Stunt Over: McCain Will Debate Without Deal on Bailout

You can fool the American people right and left on almost every issue. But everyone remembers the playground where when two big guys were scheduled to fight and one of them ducked out and ran, there was no reason acceptable short of death or loss of limb that would excuse the runner from a permanent label of "chicken-$hit".

That he is now reluctantly coming back, in spite of the fact that he has made his excuse ("I'm not going to debate until the deal is done") for trying to duck out....well...

Let's just say that now the crowd of onlookers is hoping he gets his butt whipped by Obama just to teach him a lesson for his chicanery.

That's just base human nature. Let's see how the GOP spins this one. Should be fun to watch the art of practiced-deception in its most contorted presentation yet..

Nononon, Elrod. He changed the game and made a big difference. Really!:

McCain's campaign said the Republican presidential nominee believed enough progress had been made for him to travel to Mississippi to participate in the debate, set for 9 p.m. ET at the University of Mississippi campus.

"He is optimistic that there has been significant progress toward a bipartisan agreement now that there is a framework for all parties to be represented in negotiations, including Rep. [Roy] Blunt as a designated negotiator for House Republicans," the campaign said in a statement.

See?
Hat: White. Armor: Shiny.

they must have taken their 'declared victory' sign down already. I went to his website and couldn't find it

Heh.

Is there a count of how many times McCain has broken his word in just the last month?

McCain doesn't even seem to have trace amounts of honor and integrity left. Sad really...

Very possible. I think they just rolled out all their debate graphics including the ones for afterward. Things are always in flux at McCain HQ.

Good lord, I will never understand the workings of the liberal mind.

John McCain is going to the debate because he has been handed a shiny new baseball bat with which to bludgeon Obama.

The first topic at the debate will naturally be the bailout plan. With breathtakingly stupid democrats on Capital Hill saying that a deal was in place and McCain stopped it, Barack will be forced to defend the Dodd/Paulson plan against the new republican plan.

http://www.powerlineblog.com/archives2/2008/09/...

Of course, the new plan doesn’t use taxpayer money to enrich greedy bankers, so Obama will be stuttering more than normal.

Does anyone think the question about why don’t the Democrats just pass the bill without the Republicans might come up? What will Barack say?

Here’s Bill Clinton’s former strategist on the subject:

http://townhall.com/columnists/DickMorrisandEil...

Watch the debate, but cover the kid’s eyes when it gets brutal.

Pretty funny jwest. I'm sure you know the insurance "solution" isn't even on the table as a negotiating point. Bush, Paulson and the Dems all agree that it isn't going to happen.

But nice try!

jwest, there are aspects to the Republican's plan that... ummm.... might be poorly received in the current environment. Like:

• Instead of injecting taxpayer capital into the market to produce liquidity, private capital can be drawn into the market by removing regulatory and tax barriers that are currently blocking private capital formation. Too much private capital is sitting on the sidelines during this crisis.

(my emphasis)

Advocating less regulation, just at the moment, strikes me as nearly suicidal.

JWeidner,

Right.

With calls and emails running 200 to 1 into congressional offices, those paragons of courage – the democrat congress – will ignore the people and vote what they think is best for the country, regardless of the consequences.

I guess you’re right. We’ll just have to watch tonight to see McCain apologize for slowing everything down.

(heh)

Polimom,

The only thing that the people will hear is that their taxpayer money will not be used to bailout greedy bankers.

If the dems could reduce a complex economic argument for not eliminating “barriers” to using private capital as opposed to “hard earned taxpayer dollars” to a 5 second soundbite, they might have a chance. I doubt even the Messiah has that skill.

McCain invents his own reality, too bad no one is wanting to join for the ride. I swear he is getting campaign advice from the Chinese:

http://www.telegraph.co.uk/news/worldnews/asia/...

CW seems to be that McCain arrived in DC and mucked up the negotiations, causing further disruption and chaos on Wall Street. Very presidential. It was supposed to be a trap for Obama by pairing him with Bush and the Dem party and sticking him with whatever the result is but due to the transparency of McCain's flailing about its obvious he has no leadership to add to the proceedings.

LOL...I never said McCain would apologize. In fact, I don't expect him to. As to what the Congress will do, all I'm certain of is that they won't even put your so-called "solution" on the table.

But nice try again! I applaud you for your resolute support of your candidate in the face of his ridiculous posturing and flip-flopping!

I'm not sure Obama would have to do anything more than ask McCain how fewer regulations will help... because it seems unlikely to me that McCain would be able to explain it (given his well-known mastery of economic theory)

jwest, I read a book awhile ago with a theme pretty similar to what you are saying: "It's not what you say but what people hear".

You mentioned in another thread that people who can't balance their checkbooks will be electing the next president. There may be some truth to it, but I wouldn't be the one to go out there advocating that as a strategy.

There is no reason Obama has to defend the Paulson plan in tonight's debate. McCain has to answer for why he didn't get a bailout plan passed before he "resumed" his campaign.

Polimom,

The answer to that question is pure Reagan doctrine that every conservative knows by heart.

Look, you’ve got good political instincts as evidenced by you’re catching Act 1 of this theater last night. The dems are playing out Act 2 perfectly (for McCain) as we text. There is just no way Obama and the congressional dems to come out of this set of circumstances without being completely destroyed.

If some of the people on this site played chess for money, you and I could clean up. They seem to have a problem looking more than one move ahead.

The answer to that question is pure Reagan doctrine that every conservative knows by heart.

It's answer that no ones believes is true anymore. McCain already abandoned it last week when he started calling for more regulation.

A lot of people talking about stunts and being afraid to debate, but no one on this thread mentions Obama ducking the 10 town hall meetings McCain proposed or Obama's switching his campaign funding from public---which he swore to compete with McCain on an even playing field---to private. Overnight. Without a peep from the righteous Obamaniacs.

Obama's lies on the campaign trail outnumber McCain's, but the Golden One is unaccountable. If Paulson & Bush asked McCain to come to DC, he should have come.

The media circus that this campaign has turned into reveals the hysterical emo that drives the Obama candidacy---his shady past remains unvetted by an irresponsible MSM.

JWest, one thing I haven't heard any Republican explain about the so-called "insurance solution" is exactly HOW all these troubled institutions are going to come up with the money to FUND the insurance program.

The link you provided specifically states "Currently the federal government insures approximately half of all mortgage backed securities. (MBS) We can insure the rest of current outstanding MBS; however, rather than taxpayers funding insurance, the holders of these assets should pay for it. Treasury Department can design a system to charge premiums to the holders of MBS to fully finance this insurance."

I could be wrong here...but isn't liquidity currently a problem for all these MBS holders? Where exactly are they going to come up with the money to back this insurance fund?

And I have to mention upfront that if you claim "deregulation" is going to provide all the private capital necessary, it will only prove that this is no solution at all. Further deregulation in the face of all the problems CAUSED by deregulation is no solution, only a stalling tactic.

jwest,
The insurance premium decision doesn't work for one obvious reason: the banks have no money to pay for the insurance.

The problem is liquidity and solvency. The banks need liquid cash to free up credit. Insurance premiums do nothing at this point.

It's a bogus "solution" and won't be part of the deal in the end. Hopefully Eric Cantor and the House conservatives cave.

A lot of people talking about stunts and being afraid to debate, but no one on this thread mentions Obama ducking the 10 town hall meetings McCain proposed or Obama's switching his campaign funding from public---which he swore to compete with McCain on an even playing field

Obama was willing to have 2 more joint appearances, including a town hall, and the McCain declined. I guess the McCain campaign gets exactly what it wants or they take their ball and go home. And Obama NEVER EVER agreed to even the playing field. Obama said he would seek public financing if McCain would agree with him to call of the 527s and the Party Committee spending which totally subverts the purpose of public financing.

Either way, it was never about fairness. If you have more support, you should have more resources. Politics are not supposed to be akin to handicapped golf matches. It's about the most popular person winning.

[Obama's] shady past remains unvetted by an irresponsible MSM.

This is simply a demonstrable lie. Repeating it only further discredits you.

JWeidner/Elrod,

I wish I knew where the money was coming from.

For now, I’ll assume the elimination of the mark to market provisions will end the liquidity problems, but as to the details, I just don’t know.

Of course, it doesn’t matter.

Speaking strictly politically, meaning what will the vast majority of the people who will determine the outcome of this election hear, one side is trying to bail out evil, greedy bankers with hard-earned taxpayer money (in order to finance their big bonuses), while the Maverick McCain and his rag-tag band of lovable congressional republican cost cutters are looking out for the little guy.

You don’t need to argue details with a story line like that.

JWest, your heartwarming narrative about the "Littlest Republicans Who Could" sounds a little revisionist to me. McCain and the Republicans in congress never cared much for the little guy when all the Wall Street firms were lining their pockets. Thanks, in large part I might add, to the deregulation that McCain favors. Which, coincidentally, is what has led us to the financial precipice.

We'll see if the public is as gullible this time around as you seem to believe. Personally, I don't think McCain's "leadership" is going to bear much fruit one way or the other. He's flopped around too much on the economy in the last 2 weeks for most people to take him seriously.

We'll see how he does when the subject of deregulation comes up. I'll look forward to his answer to that for sure.

Just to be clear, I don't personally favor the bailout either, but it may be a necessary evil just to keep our nation's head above water. The credit markets are starting to freeze up, and once that process completes itself, the economy is kaput. When businesses can't get loans, people can't get loans, credit cards aren't providing money....well, for a nation that is built on easy access to credit, it doesn't take an economist to figure out what would happen. We're not a cash-based nation, and haven't been for quite a while.

I loved the Dewey beats Truman campaign graphic in Elrod's post. Unfortunately, it's already been taken down (as has been said).

One thing that isn't clear is whether McCain ever suspended his campaign at all, other than canceling on Letterman. I was reading FactCheck.org articles about McCain attack ads just yesterday, though perhaps those ads were a couple days old. By the way, Factcheck just published a nice summary of election fibs so far this year if you'd like to get caught up without reading all the archives.

"It's about the most popular person winning"

American Idol!! Ah!!!

How about "So you think you think you can govern?" or "Are you smarter than GWB?" Heh...

JWeidner,

No one has ever gone broke or lost an election underestimating the intelligence of the American voters (consumers).

The beauty of this situation was that the democrats and the press were the ones portraying the Paulson plan as a Wall Street bailout for the rich. It was a piece of Rovian genius to turn that plan into the Reid/Pelosi/Dodd/Paulson/Bush proposal that is doing battle with the McCain/House Republican plan.

“Karl, you magnificent bastard.” (Patton)

To pick up on a previous Polimom theme:

“How do you think he does it? What makes him so good?”
(Pinball Wizard)

Populists R Us, eh?

::shudder::

BTW -- suspending the mark to market rule would definitely make a huge difference -- and it wouldn't require anybody to fork over 700 billion dollars, either.

When it comes right down to it, didn't AIG go out of business because they were selling insurance guaranteeing that people who couldn't afford their morgages would some how magically be able to pay them off? And now, the Republicans are proposing that the solution to this is that the banks buy insurance, ensuring that people who still can't pay their morgages somehow eventually will? Huh? That doesn't make a lick of sense.

Also: I don't think that jwest's interpretation of how this will come off to Joe-Q voter is correct at all. What I see people saying is that our president (and to most people Dubya = all Republicans because of the congressional rubber stamp of his first 6 years) is making a proposal to bail out Wall St, and the Democrats are seeing that while something does need to be done, the average person needs some protections in there -- oversite, regulation, and help for homeowners. Whether or not congressional Republicans are for the Bush plan, people are going to see it as coming from the Republican administration, while changes for the protection of the average voter are being demanded by the Dems. Much easier story line.

roro80,
Lately the Republicans have had nothing but solutions to problems that don't exist:

Iraq has WMD
Rich people pay too much in taxes
There are too many restraints on torture & eavesdropping
New Orleans doesn't have enough water
People have too much health insurance, especially kids

Roro,

“and to most people Dubya = all Republicans”

That was the dangerous part of McCain’s magic trick. Had Reid, Pelosi, Dodd, Frank and all the surrogates kept quiet yesterday evening and today, it would have appeared to be a strictly administration program.

Being so full of themselves, they couldn’t resist the chance to preen for the cameras before thinking about how they were tying themselves to Bush.

Now, you have an unpopular President joined at the hip to even more unpopular congressional democrats in a scheme to waste taxpayer’s money on a historic scale. They couldn’t even resist the temptation of trying to load the bill with pork.

McCain and the House republicans are the only ones standing apart.

Bippity…..Boppity…..BOO!

Hey, polimom, can you explain the mark to market rule for the clueless like me?

LOL JWest. I gotta hand it to you for tirelessly flogging that dead horse of a plan. We'll see how it all turns out...new polls showing Obama continuing to gain seem to bear out my argument that the people aren't going to keep falling for McCain's continual B.S., but we'll see...

But jwest, using your own line -- "No one has ever gone broke or lost an election underestimating the intelligence of the American voters". I've seen some of the things Reid and Pelosi have been saying, but I'm a poli-junky. Normal people see Bush's gloom-n-doom speach, hear him say "Oh my god we're all screwed unless you pass this bill right the hell now!!!1!!!1!!", they hear McCain saying basically the same thing "It's so bad that I have to suspend my campaign because OMG AHHHH!!!!" and then you hear Obama saying that we need to make sure that we get it right and that there are protections for everyday people and regulation and transparency put into the bill. I just don't see this "super-mavericky maverick and the I-hate-fat-cats Republicans swooping in to defy the crazy corporate-lovin' Dems and their favorite president ever, Dubya" storyline playing out all that believably to most people. But maybe that's just me.

ChrisWWW -- Word, dude.

Polimom could give you a better explanation, but I’m handy, so I’ll give it a shot.

Mark to Market is a rule to adjust the value of an asset on your books to the current fair market value.

If you want to personalize the theory, here’s an example.

Let’s say you own a house that you paid $500,000 for just last year. You took out a mortgage for $450,000 and are making the payments easily.

Let’s also say that you have an extra $25,000 in savings for emergencies.

You wake up one morning and find that your neighbor with a similar house had to sell for $300,000, due to fact that the market was down and the neighbor was forced to sell quickly for whatever he could get.

If you had to live under mark to market rules, your bank would come to you and say your house was only worth $300,000. So, even though you are making your payments on time, they want the difference. $450,000 - $300,000 = $150,000.

Pay up. Right now! Even though you had cash reserves, it’s not enough to cover the difference.

You would now have a liquidity problem. All because of a rule that could be eliminated by the stroke of a pen.

I hope this helped explain it.

jwest, that rule sounds insane. What was the motivation behind it? I guess it's that it's based on the fact that the "home owner" doesn't really own the home and so the real owners, the lenders, are getting their value back?

Paca -- I can try. I'm not an economist, but here's the way I understand mark to market:

Let's say Bank A and Bank B each own an asset, for which they each paid $100. For the sake of this simple comment, assume it's the only capital asset each bank has. Let's further suppose that Bank A and Bank B are allowed to make loans at a ratio of 10 to 1 (in relationship to the capital). In this case, Bank A and Bank B have both therefore extended $1,000 in various loans.

But now Bank B decides to sell its asset for $110. Mark to market means that everybody holding the same kind of asset must now revalue to this latest price.

Cool! Bank B's selling price means that Bank A's capital goes up by 10% -- which means they can extend a further $100 in loans.

But what happens when Bank B sells for less than what it paid? Say... $90? Now Bank A has to mark its own asset down to that same value. And because the regulations say that they cannot leverage further than 10:1, they also have to bring their loans back in line with the required ratio. So now they have to call in 10% of their loans.

Does this make any sense?

So -- the recent "fire sales" (like Merrill Lynch) had assets selling for something like 22 cents on the dollar. Think about what impact mark to market will have on the asset values.... and thus the banks' ability to make loans -- or even leave existing loans in place.

Great explanations from both of you. Thanks for clearing that up.

pacatrue,

At one point, the same rule worked in reverse for institutions to add value to their balance sheets.

I’m not a finance guy, but apparently it was used to help implement a low income housing initiative during the Clinton administration.

As with most every liberal policy, it was intended to do good, but ended up causing havoc.

Just FYI -- if this mark to market drifts the thread too far off-topic, I've opened a post at Polimom for specific discussion.

Roro,

We’ll have to see how it plays out at the debate tonight.

If the moderator picks up on the theme that Obama/Reid/Pelosi/Dodd/Bush are in agreement and McCain/Congressional Rep. are the holdouts, game over for the community organizer.

100 million viewers – ain’t no ‘splain’in this one away.

Quick note:

Newt Gingrich just said his researchers have calculated an elimination of mark to market as being worth 500 billion of the 700 billion problem.

Yes, i guess we'll have to see. Despite your insistence, I really don't see how McCain can come off as anything but an idiot over the whole thing, but I may very well be proven wrong.

jwest

Oh well if Newt said it-- then we have nothing to worry about! I'd take his word over Bernanke and Paulson anyday. :)

Of course that little egomaniac has to find a way to grandstand even when he's not running for anything.

kritt11 -- your comment made me laugh. Not so much because you picked on Newt, but because you see Bernanke and Paulson as knowledgable / trustworthy sources at the moment, when they've been telling us almost non-stop for months and months that everything's fine.

MasterMcBlaster: "Who run Bartertown?"

Congressional Republicans: "McCain runs Bartertown."

MasterMcBlaster: "Campaign Embargo...OVER!"

Next up: Thunderdome in Mississippi. Two men enter, one man leave. Spin the wheel, Raggedyman!

Wow....Mad Max Beyond Thunderdome reference....Props!

Good point there, Polimom, and I gotta agree with you on that one! Still, in
comparison to Newt and his "researchers" they're economic geniuses!

BTW, I'm wondering if there was pressure on Bernanke and Paulson from the WH to pretend the economy was in good shape when, in fact it was teetering on the brink of Armageddon.

I guess because Bush has never wanted to acknowledge any bad news in 8 years in office. (Remember when no one in the administration was allowed to recognize the insurgency in Iraq or say that there was a civil war going on? Use the "r" word about the economy?)