Little green apples

By Distributorcap

It took 30 years and 204 days, but on Tuesday, August 2, 2011 the fruits of the Reagan Tree of Life will finally have reached its peak when the over-ripened, low-hanging, worm-filled Reagapples will begin to pound the ground, not with sweetened blossoms, but with a dead thud. Thirty years and 204 days of belittling and ignoring the American education system, calling ketchup a vegetable, telling us trees cause pollution, cutting taxes to create trickled-down imaginary jobs (okay, there are a few more maids and gardeners), and teaching Americans that they could have everything they want and it will cost nothing -- the Teadras-educated Republican Party is willing to take the ultimate bet and tell the piper (or croupier) this time to shove it.

The U.S. Congress has spent the better part of the past month arguing over whether the credit limit on the Visa card should be raised in order to pay their bills -- bills they have committed and signed to pay. If this game of cold-war brinkmanship weren't so dangerous on so many levels, it would actually be comical to watch. Watching the children of the right storm out of a meeting (Eric Cantor, who probably has the distinction of having had the most spit balls thrown at him during 7th-grade lunch) and then say no, no, no as the opposition capitulates to nearly every one of their demands is nothing short of having Macbeth playing in a Kabuki theater.

The 80 or so Teabaggers who sandbagged their way into Congress last November promising to stop those eternal welfare queens from driving Cadillacs and finally ridding the country of the leeches who live off their hard-earned (over)taxed dollars, are about to allow the real grand experiment to go forward -- let the U.S. default on its payments for the first time in history, and default by choice. You know the world's strongest economy is going to look like it is managed even worse than Greece.

I used to think the only item on the Republican platform (aka Our American Mein Kampf) was the personal destruction of Barack Obama (or any Democratic president), but now I realize there is actually a second principle enshrined in the GOP's manifesto. Not only do the Teabaggers and their enablers want to see Obama fail, they also want to prove that the ripened fruit of the Reagan revolution ("something for nothing") is actually a sweet treat, that the U.S. defaulting on its bills will have absolutely no consequences.

After all, American exceptionalism is American exceptionalism. Chicken Little is really just Donkey Little, a completely made-up scenario just to allow those pesky liberals to abscond with more money from hedge-fund billionaires and private jet owners to pay for BMWs for those food-stamp queens and unemployed kings. Unlike Bill Clinton, Barack Obama has not given the goose-stepping lunatics in the GOP any stained dresses to use as evidence of a grand socialist conspiracy. Short of the 21st-century version of Fanne Foxe showing up in next few days, the Teabaggers will have to resort to their only other weapon, actually pushing the nuclear trigger. In other words, in order to save the country, they have to vaporize the country. Three hundred million Americans will just have to hope the dice on 8/2/11 are boxcars or snake eyes and not a craps. Good luck with that when one die is all threes and the other is all fours. 

Obama has made this so easy for the Republicans. He has caved so many times to the right on so many issues even the more "reasonable" Republicans (an oxymoron if there ever was one) realize they can play the blinking game knowing their odds of winning are about as good as Secretariat's was at the 1973 Belmont. His obvious weakness as a leader and his hesitancy to confront a group of people bent on his destruction has made the Republican work of making a mountain out of a molehill as easy as selling worthless credit default swaps to a bunch of insurance companies. Compromise requires compromise, not rolling over time after time. Obama has rolled over so many times John Boehner finally figured out that those 80 or so Teabaggers in Congress must really be onto something.

What the Teabaggers and their enablers (actually, they are all a bunch of Teabaggers) fail to realize is that if the sky does fall on August 2nd (and it will), it will be more than repossessed Cadillacs. While those teabagging Congressmen will barely suffer the loss of a nickel in salary, benefits, and pensions (and plenty of them have more than enough money to cushion the potential blow), I would think they have relatives who will suffer, and suffer badly, from a default. And what about the millions who actually voted for the Teabaggers thinking these really smart guys would save them from the leeches on society, only to see now that a government that cannot pay its bills means no Social Security checks mailed, no medicare payments, soaring interest rates on their variable mortgages, a collapsed housing market, more bridges and roads crumbling, weakened airport security, soldiers in Afghanistan watching their checks bounce, and finally a lot of very angry Europeans, Chinese, Indians, Japanese, Brazilians, Australians, Saudis, and Swiss, people who help fund the elite of Wall Street?

And what about those private companies the Teabaggers just love so much? You know, the ones that actually employ thousands of teabagging voters, the ones that receive a big chunk of their revenue from government contracts? Do you think Boeing and Lockheed Martin are going to keep pay a lot of private employees sitting around the lunchroom while they wait for Tim Geithner to sign the checks? What about the diners, dry cleaners, auto mechanics, waiters, coffee trucks, baby sitters, and hundreds of thousands of other private businesses that exist because of companies employing thousands of workers based on government contracts? And those free parks the Teabaggers love to take their kids to on vacation -- gonna get awfully expensive at $50 a head to get into Yellowstone. This is the real trickle-down economy, people who really do earn a living because other people are getting a paycheck, no matter where that paycheck originates, not from so-called job creators who just take their tax breaks and buy more Prada or stash the money in the Cayman Islands.

So old people, government contractors, ancillary businesses, soldiers, medical professionals that help the elderly -- it is time for you to sacrifice in the name of proving the Teabag Gambit. The road to Teabag nirvana is filled with collateral damage. We may suffer, we may default, we may see rising interest rates, we may start opening Hoovervilles, but those fine Republicans in the House, the ones that were sent to ensure an orderly country -- well, they will just be right.

Maybe we can form a new union of people to pick up those little green Reagapples.

Beware those who don't heed history's lessons: A review of HBO's Triangle: Remembering the Fire

By Edward Copeland

"People forget the Triangle fire at their peril... If people want to know what deregulated industry would look like, look at the bodies on the sidewalk outside the Triangle building."
Leigh Benin, Adelphi University labor historian

With big corporations seeking to gain more and more power by using bought-and-paid-for politicians to strip away regulations and weaken workers' rights, there couldn't be a better time to look back at the tragedy of the Triangle Shirtwaist Company fire, which killed 146 people 100 years ago March 25 and brought about the reforms and labor movements billionaires and the historically ignorant seek to dismantle today. A well-done and brief primer on the fire and the events leading up to it and its aftermath premieres on HBO tonight. Triangle: Remembering the Fire debuts at 9 p.m. EDT and PDT / 8 p.m. CDT.

For those unfamiliar with the story of the Triangle fire, this 45-minute documentary gives you almost all you need to know about the 100-year-old tragedy and offers lessons needed for today as it seems we risk the rise of a new Gilded Age where tycoons value profits over the safety of their workers and the government at both the state and national level seems to be more-than-willing co-conspirators with its push to deregulate anything and everything. If one wants to look for modern examples of this, they need looks no further than the lack of safety enforcement at various coal mines that have cost many miners their lives, the BP Gulf disaster which killed their own workers and destroyed an ecosystem and the "fracking" techniques used in the search for natural gas that has been linked to poisoned water sources, cancer deaths and possibly even earthquakes, all of which exploration companies were exempted from environmental laws under the Bush Administration. This doesn't even take into account how the blind eye of regulators allowed financial speculators to cause the biggest financial crisis since the Great Depression and a housing bubble that sparked a foreclosure debacle. Just last week, both parties in Congress, led by Sen. Jon Tester, D-Mont., all still doing the bidding of the big banks, sought to delay the huge fees the banks collect on debit card transactions for another two years, weakening already toothless financial reform legislation. Obama's Treasury Secretary Tim Geithner also is rumored to further water down the reform by exempting currency derivatives from transparency requirements in the legislation. Yes, government of the corporations, by the corporations and for the corporations shall not perish from the United States it seems.

In 1911, out of the ashes of the tragedy of the Triangle fire came reforms for workers, first in the state of New York, that laid the groundwork for FDR's New Deal when he became president 22 years later, reforms that politicians backed by rich businessmen seek to dismantle today as we've seen in states such as Wisconsin, Michigan and Ohio with more on the way.

Tovah Feldshuh narrates Triangle: Remembering the Fire and her calm voice serves perfectly as an invisible teacher. The Triangle Waistshirt Company was one of many businesses associated with the garment industry in the early part of the 20th century in New York. Co-owners Max Blanck and Isaac Harris had hit upon a new trend in ladies' fashion: basically, the blouse. For the first time, women were wearing separate tops just as men did. It made them rich and their company occupied the top three floors of one of downtown Manhattan's newest skyscrapers, the 10-story Asch Building at the corner of Washington Place and Greene Street. The building, now known as the Brown Building and part of the NYU campus, still stands and has been registered a National Historic Landmark and a New York City landmark.

With the huge demand for their product, the Triangle company workers tended to be on the job seven days a week for long hours and little pay and the people willing to be exploited this way did so because they had no other choice. They tended to be newly arrived European immigrants who had been fleeing famine and persecution. Not only did they not find the American dream in their work situation, most could only find living arrangements in tenements on the lower eastside. In the case of the garment industry, most of these virtual slaves were women, especially young women, some not even teenagers yet. To get as much production going as possible, the ninth floor of the Asch Building had been stacked to capacity with 300 sewing machines, leaving barely any elbow room for the workers inside. About a year and a half before the Triangle fire in November 1909, The International Ladies Garment Union Workers Union staged a massive strike demanding better working conditions for women. The 20,000 female strikers who took to the streets was unprecedented — and this was taking place more than a decade before women had the right to vote in the United States. It really was the first head-on clash between the tycoons of The Gilded Age and their corrupt political minions ensconced in Tammany Hall and the growing progressive movement. The strikers may have been women, but it didn't prevent Tammany from sending out police and hired thugs to arrest them and get rough. By the time the strike ended, the workers at Triangle returned to their sewing machines without any union recognition.

As we see today when the gap between what company CEOs make and the wages given to their average workers have reached startling disparities, similar differences existed at the time between company owners and the average Americans. For example, Triangle co-owner Max Blanck surrounded himself with servants and spent more than $100,000 to renovate his home, quite a contrast when the average American in 1911 only made $300 to $600 a year. Yet Blanck and other company heads didn't want to spring for the readily available sprinkler systems for new buildings or follow the recommendation of New York Fire Chief Ed Croker who, after a similarly tragic fire at a Newark, N.J., factory a mere four months before the Triangle fire had killed 25 workers, again mostly women, had suggested that buildings routinely practice fire drills. Company owners, always focusing on the bottom line, felt drills would affect work productivity and since no government regulations existed to enforce the sprinklers or the drills, they had no one twisting their arms to do the right thing.

What's so compelling about Triangle: Remembering the Fire is not just recounting all that missteps that led to the tragedy and can anger you a century later even when the event occurred long before you were born, but also the interviews with people related to both survivors and victims of the blaze. The filmmakers interview Suzanne Pred Bass who had two great-aunts who were in the fire, one who survived, one who didn't, presumably because they lost sight of each other in the smoke that quickly enveloped the ninth floor.

The cause of the fire has never been clear, but most believe a still-burning cigarette tossed into a trash can on the eighth floor quickly consumed the three floors. The switchboard operator on eight notified the 10th floor and the fire department immediately but in her haste, forgot to tell the ninth floor. Though the documentary doesn't confirm it as fact or legend, the story goes that of the two fire escapes on the ninth floor, they kept one locked so that when workers left for the day, they could be searched to make certain that they weren't stealing anything. Those who did survive from the ninth did so thanks to the heroics of elevator operator Joseph Zito who kept overloading his vehicle to get as many out as he could until it finally collapsed under the weight of the panicked who leaped down the elevator shaft to escape the flames. Most of the people on 10 were able to flee thanks to people in a neighboring building who got ladders across the space between the two buildings. Even though the fire department arrived two minutes after receiving the call, once they got to the Asch Building, the ladder trucks only reached to the sixth floor. Many of those who died were killed jumping to their deaths. At first, some bystanders thought they were tossing bundles of clothes out the windows to save them until they spotted the legs, arms and faces beneath them. Some hit the pavement so hard they crashed through glass plates on the sidewalk. In all, 146 died, 129 women and girls and 17 men. The blaze consumed all three floors in just 18 minutes from the time the blaze started and that 18 minute mark was when the last body hit the ground. Of the 146 deaths, 90 leaped to escape the flames.

The horror of what happened led Al Smith, a Democrat thick in Tammany Hall politics who would later lose the presidency to Herbert Hoover, to shake off the cronyism and lead the fight for reforms. New York led the way for proper workweeks and pay and, most importantly, safety conditions for its citizens. It even began to set up a pension system for those too old to work any longer, all ideas that Franklin Roosevelt would bring nationwide in the New Deal. The tragedy showed the need for strong unions and for the government to be for the people, not the corporations, and it is frightening to see the backpedaling that is happening today. Blanck and Harris eventually did face criminal charges for the deaths of their workers, but they were acquitted by an all-male jury and since they had lots of insurance, the fire didn't do much damage to them at all. Because many of the bodies were charred so badly, six couldn't be positively identified but in a separate feature, Triangle: The Unidentified, available only on HBO OnDemand, co-producer and historian Michael Hirsch uses research and genealogical techniques unavailable 100 years ago to give names for the first time to those resting in a mass grave in the Evergreen Cemetery in Brooklyn so now when the names of the dead are ready every year, those unidentified six can now join the other 140.

Triangle: Remembering the Fire premieres tonight at 9 p.m. EDT and PDT / 8 p.m CDT. You owe it to yourself to watch.

Michigan power grab

By Mustang Bobby.

Via Steve Benen comes a story about the new governor of Michigan being granted basically limitless power to do anything he wants.

Newly elected Republican governor, Rick Snyder, is set to pass one of the most sweeping, anti-democratic pieces of legislation in the country -- and almost no one is talking about it.

Snyder's law gives the state government the power not only to break up unions, but to dissolve entire local governments and place appointed "Emergency Managers" in their stead. But that's not all -- whole cities could be eliminated if Emergency Managers and the governor choose to do so. And Snyder can fire elected officials unilaterally, without any input from voters. It doesn't get much more anti-Democratic than that.

Except it does. The governor simply has to declare a financial emergency to invoke these powers -- or he can hire a private company to declare financial emergency and take over oversight of the city. That's right, a private corporation can declare your city in a state of financial emergency and send in its Emergency Manager, fire your elected officials, and reap the benefits of the ensuing state contracts.  [Italics in the original.]

Ironically, this was the kind of thing all the tea-partiers were screaming about last year that President Obama was plotting to do with the stimulus and healthcare law: he's a tyrant who will stop at nothing to take away the power from the people and turn it over to the bureaucrats and the evil Soshulists.  So, naturally, you'd think that the tea-folk in Michigan would be apoplectic about this.  Well, you would be wrong.  They're delighted with it.

One of the Republican state lawmakers who supports this effort characterized the plan as "financial martial law" -- and as far as he's concerned, that's not a criticism, that a defense for this little scheme.

Rule Number 1 of Dictators: It's not tyranny when we do it; it's "emergency powers." (See: Mubarak, Hosni; Castro, Fidel & Raul).

(Cross-posted from Bark Bark Woof Woof.)

Be careful which enemies you make

By Edward Copeland 

In Charles Ferguson's outstanding documentary on the financial meltdown, Inside Job, one of his interview subjects is former N.Y. Attorney General Eliot Spitzer, who'd been known as the Sheriff of Wall Street for going after shady business practices long before the collapse. Toward the end of Inside Job, it makes the point that none of the financial firms ever faced investigations for their traders writing off high-priced escort services as business expenses, but the Justice Department did pursue Spitzer when it was discovered after he was governor that he used an escort service. The work that Spitzer did and the promise he held as a gifted politician that came crashing down because of his personal weakness are detailed well in another excellent documentary from the prolific filmmaker Alex Gibney, Client 9: The Rise and Fall of Eliot Spitzer.

Gibney also made the great 2010 documentary Casino Jack and the United States of Money as well as the similarly outstanding Taxi to Dark Side and Enron: The Smartest Guys in the World. He also served in producing capacities on Ferguson's excellent No End in Sight and the brilliant Who Killed the Electric Car?

While Client 9 definitely makes the case that the political downfall of Spitzer may have been an orchestrated hit by his enemies in the business community and the Republican Party, Gibney doesn't try to downplay Spitzer's faults beyond the weakness that led him to seek high-priced sexual companionship in the first place. The film paints a broader portrait of the man's achievements and his hubris, which include a superiority complex and an approach that makes him come off as a bully, even if what he was trying to do was right.

As with the best documentaries, Client 9 teaches you things that you didn't know. It seems as if so many of the recent outstanding documentaries, no matter what their subject may be, show how spoonfed the U.S. media are, regurgitating "facts" that get handed to them while seldom checking their veracity. As far as I knew (and I imagine this to be the case with most people who heard about Spitzer and the call girl), his preferred escort was "Kristen" aka Ashley DuPre, who then turned herself into another of those freak celebrities, who ended up with a job at Rupert Murdoch's New York Post as a love and sex columnist.

Client 9, through interviews with one of the owners of The Emperors Club escort service, reveals that Spitzer saw "Kristen" maybe once but mainly went out with a woman who went by the name Angelica. Gibney interviewed her, but she didn't want her face or voice revealed, so an actress plays her part and reads the transcript of her interviews. Ironically, she's now a commodities day trader.

Where Spitzer really might have earned the enemies who were determined to stop him was when as attorney general he went after the head of AIG, Hank Greenberg, for the crooked financial games that company was playing, long before that company's collapse became a major cause of the world financial collapse and cost U.S. taxpayers billions in not one, but two bailouts. Greenberg was not at the helm by then, having been removed by his own board for violating company rules, but the methods AIG employed while Greenberg ran it were still going on and led to AIG's implosion.

U.S. Attorney Michael Garcia prevented Spitzer's pursuit of Greenberg prior to that by claiming the Justice Department was building a case against Greenberg, which they never filed. However, this same Garcia intercepted wire transfers Spitzer made and started looking into escort services that led to leaks that got Spitzer's sexual habits revealed. This also came at the time the Bush Administration was firing U.S. attorneys who weren't prosecuting enough Democrats.

Needless to say, when prosecutors go after prostitution rings, they rarely go after the clients, just the owners and the prostitutes. In contrast, around the same time, the D.C. Madam case surfaced and they only pursued the madam there, even though it was revealed that two of her clients were high-profile Republicans, including Louisiana Sen. David Vitter, who was just re-elected. He faced no legal inquiries.

Many believed that Spitzer had a good shot at being the country's first Jewish president. I just wonder if he'd been able to keep after Wall Street as he was doing, whether some of the mess that happened could have been prevented since no regulatory fixes have really been put in place to stop it since. Government of the corporations, by the corporations, for the corporations shall not perish from the United States and we the little people always will be the ones paying the price. Thank goodness we have documentary filmmakers such as Alex Gibney to do the job that journalists have long since abandoned or forgotten how to do.

(Cross-posted at Edward Copeland on Film.)

The United States of Goldman Sachs

By Edward Copeland 

In 2007, Charles Ferguson directed the great documentary No End in Sight. Last year, he helmed another that told the story of an entirely different type of destruction, Inside Job, only this time the war wasn't against another country, it was against the world's financial system and instead of only those actually in Iraq and their families paying a price, we all suffered for Wall Street's greed and Washington's malfeasance.

As Ferguson did in No End in Sight, he makes a very complicated subject easier to understand through his masterful presentation of the facts and history of the situation (narrated by Matt Damon here) and interviews with key subjects. It's not an easy task in Inside Job because trying to explain the mechanics of financial derivatives and its role in the economic collapse is nowhere near as easy to do as it was to show all the mistakes and blunders involved in the Iraq war.

Not surprisingly, most of the key figures such as Alan Greenspan, Timothy Geithner, etc., refused to be interviewed for the film, but what's shocking is that Wall Street and financial service figures who do give interviews feel completely at ease showing their arrogance and defending the industry's actions.

Inside Job, briskly edited by Chad Beck and Adam Bolt, shows how decades of deregulation under presidents of both parties led to one crisis after another, each bigger than the last, with seemingly no one in Washington learning any lessons.

The film also provides fascinating tidbits such as the fact that as recently as the early 1970s bond traders' salaries were low enough, that some had to take second jobs to make ends meet. It also tells how employees of various financial firms engaged in cocaine-fueled parties with prostitutes which were billed to the companies as things such as computer supplies.

The handful of firms who would tell their clients a purchase was good while betting on its failure behind their back is staggering, though not as staggering as the refusal of regulators to do any regulating or the number of former top Goldman Sachs executives who end up serving in presidential administrations of both parties. (When Hank Paulson stepped down as Goldman CEO to be Dubya's treasury secretary, he had to sell $450 million in Goldman Sachs stock but thanks to a law signed by the first Bush, he paid exactly zero taxes on it and some say the rich are taxed too much?)

Ferguson's No End in Sight proved to be not only informative, but to provoke outrage at all of the things that were and weren't done prior to the Iraq war. Inside Job does just the same for the history of the financial collapse, especially when you see all of the names who profited from Wall Street's greed that have populated the Obama Administration, not that he invented the problem.

It began with Reagan, got worse with the first Bush, declined further under Clinton and took the big nosedive under the second Bush. Now, Obama's advisers come from the same group and Congress passes reforms without teeth because Wall Street controls what happens. Inside Job tells this infuriating story in great detail and it tells it well.

(Cross-posted at Edward Copeland on Film.)

It's not alright, Jack

"We've lost sight in Washington of what Congress is for, of who Congress serves. It serves the people of the United States. Instead, we've found it serves Chinese sweatshop owners, Russian gangsters — Congress is now serving those interests. The thing is it has become accepted now, so part of our political culture now, that it's normal. Your average citizen doesn't have the voice you'd expect him to have because these voices are much louder and much better financed."
— J. Michael Waller, director, Institute of World Politics

By Edward Copeland 

It's slightly confusing that jailed former lobbyist Jack Abramoff has inspired two 2010 films about his escapades and that both have Casino Jack in the title. I've yet to see the fictional feature starring Kevin Spacey and directed by the late George Hickenlooper, but the documentary Casino Jack and the United States of Money by Alex Gibney, the great documentarian behind past gems such as the Oscar-winning Taxi to the Dark Side and Enron: The Smartest Guys in the Room has made an excellent nonfiction version. On top of that, Gibney also directed or co-directed THREE other 2010 documentaries I've yet to see, Client 9: The Rise and Fall of Eliot Spitzer, Freakonomics and My Trip to Al-Qaeda. He also executive produced the phenomenal No End in Sight and was a consulting producer on the exquisite Who Killed the Electric Car? Busy man and from the films I've seen him make so far, a damn fine nonfiction filmmaker as well as a prolific one.

Even if you followed the tale of uberlobbyist Jack Abramoff closely, Gibney's film will keep you riveted as it tells the story of his life and various malfeasance through interviews with many of the associates who were involved in his schemes, either as victims or perpetrators. You also get handy reminders of what a true character the man really was, dating all the way back to his days as he took over the national college Republicans to spin them in a more conservative direction with friends such as Karl Rove and Grover Norquist.

It's also funny to remember his interest and obsessions with pop culture, such as when he grew tired of his secular Jewish rearing and decided to become orthodox based on, of all things, seeing the film version of Fiddler on the Roof. Then there is the obsession he and other college Republicans had with the movie Patton, repeating the famous speech George C. Scott delivers in the film, only replacing every German or Nazi reference with Democrat. Longing for spy games at heart, when an Angolan adventure goes awry, Abramoff even turned to movie producing, financing the Dolph Lundgren hoot Red Scorpion.

However, lobbying proved far more lucrative to Abramoff than show business ever could have been, ethics and laws be damned. It led to the the top our system of legalized bribery (and some instances of not-so-legalized bribery) as he peddled influence on Capitol Hill, mostly with Republicans though Democrats cashed in on his largess as well. The shocking parts are watching as he enlists Indian tribes as clients to promote gaming on one hand and charges them huge fees while on the other hand helps forces out to stop the Indian gaming movement if it interferes with specific clients. Rest assured though, Abramoff and his associates were making money on both sides of the equation.

Casino Jack and the United States of Money tells Abramoff's story in a sleek, informative way and it's still unbelievable that only member of Congress, Bob Ney, R-Ohio, went to jail for his involvement with the man, even if he did help shove Tom DeLay out the door. Gibney saves his suckerpunch for the epilogue though, when you realize that as bad as the system is and as horribly as Abramoff abused it, it turned out to be small potatoes compared to what the lobbyists for the titans of Wall Street have and continue to accomplish.

The result should really be more depressing than it is, but it's made too well and entertains too much for much sadness to seep in.

(Cross-posted at Edward Copeland on Film.)

Obama to cap executive pay

By Creature

"If the taxpayers are helping you, then you’ve got certain responsibilities to not be living high on the hog." -- President Obama

Hog-less [Bloomberg]:

President Barack Obama will announce today that he’s imposing a cap of $500,000 on the compensation of top executives at companies that receive significant federal assistance in the future, responding to a public outcry over Wall Street excess.

Good. Now, if someone could school these executives on how not to bankrupt their companies we'd all be better off.

Geithner, the Tax Man, and the Treasury

By Michael J.W. Stickings

Oh, how the right is salivating over Treasury nominee Tim Geithner and his tax problems, specifically, his failure to pay almost $43,000 in Social Security and Medicare taxes over several years earlier this decade.

Appearing before the Senate Finance Committee on Tuesday, Geithner explained, according to the Post, that the "mistakes on his tax returns early this decade were unintentional and that he has since paid back the $42,702 he owed, including interest... [H]e mistakenly believed that his employer at the time, the International Monetary Fund, was deducting those taxes from his paycheck." Democratic committee chairman Max Baucus called his mistake "serious," Minority Leader Mitch McConnell is withholding judgement, and two other Republicans, Jim Bunning and Jon Kyl, are temporarily delaying his confirmation, but, of all people, Orrin Hatch, one of the most conservative and most partisan of Republicans, came to his defence: "I still support him. I have no problem. He's a very, very competent guy."

But then there are those who are making much ado, such as the Politico's Roger Simon, a noted conservative, who asks today, "What if I didn't pay taxes?" Which isn't fair, of course, because Geithner still paid most of his taxes, he just neglected to pay certain taxes that he thought were already being deducted." It an incredibly and typically idiotic piece.

Then there's The Wall Street Journal, a right-wing rag (in editorial terms), which facetiously calls for "a Geithner tax amnesty." But Geithner didn't "forget" to pay his taxes, it was just an oversight on his part -- a serious one, to be sure, but it's not like he was engaging in tax fraud or otherwise simply refusing to pay his taxes.

And it isn't just the right. Even The New York Times (which is actually far more rightist than most people realize) editorialized that "the disclosures cannot be dismissed so easily, or papered over," that "Geithner must be questioned forcefully about these matters at the hearing next week, and his explanations must be credible."

As the Times reports elsewhere, though, "several tax experts" say that "it is an easy mistake for an employee of an international organization to make." Even the Politico admits this: "Should the U.S. treasury secretary know how to do his own taxes? Maybe not, say payroll lawyers, accountants and tax professors, who consider Timothy Geithner’s failure to pay four years of Social Security and Medicare payroll taxes to be a fairly common mistake — even for a top economist chosen to run the Treasury Department, including the Internal Revenue Service."

And while media outlets like CNN are similarly making much ado and focusing on all the supposed opposition to Geithner, Republicans, with few exceptions, are pretty much on Geithner's side, dismissing the tax oversight and stressing his abilities and qualifications.

Now, this is not to say that I myself am fully behind Geithner. I have my reservations, but they have nothing to do with his taxes. Rather, they have to do with the fact that he once worked for Henry Kissinger (I'd like to know more about what he did for Kissinger & Associates), that he's another Rubin-Summers (who were both enablers of the banking crisis back when they were at the Treasury in the '90s under Clinton), that he has been very much part of the problem with respect to the financial meltdown, and that he's an enthusiastic cheerleader for the ever-growing financial bailout.

Still, I'm not against him -- I trust Obama on this -- and, despite these concerns, I do not necessarily oppose his confirmation. Indeed, as Robert Kuttner (via Benen) noted last September, Geithner is actually quite progressive with respect to regulatory policy. And Paul Krugman likes him, which is, for me, very much in his favour, even if Frank Rich makes a strong and persuasive case against him for being "no less tardy [than Rubin] in discovering the reckless, wholesale gambling that went on in Wall Street's big casinos, all of which cratered while at least nominally under his regulatory watch."

Regardless, it looks like he'll be confirmed. Thankfully, the stupid matter of his taxes won't be his undoing.

Drawing lines

By Creature

The question with bailing out everyone, and their mothers, usually comes down to drawing lines. I understand a frozen financial system harms all (the life-blood argument blah, blah, blah). I understand the importance of keeping Detroit, and its millions of interconnected jobs, alive as well. And, I'm all for a huge stimulus focused on infrastructure, education, and green. But keeping greedy property developers and commercial building owners in the black is a step too far and should be rejected without a second thought. As Calculated Risk points out: "How many jobs will be lost if the ownership of an office building or mall changes? Very few." If at all. Enough is enough.

(Cross-posted at State of the Day.)

Tip of the iceberg

By Carl

I've spent a few days catching up with the Bernard Madoff story (as well as the smaller but no less spectacular Marc Dreier tale of woe). I have a couple of thoughts and observations to make.

First, this is just the beginning. As with all things financial, the first shock is never the last, as things like this ripple through the interconnected financial world. Look at how the "contained" (to use Henry Paulson's term) subprime mortgage meltdown took over the entire commercial banking system.

Before we go much further, I need to do a quick primer on what Madoff and Dreier did. It involves a term you might have heard called a "hedge fund". A hedge fund is nothing more than a pool of money that places sophisticated bets on individual companies and/or stock indices. Usually, because the chance for profit is much higher, they will bet against a company or market by "shorting" the stock or borrowing shares from someone with the promise to pay for them later, turning around and selling them, then buying other shares back when the price drops and "paying" back the original loan. There are other, even more complex arrangements that hedge funds engage in, like derivatives and leverage, and I might cover those in later articles.

There are plenty of complications to short selling, not least of which is the possibility of unlimited losses: if the shares never go down below the "sales" price, the borrower can't earn any return. The upside is, it's about the only way to make money in a down market.

Hedge funds, therefore, spend an extraordinary amount of time looking for companies that are about to fail in some respect: revenues off, profits down, dividends cancelled. Obviously, they try to do this before the rest of the market finds out.

Hedge funds are also exempt from the very tight oversight rules of the SEC that apply to brokerages by dint of the fact that one has to be a "qualifed" or "accredited" investor (the rules are a bit complex, but suffice it to say to be either of these, you gotta have bucks). These are in effect private, invitation-only investments, and the investors are expected to have some financial sophistication, as evidenced by the fact they have $1 million or more.

As the Madoff case shows, not so much.

While the grunt work of a hedge fund relies on quantitative analysis (number crunching), the marketing work of a hedge fund relies primarily on the qualitative properties of the fund manager.

Which leads me to observation number two: there's no accounting for greed. By all accounts, Madoff should have been a successful manager. He was a chairman of the NASDAQ, which means he had an awful lot of success investing, and had credentials and contacts out the wazoo.

Time will tell us how he failed so miserably, but the clear lesson from Madoff's point of view is, he got greedy.

You see, fund managers are generally entitled to a percentage take of the profits (normally 20%) as well as a percentage of the assets in play (usually 1%) to cover administrative expenses (salaries, normally). Obviously, the higher the nut, the larger the percentage take is in real dollars. If you manage actual assets of $15 billion, as Madoff did, but can leverage these to three or four times their size, as Madoff did, you can claim $50 billion in assets and ignore the liabilities, because hey, they're going to be paid back! On paper, you've just earned $7 billion in bonuses and can claim $500 million in expenses.

Not bad, eh? So you can understand why Madoff didn't just toss the keys on the desk when his investments went sour.

Which brings me to point number three: There's no accounting for greed. (What?)

How he sold these stakes in his fund is simple: he dummied up numbers, attracted the right kind of attention and was able to practically hand out stakes in his fund. He all but promised a 12% return each year, allowing people to fill in the "promise" bit on their own. So long as he was able to expand his investment pool, the sky was the limit in terms of how much money he would control but also how long he could pay out 12% returns.

This is why hedge funds are run on the rule that the investors have to have sophistication, because the opportuinity to bilk people is too juicy. You're supposed to know to ask questions, the right questions. Apparently, enough people didn't, dazzled by doubling their money every six years.

Clearly, the SEC, which has nominal oversight over hedge funds, gave Madoff a pass, which brings me to point number four: too often, we are led by authority and don't question it. We saw it after Obama took the nomination, the number of liberals who creid foul as Obama correctly shifted to more centrist positions. We see it in the Madoff case. Hey, the guy was chairman of NASDAQ just ahead of the tech boom!

Point number five (and echoing point number one) is that hedge funds have already been responsible for the collapse of Bear Stearns, Lehman Brothers, and Fannie Mae and Freddie Mac. Indeed, some speculation has it that hedge funds are responsible for the year long collapse of the global stock market.

Now, take that bit of information and add this bit of information: in America alone, hedge funds control 3/4's of a trillion dollars in assets. That's roughly half of the assets under management worldwide.

Put it this way: Hedge funds as a nation would rank 8th, just ahead of Spain and just behind Germany.

Suddenly, you see that Madoff is peanuts, the tip of the iceberg, the first crack in the veneer of ice over the abyss. We're a long way from bailing out this boat.

(Cross-posted at Simply Left Behind.)

Krazy Kristol tops 2008 worst list

By Michael J.W. Stickings

Foreign Policy has published its list of "The 10 Worst Predictions for 2008." Topping the list: Krazy Bill Kristol, with this doozy:

If [Hillary Clinton] gets a race against John Edwards and Barack Obama, she's going to be the nominee. Gore is the only threat to her, then... Barack Obama is not going to beat Hillary Clinton in a single Democratic primary. I'll predict that right now.

He predicted that "right now" on Fox New Sunday on December 17, 2006 -- and, of course, it turned out, like so much of what he predicts, to be entirely wrong.

But was it really a worse prediction that this truly appalling one -- this dangerously misleading one -- from Crazy Jim Cramer?

Peter writes: "Should I be worried about Bear Stearns in terms of liquidity and get my money out of there?" No! No! No! Bear Stearns is fine! Do not take your money out... Bear Stearns is not in trouble. I mean, if anything they're more likely to be taken over. Don't move your money from Bear! That's just being silly! Don't be silly!"

Yeah, how'd that work out? Bear collapsed six days later.

Kristol was just doing what so many political pundits do, namely, making ill-informed, partisanized predictions, whereas Cramer was actually giving investment advice.

So what if you accepted Kristol's prediction? Unless you had money on the outcome of the Democratic primaries, which you shouldn't have had, what did you lose by agreeing with him that Hillary was going to win? Back then, before Iowa, many people, including me, thought that she was going to win. She was well ahead in the polls, after all, and Obama had not yet become, well, Obama.

But if you accepted Cramer's prediction? Well, you could have lost a lot of money.

In other words, what Kristol predicted was wrong, but what Cramer predicted was both wrong and deeply irresponsible.

Now, what was clear long before the Bear collapse was that you shouldn't trust Cramer with your money -- or any single investment advisor, for that matter -- and you deserve some of the blame if you accepted Cramer's word on Bear without doing your own due diligence, but that doesn't excuse Cramer from being so downright ignorant just days ahead of one of the biggest corporate meltdowns in American history.

Doing something

By Mustang Bobby

What I don't know about economics and monetary theory could fill several large volumes, and if someone asked me what we should do about the current financial crisis, I'd probably stare at them like a Shropshire sheep, then come up with something along the lines of "homina-homina." Fine; my reaction -- or lack of it -- doesn't mean anything to the global economy. But when people we've entrusted with running the country and the economy display the same kind of indecisiveness and incoherence, it can lead to all sorts of unpleasantness. It's not that they don't have the answers; economists will argue about the granular stuff, but it's the appearance of confidence and having a solution at hand that matter.

Stock markets are like herds of cattle or flocks of pigeons; they respond to input -- either positive or negative -- without really thinking; they just take off in a flurry before processing the news. But they also pay attention to the attitude, and when the leaders -- or the presumptive leaders -- actually do something that indicates they will take charge and do something, the markets respond positively, even if the ideas and stimulus come from President-elect Obama, who has no power whatsoever. Action brings confidence and relief.

There's been a lot of discussion about whether or not this financial situation is comparable to 1932 when Herbert Hoover did too little too late to try to bring the nation out of the Depression. The nation and the world waited on the verge of panic for the new administration to come into office in March 1933, and when Franklin Roosevelt took the oath of office and declared that we had nothing to fear but fear itself, it was almost cathartic. It wasn't his solutions that worked -- many of them put in place in the first 100 days and the years after didn't do all that much. It was just his attitude of confidence and belief that Americans would be able to get through it, and he was the leader to get us going again. As Will Rogers noted at the time, "If he burned down the Capitol, we would cheer and say, 'Well, we at least got a fire started somehow.'"

Cross-posted from Bark Bark Woof Woof.

Top Ten Cloves: Things about Citigroup keeping stadium sponsorship after getting government bailout

By J. Thomas Duffy

News Item: Heckuva Bailout: Citi and AIG Still Pay Hundreds Of Millions In Sports Sponsorship

10. Instead of "Fan Appreciation Day," now will be called "Hank Paulson Appreciation Day."

9. Make fans give back foul balls hit in stands, because Citigroup needs to "tighten belt and save money."

8. When starting pitcher is relieved, now will be referred to as being "bailed out."

7. Soon becomes evident ... free agent signing season on one hand ... Major layoffs at Citigroup on the other hand.

6. Citigroup making one concession: Killing plans that would allow execs to fly to stadium in their private jets.

5. "Casey at the Bat" now gets reworked to "Casey at the Bank" and it's a happy ending: Casey doesn't strike out, but walks away with billions.

4. Citigroup to sub-contract parking lot to AIG ... AIG hires people to vandalize cars ... AIG then sells fans new "Vandalism Insurance Policy."

3. Instead of ceremonial "first pitch," Citigroup execs will do ceremonial reenactment of receiving bailout check from government.

2. New 7th-inning stretch tradition: Players and Citigroup shakedown fans in stadium, making them fork over money to see the game finished.

1. Using its "expertise," Citigroup to make millions working on packaging troubled batting averages and selling them to investors.

**********

Bonus Bogus Bailout Riffs

Think Progress: Bailed-out companies AIG, Citibank have no plans to cancel expensive sports sponsorships

Michael Winter: Citi, AIG will continue sports sponsorships despite bailouts

Robert Reich: Citigroup Scores

Tyler Cowen: Whoops! Back to TARP after all...

Brilliant at Breakfast: So why DID we just throw a truckload of money at Citigroup then?

The Wonk Room: Citigroup Bailout: ‘A Lousy Deal For The Taxpayers’

Mark Thoma: The Citigroup Bailout


Bonus Bonus

Special Essay - Play Ball! ... Batter Up! ... Could You Please Tell Me, What Is This Thing Called Baseball?




(Cross-posted at The Garlic.)

Where's Bjork?

By Michael J.W. Stickings

Think things are bad here, financially speaking (not so bad here in Canada, but pretty bad south of the border)? Well, be thankful you don't live in Iceland*:

Iceland's central bank upped its key interest rate by 6 percentage points to 18 percent on Tuesday, two weeks after it had eased policy to soften the impact of the country’s financial meltdown.

The move, which one economist called extreme, was the latest by authorities to prop up the country's frozen currency and markets, offering investors a high return for putting money back into the North Atlantic island's crippled financial system.

*****

The island nation's financial system has all but collapsed since the country was forced to take over three of its biggest banks earlier this month.

Its currency has crumbled, raising the specter of inflation, which is already in double digits, soaring still further.

Ouch.

(Here in Canada, our currency is sagging, but our banking system remains fairly robust. There aren't many sub-prime mortgages to be had, and the credit crunch is being felt, but the lending rate isn't bad.)

* To our Icelandic readers -- I'm sure we've had some over the years -- I'm sure you have a lovely country otherwise. I hold Bjork against you, as many do, but I quite like Sigur Ros, and your films, some of which I've seen at the Toronto Film Festival, are generally excellent (Kieslowskian, I would call your cinema, which is high praise coming from me, I assure you). And it also seems to be an extremely beautiful country. I've never been, but I'd love to visit sometime. Oh, and Reyka vodka is very nice. But, yeah, uh, sorry about the whole financial collapse and the soaring inflation.

Seriously, 18 percent?

Kristol's cry for help

By Mustang Bobby

I am not one who believes in interventions for people who are obviously delusional. If they're not a danger to themselves or others, I let them go on their merry way, leaving them to be happy in their own little world of pink skies and talking rainbows or whatever it is that populates their reality. But in the case of William Kristol, I truly believe it is time that he got some help.

Today he devotes his column to the analysis of the "common man" and how, in spite of all sorts of evidence to the contrary, the vast population of America isn't really angry or concerned about the future of the country or their own personal well-being:

Last week, the Pew Research Center for the People and the Press released its latest national survey, taken from Oct. 9 to 12. Americans are dissatisfied with the way things are going in the country and of course concerned about the economy. But, as Pew summarized, “there is little indication that the nation’s financial crisis has triggered public panic or despair.”

In fact, “There is a broad public consensus regarding the causes of the current problems with financial institutions and markets: 79 percent say people taking on too much debt has contributed a lot to the crisis, while 72 percent say the same about banks making risky loans.”

This seems sensible. Indeed, as Sept. 11 did not result in a much-feared (by intellectuals) wave of popular Islamophobia or xenophobia, so the market crash has resulted in remarkably little popular hysteria or scapegoating.

I added the emphasis, and it's that line that should set off the alarms: "Sept. 11 did not result in a much-feared (by intellectuals) wave of popular Islamophobia or xenophobia..."

WTF??

That right there should tell you that Mr. Kristol has obviously taken leave of his senses. The anti-Islamic rhetoric, demagoguery, and hysteria that took over this country after September 11, 2001 is not only well-documented in case after case of vandalism, threats, physical assaults, terror alerts, and other acts of mindless hysteria, it has never stopped. It is still going on today and is playing a major role in the presidential campaign -- Obama is a Muslim! His middle name is Hussein! For Mr. Kristol to say that there was no "Islamophoba or xenophobia" is pretty much the same as saying that there was no popular hysteria or scapegoating of the Japanese after Pearl Harbor.

As for the reaction by the public to the collapse of Wall Street, all he has to do is look at the poll numbers for the McCain-Palin ticket and see exactly who the public blames for their dwindling fortunes. People don't riot in the streets when they open their mail and read their 401(k) quarterly statements, but they know who's been in charge of the economy for the last eight years and they know who let the banks get away with it. There isn't hysteria in the streets, but there may well be panic in Phoenix on November 4 when the scapegoating shows up in the election booths.

Mr. Kristol concludes his paean to the common man by praising Joe the Plumber: "He seems like a sensible man to me." If his idea of "sensible" is a guy whose entire "Joe the Plumber" persona is a fiction dreamed up by the McCain campaign and Fox News but who is in reality nothing more than a shill who is not really a plumber, owes back taxes, and thinks that Barack Obama tap dances better than Sammy Davis, Jr., then I think intervention is his only hope.

(Cross-posted from Bark Bark Woof Woof.)

Show me the veeps: Live-blogging the Biden-Palin debate

By Michael J.W. Stickings

UPDATED FREQUENTLY -- PLEASE ADD YOUR COMMENTS AND LET US KNOW WHAT YOU THOUGHT OF THE DEBATE.

THIS HAS BECOME A VERY LONG POST. SCROLL DOWN FOR OUR LATEST UPDATES.

8:51 pm - Okay, here we go. Less than ten minutes before the debate. Keep checking back. I'll be updating this frequently over the next couple of hours.

8:53 pm - First observation: CNN is populated with fools. In response to Jeffrey Toobin's poing that Palin's interview with Couric was a disaster, John "Magic Board" King said that everyone has a bad day now and then. Really? Palin's utter incompetence can be chalked up to a bad day? And don't get me started on Gloria Borger, who has yet to say a single intelligent thing in all my time watching CNN throughout this entire campaign -- okay, I'm exaggerating, but she's just so... trivial.

8:56 pm -- Here's the problem going in: expectations. According to Toobin, generally a solid Obama supporter and Democrat, Palin just needs to look competent. See how low the expectations are for her? I wrote about this yesterday. David Gergen at least argued that she needs to look like a leader -- in other words, much more than merely competent.

9:00 pm - By the way, I'm drinking Yamazaki single malt whisky (aged 12 years). The Japanese tend to like their whisky watered down, but I'm having it straight, with just a trickle of cold water. I prefer my whisky a bit smokier than this, but it's good stuff. Hopefully -- if I may take from my favourite song of all time by my favourite band of all time -- it'll keep me going through the show. (Hello, hello, hello... is there anybody in there, just nod if you can hear me...)

9:04 pm - Palin asks if she can call him Joe. Nice, populist touch, even if her plan is to attack him. And Biden's off to a good start: very sober and restrained, but hitting Bush hard. Yes -- focus on homeowners, talk about Main Street. He's making good points while contrasting Obama-Biden from McCain-Palin.

9:05 pm - Palin, predictably, is playing the populist card, but she's doing okay so far. There's no real substance to what she's saying, but at least she's speaking coherently and is looking straight into the camera. But praising McCain for the bailout bill? Putting politics aside? Bullshit.

9:07 pm - This is good. Biden talking about his record and bipartisanship. And calling out McCain for his stupid comment about the fundamentals of the economy. This is what Biden has to do: focus on McCain. Make this about McCain. And McCain wasn't talking about the workforce, which is Palin's defence. "A team of mavericks." More bullshit.

9:09 pm - Palin: Americans want something different? Yeah, Obama. Really, how are McCain and Palin going to stop the greed on Wall Street? Hockey moms, Joe Six-Pack. Yup, she's trying to be the folksy all-American.

9:11 pm - Biden is being so careful. Taking it to McCain -- on McCain's love of deregulation, for example -- but, again, being very restrained. Let Palin look like she's trying too hard. And here she is, attacking Obama and Biden on taxes. So predictable.

9:14 pm - My friend and co-blogger J. Thomas Duffy just sent me a post he's done. Check it out.

9:15 pm - Palin won't answer the questions the way the moderator wants? She'll talk straight to the people? Thankfully, Ifill cut her off. It's because she's just a wellspring of hollow talking points.

9:17 pm - Biden is right. This is about class. Higher taxes for the wealthy, who have already had their taxes slashed, doesn't equate to higher taxes for the middle class.

9:18 pm - Oooh, Palin has details of McCain's health-care plan. Biden needs to go after her on this. It's a market-oriented plan, with Americans required to find their health care on their own in the market. How does that sound at this time of financial crisis?

9:20 pm - Biden: solid. Tax breaks not for Exxon but for people from places like Scranton. Good job. He has such command. "The ultimate bridge to nowhere." Cheap, but a nice touch -- and one that drew a laugh from the audience.

9:23 pm - Stay in control, Joe, stay in control. She's just trying to taunt you. Really, though, she's attacking him for supporting Big Oil? She basically wants to allow Big Oil to rape Alaska.

9:24 pm - She didn't answer the question, by the way. What would she take back from her promises? She can't think of one friggin' thing? They'll keep all their promises? Bullshit.

Creature: "He has command, but he's coming across a bit too strong. I'm not sure he's playing well.

J. Thomas Duffy: "Palin just threw a Shout Out to the base conservatives, when she called on people to 'step out of the way and let the Private Sector handle it' ... She hasn't flubbed anything yet, but she's sounding awfully canned."

Creature: "Though her folksy shtick make me sick." I hear you, my friend. (Thankfully, this whisky is really good.)

9:28 pm - Come on, let's get to social and foreign policy...

9:29 pm - Palin just wants to read from her mental script, avoiding pretty much every question. It's crazy for her to defend her and McCain's record on alternative energy. Come on, Joe. Don't let her get away with it. Obama's the one with the viable plan for energy independence.

9:31 pm - Ah, climate change. As she told Couric, she doesn't think it's all man-made. No one says it's all man-made. But she clearly doesn't get it. You have to know and understand the causes in order to do anything about it. What an idiotic response.

9:33 pm - Yes! Biden makes that point. It's man-made. And you have to know the causes. McCain has voted repeatedly against funding alternative energy. Invest in clean technology, export that technology. Good stuff. All the Republicans have is more and more drilling.

9:34 pm - "Drill, baby, drill," says Palin. Insane. Drilling won't make much of a difference in the short-term, if any at all. We're looking decades into the future. Oh, and she neglected to answer the question (about clean coal). Again.

9:36 pm - "How do we deal with global warming with additional carbon emissions?" asks Biden.

9:37 pm - Social policy... Same-sex benefits. Good answer from Biden. Constitutional benefits. And Palin? -- no change to "traditional definition of marriage." Oh, but she'll be "tolerant." Thanks. "I have a very diverse family." Uh-huh. She she may be for equal treatment in terms of benefits, but... her answer is about marriage. Damn. This is where I can't stand Obama and Biden. They say they aren't for same-sex marriage. Come on. Let's get past this.

Creature: "She's not answering the questions and Gwen's letting her get away with it. What's up with that? I'll agree with JTD very canned (but it may work)."

9:40 pm - Foreign policy. Iraq. Palin's pro-surge talking points are, once again, predictable. "We have got to win in Iraq." Okay... and how? And what is victory? Where's Katie to ask some follow-up questions? "We're getting closer and closer to victory." Really? Evidence?

9:41 pm - Biden: Obama's plan is Maliki's plan. It's what the Iraqis want. Palin attacked Obama for voting against funding the troops, but, of course, that was a bill without a timetable. McCain voted against funding the troops on a bill with a timetable. Good for Biden for making that distinction. Biden: "We will end this war." For McCain, "there is no end in sight." Solid. Solid. Solid. And Palin's playing the surrender card. Bullshit. Backed into a corner, all she has left are inartful smears.

9:44 pm - Palin thinks she's got Biden and is so smug about it (about Biden once saying nice things about McCain). She makes the "cutting off funding" point again. She's running out of talking points. Good, Joe. Going after McCain for being so utterly wrong in Iraq from the beginning.

9:47 pm - Biden certainly knows his foreign policy. His discussion of Pakistan is pretty good. Palin: "central war on terror" is in Iraq? Right, sure. So she doesn't think Iran should be allowed to acquire nuclear weapons. But it's not like she actually has a plan or anything. It's all hollow rhetoric.

9:49 pm - Oh, Palin had a nice conversation with Kissinger. Great. We're back to last Friday's debate. Palin is making the misleading point that Obama wants to meet with America's enemies without pre-conditions. "Simply not true," responds Biden. He's clarifying. Talk, talk, talk -- this is diplomacy. Good point: McCain won't even sit down to talk with foreign leaders.

9:52 pm - Seriously, what does Palin know about the Israeli-Palestinian conflict? Let along a two-state solution? "We should never allow a second Holocaust." Obviously. Again, there's no substance to anything she's saying.

My friend T-Steel from TMV: "I'm trying to remain impartial but Governor Palin is just to general and sweeping. She is working her notes hard."

J. Thomas Duffy: "The longer this is going, the more Palin is going into the Tina Fey/Katie Couric mode, that she's splaying all over the place, almost that we can hear the words in her head being lifted on to the conveyor belt, going into the "Out" tube..."

9:54 pm - "The only thing on the march is Iran." -- Biden. Well said. Bush's policies have been abject failures. "We both love Israel." -- Palin. Fantastic.

9:55 pm - Jesus. Palin's not even coming close to answering the question. She's all over the place. Reform, McCain the maverick, yadda, yadda, yadda... There are blunders in every administration? Bush's blunders have been rather more significant, no? And Biden makes a good point in response: McCain's policies would be just like Bush's. I'd say: likely even worse.

9:57 pm - Wait, did Palin just say there's a safe way to use "nuclear weaponry"? Huh?

9:58 pm - Biden's confident. Maybe a bit too strong. But he's right that an Iraq-like surge won't work in Afghanistan. Which was Palin's point. She wanted desperately to talk about Afghanistan, but all she could say was that there should be a surge there.

9:59 pm - Biden on nuclear proliferation, one of Obama's strongest issues. Palin's back to the surge, though -- not answering the question. She's reading her notes. Stay in control, Joe. Biden: We've been calling for more money and more troops for Afghanistan, not McCain.

10:01 pm - Biden on Bosnia/Kosovo, Iraq, and Darfur. He's a hawk, there's no denying that. But he was right about Bosnia. He's a bit shaky on his support for the Iraq War, though: he was for it, but not really. Hmmm. But he does have a workable plan on Darfur.

10:03 pm - And Palin plays the outsider card. "Straight talk." Bullshit. But this is a weak spot for Biden, who has disagreed with Obama on Iraq. She gives a decent answer on Darfur, but without much substance. Divestment, that's it.

10:05 pm - Good. Biden's tying McCain to Cheney on Iraq. His own views may be somewhat contradictory, but he can get around that by focusing on McCain. In response, Palin is waffling. McCain know this and that. "He will know how to implement the strategies... He will know how to win a war." That's all she's got, folks. And I'm out of whisky. Damnation.

10:08 pm - If necessary, Biden would carry out Obama's policies -- and he does well to provide an overview of them. "There are such stark differences" between the two tickets. Palin: "What do you expect? A team of mavericks." Bullshit. Seriously. Bullshit. "Putting government back on the side of the people." Really? Like Bush's tax cuts? Like the ongoing Iraq War? Like more deregulation anywhere and everywhere. And she's folky again: Wasilla's Main Street. Oy. And, once more, she shows she's a good Republican by smearing Obama and Biden on taxes.

10:11 pm - Solid rebuttal from Biden on the middle class. Palin: "Say it ain't so, Joe." Well, I guess you knew that was coming. Oh, good, she winked at her dad. She doesn't know what she's talking about.

10:14 pm - What does a vice president do? Hey, everyone, it's civics class with Sarah Palin. Needless to say, Biden's response is much more substantive.

10:16 pm - Palin keeps reading her notes. Really weak. She's sounding like she did with Couric. Biden: "Dick Cheney is probably the most dangerous vice president we've had in our history." Something like that. Nice. And he understands the VP only presides over the Senate in case of a tie.

10:18 pm - What's Palin's Achilles heal? The CW is lack of experience, says Ifill. Palin, again, is not answering the question. She's talking about how great her experience is. "Beacon of hope." "Shining light." "We represent a perfect ideal..." Wow. So incredibly banal. So incredibly empty.

10:20 pm - Biden. The CW is lack of judgement, says Ifill. Biden acknowledges that, and moves on. Well done. And he's talking about his personal story, about being a single father. This may be Biden't best moment of the entire debate. He knows what it's like to sit around the kitchen table, he knows that people need hope. He's a passionate man. He is what he is. He won't change. And what do we get from Palin? More maverick talk, as if she and McCain are all about change. Come on. "Change is coming and McCain is the leader..." Bullshit. Biden: McCain is no maverick. He voted for Bush's tax cuts. He voted against health care for children. He didn't support tax cuts for people who want to send their kids to college. He hasn't been a maverick on the war. Kitchen table stuff again... very strong. "Maverick he is not," said Biden of McCain. Excellent.

10:24 pm - Biden's reading his notes. Stop it. And he's talking about judicial appointments. Good to bring up the Supreme Court, given Palin's appalling non-answer to Couric on SCOTUS cases. Palin says she's never had to compromise on anything important. But now she's talking about bringing both sides together. Oy. More bullshit.

10:27 pm - Biden needs to look directly in the camera. But he's making a strong, if convoluted, case for reaching out in a bipartisan way. And Palin's talking about her "diverse" family. But she's all over the place, like she's plucking out talking points, patching one-liners together.

10:29 pm - Final statements.

10:30 pm - Palin attacks "the mainstream media" as a "filter." We'll fight for the middle class, she claims. "We are so blessed... We have to fight for our freedoms... It was Ronald Reagan who said... There is only one man in this race who has fought for you..." Such mindless drivel.

10:31 pm - Good. Biden's looking into the camera, talking about paying the mortgage, sending kids to college... the bread-and-butter issues on Main Street. "It's time for America to get up together." Very well done.

10:33 pm - Alright, that's it.

**********

Creature: "This is disappointing. Palin played the agreeable role Barack Obama played Friday night and Joe Biden played the surly old man. She was canned, she was overly folksy for my taste, she spoke in generalities, she didn't answer the questions but she's was prepared and far from the ditsy caricature that she's been portrayed as recently. Unfortunately, a rejuvenated Plain will be the new narrative after tonight."

Well, this is what I feared going in, that, with such low expectations, a decent performance by Palin would be spun as a "comeback." And she certainly did... okay. But "rejuvenated"? We'll see. She did much better early on, discussing economic issues. I thought she was rather weak on foreign policy, and it showed. And, towards the end, her answers seemed canned, like talking points stitched together. And so much of what she said involved taxes, the usual Republican attack on Democrats. It doesn't work this year.

As for Biden, I think he did fairly well. He was strong on the issues and he avoided a major gaffe, and avoided coming across as arrogant and condescending.

10:37 pm: Gergen thinks Biden gave the best debate performance of his life. But the overall assessment seems to be that Palin held her own. Again, she beat expectations. Oh, so Borger does say something mildly perspective, if obvious: Palin didn't answer the questions. No substance, says Hilary Rosen. "On Iraq, she wandered all over the place." No game-changer, says Ed Rollins.

All so predictable. There was really nothing Biden could do to win, nothing he could do to stand out. It was all about Palin: Would she flounder and embarrass herself? Would she single-handedly sink the McCain campaign tonight. Obviously, that wasn't going to happen. As so many people were saying going in, myself included, she was bound to give a decent performance. And, well, she did -- in superficial debating terms. But she lagged far behind Biden on the issues, on substance, and I thought Biden had some particularly excellent moments.

So who won? Well, let me think about it for a moment...

10:44 pm - More Creature, from his post-debate post: "[Palin] was prepared and far from the ditsy caricature that she's been portrayed as recently. I think Biden did fine. He certainly ended very strong and I think he was genuine (and right on the issues, BTW). But, unfortunately, a rejuvenated Plain will be the new narrative after tonight."

10:55 pm - Yup, here's the spin. Rollins: "She's back." This is the point Creature and I are making. Palin may have won this debate simply by not embarrassing herself. The expectations for her were that low. Forget that she failed miserably on the issues. All she wanted to talk about was energy and taxes. On pretty much everything else, she was just regurgitating the talking points, often stringing them together incomprehensibly. No, it wasn't nearly as bad as her Couric performance, but that's the point. By doing better, she triumphed.

10:57 pm - But let's not look past Biden, even though all the talk is about Palin. He did very well. He did what he had to do. He showed a commend both of himself and of the issues, he didn't fuck up, didn't have to extricate his foot from his mouth, and, again, on substance, won easily. The problem is that media (and many voters) don't judge debates on substance. For them, it's about style and expectations.

10:59 pm - So who won? I'll call it a slight "win" for Palin -- and especially for McCain, who should get a boost from this. If nothing else, the media have something else to talk about other than Obama's surge in the polls and McCain's ridiculous behaviour in response to the financial crisis. And it's sad to say that it's a "win" for Palin -- a perceived win, that is. It's sad that this is what American politics, even at the highest level, has been reduced to.

11:05 pm - "Sarah Palin had a pretty good night tonight." Republicans will be energized again. See? Gergen agrees, but "it doesn't change the dynamic of the race." Let's hope not. Toobin agrees. This debate won't bring independents over to McCain. Hold on, I need to switch over to MSNBC. (I can't believe I just typed that.)

11:08 pm - Howard Fineman on Palin: "a wolverine attaching herself to the pantleg of a passerby." Something like that. Good line. And Olbermann's calling her out for not answering the questions. But, Fineman again: "She was more than ready for prime-time." Sure, if prime-time is pre-packaged excrement. Oh, wait, it is. Come on, talk about the substance... and they are. Fineman: "I don't think she helped at all."

11:11 pm - Ah, Rachel Maddow... finally, some intelligence. "She hammed it up" on the folksiness. "Joe Biden was boring." She comments on Palin's suggestion that the veep's powers be expanded: "the legacy of Cheney."

11:13 pm - Initial poll, reported by Olbermann: Biden victory on content, but not much moved in terms of the race itself. And we'll have to wait to see what the polls say. Remember that many pundits were calling the first presidential debate a tie or even a slight McCain victory. It wasn't until the polls came out that it was clear that it was a solid victory for Obama.

LindaBeth: "My big gasp came at the end, and I just got finished debating it with my b/f's dad: in her closing statement, Palin called herself a 'middle class family'. I was almost certain that wasn't at all true, considering that the Tax Foundation cites that $122,000 is the max family income that can be called 'middle income' (it's the top figure for the middle 60% of American families' incomes). Huff-Po cites her economic resources, including her $250k income, here."

11:29 pm - Newshoggers' Fester: "Gov. Palin played to her strength of being a nasty talking point repeated with a kindergarten teacher's voice. She also managed to string words in forms that resembled sentences and the occassional sentence group into paragraphs. Sen. Biden kept his feet firmly on the ground and out of his mouth while his fire was aimed straight at McCain."

An update from Creature: "The spin has begun and maybe I was wrong. Bob Schiffer gave huge props to Biden. Rachel Maddow also says Biden was more human. Though, Pat Buchanan -- speaking for the base, of course -- was head over heels for Palin... Early polls, according to CNN, give the debate to Biden. Maybe my first impression, pre-debate, was right after all. Interesting. Maybe the bloom is so off the McCain/Palin ticket that there's no going up for them."

12:23 am - Sorry, just took a break to decompress -- with some tea, some dessert, and Jon Stewart.

12:24 am - The Politico's Roger Simon, a guest on Hardball, thought Palin was amazing. Breaking news: Roger Simon is an idiot.

12:25 am - I thought Keith Olbermann did a fantastic job on Palin's Afghanistan blunder. First, she referred to the U.S. commander in Afghanistan as "McClellan." Actually, the current commander of the International Security Assistance Force is Gen. David McKiernan. Second, McKiernan did say, contrary to Palin's claim, that an Iraq-like surge wouldn't work in Afghanistan.

12:30 am - The polls -- CBS and CNN -- have Biden as the winner. Once again, the pundits are wrong.

12:32 am - Although, this headline from the AP could be the dominant spin tomorrow: "Palin stands her ground in VP debate with Biden." See, the expectations game. That's what Palin won.

12:33 am - For some other live-blogging of the debate, now in the past (so, according to McCain-Palin, it no longer matters), see Think Progress and Andrew Sullivan. Kos has some post-debate thoughts here: "Sarah Palin won! Actually, she survived, since she had no 'deer in headlight' moments... On the merits, Biden won easy. On the things that debates are scored on, it was a draw. And for us Democrats, that's the same as victory." (On another matter, Kos thought Gwen Ifill was "excellent." I thought she was just okay. Sullivan thought she was "intimidated, peripheral, neutered."

12:39 am - Sullivan has additional debate reaction here. He also makes some good points here, including: "Palin's inability to answer real questions, her capacity to avoid follow-ups, her slightly manic quality, and her inability to relate to working class voters came across... What we need now is a press conference with Palin. She needs to be forced to answer follow-ups. She needs to be made accessible to the press and thereby the American people." Indeed she does.

12:41 am - By the way, CNN has a transcript of the debate here. I'm sure it's a fantastic read.

12:42 am - And that's it for me for tonight. It's been long, but fun. Thank you all for stopping by, and especially to all of you who took the time to share your thoughts. (I encourage you all to read the comments. There are quite a few of them, and many of them are excellent.)

And thank you to Creature for his fantastic contributions throughout the evening, as well as to JTD and LB. I'll be back tomorrow, along with the co-bloggers, with more reaction. I'm sure there will be a lot more to say. Stop by and read us again.

Good night, everyone, and take care.