The Lion and Gun

If you haven't seen The Wire, or haven't seen all of the seasons, you should. It's a great show. Here's the opener from season one - it's worth revisiting. Given our current events, I caught myself thinking - are we done giving Wall Street second chances? Is that a good thing?

CIMITYM - because your business can survive without your mother, but not without cash. That's lesson number one in the Entrepreneurial Finance and Private Equity class at the University of Chicago. Businesses are relearning this lesson in the wake of the credit crisis. The start of the cash-crisis Tsunami here and here.

Fannie Mae begins incentivizing people to shoot themselves. Yikes.

(h/t Marginal Revolution)

On washingtonpost.com this morning:



Is this campaign being run by the Marx brothers?

Edit: And Peggy Noonan is not a famous person. You're a nerd for thinking so.

This one has been flying around the finance community for a couple of days now...


(Click to enlarge.)

Rich Lowry's reaction to last night's debate is being made fun of all over the place. And let's be honest, he's earned it:

Palin too projects through the screen like crazy. I'm sure I'm not the only male in America who, when Palin dropped her first wink, sat up a little straighter on the couch and said, "Hey, I think she just winked at me." And her smile. By the end, when she clearly knew she was doing well, it was so sparkling it was almost mesmerizing. It sent little starbursts through the screen and ricocheting around the living rooms of America.

Matt asks for my thoughts on the bail-out below, and to him I say: Recapitalize. Invest in underfunded banks and keep them liquid by investing equity capital...not by buying their shady assets. Here's Alex Taborrok on an emerging consensus amongst economists that capital injection on the equity side of the balance sheet will be more meaningful and potent than the proposed bail-out.

I have to warn you, if you watch this exchange it's three minutes and forty-six seconds of your life that you won't get back.



I warned you.

That's what she tells FOX News.

Okay, so that's the punchline, but what was the joke?

I noticed this one while watching Charlie Rose a couple of weeks ago. Austan Goolsbee, Obama economics advisor and Chicago GSB professor extraordinaire, is referencing his run-in with certain Canadians over this little thing called 'NAFTA'.



For the full conversation, which is great, go here.

In another courageous act of political bipartisanship Senator John McCain remained silent on the bailout bill when it was brought before the Senate. He reached across the aisle by sitting quietly at his desk with his arms folded until Senator Obama dropped by, at which point McCain fearlessly scowled. What a maverick!

Matt links below to an Ezra Klein article that advances a pretty standard / simple argument for government spending in recessionary times..ie 'priming the pump'.

In hard times, families cut back. But the government is not a household. In hard times, it should spend more in order to stimulate the economy.

The Presidential debate last week didn't draw as many viewers as expected. Seems they were holding out for last night.

With numbers like these, how far can we be from a Veep-picking reality show?

Oh, wait.

Chuck Todd nails it. I think the 'expectations game' is little more than that: an idle parlor game for political hacks and talking heads to pass the time and pad their egos. Fact is, the pundits, for all their purported wisdom about what the guy on the street in Scranton (always Scranton) thinks, judge candidates by a pretty different metric from the rest of us. Turns out the election really isn't graded on a curve; just because Palin did better than many thought she would didn't mean she did well enough. But it wouldn't be an American tale if the plucky average Jane underdog didn't defeat the tired old Washington dog.

Speaking of which, Sarah Palin still doesn't strike me as being 'average' in a way that resonates with voters; she doesn't sound like someone from the heartland, she sounds like someone people who've never lived in the heartland think sounds like someone from the heartland. The more often she assures us she's Just Another Hockey Mom the more it sounds like the lady doth protest too much. And, anyway, mediocrity doesn't equal relatability.

I wonder if this is partly a reflection of what's happened in the last 16 years, with two folksy Presidents in a row. But Bill Clinton had the advantage of also being smart as hell, and George W. ran against two pretty flawed opponents. Maybe it wasn't just the ability to reduce complex realities into pithy aphorisms that determined the last four elections, and maybe it won't be what determines this one.

Anyway, I vote to replace every television pundit with Chuck Todd.

Ezra Klein thinks it's time to prime the pump. Hobbes?

Last night's debate shows some serious Mulder/Scully sexual tension. (We're talking circa fifth season here, folks.) At this rate Biden's about a week away from a fatwa.

Edit: That's my first X-Files reference on this blog. I doubt it's the last.

The new version of the bill, which passed in the Senate a couple days back, made its way through the House just now 263 to 171. John McCain heaves a sigh of relief, swing-district Dems start sending out fundraising emails with furious abandon, and news orgs prepare their knee-jerk reactions to the Dow's every little hissy fit in the next few hours.

What about the rest of us? I'll be perfectly honest: my knowledge of economics stems from maybe four undergrad courses and that Thaler and Sunstein book Hobbes made me read. (Which I never finished -- sorry, dude.) So I'm going to leave it to my partner-in-crime to say something smart about this.

Charles Krauthammer sturck off John McCain's Christmas card list.

I guess Sarah Palin would call that 'waving the white flag of surrender.'

The inimitable Hugh Hewitt writes about the second Palin bounce and the rise of John McCain. (I'm not being sarcastic; it's the title of his post.) He draws a roadmap for GOP victory in November: cutting taxes and trade barriers, reducing government regulation of the economy, and above all a focus on attacking the mainstream media as being a bunch of liberal effetes. Right, because free trade has been a winning issue for the Republicans; what people are clamoring for in response to the market meltdown is less regulation; and, oh yeah, most voters these days are up late at night pacing the floors because that Ivy League trollop Katie Couric was mean to Sarah Palin. Give me a break.

If this is the team he's got arrayed against him, Obama can just jet off to Maui from now till November 5th. Seriously, the GOP are starting to look like the Washington Generals.

From Adennak by way of Sullivan:

I don't know where this rates on the 'You are no Jack Kennedy' scale, but Biden's emotional moment near the end was, for me, the moment in this debate that I'll most likely remember four years from now. What about you, Hobbes?

(And who would have thought that out of the two of them it'd be Biden who came closest to crying?)

Saying you want to double down on Dick Cheney's Theory of Vice Presidential Authority = poor campaign strategy.

I more or less agree with Hobbes. I think Biden won on substance, but Palin managed not to eat her own head so there'll be some political types who'll call this a win by not losing. I frankly think it's the other way around: when your ticket is eight points in the hole you always lose by not winning. I don't care how low the bar is set; this thing ain't won on points.

In some ways it reminded me of the Kerry/Bush debates in '04, Biden slipping into Senatese and Palin playing just folks. Still, I'm doubtful someone who sounds like a Fargo extra in a Frank Capra movie can really connect with Joe Sixpack. (Nor anyone, for that matter, who actually calls him 'Joe Sixpack'.) And, like McCain a week ago, I think her demeanor worked against her once the cheerines began to grate: like a Chatty Cathy doll spouting talking points without feeling or understanding. Those few moments where she slipped off script were clear; like in the Couric interviews she strung appealing words together in more or less random order till finding her way back to platitudes or running out the clock.

Where do I think this leaves things? Pretty much where they were. Will it stop McCain's polling free-fall? Maybe. Maybe not. But while it might temporarily reduce the Pepto-Bismal intake in the GOP I doubt it'll rally wavering independents back onside. She hasn't killed McCain's chances with this single performance, but she also failed to cross the gap between beating expectations and looking remotely qualified.

We'll see how many agree as the polling rolls in.

My take is pretty simple - Palin dodged the debate. At every opportunity she sidestepped arguments and policy discussion in favor of simple talking points and cliché platitudes. When asked questions that might require a little explanation she would convert said question into a 'yes' or 'no' and start talking about ending greed on Wall Street (good luck!). Joe Biden didn't have much to work with in terms of 'debate' so he just kept scoring points on the empty net that was every issue of substance. Yet I'm sure that Dems will find this oddly unsatisfying. Why? Because all people are going to talk about this evening and tomorrow is Sarah Palin.

The only thing more I can muster is a 'meh', followed by a Joe Biden sigh. I guess it's endearing that Palin says things like "darn right" and pronounces 'nuclear' like the president - ie, 'Newk-u-lar' - but really, how can this person possible be President? I'm all ears for intelligent defenses of her performance.

If the size of your American Flag lapel pin matters, then Sarah Palin is going to be the best damn Vice-President this Country has ever seen.

As much as I'm looking forward to it, I doubt tonight's debate will substantially alter the dynamic of the race. As gaffe-prone as conventional wisdom tells us Joe Biden is, I think Palin is by far the more likely candidate to make a big mistake. Nevertheless, the GOP will be on the lookout for anything Biden can give them -- in his words or his demeanor -- to bait the sexism hook.

In fact this was the first thing I thought of when I learned back in August that Sarah Palin was going to be the GOP VP nominee. Let's turn our memories all the way back to late August and try to put ourselves in the mindset of the McCain campaign: a fundamentally reactive and tactical campaign, perhaps even myopic, as I've argued before. Barack Obama is experiencing a sudden surge in the polls; his speech is a hit despite all attempts to shift focus to the Greek columns behind him; both Clintons have made speeches that the pundits say healed most of the rift in the party; Barack Obama has just made the not-terribly-controversial decision to run with Joe Biden. At this point it looks like the key swing demographic will be the Clinton voters -- that is to say, older whites, especially women, living in Appalachia; that's Ohio and Pennsylvania, maybe even Michigan. You need to make a play for those voters. In fact, in the past few days you've cut commercials that rather ham-handedly appeal to PUMAs basking in their last fleeting moments in the spotlight. You decide to shake things up -- how about Lieberman, centrist Jewish Democrat? But, no, that might cause a party revolt. So Sarah Palin: she's a woman, after all, right?

I did not for an instant think the consideration was as simple as that. I don't think the hands at the wheel of the Straight Talk Express seriously thought that simply having a woman would peel away any but the softest of Obama's supporters -- the kind of voters they could get, if they could get them at all, without Sarah Palin.

Instead, I think the campaign remembered the lessons of the primaries. Once Clinton became the underdog her campaign underwent something of a renaissance and she became a symbol for many women of the struggle for equality. She was then able to use the media's treatment of her to her advantage; she could play the gender card in a way Obama could never play the race card, but she had to wait until she was, in the judgment of some (including, apparently, the writers at SNL), manhandled at a Presidential debate. The narrative that she was being treated badly by a hostile and sexist media rallied many women to who side who might not otherwise have supported her so actively or even supported her at all.

The notion of media as bugbear has long held a special place in many conservatives' hearts, and it's a pretty easy sell to the general public. I have no doubt that Republican strategists, having seen Clinton's politically fruitful battle with the media and furthermore knowing Biden's tendency toward arrogance and his famous penchant for gaffes, set up Sarah Palin to be victim at tonight's debate well in advance. Never mind that that very strategy is itself pretty sexist: it could still work.

It'll be harder to pull off now, I think. Biden's no fool, and the Obama people have probably focused a fair bit of his debate training on how not to look sexist. Meanwhile, Palin's bungled roll-out makes the public less inclined toward sympathy. Clinton might have been just as polarizing but she had a much larger proportion of admirers.

That's probably the source of this last-minute cognitive dissonance about Gwen Ifill (she's clearly biased, but clearly not biased enough to rule her out from moderating the debate, unless of course Palin flails and Biden provides them nothing to grab onto). Still, the potential remains that Biden will do something, say something, or simply carry himself in a way that lets the Republicans build their own story of the little woman that could.

While we contain our Shadenfreude, Krugman rolls around in it.

The folks at Power Line are coming to realize that it's a bad year to be a Republican. I'll try to contain my schadenfreude.

The phrase 'double-click' is quickly becoming all the rage in corporate strategy consulting circles - which means its next stop is banking - after which it will make its way to politics. (btw, it's always stunned me that political types couldn't come up with their own bullshit clichés...wait...no it doesn't stun me at all actually). Here's the definition from the indispensible buzzwhack.com:

double-click: To give more attention or evaluate in depth. Derived from double-clicking on a file to open it. "Let's start with the historical data and after that we can double-click on the pro formas."

No, seriously.

Here's a question of the rhetorical variety: if McCain's campaign is being forced to withdraw from Michigan, what the hell was he doing campaigning in Iowa on Monday>

Consider the following from, er, US weekly:

Some of her startling skinny 90210 costars may pick at the food, but AnnaLynne McCord, 21, isn't into starving herself. "I love to eat!" she told Hot Stuff on September 20 at the Main Event Eco-Emmy suite in L.A. "I'm kind of the girl you don't like because I can eat whatever I want!".

As I wrote just hours ago, it's going to be very difficult for McCain to win the election without Michigan, yet the spending limit on public campaign finance forces tough choices, and the McCain campaign probably thinks it has a better shot right now in Pennsylvania. So according to Politico they're pulling out of the mitten state.

Obama's probably feeling pretty good right now about his decision to drop out of public financing.

Chris Bowers has an interesting article on what he sees as a full-scale collapse not just of the McCain campaign or the Republican brand but the very notion of conservatism in America, or at least conservatism as it's fought in the political battles of the culture wars.

I think there are some good reasons to believe that there is a long-term shift at work in American politics that goes beyond the Bush administration's public relations disasters over the past three years. I'll write about this in a longer post sometime in the next week or so, but for many reasons I think that the last Presidential election was somewhat anomalous and that Bush's victory could be attributed to a well-run campaign (and a Democratic candidate who fit almost every negative stereotypes about Democratic candidates). This time around I don't think it's a stretch to suggest that John McCain only managed to stay competitive for so long because his personal brand put him at a distance in many voters' minds from both the Republican party and conservative ideology.

Nevertheless, I think that any declarations of political conservatism's death are premature, particularly if the evidence is the past several weeks' polling. Bowers is technically right to note that Obama's numbers started to improve even before the financial mess, but I think that's looking at it from the wrong perspective: better to say that McCain's post-convention bounce had begun to fade.

Admittedly, I am surprised that Obama's surge continues, but what's really stunning about it isn't its persistence -- despite what Bowers says Obama has had more sustained rises both in February and in June -- but its magnitude and rapidity, especially coming hot on the heels of a similarly dramatic shift in the other direction. McCain had been chipping away at Obama's lead since early July and the large bounce Obama received from the Convention proved ephemeral, but the larger bounce McCain received from Palin and the RNC proved even more ephemeral. That roller coaster ride imparts to us, I think, two lessons.

First, as I have said already, at least part of the latest shift toward Obama was a rebalancing of a race that should naturally favor Obama after an early September McCain bounce. Then, of course, several things have happened to genuinely shift the race even more in Obama's favor -- the financial collapse, Palin's devastating interviews with Couric, and the McCain campaign's political flailing. Even there, though, there is probably a bounce effect, and as the panic surrounding the banking collapse becomes more numbingly ordinary and the Couric interview fades into memory Obama's numbers will probably adjust a little bit downward. It's possible the electorate will break for him, and I've always thought that strong and (more importantly) reassuring debate performances could work to his advantage the way they did for Reagan in 1980, but we still have three more debates to go.

The second thing we've learned is that the dynamic in this race can change pretty dramatically. The McCain campaign is throwing one risky gambit after another and there's a possibility that one of them will stick. Or there could be some unexpected event, a terror attack or a natural disaster or a last-minute scandal, that changes the race overnight -- much like the failures of Fannie and Freddie and Lehman and all the rest. There's a reason they're called 'October surprises', and we've still got 29 days to go.

Ultimately, Obama's dramatic rise in the polls is as much the product of a political perfect storm as it is a reflection of more fundamental and longer-lasting changes in American ideology. I'm convinced he'll win this thing, as I have been convinced he'd be President since I saw his keynote at the 2004 Democratic National Convention, but history has given us a very recent example of how sudden surges in the polls can be just as quickly undone.

So let's stop with the eulogies already.

It is a dismaying irony to see federal prosecutors abuse their position to withhold evidence from the defense of a United States Senator accused of abusing his position.

Unlike fellow Alaskan Sarah Palin's efforts to duck investigation into accusations of ethical lapses, Ted Stevens was determined to get his trial over with before Election Day. I'm not sure if a mistrial, or even dismissal of charges against him, will be enough to bring victory at the ballot box. Palin will have long coattails in her home state, but Democratic candidate and Anchorage mayor Mark Begich still holds the advantage. Nevertheless, Stevens' decision now looks like it might have been the best possible given his situation.

Okay, so maybe she thinks people choose to be gay, but to her credit Sarah Palin assures us that her gay friend isn't her friend just because it's kind of cool these days to have a gay friend.

All right, I promise I'll stop talking about Palin soon. Tomorrow.

Seems Pakistani President Asif Ali Zardari has gotten into some hot water for putting the moves on Sarah Palin.

If I can't leer at another woman without getting a fatwa issued against me, I don't think I want to be President of Pakistan anymore.

Daniel Larison points to Rasmussen polling:

Looking at the crosstabs, I see that 28% of independents and 22% of McCain supporters say that the debate tonight will be very important for how they vote. I take this to mean that all these people could change their minds based on what happens tonight.

I would be loathe to allow a post on the congressional baseball hearings to surface without reminding everyone of Spector's idiotic attempt to get at the bottom of the NFL Spygate 'scandal' last year.


Man, Spector is a serious popinjay.

Carrie Dann over at First Read wonders, 'How did the Bill Clinton-campaigning-for-Obama story get so little play?' Not to be glib, but my immediate response is: because it doesn't matter? Shockingly, this election is no longer about the drama of the Clintons. For a while it maybe looked like the next one would be, and if McCain gets his way it will, but these days it doesn't look like McCain is going to get his way.

I know it's going to be difficult for the media. Letting go is never easy. I'd recommend some books on recovery but the only one I've ever read was A Million Little Pieces, and that sucked.

By way of Ben Smith:

Congressional involvement in Major League Baseball was sometimes dismissed as grandstanding, but it did seem like good politics, and gave the sense that Congress was getting involved in something people cared about.

On ESPN Radio today, though, Obama criticized an investigation with which McCain was closely involved.

"I gotta admit that seeing a lot of congressional hearings around steroid use is not probably the best use of congressional time," Obama said.

A few hours ago Public Policy Polling released numbers comparing Sarah Palin's favorability ratings in four key swing states now and immediately after the RNC; they've also looked at Obama's gains in the horse race. In all four states -- Colorado, North Carolina, Florida, and Michigan -- Palin's favorables have plummeted, an average of 12 points overall, while Obama has gained an average of 6 points over McCain. He's taken the lead in Florida and North Carolina (although I'm not getting my hopes up just yet about NC) and increasing his advantage in Colorado and Michigan.

The biggest shift on both counts was in Michigan. This shouldn't be completely surprising. In an election where it's long been obvious that the economy was going to be an issue, Michigan should have been an easy get for Obama -- easier, at any rate, than Ohio or Virginia or Pennsylvania. That it wasn't had a little to do with the uncontested primary and a lot to do with Detroit's racially polarized response to embattled mayor Kwame Kilpatrick. It was clear this summer that McCain was making a major play for Michigan -- that's what drove a lot of the punditspeak about McCain/Romney '08 -- and, indeed, it probably represented his most likely route to the White House. Now, with the McCain campaign's stumbles and the economy brought even more to the forefront of the national consciousness, it looks like Michigan might be out of reach for the GOP. This is a pretty substantial setback. Obama can easily make up for a loss in Ohio on the mid-Atlantic or in the mountain west, but McCain's options are more limited. Immediately after bringing Palin onto the ticket it looked like Pennsylvania might come within reaching distance, but now that her candidacy has fizzled McCain's only real hope -- barring a (quite possible) game-changing event -- is to pick off New Hampshire and successfully play defense almost everywhere else.

This boat's sprung more than one leak. We'll see if he can do it.

I'm of the opinion that time spent talking about Sarah Palin instead of John McCain is time wasted for Democrats -- time wasted for anyone, really. But I have plenty of time to waste. And, anyway, tonight's the debate, so let me indulge.

We're hearing a lot these days about the 'expectations game', another one of those once-useful phrases half-beaten-to-death by know-nothing would-be politicos trying to prove their street cred with talismanic catch-phrases ostensibly encompassing all that matters into two words (five syllables between them). As a result, almost everyone writing about tonight's debate seems determined to one-up their competition by setting the bar more outlandishly low: suddenly this has become political t-ball and as long as Gov. Palin manages not to drool on herself too much, or in a way that can be caught by the television cameras, it'll be a resounding victory for Team McCain. In that case this -- the Couric interview, the Gibson interview, hiding from anyone with a notepad or a tape recorder, all of it -- will prove to have been some brilliant Manchurian Candidate maneuver exposing not Sarah Palin's incompetence but Steve Schmidt's demented brilliance.

Or maybe not.

Maybe, sometimes, stupid just is as stupid does. If Palin performs poorly, but not as poorly as some fear or hope or expect, viewers might just say to themselves, 'Hmmm, not as incompetent as I thought, but still pretty damned incompetent.'

Look, I'm not going to deny the importance of expectations in politics, but I don't think that importance should be overblown. Especially when what we're dealing with is, after all, a Vice-Presidential debate. It's become almost cliché to say that the guiding consideration in choosing a running mate is 'First do no harm,' but it's true. Sarah Palin energized the base but if the past few weeks have proved anything it's that there's much more she can do to harm the ticket than to help it. So while a not-very-good performance might staunch some of the McCain campaign's hemorrhaging, to outright reverse the trend against them she's got to knock it way out of the park -- or else hope that Joe Biden makes a pretty damaging gaffe.

You can decide which is the more likely outcome.

Update: I've given this some more thought, and it strikes me that expectations were high that Obama would win the first debate, and despite a performance that most pundits characterized as a draw for Obama at best, all indications now are that he still managed to walk away the victor in voters' eyes. Obviously the expectations handicap is stronger in Palin's case than in McCain's, but my point remains that it's mostly overblown.

Please?

Okay, so I actually do think it's important that a would-be President know more landmark Supreme Court cases than Roe v. Wade, and that she know more about Roe v. Wade than its name and that it has something to do with abortion. And, contrary to what is implied in the email Malkin quotes in this piece, Couric did ask Biden which Supreme Court decisions he disagreed with. But I think Malkin is essentially right when she says that if Palin doesn't know something she's asked about tonight it'd be in her interests just to 'fess up and move retreat to vague talking points, instead of trying to gussy up vague talking points like they're real answers. (Which newspapers and magazines specifically? All of them! Specifically.)

Of course, that would force a change in my plan to turn tonight's debate into a drinking game. On the upside, I might wake up tomorrow without a hangover.

Update: One-time Wonkette Ana Marie Cox has some suggestions for my drinking game.

Also sprach Katherine Seelye:

This is a sit-down debate. Will Mr. Biden help Ms. Palin with her chair? If Mr. Biden does not make some gentlemanly gesture, it may be a tip-off that he’s preparing mentally to clobber her. Or maybe he’ll just be recalling the observation from Chairman Mao, that a revolution is not a dinner party.

Nate Silver at FiveThirtyEight.com, in a follow-up to an earlier piece defending RealClearPolitics' decision to exclude the Research 2000 daily tracking poll from its averages, now doubts RCP's explanations for its sometimes dubious choice of polling to present in its widely-touted averages.

Ironically, perhaps the most important lesson imparted by FiveThirtyEight's borderline-fetishistic polling panoply is to treat all numbers with a skeptical gaze. Differences in methodology and the wording of questions, statistical noise and, yes, cherry-picked numbers all render statistics a helpful but untrustworthy friend.

All right, it'll become pretty obvious to readers over time that I'm no legal scholar. I know enough, however, to know that the decision in Roe v. Wade, whatever its merits, was founded on the right to privacy that Justices in Griswold v. Connecticut found to be implied in the Constitution. So I am persuaded by Adam Serwer's response to Ramesh Ponnuru that Sarah Palin's admission to Katie Couric that she believes the Constitution guarantees a right to privacy really does undermine key conservative attacks against choice. Of course her answer doesn't insinuate doubt in Sarah Palin's mind about the right to life (on the contrary, the answer's only insinuation is about what isn't in Palin's mind), and so conservatives are happy to let it slide. It's a technical point and I doubt it's going to do much to advance the cause either for or against abortion. Still, it's always amusing to me to see intellectual contortion on the right.

Post continues here.

It's long been well-known in political circles that John McCain has a temper and a penchant for profanity that would make his seagoing peers blush, and it's not much of a secret that he has a proclivity for gambles. Yet I think that till now that's been inside baseball: to John Q. Voter, John McCain has been the candidate of wisdom and experience, and if he gets angry sometimes that's just a reflection of his maverickyness. Mavericks, after all, are supposed to get angry when it's called for. I mean, hell, you've seen Top Gun.

For many Democrats this maverick branding long proved frustrating. Tying McCain to Bush in voters' minds was an uphill battle, never mind that it's reflective of reality. But now, even as that idea has started to take hold, it looks like a doubling-down of McCain maverickism is exactly what the Dems need.

As James Fallows rightly observes, the McCain campaign has focused on tactics largely at the expense of strategy, particularly since Steve Schmidt took over the reins. As his campaign increasingly falls behind Obama's in the polls those tactical gambles have become increasingly risky.

And it could work, even without a game changer. The 'celebrity' ads effectively chipped away at Obama's lead. Sarah Palin's selection was an early success. The GOP Convention, despite losing a day and a weak acceptance speech by McCain, was a hit with voters. With the race structurally favoring Obama, McCain's handlers are hoping for that kind of a six-day story five days before the election, and they could well get it. In the meantime, however, those gambles feed into the idea that McCain is impulsive and tempestuous -- and feed that idea to the public.

Unlike a monstrous gaffe, this is the sort of story that seeps into the electorate's consciousness little-by-little. It happens more easily, of course, if it conforms to what voters already think they know about a candidate. That's why a foreign policy gaffe by 'inexperienced' Obama will always garner more media attention than John McCain, for example, not knowing the difference between Sunni and Shia. That's also why it's been difficult to portray a McCain Presidency as a third term of Bush.

Angry McCain, however, dovetails well with Maverick McCain. And what seemed harmless to most voters has now, it seems to me, jumped the shark.

McCain's temper tantrum at the Des Moines Register yesterday added to this narrative. So did his petty reaction to Obama on the Senate floor a few hours later. Not to mention his much-remarked-upon failure to look directly at his opponent during Friday's debate.

McCain's anger turns his well-manicured maverick label against him and for that reason opens a more effective line for Democratic attack. At the same time it undermines his other chief narrative, that of Experienced McCain. After all, it's not really the knowledge gained from experience that makes a longer-serving candidate more attractive to most voters, it's the wisdom. Experience is supposed to mean a steady hand at the till.

Right now McCain betrays no signs of that greatest fruit of his labors.

That this turn of narrative comes at a time of national crisis when what people want more than anything is a calm, confident leader has made it even more damaging for McCain. I think that this, as much as any built-in advantage a generic Democrat has on the economy, explains McCain's recent polling free-fall. Until now many have been afraid that a vote for Obama was a risk. At a time when McCain could use his national reputation to capitalize on that anxiety, he's instead made himself the bigger risk.

As a Democrat I approach today with the giddy anticipation of a five-year-old hyperactive on Christmas morn. Will Biden make a gaffe? Will Ifill be cowed by charges of bias? Does Palin's head make a ripe thunk when you tap it with your finger? I can't wait to find out.

It is with some amusement that I read about attempts to suspend (eliminate?) the use of mark-to-market (MTM) accounting for financial assets like mortgage backed securities because the market 'undervalues' them. I remember when people were upset with MTM when Enron was using the practice to overstate the value of its financial contracts, and by extension their corporate earnings - now we don't like MTM for the exact opposite reason. Oh, how times change. When will those crazy capitalists ever learn?

This idea joins the suspension of short selling (in financial stocks anyway) as tools regulators have been thinking about / enacting to save bankers and investors from the ugly reality of the markets. I think the ban on short selling is a brazen attempt to scapegoat the people who made money from this crisis (those bastards!), never mind that they probably helped avert an even more dangerous bubble. Suspending or ending MTM on the other hand feels more meritous. It just feels comfortable to curtail a practice that can be abused the inflate earnings and potentially creates death spirals of asset markdowns in times of panic. Yglesias provides an interesting argument for the practice here (though I think it's basically the 'broken windows' argument debunked in Freakonomics).

Alas, I fear this response does more to ensure market manipulation than to prevent it. After all, MTM's entire purpose is to eliminate the subjectivity of asset prices and reduce the ability of management to manipulate earnings by deciding when, and by how much, such assets should be marked up or down. Markets discipline capitalists - regulators need to strive to create efficient markets with better information, not obscure those markets and impede price discovery when the prices are subjectively 'too high' or 'too low'. The long term effects of a move to more subjective asset marking would prove, I think, more disastrous than any problems with MTM.

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National





Battleground States

• Colorado
• Florida
• Georgia
• Indiana
• Iowa
• Minnesota
• Missouri
• Montana
• Nevada
• New Hampshire
• New Mexico
• North Carolina
• North Dakota
• Ohio
• Pennsylvania
• Virginia
• West Virginia
• Wisconsin

Keep reading...

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