Sunday's NYT editorials

[schmiss]

He Just Can’t Quit W
By FRANK RICH

OLD Mr. Straight Talk has become so shaky a speaker that when he does talk straight, it’s startling. On Wednesday night, John McCain mustered exactly one such moment of clarity: “Senator Obama, I am not President Bush. If you wanted to run against President Bush, you should have run four years ago.”

Thanks largely to this line, McCain’s remaining base in the political press graded his last debate performance his best. The public, not so much. As with the previous debates, every poll found Barack Obama the winner, this time by as much as two-to-one ratios. Obama even swept the focus group convened by the G.O.P. pollster Frank Luntz in the once-impregnable McCain bunker of Fox News.

Perhaps voters were unimpressed by McCain’s big moment because they can figure out the obvious rejoinder: Why didn’t McCain run against President Bush four years ago - as he had four years before that? Instead McCain campaigned for Bush’s re-election, cheered for Bush policies he once opposed and helped lower himself and America into the pit where we find ourselves today.

The day after the debate, McCain put up a new ad trying yet again to shake the president. “The last eight years haven’t worked very well, have they?” he asks, as if he were an innocent bystander the entire time. But no matter what McCain says or does, he still can’t quit the guy. Heading from a Midtown hotel to a fund-raiser the night before facing Obama onstage on Long Island last week, the McCain motorcade lined up right next to the New York red-carpet premiere of Oliver Stone’s “W.” A black cat would have been a better omen.

The election isn’t over, but there remain only three discernible, if highly unlikely, paths to a McCain victory. A theoretically mammoth wave of racism, incessantly anticipated by the press, could materialize in voting booths on Nov. 4. Or newly registered young and black voters could fail to show up. Or McCain could at long last make good on his most persistent promise: follow Osama bin Laden to the gates of hell and, once there, strangle him with his own bare hands on “Hannity & Colmes.”

Even Republicans are rapidly bailing on a McCain resuscitation. It’s a metaphor for the party’s collapse that on the day of the final debate both Nancy Reagan and Dick Cheney checked into hospitals. Conservatives have already moved past denial to anger on the Kubler-Ross scale of grief. They are not waiting for votes to be counted before carrying out their first round of Stalinist purges. William F. Buckley’s son Christopher was banished from National Review for endorsing Obama. Next thing you know, there will be a fatwa on that McCain-bashing lefty, George Will.

As the G.O.P.’s long night of the long knives begins, myths are already setting in among the right’s storm troops and the punditocracy alike as to what went wrong. And chief among them are the twin curses of Bush and the “headwinds” of the economy. No Republican can win if the party’s incumbent president is less popular than dirt, we keep being told, or if a looming Great Depression 2 is Issue No. 1.
This is an excuse, not an explanation. It absolves McCain of much of the blame and denies Obama much of the credit for their campaigns. It arouses pity for McCain when he deserves none. It rewrites history.

Bush’s impact on the next Republican presidential candidate did not have to be so devastating. McCain isn’t, as he and his defenders keep protesting, a passive martyr to a catastrophic administration. He could have made separating himself from Bush the brave, central and even conservative focus of his campaign. Far from doing that, he embraced the Bush ethos - if not the incredible shrinking man himself - more tightly than ever. The candidate who believes in “country first” decided to put himself first and sell out his principles. That ignoble decision is what accounts for both the McCain campaign’s failures and its sleaze. It’s a decision McCain made on his own and for which he has yet to assume responsibility.

Though it seems a distant memory now, McCain was a maverick once. He did defy Bush on serious matters including torture, climate change and the over-the-top tax cuts that bankrupted a government at war and led to the largest income inequality in America since the 1930s. But it isn’t just his flip-flopping on some of these and other issues that turned him into a Bush acolyte. The full measure of McCain’s betrayal of his own integrity cannot even be found in that Senate voting record - 90 percent in lockstep with the president - that Obama keeps throwing in his face.

The Bushian ethos that McCain embraced, as codified by Karl Rove, is larger than any particular vote or policy. Indeed, by definition that ethos is opposed to the entire idea of policy. The whole point of the Bush-Rove way of doing business is that principles, coherent governance and even ideology must always be sacrificed for political expediency, no matter the cost to the public good.

Like McCain now, Bush campaigned in 2000 as a practical problem-solver who could “work across the partisan divide,” as he put it in his first debate with Al Gore. He had no strong views on any domestic or foreign issue, except taxes and education. Only after he entered the White House did we learn his sole passion: getting and keeping power. That imperative, not the country, would always come first.

One journalist who detected this modus operandi early was Ron Suskind, who, writing for Esquire in January 2003, induced John DiIulio, the disillusioned chief of the White House Office of Faith-Based and Community Initiatives, to tell all. “There is no precedent in any modern White House for what is going on in this one: a complete lack of a policy apparatus,” DiIulio said. “What you’ve got is everything - and I mean everything - being run by the political arm. It’s the reign of the Mayberry Machiavellis.”

If politics strongarm everything, you end up with the rampant cronyism, nonexistent long-term planning and abrupt, partisan policy improvisations that fed the calamities of Iraq, Katrina and the economic meltdown. Incredibly, McCain has nakedly endorsed the Bush-Rove brand of governance in his own campaign by assembling his personal set of lobbyist cronies and Roveoperatives to run it. They have not only entangled him in a welter of conflicts of interest, but they’ve furthered cynical political stunts like the elevation of Sarah Palin. At least Bush and Rove didn’t try to put an unqualified hack like, say, Alberto Gonzales half a heartbeat away from the presidency.

As if the Palin pick weren’t damning enough, McCain and his team responded to the financial panic by offering their own panicky simulation of the Bush style of crisis management in real time. Fire the S.E.C. chairman and replace him with Andrew Cuomo! Convene a 9/11 commission to save Wall Street! Don’t bail out A.I.G.! Do bail out A.I.G.! Reacting to polls and the short-term dictates of 24-hour news cycles, McCain offered as many economic-policy reboots in a month as Bush offered “Plans for Victory” during the first three years of the Iraq war.

Now McCain is trying to distract us from his humiliating managerial ineptitude by cranking up the politics of fear - another trademark Bush-Rove strategy. But the McCain camp’s quixotic effort to turn an “old washed-up terrorist” into a wedge issue as divisive as same-sex marriage is too little, too late and too tone-deaf at a time when Americans are suffering too much to indulge in 1960s culture wars. Voters want policies that might actually work rather than another pandering, cynical leader who operates mainly on the basis of his “gut” and political self-interest.

The former Bush speechwriter David Frum has facetiously written that McCain could be rescued by “a 5,000-point rise in the Dow and a 20 percent jump in home prices.” But the economy, stupid, can’t be blamed for McCain’s own failures, any more than Bush can be. Even before the housing bubble burst and Wall Street tumbled, voters could see that the seething, impulsive nominee isn’t temperamentally fit to be president.

That’s where the debates have come in. There may have been none of those knockout blows the press craves, but the accretional effect has been to teach the public that McCain isn’t steady enough to run the country even if the economy were sound, and that Obama just might be.
In Debate No. 1, you could put the volume on mute and see what has proved to be the lasting impressions of both candidates start to firm up. In Debate No. 2, McCain set the concrete: he re-enacted the troubling psychological cartography of his campaign “suspension” by wandering around the stage like a half-dotty uncle vainly trying to flee his caregiver. After the sneering and eye-rolling of McCain’s “best” debate on Wednesday, CNN’s poll found the ever-serene Obama swamping him on “likeability,” 70 to 22 percent.

At least McCain had half a point on Wednesday night when he said, “I am not President Bush.” What he has offered his country this year is an older, crankier, more unsteady version of Bush. Tragically, he can no sooner escape our despised president than he can escape himself.

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After W., Le Deluge
By MAUREEN DOWD

It is the best of times, it is the worst of times.

The best of times because W.’s long Reign of Error is about to end.

The worst of times because, well, you know why.

In this season of darkness, as Charles Dickens described an earlier mob scene, I’m feeling as vengeful and bloodthirsty as Madame Defarge sharpening her knitting needles at the guillotine.

I even felt a little thrill go up my leg, as Chris Matthews would put it, when I heard that the Lehman Brothers C.E.O., Richard Fuld, got punched in the company gym after it was announced that the firm was going under.

I can’t wait to see the tumbrels rumble up and down Wall Street picking up the heedless and greedy financial aristocracy that plundered and sundered free-market capitalism.

Just when we thought executives of A.I.G., the insurance giant bailed out by taxpayers for $123 billion, had been shamed into stopping their post-bailout Marie Antoinette spa treatments, luxury sports suites, Vegas and California posh resort retreats, we were dumbfounded to learn that some A.I.G. execs were cavorting at a lavish shooting party at a British country manor.

London’s News of the World sent undercover reporters to hunt down the feckless financiers on their $86,000 partridge hunt as they tromped through the countryside in tweed knickers, and then later as they “slurped fine wine” and feasted on pigeon breast and halibut.

The paper reported that the A.I.G. revelers stayed at Plumber Manor - not the ancestral home of Joe the Plumber, a 17th-century country house in Dorset - and spent $17,500 for food and rooms. The private jet to get there cost another $17,500, and the limos added up to $8,000 more.

In an astonishing let-them-eat-cake moment, the A.I.G. big shot Sebastian Preil held court at the bar and told an undercover reporter, “The recession will go on until about 2011, but the shooting was great today and we are relaxing fine.”

There were at least three New Yorkers bagging birds - Jeffrey Malkovsky, a senior director at A.I.G.’s Manhattan office, Hilary James, the general manager of the Bristol Plaza Hotel, and her friend, John Roberts, an A.I.G. adviser.

Who are these looters of our loot? The New York Times should follow up the excellent Portraits of Grief it did after 9/11 with Portraits of Greed.

Payback doesn’t have to go as far as the French Revolution. The grifters shafting us don’t have to shed blood, but they do have to give the money back. As far as these self-serving corporate con men and short-selling traders are concerned, off with their headsets.

John McCain wasted his last-chance debate Wednesday by trying to stir up faux class rage against Barack Obama with Joe the Unvetted Plumber instead of tapping into the real class rage the country feels over bailing out ungrateful financiers who gambled away the life savings of working people.

’Tis a far, far better thing that New York’s attorney general, Andrew Cuomo, did when he demanded that A.I.G.’s former executives who were trying to abscond with many millions in severance payments, bonuses and golden parachutes surrender the swag. He set a good example for the feds, who slapped Mr. Fuld in the face with a subpoena.

Cuomo got A.I.G. to instantly reverse itself and cancel 160 conferences and other events that would have cost more than $8 million, as well as give up information on compensation, bonuses and other payments to determine whether they were fitting. (How could they be?)

“We stopped a $10 million severance payment to Stephen Bensinger, the chief financial officer,” Cuomo told me Friday. “Just look at the words chief financial officer. There’s a phenomenon when senior management sees the corporation deteriorating and they concoct a version of looting the company to take care of themselves.”

Even Cuomo, who has been locked in battle with A.I.G. for a long time, was stunned when he learned of the British hunting folly. At first he thought it could not be true.

“That was our partridge hunting trip,” he said. “The partridge paid the ultimate price, but the taxpayer came close.”

He is using a state “claw back” law, which he says allows him to recover contracts and rescind payments if there was unjust compensation.

Great. Now can he find the $123 billion lost by A.I.G. that we now have to plug with taxpayers’ money?

Let’s hope that if Barack Obama becomes president, the first thing he does is keep his promise to make the junketeers come to Washington (preferably by bus or carpooling) and write the U.S. Treasury a check, after which he will fire them on the spot.

Heads must roll.

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The Great Iceland Meltdown
By THOMAS L. FRIEDMAN

Who knew? Who knew that Iceland was just a hedge fund with glaciers? Who knew?

If you’re looking for a single example of how the globalization of finance helped get us into this mess and how it will help get us out, you need look no further than British newspapers last week and their front-page articles about the number of British citizens, municipalities and universities - including Cambridge - that are in a tizzy today because they had savings parked in Icelandic banks, through online banking services like Icesave.co.uk.

As Dave Barry would say, I’m not makin’ this up.

When I went to the Icesave Web site to see what it was all about, the headline read: “Simple, transparent and consistently high-rate online savings accounts from Icesave.” But then, underneath in blue letters, I found the following note appended: “We are not currently processing any deposits or any withdrawal requests through our Icesave Internet accounts. We apologize for any inconvenience this may cause our customers.”

Any “inconvenience?” When you can’t withdraw savings from an online bank in Iceland, that is more than an inconvenience! That’s a reason for total panic.

So what’s the story? Around 2002, Iceland began to free its banks from state ownership. According to The Wall Street Journal, the three banks that make up almost the entire banking system in Iceland “grew quickly on easy credit” and “their combined assets rose tenfold in five years.” The Icelandic banks, while not invested in U.S. subprime mortgages, had gone on their own borrowing and lending binges, wooing savers from across Europe with 5.45 percent interest savings accounts.

In a flat world, money can easily seek out the highest returns, and when word got around about Iceland, deposits poured in from Britain - some $1.8 billion. Unfortunately, though, when global credit markets closed up, and the krona fell, “the Icelandic banks were unable to finance their debts, many of which were denominated in foreign currencies,” The Times reported. When depositors rushed to get their money out, the Icelandic banking system had too little reserves to cover withdrawals, so all three banks melted down and were nationalized.

It turns out that more than 120 British municipal governments, as well as universities, hospitals and charities had deposits stranded in blocked Icelandic bank accounts. Cambridge alone had about $20 million, while 15 British police forces - from towns like Kent, Surrey, Sussex and Lancashire - had roughly $170 million frozen in Iceland, The Telegraph reported. Even the bobbies were banking in Iceland!

So think about it: Some mortgage broker in Los Angeles gives subprime “liar loans” to people who have no credit ratings so they can buy homes in Southern California. Those flimsy mortgages get globalized through the global banking system and, when they go sour, they eventually prompt banks to stop lending, fearful that every other bank’s assets are toxic, too. The credit crunch hits Iceland, which went on its own binge. Meanwhile, the police department of Northumbria, England, had invested some of its extra cash in Iceland, and, now that those accounts are frozen, it may have to reduce street patrols this weekend.

And therein lies the central truth of globalization today: We’re all connected and nobody is in charge.

Globalization giveth - it was this democratization of finance that helped to power the global growth that lifted so many in India, China and Brazil out of poverty in recent decades. Globalization now taketh away - it was this democratization of finance that enabled the U.S. to infect the rest of the world with its toxic mortgages. And now, we have to hope, that globalization will saveth.

The real and sustained bailout from the crisis will happen when the strong companies buy the weak ones - on a global basis. It’s starting. Last week, Credit Suisse declined a Swiss government bailout and instead raised fresh capital from Qatar, the Olayan family of Saudi Arabia and Israel’s Koor Industries. Japan’s Mitsubishi bank bought a stake in Morgan Stanley, possibly rescuing it from bankruptcy and preventing an even steeper decline in the Dow. And Spain’s Banco Santander, which was spared from the worst of this credit crisis by Spain’s conservative banking regulations, is purchasing America’s Sovereign Bankcorp.

I suspect we will soon see the same happening in industry. And, once the smoke clears, I suspect we will find ourselves living in a world of globalization on steroids - a world in which key global economies are more intimately tied together than ever before.

It will be a world in which America will not be able to scratch its ear, let alone roll over in bed, without thinking about the impact on other countries and economies. And it will be a world in which multilateral diplomacy and regulation will no longer be a choice. It will be a reality and a necessity. We are all partners now.

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