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Yglesias

Into The Breach

The most tangible sign of the credit crunch has been the complete drying out of the so-called “commercial paper” market, wherein companies pass out IOU slips (“unsecured debt”) so that their day-to-day operations aren’t shackled by the ups-and-downs of the cash flow cycle. Under the circumstances, it seems natural for the Fed to consider an unprecedented move to step into the breach and start buying commercial paper in order to get the juices flowing here.

Needless to say, this whole topic is pretty far outside my comfort zone. But I wonder — once the Fed gets into this sort of thing, how easy is it to step back out?

Yglesias

Sen. Hagel’s Wife For Obama

It came up at dinner tonight that neither Chuck Hagel nor Colin Powell yet seems to have made a presidential endorsement and was all set to do a post on the subject, when along comes word that the Hagel striptease is moving forward a bit with his wife stepping forward to endorse Obama, while the Senator himself stays on the sidelines. Weird.

Politics

Coleman aide won’t side with McCain’s health care plan.

The Center for American Progress Action Fund reported last month that 3.1 million Minnesotans could lose their employer health benefits under Sen. John McCain’s (R-AZ) health care plan, which would also lead to “major reductions to Medicare and Medicaid.” Recently, Luke Friedrich, an aide to Sen. Norm Coleman (R-MN), was asked four times whether Coleman supports McCain’s plan. Each time, he refused to back McCain, only claiming that Coleman “is aligned with Senator Coleman’s plan”:

FRIEDRICH: Well, Senator Coleman is aligned with Senator Coleman’s plan and I think that’s the point that I want to make here. [...]

Q: If Senator McCain’s bill came up for a vote, how would the Senator vote on it?

FRIEDRICH: Again, it would depend on what was in the bill. … I’m sure, some things that will line up. I mean, they are both pretty comprehensive plans. I’m sure there are some things that line up from Senator Obama’s plan as well.

Watch it:

The Wonk Room has more on the Bush administration’s plan to cut Medicaid for 18,000 low-income parents in Minnesota.

Politics

Lehman board recommended $20 million in executive ‘special payments’ while filing for bailout.

The AP reports that Lehman CEO Richard Fuld admitted to Congress today that he has taken home over $300 million since 2000, “some $60 million in cash compensation.” Furthermore, “executives who feared for their bonuses in the company’s last months were told not to worry,” even as Lehman plead for a federal bailout. Waxman revealed that “the board give three departing executives over $20 million in ‘special payments.’” Watch it:

“In other words, even as Mr. Fuld was pleading with Secretary Paulson for a federal rescue, Lehman continued to squander millions on executive compensation,” Waxman said. Read more

Politics

Palin staff keep journalists locked inside press area to prevent them from writing ‘negative things.’

During Gov. Sarah Palin’s (R-AK) speech in Florida this morning, campaign staffers kept the press locked out of the park and away from supporters attending the speech:

Constantly under the watchful eyes of security, the media wasn’t permitted to wander around inside Coachman Park to talk to Sarah Palin supporters. When reporters tried to leave the designated press area and head toward the bleachers where the crowd was seated, an escort would dart out of nowhere and confront him or her and say, “Can I help you?” and turn the person around.

When one reporter asked an escort, who would not give her name, why the press wasn’t allowed to mingle, she said that in the past, negative things had been written. The campaign wanted to avoid that possibility Monday.

Palin has still yet to give a single press conference since being tapped as Sen. John McCain’s running mate on August 29.

Update

Steve Benen has more.

Climate Progress

Google’s ambitious energy and climate plan

Google

Google has come out with a plan to “greatly reduce fossil fuel use by 2030.” It is one of the most ambitious such plans ever offered by a major US company and deserves a close look by everyone (details here, long CEO speech here). Compared to business-as-usual growth, the plan would reduce:

  • Fossil fuel-based electricity generation by 88%
  • Vehicle oil consumption by 38%
  • Dependence on imported oil (currently 10 million barrels per day) by 33%
  • Electricity-sector CO2 emissions by 95%
  • Personal vehicle sector CO2 emissions by 38%
  • US CO2 emissions overall by 48% (40% from today’s CO2 emission level)

The cost is high, $4.4 trillion, but savings are even higher, $5.4 trillion, “returning a net savings of $1.0 trillion over the 22-year life of the plan” — not counting the value of carbon credits, which, Google says, would boost the savings to over $2 trillion. And that’s assuming very optimistically that the price of CO2 in 2030 is only $40/ton, which is the European price today. In fact, we’ll probably need CO2 prices twice as large by 2030.

The two most interesting aspects to me are Google’s (inevitable) recognition that cutting oil demand in the medium term is much harder than cutting fossil power generation and, as a result, their call to speed up the retirement of existing vehicles (discussed below).

The Google plan is built around massive and rapid deployment of clean technology:

Read more

Politics

Pfotenhauer Claims McCain Has Made The Economy The ‘Fulcrum Of His Whole Campaign’

With close friends like Sen. Joe Lieberman (I-CT) acknowledging that a focus on the economy has been bad for Sen. John McCain’s (R-AZ) presidential campaign, his adviser have announced a strategy for “turning a page on this financial crisis” in order to stop “talking” about the economy. But on the defensive about trying to avoid the most important issue of the day, senior McCain adviser Nancy Pfotenhauer argued on Fox News today that McCain “has made the economy, and his economic policies, just really, the fulcrum of his whole campaign”:

PFOTENHAUER: Now, obviously, Senator McCain has made the economy, and his economic policies, just really, the fulcrum of his whole campaign. I mean, we spend about 80 percent of our time talking about it, unless Russia invades Georgia, and then there’s a little bit of a sidebar. But we spend most of our time focusing on those things because Senator McCain cares so much about it. And he’s been very clear, if I can be biased, he has a very comprehensive plan to get the economy back on track and we spend almost all of our time advocating it.

Watch it:

In reality, McCain has made every effort he can to talk about anything but the economy. In June, Fortune magazine asked McCain what he saw as “the gravest long-term threat to the U.S. economy.” Instead of mentioning an actual economic issue, McCain paused for 11 seconds before saying “radical Islamic extremism“:

He’s looking not at us but into the void. His eyes are narrowed. Nine seconds of silence, ten seconds, 11. Finally he says, “Well, I would think that the absolute gravest threat is the struggle that we’re in against radical Islamic extremism, which can affect, if they prevail, our very existence. Another successful attack on the United States of America could have devastating consequences.”

McCain’s pivot in his interview with Fortune is similar to the pivot he made during a primary debate earlier this year. Asked about why he was “qualified” to “manage our economy,” McCain said that his military background gave him “the vision and the knowledge and the background to take on the transcendent issue of the 21st century, which is radical Islamic extremism.”

Considering that McCain has previously admitted that he knows “a lot less about economics than I do about military and foreign policy issues,” it’s not surprising that he would often choose to talk about “radical Islamic extremism” instead of the economy. What is surprising is that McCain’s advisers believe they can credibly claim McCain has made the economy “the fulcrum” of his campaign.

Politics

McCain offers no response to supporter who yells out that Obama is a ‘terrorist.’

This afternoon, Sen. John McCain (R-AZ) gave a “sharply worded” speech full of “verbal assaults” directed at Sen. Barack Obama (D-IL). At one point, McCain asked, “Who is the real Barack Obama?” A member of the crowd yelled out, “a terrorist!” McCain paused while the audience laughed at the comment, and then continued with his attack — without condemning or admonishing the audience member. Watch it:

Last year, McCain had a similar reaction when one of his supporter asked, regarding Sen. Hillary Clinton (D-NY), “How do we beat the b*tch?” McCain laughed and replied, “That’s an excellent question.” (HT: AmericaBlog)

Update

The Washington Post reports that when Gov. Sarah Palin (R-AK) attacked Obama during a speech in Florida this morning, one audience member shouted, “Kill him!

Health

McCain’s New Health Care Plan Delays the Tax Increase

Our guest blogger is James Kvaal, a Senior Fellow at the Center for American Progress Action Fund.

The McCain campaign has altered its health care plan again. The new plan reduces the number of families facing tax increases, but it requires deep cuts in Medicare and Medicaid and still will eventually require most middle-class families to pay higher taxes.

The original McCain plan imposed both income and payroll taxes to health benefits. The campaign never said so explicitly, but its figures for the plan’s budget cost and its impact on a typical family could not be understood any other way.

The plan would raise taxable income by about $13,000 for an average family with health benefits. That’s a hefty tax increase on the middle-class. We estimated that a typical middle-class family making $60,000 would pay $1,100 more in taxes in 2013.

The new McCain plan imposes only income taxes on health benefits, according to figures released over the weekend by McCain aide Douglas Holtz-Eakin. Without higher payroll taxes, fewer families will be socked with higher tax bills but taxpayers must pony up an additional $1.3 trillion. (Igor has more on McCain’s plan to pay for it by cutting Medicare and Medicaid.)

Some families still face an immediate tax increase under McCain’s plan; those with incomes and premiums that are higher than average are most likely to see higher taxes. Some families must pay more in premiums because they have significant health needs or live in a costly area of the country.

A middle-class family paying 25 percent in income taxes and 5 percent in state taxes would pay more under McCain’s plan right away if their premiums are more than $16,700 – which would make it a relatively costly plan but hardly the most expensive out there.

Moreover, more and more families will pay higher taxes over time. That’s because McCain’s tax credit will increase no faster than inflation (about 2 percent a year). In contrast, the new tax on health benefits will increase along with premiums (about 7 percent a year).

By 2014, a middle-class family (who is in the 25 percent tax bracket and pays average premiums) would pay $300 more in taxes. Every following year, the tax hike would get larger. By 2018, it would be more than $1,400.

The original McCain plan featured an unappealing tax increase on middle-class families. The new plan cuts Medicare and Medicaid, but it only delays — rather than eliminating — the tax increase on middle-class families.

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