White House used ‘taxpayer-funded trips to help elect Republican candidates.’

Report finds that White House used ‘taxpayer-funded trips to help elect Republican candidates.’
A draft House Oversight Committee report finds that the White House “used the political affairs office to orchestrate an aggressive strategy to use taxpayer-funded trips to help elect Republican candidates for public office.” Under the direction of Sara Taylor, the political affairs office identified struggling GOP candidates and arranged for cabinet members to make appearances on their behalf:

From January 1, 2006, until the mid-term elections on November 7, 2006, cabinet secretaries and other senior officials traveled to over 300 events recommended by the political affairs office. All of these events were held with Republican candidates, and in most cases, the travel costs were paid for with federal funds. … In some instances, the White House specifically requested that travel be billed to the taxpayers to save Republican campaigns money.

During the course of their investigation, the Oversight Committee found Taylor to be “evasive” and “misleading.”

Palin Sees America As Wealthy And White: New Hampshire And Alaska Are ‘Microcosms’ Of The Country»

Speaking at a rally today in Dover, NH, Gov. Sarah Palin (R-AK) praised the area’s beauty and natural resources. She also claimed New Hampshire is “kind of this microcosm here in the state of the rest of the entire U.S.” In the past, she has said her home state of Alaska “is like a microcosm of America.” Watch it:
Apparently, Palin thinks the entire United States is wealthy and white. Census information for Alaska and New Hampshire show that their populations are hardly representative of the rest of the country:

	United States	New Hampshire	Alaska
Median Income (’04)	$44,334	$53,377	$52,141
Poverty Rate (’04)	12.7%	6.6%	10%
Non-Hispanic Whites (’06)	66.4%	93.8%	66.4%
Blacks (’06)	12.8%	1.1%	3.7%
Hispanic/Latino Origin (’06)	14.8%	2.3%	5.6%

It’s no surprise that Palin boasts a particularly poor record on diversity. She snubbed Alaska’s small African-American community — becoming the first governor to refuse to recognize the annual Juneteenth celebration — and named a white person to a game board post held by an Alaskan Native for more than 25 years.
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McCain “New” Proposal: Tax Cut For Millionaires

On Saturday night, the McCain campaign told Politico.com that it was planning to unveil "new economic plans" that included temporary tax cuts on capital gains. Politico incorrectly noted that this proposal, which benefits the wealthy, would be "aimed directly at the middle class."
Brad DeLong spotted the problems with McCain’s proposals, saying that “the middle class doesn’t collect capital gains, or dividends, in any material amount. Indeed, that’s what makes you middle class–that even though you have a fair or a good income you work for it.”
McCain has already made it abundantly clear that he plans to craft his economic proposals around aiding the wealthy, corporations, and bankers who made bad loans. In that light, these new proposals would actually fit in rather well.
On Sunday morning, Sen. Lindsey Graham said McCain was planning "a very comprehensive approach to jump-start the economy, by allowing capital to be formed easier in America by lowering taxes."
But by Sunday night, the McCain campaign - in a sign of "internal confusion" -- was telling the New York Times that they "would not have any more proposals this week."
On Monday, Barack Obama announced "a new economic rescue plan Monday geared toward middle-class voters." McCain didn't announce anything, which "caused some head scratching."And now, on Tuesday, McCain is unveiling his new proposals, going back to the well of tax cuts for the rich. McCain will announce plans to "cut the capital gains tax on stock profits in half, from 15 percent now on stocks held a year or longer to 7.5 percent -- a $10 billion proposal." The Wonk Room's James Kvaal noted the impact of cutting capital gains:

Households earning less than $50,000 a year collected a mere 2.5 percent of capital gains in 2005, according to the Tax Policy Center. Families earning more than $1 million a year collected 59 percent of capital gains. Moreover, most middle-class families with capital gains hold their investments in retirement accounts shielded against capital gains taxes.

For a candidate already promising $175 billion tax cut for corporations, including $4 billion for oil companies, handing out a new tax cut for millionaires and calling it a "Pension And Family Security" plan is oddly appropriate.

Rachel Maddow Battles David Frum's False Equivalencies, Calls Palin A 'Liar'

Last night, Rachel Maddow sparred with former Bush speechwriter/National Review contributor David Frum, after Frum thought he'd cleverly ambush Maddow with the accusation that she was contributing to the low tone of the political discourse.

MADDOW: You have publicly stated some reservations about John McCain and criticisms about the way his campaign is run, even though you have also said that you will vote for him. One quote I wanted to ask you about. You said, "Those who press this Ayers line of attack are whipping Republicans and conservatives into a fury that's going to be very hard to calm after November." What do you mean by that, in that word, "fury."
FRUM: Well, I think that you were talking through much of the show about the matter of tone in our politics. And yet, we are seeing, I think, an intensification of the ugliness of tone that has been a feature of American politics for the past eight years. I mean, this show, unfortunately, is an example of that problem.

Basically, Frum objected to Maddow's injection of humor and sarcasm into her show as an example of how political culture was circling the drain. Maddow, obviously, had some disagreement with this contention, suggesting that her use of comic effect was not in any way equivalent to say...calling for someone's head on the campaign trail.

Of course, Frum seems to have a problem with political comedy in general. Back in July, he took to his "Diary" to caterwaul over the way Jon Stewart and Stephen Colbert treat the conversation:

Jon Stewart and Stephen Colbert obviously see themselves as something more than ordinary funny men. Recall Stewart's memorable scolding of Crossfire for hurting America; remember Stephen Colbert's preachy appearance at the White House correspondents dinner. They think something is very wrong with cable news, and so they satirize that wrong.
In making their point, they themselves violate every kind of journalistic ethical rule. They say, "It's OK for us - we're fake news." That's a convenient excuse. But it's not really an adequate one.

Yes! It's almost as if The Daily Show and the Colbert Report have an established, intrinsic comedic conventions that are a thing apart from the two men's appearances in all other fora! And because they don't adhere to those conventions ALL THE TIME, like on Crossfire, or at the Duane Reade, they are violating some journalistic ethics.

Frum went on to say:

A few days ago, Colbert scoffed at my friend David Brooks for referring to the "salad bar" at Applebee's - when Applebee's doesn't feature salad bars. An error - how ridiculous! But conscious fabrication? I guess that's OK, so long as it's done in the sacred name of comedy.

ALSO:

Also on the show, Maddow had this to say about Sarah Palin's contention that she has been exonerated by the Troopergate scandal: "Day is night, up is down. This isn't one of those differences of opinion things, a question of interpretation. The report says she broke ethics laws, and she says the report doesn't say that. She is lying. This is a person who is running for office who's been confronted with an uncomfortable and inconvenient fact, and her response to that is to look into the camera and lie to you. Enthusiastically and repeatedly. I know I'm not supposed to use that particular L-word...but sometimes the most important thing you need to know about a politician is the frequency and enthusiasm and skill with which they lie to you."


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Even Conservatives like Bill Kristol Don't Buy It.

The state of the McCain campaign is drawing fire from its own ostensible allies. At the head of the line of Republicans looking to be the first to flick dirt on McCain's grave is Bill Kristol, who says in today's New York Times, that if "the race continues over the next three weeks to be a conventional one, McCain is doomed." Since that's coming from a guy who, through his own bad advice, has contributed mightily to the grave McCain is measuring, it makes sense that he be given the first shovel of dirt.

But didn't Kristol get the message? Today, the key line of John McCain's rebooted stump speech is directed at his rival, Barack Obama, and it goes a little something like, "We have him right where we want him." That was the plan, all along, you see! Be down double digits in the polls, possessed of the necessity of campaigning in West Virginia, and in need of tempering your supporters' passions because they have suddenly veered wildly in the direction of psychosis. I love it when a plan comes together, even if that plan is only indicative of the fact that McCain's moved to the "denial" stage of grief. Brace yourself, because anger and depression are still to come!

Amid this turmoil, McCain's attempts to relaunch his campaign have encountered a new obstacle: his fellow Republicans, who, like Kristol, are prepping themselves for an old-fashioned circular firing squad. Over the weekend, the New York Times noted that party leaders "were worried Mr. McCain was heading for defeat unless he brought stability to his presidential candidacy and settled on a clear message" for his campaign. And in today's edition of The Hill, a chorus of disapproval weighs in on McCain's muffed punt of the Paulson bailout package.

Naturally, McCain's responded through Nancy Pfotenhauer, who's accused Kristol of "buying into the Obama campaign's party line." These sentiments were similarly voiced by the ubiquitous Tucker Bounds later in the day:

So what's the new party line from John McCain? In the first place, McCain is now saying, "What America needs in this hour is a fighter." Doesn't that mess up Sarah Palin's constant contention that McCain being "the only man in the race who has ever really fought for you" was something that she had to say because McCain was too modest to admit it? More to the point, doesn't this mess up the Sarah Palin Stump Speech Drinking Game? Ever since she dropped the "I sold it on eBay" line I've been practically teetotaling!
But the crux of McCain's case seems to be this line:

I come from a long line of McCains who believed that to love America is to fight for her.

So there you have it! Vote for McCain! He's the McCainiest!

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No End In Sight

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Intervention Is Bold, but Has a Basis in History

After a week of mounting chaos in financial markets around the globe, the United States took a momentous step that shifts power in the economy toward Washington and away from Wall Street.
The government’s plan to prop up banks large and small — along with recent bailouts as well as guarantees to support business loans, money markets and bank lending — represents the most sweeping government moves into the nation’s financial markets since the Great Depression, and perhaps ever, according to economists and finance experts.
The high-stakes program is intended to halt the worst financial crisis since the 1930s. If successful, it could long be studied by historians as a textbook case of the emergency role that government can play to rescue a teetering economy.
“It is profound, and it is something of a shift back to the state,” said Adam S. Posen, an economist at the Peterson Institute for International Economics. “But is this a recasting of capitalism? I think what we’ll see is that the government acts as a silent partner and gets out as soon as it can.”
Indeed, they say, many questions remain. Is the government picking winners in a plan that initially seems tilted toward the nation’s largest banks? What strings are attached to the investment in matters like executive pay? Will the move presage a more forceful government hand to control financial markets or will it be a brief stint as capitalism’s protector?
The package does call for the government investments to be in three-year securities that the banks can repay at any time, when markets settle and conditions improve. “This is clearly a crisis measure in crisis times, but it’s a good thing there is a sunset provision that limits the length of the government’s investment,” said Richard Sylla, an economist and financial historian at the Stern School of Business at New York University.
The United States is acting in step with Europe, where governments often take a more interventionist stance in economies and the financial systems are in the hands of a comparatively small number of banks.
Britain took the lead last week, declaring its intention to take equity stakes in banks to steady them. In the last two days, France, Italy and Spain have announced rescue packages for their banks that include state shareholdings.
The government’s plan is an exceptional step, but not an unprecedented one.
The United States has a culture that celebrates laissez-faire capitalism as the economic ideal, yet the practice strays at times. Over the last century, the federal government has occasionally taken stakes in railways, coal mines and steel mills, and has even taken a controlling interest in banks when it was deemed to be in the national interest.
The corporate wards of the state typically have been returned to private hands after short, sometimes fleeting, stretches under federal stewardship.
Finance experts say that having Washington take stakes in United States banks now — like government interventions in the past — would be a promising move to address an economic emergency. The plan by the Treasury Department, they say, could supply banks with sorely needed capital and help restore confidence in financial markets.
Elsewhere, government bank-investment programs are routinely called nationalization programs. But that is not likely in the United States, where nationalization is a word to avoid, given the aversion to anything that hints of socialism.
In past times of war and national emergency, Washington has not hesitated. In 1917, the government seized the railroads to make sure goods, armaments and troops moved smoothly in the interests of national defense during World War I. After the war ended, bondholders and stockholders were compensated and railways were returned to private ownership in 1920.
During World War II, Washington seized dozens of companies, including railroads, coal mines and, briefly, the Montgomery Ward department store chain. In 1952, President Harry S. Truman seized 88 steel mills across the country, asserting that unyielding owners were determined to provoke an industry-wide strike that would cripple the Korean War effort. That nationalization did not last long, though, because the Supreme Court ruled the move an unconstitutional abuse of presidential power.
In banking, the government took an 80 percent stake in the Continental Illinois Bank and Trust in 1984. Continental Illinois failed in part because of bad oil-patch loans in Oklahoma and Texas. As the nation’s seventh-largest bank, Continental Illinois was deemed “too big to fail” by federal regulators, who feared wider turmoil in the financial markets. In the end, the government lost an estimated $1 billion on the bad loans it bought as part of the takeover of Continental, which eventually became part of Bank of America.
The nearest precedent for the Treasury plan, finance experts say, are the investments made by the Reconstruction Finance Corporation in the 1930s. The agency, established in 1932, not only made loans to distressed banks, but also bought stock in 6,000 banks, at a cost of $1.3 billion, said Mr. Sylla, the N.Y.U. economist. A similar effort these days, in proportion to today’s economy, would be about $200 billion.
When the economy stabilized eventually, the government sold the stock to private investors or the banks themselves — and about broke even, Mr. Sylla estimated. The 1930s program was a good one, experts say, but the government moved too slowly to deal with the financial crisis, which precipitated and lengthened the Great Depression. The lesson of history, it seems, is for Washington to move quickly in times of economic crisis with a forceful government intervention in the marketplace. And Ben S. Bernanke, chairman of the Federal Reserve, has studied the Great Depression and the policy miscues in those years.
“The goal is to get the engine of capitalism going as productively as possible,” said Nancy Koehn, a historian at the Harvard Business School. “Ideology is a luxury good in times of crisis.”
The traditional American reluctance for government ownership is not shared in other countries. After World War II, several European countries nationalized basic industries like coal, steel and even autos, which typically remained in government hands until the 1980s, when most Western economies began paring back the state’s role in the economy.
Europe remains far more comfortable with government having a strong hand in business. So when Sweden, for example, faced a financial crisis in the early 1990s, the nationalization of much of the banking industry was welcomed. The Swedish government quickly bought stakes in banks, and sold most of them off later — a model of swift, forceful intervention in a credit crisis, financial experts say.
“In Europe, the concept of the social contract is much more social — that is, socialist — than we’ve been comfortable with in America,” said Robert F. Bruner, a finance expert at the Darden School of Business at the University of Virginia.
“The obvious danger with anything that really starts to look like the government taking ownership or control of a significant piece of an industry is, Where do you stop?” Mr. Bruner said. “The auto industry is in dire straits and the airline industry is in trouble, for example.”
“But the spill-over effects from the crisis in the financial system are so great, pulling down the rest of the economy in a way that no other industry can, so that the potential cost of not doing something like this is immense,” Mr. Bruner said.

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