Our guest blogger is John Halpin, a senior fellow at the Center for American Progress Action Fund and co-author of “The Power of Progress: How Progressives Can (Once Again) Save Our Economy, Our Climate, and Our Country.”

Anyone who thinks that the Fed’s rescuing of AIG and Treasury Secretary Paulson’s unconditional, blank-check bailout plan somehow validate the beliefs of FDR needs a serious tutorial in the history of the Democratic Party.

Democrats, since the days of Thomas Jefferson, have always stood on principle against the predatory instincts of Wall Street, speculators, and bankers.

As political theorist Michael Sandel has noted, the fight between Jefferson and Alexander Hamilton over the First Bank of the United States (and Hamilton’s larger government-sponsored economic agenda) was a legendary battle about competing visions of the nation. Jefferson, seeking to uphold the civic republican tradition of the nation’s founding, argued that Hamilton’s national bank was unconstitutional and a “treasonous” tool of oppression supported by northern financial interests. Jefferson believed a central bank and national capitalism would undermine the economic independence and civic virtue of farmers and small producers. Hamilton, in turn, thought Jefferson’s economic vision for the country was quaint and would inhibit the nation from becoming a world leader in manufacturing and finance. He viewed the national bank as an essential engine of the American economy.

Hamilton won that debate but the Jeffersonian skepticism of a national bank and government-sponsored capitalism lived on. Sounding similar themes, President Andrew Jackson accused the Second Bank of the United States of supporting an economic elite that controlled Congress and was neglectful of southern and western agrarian interests. Three-time Democratic presidential candidate, William Jennings Bryan, picked up this strand of thought in his attacks on the early plans for the Federal Reserve system put forth by Republican Senator Nelson Aldrich, the Hamiltonian-inspired nemesis of progressives at the turn of the twentieth century. Aldrich, a close associate of J.P. Morgan, devised a plan to create a system of regional reserve banks with a central authority run by private bankers. The thought of turning the nation’s finances over to the “money trust” set the hair on fire of progressives like Bryan and Republican Senator Robert La Follette of Wisconsin who wanted full public control of the nation’s money supply and credit. After fierce congressional wrangling, President Wilson heeded Bryan’s warnings and eventually negotiated the hybrid Federal Reserve system we have today that preserves privately owned banks with a publicly controlled central board.

Which brings us to Franklin Roosevelt. Read more

Eli Lake reports that “America’s counterterrorism community is warning that Al Qaeda may launch more overseas operations to influence the presidential elections in November,” noting that “bin Laden has sought to influence democratic elections in the past”:

In the week before the 2004 American presidential election, Mr. bin Laden recorded a video message to the American people promising repercussions if President Bush were re-elected. In later messages, Al Qaeda’s leader claimed credit for helping elect Mr. Bush in 2004.

Interestingly, Lake doesn’t mention why bin Laden would claim credit for having helped elect Bush, or why the CIA concluded that electing Bush was, in fact, bin Laden’s aim: Because Bush’s war on terror has been a propaganda, recruiting, and training bonanza for Al Qaeda.

Given that the only difference between McCain’s and Bush’s approach to the war on terror is that McCain promises more of it and harder, it’s not really difficult to guess which of the candidates a new Al Qaeda intervention would be intended to help.

Looking ahead to this Friday’s presidential debate on foreign policy, it’s worth reviewing some of the items on John McCain’s promised agenda. McCain maintains that on “transcendent issues” like the war on terror, he is in “total agreement” with President Bush, and McCain’s ideas bear this out. Like Bush, McCain contends that Iraq is the “central front” in the war on terror, ignoring the fact that there was no Al Qaeda in Iraq before there was America in Iraq. Invading Iraq has radicalized scores of young Muslims, who have traveled to Iraq and learned terrorist tactics, which they have now begun to bring back to their home countries. In a speech in November 2003, McCain responded to a question about whether the U.S. would “finish the job” in Afghanistan by saying that “we may muddle through.”

Unfortunately, as a result of the diversion of resources and attention to an unnecessary war in Iraq, “muddling through” is precisely what we have been doing in Afghanistan. Al Qaeda and the Taliban have regrouped in the Afghanistan-Pakistan border areas and waged an increasingly lethal insurgency. Chairman of the Joint Chiefs of Staff Admiral Mike Mullen recently told the House of Representatives Armed Services Committee, “I’m not convinced we are winning it in Afghanistan…Frankly, we’re running out of time.” In July, Mullen told reporters, “I don’t have troops I can reach for, brigades I can reach to send into Afghanistan, until I have a reduced requirement in Iraq.” Though McCain now says that he will support a “surge” in Afghanistan, he has consistently opposed drawing down troops from Iraq, so it’s unclear where he intends to find the troops. Read more