Good morning and welcome once again to this weekly exercise of laughing in the face of utter futility known as the Sunday Morning Liveblog. Who'd ever think it? Such a squalid little ending! Watching the Dow descending, just as far as it could go. Now we are going to learn things that you didn't want to know, mainly from the King of the Sunday Morning Bonershrinkers, Hank Paulson, who's going to be all over the programs today.
This stuff, sad to say, just isn't my forte, so you particularly astute and savvy commenters should settle in and help provide the sort of insight I cannot. I can say that over the past week, I've gone from being uninformed to more informed about things like Credit Default Swaps, but my opinion on how truly FUBAR our financial system seems has only grown in inverse proportion to the increase of penetrating awareness. It's like an onion, where the more you peel it, the more you cry.
Anyway, please bring your A-game to the commenting. And feel free to send emails (Ana Marie Cox and I will be shooting a vlog later, so if you have questions, this is a good time to send them our way.) And there's a musical theater reference buried within the first paragraph. Can you guess it before my colleague Rachel Sklar? Probably not!
FOX NEWS SUNDAY
Ahh, the tyranny of television programming that forces me to begin every Sunday staring the pinch-faced goober known as Chris Wallace. It's no wonder that a twinge of panic-slash-depression settles in to my soul every Saturday night! Next week, I might do myself the favor and sleep in.
All right. Gonna get right into it with Paulson. How dire is the situation, Wallace asks? Paulson says that there are clogs, and farmers can't get loans, and OH NO retirement income could be threatened! He makes up a word 'illiquid" and says "I can't say there won't be more financial systems that won't have problems."
"We're not doing this to protect the financial institutions, in and of themselves...we're protecting the American taxpayer." By giving billions of dollars to financial institutions. Paulson says that the administration is going to be listening to "experts," which remind one of the many "expert" generals who became "retired" generals because it was no fun listening to their expertise.
"What guarantees are there that Americans won't end up holding billions of dollars of bad paper?" Paulson says there are no guarantees. I think the problem with the question is the use of the phrase "end up." "End up?" Aren't Americans holding billions of dollars of bad paper RIGHT NOW?
Do you limit executive salaries? OF COURSE YOU DO! Big salaries go to people who know what they are doing, right? Who don't cause financial armageddon?
What if the Democrats add relief for mortgage "forecloshah" as Wallace pronounces it, will the President veto it? Paulson says there should be a mortgage relief component! Interesting.
Fannie and Freddie are examples where the government owned up to its responsibilities, Paulson says of two programs offloaded years ago because the Johnson administration wanted to balance its budget on the cheap. Now we own it again - and I mean "we," the people. Hooray for our new responsibilities! And hey, AIG, too! I don't know how much of AIG we bought, by the way, but it's been pointed out to me that we probably bought just enough to get in WAY DEEP but not so much that we are required to place that debt on the balance sheet at the moment.
Now Wallace pulls a Russert: MISTER PAULSON! YOU ONCE SAID THE FINANCIAL MARKETS WERE STABLE! What do you think about that? The answer is he doesn't think much about it! We couldn't have gotten Congress to buy illiquid assets unless something urgent happens.
Paulson then "guarantees" that anyone in an FDIC backed bank are going to keep their money! Everyone's savings are safe! We can have confidence! Until the peeple who manage the Social Security "trust fund" walk over to the Treasury with a stack of bonds to say, "Hello! We'd like this money, now, please!"
Time for Kyl and Schumer to do battle over how much partisan hoo-hah they can add to the problem. Schumer, right off the bat, says mortgage relief is going to be in the bailout bill. He and John Kyl are working on the weekends! They are that serious! But they are not going to "CHRISTMAS TREE" this bill! WHY WON'T CHARLES SCHUMER SUPPORT CHRISTMAS TREES?
Kyl hasn't got it in him to fight back on this with heat, probably because he, like everyone else, is trying to lead with calm. Wallace admonishes Kyl for getting "in the weeds," but Schumer backs Kyl out, "It's hard not too." Schumer makes an analogy that there are arteries clogged, and they need to prevent a heart attack. Uhm...so, eat better? Avoid fatty derivatives? NO TAXPAYER FUNDED BALLOON ANGIOPLASTIES FOR EVERYONE!
OOOH. Big tiff over Joe Biden's "paying taxes is patriotic" remark. "Joe Biden put it in his way," Schumer says. TRANSLATION: Joe Biden says some stuff! Kyl runs McCain's countering talking points, but these two are really working hard to present as united a front as possible. Is that an after-effect of this economic meltdown? A softening of surrogacy? Well, Schumer amps up his support a little bit more?
In responding to McCain's "unbridled greed" remark, Kyl seems to be coming out in favor of, uhm...bridles. Democrats were unwilling to participate in regulation! Dogs are sleeping with cats!
Great line from Schumer, "McCain, in one week, went from sounding like Milton Friedman to sounding like Huey Long." Kyl continues to paint his party as the party of regulation.
In honor of Bank Of America's purchase of Merrill Lynch, we present you with the song stylings of the Bank Of America Merger Douchebag:
Panel Time! What does Bill Kristol think about the massive socialization of risk? He's shocked! And for more, you should probably read Sebastian Mallaby's "devastating critique."
Wallace ties events to the poll shift, with Obama garnering an uptick that Mara Liasson attributes not to Obama's skill, but to McCain's gaffes and the traditional advantage Dems receive during times of financial crisis. I agree! Much of the certain economic trends favor Obama going forward, but what have we be learning? It's not good enough to expect to win the White House by default. Obama and McCain are both captives to events. The economic worries aren't going away, but you know what could come back? Foreign policy concerns! You just KNOW bin Laden's prepping another one of his mixtapes, what happens when it drops? Is David Axelrod going to be October Surprised? He'd better take the opportunity, while events suit it, to get some strong McCain foreign policy critiques readied, because you have got to fight McCain where he's strongest (even if that strength is based more on perception than good sense). But I've been saying that for months!
Well, let's talk about the upcoming presidential debate! Fred Barnes says John McCain needs to look like a "peacemaker." Liasson says that McCain basically, cannot lose his mind and go all crazyfaced. Kristol says he needs to invoke Hillary Clinton, all the time, as well as "Surge." And Juan Williams says he needs to hit hard on foreign policy, and tie "the surge to the economy." WHICH IS THE ONE THING I WOULD NOT ATTEMPT.
On Obama's side, Barnes says he needs to "look like a Commander-in-Chief." Which Barnes, of course, thinks he won't do. Barnes basically thinks the military voters need a bunch of shibboleths, because they aren't already donating six dollars to every one they give McCain! Liasson says, "Be crisp, not professorial." Kristol says Obama needs to talk about all the Republicans who back him - because God knows there aren't any Democrats who know a blessed thing about foreign policy! Juan Williams says tie McCain to Bush, blah blah blah.
FACE THE NATION
Of this bailout package, Matty has a pretty strong indictment:
The plan is bad. But bad policies get enacted all the time. But we're at a point now where congress is, allegedly, in the hands of progressive leadership. Simply put, if congressional Democrats manage to acquiesce in a plan that spends $700 billion on a bailout while doing nothing for average working people and giving the taxpayer virtually no upside in a way that guarantees that even electoral victory would give an Obama administration no resources with which to implement a progressive domestic agenda in 2009 then everyone's going to have to give serious consideration to becoming a pretty hard-core libertarian.
It'd be one thing for a bunch of conservative politicians to ram a terrible policy through. Then we could say "well, if some progressives win the next election things will be different." But if this comes through an allegedly progressive congress then the whole enterprise starts looking pretty hollow.
Pretty hollow? Consider the text of Section 8 of this plan!
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
This is how Congressional oversight of the Federal purse ends: not with a bang, with a whimper.
Commenter "jetfueler" forces me to make a correction. "Illiquid" is, indeed, a word. Paulson did not make it up. It was probably, like "tintinnabulation," invented by Edgar Allan Poe, since he specialized in doom. I'm a little prone to prevailing against words that sound jargon-y this week, in the wake of "verbage" and "oversighting."
Also: you musical theatre buffs wake up WAY TOO EARLY. Is it because Rent finally closed? The answer, was Chess - a weird Tim Rice/Two Dudes from Abba freakout about testy chess players, Cold War politics, and the sort of music that passes on Broadway as HOTT LIXX. True story: my wife was in a production of Chess once! And in the cast with her was a woman who many of you now know as "Joan Holloway."
Speaking of Mad Men: Henry Paulson is back on my teevee. When capital markets freeze up, everyone suffers, he says. It's a situation that couldn't be allowed to continue! It has its roots in irresponsible actions. And this began as a way of making this SEPARATE AND DISTINCT FROM THE IRAQ WAR.
Was the system on the verge of collapse. Schieffer asks. Paulson didn't say that! Oh no! Just a clog! Just needed some Drano! $70 billion worth of Roto-Rooting.
I wish I was TiVoing this. Because I'd be playing this over and over again, just because what Paulson's doing with his hands is MESMERIZING. He's floating them up and down, like he was massaging an invisible back. Hope he gives the economy a happy ending, right here, on national teevee!
Oh boy! Barney Frank versus Richard Shelby! Frank says that he and Hank have different opinions on "clean," and that stimulus and putting the kibosh on executive payouts are on the table, as is mortgage relief - but, he thinks the government needs "to buy up the bad paper." OOOPS. I think what Frank meant is that YOU need to buy up the bad paper! Unless Barney Frank is having a bake sale to raise money for this that I haven't heard of!
Richard Shelby is like an alien muppet.
Frank, speaking only for himseld, calls for a "surtax" on the wealthy, for these mistakes. Shelby says that "he's not a taxer," but when you add a trillion to the debt, "there's got to be a reckoning." He also says it should be up to a board of directors to decide how shiny all the golden parachutes should be. Government-owned entities, however, are a different story.
Frank says that this week, the Congress was told there would be very dire consequences for the economy. HA! This week they learned this! Just wait until the week comes when they discover they are on the hook for this stuff called Medicaid! That's gonna be a fun week for them!
"Being Jewish, I don't normally do this, but I want to say an 'amen' to Senator Shelby." Man, there's nothing like wealth getting threatened to make political opponents into bedfellows, is there? The bald eagle better watch out! It looks like an origami bird made from a hundred dollar bill could become our national bird!
Bob Schieffer says that what bothers him about this mess is that all this horrible stuff that happened happened "within the law." He admits that he doesn't have the technical expertise to know whether this bailout will work - the list of media figures willing to admit that won't be very long, I'm sad to say.
I hate to criticize our site's advertisers, but with the economy in such crisis, can we REALLY afford a remake of the television show Knight Rider?
THE CHRIS MATTHEWS SHOW
A commenter asks: "What do you eat for breakfast on Sunday morning that prevents you from puking all over the t.v. box?" GOOD QUESTION. Typically, I keep an empty stomach until Meet The Press is over. That leaves only the raw bile, heaving it's way up, which I try to tamp down with coffee. I have just put on a third pot of that, by the way! (Though this will be half-caff, shared with my wife, who mainly eschews caffeine. NOT BY CHOICE!)
So, this CM SHOW was all filmed before the bailout package, so it's going to be a lot of debate talk. Norah O'Donnell, Bob Woodward, Elizabeth Bumiller, and Richard Stengel are on. Stengel says that Obama should be able to paint himself as FDR. Hey, what with Hank Paulson fashioning his own bizarro-universe New Deal package, maybe that's possible. Bumiller points out what we already know: that McCain has had a bad week and he flip-flops by the hour. Bob Woodward, as is his wont, answers the question with a question, and thinks that Warren Buffet should be the Treasury Secretary. Norah gets a little specific, pointing out the reasons why McCain buried himself over the week.
Oy. Here's the quote from The War Within that Matthews uses to set up the next segment.
"The next president will face a complex set of organizational, military, political and leadership challenges because of the Iraq War. It won't be solved with slogans or party doctrine, or through wishful thinking. When the next president steps into the Oval Office on January 20, 2009, and surveys what he has inherited, I suspect he will be sobered by all that has been left behind."
Jeez. It took FOUR BOOKS for Woodward to arrive at the point where the Iraq War becomes MAYBE IMPORTANT? Isn't this comfortably in the realm of the obvious? There's another quote from the book I wish I had in front of me, that captures the president saying that it was hard to conclude that the Iraq War was succeeding when the news reports were "25 dead here" and "50 dead there." GEE. YOU THINK?
Anyway, it's just great that all this is being written about, now that nothing can be done about it. Really. Just fantastic.
Bush's "Don't let it fail," Woodward says, is indicative of a diminishment of Presidential "bluster." I see it as a telling admission that failure was an option from the get-go.
Elisabeth Bumiller says that "McCain and Obama aren't very far away from each other" in terms of what they want to do militarily. And that's the wrongest thing I've heard this Sunday!
Matthews wants to know how Obama beats McCain on foreign policy, since McCain is "in a uniform" - within which he crashed many planes. O'Donnell says Obama wins on judgement and temperament. Notice "temperament" coming into the discussion lately? All part of the media backlash.
Watch McCain, though, at the debate: "My friends" is his "Serenity now."
Stengel adds "knowledge" to the foreign policy equation, and he's got "surge" pushback more or less correct, but O'Donnell and Woodward each have nice enhancements, other factors in peace making. What none of them seem to understand about the diminishment of violence in Iraq, is that it's the sectarian cleansing, stupid. Adding to the copious amount of study that's already been done on this matter, Matt Yglesias has found an interesting study from UCLA, that finds impact links within the patterns of electricity usage. Obama had better be studying this research, and he might as well borrow Matt's first two sentences wholesale for his "Didn't the 'surge' work?" question on Friday:
The fly in the ointment of the feel good story of "the surge" and improved counterinsurgency tactics bringing security to Iraq has always been that the level of sectarian violence in Baghdad actually kept increasing for quite a while after the new problem was in place. By the time the violence drop occurred, Baghdad neighborhoods had generally become monosectarian enclaves after a process of cleansing.
Since "The Surge" is the only part of the entire Iraq War McCain is willing to talk about, I'd maybe introduce the topic by suggesting that if John McCain or George Bush had come before the United States in March 2003 to tell the American people needed to spend trillions of dollars and many, many pints of American blood in Iraq for the sole purpose of proving the efficacy of reinforcements, they would have been - not criticized, not impeached - but sent to a rubber room somewhere.
Anyway, Ana Marie has come through for us, and supplies part of Woodward's book that is truly sobering. She writes: "Page 101, Bush is reflecting on the reports he's getting from Megan O'Sullivan around May 2006."
"The whole time I'm asking the question, 'Are people able to live peaceful lives?'" the president recalled. O'Sullivan was saying no, and he agreed. "The answer's also no from the number of deaths I'm seeing and the number of, you know, the famous attacks chart." Also, the reports of 50 bodies a day showing up bound, with bullets in the back of the head.
"It's a sign the strategy's not working," Bush said. "It becomes apparent when you're picking up reports saying, 'Twenty-five people murdered here. Thirty people's throats slit here. Fifty-five here.'"
In 2006, the President says it's "become apparent" that "the strategy's not working." That's 2006! Why wasn't it apparent in 2004? Why isn't it apparent now? The celebrated "surge" has only returned violence in Iraq to the 2004 levels.
And you wonder why reasonable people drink to excess in this country!
Everyone more or less agrees on the same thing: Obama has the momentum, the Palin honeymoon is over, Obama's debate performance is critical to maintaining momentum, and this debate may be the most watched debate ever. EVER. McCain and Obama should be approaching this debate as a truly historic event.
By the way, as is my luck, it seems that THIS WEEK WITH GEORGE STEPHANOPOULOS was the show to watch this Sunday! Sam has got a story up on it, and several commenters share highlights, below.
What "pitfalls" do the candidates need to avoid? Chris says Obama needs to cut down on the verbosity, McCain needs to stop being dismissive.
DID YOU HEAR THAT RICHARD STENGEL HOSTED A SERVICE FORUM? HE DID!
Bumiller warns of the creepy McCain smile, just like THE ONION did!
Everyone says that McCain's strong suit is foreign policy and military bearing. Apparently, the pundit class has decided that incoherent bellicosity is the new gravitas. I mean, when McCain said, "We are all Georgians," I thought, "I hope he has some magic in that old, comb-overed head that can make us all members of the Marine Corps! Because we're in too short supply of those guys to back up all this saber-rattling for the benefit of people who don't seem to want to remain in Georgia anyway! Clearly, for Obama to compete, he's going to need to call for more wars than McCain.
Here are the things Matthews doesn't know: O'Donnell says Obama's been running negative ads, Woodward says that the Iraq War is not over and toughness (MORE WARS! LOTS OF TOUGH ASS WARS!) counts in the debates. Bumiller says Condi Rice wants to write a "serious foreign policy book." It's fun to have crazy, impossible dreams. I want to poop gold doubloons! Stengel says that Michigan is going to get push-polled like there is no tomorrow.
Is the Palin bounce over? O'Donnell says she appeals to the base, but not to independent women. Woodward says some stuff that doesn't make any sense. Bumiller says that Palin's peaked, but she's still a bigger draw than McCain. Stengel attests to his own career of beergoggling, apparently. I think one of the great ironies of Palin is that she's not succeeding as a "reformer," rather, she's succeeding as a sop to the traditional GOP - who McCain claims to want to stand up to.
MEET THE PRESS
As I get, finally, to MEET THE PRESS, some vital news: Washington is up 7-0 on Arizona, thanks to Clinton Portis!
Anyway, FINANCIAL CRISIS! Erin Burnett, Steven Pearlstein, Michael Bloomberg. And, SIGH. Henry Paulson. Brokaw interviewed him in Beijing, but didn't think he'd be back on the show so quickly. Let that be a measure of how far off the chart the media was, in attending to this financial crisis!
Anyway, I've seen Paulson's boilerplate and come to understand that "illiquid" is a word. "There is a lot of risk in the system," Paulson says, and it is our risk, now. Mine and yours. Don't worry about ol' King Hank! He's gonna come out of this okay! You and me, different story.
"I don't like the fact that the taxpayer has been put in this situation," Paulson says. Tea and sympathy from the oligarchy this morning. (The tea? Tres weak!)
"This is a serious situation, and we need to avoid this." See, if I had been questioning Paulson, I'd challenge him on his verb tenses.
"I won't bet against the American people," Paulson says. And hey. That's real sweet of him. But the bets that got made, got made, to the detriment of the American people. Now, we're all going to bet on Paulson - note that when Brokaw mentioned the fact that he's going to leave office soon, Paulson said, "We need to act very quickly." Hell, if I knew that I was going to have a three month window to spend billions of your dollars without any oversight from the Legislature or the courts, I'd want to act quickly, too!
WE CAN'T DEAL WITH ENFORCEMENT AND OVERSIGHT RIGHT NOW! I GOT TO SPEND YOUR MONEY!
Brokaw shrewdly notes that a collapse in the money-market sector could directly impact a lot of nuts and bolts banking. "You just made my case for me," Paulson exclaims. ME WANTY POWER AND MONEY, PLS!
None of this restores my confidence, I'm afraid.
Michael Bloomberg, who tried to make congestion pricing happen, because it's comBESTion pricing. He says "Hank is the right guy for now." This is "a problem for the world," which must be why, under the bailout plan, we're going to be propping up needy foreign banks as well.
Credit Brokaw, who places the call for alacrity in this matter in a similar vein to many other hastily considered plans: like Iraq War, like Patriot Act. "We don't have the time," Bloomberg says.
I have to throw a little water on this argument that our "regulatory arm" is outmoded, because all these different industries now do the same thing: isn't that the logical outcome of repealing the Glass-Steagal Act? When do we become good at talking straight about consequences and outcomes. When does the endless grabbing our ass out of the fire at the last second cease?
"For them to have a better world for their kids," Bloomberg says, "the taxpayer needs to pay for it upfront." Jesus. It's starting to feel like a car dealership in here!
Bloomberg puts his sights on hosting MTP. I still think that Bob Costas deserves a shot at this! He's done the best interview with President Bush this year!
After beating around the bush, Bloomberg admits that this will probably be a year of no-growth. I wish I could share his optimism on the essential self-critical nature of America. Seems to me that we have a deeply ingrained crisis on personal responsibility among our leaders. I wonder how that happened?
Bloomberg, in dispensing what needs to be sone, shifts with astounding rapidity between GOP and Democratic talking points. On the difference between bailing out Freddie/Fannie/AIG versus Lehman, the story seems to be that if you structure you money in the most effed-up way possible, you'll get bailed out, because who has the time to wrap their head around what happened? Nationalize and move on.
Head spins again, because everything he's saying about the automotive industry makes sense.
SNIPPY! Tom Brokaw says, "Joe Biden, who is the vice-presidential candidate on the Democratic side," to which Bloomberg snips, "I know who he is." Bloomberg, very softly, seems to agree that paying taxes is patriotic. Also: they pay for services, whether you are patriotic or not.
Bloomberg won't endorse, so, I'll let you read the tea leaves: "It is going to require great judgement and LEADERSHIP on the part of whoever wins. Their main job is going to be to lead Congress to work together to get the kind of regulation, the kind of tax policy...that this country needs.
Trapezoid time! Erin Burnett says that the deal is getting done by Friday, but that the Dems are working to limit CEO compensation and offer stimulus," Steve Liesman says that the government is going to be auctioning off crappy derivatives instead of actual assets, which...doesn't sound smart to me? Beyond my pay grade, folks. Sorry.
Steven Pearlstein's Thursday column? A fantastic piece of writing. Man, he can put words together and make them sing. That's about as far as I can evaluate his argument, other than to say his litany of doom feels appropriate to me. "There were no grownups in the game," he says today. Liesman says that the "high-flying days" of Wall Street are over. I guess the human impulse for greed is getting surgically removed from our collective human consciousness then?
Burnett: "The contention...that once the housing prices stop dropping, we're going to be all right, is questionable." I should say so! You know, those that even survive the housing crash, handcuffed to their homes for life, are not going to be buying new cars in 2009. They aren't going on vacation in 2009. They aren't going out to dinner in 2009. Their kids might have to defer college enrollment. All sorts of goods and services, in the down economy they face, become "luxuries," and the actual luxuries come right off the table. And remember, I'm talking about the people who get to STAY in their homes!
Brokaw: "But I think the judgement of a lot of people from around the country was that neither candidate distinguished themselves." SERIOUSLY, TOM BROKAW? "The fundamentals of our economy are strong," Tom Brokaw? "The candidate I flack for lacks the ability to run a business," Tom Brokaw? "I invented the Blackberry," Tom Brokaw? "HEY, FOR NO GOOD REASON OTHER THAN THE FACT THAT I DO NOT WANT TO ADMIT I WAS MOMENTARILY CONFUSED, LET'S POINTLESSLY GET INTO A DIPLOMATIC TIFF WITH BLOODY SPAIN FOR SOME GODDAMNED REASON," Tom Brokaw? Oh, oh...I'm really sorry, Tom Brokaw! Here I thought you were an EFFING NEWSMAN OR SOMETHING. Well, well! My, my! I have to admit, you actually do a great job as host of MEET THE PRESS, relative to all the other IGNORANT TURNIP FARMERS OUT THERE.
Oh, crimony! Brokaw IS aware of one of McCain's nonsensical moments that I didn't even conclude: saying that he would, as President, fire Chris Cox! Which, as President, he could not do, but doesn't know that, because he's a dummy, I guess! BUT OH, YEAH, Tom Brokaw, this week...it's been a REAL MIXED BAG.
Liesman complains that he got an angry email from someone in the McCain campaign. Really? You got just the one? Angry emails are, like, the main product of the McCain campaign! Each is so unique and special, too! I'm surprised there isn't some sort of swap market for angry McCain campaign emails. They are like Beanie Babies!
"At Capitol Hill?" No. ON Capitol Hill. "At Capitol Hill" is DC's "IN the LES."
Tom Brokaw wants you to know that tonight, on CNBC, there is a one-hour special, "Wall Street Crisis: Is Your Money Safe?" So, tune in and find out what CNBC host will successfully say the word "NO" for sixty minutes without interruption!
OK. I am done watching Henry Paulson talk about what he's going to do, and I need to get prepared for what he's going to do to me. It can all be boiled into a relevant, six-letter acronym: B.O.H.I.C.A. Enjoy researching what that means, people! Invest in some lubricant! See you next week!