National Security Edition

"There's an America that's bigger than any of us, and, for those of you who have not yet voted, it is the only thing that should matter when you go to the polls tonight."

--Matthew Santos, The West Wing

(In case you're wondering, I just spent an extremely weepy hour watching a rerun of the last episode of "The West Wing.")

Thanks to everyone who replied to my brain-addled "Cash Only Edition" yesterday, providing me with even better info on ...um...what the heck is going on in the financial world!

Special shout-out to Daniel--the only one to explain "collateralized debt obligations" to me, way back in April--who adds this insight:

"CDS, subprime mortgages, CMBS, CDOs, CLOS – these are all symptoms of a disease called EXCESSIVE LEVERAGE. Look there for the answer as banks are de-leveraging. Some were leveraged 30+ times! That means for every $100 in assets they bought only $3.30 was their equity (i.e their capital at risk). This is akin to the subprime 'no money down' mortgages where the owner had NO capital at risk. You're now seeing the result of massive de-leveraging (ie. paying down debt by selling assets) which leads to a vicious cycle – need to sell assets which further depresses the price of the asset, thus need to sell more assets which depresses the price of the stock, thus need to raise more capital but hard to do when the stock is falling off a cliff!"

I'm so glad you said all those things are all part of the same disease, because I don't even know what some of those acronyms are. And now I don't have to look them up.

Mary Ann also sent word of Glenn Beck's hilarious explanation using Tickle Me Elmo Dolls. I love this one: "It's just before Christmas,1996, and as you watch overeager parents trample each other to buy Tickle Me Elmo dolls for their kids, you see an opportunity. "This isn't a Tickle Me Elmo bubble," you think to yourself, "this is a long-term trend. Every person in America will soon own a Tickle Me Elmo, maybe even two. It's the American dream." You approach your local banker about a loan and, naturally, he loves your idea. In fact, he loves it so much that for every $1 you have in your account, he's willing to lend you $34. Great deal, you think, as you max out your credit line and buy as many Tickle Me Elmos as you possibly can..." Read the rest here. (So, Daniel, can you tell me what a "credit-default swap" would be in the Tickle Me Elmo scenario? Is that other people betting back and forth on whether or not I'm actually going to sell any of those Elmos and pay the money back? Was I leveraged 34 times in that example? I know. I'm hopeless.)

The New York Times has also assembled a panel with some "in English please" answers.

The general consensus seem to be that this economic focus only boosts Obama, as the current woes are seen as tied to the Bush Administration. ( Amazingly, no one in McCain's camp has tried yet to tie them to the Clinton Administration or the Carter Administration, but the day is still young.) Equally amazing is that every time McCain opens his mouth he seems to be creating a problem for himself.

Yesterday, McCain laid the blame for the crisis at the feet of SEC chair Christopher Cox. "Regulators were asleep at the switch," says John McCain in his attempt to explain it all. In his speech in Cedar Rapids, he also called "for creation of a new agency modeled after the Resolution Trust Corp. that handled the fallout from the savings and loan crisis." He said the new agency would be called the Mortgage and Financial Institutions Trust." That's pretty rich, coming from the guy whose whole party always hung their hat on the idea of smaller government, and less regulation. Shouldn't he have been happy that the regulators weren't doing their regulating? Especially given McCain's history as one of the Keating Five? (Remember them? The five Senators accused of helping the head of the failed Lincoln savings and loan dodge Federal regulation and taking kickbacks from same? McCain was officially cleared of wrongdoing, but admonished for "bad judgment" in meeting with Federal regulators on Keating's behalf.)

McCain senior policy adviser Doug Holtz-Eakin said earlier this week that the system for investment banks would be much like the system in place for commercial banks. Once the problems were identified, the government could "take control of them as a regulatory matter and wind it down effectively." Seriously? So, at any sign of trouble, Big Government would just step in and nationalize Private Company? What kind of Republican are you?
McCain says in a Fearless Leaderly-like fashion that if he were Prez, he'd can Cox: "The chairman of the SEC serves at the appointment of the President and has betrayed the public's trust. If I were President today, I would fire him." I guess no one has told him that the President, um... doesn't actually have the power to fire the SEC chair?

And if McCain looked like he was trying to shoot his pals in the media in the face last week, this week he's alienating his friends in the finance world. In another "Ow-ee" moment, the Wall Street Journal editorial board blasted McCain with the kind of sarcasm that, well, that you usually see ME using. And I quote: "Wow. 'Betrayed the public's trust.' Was Mr. Cox dishonest? No. He merely changed some minor rules, and didn't change others, on short-selling. String him up! Mr. McCain clearly wants to distance himself from the Bush Administration. But this assault on Mr. Cox is both false and deeply unfair. It's also un-Presidential."

Christopher Cox is of course, not amused by McCain' critiques, but releases a remarkably level-headed response... compared to the WSJ. "The best response to political jabs like this is simply to put your head down and not lose a step doing the best job you can possibly do on behalf of those you serve."

And Robert Scheer reminds us that although he's all "Regulate them!" now, John McCain's stock in trade was always eliminating regulations: "McCain has been a master of the special interest giveaways to Wall Street that enabled this meltdown... he voted for abolishing all of the significant rules put in place at the time of the Great Depression designed to prevent a repeat. The two main bills accomplishing that, which McCain enthusiastically supported, were the Commodity Futures Modernization Act and the Gramm-Leach-Bliley Act. The Gramm is former Sen. Phil Gramm, chair of the Senate Banking Committee when he acted as chief sponsor of both pieces of legislation. The same Gramm that McCain picked to co-chair his presidential campaign."

In the (Unintended?) Levity Department: Si se habla Espanol, por favor, eschucha esta entrevista en Union Radio en Miami y digame si que es la problema de Johnny Macque? Did JM really not understand that Spain's Prime Minister Zapatero is not in Latin America? Does he just not like his tie? Or maybe he just think he's passing on tapas? Y mira, check out this piece in El Pais. This is, of course, getting more play in Spain than it is here.

Meanwhile, there are signs that the Obama Campaign intends to fight the "lose your house, lose your vote" scheme in Michigan, and any signs of voter disenfranchisement anyplace else. To recap, the Republican party in Macomb County, MI is strategizing how to keep people whose houses have been foreclosed upon from voting. "We will have a list of foreclosed homes and will make sure people aren't voting from those addresses," party chairman James Carabelli told Michigan Messenger. Apparently it's an attempt to challenge ineligible voters as not being "true residents."

On Talking Points Memo, an alert reader notes that "The really interesting part of the filing is the effort by the Obama campaign to demonstrate, in a court of law, that this behavior is 'part of a broader state and nationwide campaign by the Republican Party to suppress the vote.' And, upping the ante, the filing alleges that 'Defendant Republicans have a long history of engaging in coordinated, systematic campaigns to suppress and deny the right to vote of American citizens. Those campaigns are often targeted at various racial groups, language minorities, or individuals of low or modest economic circumstances whom Defendant Republicans believe are unlikely to support them in political campaigns.'"

Well anyway, McCain's post-RNC, Palin-induced (?!?!?!) bounce seems to be fading. Even though Palin appears to imagine that SHE'S at the top of the ticket. New polls show Obama climbing again, as would-be voters figure out that Palin is both unqualified and not actually all that cute, that McCain has been lying and is possibly off his rocker, and that Obama doesn't look like Jesus, but just might have a BETTER plan to get the country in order. Jeez, poll-ees, whoever the heck you are, welcome back to sanity!

If you really like driving yourself insane over voter indecision, watch the red and blue flash back and forth in this animated map showing polling data for the last three months.

Media Curves suggests that this ad from the Defenders of Wildlife is helping shift voter perception on the gun-totin', moose-eviscerating, wolf-hunting Sarah Palin. On a personal note, I find the ad horribly hard to watch, mainly because I can't bear to watch the wolves being shot, but if the polling is to be believed, I guess I'm not the only one.

Yeesh. I'm tired of talking about Palin-McCain. (Yeah, the link again-- I just can't get over her delusions of grandeur.)

A quick Hurricane Ike aside: Remember the folks in Galveston? You might have seen the photos of the one single house left standing in the hurricane's wake. CNN's iReport had some interesting info on the house and its construction from the owner's sister. Galveston is pretty much flattened, and much of Texas is still without power. By the way.

And as we get ready to talk foreign policy, watch Jon Stewart take Tony Blair to task over the Iraq invasion (from last night's Daily Show). I marvel once again that in America, in order to find someone to grill a political leader on camera, you have to turn to Comedy Central. Funny ol' world, in'nit?

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As we gear up for the Presidential debate on on Foreign Policy September 26-- it's a Friday, mark your calendars-- today's topic is National Security. Note that both Obama and Biden are on the Senate Foreign Relations Committee, which Biden chairs. McCain is the ranking member on the Senate Armed Services committee.

The candidates offer a lot more detail on their websites (Obama website-- McCain website)--honestly, way too much detail for me to include or summarize here. (Yes, I did try, but got lost somewhere on policy positions on Zimbabwe--seriously!) On The Issues also offers some enlightening public statements and voting background from both Obama and McCain. For this snapshot entry, though, I'm taking the candidate statements of what their top three national security priorities would be, as stated to the Washington Post.

The Washington Post asks Obama what his top three national security priorities would be if he were elected:

My first priority would be to end the war in Iraq. It has cost America dearly in terms of blood and treasure, been a diversion from the fight against al Qaeda, stretched our military, and undermined the view of the United States the world wide.

Ending the war in Iraq will permit us to develop a comprehensive strategy against terrorism, which will be another chief national security priority of my administration. I will ensure that we are taking sufficient action against the terrorists on the right battlefield in Afghanistan and Pakistan; that we develop the capabilities and partnerships we need to counter the terrorist threat in other parts of the world; that we engage the world to dry up support for terrorism and extremism; that we restore for the rule of law and our values; and that we secure a resilient homeland. My administration will also make it a priority to marshal a global effort to meet a threat that rises above all others in urgency -- securing, destroying, and stopping the spread of weapons of mass destruction.

As president, I will lead a global effort to secure all nuclear weapons and material at vulnerable sites within four years -- the most effective way to prevent terrorists from acquiring a bomb. We should fully implement the law I passed with Senator Dick Lugar that would help the United States and our allies detect and stop the smuggling of weapons of mass destruction throughout the world. While we work to secure existing stockpiles of nuclear material, we should also negotiate a verifiable global ban on the production of new nuclear weapons material. As starting points, the world must prevent Iran from acquiring nuclear weapons and work to eliminate North Korea's nuclear weapons program. We must also dissuade other countries from joining the nuclear club. Countries should not be able to build a weapons program under the auspices of developing peaceful nuclear power.

That's why we should create an international fuel bank to back up commercial fuel supplies so there's an assured supply and no more excuses for nations like Iran to build their own enrichment plants. And if we want the world to deemphasize the role of nuclear weapons, the United States and Russia must lead by example. President Bush once said, 'The United States should remove as many weapons as possible from high-alert, hair-trigger status -- another unnecessary vestige of Cold War confrontation.' Six years later, President Bush has not acted on this promise. I will. We cannot and should not accept the threat of accidental or unauthorized nuclear launch. We can maintain a strong nuclear deterrent to protect our security without rushing to produce a new generation of warheads.

The Washington Post asks McCain what his top three national security priorities would be if he were elected:

Defeating radical Islamist extremists is the national security challenge of our time. At home, my administration will be fully prepared to deter, detect, and respond to any attack. But we must stay on offense. The 9/11 attack highlighted a failure to adequately respond to a hostile global terror network. Before 9/11, al Qaeda was basically free to plan, train, and conduct attacks from Afghanistan-despite bombing US embassies and attacking the USS Cole. As president, I will not allow such terrorist sanctuary. We must never again assume that the activities of extremists overseas do not impact our own security, which is why we must succeed in Iraq and Afghanistan. But prevailing in this struggle will require more than military power. I would employ every tool possible to help moderate Muslims resist the well-financed campaign of extremism that is tearing their societies apart.

I would also seek a Free Trade Area from Morocco to Afghanistan, open to all who do not sponsor terrorism. Secondly, I will act to break our dependency on foreign oil. Al Qaeda continues to plan attacks on oil facilities hoping to skyrocket oil prices and nosedive the American economy. We cannot continue to enrich the foreign oil cartel and petro-dictators.

In fact, some of our gas dollars flow to the very fanatics we are fighting. As President, I'll implement an energy strategy of diversification and conservation to break the dominance of oil in our transportation sector. For example, my agenda will include deploying more technologies to improve energy efficiency, developing alternative fuels, increasing electrical power generation from nuclear power and other sources and increasing domestic oil production in environmentally friendly ways.

I will also push for a worldwide League of Democracies. It could act where the UN fails, principally because of the vetoes of autocratic states. The UN has proven to be ineffective in meeting the great challenges of our time. The League would not supplant the UN but would harness the political and moral advantages offered by united democratic action. Whether pressuring tyrants in Burma or Zimbabwe or Sudan or Syria, uniting to impose sanctions on Iran and North Korea to stem nuclear proliferation, or supporting struggling democracies in Ukraine and Serbia, the League would advance freedom and opportunity. As president, I would call a summit of the world's democracies in my first year--just as America led sixty years ago in creating the NATO alliance.

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Bonus for California readers, I've got the California Prop Watcher blog started up again (updates as they amend the text), in case you're wondering what all these ads are about.

A reminder that tonight at midnight is the deadline to help the Obama's campaign reach their fundraising goals. Support at the grassroots level has been so strong that they're on track to list 100,000 new donors by Friday midnight!

Folks, we are 46 days out from the election. This is a reminder too that for most states, would-be voters must register at least 30 days in advance of the elections, so as always, I exhort my friends in the swing states get out there and REGISTER TO VOTE NOW! If you're voting absentee, get a hold of your ballot.