McCain’s Suspension Bridge to Nowhere

WHAT we learned last week is that the man who always puts his “country first” will take the country down with him if that’s what it takes to get to the White House.

For all the focus on Friday night’s deadlocked debate, it still can’t obscure what preceded it: When John McCain gratuitously parachuted into Washington on Thursday, he didn’t care if his grandstanding might precipitate an even deeper economic collapse. All he cared about was whether he might save his campaign. George Bush put more deliberation into invading Iraq than McCain did into his own reckless invasion of the delicate Congressional negotiations on the bailout plan.

By the time he arrived, there already was a bipartisan agreement in principle. It collapsed hours later at the meeting convened by the president in the Cabinet Room. Rather than help try to resuscitate Wall Street’s bloodied bulls, McCain was determined to be the bull in Washington’s legislative china shop, running around town and playing both sides of his divided party against Congress’s middle. Once others eventually forged a path out of the wreckage, he’d inflate, if not outright fictionalize, his own role in cleaning up the mess his mischief helped make. Or so he hoped, until his ignominious retreat.

The question is why would a man who forever advertises his own honor toy so selfishly with our national interest at a time of crisis. I’ll leave any physiological explanations to gerontologists — if they can get hold of his complete medical records — and any armchair psychoanalysis to the sundry McCain press acolytes who have sorrowfully tried to rationalize his erratic behavior this year. The other answers, all putting politics first, can be found by examining the 24 hours before he decided to “suspend” campaigning and swoop down on the Capitol to save America from the Sunnis or the Shia, or whoever perpetrated all those credit-default swaps.

To put these 24 hours in context, you must remember that McCain not only knows little about the economy but that he has not previously expressed any urgency about its meltdown. It was on Sept. 15 — the day after his former idol Alan Greenspan pronounced the current crisis a “once-in-a-century” catastrophe — that McCain reaffirmed for the umpteenth time that the “fundamentals of our economy are strong.” As recently as Tuesday he had not yet even read the two-and-a-half-page bailout proposal first circulated by Hank Paulson last weekend. “I have not had a chance to see it in writing,” he explained. (Maybe he was waiting for it to arrive by Western Union instead of PDF.)

Then came Black Wednesday — not for the stock market, which was holding steady in anticipation of Washington action, but for McCain. As the widely accepted narrative has it, his come-to-Jesus moment arrived that morning, when he awoke to discover that Barack Obama had surged ahead by nine percentage points in the Washington Post/ABC News poll . The McCain campaign hastily suited up its own pollster to belittle that finding — only to be drowned out by a fusillade of new polls from Fox News , Marist and CNN/Time , each with numbers closer to Post/ABC than not. Obama was rising most everywhere except the moose strongholds of Alaska and Montana.

That was not the only bad news raining down on McCain. His camp knew what Katie Couric had in the can from her interview with Sarah Palin . The first excerpt was to be broadcast by CBS that night, and it had to be upstaged fast.

But even that wasn’t the top political threat McCain faced last week. Bigger still was the mounting evidence of the seamless synergy between his campaign and Fannie Mae and Freddie Mac, the mortgage monsters at the heart of the housing bust that set off our current calamity. Most of all, it was the fast-moving events on that front that precipitated his panic to roll out his diversionary, over-the-top theatrics on Wednesday.

What we were learning — through The New York Times , Newsweek and Roll Call — was ugly. Davis Manafort, the lobbying firm owned by McCain’s campaign manager, Rick Davis, had received $15,000 a month from Freddie Mac from late 2005 until last month. This was in addition to the $30,000 a month that Davis was paid from 2000 to 2005 by the so-called Homeownership Alliance, an advocacy organization that he headed and that was financed by Freddie and Fannie to fight regulation.

The McCain campaign tried to pre-emptively deflect such revelations by reviving the old Rove trick of accusing your opponent of your own biggest failings. It ran attack ads about Obama’s own links to the mortgage giants. But neither of the former Freddie-Fannie executives vilified in those ads, Franklin Raines and James Johnson , had worked at those companies lately or are currently associated with the Obama campaign. (Raines never worked for the campaign at all .) By contrast, Davis is the tip of the Freddie-Fannie-McCain iceberg. McCain’s senior adviser , his campaign’s vice chairman, his Congressional liaison and the reported head of his White House transition team all either made fortunes from recent Freddie-Fannie lobbying or were players in firms that did.

By Wednesday, the McCain campaign’s latest tactic for countering this news — attacking the press, especially The Times — was paying diminishing returns. Davis abruptly canceled his scheduled appearance that day at a weekly reporters’ lunch sponsored by The Christian Science Monitor, escaping any further questions by pleading that he had to hit the campaign trail. (He turned up at the “21” Club in New York that night, wining and dining McCain fund-raisers.)

It’s then that Angry Old Ironsides McCain suddenly emerged to bark that our financial distress was “the greatest crisis we’ve faced, clearly, since World War II” — even greater than the Russia-Georgia conflict, which in August he had called the “first probably serious crisis internationally since the end of the cold war.” Campaigns, debates and no doubt Bristol Palin’s nuptials had to be suspended immediately so he could ride to the rescue, with Joe Lieberman as his Robin.

Yet even as he huffed and puffed about being a “leader,” McCain took no action and felt no urgency. As his Congressional colleagues worked tirelessly in Washington, he malingered in New York. He checked out the suffering on Main Street (or perhaps High Street) by conferring with Lady Lynn Forester de Rothschild, the Hillary-turned-McCain supporter best known for her fabulous London digs and her diatribes against Obama’s elitism. McCain also found time to have a well-publicized chat with one of those celebrities he so disdains , Bono, and to give a self-promoting public speech at the Clinton Global Initiative.

There was no suspension of his campaign. His surrogates and ads remained on television. Huffington Post bloggers, working the phones, couldn’t find a single McCain campaign office that had gone on hiatus. This “suspension” ruse was an exact replay of McCain’s self-righteous “suspension” of the G.O.P. convention as Hurricane Gustav arrived on Labor Day. “We will put aside our political hats and put on our American hats,” he declared then , solemnly pledging that conventioneers would help those in need. But as anyone in the Twin Cities could see, the assembled put on their party hats instead, piling into the lobbyists’ bacchanals earlier than scheduled, albeit on the down-low.

Much of the press paid lip service to McCain’s new “suspension” as it had to its prototype. In truth, the only campaign activity McCain did drop was a Wednesday evening taping with David Letterman. Don’t mess with Dave. Picking up where the “The View” left off in speaking truth to power, the uncharacteristically furious host hammered the absent McCain on and off for 40 minutes, repeatedly observing that the cancellation “didn’t smell right.”

In a journalistic coup de grâce worthy of “60 Minutes,” Letterman went on to unmask his no-show guest as a liar. McCain had phoned himself that afternoon to say he was “getting on a plane immediately” to deal with the grave situation in Washington, Letterman told the audience. Then he showed video of McCain being touched up by a makeup artist while awaiting an interview by Couric that same evening at another CBS studio in New York.

It’s not hard to guess why McCain had blown off Letterman for Couric at the last minute. The McCain campaign’s high anxiety about the disastrous Couric-Palin sit-down was skyrocketing as advance excerpts flooded the Internet. By offering his own interview to Couric for the same night, McCain hoped (in vain) to dilute Palin’s primacy on the “CBS Evening News.”

Letterman’s most mordant laughs on Wednesday came when he riffed about McCain’s campaign “suspension”: “Do you suspend your campaign? No, because that makes me think maybe there will be other things down the road, like if he’s in the White House, he might just suspend being president. I mean, we’ve got a guy like that now!”

That’s no joke. Bush has so little credibility he can govern only through surrogates (Paulson is the new Petraeus). When he spoke about the economic crisis in prime time earlier that same night, he registered as no more than an irritating speed bump en route to “David Blaine: Dive of Death.”

It’s that utter power vacuum that gave McCain the opening to pull his potentially catastrophic display of economic “leadership” last week. He may be the first presidential candidate in our history to risk wrecking the country even before being voted into the Oval Office.

I know Wall Street is crumbling, but Washington needs to start paying attention:

Putin’s in bed with Hugo Chavez.

North Korean Nukes are back in business.

Iran is keeping on keeping on.

Pakistan is playing chicken with US Troops in Afghanistan.

Turkey playing war games against Kurds in Iraq.

President Bush will most certainly go down in history as the worst President in American History and one of the worst leaders of all time.

The Bush Administration’s proposed $700 billion Wall Street Bail Out proposal is a collosal mistake for the US economy and the American people no matter what restrictions and limitations Congress is able to impose on a power-hungry Treasury Secretary Henry Paulson.

This “rescue plan” forces taxpayers to reward destructive and negligent business practices and does not address the ruptures in the foundation of the US financial system: deregulation of banks and financial firms, the overturn of the Glass-Steagal Act and a pronounced crony corporate business model which espouses a lack of transparency, limited share-holder input, misleading sales tactics and irresponsible lending.

If Congress actually cared “protecting the taxpayer” then lawmakers would attack the root of the current problem: declining home values and criminal mortgage rates.

Why not use $700 billion dollars to help homeowners keep their homes by purchasing foreclosed homes and offering affordable and reasonable mortgages?  It could be a program similar to the Federal Student Loan program which gives millions of Americans the opportunity to pursue a higher education at affordable rates.  It doesn’t take a MBA or PHD in economics to figure this out.

A healthy Main Street leads to a healthy Wall Street, but not necessarily the other way around.

Stop the Socialist Spendathon
Try pro-market, pro-growth solutions instead.

By Deroy Murdock

It is beyond irritating to watch President Bush, Treasury Secretary Henry Paulson, and Federal Reserve Chairman Ben Bernanke gift-wrap their $700-billion early Christmas present for financially irresponsible bankers and the overleveraged borrowers who love them. These “three wise men” consider theirs the only method to stop the turmoil roiling trading desks from Gotham to Tokyo.

“Action by the Congress is urgently required to stabilize the situation and avert what otherwise could be very serious consequences for our financial markets and for our economy,” Bernanke told the Senate Banking Committee Tuesday.

But this mother of all government interventions is unlike a long, cold hypodermic needle in the belly: an inescapable misery, but preferable to death by rabies. There actually are desirable alternatives to building socialism and saddling every American man, woman, and child with another $2,300 in unjustified federal spending.

One option is to instruct the geniuses from Fannie Mae to Wall Street to deal with it. They made this mess; they should mop it up. Cut back, sell assets, develop fresh services, or get new jobs. Absent a federal bailout, Lehman Brothers sold parts of itself to Barclay’s Bank. Facing Uncle Sam’s cold shoulder, Merrill Lynch ran into the loving arms of Bank of America. Merrill’s customers will survive, and its employees will work for B of A or seek their fortunes elsewhere.

It may take time and tightened belts, but padlocking Washington’s bailout window will offer a generation of “masters of the universe” lessons that America’s Mr. Rogers-in-Chief cannot teach: Keep your winnings, but own your losses. If you fall on your face, especially after dancing drunk on the roof, Uncle Sam may empathize, but he no longer will rush in to swaddle you in silk sheets and place your bruised head on pillows stuffed with crisp $100 bills.

Other options exist, of course — and while they lack the bracing appeal of this sort of financial Darwinism, they remain far more attractive than our current policy of “survival of the fattest.”

Rep. Jeb Hensarling (R., Texas) chairs the Republican Study Committee, the congressional caucus of idea-driven, free-market stalwarts. These practicing Reaganites seem appalled to watch their GOP president morph before their eyes from GWB to LBJ to FDR. At a Capitol Hill press conference at high noon on Tuesday, Hensarling and a dozen RSC members expressed deep misgivings about Bush’s $700-billion baby. Preferring to drown it in the bathwater, Hensarling and his band of true believers rejected Bush’s collectivism and offered their own proposals for escaping this rubble — and returning America to a path of robust growth:

Give the capital-gains tax a two-year vacation. “Suspending capital gains taxes would bring as much as a trillion dollars of capital sitting on the sidelines back into the market,” Hensarling predicts. Also, as the Tax Foundation proposes, cutting America’s 35-percent corporate tax — the industrialized world’s second highest, after Japan’s — would boost U.S. global competitiveness. Since equity prices partially reflect long-term after-tax profits, lowering corporate levies should buoy stock markets.

Denationalize, then privatize Fannie and Freddie. “These troubled financial Frankensteins — created in a government laboratory — are not creatures of the free enterprise system,” Hensarling said. “We must ultimately take their monopoly powers away and return them to the marketplace.” Why not array Fannie’s and Freddie’s loans according to mortgage holders’ surnames? They then could be divided alphabetically into 26 units and auctioned off.

Waive “mark-to-market” accounting. As the Competitive Enterprise Institute’s John Berlau argues, when distressed mortgage-backed securities sell at bargain-basement prices, unhelpful new bookkeeping regulations require that similar instruments elsewhere — including viable loans — be valued at equally low prices. This needlessly stains balance sheets.

Strengthen the dollar. Bernanke should boost U.S. currency, not pose as America’s uber-stock broker. A strong dollar lowers inflation, cheapens oil, and soothes world markets.

Bush’s bailout bonanza began with $29 billion for Bear Sterns. Then came the taxpayer-financed purchase of an 80-percent stake in AIG. And while the public and press gaped open-mouthed at the $700 billion request to rescue the financial-services sector, Washington quietly passed $25 billion to the auto industry. Doubtless, credit-card companies now await their slab of bacon. This cavalcade of giveaways and takeovers monumentally betrays the Republican Party’s most sacred tenets.

Even worse, Bush’s hyper-statism offers nothing imaginative. It takes brains to generate interesting ideas like Hensarling & Co.’s. It takes mere muscle to nationalize companies and toss handfuls of cash into the air. Just ask Eva Peron.

— New York commentator Deroy Murdock is a columnist with the Scripps Howard News Service and a media fellow with the Hoover Institution.

Everyone should be waking up to Thomas Friedman’s column in the New York Times today. He puts it plain and clear why McCain-Clinton’s ponzi-scheme “gas tax break” is a ruinous plan for an already nose-diving “energy policy”.

“If you are going to use tax policy to shape energy strategy then you want to raise taxes on the things you want to discourage — gasoline consumption and gas-guzzling cars — and you want to lower taxes on the things you want to encourage — new, renewable energy technologies. We are doing just the opposite.” - Thomas Friedman

Americans should be outraged by their elected officials squabbling over energy policy in Washington. Has the oil industry paid everyone off??? Otherwise Congress’ actions and inaction simply make no sense at all.