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Yglesias

The Bad Debt of Tomorrow

Next up around the corner, it seems, will be a wave of credit card defaults which, like mortgages, have been packaged and securitized and God only knows if the risk models that the owners of the securities are workign from are actually any good. In light of recent events, one suspects the answer is no. Hilzoy has this interesting chart:

creditcardvwages.png

The basic credit card business model is pretty bizarre. With a mortgage, the bank lends out money. In exchange, they charge interest on the loan. There’s a risk of default, but the basic business model is that you’re hoping most of your customers pay their bills on time. With credit cards, though, you don’t make any money off people who pay their bills on time. You’re hoping your customers won’t pay what they owe you, thus letting you start tagging them with the high interest rates and sundry penalties. But of course you don’t want your customers to default either. It’s a delicate balance. But the risk with a delicate balance is that you fall off.

Politics

Video: Attacks on ACORN are part of a long-running right-wing campaign of voter suppression.

A new video from Brave New Films makes the case that recent fear-mongering claims of “voter fraud” are part of a long-running right-wing campaign to suppress the vote. As evidence, the video documents this statement made in 1980 by conservative activist Paul Weyrich:

They want everybody to vote! I don’t want everybody to vote. Elections are not won by a majority of people – they never have been from the beginning of our country and they are not now. As a matter of fact, our leverage in the elections, quite candidly, goes up as the voting populace goes down.

Watch it:

Yglesias

White Solidarity

Ryan Powers observes that conservative talk radio host Michael Savage thinks that “the only people who don’t seem to vote based on race are whites of European origin.”

This is a pretty bizarre point of view. It’s quite common to see African-Americans voting in droves for a white politician. By contrast, you almost never see a black politician win a majority of the white vote. And for a long time southern whites oriented their partisan affiliations entirely around their goal maintaining a white monopoly on political power.

Yglesias

The RNC’s Stimulus Package

081021_palin_redcoat_297.jpg

No more making fun of John McCain’s expensive shoes for me — $520 for a pair really does look down-home and working class compared to his everywoman running mate:

The Republican National Committee appears to have spent more than $150,000 to clothe and accessorize vice presidential candidate Sarah Palin and her family since her surprise pick by John McCain in late August.

According to financial disclosure records, the accessorizing began in early September and included bills from Saks Fifth Avenue in St. Louis and New York for a combined $49,425.74.

The records also document a couple of big-time shopping trips to Neiman Marcus in Minneapolis, including one $75,062.63 spree in early September.

The RNC also spent $4,716.49 on hair and makeup through September after reporting no such costs in August.

I’m a little bit surprised to learn that expenditures of that sort are legal. They appear on the disclosure forms, so apparently they are, but this seems to open the door to candidates using party committee money as a personal slush fund. Although now that I think about it, there was a story about John Edwards getting an expensive haircut that’s like a rounding error compared to Palin’s September hair and makeup expenses. The total bill is well over double the median household income in the United States.

Politics

McCain Campaign Backtracks On Balanced Budget Pledge, Admits It Might ‘Take Longer’ Than End Of First Term

mccain234.jpgAs ThinkProgress has noted, despite the recent economic downturn and $700 bailout, Sen. John McCain (R-AZ) and his advisers still pledged that McCain will balance the budget by the end of his first term. “I believe we can still balance the budget,” McCain said last month when asked if he could “achieve your goal of balancing the budget in your first term.”

Yesterday, however, in a debate with Obama economic adviser Austan Goolsbee at Columbia University, McCain adviser Douglas Holtz-Eakin significantly lowered the bar for McCain. Holtz-Eakin admitted that the economic crisis makes McCain’s balanced budget promise “harder,” thus it will take “longer” to implement:

“The events of the past few months have completely thrown a wrench into that, there’s no way round it. He would still like to balance it. It’s going to be harder, take longer,” said Holtz-Eakin at a debate with his Democratic counterpart at Columbia University in New York.

Holtz-Eakin is finally admitting the obvious: that it is impossible for McCain to fulfill his balanced budget pledge. The Wonk Room has noted that McCain’s proposals would result in the largest deficit in 25 years. Combined with the economic crisis and the $700 billion bailout, balancing the budget through massive spending cuts is neither prudent nor plausible. Next year’s deficit is predicted to start at roughly $550 billion and go as high as $1 trillion.

It’s unclear, however, what the campaign’s real policy on the budget is. Yesterday, Gov. Sarah Palin said that McCain would still balance the budget by the end of his first term.

Furthermore, in the third presidential debate, McCain promised an “across-the-board spending freeze” in order to reduce the deficit, while still sticking to his radical tax plan.

Politics

Palin: ‘I’m Not Going To Call’ Obama ‘A Socialist,’ But He Believes In Socialism

Today, Gov. Sarah Palin (R-AK) sat down with CNN for the first time. During the interview, CNN reporter Drew Griffin noted that “socialism” has “come up on the campaign trail.” But when Griffin asked, “is Barack Obama a socialist,” Palin dodged and deferred to “Joe the plumber“:

PALIN: I’m not going to call him a socialist but as Joe the plumber has suggested, in fact, he came right out and said it, it sounds like socialism to him and he speaks for so many Americans who are quite concerned now after hearing finally what Barack Obama’s true intentions are with his tax and economic plan.

Watch it:

Palin is trying to have it both ways — trying to take the high road in saying she won’t call Obama a “socialist” and at the same time, calling his policies “socialism,” all while hiding behind “Joe the plumber.” Indeed, just hours before her CNN interview, Palin told Glenn Beck, referring to Obama’s tax policy, “We cannot flirt with this and now is not the time to experiment with, as Joe the plumber calls it, socialism.”

In fact, by definition, a “socialist” is “one who advocates or practices socialism,” which is exactly what Palin has been accusing Obama of for the last week:

October 17: “Sen. Obama said that he wants to spread the wealth and he wants government to take your money and decide how to best to redistribute it according to his priorities…Joe [the plumber] suggested that sounded a little bit like socialism.”

October 19: “Friends, now is no time to experiment with socialism. To me our opponent’s plan sounds more like big government, which is the problem.”

October 20: “There are socialist principles to [Obama's tax plan], yes.”

Perhaps Palin is also trying to distance herself from the right wing’s common talking point that Obama is a Marxist. But it seems that she has at least one mainstream media figure fooled. Time’s Mark Halperin said of Palin’s CNN interview: “Palin declines to call Obama ‘socialist.’”

Climate Progress

The climate time clock: A presidential action plan

When America finally picks the next president two weeks from now, the clock will start ticking on a set of milestones critical to his leadership on climate. The first, lasting about 11 weeks, will be the transition period that ends with the Jan. 20 inauguration.

The President-elect and his team will have an enormous amount of work to do in a very short time to get ready for the extraordinary set of issues he will inherit, including two wars, a financial crisis and the restoration of American leadership in the most pressing and challenging issue of our time, and perhaps all time — global climate change.

Next comes the traditional honeymoon period in which a president sets the tone of his administration and has the best chance of implementing his agenda. It lasts for the six months between inauguration and Congress’s August recess. This short period, just an eighth of the first term, will have a lot to do with the president’s success for the remainder of his time in office.

How should the president use this time to jump-start federal leadership on climate change?

Read more

Economy

McCain’s Plan To ‘Redistribute The Wealth’ To The Already Wealthy

mccainpout1.jpgRecently, Sen. John McCain (R-AZ) has been criticizing Sen. Barack Obama (D-IL) for his belief “in redistributing wealth.” “I’m not going to redistribute your wealth,” claims McCain.

However, McCain is absolutely going to redistribute wealth. He is just going to redistribute it to the already wealthy. By doubling down on the Bush tax cuts and proposing $175 billion in tax cuts for corporations, McCain’s policies will exacerbate the already astounding income inequality in the United States.

Today, the Organization for Economic Cooperation and Development (OECD) released a report showing that “the United States has the highest inequality and poverty in the OECD after Mexico and Turkey, and the gap has increased rapidly since 2000.” The report notes that “in the United States, the richest 10 percent earn an average of US$93,000 — the highest level in the OECD. The poorest 10 percent earn an average of US$5,800 — about 20 percent lower than the OECD average.”

An analysis by the Center for American Progress Action Fund shows that President Bush’s economic policies “redistributed wealth to the richest Americans and left the majority with stagnating wages and declining household incomes.” As Scott Lilly noted today:

Based on data prepared by the Internal Revenue Service from tax returns filed during the post-9/11 recovery (2002 to 2006), household income grew by $863 billion during the period. The 15,000 families at the top of the income scale saw their annual incomes go from about $15 million a year to nearly $30 million. They alone accounted for more than 25 percent of all of the growth in income for the entire country. The remaining 1.7 million families in the top 1 percent of households accounted for nearly another 50 percent.

Currently, the United States’ income concentration is at its highest level since 1928. Meanwhile, McCain has embraced the Bush economic agenda, proposing making the Bush tax cuts permanent, a move from which the bottom 60 percent of taxpayers would only see 12 percent of the benefit. McCain’s tax plan gives no benefit to over 100 million middle class households, but does give $175 billion in tax breaks to America’s corporations.

But income inequality is cause for even more concern than the simple numbers suggest, since it also has an effect on mobility. McCain said today that “in this country, we believe in spreading opportunity.” It should give him pause, then, to note that just “7 percent of children born to parents in the bottom wealth quintile make it to the top quintile in adulthood,” and “36 percent of children born to parents in the bottom wealth quintile remain in the bottom as adults.”

OECD Secretary General Angel Gurria said that “greater income inequality stifles upward mobility between generations, making it harder for talented and hard-working people to get the rewards they deserve.”

As Matthew Yglesias wrote today:

It’s neither possible nor desirable to have complete equality of income, wealth, or opportunity. But at the same time, it’s impossible to prevent large inequalities in income and wealth from creating the kind of large inequalities in opportunity that most people, including people like McCain who are committed to making the distribution of wealth and income as unequal as possible, find undesirable.

Security

Limbaugh And Giuliani Indirectly Blame 9/11 On President Clinton

rudyrush.jpgDiscussing Sen. Joe Biden’s (D-DE) recent comments that the world will “test the mettle” of Sen. Barack Obama (D-IL) with an international crisis if he is elected, right-wing talker Rush Limbaugh and former NYC mayor Rudy Giuliani indirectly blamed the terrorist attacks of 9/11 on former President Bill Clinton. “Every time Clinton was tested, he failed, and that’s why they tested Bush on 9/11,” said Limbaugh. Giuliani agreed:

RUSH: Mr. Giuliani, do you realize how many times Bill Clinton was tested by Al-Qaeda, starting in 1993 through Mogadishu to the USS Cole, and every time Clinton was tested, he failed, and that’s why they tested Bush on 9/11.

GIULIANI: Yeah.

Listen here:

The fact that Giuliani so easily agreed with Limbaugh is surprising, considering that in 2006 he said it was wrong to “cast blame on Clinton” for 9/11:

The idea of trying to cast blame on Clinton [for the 9/11 attacks] is just wrong for many, many reasons, not the least of which is I don’t think he deserves it.

Though Clinton has freely acknowledged that he “failed” to get Osama Bin Laden, his administration aggressively pursued terrorism.

For instance, a June 1995 Presidential Decision Directive issued by Clinton emphasized concern about terrorism “as a national security issue” for the first time, instead of just a matter of law enforcement. Clinton’s directive declared that the United States saw “terrorism as a potential threat to national security as well as a criminal act and will apply all appropriate means to combat it.” For the last three years of his presidency, Clinton “raised the issue of terrorism in virtually every important speech he gave.”

In his book, Against All Enemies, former counterterrorism czar Richard Clarke — who served under Reagan, both Bushs and Clinton — wrote that Clinton did more right than he did wrong in combating terrorism, such as declaring “a war on terror before the term became fashionable.” As Clarke notes, Clinton did not shy away from using force to respond to terrorists. For example, after the African embassy bombings, he ordered strikes on terrorist camps in Afghanistan and a chemical plant in Sudan.

Yglesias

Ayers Video

Some wingnuts put together this ad which they deem “the McCain ad you’ll never see.” Presumably they think you’ll never see it because McCain is too weak-kneed to air it. In fact, you’ll never see it because it’s way too long and also incredibly unpersuasive:

The collective meltdown over at the Corner over the past few weeks makes me tempted to say that a lot of folks have oozed down to Mark Steyn’s level, but actually Steyn’s getting dumber, too, as witnessed by his huzzahs for the ad and puzzlement that no wealthy 527 donors want to pick it up. But here’s a clue — the ad, while a damning indictment of Bill Ayers, has nothing on Obama. There’s not even a proper insinuation of wrongdoing here.

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