a level of sickness and slander in a campaign that has nothing to say to voters about the only real issue in the election. It is amazing and astonishing that McCain is now reduced to literally nothing but slander, character assassination and lies even as his polls continue to sink.

How can anyone serve government during three decades and admit he does not know much about the economy?

With American families deeply worried and troubled by the state of the economy, how can any candidates be so divorced from reality that he, and she, try to trick voters into forgetting about the economy with a politics of defamation?

There is the whiff of the pungent and repulsive odor of the George Bush years from McCain and Palin, from Rove and Schmidt, from Wallace and Kristol, from Republicans who repulse a nation in crisis with this Mount Vesuvius of mud.

And now, McCain is Bush; the same people who ran the dirtball campaigns of Bush move down the street to run the dirtball campaign of McCain. The same bad economics, the same Gilded Age greed, the same attacks on the patriotism of opponents but now, with the economy in such danger, Americans do not want the bad smell of four more years of George W. Bush in the name of Palin and McCain.

How can anyone be so totally divorced from the reality of American life to believe our economy is strong and sound, as McCain recently said?

Yet the lava pours out with a never-ending litany of lies like this: Obama wants to lose a war, and to bring cameras and reporters to exploit wounded troops. Palin tells the lie that went nowhere, pretending she killed the Bridge to Nowhere, and then makes up tall tales about Obama “palling around” with terrorists. The list goes on. The mud piles up.

McCain, Palin and the entire Republican convention mock and ridicule Obama's work with churches helping jobless workers in the sickest slander of all.

McCain performs a ridiculous stunt where he suspends a campaign he does not really suspend, pretends to cancel a debate he does not really cancel, airlifts himself into a negotiation on a subject he knows little about, wanders aimlessly around Washington for 24 hours, and then claims credit for the result.

McCain's strange behavior in this crisis reminds me of the movie producer in “The Godfather” who says, shortly before receiving the horse's head: "A man in my position can’t afford to be made to look ridiculous.”

McCain looks ridiculous.

Barack Obama will win because faced with this deluge of dirt, he stands tall as an oak with his dignity, cool in a crisis, calm in a storm, a serious man for serious times, a thoughtful man with major ideas to make our economy stronger, an idealist without illusions, a leader to fix the problems, the real voice for authentic change who will transcend this Vesuvius of mud that is the last desperate gasp of the George Bush years.

Alaskan Independence Party: Last Refuge of a Scoundrel.

by Robert F. Kennedy Junior October 9, 2008

In 2004, America's malleable mainstream media allowed itself to be manipulated by artful Republican operatives into devoting weeks of broadcast attention and drums of ink to unfairly desecrating John Kerry's genuine Vietnam heroics while obligingly muzzling serious discussion of George W. Bush's shameful wartime record of evasion and cowardice.

Last week found the American media once again boarding Republican swift boats against this season's Democratic candidate armed with unfair and hypocritical attacks artfully designed by GOP strategists to distract attention from the cataclysmic outcomes of Republican governance. Vice Presidential hopeful Sarah Palin has taken to faulting Senator Barack Obama for his casual acquaintance with a respected Illinois educator Bill Ayers, who forty years ago was a member of the Weathermen, a movement active when Obama was eight and which he has denounced as "detestable." Palin argues that the relationship proves that Obama sees "America as being so imperfect that he is palling around with terrorists who would target their own country."

The Times dedicated a page one article to Obama's relations with Ayers and CNN's Anderson Cooper obliged Palin by rewarding her reckless accusations about Obama's patriotism with a major investigative report. Fox, meanwhile, is still riveting its audience with wall to wall coverage of this pressing irrelevancy.

But if McCarthy-era guilt-by-association is once again a valid political consideration, Palin, it would seem, has more to lose than Obama. Palin, it could be argued, following her own logic, thinks so little of America's perfection that she continues to "pal around" with a man--her husband, actually--who only recently terminated his seven-year membership in the Alaskan Independence Party. Putting plunder above patriotism, the members of this treasonous cabal aim to break our country into pieces and walk away with Alaska's rich federal oil fields and one-fifth of America's land base--an area three-fourths the size of the Civil War Confederacy.

AIP's charter commits the party "to the ultimate independence of Alaska," from the United States which it refers to as "the colonial bureaucracy in Washington." It proclaims Alaska's 1959 induction as a state "as illegal and in violation of the United Nations charter and international law."

AIP's creation was inspired by the rabidly violent anti-Americanism of its founding father Joe Vogler, "I'm an Alaskan, not an American," reads a favorite Vogler quote on AIP's current website, "I've got no use for America or her damned institutions." According to Vogler AIP's central purpose was to drive Alaska's secession from the United States. Alaska, says current Chairwoman Lynette Clark, "should be an independent nation."

Vogler was murdered in 1993 during an illegal sale of plastic explosives that went bad. The prior year, he had renounced his allegiance to the United States explaining that, "The fires of hell are frozen glaciers compared to my hatred for the American government." He cursed the stars and stripes, promising, "I won't be buried under their damned flag...when Alaska is an independent nation they can bring my bones home." Palin has never denounced Vogler or his detestable anti-Americanism.

Palin's husband Todd remained an AIP party member from 1995 to 2002. Sarah can be described in McCarthy-era palaver as a "fellow traveler." While retaining her Republican registration, she attended the AIP's 1994 convention where the party called for a draft constitution to secede from the United States and create an independent nation of Alaska. The McCain Campaign has reluctantly acknowledged that she also attended AIP's 2000 Convention. She apparently found the experience so inspiring that she agreed to give a keynote address at the AIP's 2006 convention and she recorded a video greeting for this year's 2008 convention. In other words, this is not something that happened when she was eight!

So when Palin accuses Barack of "not seeing the same America as you and me," maybe she is referring to an America without Alaska. In any case, isn't it time the media start giving equal time to Palin's buddy list of anti-American bombers and other radical associates?

Sean Hannity, Robert Gibbs and anti-Semitism: How to go on Fox News

October 7, 2008

Moments that pleased voters

Members of audience get chance to go one-on-one with candidates

By Colby Sledge
STAFF WRITER for The Tennesseean

Tuesday's presidential debate at Belmont University was a carefully orchestrated affair, one that was intended to make this event a barometer of what the nation wants from its next president.

But from inside the Curb Event Center, there was an audience that was unafraid to react to candidates' responses, or their lack thereof — something that didn't always show up on camera.

In addition to the chuckles moderator Tom Brokaw drew when he repeatedly addressed time constraints on candidate responses, reactions from audience members ranged from holding head in hands to chuckling at candidates' responses and squabbles.

Before the debate, many audience members tried to see how many national political figures they could pick out of the crowd seated directly below the network camera platform. Al and Tipper Gore received special recognition from the debate commission and were treated to a standing ovation.

Other notable guests included former Republican presidential hopeful Fred Thompson, who chatted it up with Mitt Romney, another Republican hopeful this year, seated in the row behind him. Former Titans running back Eddie George had a prime seat next to the Gores.

Ben Raybin was one of the 80 people who participated in the town hall session. The Vanderbilt University law student didn't get to ask his question (which was on Iraq), but he said what happened in the hall after the debate was perhaps the most informative moment of the evening.

He said John McCain stayed around for a few minutes and then quickly left, but Barack Obama stuck around for about 30 minutes afterward signing autographs and snapping photos with the participants.

Raybin said that personal touch made a strong impression on almost everyone at the debate.

Raybin said he was undecided but leaning toward Obama before the debate, but he had pretty much made up his mind now.

"It really struck a chord that Senator Obama stayed," Raybin said. "Him sticking around resonated with people. He seemed genuinely interested and curious about real people. He asked people their names and what they did."

Raybin, 23, said some people who didn't get to ask their questions in the debate actually got to ask him the questions.

"It's hard to blame Senator McCain for leaving," Raybin said. "I understand he's very busy and got a lot to do."

From CNN Deputy Political Director Paul Steinhauser, Extra

NASHVILLE, Tennessee (CNN) — A national poll of debate watchers suggests that Barack Obama won the second presidential debate.

Fifty-four percent of those questioned in a CNN/Opinion Research Corporation survey conducted after the debate ended said that Obama did the best job in the debate, with 30 percent saying John McCain performed better.

Watch: Debate analysis

A majority, 54 percent, said Obama seemed to be the stronger leader during the debate, to 43 percent for McCain. By a greater than two to one margin — 65 percent to 28 percent — viewers thought Obama was more likeable during the debate.

"Obama had made some gains on the leadership issue even before the debate," said CNN Polling Director Keating Holland. "McCain's advantage on leadership shrunk from 19 points in September to just five points this weekend. If Obama can use this debate to convince Americans that he is a stronger leader than McCain, he may be difficult to defeat."

Watch: Reading the candidates' faces

A majority of debate watchers polled thought Obama was more intelligent, by a 57 percent to 25 percent margin over McCain. Twice as many debate watchers also thought Obama more clearly expressed than McCain, with 60 percent giving the nod to the Democratic nominee and 30 percent to his GOP opponent.

Hands down, debate watchers questioned thought McCain rather than Obama spent more time attacking his opponent: 63 percent said McCain went more negative, as opposed to 17 percent who pointed to Obama.

Half of those polled say Obama answered questions more directly, 13 points ahead of McCain, and by a 14 point advantage debate watchers thought Obama seemed to care more about the problems of audience members who asked questions.

McCain did come out on top in one category that neither candidate wants to win: By a 16 point margin, debate watchers thought McCain seemed more like a typical politician during the debate.

According to the poll, 64 percent had a favorable opinion of Obama after the debate, up four points from the pre-debate result. McCain’s favorability rating remained unchanged: both before and after the debate percent of those polled had a favorable opinion of the Republican nominee both before and after the debate.

"For McCain, the key finding may be that his favorable rating did not change at all," Holland said. "It's unclear whether Obama will gain any momentum from Tuesday night's debate, but it looks like McCain will not do so, and for a candidate who has consistently been a few points behind in national polls, that's not a good sign."

The poll suggests that independent voters thought Obama won the debate. Fifty-four percent of those identifying themselves as independent say Obama performed best, with 28 percent saying that McCain did the better job.

Among Democrats, 85 percent say Obama won, with just 5 percent saying McCain was the winner. Among Republicans, 64 percent say McCain won, with 16 percent saying Obama won the night.

The CNN/Opinion Research Corporation poll was conducted by telephone with 675 adult Americans who watched the debate. All interviews were taken after the end of the debate. The audience for this debate was 38 percent Democratic and 31 percent Republican — very close to the partisan breakdown among all Americans nationwide. The survey's sampling error is plus or minus 4 percentage points.

Sarah Palin Sits In Church While Her Guest Pastor Attacks Jews. She didn't "get up and leave." She then criticizes Obama for not "getting up and leaving" after comments made by Reverend Wright, even though Wright never said his controversial comments with Barack Obama in attendance.

Monday, October 06, 2008
Sarah Palin just called herself an anti-Semite

I've written before that Palin is not a very bright person, and that she and John McCain have very disturbing ties to anti-Semitism. And she proved it again today, in a way that made her own anti-Semitism fair game.

Don't get me wrong - Sarah Palin knows how to make love to the camera. The thing is, she isn't very smart. They're different skills, seducing an audience and actually having an intellect (and with my 401k in the balance, I'm gonna go with brains over winks). I say this because McCain made a mistake by designating Palin his attack dog. She reads a good script, but when she speaks her mind, as she did yesterday trying to attack Obama over Rev. Wright, she causes more trouble for her own campaign than Obama's.

Yesterday is a perfect example, and perhaps her most damaging yet. Palin did an interview with right-wing commentator Bill Kristol. Palin took it upon herself to talk about Rev. Wright:

“To tell you the truth, Bill, I don’t know why that association isn’t discussed more, because those were appalling things that that pastor had said about our great country, and to have sat in the pews for 20 years and listened to that — with, I don’t know, a sense of condoning it, I guess, because he didn’t get up and leave — to me, that does say something about character. But, you know, I guess that would be a John McCain call on whether he wants to bring that up.”

Yeah, you see, Sarah Palin's inner idiot came out again on that one. If Sarah Palin thinks not getting up and leaving when your pastor says something outrageous in church says something about your character, then Sarah Palin just called herself a rabid anti-Semite.

Sarah Palin sat in her conservative evangelical church, twice, and said nothing when her visiting pastors and speakers attacked another great nation and another great people - Jews and Israel.

Just three years ago, Palin sat in church and did nothing - nay, she went up on stage and joined a rather out-there evangelical preacher minutes after he said that the reason we have so much corruption on Wall Street is that it's run by Jews. Yes, she really did. Here is what Sarah Palin's guest preacher said, in her presence, minutes before she joined him in front of the entire congregation:

"The second area whereby God wants us, wants to penetrate in our society is in the economic area. The Bible says that the wealth of the wicked is stored up for the righteous. It's high time that we have top Christian businessmen, businesswomen, bankers, you know, who are men and women of integrity running the economics of our nations. That's what we are waiting for. That's part and parcel of transformation. If you look at the -- you know -- if you look at the Israelites, that's how they work. And that's how they are, even today. When we will see that, you know, that the top transporters (?) in the lands, we see, you know, the bankers, we see the people holding the parts (?), they are believers, we will not have the kind of corruption that we are hearing in our societies."

Did you catch that? Sarah Palin's guest preacher says that if only good Christians could take control of the banking industry away from the wicked Jews we would "not have the kind of corruption that we are hearing in our societies." Nice. And she "didn't get up and leave," she got up and joined the anti-Semite on stage moments later.

Then there's the time, this past August 17 - just six weeks ago - that Sarah Palin sat in church and listened to (and may have even given a donation to) a Jews for Jesus founder David Brickner who, in Palin's presence, said Palestininian terrorist attacks on Israelis are God's "judgment" on Jews who haven't embraced Christianity.

Did you catch that? According to Palin's friend the guest-preacher, it's the Jews' own fault that the terrorists blow them up in Israel. If only Jews would convert to Christianity, and stop being so Jewish, nobody would have to kill them, says Palin's guest-preacher with her in attendance.

Sarah Palin sat there, didn't say a word, didn't leave, and according to one report may have even donated money to the man after he basically said that Jews in Israel deserve to get blown up. Here is what the Jews for Jesus executive director had to say:

Brickner also described terrorist attacks on Israelis as God's "judgment of unbelief" of Jews who haven't embraced Christianity.

"Judgment is very real and we see it played out on the pages of the newspapers and on the television. It's very real. When [Brickner's son] was in Jerusalem he was there to witness some of that judgment, some of that conflict, when a Palestinian from East Jerusalem took a bulldozer and went plowing through a score of cars, killing numbers of people. Judgment — you can't miss it."

Palin was in church that day...

Sarah Palin was there. Sarah Palin didn't leave. She may have given a donation to one man preaching anti-Semitism, and she got up and stood alongside a second man preaching anti-Semitism. Under her own standard enunciated today, Sarah Palin just admitted that she's an anti-Semite.

The Palins' Un-American Activities

Imagine if the Obamas had hooked up with a violently anti-American group in league with the government of Iran.

By David Talbot

Oct. 07, 2008 | "My government is my worst enemy. I'm going to fight them with any means at hand."

This was former revolutionary terrorist Bill Ayers back in his old Weather Underground days, right? Imagine what Sarah Palin is going to do with this incendiary quote as she tears into Barack Obama this week.

Only one problem. The quote is from Joe Vogler, the raging anti-American who founded the Alaska Independence Party. Inconveniently for Palin, that's the very same secessionist party that her husband, Todd, belonged to for seven years and that she sent a shout-out to as Alaska governor earlier this year. ("Keep up the good work," Palin told AIP members. "And God bless you.")

AIP chairwoman Lynette Clark told me recently that Sarah Palin is her kind of gal. "She's Alaskan to the bone ... she sounds just like Joe Vogler."

So who are these America-haters that the Palins are pallin' around with?

Before his strange murder in 1993, party founder Vogler preached armed insurrection against the United States of America. Vogler, who always carried a Magnum with him, was fond of saying, "When the [federal] bureaucrats come after me, I suggest they wear red coats. They make better targets. In the federal government are the biggest liars in the United States, and I hate them with a passion. They think they own [Alaska]. There comes a time when people will choose to die with honor rather than live with dishonor. That time may be coming here. Our goal is ultimate independence by peaceful means under a minimal government fully responsive to the people. I hope we don't have to take human life, but if they go on tramping on our property rights, look out, we're ready to die."

This quote is from "Coming Into the Country," by John McPhee, who traipsed around Alaska's remote gold mining country with Vogler for his 1991 book. The violent-tempered secessionist vowed to McPhee that if any federal official tried to stop him from polluting Alaska's rivers with his earth-moving equipment, he would "run over him with a Cat and turn mosquitoes loose on him while he dies."

Vogler wasn't just a blowhard either. He put his secessionist ideas into action, working to build AIP membership to 20,000 -- an impressive figure by Alaska standards -- and to elect party member Walter Hickel as governor in 1990.

Vogler's greatest moment of glory was to be his 1993 appearance before the United Nations to denounce United States "tyranny" before the entire world and to demand Alaska's freedom. The Alaska secessionist had persuaded the government of Iran to sponsor his anti-American harangue.

That's right ... Iran. The Islamic dictatorship. The taker of American hostages. The rogue nation that McCain and Palin have excoriated Obama for suggesting we diplomatically engage. That Iran.

AIP leaders allege that Vogler, who was murdered that year by a fellow secessionist, was taken out by powerful forces in the U.S. before he could reach his U.N. platform. "The United States government would have been deeply embarrassed," by Vogler's U.N. speech, darkly suggests Clark. "And we can't have that, can we?"

The Republican ticket is working hard this week to make Barack Obama's tenuous connection to graying, '60s revolutionary Bill Ayers a major campaign issue. But the Palins' connection to anti-American extremism is much more central to their political biographies.

Imagine the uproar if Michelle Obama was revealed to have joined a black nationalist party whose founder preached armed secession from the United States and who enlisted the government of Iran in his cause? The Obama campaign would probably not have survived such an explosive revelation. Particularly if Barack Obama himself was videotaped giving the anti-American secessionists his wholehearted support just months ago.

Where's the outrage, Sarah Palin has been asking this week, in her attacks on Obama's fuzzy ties to Ayers? The question is more appropriate when applied to her own disturbing associations.