History: McKeating to Meltdown

By contrast, the Keating Five scandal was small potatoes. A financial institution bailout costing over $3 billion in 1989.

Compared with the bailout of hundreds of billions for the current financial meltdown, it seems small potatoes. But, there are other comparisons that chill.

The Keating Five scandal.... five Senators entangled in the failure of big- time campaign contributor Charles Keating's Lincoln Savings and Loan. The five were accused of intervening with banking regulators to protect Keating.

Then-economist Alan Greenspan wrote a letter on Keating's behalf extolling the management of Lincoln Savings as "seasoned and expert" with a "record of outstanding success."

Sen. John McCain, now seeking the presidency of the United States, was one of the five.

Alan Greenspan went on to become chairman of the Federal Reserve.

In today's New York Times Frank Rich puts a fine point on this history in Truthiness Stages a Comeback.

Rich reminds us that McCain.... "has been chairman of the Senate Commerce Committee, where he claims to have overseen “every part of our economy.” He didn't, thank heavens, but he does have a long and relevant economic record that begins with the Keating Five scandal of 1989 and extends to this campaign, where his fiscal policies bear the fingerprints of Phil Gramm and Carly Fiorina. It’s not the résumé that a presidential candidate wants to advertise as America faces its worst financial crisis since the Great Depression. That’s why the main thrust of the McCain campaign has been to cover up his history of economic malpractice.

McCain has largely pulled it off so far, under the guidance of Steve Schmidt, a Karl Rove protégé. A Rovian political strategy by definition means all slime, all the time. But the more crucial Rove game plan is to envelop the entire presidential race in a thick fog of truthiness. All campaigns, Obama’s included, engage in false attacks. But McCain, Sarah Palin and their surrogates keep repeating the same lies over and over not just to smear their opponents and not just to mask their own record. Their larger aim is to construct a bogus alternative reality so relentless it can overwhelm any haphazard journalistic stabs at puncturing it.

These smear tactics are nothing new.... George Bush smeared McCain in the 2000 GOP presidential primaries, and Swiftboated John Kerry in the 2004 presidential election..... but, it was the former Republican Speaker of the House Newt Gingrich who codified such tactics in a 1996 GOPAC memo entitled Language: A Key Mechanism of Control.

Gingrich advised GOP campaigners to memorize as many of his suggested words as possible and use them. He suggested they talk about themselves with optimistic positive governing words such as... change, commitment, moral, family, vision... and use words to define Democrats such as.... abuse of power, betray, cheat, corrupt, greed, hypocrisy, traitors, welfare.... even, gasp, liberal.

And the point.... control. Over our country, over our lives.

And control the GOP did. Congress from 1994 to 2004 and the White House for the last eight years. Now they want to point the finger at everyone else for the dismal state of our economy, although there is plenty of blame to go around and the Democrats skirts aren't all clean.

The combination of Rove's bogus alternative to reality and the application of Gingrich's advice to use words as tactics has been politically successful for the GOP, and lethal for the country as the populace was manipulated and misled.

As Rich explains: "When a McCain spokesman told Politico a week ago that 'we’re not too concerned about what the media filter tries to say' about the campaign’s incessant fictions, he was channeling a famous Bush dictum of 2003: 'Somehow you just got to go over the heads of the filter.' In Bush’s case, the lies lobbed over the heads of the press were to sell the war in Iraq. That propaganda blitz, devised by a secret White House Iraq Group that included Rove, was a triumph. In mere months, Americans came to believe that Saddam Hussein had aided the 9/11 attacks and even that Iraqis were among the hijackers. A largely cowed press failed to set the record straight...

"If you doubt that the big lies are sticking, look at the latest Washington Post/ABC News poll. Half of voters now believe in the daily McCain refrain that Obama will raise their taxes. In fact, Obama proposes raising taxes only on the 1.9 percent of households that make more than $250,000 a year and cutting them for nearly everyone else."

This same media filter is being used in the current financial crisis. Why isn't the press talking about McCain's Keating past? Rich notes that the "indisputable historical antecedent for our current crisis is the Lincoln Savings and Loan scandal of the go-go 1980s. When Charles Keating’s bank went belly up because of risky, unregulated investments, it wiped out its depositors’ savings and cost taxpayers more than $3 billion. More than 1,000 other S.&L. institutions capsized nationwide.

"It was ugly for the McCains. He had received more than $100,000 in Keating campaign contributions, and both McCains had repeatedly hopped on Keating’s corporate jet. Cindy McCain and her beer-magnate father had invested nearly $360,000 in a Keating shopping center a year before her husband joined four senators in inappropriate meetings with regulators charged with S.&L. oversight.

"After Congressional hearings, McCain was reprimanded for 'poor judgment.' .... Yet he, like many deregulators in his party, was guilty of bankrupt policy-making before disaster struck. He was among the sponsors of a House resolution calling for the delay of regulations intended to deter risky investments just like those that brought down Lincoln and its ilk."

McCain as a "maverick" is just another manipulative use of a word as a tactic.

In truth, as Rich reminds us.... "The corporate jets, lobbyists and sleazes that gravitated around McCain in the Keating era have also reappeared in new incarnations. The Nation’s Web site recently unearthed a photo of the resolutely anticelebrity McCain being greeted by the con man Raffaello Follieri and his then girlfriend, the Hollywood actress Anne Hathaway, as McCain celebrated his 70th birthday on Follieri’s rented yacht in Montenegro in August 2006. It’s the perfect bookend to the old pictures of McCain in a funny hat partying with Keating in the Bahamas."

Eric Hovde explains today in Calling Out the Culprits Who Caused the Crisis (WaPo) ...."In the run-up to the millennium, the Federal Reserve, led by then-Chairman Alan Greenspan, began to pump money into the capital markets to deal with any financial problems that might arise from a Y2K meltdown."

The meltdown didn't happen, but the "monetary stimulus, coupled with the aforementioned hype, created an unfortunate bubble in Internet, technology and telecommunications stocks."

Large Wall Street investment banks recognized the potential profit in promoting the technology boom and from mid-1999 to mid-2000 they took about 500 companies public, raising about 77 billion for the IPOs, for which they received a 6 percent underwriting fee.

In this rush for profits, the investment banks also invested in these companies before the IPO when the stock was valued at a fraction of the post IPO, and threw out their underwriting guidelines in place since the Great Depression.

Then.... the technology bubble burst and as Hovde explains, "America's corporate landscape was littered with bankruptcies and mass layoffs, and investor losses have been estimated at more than $1 trillion."

Greenspan's Federal Reserve reacted by increasing the money supply and slashing short-term interest rates to 1 percent... a level not seen for more than 45 years. This stimulus led to an enormous housing boom and new mortgage products that ignored all previous lending guidelines.

Wall Street then packaged these subprime mortgages, again receiving billions in fees, and sold them to investors.

We are now facing the disastrous result as this whole get-rich-quick scheme falls apart as the bills come due.

Hovde explains, "First, the Fed laid the groundwork for both these asset bubbles by lowering interest rates to historic lows. In an attempt to protect his legacy after the Internet-bubble collapse, Greenspan provided unprecedented stimulus to re-inflate the economy and maintain his popularity with Wall Street.... But in doing so, he spawned the largest debt and asset bubble in U.S. history."

Of course, the SEC stood idly by as Wall Street took advantage of the investing public in the Internet and housing bubbles. Treasury secretaries took no action to curb these abuses, and "Wall Street investment banking firms sprinkled some of its massive gains into the pockets of our elected officials," and bought itself protection from any tough government enforcement, Hovde explains.

And, regardless of his current fiery calls for a crackdown on Wall Street, McCain opposed the very regulations that might have helped avert the current catastrophe. In 1999, he supported a law co-authored by his campaign financial guru then-Sen. Phil Gramm "that revoked the New Deal reforms intended to prevent commercial banks, insurance companies and investment banks from mingling their businesses," Rich reminds us.

Now, Gramm is keeping a low profile after he blamed the economic meltdown on our 'nation of whiners' and 'mental recession,' but he remains in the McCain loop.

So there you have it.... greed, corruption and a gulled electorate have brought us to this catastrophic financial crisis.

But history doesn't have to be prologue to the future. We can and must change business as usual.

November!

Palin... Where's the Moose?

Once again our nation is being fed fundamentalist cause-driven campaign hype. With the selection of Sarah Palin, John McCain is forever abandoning his "agents of intolerance" bandwagon for the gaudy, evangelical-pleasing circus wagon.

Revelling in her NRAishness, a supporter enthused, "What woman do you know who could shoot a moose, field-dress it and serve it?.... This has really energized the conservative side of the house." (WaPo)

Oh, wow! And this does what for the real problems facing voters?..... like unemployment, a trashed economy and increasingly deadly world tensions?

What we have here folks, is the usual Rovian campaign tactics of distraction.... watch Smokin' Sarah in the middle ring so you don't remember that the Bushies have been picking your pockets and ravaging the countryside for eight years.

Are we going to fall for this yet again?

How about some sober, decidedly unmoosey, facts.

Since it has been revealed that there was no vetting of Palin among Alaskans who know her, we turn to a woman from Palin's hometown of Wasilla, Anne Kilkenny, who gives her firsthand view of the Sarah phenom as mayor and eighteen-months governor of Alaska. Kilkenny, a Wasilla homemaker and education advocate, is a faithful attender of City Council meetings, a voter registrar and informed-voter activist.

Kilkenny said of Palin's experience: "During her mayoral administration most of the actual work of running this small city was turned over to an administrator. She had been pushed to hire this administrator by party power-brokers after she had gotten herself into some trouble over precipitous firings, which had given rise to a recall campaign."

And, although Palin had campaigned as a fiscal conservative, Kilkenny said that "she increased general government expenditures by more than 33 percent. During those same six years, the amount of taxes collected by the city increased by 38 percent. This was during a period of low inflation (1996-2002), She reduced progressive property taxes and increased a regressive sales tax, which taxed even food. The tax cuts that she promoted benefited large corporate property owners way more than they benefited residents."

But, Kilkenny notes, "The huge increases in tax revenue during her mayoral administration weren't enough to fund everything on her wish list, though -- borrowed money was needed, too. She inherited a city with zero debt but left it with indebtedness of more than $33 million.

"What did Mayor Palin encourage the voters to borrow moneys for? Was it the infrastructure that she said she supported? The sewage treatment plant that the city lacked? Or a new library? No. $1 million for a park. $15 million-plus for construction of a multi-use sports complex, which she rushed through, on a piece of property that the city didn't even have clear title to....."

As governor during a time of a big budget surplus for Alaska, Palin "recommended that the state borrow/bond for road projects, even while she proposed distribution of surplus state revenue: Spend today's surplus, borrow for needs."

And, instead of ousting the "old boy's club" as Palin claims, she instead installed a new set of "old boys".... "Palin fired most of the experienced staff she inherited. At the city and as governor, she hired or elevated new, inexperienced, obscure people, creating a staff totally dependant on her for their jobs and eternally grateful and fiercely loyal -- loyal to the point of abusing their power to further her personal agenda...."

"As governor, she gave the Legislature no direction and budget guidelines, then made a big grandstand display of line-item vetoing projects, calling them pork. Public outcry and further legislative action restored most of these projects -- which had been vetoed simply because she was not aware of their importance -- but with the unobservant she had gained a reputation as 'anti pork.' "

As Frank Rich points out in "Palin and McCain's Shotgun Marriage," (NYTimes).... "We still don't know a lot about Palin except that she's better at delivering a speech than McCain and that she defends her own pregnant daughter's right to privacy even as she would have the government intrude to police the reproductive choices of all other women. Most of the rest of the biography supplied by her and the McCain camp is fiction.

"She didn't say 'no thanks' to the 'Bridge to Nowhere' until after Congress had already abandoned it but given Alaska a blank check for $223 million in taxpayers' money anyway. Far from rejecting federal pork, she hired lobbyists to secure her town a disproportionate share of earmarks ($1,000 per resident in 2002, 20 times the per capita average in other states). Though McCain claimed 'she has had national security as one of her primary responsibilities,' she has never issued a single command as head of the Alaska National Guard.

"How long before we learn she never shot a moose?"

Doesn't all of this have a familiar ring....reckless spending and running up debt, tax cuts for corporations while increasing the burden on the middle class, political appointments instead of the best people for the job, inflating her resume... all-hat-and-no-cattle style.

Palin is The Decider in go-go boots!

And, if fading-wallflower McSame wins, she'll be just a heartbeat away from the presidency!

The fundamentalist circus is back in town, and the GOP barker wants you to keep your eyes on their creation, Smokin' Sarah, as she performs her high-wire act. In the meanwhile, as Rich points out, the McCain operatives are hoping that "whatever happened in Alaska with Sarah Palin stays in Alaska."

Where's the moose? November.

McCain: Who ARE You?

Frank Rich in his Sunday op-ed in the New York Times, "The Candidate We Still Don't Know," takes a sober look at the myth.... GOP candidate John McCain.

The fairy tale.... once upon a time McCain "strenuously opposed the execution of the Iraq war; he slammed the president's response to Katrina; he fought the 'agents of intolerance' of the religious right; he crusaded against the G.O.P. House leader Tom Delay, the criminal lobbyist Jack Abramoff and their coterie of influence-peddlers."

Not!

As Rich points out, thanks to "both the excessively genteel Obama campaign and a too-compliant press," most Americans don't know McCain, they just hear Karl Rove's resuscitated "hackneyed script" casting McCain as a maverick and renegade, raising McCain Lazarus-like from the campaign death-throes of association with the wreckage.... of country and party.... wrought by The Decider.

So, U.S. voters don't know that on the campaign trail McCain is frequently confused about policy, countries and forgets things he said only hours or days before. McCain's Straight Talk Express has detoured into the "no access" lane as the press is no longer allowed unfettered access to the increasingly muddled candidate.

It's time to separate the candidate from the myth, and discover the true McCain before we find ourselves being governed by Puff the Magic Dragon.

CW, Superdelegates and Divides

Conventional wisdom.... what we fall back on to fortify our arguments, to prop up our misconceptions, to put the coup de grace to dissent.

Forget some CW in this 2008 election season, as Ellen Goodman points out, "Conventional wisdom fails to explain anything about Election 2008." (Post-Gazette)

"It'll Be All Over by February 6." Not according to Mike Huckabee. And only in Hillary Clinton and Barack Obama's dreams.

"Kennedys are Kingmakers." Why then didn't Obama carry Massachusetts, or California? Maybe kingmakers if they can deliver the majority of the worst idea the Democratic Party ever had, superdelegates. That remains to be seen.

"Southern White Men Won't Vote for a Black President." Well.... Georgia white men voted 48 percent for Obama. But then, as Goodman pointed out, perhaps it just proves that "Southern white men still won't vote for a woman."

"Evangelicals Vote in Lockstep." This time they scattered to GOP candidates Mike Huckabee, Mitt Romney and John McCain.

"Money Uber Alles." After spending $35 million of his own money, the departing Romney begs to differ. Nice to know, though, that the presidency isn't for sale to the highest bidder.

"Dittoheads Rule." Far right talking heads savaged McCain and Republicans yawned.

"The Death of the Nominating Convention." Get your popcorn ready, with the Democrats it looks like a nominating fight to the finish.

When it comes to the delegate dead heat between Clinton and Obama that is hurtling headlong toward a nominating convention, Tad Devine advises "Superdelegates, Back Off." (NYTimes)

He admonishes these superdelegates "to stop pledging themselves to either Mrs. Clinton or Mr. Obama.... If the superdelegates determine the party's nominee before primary and caucus voters have rendered a clear verdict, Democrats risk losing the trust" of the voters.

Actually, they risk a rebellion and the disaffection of the many blacks and women who see this as their moment. Luckily, there is The Decider's monstrous record, and the specter of more with his ideological replacement McCain, to provide the unifying glue. But, will this be enough?

Frank Rich thinks until then, "Next Up for the Democrats: Civil War." (NYTimes)

Reporting on Hillary Clinton's paid-for hour in the run-up to Super Tuesday on the Hallmark Channel, plus satellite TV hookups for assemblies of coast-to-coast supporters, Rich said he was given a "naked preview of how nastily the Clintons will fight, whatever the collateral damage to the Democratic Party, in the endgame to come."

He points out that after over-playing their hand trying to scare off white voters by framing Obama as the "ghettoized-cocaine-user" and Jesse Jackson redux.... and in the process alienating many black voters.... they abandoned black America and redoubled efforts to pander to the Hispanic population, especially in delegate-rich California.

The makeup of the Hallmark audience.... few blacks.... with many Hispanic canned-question askers.... no blacks.... brought this forcefully home. Leaving no Hispanic stone unturned, Mayor Antonio Villaraigosa of LA had a cameo, and one of the satellite meetings was held in the National Hispanic Cultural Center in Albuquerque.

Earlier, in an attempt to divide the voters and reinforce their racial game plan, Clinton's pollster told The New Yorker that Hispanic voters have "not shown a lot of willingness or affinity to support black candidates,".... followed by Hillary telling Tim Russert in a debate that her pollster was "making a historical statement."

As Rich points out, this "wasn't an accurate statement, historical or otherwise. It was a lie, and a bigoted lie at that....." For example, all three black members of congress from the LA area won in heavily Latino districts. And in the 1990s, Dallas Mayor Ron Kirk received more than 70 percent of the Hispanic vote.

Now comes Texas.... what despicable racial ploys will the Clintons unleash in that heavily Hispanic state before the March 4 primary contest?

And, is the Democratic Party in free-fall toward for a race-tinged brawl and superdelegate bullying at their convention some nine weeks before Election Day?.... a non-"Hallmark moment?"

Democratic voters will demand a just and representative convention, where superdelegates vote their constitutents' preferences.... that's CW you can take to the polls.

Is Hillary Really Inevitable?

Throwing red meat to his GOP base, Rudy Giuliani unleashed a new battle cry.... "I'm not Hillary."

While dissing Hillary Clinton, Giuliani, as a member of the white-males-only GOP presidential candidate club, ironically told a national convention of Republican women devoted to getting women elected, "We have a record that's very, very proud and very long of making certain that women participate on a full and complete and equal basis with men."

Just not when aspiring to the highest office.

Today's New York Times also fired at Hillary.... Frank Rich aimed his powerful pen at the similarities between Hillary's perfectly oiled "inevitability" campaign and that of the losing Al Gore in 2000.... or even that of slick New York Republican Thomas Dewey running against the unslick but earnest incumbent Harry Truman in 1948. Dewey sloganeered... "It's time for a change." NOT!

Rich wonders if with a presidential candidate from New York known for her experience, competence and above-the-fray demeanor.... Hillary.... the Democrats could lose the White House in 2008.

In a effort to divert attention from this robotic campaign performance, Hillary has resorted to a loud giggle-laugh.... it's about as humanizing, and authentic, as Rudy Giuliani's smooching I'm-a-loving-husband cellphone calls from his third wife in the middle of campaign speeches.

The public senses authenticity.... and Hillary's make-no-mistakes defensive debate crouch punctuated with a laugh sure to be labeled a "Shrillary" is a campaign three dollar bill.

Next thing we know, Hillary will plant on her frisky Bill a full lip lock a' la Al and Tipper's convention stopper. But, what Hillary really needs to do is stop giving safe answers when voters are looking for Truman truthiness. Rich grumbled, "What I saw on television last Sunday was the incipient second coming of the can't-miss 2000 campaign of Al Gore."

Tying together both the Giuliani take on Hillary with the cautionary tale of Rich, Maureen Dowd today unleashed her piece "The Nepotism Tango" in defining the Democratic frontrunner.

Dowd muses that, "Without nepotism, Hillary would be running for the president of Vassar. But then, without nepotism, W. would be pumping gas in Midland -- and not out of the ground."

As Joe Biden pointed out at last Sunday's debate, all of the "old stuff" might get in the way of passing legislation. "The special interests, with regard to Hillary, they feed on this, you know, this Clinton-Bush thing." That "thing" is dynasty.

Perhaps this seeming dynastic inevitability is the reason for Hillary's un-Mona Lisa guffaw.... tickled pink by the thought of her entitled Democratic coronation.

Or, is it as Leon Wieseltier, the literary editor of the very conservative The New Republic, sees Hillary (listen up "equal" GOP women), "She's like some hellish housewife who has seen something that she really, really wants and won't stop nagging you about it until finally you say, fine, take it, be the damn president, just leave me alone."

Hillary seems locked into her disciplined campaign march, daily becoming less, not more, likable.... just like the hapless wooden Gore, despite his wardrobe changes and wife wuzzies. As the saying goes, at this point it's still Hillary's to lose.

Which might not be a bad turn of events for the Democratic party and the country. We can do better than the dynastic choke-hold of Bush-Clinton-Bush-Clinton.

Homeland Insecurity....

The quote of the day from Frank Rich of the New York Times.... "Though Mr. Chertoff may be the man standing between us and Armageddon, he is seen as a leader of stature only when standing next to his cabinet mate Gonzo."

And, don't miss Maureen Dowd's column in the NYT today either.... priceless.

Mirroring Imus

Frank Rich, the brilliant New York Times columnist, hit the ball out of the park today with his editorial "Everybody Hates Don Imus." He catalogues the "astounding display of hypocrisy, sanctimony and self-congratulations from nearly every side of the debate, starting with Al Sharpton...."

For those of you who didn't hear the full context of the Imus remarks about the Rutgers women's basketball team, just the selectively edited sound bites that the media focuses on, here they are.

The reaction to this "humor," ... really a dialog with Imus's evil twin and show producer Bernie.... was a resounding enough-is-enough.

While Imus defenders like to point out the many good works of Imus, that argument is like saying the penalty for the mass murder of 33 young men by John Wayne Gacy should be lessened because Gacy spent his spare time entertaining children by dressing up as a clown.

Imus was a mass slurmeister and is now paying the consequences. As Imus said of himself.... "I dished it out for a long time, and now it's my time to take it."

One of the most troubling aspects of the whole incident is the way it buried other news of import, like the devastating bombing in the Baghdad Green Zone.... glossed over in the media's rush to make ratings and the big $$$ on the Imus controversy.

Which brings us to the bottom line.... Why the Imus-type of entertainment?... Why the media capitalizing?... Why the downward-spiraling coarsening of America? Because, the public likes, tolerates or even demands it.

Until that image in my and your mirror says "Enough" nothing will change.