Why Conservatives Led the Fight Against the Bailout Deal

By Joshua Holland
Their revolt was anything but an act of courage to protect American families.

On Monday, the Bush administration's massive Wall Street bailout went down to a narrow defeat in the House. After the 228-205 vote, markets crashed, and the usual partisan finger-pointing followed. According to the Washington Post, Speaker Nancy Pelosi "maintained that Democrats 'delivered on our side of the bargain' by getting 60 percent of House Democrats to support a bill that was built around the Bush administration's proposal, whereas 67 percent of House Republicans voted against it."
At first glance, it may appear that the 133 House Republicans who broke with their party's leadership did so out of principle -- that they bravely stood up against a massive cash transfer to those most responsible for precipitating the financial crisis in the first place. They appeared to be gambling a lot in taking that principled position, despite the fact that the bailout had drawn fire from across the political spectrum. The conventional wisdom, after all, has gelled around the idea that only an unprecedented cash infusion into the ailing banking system will stave off a potential Next Great Depression. The message many rebellious conservatives sent was that it takes courage to roll the dice with the world's economy six weeks before an election, even if the public was deeply skeptical of the measure (the reality is that almost none of the lawmakers who face tight races this fall voted for the bailout, fearing a backlash from voters; Congress is not known for courage or principle on the eve of an election).
And there's no question that the bill they and 95 of their Democratic colleagues killed was an extremely bad one, even if some token nods to "Main Street" had been added to help it go down lawmakers' throats more smoothly. Democrats abandoned a key provision -- one vehemently opposed by lenders -- to allow bankruptcy judges to modify mortgages that are in the process of foreclosure, and they accepted only token limits on executive compensation for companies that would be rescued under the plan (PDF). Worst of all was a vaguely worded provision that might have allowed the Treasury to buy up bad paper at the price at which it was originally booked, rather than at those securities' largely unknowable but deeply diminished current value. That would have essentially given a small investor class an opportunity to recover its losses at the expense of the American taxpayer (and future taxpayers, as the bailout would be financed through debt).
But a deeper look reveals another picture of the legislative fight that has occupied Washington since George W. Bush first proposed the bailout. Unlike most House Democrats, who voted against the bill in an attempt to send the plan back to the drawing board to get a deal that might better protect taxpayers and homeowners, House conservatives torpedoed the measure in order to advance their own alternative "bailout," one that's an ideologically motivated back door to bailing out Wall Street without doing anything for Main Street.
The plan is notably light on detail, even for campaign season, when politicians are loath to discuss the fine points of any proposal. But based on what can be gleaned from media reports, the heart of the "alternative" scheme is for the government to sell insurance for securities based on bad loans, rather than buy up the paper directly. Supposedly, the premiums would be high enough to assure that Joe and Jane taxpayer don't get fleeced.
On its face, that idea seems both fiscally sound and decidedly conservative, in the traditional sense of the word.
But remember what the immediate problem we face is all about. The financial industry is weighed down by an enormous "shit pile" of bad paper -- mortgage-backed securities, complex derivatives and insurance-like instruments that were supposed to make all these "creative" investment vehicles somewhat sound. That shit pile, impossible to value accurately, is threatening the whole economy, as lenders hunker down and hold onto their cash reserves in an attempt to ride out the storm of foreclosures, and that's making it tough for businesses and consumers to get credit they need to expand their operations or buy new gizmos.
That's not a situation that lends itself to a government-backed insurance policy. If the premiums aren't deeply subsidized by the American public, they'll be out of reach of troubled banks by definition -- after all, if they had enough cash to cover their bad debts, which will ultimately be the job of the insurer (that's you, me and the people we know), then they wouldn't find themselves on the brink of collapse to begin with. That means the government would still end up effectively buying up the banks' worthless paper piece by piece as the underlying assets on which that paper is written go belly-up. Think of it as the government selling fire insurance for houses that are already ablaze.
So the point was not to spare the taxpayer the expense of Wall Street's shit pile. By offering an alternative plan, House conservatives abandoned a negotiating process that was, at heart, about trying to modify the disastrous Bush-Paulson plan so that it didn't just bail out the financial sector's movers and shakers without getting some concessions for working America.
The other two tenets of the alternative plan are worse still.
In keeping with the tradition of a party that has one policy solution to all economic ills -- cutting taxes on the wealthy -- the conservatives who bucked their leaders also suggested cutting capital gains taxes, even if only on a temporary basis. It's a triumph of ideology over common sense. We've seen stock markets tanking, as investors flee like rats from a sinking ship, seeking safer ground in commodities, which have gone through the roof (oil prices have been moderated somewhat by expectations of a long slowdown that would cut demand). A tax holiday on capital gains would only encourage those investors with steely nerves (and gains) who are staying in the market to join the herd, getting out while it's tax-free to do so. That can only send the already sky-high prices for food, energy and everything else even higher into the stratosphere. Ordinary working people would end up paying on both sides of the deal -- getting soaked for Wall Street's Reckless Lending Insurance and then paying through the nose to put food on the table.
Adding insult to injury is the third leg of the "alternative" bailout plan: more deregulation of the financial sector.
That's nothing short of breathtaking in its audacity. It was a lax regulatory environment that brought us to the verge of collapse in the first place. Exotic security-backed loans -- loans that didn't conform to the standards in place for banks that held deposits, including subprime loans, mortgages given to people who misstated their income and loans with heavy prepayment penalties and huge balloon payments -- are, as one would expect, faring far worse than the kinds of traditional loans that are regulated by the Federal Housing Authority or backed by Fannie Mae. Regulations passed by Congress only three months ago, as the depth of the meltdown had become clear, made "coercing a real estate appraiser to misstate a home's value" and "making a loan without regard to borrowers' ability to repay the loan from income and assets other than the home's value" a no-no; if similar commonsense regulations had been in place over the past decade, the run-up of the real estate market wouldn't have been as frenzied, and we wouldn't see the skyrocketing number of foreclosures we're witnessing today.
Again, none of this is to suggest that Americans should shed a tear for the demise of the compromise deal struck between Treasury Secretary Paulson and the Bush administration -- it was a bad deal that deserved to go down in flames. But it's also becoming increasingly evident that some sort of intervention is necessary to prevent the crisis from spreading through the entire global economy. Rather than pugnaciously cling to a failed ideology by heaping lucre on the wealthiest in the hope that it trickles down to the rest of us, Congress should be going back to the drawing board and coming up with a bailout plan rooted in a modicum of economic justice.
The House conservatives who have proven to be such a fly in the ointment are trying to go the other way -- cooking up a plan that will only deepen Main Street's pain in the name of saving it from Wall Street's predations.

Palin Not Always Speechless

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What is the True Cost?

By Robert J. Samuelson and [Pointer]
Thursday, September 25, 2008;
[The loss of Black Monday cost the USA 1.2 trillion dollar in a couple of hours.]
Love it or hate it, the true cost of Treasury Secretary Hank Paulson's proposed rescue of the financial system is not the sticker price of $700 billion. Conceivably, the government could make money; with glum assumptions, the losses would probably be less than $250 billion. No one knows the correct answer -- not Paulson, not Federal Reserve Chairman Ben Bernanke nor anyone else -- but here's how to think about the problem.
Under Paulson's proposal, the Treasury could buy distressed mortgage-backed securities. Consider a batch of hypothetical securities originally worth $100 million and paying an interest rate of 6 percent. They're no longer worth $100 million because half of the homeowners have stopped making their monthly payments. Suppose, then, that the government buys the mortgages for $50 million. It earns 6 percent on its $50 million, and if it borrowed money at 4 percent to buy the securities, it would make a tidy profit. If the government holds the securities until maturity and all the remaining homeowners repay their mortgages, the government would come out ahead.
Would something like this happen?
It could, and Pimco's Bill Gross argued in today's Post that it might, but there are several reasons it might not.
First, we don't know what price the government would pay for the mortgage-backed securities. There are conflicting goals. On the one hand, the government wants to minimize the bailout's costs to taxpayers; that would favor paying the lowest possible price. In my example, the profit would be greater if the government paid only $40 million. On the other hand, the whole idea of the bailout is to help banks and other financial institutions get rid of risky assets and replace them with cash that would encourage a resumption of normal lending and investing. That favors a higher price. If the government paid $80 million instead of $40 million, say, it would lose money.
[Paulson was not willing to accept any oversight and control, without responsibility and accountability in front of Congress nor court, what should make him the most powerful and untouchable man on earth.]
Second, we don't know how a weakening economy will affect future mortgage repayments.
[You surely know, but you don’t want to know.]
The worse the economy gets, the more homeowners will default. At the end of June, about 2.75 percent of home mortgages were in foreclosure, and an additional 6.4 percent were at least 30 days behind in their payments. The unemployment rate was 6.1 percent in August. If it rose to 7 percent or higher, defaults and delinquencies would climb. In my example, if only 25 percent of borrowers repaid their mortgages, the government would lose money.
[And without bailout a rising unemployment to 20%? Do you have an answer on that?]
No wonder members of Congress -- and the public -- are confused. My simple example captures the main unknowns, but in practice there are many more. What bonds and securities would Treasury buy? Would the government hold them to maturity or later try to resell them to private investors?
To all questions, Paulson has said in effect: Trust us.
[Well that’s a big problem. The Bush Administration did never show up to be trustworthy.]
Mark Zandi of Moody's Economy.com has crudely estimated that the ultimate cost of Paulson's plan and all the other rescues (of the mortgage giants Fannie Mae and Freddie Mac, the investment bank Bear Stearns, and the insurer AIG) won't exceed $250 billion. That's a lot, but consider that the annual federal budget runs at about $3 trillion. Compounding the confusion is this: For budget purposes, the Paulson rescue would probably be "scored" under the Federal Credit Reform Act. This law sets budget spending at the proposal's ultimate cost -- not the annual cash flows. For now, the Congressional Budget Office says there are so many unknowns that it can't make an estimate.
[That makes the check in fact a blank check and if it can be more, it shall be more. The reasoning for more will be: If we don’t spent another 700billion the first 700billion is lost for nothing. Such a reasoning can ever be repeated. So, openness, oversight and control is absolutely first necessarily.]
But the biggest unknown lies elsewhere. What happens if Congress doesn't approve the plan, or something like it? Zandi, a supporter, argues that the economy will get much weaker, that many more banks and financial institutions will fail, and that the rise of joblessness will be greater, as will the fall in tax revenue and the increase in unemployment insurance and other government payments. Is this scare talk or a realistic threat?
[You bet. Why is the Party of Fear now at once afraid of “scare talk”? History showed how it works in the 19-twenties with the same politics. Europe has showed in more recent years how to manage such a crisis. Japan has showed how it works when you are late. The Republican Party has in 20 years (Reagan 8, Bush41 4 and Bush43 8 years) Reaganomics prepared and is deliberating arranging a new Great Depression to fight an ideological war against liberalism.]
The true cost of Paulson's plan hangs on the answer, and if the danger is real and imminent, then the cost of doing nothing would be far greater.
[No, there is no Paulson’s plan anymore, thus the true costs depends on speed of the governments answer and the Republican Party anyway will not favor a bailout. They can’t sell there base a principle of the Democratic Party that government’s regulation, control and interference are necessarily and good for the economy.
The free market has to be protected against the exclusive Army of Greed to serve the broader Army of Need.]

War is Hell, But What the Hell Does it Cost?

One Week at War in Iraq and Afghanistan for $3.5 Billion
By William D. Hartung

War is hell -- deadly, dangerous, and expensive. But just how expensive is it?

In a recent interview, Nobel Prize-winning economist Joseph Stiglitz asserted that the costs of the Iraq war -- budgetary, economic, and societal -- could reach $5 trillion.

That's a hard number to comprehend. Figuring out how many times $5 trillion would circle the globe (if we took it all in one dollar bills) doesn't really help matters much, nor does estimating how many times we could paper over every square inch of Rhode Island with it. The fact that total war costs could buy six trillion donuts for volunteers to the Clinton, Obama, McCain, and Huckabee campaigns -- assuming a bulk discount -- is impressive in its own way, but not all that meaningful either. In fact, the Bush administration's war costs have already moved beyond the human scale of comprehension.

But what if we were to try another tack? How about breaking those soaring trillions down into smaller pieces, into mere millions and billions? How much, for instance, does one week of George Bush's wars cost?

Glad you asked. If we consider the wars in Iraq and Afghanistan together -- which we might as well do, since we and our children and grandchildren will be paying for them together into the distant future -- a conservative single-week estimate comes to $3.5 billion. Remember, that's per week!

By contrast, the whole international community spends less than $400 million per year on the International Atomic Energy Agency, the primary institution for monitoring and preventing the spread of nuclear weapons; that's less than one day's worth of war costs. The U.S. government spends just $1 billion per year securing and destroying loose nuclear weapons and bomb-making materials, or less than two days' worth of war costs; and Washington spends a total of just $7 billion per year on combating global warming, or a whopping two weeks' worth of war costs.

So, perhaps you're wondering, what does that $3.5 billion per week actually pay for? And how would we even know? The Bush administration submits a supplemental request -- over and above the more than $500 billion per year the Pentagon is now receiving in its official budget -- to pay for the purported costs of the wars in Iraq, Afghanistan, and for the Global War on Terrorism (GWOT). If you can stay awake long enough to read the whole 159-page document for 2008, it has some fascinating revelations.

For example, to hear the howling of the white-collar warriors in Washington every time anyone suggests knocking a nickel off administration war-spending requests, you would think that the weekly $3.5 billion outlay is all "for the troops." In fact, only 10% of it, or under $350 million per week, goes to pay and benefits for uniformed military personnel. That's less than a quarter of the weekly $1.4 billion that goes to war contractors to pay for everything from bullets to bombers. As a slogan, insisting that we need to keep the current flood of military outlays flowing "for Boeing and Lockheed Martin" just doesn't quite have the same ring to it.

You could argue, of course, that all these contracting dollars represent the most efficient way to get our troops the equipment they need to operate safely and effectively in a war zone -- but you would be wrong. Much of that money is being wasted every week on the wrong kinds of equipment at exorbitant prices. And even when it is the right kind of equipment, there are often startling delays in getting it to the battlefield, as was the case with advanced armored vehicles for the Marine Corps.

But before we get to equipment costs, let's take a look at a week's worth of another kind of support. The Pentagon and the State Department don't make a big point -- or really any kind of point -- out of telling us how much we're spending on gun-toting private-contract employees from companies like Blackwater and Triple Canopy, our "shadow army" in Iraq, but we can make an educated guess. For example, at the high end of the scale, individual employees of private military firms make up to 10 times what many U.S. enlisted personnel make, or as much as $7,500 per week. If even one-tenth of the 5,000 to 6,000 armed contract employees in Iraq make that much, we're talking about at least $40 million per week. If the rest make $1,000 a week -- an extremely conservative estimate -- then we have nearly $100 million per week going just to the armed cohort of private-contract employees operating there.

Now, let's add into that figure the whole private crew of non-government employees operating in Iraq, including all the cooks, weapons technicians, translators, interrogators, and other private-contract support personnel. That combined cost probably comes closer to $300 million per week, or almost as much as is spent on uniformed personnel by the Air Force, Army, Navy, and Marines.

By one reliable estimate, there are more contract employees in Iraq alone -- about 180,000 -- than there are U.S. troops. There are thousands more in Afghanistan. But since many of these non-military employees are poorly paid subcontract workers involved in cooking meals, doing laundry, and cleaning latrines, the total costs for the services of all private-contractor employees in Iraq probably runs somewhat less than the costs of the uniformed military. Hence our estimate.

So, if $650 million or so a week is spent on people, where does the other nearly $3 billion go? It goes for goods and services, from tanks and fighter planes to fuel and food. Most of this money ends up in the hands of private companies like Boeing, Lockheed Martin, and the former Halliburton subsidiary, Kellogg, Brown and Root.

The list of weapons and accessories paid for from our $3.5 billion is long and daunting:

$1.5 million for M-4 carbines (about 900 guns per week);
$2.3 million for machine guns (about 170 per week);
$4.3 million for Hellfire missiles (about 50 missiles per week);
$6.9 million for night vision devices (about 2,100 per week);
$10.8 million for fuel per week;
$5 million to store and transport that fuel per week;
$14.8 million for F-18E/F fighter planes per week (one every four weeks);
$23.4 million for ammunition per week;
$30.7 million for Bradley fighting vehicles (10 per week).

And that's only a very partial list. What about the more mundane items?

"Laundries, showers, and latrines" cost more than $110,000 per week;
"Parachutes and aerial delivery systems" cost $950,000 per week;
"Runway snow removal and cleaning" costs $132,000 per week;
Flares cost $50,000 per week.

Some of these figures, of course, may cover worldwide military operations for the U.S. armed forces. After all, by sticking the acronym GWOT in the title of any supplemental war-spending request, you can cram almost anything into it.
Then there are the sobering figures like: $2.4 million per week for "death gratuities" (payments to families of troops killed in action) and $10.6 million per week in "extra hazard pay."
And don't forget that all the death and destruction lurking behind these weekly numbers makes it that much harder to get people to join the military. But not to worry, $1 million per week is factored into that supplemental funding request for "advertising and recruitment" -- not enough perhaps to fill the ranks, but at least they're trying.
Keep in mind that this only gives us a sense of what we do know from the public Pentagon request; there's plenty more that we don't know. As a start, the Pentagon's breakdown of the money in its "emergency" supplemental budget leaves huge gaps.
Even your own congressman doesn't know for sure what is really in the U.S. war budget. What we do know is that the Pentagon and the military services have been stuffing more and more projects that have nothing to do with the fighting in Iraq and Afghanistan, or even the war on terror, into those war supplementals.
Layered in are requests for new equipment that will take years, or even decades, to build and may never be used in combat -- unless the Iraq war really does go on for another century, as John McCain recently suggested. These "non-war" items include high-tech armored vehicles and communications devices for the Army as well as new combat aircraft for the Air Force.
Even though these systems may never be used on our current battlefields, they are war costs nonetheless. If they weren't inserted into the supplemental requests for Iraq and Afghanistan, they might never have been funded. After all, who wants to vote against a bill that is allegedly all "for the troops," even if it includes weapons those troops will never get?
These add-ons are not small change. They probably cost in the area of $500 million per week.
Given all of this, it may sound like we have a fair amount of detail about the costs of a week of war. No such luck. Until the "supplemental" costs of war are subjected to the same scrutiny as the regular Pentagon budget, there will continue to be hundreds of millions of dollars unaccounted for each and every week that the wars go on. And there will be all sorts of money for pet projects that have nothing to do with fighting current conflicts. So don't just think of that $3.5 billion per week figure as a given. Think of it as $3.5 billion… and counting.

Doesn't that make you feel safer?

William D. Hartung is the director of the Arms and Security Initiative at the New America Foundation. He is the author of And Weapons for All (Harper Collins, 1994) and How Much Are You Making on the War, Daddy? A Quick and Dirty Guide to War Profiteering in the Bush Administration (Nation Books, 2004). His commentaries on military and economic issues have appeared in the Washington Post, the New York Times, the Los Angeles Times, Newsday, and the Nation magazine.

[Source Note: Readers who want to check out the latest Department of Defense supplemental request for war-fighting funds can click here (PDF file) and read, "FY 2008 Global War on Terror Pending Request" from the Office of the Secretary of Defense.]

Change is already Ringing the Bell

The published proposal can be found here (pdf).
When John McCain said he would suspend his campaign and the first presidential debate with Barack Obama to go to Washington and show some real leadership there, Pointer wrote September 25 on the debating site Repptide.com that Barack had nothing to do in Washington than putting his amends (listed by Pointer) on the table and return campaigning. Love it or leave it! That is the message.
McCain should not return to campaigning until substantial results in solving the problem should be reached. Bur McCain had to break his promise and it turned out that Obama did what was needed and the negotiators agreed on the message.
They had no choice and McCain c.s. all champions of deregulation, favoring the Army of Greed, that caused the mess of the financial market, could not do anything about it. Paulson had to re-balance and change his proposal. The Army of Need, called "Main Street" has to get full control over their tax-money and becomes shared owners with preference, earning the money back when times will become better, perhaps with some profit. It's the Swedish model to handle such crises.

Nevertheless, while it is a initial proposal of the Republican Administration it needs the approval of a severe amount of Republicans in House and Senate. Let's watch and wait. The only things the Republicans can do is suspend the voting some days and that's all. The free market, when it is reigned by greed and fraud, is real hellfire.
Will they vote to burn?

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Anti-Palin rally calls for Colberg removal

TROOPERGATE: More than 1,000 protesters gather in downtown Anchorage park.

A protest slamming Gov. Sarah Palin's handling of the state's so-called Troopergate investigation -- and calling for the attorney general to lose his job -- drew more than 1,000 people to the Delaney Park Strip in Anchorage on Saturday.
Protesters chanted "recall Palin!" as organizers told the crowd to push state legislators to keep after their investigation into the governor's firing of her top cop.
An investigator hired by the lawmakers is scheduled to present his report on Oct. 10.
"This report needs to be released. Not just for us ... it needs to be released for all those people in the Lower 48 who are going to make a decision on Nov. 4," Democratic blogger Linda Kellen Biegel told hundreds of protesters gathered on the Park Strip grass.
The McCain-Palin campaign dismissed the rally as nothing more than a partisan strike from Barack Obama loyalists. [Pointer: Of course it is. Barack Obama stands for enforcing truth and openness!]
The crowd lined I Street, waving signs that said "Steady on her heels, wobbly on her words" and "Dude, where's my governor?" at passing cars. They dressed as Richard Nixon, or Hillary Clinton, or as Palin herself, holding a sign that said "hold me accountable."
A group calling itself Alaskans for Truth organized the event, which at times resembled an Obama campaign rally.
Between speeches, Anchorage singer-songwriter Libby Roderick led the crowd in a chorus of "We're gonna keep on moving forward" and "Stand tall for Obama." Obama volunteers signed up supporters under a nearby tent.
"Clearly this was an Obama rally and nothing else," Palin campaign spokeswoman Meghan Stapleton said in an e-mailed statement. "The rally proves the point of partisanship which the Governor has been trying to remove from the investigation in an effort to get a fair and just result."
Organizer Camille Conte, a radio host on left-leaning KUDO 1080 AM, said the event was about holding Palin to her word, and the pro-Obama message wasn't supposed to be part of the rally.
"It was hard to stop that once it started, and the crowd seemed to want it," she said.

FIGHTING DELAY TACTICS
Next to the political fliers sat petitions calling for the removal of Attorney General Talis Colberg.
On July 28, the Legislative Council -- a bipartisan group of 12 state lawmakers -- voted to launch an abuse-of-power investigation into Palin's firing of Public Safety Commissioner Walt Monegan.
Some Republican lawmakers have tried to get the Legislative Council, or the court, to delay the investigation until after the presidential election.
Rally organizers handed out talking points Saturday urging people to e-mail and call council members and tell them to stick with the probe.
Palin initially said she'd cooperate with the investigation. Presidential candidate Sen. John McCain announced Palin as his running mate Aug. 29, and the McCain camp has argued that the investigation became a partisan witch hunt spurred by Democrats.
Colberg is suing to quash the Legislature's subpoenas of Palin aides in what's become a struggle between the state's executive and legislative branches of government.

DOGGED PROTESTERS
Nicole McCullough came to the rally with her grand-niece and grand-nephew -- twins born the day before Palin's youngest son, Trig. McCullough wore a pitbull mask with giant red lips, a reference to a Palin's joke about hockey moms, pit bulls and lipstick at the Republican National Convention.
The twins held pit bull masks too.
A Hillary Clinton supporter earlier in the election, McCullough called Palin "a female Dan Quayle" and carried a sign that read: "Gov. Pitbull: call off your McCain dogs."
It was a reference to the McCain spokespeople and attorneys, including the self-described "Truth Squad" who have been defending the governor in regular Anchorage press conferences.
The Outside lawyers are clogging Alaska's legislative process, McCullough said.
The McCain camp says it's the other side that's making things political. For example, they say statements by Sen. Hollis French, who is overseeing the investigation and said the probe could end in impeachment, show Democrats are gunning for the governor.
The rally stretched past two hours, with a string of speeches from bloggers, the head of the troopers union and Monegan's mom. Someone read a written statement from Democratic Anchorage Rep. Les Gara -- which at one point ignited a chant of Obama's campaign slogan, "Yes we can" -- and calling for a "shout out" to French.
Like a similar rally two weeks earlier, the event gathered anti-Palin protesters from all corners. Some held signs saying "My body, my rights," while others criticized her views on aerial wolf-hunting.
Unlike last time, no organized counter-protest appeared.

Brigade homeland tours start October 1, 2008

Photo: The Alleged Terrorists


3rd Infantry’s 1st BCT trains for a new dwell-time mission. Helping ‘people at home’ may become a permanent part of the active Army
By Gina Cavallaro - Posted at Army Times: Monday Sep 8, 2008 6:15:06 EDT

The 3rd Infantry Division’s 1st Brigade Combat Team has spent 35 of the last 60 months in Iraq patrolling in full battle rattle, helping restore essential services and escorting supply convoys. Now they’re training for the same mission — with a twist — at home.

Beginning Oct. 1 for 12 months, the 1st BCT will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.
It is not the first time an active-duty unit has been tapped to help at home. In August 2005, for example, when Hurricane Katrina unleashed hell in Mississippi and Louisiana, several active-duty units were pulled from various posts and mobilized to those areas.
But this new mission marks the first time an active unit has been given a dedicated assignment to NorthCom, a joint command established in 2002 to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities.
After 1st BCT finishes its dwell-time mission, expectations are that another, as yet unnamed, active-duty brigade will take over and that the mission will be a permanent one.
“Right now, the response force requirement will be an enduring mission. How the [Defense Department] chooses to source that and whether or not they continue to assign them to NorthCom, that could change in the future,” said Army Col. Louis Vogler, chief of NorthCom future operations. “Now, the plan is to assign a force every year.”
The command is at Peterson Air Force Base in Colorado Springs, Colo., but the soldiers with 1st BCT, who returned in April after 15 months in Iraq, will operate out of their home post at Fort Stewart, Ga., where they’ll be able to go to school, spend time with their families and train for their new homeland mission as well as the counterinsurgency mission in the war zones.
Stop-loss will not be in effect, so soldiers will be able to leave the Army or move to new assignments during the mission, and the operational tempo will be variable.
Don’t look for any extra time off, though. The at-home mission does not take the place of scheduled combat-zone deployments and will take place during the so-called dwell time a unit gets to reset and regenerate after a deployment.
The 1st of the 3rd is still scheduled to deploy to either Iraq or Afghanistan in early 2010, which means the soldiers will have been home a minimum of 20 months by the time they ship out.
In the meantime, they’ll learn new skills, use some of the ones they acquired in the war zone and more than likely will not be shot at while doing any of it.
They may be called upon to help with civil unrest and crowd control or to deal with potentially horrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive, or CBRNE, attack.
Training for homeland scenarios has already begun at Fort Stewart and includes specialty tasks such as knowing how to use the “jaws of life” to extract a person from a mangled vehicle; extra medical training for a CBRNE incident; and working with U.S. Forestry Service experts on how to go in with chainsaws and cut and clear trees to clear a road or area.
The 1st BCT’s soldiers also will learn how to use “the first ever nonlethal package that the Army has fielded,” 1st BCT commander Col. Roger Cloutier said, referring to crowd and traffic control equipment and nonlethal weapons designed to subdue unruly or dangerous individuals without killing them.
Homeland Security
“It’s a new modular package of nonlethal capabilities that they’re fielding. They’ve been using pieces of it in Iraq, but this is the first time that these modules were consolidated and this package fielded, and because of this mission we’re undertaking we were the first to get it.”
The package includes equipment to stand up a hasty road block; spike strips for slowing, stopping or controlling traffic; shields and batons; and, beanbag bullets.
“I was the first guy in the brigade to get Tasered,” said Cloutier, describing the experience as “your worst muscle cramp ever — times 10 throughout your whole body.
“I’m not a small guy, I weigh 230 pounds ... it put me on my knees in seconds.”
The brigade will not change its name, but the force will be known for the next year as a CBRNE Consequence Management Response Force, or CCMRF (pronounced “sea-smurf”).
“I can’t think of a more noble mission than this,” said Cloutier, who took command in July. “We’ve been all over the world during this time of conflict, but now our mission is to take care of citizens at home ... and depending on where an event occurred, you’re going home to take care of your home town, your loved ones.”
While soldiers’ combat training is applicable, he said, some nuances don’t apply.
“If we go in, we’re going in to help American citizens on American soil, to save lives, provide critical life support, help clear debris, restore normalcy and support whatever local agencies need us to do, so it’s kind of a different role,” said Cloutier, who, as the division operations officer on the last rotation, learned of the homeland mission a few months ago while they were still in Iraq.
Some brigade elements will be on call around the clock, during which time they’ll do their regular marksmanship, gunnery and other deployment training. That’s because the unit will continue to train and reset for the next deployment, even as it serves in its CCMRF mission.
Should personnel be needed at an earthquake in California, for example, all or part of the brigade could be scrambled there, depending on the extent of the need and the specialties involved.
Other branches included
The active Army’s new dwell-time mission is part of a NorthCom and DOD response package.
Active-duty soldiers will be part of a force that includes elements from other military branches and dedicated National Guard Weapons of Mass Destruction-Civil Support Teams.
A final mission rehearsal exercise is scheduled for mid-September at Fort Stewart and will be run by Joint Task Force Civil Support, a unit based out of Fort Monroe, Va., that will coordinate and evaluate the interservice event.
In addition to 1st BCT, other Army units will take part in the two-week training exercise, including elements of the 1st Medical Brigade out of Fort Hood, Texas, and the 82nd Combat Aviation Brigade from Fort Bragg, N.C.
There also will be Air Force engineer and medical units, the Marine Corps Chemical, Biological Initial Reaction Force, a Navy weather team and members of the Defense Logistics Agency and the Defense Threat Reduction Agency.

One of the things Vogler said they’ll be looking at is communications capabilities between the services.
“It is a concern, and we’re trying to check that and one of the ways we do that is by having these sorts of exercises. Leading up to this, we are going to rehearse and set up some of the communications systems to make sure we have interoperability,” he said.
“I don’t know what America’s overall plan is — I just know that 24 hours a day, seven days a week, there are soldiers, sailors, airmen and Marines that are standing by to come and help if they’re called,” Cloutier said. “It makes me feel good as an American to know that my country has dedicated a force to come in and help the people at home.”

BUT WHY WILL THE MILITARY USE WEAPONS OF MASS
DESTRUCTION AT HOME?

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Joe Biden & Hilary Clinton on Women's Issues

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GOP concerns about Palin grow

A growing number of Republicans are expressing concern about Sarah Palin’s uneven — and sometimes downright awkward — performances in her limited media appearances.
Conservative columnist Kathleen Parker, a former Palin supporter, says the vice presidential nominee should step aside. Kathryn Jean Lopez, writing for the conservative National Review, says “that’s not a crazy suggestion” and that “something’s gotta change.”
Tony Fabrizio, a GOP strategist, says Palin’s recent CBS appearance isn’t disqualifying but is certainly alarming. “You can’t continue to have interviews like that and not take on water.”
“I have not been blown away by the interviews from her, but at the same time, I haven’t come away from them thinking she doesn’t know s—t,” said Chris Lacivita, a GOP strategist. “But she ain’t Dick Cheney, nor Joe Biden and definitely not Hillary Clinton.”
There is no doubt that Palin retains a tremendous amount of support among rank-and-file Republicans. She draws huge crowds, continues to raise a lot of money for the McCain campaign, and state parties report she has sparked an uptick in the number of volunteers.
Asked about Palin's performance in the CBS interview, a McCain official briefing reporters on condition of anonymity said: "She did fine. She's a tremendous asset and a fantastic candidate."
But there is also no doubt many Republican insiders are worried she could blow next week’s debate, based on her unexpectedly weak and unsteady media appearances, and hurt the Republican ticket if she does.
What follows is a viewer’s guide to some of Palin’s toughest moments on camera so far.
Speaking this week with CBS’s Katie Couric, Palin seemed caught off-guard by a very predictable question about the status of McCain adviser Rick Davis’ relationship with mortgage lender Freddie Mac. Davis was accused by several news outlets of retaining ties — and profiting from — the companies despite his denials.
Where a more experienced politician might have been able to brush off Couric’s follow-up question, Palin seemed genuinely stumped, repeating the same answer twice and resorting to boilerplate language about the “undue influence of lobbyists.”



Panic:

There must be something wrong with the landlines. I was speaking to my sister and our lines got crossed with someone from the GOP. Here's what we heard (no joke):
"We got to get her off the ticket"
"We may need to wait until the debate is over, if not we're done!"
"**** that! we need to get her off now. We need to figure how to do this with little damage to our ticket. Call Romney and tell him to get ready to stand in for Thursday's debate. We'll run it as her daughter is ill or something then we can roll her off the ticket on Friday evening"
"John really screwed us this time"

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Reality Check: MacCain About Iraq in the Near Past

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FactChecking First Presidential Debate

Summary

McCain and Obama contradicted each other repeatedly during their first debate, and each volunteered some factual misstatements as well. Here’s how we sort them out:
• Obama said McCain adviser Henry Kissinger backs talks with Iran “without preconditions,” but McCain disputed that. In fact, Kissinger did recently call for “high level” talks with Iran starting at the secretary of state level and said, “I do not believe that we can make conditions.” After the debate the McCain campaign issued a statement quoting Kissinger as saying he didn’t favor presidential talks with Iran.
• Obama denied voting for a bill that called for increased taxes on “people” making as little as $42,000 a year, as McCain accused him of doing. McCain was right, though only for single taxpayers. A married couple would have had to make $83,000 to be affected by the vote, and anyway no such increase is in Obama’s tax plan.
• McCain and Obama contradicted each other on what Joint Chiefs of Staff Chairman Admiral Mike Mullen said about troop withdrawals. Mullen said a time line for withdrawal could be “very dangerous” but was not talking specifically about “Obama’s plan,” as McCain maintained.
• McCain tripped up on one of his signature issues – special appropriation “earmarks.” He said they had “tripled in the last five years,” when in fact they have decreased sharply.
• Obama claimed Iraq “has” a $79 billion surplus. It once was projected to be as high as that. It’s now down to less than $60 billion.
• McCain repeated his overstated claim that the U.S. pays $700 billion a year for oil to hostile nations. Imports are running at about $536 billion this year, and a third of it comes from Canada, Mexico and the U.K.
• Obama said 95 percent of “the American people” would see a tax cut under his proposal. The actual figure is 81 percent of households.
• Obama mischaracterized an aspect of McCain’s health care plan, saying “employers” would be taxed on the value of health benefits provided to workers. Employers wouldn’t, but the workers would. McCain also would grant workers up to a $5,000 tax credit per family to cover health insurance.
• McCain misrepresented Obama's plan by claiming he'd be "handing the health care system over to the federal government." Obama would expand some government programs but would allow people to keep their current plans or chose from private ones, as well.
• McCain claimed Gen. Dwight D. Eisenhower had drafted a letter of resignation from the Army to be sent in case the 1944 D-Day landing at Normandy turned out to be a failure. Ike prepared a letter taking responsibility, but he didn’t mention resigning.
For full details, as well as other dubious claims and statements, please read our full Analysis section.


Analysis

The first of three scheduled debates between Republican Sen. John McCain and Democratic Sen. Barack Obama took place Sept. 26 on the campus of the University of Mississippi at Oxford. It was sponsored by the Commission on Presidential Debates. It was carried live on national television networks and was moderated by Jim Lehrer, executive editor and anchor of the PBS "NewsHour" program.

We noted these factual misstatements:
Did Kissinger Back Obama?
McCain attacked Obama for his declaration that he would meet with leaders of Iran and other hostile nations "without preconditions." To do so with Iran, McCain said, "isn't just naive; it's dangerous." Obama countered by saying former Secretary of State Henry Kissinger – a McCain adviser – agreed with him:

Obama: Senator McCain mentioned Henry Kissinger, who's one of his advisers, who, along with five recent secretaries of state, just said that we should meet with Iran – guess what – without precondition. This is one of your own advisers.
McCain rejected Obama's claim:
McCain: By the way, my friend, Dr. Kissinger, who's been my friend for 35 years, would be interested to hear this conversation and Senator Obama's depiction of his -- of his positions on the issue. I've known him for 35 years.
Obama: We will take a look.
McCain: And I guarantee you he would not -- he would not say that presidential top level.
Obama: Nobody's talking about that.

So who's right? Kissinger did in fact say a few days earlier at a forum of former secretaries of state that he favors very high-level talks with Iran – without conditions:

Kissinger Sept. 20: Well, I am in favor of negotiating with Iran. And one utility of negotiation is to put before Iran our vision of a Middle East, of a stable Middle East, and our notion on nuclear proliferation at a high enough level so that they have to study it. And, therefore, I actually have preferred doing it at the secretary of state level so that we -- we know we're dealing with authentic...
CNN's Frank Sesno: Put at a very high level right out of the box?
Kissinger: Initially, yes.But I do not believe that we can make conditions for the opening of negotiations.

Later, McCain's running mate, Sarah Palin, was asked about this by CBS News anchor Katie Couric, and Palin said, "I’ve never heard Henry Kissinger say, ‘Yeah, I’ll meet with these leaders without preconditions being met.'" Afterward Couric said, "We confirmed Henry Kissinger’s position following our interview."
After the McCain-Obama debate, however, Kissinger issued a statement saying he doesn't favor a presidential meeting:

Kissinger: Senator McCain is right. I would not recommend the next President of the United States engage in talks with Iran at the Presidential level. My views on this issue are entirely compatible with the views of my friend Senator John McCain.

Score 0-1

$42,000 per year?
McCain said – and Obama denied – that Obama had voted to increase taxes on "people who make as low as $42,000 a year." McCain was correct – with qualification.

McCain: But, again, Senator Obama has shifted on a number of occasions. He has voted in the United States Senate to increase taxes on people who make as low as $42,000 a year.
Obama: That's not true, John. That's not true.
McCain: And that's just a fact. Again, you can look it up.
Obama: Look, it's just not true.

Yes, as we’ve said before, Obama did in fact vote for a budget resolution that called for higher federal income tax rates on a single, non-homeowner who earned as little as $42,000 per year. A couple filing jointly, however, would have had to earn at least $83,000 per year to be affected. A family of four with income up to $90,000 would not have been affected.
The resolution actually would not have altered taxes without additional legislation. It called generally for allowing most of the 2001 and 2003 Bush tax cuts to expire. McCain is referring to the provision that would have allowed the 25 percent tax bracket to return to 28 percent. The tax plan Obama now proposes, however, would not raise the rate on that tax bracket.
Score 1-1

Timetable Tiff
Obama contradicted McCain about what Joint Chiefs of Staff Chairman Admiral Mike Mullen's said regarding "Obama's plan" for troop withdrawals.

McCain: Admiral Mullen suggests that Senator Obama's plan is dangerous for America.
Obama: That's not the case.
McCain: That's what ...
Obama: What he said was a precipitous...
McCain: That's what Admiral Mullen said.
Obama: ... withdrawal would be dangerous. He did not say that. That's not true.

Admiral Mullen did say in a Fox News interview that having a time line for withdrawal would be dangerous.

Mullen (July 20): I think the consequences could be very dangerous in that regard. I'm convinced at this point in time that coming – making reductions based on conditions on the ground are very important.

However, interviewer Chris Wallace had just told Mullen to take Obama out of the equation.

Wallace (July 20): But I'm asking you in the absence – forget about Obama. Forget about the politics. If I were to say to you, "Let's set a time line of getting all of our combat troops out within two years," what do you think would be the consequences of setting that kind of a time line?

So strictly speaking Mullen was not talking specifically about "Obama's plan." He did say a rigid timetable could have dangerous consequences.
Score 1.5 – 1.5

Earmarks Down, Not Up
McCain was way off the mark when he said that earmarks in federal appropriations bills had tripled in the last five years.

McCain: But the point is that – you see, I hear this all the time. "It's only $18 billion." Do you know that it's tripled in the last five years?

In fact, earmarks have actually gone down. According to Citizens Against Government Waste, there was $22.5 billion worth of earmark spending in 2003. By 2008, that figure had come down to $17.2 billion. That's a decrease of 24 percent.
Taxpayers for Common Sense, another watchdog group, said in 2008 that "Congress has cut earmarks by 23 percent from the record 2005 levels," according to its analysis.
Score 2.5 – 1.5

$3 million to study the DNA of bears?
And while we're on the subject of earmarks, McCain repeated a misleading line we've heard before.

McCain: You know, we spent $3 million to study the DNA of bears in Montana. I don't know if that was a criminal issue or a paternal issue, but the fact is that it was $3 million of our taxpayers' money. And it has got to be brought under control.

McCain's been playing this for laughs since 2003. The study in question was done by the U.S. Geological Survey, and it relied in part on federal appropriations. Readers (and politicians) may disagree on whether a noninvasive study of grizzly bear population and habitat is a waste of money. McCain clearly thinks it is – but on the other hand, he never moved to get rid of the earmark. In fact, he voted for the bill that made appropriations for the study. He did propose some changes to the bill, but none that nixed the bear funding.
Score 3.5 – 1.5

Iraqi Surplus Exaggerated
Obama was out of date in saying the Iraqi government has "79 billion dollars," when he argued that the U.S. should stop spending money on the war in Iraq.

Obama: We are currently spending $10 billion a month in Iraq when they have a $79 billion surplus.

As we've said before, there was a time when the country could have had as much as $79 billion, but that time has passed. What the Iraqis actually “have” is $29.4 billion in the bank. The Government Accountability Office projected in August that Iraq’s 2008 budget surplus could range anywhere from $38.2 billion to $50.3 billion, depending on oil revenue, price and volume. Then, in early August, the Iraqi legislature passed a $21 billion supplemental spending bill, which was omitted from the GAO’s surplus tally since it was still under consideration. The supplemental will be completely funded by this year’s surplus. So the range of what the Iraqi’s could have at year’s end is actually $47 billion to $59 billion. The $79 billion figure is outdated and incorrect.
Score 3.5 – 2

$700 billion for oil?
McCain repeated an exaggerated claim that the U.S. is sending $700 billion per year to hostile countries.

McCain: Look, we are sending $700 billion a year overseas to countries that don't like us very much. Some of that money ends up in the hands of terrorist organizations.

That's not accurate. McCain also made this claim in his acceptance speech at the Republican National Convention. He's referring to the amount of money the U.S. spends in importing oil. But the number is inflated. In fact, we actually pay more like $536 billion for the oil we need. And one-third of those payments go to Canada, Mexico and the U.K.
(Note: A few of our readers messaged us, after we first noted McCain's mistake, with the thought that he was referring to foreign aid and not to oil. If so he's even farther off than we supposed: The entire budget for the State Department and International Programs works out to just $51.3 million.)
Score 4.5 – 2

Tax Cut Recipients
Obama overstated how many people would save on taxes under his plan:

Obama: My definition – here's what I can tell the American people: 95 percent of you will get a tax cut. And if you make less than $250,000, less than a quarter-million dollars a year, then you will not see one dime's worth of tax increase.

That should be 95 percent of families, not 95 percent of "American people." An analysis by the Urban-Brookings Tax Policy Center found that Obama's plan would decrease taxes for 95.5 percent of families with children. Overall, 81.3 percent of households would get a tax cut under his proposal.
Score 4.5 – 2.5

Health Care Hyperbole
Obama and McCain traded incorrect statements on each other's health care plan.

Obama: So you may end up getting a $5,000 tax credit. Here's the only problem: Your employer now has to pay taxes on the health care that you're getting from your employer.

As we said before, McCain’s plan doesn’t call for taxing employers on health care benefits; it would instead tax employees. As the law stands now, employees don’t pay taxes on the dollar value of their health insurance benefits. Under McCain’s plan, they would.
McCain also misrepresented Obama's plan when he said that his opponent favored "handing the health care system over to the federal government."

McCain: Well, I want to make sure we're not handing the health care system over to the federal government which is basically what would ultimately happen with Senator Obama's health care plan. I want the families to make decisions between themselves and their doctors. Not the federal government.

McCain made a similar claim in his acceptance speech, when he said that Obama's plans would "force families into a government run health care system." We called it false then and we stand by that. Obama's plan mandates coverage for children, but not for adults, and it does not require anyone to be covered by a nationalized system. Obama's plan expands the insurance coverage offered by the government, but allows people to keep their own plans or choose from private plans as well.
Score 5.5 – 3

Ike Was No Quitter
McCain mangled his military history:

McCain: President Eisenhower, on the night before the Normandy invasion, went into his room, and he wrote out two letters.
One of them was a letter congratulating the great members of the military and allies that had conducted and succeeded in the greatest invasion in history, still to this day, and forever.
And he wrote out another letter, and that was a letter of resignation from the United States Army for the failure of the landings at Normandy.

The story is widely circulated in military circles but not entirely true. Eisenhower (then a general, not yet a president) did in fact write a letter taking responsibility should the D-Day invasion fail. But Eisenhower's letter does not mention resigning. Here's the full text:

Eisenhower (June 5, 1944): Our landings in the Cherbourg-Havre area have failed to gain a satisfactory foothold and I have withdrawn the troops. My decision to attack at this time and place was based on the best information available. The troops, the air and the Navy did all that bravery and devotion to duty could do. If any blame or fault attaches to the attempt it is mine alone.

No mention of quitting the Army, or his command.
Score 6.5 – 3

A Longer Timetable
Obama stretched out his schedule for withdrawing troops from Iraq. During the debate, Obama said we could "reduce" the number of combat troops in 16 months:

Obama: Now, what I've said is we should end this war responsibly. We should do it in phases. But in 16 months we should be able to reduce our combat troops, put – provide some relief to military families and our troops and bolster our efforts in Afghanistan so that we can capture and kill bin Laden and crush al Qaeda.

But in Oct. 2007, Obama supported removing all combat troops from Iraq within 16 months:

Obama (Oct. 2007): I will remove one or two brigades a month, and get all of our combat troops out of Iraq within 16 months. The only troops I will keep in Iraq will perform the limited missions of protecting our diplomats and carrying out targeted strikes on al Qaeda. And I will launch the diplomatic and humanitarian initiatives that are so badly needed. Let there be no doubt: I will end this war.

The quote appears in "Barack Obama and Joe Biden on Defense Issues" – a position paper that was still available on the campaign's Web site as Obama spoke.
Score 6.5 – 4

Still Soft on Iran?
McCain repeated the false insinuation that Obama opposed naming Iran's Islamic Revolutionary Guard Corps as a terrorist organization.

McCain: There is the Republican Guard in Iran, which Senator Kyl had an amendment in order to declare them a sponsor of terror. Senator Obama said that would be provocative...
Obama: Well, let me just correct something very quickly. I believe the Republican Guard of Iran is a terrorist organization. I've consistently said so. What Senator McCain refers to is a measure in the Senate that would try to broaden the mandate inside of Iraq. To deal with Iran.

Obama has in fact said that the IRGC should be named a terrorist group. He was a cosponsor of the Iran Counter-Proliferation Act, which, among other things, named the IRGC a terrorist organization. What he voted against was the Kyl-Lieberman amendment, which also called for the terrorist group distinction. But Obama said that he opposed the amendment on the grounds that it was "saber-rattling."

Obama press release (Sept. 26, 2007): Senator Obama clearly recognizes the serious threat posed by Iran. However, he does not agree with the president that the best way to counter that threat is to keep large numbers of troops in Iraq, and he does not think that now is the time for saber-rattling towards Iran. In fact, he thinks that our large troop presence in Iraq has served to strengthen Iran - not weaken it. He believes that diplomacy and economic pressure, such as the divestment bill that he has proposed, is the right way to pressure the Iranian regime. Accordingly, he would have opposed the Kyl-Lieberman amendment had he been able to vote today.

Score 7.5 – 4

Who's Naive on Georgia?
McCain called Obama's initial statement on the conflict in Georgia "naive." It's worth noting Obama's words echoed those of the White House.

McCain: Well, I was interested in Senator Obama's reaction to the Russian aggression against Georgia. His first statement was, "Both sides ought to show restraint."
Again, a little bit of naivete there. He doesn't understand that Russia committed serious aggression against Georgia.

It's true, as McCain said, that during the conflict between Georgia and Russia, Obama said, "Now is the time for Georgia and Russia to show restraint, and to avoid an escalation to full scale war" in his first statement on the conflict. But so did the White House. Press secretary Dana Perino said on Aug. 8, “We urge restraint on all sides – that violence would be curtailed and that direct dialogue could ensue in order to help resolve their differences.” We pointed this out when New York Mayor Rudy Giuliani mischaracterized Obama's response to the crisis during the GOP convention.
Score 8.5 – 4


Boeing Boasts
McCain was went too far when he said, "I saved the taxpayers $6.8 billion by fighting a contract that was negotiated between Boeing and DOD that was completely wrong. And we fixed it and we killed it."
McCain certainly did lead a fight to kill the contract, and the effort ended in prison sentences for defense contractors. But the contract isn't exactly "fixed" yet. In fact, questions have been raised about the role McCain has played in helping a Boeing rival secure the new contract.
After the original Boeing contract to supply refueling airliners was nixed in 2003, the bidding process was reopened. And in early 2007, Boeing rival EADS/Airbus won the bid the second time around. But Boeing filed a protest about the way the bids were processed, and the Government Accountability Office released a report that found in Boeing's favor. In the summary of GAO's investigation, the organization said there were "significant errors" with the bid process and that the directions given to Boeing were "misleading."
Further, the New York Times reported that "McCain’s top advisers, including a cochairman of his presidential campaign, were lobbyists for EADS. And Mr. McCain had written to the Defense Department, urging it to ignore a trade dispute between the United States and Europe over whether Airbus received improper subsidies." A liberal campaign finance group ran an ad hitting McCain on the connections back in July and our colleagues at PolitiFact found their attacks to be true, saying: "Center for Responsive Politics prepared a report for PolitiFact that backs [the charge] up. U.S. employees of EADS/Airbus have contributed $15,700 in this election cycle to McCain’s campaign."
Score 10 – 4

Nuclear Charges
McCain said Obama was against storing nuclear waste. That's not exactly his position.

McCain: And Senator Obama says he's for nuclear, but he's against reprocessing and he's against storing.
Obama: I -- I just have to correct the record here. I have never said that I object to nuclear waste. What I've said is that we have to store it safely.

Obama's official position is that he does support safe storage of nuclear waste:
Obama fact sheet: Obama will also lead federal efforts to look for a safe, long-term disposal solution based on objective, scientific analysis. In the meantime, Obama will develop requirements to ensure that the waste stored at current reactor sites is contained using the most advanced dry-cask storage technology available. Barack Obama believes that Yucca Mountain is not an option. Our government has spent billions of dollars on Yucca Mountain, and yet there are still significant questions about whether nuclear waste can be safely stored there.
But the McCain campaign has attacked Obama before on this issue, going as far as to claim Obama did not support nuclear energy at all, which was false. Obama has said he supports nuclear as long as it is "clean and safe."
Score 11 – 4

Against Alternative Energy
Obama said that McCain had voted 23 times against alternative energy:

Obama: Over 26 years, Senator McCain voted 23 times against alternative energy, like solar, and wind, and biodiesel.

Here's the Obama campaign's list of the 23 votes. We find they're overstating the case. In many instances, McCain voted not against alternative energy but against mandatory use of alternative energy, or he voted in favor of allowing exemptions from these mandates. Only 11 of the 23 votes cited by the Obama campaign involve reducing or eliminating incentives for renewable energy.
Meanwhile, McCain was indignant at the suggestion that he'd voted against alternative energy at all.

McCain: I have voted for alternate fuel all of my time... No one can be opposed to alternate energy.

But McCain's record says differently. As we say above, he has voted against funding for alternative energy on 11 occasions. He may be in favor of alternative energy in theory, but he has declined opportunities to support it.
In McCain's energy plan, he supports nuclear power and "clean" coal, which are alternative energies. But they don't qualify as renewable energy, such as hydro, solar and wind power. McCain's plan makes a vague promise to "rationalize the current patchwork of temporary tax credits that provide commercial feasibility." The experts we talked to weren't sure what exactly that meant.
Score 12 – 4

Committee Oversight
Both candidates were right in talking about Obama’s NATO subcommittee.

McCain: Senator Obama is the chairperson of a committee that oversights NATO, that's in Afghanistan. To this day he's never had a hearing…
Obama: Look, the - I'm very proud of my vice presidential selection, Joe Biden, who's the chairman of the Senate Foreign Relations Committee. And as he explains and as John well knows, the issues of Afghanistan, the issues of Iraq, critical issues like that don't go through my subcommittee because they're done as a committee as a whole.

As we've already reported Obama's subcommittee on Afghanistan does have jurisdiction over NATO, which is supplying about half of the troops in Afghanistan. His subcommittee does not have jurisdiction over Afghanistan proper.
Score 13 – 4

Getting the Dates Wrong
We also caught McCain getting his congressional history a little wrong.

McCain: Back in 1983, when I was a brand-new United States congressman, the one - the person I admired the most and still admire the most, Ronald Reagan, wanted to send Marines into Lebanon. And I saw that, and I saw the situation, and I stood up, and I voted against that because I was afraid that they couldn't make peace in a place where 300 or 400 or several hundred Marines would make a difference. Tragically, I was right: Nearly 300 Marines lost their lives in the bombing of the barracks.

This isn’t quite right. Marines were initially deployed to Lebanon in August 1982. McCain, however, was not elected to the U.S. House until November 1982, more than three months after Marines had already landed.
McCain is referring to a 1983 vote to invoke the War Powers Act. That bill, which Ronald Reagan signed into law on October 12, 1983, authorized an 18-month deployment for the Marines. On October 13, a suicide bomber destroyed the Marine barracks in Beirut. McCain did in fact break with most Republicans to vote against the bill.
End-score 14 – 4

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The First Presidential Debate

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Kathleen Parker: How to solve this Palin problem?

If at one time women were considered heretical for swimming upstream against feminist orthodoxy, they now face condemnation for swimming downstream – away from Sarah Palin.
To express reservations about her qualifications to be vice president – and possibly president – is to risk being labeled anti-woman.
Or, as I am guilty of charging her early critics, supporting only a certain kind of woman.
Some of the passionately feminist critics of Ms. Palin who attacked her personally deserved some of the backlash they received. But circumstances have changed since Ms. Palin was introduced as just a hockey mom with lipstick – what a difference a financial crisis makes – and a more complicated picture has emerged.
As we've seen and heard more from John McCain's running mate, it is increasingly clear that she is a problem. Quick study or not, she doesn't know enough about economics and foreign policy to make Americans comfortable with a President Palin should conditions warrant her promotion.
Yes, she recently met several heads of state as the U.N. General Assembly convened in New York. She was gracious, charming and disarming. Men swooned. Pakistan's president wanted to hug her. (Perhaps Osama bin Laden is dying to meet her?)
And, yes, she has common sense, something we value. And she's had executive experience as a mayor and a governor, though of relatively small constituencies (about 6,000 and 680,000, respectively).
Finally, Ms. Palin's narrative is fun, inspiring and all-American in that frontier way we seem to admire. When Ms. Palin first emerged as Mr. McCain's running mate, I confess I was delighted. She was the antithesis and nemesis of the hirsute, Birkenstock-wearing sisterhood – a refreshing feminist of a different order who personified the modern successful working mother.
Ms. Palin didn't make a mess cracking the glass ceiling. She simply glided through it.

It was fun while it lasted.

Ms. Palin's recent interviews with Charles Gibson, Sean Hannity and now Katie Couric have all revealed an attractive, earnest, confident candidate. Who Is Clearly Out Of Her League.
No one hates saying that more than I do. Like so many women, I've been pulling for Ms. Palin, wishing her the best, hoping she will perform brilliantly. I've also noticed that I watch her interviews with the held breath of an anxious parent, my finger poised over the mute button in case it gets too painful. Unfortunately, it often does. My cringe reflex is exhausted.
Ms. Palin filibusters. She repeats words, filling space with deadwood. Cut the verbiage, and there's not much content there. Here's but one example from her interview with Mr. Hannity:
"Well, there is a danger in allowing some obsessive partisanship to get into the issue that we're talking about today. And that's something that John McCain, too, his track record, proving that he can work both sides of the aisle, he can surpass the partisanship that must be surpassed to deal with an issue like this."
When Ms. Couric pointed to polls showing that the financial crisis had boosted Barack Obama's numbers, Ms. Palin blustered wordily: "I'm not looking at poll numbers. What I think Americans at the end of the day are going to be able to go back and look at track records and see who's more apt to be talking about solutions and wishing for and hoping for solutions for some opportunity to change, and who's actually done it?"

If b*ll-sh*t were currency, Ms. Palin could bail out Wall Street herself.

If Ms. Palin were a man, we'd all be guffawing, just as we do every time Joe Biden tickles the back of his throat with his toes. But because she's a woman – and the first on a Republican presidential ticket – we are reluctant to say what is painfully true.

What to do?

Mr. McCain can't repudiate his choice for running mate. He not only risks the wrath of the GOP's unforgiving base, but he invites others to second-guess his executive decision-making ability. Mr. Obama faces the same problem with Mr. Biden.
Only Ms. Palin can save Mr. McCain, her party and the country she loves. She can bow out for personal reasons, perhaps because she wants to spend more time with her newborn. No one would criticize a mother who puts her family first.

Do it for your country.
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‘The market tried to tell us something and no one listened’

Mohamed A. El-Erian is the co-ceo of the world's largest asset management company Pimco. An interview about the ins and outs of the credit crunch.
Mohamed El-Erian has worked through the weekend again, just like he has every other weekend over the past weeks. When the American government announced the comprehensive bail out plan for banks, he wrote a ten page investment instruction for his employees at Pimco, the largest asset manager in the world.
During an interview with El-Erian on the 49th floor of the Allianz Tower, with a view on Central Park, he looks exhausted. As Pimco’s co-ceo is responsible for Pimco’s 830 billion dollars in assets.
He says the American bailout plan is “a necessary step because the situation had to be stabilized”. But he doubts it will be sufficient. “My sense is you need to do more. We are going to look back and 700 billion will not be the final number.”
He tells how he and his people at Pimco saw the markets stumble.
"Last week the only market that still functioned was that of short term US treasuries. Suddenly the money market funds were contaminated. So something that was viewed as a very arcane Wall Street matter suddenly became a Main Street problem. Losses were imposed on the biggest money market fund, a 62 billion dollar fund. As people realized that they started pulling their money out. For the fund to get liquidity, it had to sell. But the market was dislocated. Had the authorities not acted on Friday, you would have had a very big run on the money market funds and on the banks. You would have had cascading gates where those investors would have been told: come back tomorrow, or next week, to get your money out.”
In a crisis, when one is infected anyone can get infected?
"In August last year I was trying to take a holiday, I was back in the office - at Harvard at the time - the first day, because we started sensing difficulties. I asked our people: where is our cash? And they answered by telling me how much cash we had. But that wasn’t the answer to my question. ’It is in money market funds, with the best counter parties on Wall Street', they said, after I asked again. I asked what was in the money market funds, but they didn’t know. I told them at the time: take the money out and put it in treasuries and then let’s see. That was the reaction you saw last week, multiplied a million times. That made people question the integrity of the money market segment.”
The authorities have been trying to calm down the markets for a year now. But they haven’t succeeded.
"After Lehman and AIG, the US authorities shifted from targeting institutions to targeting the system as a whole. The authorities moved from piece meal measures to a package deal. If you go back to remarks of officials you find the words 'comprehensive package' only to appear last week. Before that it was like fighting isolated fires. The next step is happening very quietly, but I think it will accelerate. We are moving from a domestic response to an international response. The ban on short selling in different countries is a first example of that.”
Did the authorities worsen the situation?
"I worked at the IMF for fifteen years, so I’ve seen crises. This is exactly what happened in the Asian crisis [in the 1990s]. The first reaction is either policymakers do not recognize the crisis, or they do not believe there is a crisis. The US is not used to crisis management, particularly in what is seen as the most sophisticated financial system in the world. There is not enough information about the crisis. And when the authorities do have information, they realize their instruments are blunt. That they are creating collateral damage. This let to rational paralysis. The central question is: how are we going to get this stabilized? Gordon Brown gave the answer this weekend: 'Three words. Whatever it takes.' And that will lead to overreaction.”
But do the authorities know what they are doing?
"They are not doing it according to some master plan. Nobody decided at the beginning of the year that investment banks would no longer exist, that they were going to nationalize Fanny and Freddy. Nobody decided that they were going to intervene in an insurance company [AIG]. But it all happened. There is a reason for this. The system was undertaking activities that the infrastructure on the policy side and on the market side could not support. The amount of activities taking place in global finance far exceeded the capability of the system. I use the metaphor of the plumbing system where you are forcing very strong new flows into a plumbing system that is too old. So it is going to blow up and then you have to clean it up. And it is not going to be nice.”
What needs to be done?
"The authorities have tried to take three steps. The first is to reliquify the system, to get things flowing again, I suspect they have to cut interest rates in a globally coordinated fashion in order to make that happen. The second is this indiscriminate selling of assets. So they provided a balance sheet which is up to 700 billion to buy assets. I suspect they have to put capital directly into some of the institutions. The third step, which is causing the biggest anxiety in the markets, is a regulatory response. It is to try and enforce circuit breakers to the system. One of course is the banning of short selling. It was necessary, but not elegant.”
Regulators did not see this crisis coming?
"The blame game has yet to begin. The government, the regulators, the credit raters, the private sector, they were all at fault at some point. The central question will be: who lost the American financial system? If you want hear a big mistake that was made on the government side, look at the off balance activities, the conduits and the SIVs [structured investment vehicles], that were completely unregulated. There were no capital requirements. Those activities were the first to go down in the crisis. And they contaminated everything else.”
Will this crisis be a turning point for regulators?
"We are going to overreact on the regulatory part now. When this is all finished, we are going to end up with a much smaller, slimmer and less risky financial system. The good news is that the likelihood of a future crisis can be reduced. The bad news is that we are going to lower the speed limit for the growth of the economy. That is a cold shower for people in this country.
"A very well-paid industry, which is what finance is, was living in a system that privatized the gains and socialized the losses. Society will not accept that. Keep in mind, the 700 billion is more than the whole social service budget of the United States."
Who, after the investment banks, are going to be the next victims?
"The fall of the investment banks was inevitable after the Fed opened up the liquidity window, with the rescue of Bear Stearns. That dissolved the difference between commercial banks and investment banks. It was only a matter of time before the other investment banks would disappear, either through bankruptcy, acquisition or a change in their business model. The next businesses under pressure are the hedge funds.
"The keyword here is leverage. Investment banks used a leverage over 30. On every dollar they owned, they borrowed over 30 to invest. When the market goes up, the profits are enormous, but the losses are as big when markets come down. The market for investing with borrowed money has dried up completely. Hedge funds work the same way, with a little less leverage.
"Further down the line you have the non-financial institutions, the AIGs of this world,. And the commercial banks, which have a 10 to 1 leverage. And there is us, without any leverage. Last year everyone said we were boring. We avoided risks, so we didn’t have high returns. But now the fact that we’re not levered is really important.”
Is this the end for leverage?
"No, the system cannot handle that. If you deleverage too quickly, you’ll shock the real economy. The 700 billion help deleverage investment banks and investors. I think the line will be drawn at the commercial banks. They invest every dollar they have ten times, but that is an acceptable risk.”
After the 1929 Great Depression it was decided to separate commercial banks and investment banks. Clinton changed that. What will happen next?
"Creative destruction is part of capitalism. Capitalism destroys parts of itself and recreates itself stronger. By its very nature has a tendency to run ahead of what the system can accommodate. But it is very significant when this happens in the financial system, because that ties everything together. We will go through this cycle again every 30 or 40 years.
"Politicians will have to make the decisions. Do we want a Wild West financial system? One that innovates, produces many things, allows homeownership to go up - which is good for society, but that will fall down once in a while. Or do we want a very regulated system? One that is safer, but doesn’t allow all these innovations. The economist [Hyman P.] Minsky wrote: stability leads to instability in a capitalistic system. And instability leads to stability.
How do you see the role of the sovereign wealth funds. They can offer the liquidity the West needs. Do you feel SWFs can balance the system?
"SWFs have what is most needed right now, and that is pure capital. They are long term investors. The bulk of them are only interested in ownership, not control. They stepped up in the last quarter of 2007 and put 60 billion dollars of pure capital in the western financial system. And they got criticized for it. Now they are sitting on losses.
"They are on the sidelines, watching the game. They don’t quite understand the rules anymore, nobody does. They won’t get involved again until the air clears. They will be part of the solution, but they are not going to be the leaders of the solution, they are going to be reactive. The speed with which the original credit crunch has changed into a global confidence crisis was unthinkable. But all the unthinkable has become thinkable in the last few months.”
What is the main characteristic of this crisis?
"The main characteristic is what you don’t see. It is happening behind the scenes: the confidence crisis between banks, the end of the market for loans, the disappearance of liquidity."
Did central banks created too much liquidity, did they over-fuel the system?
"I think that is unfair. Greenspan [Former Fed chairman] first, and after him Bernanke raised interest rates from 1 percent to 5.25. As they were raising short term interest rates, long term interest rates where coming down. This is one of the many signals that the system was sending out. But the marketplace said: these are not signals, this is noise. The market tried to tell us something and no one listened.”.
How big will the damage be?
"Let me leave you with a thought that scares me the most. So far the world is deleveraging three balance sheets. First that of US housing, which peaked in the summer of 2006. Secondly the financial sector, which peaked in the summer of 2007. The third one , which peaked this summer and now starts to deleverage, is the US consumer. The good news about all of these three things is there is a stock of wealth underneath them, to dampen the consequences.
"But there is one balance sheet out there that so far has avoided all this, but is now coming under pressure. That is the growth in emerging markets. It is slowing down. If that balance sheet is forced in contraction, the welfare implications are huge. Because those markets do not have a wealth cushion. It will mean poverty, much more pain, and much more human suffering. That’s my major concern: if this doesn’t get stopped and the tidal wave is going to hit people that are least able to survive it."
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