WAMU: Largest Bank Failure in American History

The crisis continues regardless of what the politicians are doing.

Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night in what is by far the largest bank failure in American history.

Regulators simultaneously brokered an emergency sale of virtually all of Washington Mutual to J.P. Morgan Chase. The remainder of WaMu, the nation's largest savings and loan, will be operated by the government. Shareholders and some bondholders will be wiped out. WaMu depositors are guaranteed by the Federal Deposit Insurance Corp. up to the $100,000 per account limit. WaMu customers are unlikely to be affected.

J.P. Morgan Chase is to take control Friday of all of WaMu's 2,300 branches, which stretch from New York to California, and will oversee its big portfolio of mortgage and credit card loans. It will also acquire all of WaMu's deposits with the sale.

For weeks, the Federal Reserve and the Treasury Department had been nervous about the fate of WaMu, among the worst-hit by the housing crisis, and pressed hard for the bank to sell itself. As panic gripped financial markets last week following the collapse of Lehman Brothers, the government stepped up its efforts, working behind the scenes, and at points going behind WaMu's back to work privately with potential bidders on a deal.

The seizure and the deal with J.P. Morgan came as a shock to Washington Mutual's board, which was kept in the dark: the company's newly-minted chief executive, Alan C. Fishman, was in flying from New York to Seattle at the time the deal was finally brokered, according to these people.

The action removes one of America's most troubled banks from the financial landscape, and helps to avoid sticking taxpayers with a huge bill for the rescue of another failing institution.

As with Lehman Bros., the government allowed Washington Mutual to fail because it was less entangled with the rest of the financial system than a behemoth like American International Group Inc., which the government spent $85 billion to take over last week while it faced collapse. On Sunday, the government approved emergency measures to help stabilize Goldman Sachs and Morgan Stanley.

Federal regulators had been trying to broker a deal for Washington Mutual because a takeover by the Federal Deposit Insurance Corp. would have dealt a crushing blow to the federal government's deposit insurance fund. The fund, which stood at 45.2 billion at the end of June, has been severely depleted from the sudden collapse of IndyMac Bank. Analysts say that a failure of Washington Mutual would cost the fund upwards of $20 or $30 billion.

There are other major banks facing crisis.

Global bank HSBC Holdings (HSBA.L) is cutting 1,100 jobs in its investment banking operation, or 4 percent of the unit's total, as it weathers the global financial crisis.

[...]The cuts add to more than 80,000 job losses across the banking landscape in the past 18 months as the worst financial crisis since the Great Depression deepens. It has caused unprecedented change on Wall Street and the demise of venerable firms such as Bear Stearns and Lehman Brothers (LEHMQ.PK).

[...]In August, the bank posted a 28 percent fall in first-half pretax profit to $10.2 billion as it took a $14 billion hit from bad debts on U.S. home loans and asset writedowns.

Meanwhile the politicians fiddle.

What began as high-stakes negotiations over the proposed $700 billion bailout of the nation's financial system dissolved into bickering, begging and a roiling battle between parties Thursday night.

One day after President Bush said the nation's economy is at grave risk, lawmakers argued over competing counterproposals and wound up without any apparent financial bailout deal on the table.

Even Treasury Secretary Henry Paulson got down on one knee to half-jokingly beg Speaker Nancy Pelosi and other Democratic leaders not to go to the television cameras and blast the failed negotiations, according to two senior Democratic aides.

Sens. John McCain and Barack Obama left a White House meeting, described as at times "contentious," having made no progress toward a resolution.

Obama, appearing on CNN's "The Situation Room" afterward, said there "has to be a sense of urgency on the part of everybody. ... We've got to move rapidly."

Obama said a deal will come eventually, but there is still work to do, including reaching a consensus among Bush, Paulson and House Republicans.

Shortly after 10 p.m., Rep. Barney Frank, D-Mass., the lead House Democrat on the issue who had been in close talks with Paulson for days, accused Republicans of refusing to negotiate, CNNMoney.com reported.

"At this point, we have absolutely no participation or cooperation from House Republicans," Frank said.

McCain told ABC News on Thursday night that Republicans "have legit concerns. Some of those have already been satisfied, such as accountability and oversight board and CEO executive pay. Members are aware of the crisis situation that we are in."

However, McCain said, "They do have concerns, which I think when you're talking about $700 billion to a trillion dollars, that need to be addressed."

Obama, who spent Thursday night in Washington, once again railed against infusing presidential politics into the negotiations over the $700 billion economic bailout. McCain's campaign said he also stayed in the Washington area for the night.

"One of the concerns I've had over the last several days is that when you start injecting presidential politics into delicate negotiations," Obama said, "then you can actually create more problems rather than less."

Democratic sources said that House Minority Leader John Boehner, R-Ohio, threw a wrench into the meeting when he brought up issues from conservative Republicans that negotiators thought had been settled.

Warren Buffett: Crisis is 'Economic Pearl Harbor'

If Mr.Capitalism says it then it must be really bad.

Billionaire investor Warren Buffett called the $700 billion U.S. bailout plan "absolutely necessary" to help pull the financial system out of an "economic Pearl Harbor."

Speaking on CNBC television on Wednesday, the 78-year-old Buffett also called on Congress to leave no doubt by Friday that a bailout would be adopted, or risk throwing markets and the economy into further turmoil.

"We were very, very close to a system that was totally dysfunctional, and would have not only gummed up the financial markets but gummed up the economy in a way that would take us years and years to repair," Buffett said, referring to recent events.

[...]Buffett's insurance and investment company, announced a $5 billion investment in Goldman Tuesday.

"I'm not buying a cross-section of banking institutions," Buffett said. "I certainly have confidence in Goldman, and you could say it's a vote of confidence in Congress to do the right thing."

As lenders try to reduce balance sheet risk, Buffett said the government should buy some of the assets they unload, but not at inflated prices.

"There is no one that can leverage up like the United States government," Buffett said. "If they do it right, and I think they will do it reasonably right ... they'll make a lot of money."

It looks pretty bleak. But the solution lies with listening to people like Buffett. He should be at the White House in those meetings on the government "rescue plan."

One Congressman questioned whether the bailout is necessary, since Mr Buffett's purchase suggested confidence was returning. But Mr Bernanke said: "Mr Buffett said on TV this morning that he thought Congress would act, and if Congress didn't act we would go over a precipice." It seemed increasingly likely yesterday that the Treasury would accept legislation to limit executive pay as a quid pro quo. Democrats were also pushing for the government to take equity stakes in companies that receive assistance, and some suggested the $700bn should only be released in increments.

Financial markets remained on tenterhooks. Investors bought short-term US government bonds as a safe haven, fearing a credit market meltdown if legislation is not passed. In Hong Kong, thousands of savers mobbed the offices of the Bank of East Asia amid text message rumours that it was about to go under. The bank vehemently denied the rumours.

"The market could not have taken another week like what was developing last week," Mr Buffett told CNBC. "Last week will look like Nirvana if they don't do something. I think they will. I understand they're very mad about what's happened in the past, but this isn't the time to vent your spleen about that." He predicted that the taxpayer would make a profit on its investments in toxic mortgage debt. "If I had $700bn on the government's terms to buy distressed assets, I would," he said. "Unfortunately, I'm tapped out."

The value of trillions of dollars of mortgage-related derivatives has collapsed since the housing market turned down, and their ultimate value rests on where house prices settle and how widespread foreclosures become. The latest data on the sale of existing homes, out yesterday, showed 10.7 per cent fewer transactions in August than a year ago, at an average price down 9.5 per cent.

In his testimony to the Joint Economic Committee of Congress yesterday, Mr Bernanke painted his bleakest outlook yet for the US economy, and he warned it would get even worse if the bailout is not successful.

"Ongoing developments in financial markets are directly affecting the broader economy through several channels," he said. "When worried lenders tighten credit, then spending, production and job creation slow. Real economic activity in the second quarter appears to have been surprisingly resilient, but, more recently, economic activity appears to have decelerated broadly." He said that the market turmoil was causing problems overseas that would hold back exports – which has been the most robust plank of economic growth and kept the US out of recession since the credit crisis broke.

Bush is perfectly correct on the root cause of the problem. But he doesn't mention is that his administration's policies accelerated the conditions that led to the bubble bursting.

First, how did our economy reach this point? Well, most economists agree that the problems we're witnessing today developed over a long period of time. For more than a decade, a massive amount of money flowed into the United States from investors abroad because our country is an attractive and secure place to do business.

This large influx of money to U.S. banks and financial institutions, along with low interest rates, made it easier for Americans to get credit. These developments allowed more families to borrow money for cars, and homes, and college tuition, some for the first time. They allowed more entrepreneurs to get loans to start new businesses and create jobs.

Unfortunately, there were also some serious negative consequences, particularly in the housing market. Easy credit, combined with the faulty assumption that home values would continue to rise, led to excesses and bad decisions.

Many mortgage lenders approved loans for borrowers without carefully examining their ability to pay. Many borrowers took out loans larger than they could afford, assuming that they could sell or refinance their homes at a higher price later on.

Optimism about housing values also led to a boom in home construction. Eventually, the number of new houses exceeded the number of people willing to buy them. And with supply exceeding demand, housing prices fell, and this created a problem.

Borrowers with adjustable-rate mortgages, who had been planning to sell or refinance their homes at a higher price, were stuck with homes worth less than expected, along with mortgage payments they could not afford.

As a result, many mortgage-holders began to default. These widespread defaults had effects far beyond the housing market.

See, in today's mortgage industry, home loans are often packaged together and converted into financial products called mortgage-backed securities. These securities were sold to investors around the world.

Many investors assumed these securities were trustworthy and asked few questions about their actual value. Two of the leading purchasers of mortgage-backed securities were Fannie Mae and Freddie Mac.

Because these companies were chartered by Congress, many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk.

The decline in the housing market set off a domino effect across our economy. When home values declined, borrowers defaulted on their mortgages, and investors holding mortgage-backed securities began to incur serious losses.

Before long, these securities became so unreliable that they were not being bought or sold. Investment banks, such as Bear Stearns and Lehman Brothers, found themselves saddled with large amounts of assets they could not sell. They ran out of money needed to meet their immediate obligations, and they faced imminent collapse.

Other banks found themselves in severe financial trouble. These banks began holding on to their money, and lending dried up, and the gears of the American financial system began grinding to a halt.

McCain, Palin are Ridiculed by David Letterman

McCain bailed out on David Letterman. The famous talk show host was not amused.

The Republican presidential candidate said he was halting his campaign activities Wednesday, citing the need to deal with the nation's financial crisis, and called Letterman to drop out of the show's late-night lineup. On the air Wednesday night, Letterman assailed McCain's rationale and, with prickly humor, questioned whether the nominee — now trailing in some polls — was in trouble.

"This doesn't smell right," Letterman said. "This is not the way a tested hero behaves. Somebody's putting something in his Metamucil."

And there was more:

During his chat with Olbermann, Letterman used the in-house CBS cameras and monitors to show McCain being readied for his interview with Couric on the set of the CBS Evening News.

“He doesn’t seem to be racing to the airport, does he?” Letterman said referring to McCain's call earlier in the day when he told Letterman he was canceling because "the economy is cratering" and he has to rush back to Washington to work on a Wall Street bailout plan.

“Hey John, I got a question! You need a ride to the airport?” Letterman yelled at the TV monitor as the in-house camera showed McCain talking to Couric.

The audience howled in delight at the merciless edge of Letterman's anti-McCain barbs. The comedian also repeatedly asked why McCain didn't send Palin in his place -- suggesting the GOP handlers were afraid that she couldn't handle it.

But its been a comedy of errors for the Republican ticket for weeks. How can anyone argue these people are fit to run the executive branch of the government (includes video).

It was a bad day at CBS for Republican candidates John McCain and Sarah Palin. It started with CBS News anchorwoman Katie Couric and ended with late night host David Letterman, and between the two, it looks like some serious damage might have been done to the GOP ticket.

In a particularly wild day on the campaign trail, TV news was at the center of events -- mostly in the person of Couric. Beyond getting two exclusive interviews with John McCain and Sarah Palin, the veteran newswoman served viewers extremely well in her superb handling of the Republican candidates.

The headlines: Palin told Couric she thinks "America may find itself on" the road to "another Great Depression."

Then in a separate interview, when Couric repeated Palin's answer to McCain, he had to try and do damage control saying: "I, I don't know if, if, if it's exactly the depression..."

[...]Here's Couric pressing McCain on Palin's talk of American being on the road to another Great Depression:

Couric: “But isn't much of this, Senator McCain about consumer confidence?”

McCain: “Sure.”

Couric: “And using rhetoric like the Great Depression, is that the kind of language Americans need to hear right now?”

McCain: “Well, listen, I've heard language from respected people who are staring at the abyss. I've, I've heard all kinds of, of things from people. I don't think we need to scare people. …”

And here's Couric pressing Palin on a claim that McCain is the right man to "reform government" and Wall Street.

Couric: “But he's been in Congress for 26 years. He's been chairman of the powerful Commerce Committee. And he has almost always sided with less regulation -- not more.”

Palin: “He's also known as a maverick though. Taking shots from his own party, and certainly taking shots from the other party. …”

Couric: “I'm just going to ask one more time, not to belabor the point -- specific example in his 26 years of pushing for more regulation.”

Palin: “I'll try to find you some, and I'll bring them to you.”

It is becoming increasingly clear that Palin is unfit to be running for VP.

Republican vice presidential candidate Sarah Palin said Wednesday that the United States could be headed for another Great Depression if Congress doesn't act on the financial crisis.

Palin made the comment in an interview with "CBS Evening News" anchor Katie Couric while visiting New York to meet foreign leaders for the first time in her political career. As Palin sought to establish her credentials in world affairs, first lady Laura Bush said Palin lacked sufficient foreign policy experience but was "a quick study."

Recent surveys have shown that Palin's popularity, while still strong, has begun to fade.

Earlier this month, an Associated Press-Yahoo News poll showed more people viewing Palin favorably than unfavorably, 47 percent to 28 percent. But an ABC News-Washington Post poll released Wednesday showed that in a two-week period, the number seeing Palin positively dropped 6 percentage points while 10 points more see her unfavorably. On Monday, a CNN-Opinion Research Corp. poll said her favorable rating dropped 4 points and her unfavorable rating rose 8 points over two weeks.

This from the Huffington Post:

John McCain has tried to convince Americans that his sense of stability and leadership is the only choice for Americans. Instead, John McCain has shown so little stability that he makes a Slinky seem sturdy.

One week ago, John McCain claimed (again) that the fundamentals of the economy are strong. Just one week later, he now says the economy is in such dire straights that he's suspending his campaign.

Mere days ago, after claiming for months how inexperienced Barack Obama was, John McCain tried to claim that Sen. Obama was so experienced that the economic crisis was somehow his fault. And then mere days after that, on Bad Wednesday, he offered that Mr. Obama should join him in resolving the crisis he'd supposedly caused.

Wednesday was, indeed, a bad day for John McCain. While trying to show his great stability and leadership qualities, he told the American public that he was unable to chew gum and walk at the same time. That he was unable to have his scheduled debate with Barack Obama because he'd be having meetings in Washington.

Sen. Obama figured out how to handle both.

A NYTimes blog wonders:

“Do you get the impression a McCain presidency would be a bit exhausting?” writes Mickey Kaus, the Slate blogger. “No convention today! … OK, it’s on! … The economy’s sound… No, wait, it’s going to fall apart unless I go to Washington tomorrow! … We need a commission! … We need to fire somebody! … Get me Andrew Cuomo! … I want ten more debates! … But let’s postpone the one we’ve scheduled!”

They quote a pro-Republican magazine (American Spectator) that is similarly annoyed with the McCain-Palin soap opera:

She clearly stumbled twice — when asked how McCain has fought to reform Wall Street and about Rick Davis’s ties to Freddie Mac. Her answer that not supporting a bailout could mean a Great Depression was off message and irresponsible. For the rest of the interview, it was just lots of tired cliches, and random jargon that made it seem as if she was reading off of mental index cards. I know a lot of conservatives like Sarah Palin and always rush to her defense. But it’s absolutely not meant as an insult to say that she simply is not ready to be a heartbeat away from the presidency.

Here is proof that the debate pullout was a cynical ploy by McCain:

Early on a day when national polls showed Barack Obama pulling away from McCain, the Democrat called him and privately suggested that the two issue a joint statement in an effort to keep presidential campaign politics from becoming an impediment to bailout package deliberations. The offer echoed a similar one Obama had made that resulted in the candidates appearing at Ground Zero earlier in the month on the anniversary of the 9/11 attacks.

McCain huddled with his advisers. He finally accepted several hours later, but only after he rejected Obama’s call for the bailout package to include oversight provisions, cap executive salaries and help foreclosed homeowners. His campaign then announced then that, in so many words, it was pulling the rug out from under the entire purpose of the joint statement and injected a huge shot of campaign politics into the deliberations. McCain was suspending campaigning, was rushing back to Washington and would skip the first presidential debate tomorrow night.

As the day went on and McCain preened before the cameras not in Washington but in New York City, with timeouts for Katie Couric and Lady Lynn de Rothschild but not David Letterman, one of the candidate’s leading surrogates added a further wrinkle: That the first presidential debate should supplant the only debate between Joe Biden and Sarah Palin.

It is not known if Palin is suspending campaigning since she wasn’t doing any of substance in the first place.

McCain Debate Pullout is an act of Desperation

Does anyone really believe that McCain's debate pullout was motivated by selfless patriotism?

"I think this is a gimmick, pure and simple," said Tom Schaller, a political commentator and professor of political science at the University of Maryland. "McCain is losing the national conversation on the economy, so he's looking for some attempt to prove he is high-minded and above mere campaign and debate politics.

"It looks like he's trying to call a time out in the middle of a presidential campaign and then take credit for it."

He wants to distract people from the polls showing a tidal wave favoring Obama.

The decision by Mr. McCain came on the same day that a Washington Post-ABC News poll showed that Mr. Obama now holds a nine-point lead in the race because of the pessimism surrounding the economy.

The military man who was tortured during wartime can't take the heat of a presidential debate.

Toni-Michelle Travis, professor of government at George Mason University in Washington, thinks that Mr. McCain will be perceived as "ducking and running" from a fight. She also said that the recent bank bailouts and the ensuing market volatility has "changed the campaign."

"I think there's something about our culture that when you back off for a potential fight that does not play well," said Prof. Travis. "I think he's trying to find his way and he's not showing leadership. It's a short coming if you look like you're ducking and running from the debate and I think it's going to be perceived negatively. I think he's trying to regroup."

She said in any debate Mr. McCain would be portrayed as being part of the current mess, part of the "non-regulatory Republican gang."

"How many houses does McCain own? How close can you tie him to the filthy rich? I think Obama could easily say he's closer to them than he is to you because you're working class, you're punching the time clock or a single parent trying to make ends meet. And our retirement plans are eroding away and we don't want to think how badly."

It's not unlike McCain:

Threatening to boycott Friday's debate in favor of full time focus on the nation's financial meltdown is one way to at least temporarily upset the course of a race that isn't going your way. Whenever things aren't going well for McCain he comes up with something to change the narrative.

So much is stacked against McCain. Republicans are politically on the run. His party's president is unpopular. And the sudden national obsession with big-finance economics is keeping the GOP nominee on the defensive, even threatening to ensare his own campaign manager for doing business with a troubled company.

This supporter of the McCain pullout puts their finger on the real reason for the Republican nominee's ploy.

This move also halts Obama's momentum. McCain was taking a bath in the polls as this economic crisis grabbed ever more attention. Regardless of reality, public perception is that the left are better stewards on economic issues. Obama has gained on the economic crisis while McCain has been flailing in response, still not yet responding effectively. This move stops the Obama camp in their tracks from attacking McCain on economic issues while McCain is in Washington. To do otherwise would reflect very poorly on Obama.

There is a solution for McCain supporters. This "idea" comes from the 'Draft Palin for Vice President' website:

This leaves McCain in a tricky position. If he has the courage to stay at work, Obama could turn the "debate" into an infomercial and harangue McCain for not coming. If he shows up, however, he will be going back on his word and possibly letting the negations disintegrate at the eleventh hour. While most people think that this puts McCain's back to the wall, they are failing to consider a third potential option: McCain could stay at work and offer to send Gov. Palin as a surrogate if Obama continues his temper-tantrum. I know that this sounds rather crazy[...]

It's it also about doing something dramatic. Selecting Palin hasn't worked, although initially it looked brilliant.

"McCain needed to do something dramatic to change the tone of the conversation," said Dan Schnur, a top aide in McCain's 2000 campaign. "It may work. It may not work. But it's got a much better chance of working than just sitting there and letting this crisis roll over him."

Democrats -- noting that until recently McCain had opposed government intervention in the financial crisis and insisted the economy was fundamentally sound -- cast his move as politically convenient. "Transparent, vapid publicity stunt," Democratic pollster Mark Mellman scoffed.

McCain essentially tried to cast Obama in the position of junior partner, following McCain's lead on the dominant issue of the day.

Obama made clear that he was the one who first called McCain Wednesday morning to ask that the two campaigns issue a joint statement outlining their principles for a deal. Obama said he only learned of McCain's plans to return to Washington from TV.

[...]McCain's move came as his campaign faces trouble on several fronts. National polls by ABC-Washington Post and NBC-Wall Street Journal showed Obama gaining favor as the economy dominated voters' concerns. There's also a brewing controversy over payments to a lobbying firm founded by McCain campaign manager Rick Davis from mortgage giants Fannie Mae and Freddie Mac, which have been taken over by the government.

The Democratic leadership realizes this is a stunt and are not falling for it.

On Capitol Hill, McCain's move could complicate sensitive negotiations on the bailout. Senate Majority Leader Harry Reid made it clear McCain wasn't welcome.

When McCain called Reid and said he wanted to sit down with congressional leaders, Reid read him a statement he had released to reporters characterizing McCain's move as a gimmick. Reid spokesman Jim Manley said the Nevada Democrat told McCain "it would not be helpful" for the candidates to get involved in the talks and risk injecting presidential politics in them.

"We need leadership, not a campaign photo op," Reid said.

Wouldn't have anything to do with an alleged affair by Palin exposed by the National Enquirer? Before you scoff, the Enquirer exposed the Edwards sex scandal as well.

REPUBLICAN VP hopeful Sarah Palin has been accused of having an affair with her husband's business partner.

The Alaska governor, a mother of five, is alleged to have cheated on her husband Todd – a 44-year-old fisherman – in an affair which almost ruined her career.

The National Enquirer claims the relationship was being widely discussed in Alaska, and that Mr Palin had severed all connections with the friend.

McCain has a history of pulling out of debates when he is behind in the polls. This belies his dishonest contention that he is doing it for patriotic reasons.

[...]this is not the first time the Arizona Senator has withdrawn from a presidential debate; he did it in California in 2000 against George W. Bush.

At the time, polls showed he was lagging seriously behind the then-Texas governor, and he said he would appear with the candidate on Sunday talk shows instead."

McCain, Palin Speech in Reading, Pennsylvania: Transcript (9-22-08)

Read the full transcript.

OK, Pennsylvania. Over the next 43 days John McCain and I are going to take our message and our mission of reform to voters of every background in every party or no party at all and with your vote we’re going to Washington to shake things up.

Pennsylvania, this is a time when principles and political independence mean a heck of a lot more than just a party line. And Americans are tired of the old politics as usual and those who only run with the Washington herd and that’s why we need to take the maverick of the Senate and put him in the White House.

John McCain and I believe that now is the time to put government back on the side of the people. And you know, as mayor and then as governor I always knew that I was accountable to the people who hired me, that was the people of Alaska. And in a McCain/Palin administration we will never forget that we’ll be there to work for you, the people of America.

John and I, we have a plan, and if we are so privileged to get to serve you, I’m going to have some new responsibilities as vice president. Government reform, energy independence.

And helping families and children, those with special needs. That’s going to be at the top of our list.

First, I will help lead our reform effort. John and I are the only candidates in this race with a track record of truly being able to make change happen, not just talking about it but making change happen.

I want to ask you a few questions, Media. Let me ask you a few questions. Our opponent, he likes to point the finger of blame but tell me has he ever lifted a finger to help.

[...]PALIN: John McCain and I want reform. We want transparency in Washington. As the governor of Alaska I just think (ph) like, put the state’s checkbook online so that everybody can see where the money is being spent. We want to do the same thing in D.C.

John wants to do the same thing with the Treasury bill. We believe that the American people have the right to know which firms the Treasury is helping and what that selection is based on and how much that help will cost you. It’s your money and you do have a right to know where it’s going.

Truly in this race there is only one man of action, one proven reformer who will clean up Wall Street and Washington and that man is John McCain .

OK. The second thing that I’ll be leading in a McCain/Palin administration is our mission of energy independence.

Here in Pennsylvania I know that high gas prices, they’re making a full tank feel like a luxury and the cost of living is going up and the cost of groceries is going up. Everything is going up. But the value of your paycheck is going down all because of energy costs.

Now, our opponent says that he wants to help Americans who are struggling with high energy costs. He says he wants to but time and time and time again he has sided with special interests and against solutions that would help Americans keep their homes, fuel up their energy tanks and pay their energy bills.

Now maybe if he had been the governor of an energy rich state maybe he’d get it or maybe, maybe if he had been on the front lines helping to secure our nation’s energy independence, maybe then he’d understand.

As governor of Alaska and former chair of the Interstate Oil and Gas Conservation Commission, I’ve overseen a very large portion of the U.S. domestic supply of oil and through a heck of a lot of competition, a lot of hard work, recently I got agreements to build a nearly $40 billion natural gas pipeline to bring Alaska’s North Slope gas reserves down to the very, very hungry markets here. It’s going to help you.

We know what it’s going to take, John and I do, we know that it’s going to take American ingenuity and produced by American workers.

And that’s why we’re going to expand our use of alternative fuels also and we’re going to drill now to make this nation energy independent.

AUDIENCE: Drill, baby, drill. Drill, baby, drill. Drill, baby, drill.

PALIN: And finally, friends, helping families who have children with special needs, it is an issue very near and dear to my heart. With the recent birth of our perfectly beautiful baby boy, we joined so many other American families know that some of life’s greatest joys sometimes come with some unique challenges.

- Related Posts:

• Obama on NBC's 'Today Show': Transcript (9-23-08)
• McCain Aide’s Firm Was Paid by Freddie Mac

Obama on NBC's 'Today Show': Transcript (9-23-08)

Read the full transcript.

LAUER: Forty-two days until this nation elects a new president. Today Barack Obama is coming here to the Tampa Bay area for a rally, and to prepare for Friday night’s presidential debate. On Monday, I caught up with Senator Obama in Green Bay, Wisconsin, where he was campaigning. And we talked about this massive federal bailout package of $700 billion. And I said, despite the pressure to get this bill passed quickly, what would cause you in the Senate to stand up and vote no?

(BEGIN VIDEOTAPE)

OBAMA: Well, there are a couple of core principles that I think have to be in place.

LAUER: Deal breakers.

OBAMA: Deal breakers. I think you have to have a some mechanism of oversight. You can’t get...

LAUER: But both sides agree on that.

OBAMA: Both sides agree on that. But the administration hasn’t been entirely clear on whether they agree with it. But the bottom line is, you can’t give one person authority over $700 billion without any oversight whatsoever. So I think that’s going to be important.

A second thing that is going to be important is to make sure that the criteria by which people -- firms participate, the way it’s set up assures that taxpayers are going to get the upside and not just the downside.

We want to make sure that taxpayers are benefiting. Third principle is it can’t be simply a bailout for investors, CEOs, shareholders. They’ve got to take a hit for the bad decisions that they make.

LAUER: But how much time do you have to vet this? The talk is this has to get done within the next week or two weeks.

OBAMA: Right. Yes.

LAUER: If you’re lucky enough to be elected president and it turns out this plan has flaws, they’re not going to want to hear from you, “We were rushed into this.” They’re going to say, “You voted yes, pal. It’s yours.”

OBAMA: Well, this is why we’ve got to think about this in two phases. We’ve got a short-term crisis that has to be dealt with in a bipartisan fashion, and then we got a long-term structural set of problems that we’ve got to deal with.

(BEGIN VIDEO CLIP)

OBAMA: If you have health care, my plan will lower your premiums.

(END VIDEO CLIP)

LAUER: You’ve laid out an ambitious plan. You want to improve health care, you want to improve education, the infrastructure...

Obama: Right. LAUER: ... investment in energy. And, oh boy, here comes this $700 billion bill that wasn’t a part of your thinking when you laid out this plan.

OBAMA: Right.

LAUER: If I’m a voter and I’m trying to decide whether I want to vote for you or Senator McCain, don’t I have a right to know right now from you which of those things are going to get hit by the budget axe before I vote for you?

OBAMA: Although we are potentially providing $700 billion in available money to the Treasury, we don’t anticipate that all that money gets spent right away and we don’t anticipate that all that money is lost.

How we’re going to structure that in budget terms, it still has to be decided.

Does that mean that I can do everything that I’ve called for in this campaign...

LAUER: Probably not.

OBAMA: ... right away? Probably not. I think we’re going to have to phase it in. And a lot of it’s going to depend on what our tax revenues look like.

LAUER: As part of this whole economic picture was the AIG situation. On Tuesday night, the Fed decided to bail them out -- huge amount of money.

OBAMA: Right.

LAUER: That morning, prior to the bailout, John McCain said that the federal government should not bail out AIG. You chastised him.

OBAMA: Right.

LAUER: On the campaign trail.

(BEGIN VIDEO CLIP)

OBAMA: He said the government should stand aside and allow one of the nation’s largest insurers, AIG, to collapse.

(END VIDEO CLIP) LAUER: So the message to those voters: “ John McCain didn’t grasp the scope of the situation...

OBAMA: Right.

LAUER: ... and get the fallout from the failure of AIG?

OBAMA: I think what has been clear during this entire past 10 days is John McCain has not had clarity and a grasp on the situation.

McCain Aide’s Firm Was Paid by Freddie Mac

This major story on McCain campaign corruption comes from the NY Times.

One of the giant mortgage companies at the heart of the credit crisis paid $15,000 a month from the end of 2005 through last month to a firm owned by Senator John McCain’s campaign manager, according to two people with direct knowledge of the arrangement.

The disclosure undercuts a statement by Mr. McCain on Sunday night that the campaign manager, Rick Davis, had had no involvement with the company for the last several years.

Mr. Davis’s firm received the payments from the company, Freddie Mac, until it was taken over by the government this month along with Fannie Mae, the other big mortgage lender whose deteriorating finances helped precipitate the cascading problems on Wall Street, the people said.

They said they did not recall Mr. Davis’s doing much substantive work for the company in return for the money, other than speak to a political action committee of high-ranking employees in October 2006 on the approaching midterm Congressional elections. They said Mr. Davis’s firm, Davis & Manafort, had been kept on the payroll because of Mr. Davis’s close ties to Mr. McCain, the Republican presidential nominee, who by 2006 was widely expected to run again for the White House.

Mr. Davis took a leave from Davis & Manafortfor the presidential campaign, but as a partner and equity-holder continues to benefit from its income. No one at Davis & Manafort other than Mr. Davis was involved in efforts on Freddie Mac’s behalf, the people familiar with the arrangement said.

A Freddie Mac spokeswoman said the company would not comment.

Jill Hazelbaker, a spokeswoman for the McCain campaign, did not dispute the payments to Mr. Davis’s firm. But she said that Mr. Davis had stopped taking a salary from his firm by the end of 2006 and that his work did not affect Mr. McCain.

“Senator McCain’s positions on policy matters are based upon what he believes to be in the public interest,” Ms. Hazelbaker said in a written statement.

The revelations come at a time when Mr. McCain and Mr. Obama are sparring over ties to lobbyists and special interests and seeking political advantage in a campaign being reshaped by the financial crisis and the plan to bail out investment firms.

Mr. McCain’s campaign has been attacking Senator Barack Obama, his Democratic rival, for ties to former officials of the mortgage lenders, both of which have long histories of cultivating allies in the two parties to fend off efforts to restrict their activities. Mr. McCain has been running a television commercial suggesting that Mr. Obama takes advice on housing issues from Franklin D. Raines, former chief executive of Fannie Mae, a contention flatly denied by Mr. Raines and the Obama campaign.

This follows a previous story on the McCain lobbying scandal by the NY Times.

Senator John McCain’s campaign manager was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations, current and former officials say.

Mr. McCain, the Republican candidate for president, has recently begun campaigning as a critic of the two companies and the lobbying army that helped them evade greater regulation as they began buying riskier mortgages with implicit federal backing. He and his Democratic rival, Senator Barack Obama, have donors and advisers who are tied to the companies.

But last week the McCain campaign stepped up a running battle of guilt by association when it began broadcasting commercials trying to link Mr. Obama directly to the government bailout of the mortgage giants this month by charging that he takes advice from Fannie Mae’s former chief executive, Franklin Raines, an assertion both Mr. Raines and the Obama campaign dispute.

Incensed by the advertisements, several current and former executives of the companies came forward to discuss the role that Rick Davis, Mr. McCain’s campaign manager and longtime adviser, played in helping Fannie Mae and Freddie Mac beat back regulatory challenges when he served as president of their advocacy group, the Homeownership Alliance, formed in the summer of 2000. Some who came forward were Democrats, but Republicans, speaking on the condition of anonymity, confirmed their descriptions.

McCain NY Times Interview: Transcript (9-21-08)

"The following is a transcript of an interview with Senator John McCain by John Harwood of The New York Times and CNBC." Read the full transcript.

HARWOOD: You've been briefed on this massive bailout the Treasury's proposing. Should it happen? Should foreign-owned firms be eligible for it? And will it work?

Sen. McCAIN: I haven't been--I've talked to Secretary Paulson, and I haven't gotten into all the details of it. Obviously the rescue is absolutely called for. But I have focused my attention on two things. One is that I respect and admire Secretary Paulson, but as far as I can dell--can tell, we're placing all those responsibilities in the hands of one person. I think we need to appoint an oversight board of the most respected people in America, such as maybe Warren Buffett, who's a Obama supporter; Mitt Romney, Mike Bloomberg, so that there can be some kind of oversight of, instead of just putting all this responsibility on a person who may be gone in four months.

The second thing is, this CEO executive compensation. I notice at Lehman, aren't bailed out but went bankrupt, that some $2.5 billion in compensation. If they're bankrupt, where did they get that? But the major point is that no CEO of any corporation or business that is bailed out by us, that is rescued by American tax dollars, should receive any more than the highest paid person in the federal government and in...

HARWOOD: And foreign-owned firms?

Sen. McCAIN: On the foreign-owned firms, there's so much mixed ownership and there's questions about who really runs things and who is there, I'd have to look at that more precisely, and I'm sure that we can sort that out. But I think the major thing is that, as much as I admire Secretary Paulson, we've got to have more people that're respected by Americans. We're sending--we're spending as much or more than a trillion dollars on this. We all know, this is the greatest crisis we've faced, clearly, since the end of World War II.

HARWOOD: What do you say to conservatives in your party who look at the--look at this and say, `Wow, this is a lot closer to socialism than to free market capitalism'?

Sen. McCAIN: I say to them, `I'm with you in spirit, but I remember the S&L crisis, and we had to go in, we created the RTC, and we had to go in and fix these problems.' The Japanese, as we know, had a crisis some years ago. They didn't fix it, and their economy has limped along, as we all know. So this is going to require drastic action. The role of government in our society is clearly that we help Americans who are being hurt by circumstances beyond our control. This is Washington cronyism in excess and Wall Street cronyism in excess that has caused this. Meanwhile, the innocent bystanders are having their very life threatened, or certainly their futures threatened by this crisis.

HARWOOD: You mentioned cronyism and corruption on Wall Street and in Washington, and you've criticized Obama for self dealing here. How do you square that with the fact that your campaign manager, Rick Davis, was involved in some lobbying activities on behalf of Fannie Mae? And secondly, what specifically would you prevent, would you outlaw--what activity would you outlaw in Wall Street to make sure this doesn't happen again?

Sen. McCAIN: Now, on Wall Street, I'd--obviously we need to stop--we need to more--have more transparency. We need to take the regulatory agencies and merge them together in one effective agency. These regulatory agencies, this alphabet soup, was really designed for a different era. We're now in global transactions. We need more transparency. We need to combine the regulatory agencies, and we need to give them some more authority, if necessary, to do so. You know, Secretary Paulson had a package of recommendations sometime ago that basically did not really go anywhere. Maybe we can look at those and other recommendations in the future.

Obama NY Times Interview: Transcript (9-21-08)

"The following is a transcript of an interview with Senator Barack Obama by John Harwood of The New York Times and CNBC." Read the full transcript.

HARWOOD: You've been briefed on this plan the Treasury is putting forward, working out with Congress. How confident are you that this is going to work?

Sen. OBAMA: Well, I don't think it's completely a plan yet. What we have is a request, a massive amount of money that the Treasury would have discretion over, and we know that it's going to potentially take a while to work this thing out. We haven't seen all the details. But we have to remember, first of all, how we got here. We had years of regulators looking the other way. We had, I believe, a economic theory that's failed, that says anything goes at the top and we're not going to worry about what's happening on Main Street. Regardless of how we got there, we now have a situation where people's jobs, people's savings, people's retirement accounts, their job security, all that is at risk. And so we've got to take some firm and decisive steps. I think that it has to be bold, and I am supportive of the need for quick action, but there's some principles that I think have to be included.

Number one, I think we have to have oversight. I don't think it can be a blank check. We can set up a system where there's an independent overseer, maybe the chairman of the Federal Reserve Bank and the Democrats and the Republicans each appoint somebody to oversee the system. But we have to make sure that this is--there's some accountability mechanism in it.

A second principle that we have to have is that the taxpayers have to share in the upside of this process. If we are buying up assets and are eventually selling them, we want to make sure that it's structured in a way that taxpayers aren't left holding the bag and it ends up costing a lot more than it should.

Third principle is that we've got to have relief for the homeowners. The underlying problem in this whole situation is that home values are declining, foreclosures are going haywire. We've got to make sure that we're addressing that underlying problem and that relief flows to homeowners and it's not just a bailout for Wall Street.

And the fourth principle that I think is important is that as we increase liquidity in the system as we restore market confidence; that we're also making sure that CEOs and executives, large investors, that they are not walking away with billions of dollars in profits or added value. I think there's got to be some constraints on what they benefit in terms of making sure that the program works and the taxpayers aren't paying for multimillion dollar bonuses.

HARWOOD: It looks as if there's the bipartisan will to move this through quickly in Congress, and if that happens then the government will have just taken on $700 billion of obligations that you haven't planned on throughout your two-year campaign for president. So how do you adjust your agenda in light of that, whether it's the scale of your plans for spending on health care, energy or other issues, whether it's on the advisability of raising taxes on capital gains and dividends, even staffing your administration? Would you ask Hank Paulson, for example, to stay on as Treasury secretary?

Sen. OBAMA: Well, I'll take the last question first. I think that the transition from the current administration to the next one is going to be something we've got to pay a lot of attention to; not just because of the financial crisis, but also because we're in the middle of two wars and we are still vulnerable to terrorist attacks. So without saying specifically what we'll do, I think it's important to make sure that that transition is seamless and that we pass the baton effectively.

McCain's at the Irish-American Presidential Forum: Transcript (9-22-08)

This speech was given in Scranton, Pennsylvania. Read the full transcript.

Thank you for the honor of appearing with you here today. The Irish-American Presidential Forum has been held since 1984, and since its inception there has been a lack of Republicans. And while my affection for Democrats and independents is deep and wide, I am proud to be the first Republican to appear before the Forum.

You are very kind to invite someone with a name like McCain, a Scots-Irish descendent whose family came to the New World some generations ago. I hope you won't hold it against us - I do try to get back to the island as often as possible.

I'd like to talk about some issues that are of particular concern to Irish-Americans, but before I do, I'd like to take a couple minutes to talk about an issue that is concerning to us all, and that is the economic crisis that we have all been following since last week.

On Friday, I laid out my plan for addressing this crisis. At its heart, my plan is about keeping people in their homes and safeguarding the life savings of all Americans by protecting our financial system and capital markets. These are my priorities.

Senator Obama has declined to put forth a plan of his own. At a time of crisis, when leadership is needed, Senator Obama has simply not provided it.

And the truth is that we don't have time to wait for Senator Obama's input for our nation to act. I think it is clear that Congress must act and must act quickly. I laid out my plan and my priorities last Friday. I spoke to Secretary Paulson over the weekend, and I've been looking at the plan the administration has put forth. I urge Congress to study this proposal carefully as they consider the remedy for this crisis.

As for me, I am greatly concerned that the plan gives a single individual the unprecedented power to spend $1 trillion - trillion - dollars without any meaningful accountability. Never before in the history of our nation has so much power and money been concentrated in the hands of one person. This arrangement makes me deeply uncomfortable. When we are talking about a trillion dollars of taxpayer money "trust me" just isn't good enough.

We will not solve a problem caused by poor oversight with a plan that has no oversight. Part of the reason we are facing this crisis is an antiquated regulatory system of uncoordinated agencies that haven't been doing the job.

I believe we need a high level oversight board to impose accountability and establish concrete criteria for who gets help and who does not. They must ensure that throughout this crisis, the government is a careful steward of the taxpayer's dollars. The oversight board should be bipartisan and have qualified citizens who have no agenda but the protection of taxpayers and the financial markets. People like: Warren Buffet, who supports my opponent, Governor Romney, who supports me, or Mayor Bloomberg, an independent.

- Related Post:

• Obama NY Times Interview: Transcript (9-21-08)
• Obama Speech in Greenbay, Wisconsin: Transcript (9-22-08)

Obama Speech in Greenbay, Wisconsin: Transcript (9-22-08)

Read the full transcript.

The era of greed and irresponsibility on Wall Street and in Washington has led us to a perilous moment. They said they wanted to let the market run free but instead they let it run wild, and in doing so, they tramped our core values of fairness, balance, and responsibility to one another. As a result, we are facing a financial crisis as profound as any we have faced since the Great Depression. As a result, your jobs, your savings, and your economic security are now at risk.

This week, we must work quickly, in a bipartisan fashion, to resolve this crisis and avert an even broader economic catastrophe. And as we do act, Washington must recognize that true economic recovery requires addressing not just the crisis on Wall Street, but the crisis on Main Street that so many of you have been feeling in your own lives long before the news of last week. We need a plan that helps families stay in their homes, and workers keep their jobs; a plan that gives hardworking Americans relief instead of using taxpayer dollars to reward CEOs on Wall Street. And we cannot give a blank check to Washington with no oversight and accountability when no oversight and accountability is what got us into this mess in the first place.

But no matter what solution we finally decide on this week, it is absolutely imperative that we get to work immediately on reforming the broken politics and the broken government that allowed this to crisis to happen in the first place.

We did not arrive at this moment by some accident of history. We are in this mess because of a bankrupt philosophy that says we should give more and more to those with the most and hope that prosperity trickles down to the rest of us.

We're here because for too long, the doors of Washington have been thrown open to an army of lobbyists and special interests who've turned our government into a game only they can afford to play - who have shredded consumer protections, fought against common-sense regulations and rules of the road, and distorted our economy so that it works for them instead of you.

We are here because an ethic of irresponsibility has swept through our government, leaving politicians with the belief that they can waste billions and billions of your money on no-bid contracts for friends and contributors, slip pork projects into bills during the dead of night, and spend billions on corporate tax breaks we can't afford and old programs that we don't need.

And today, even as Congress debates an emergency plan to save our economy from the verge of collapse, there are reports that lobbyists and CEOs are already lining up to figure out what's in it for them; to find out how they can get theirs.

Did McCain Break the Law in Mentioning Andrew Cuomo

This article was written by Michael Tomasky and appears in the Guardian. Just another reason not to vote for McCain.

Last night on 60 Minutes, John McCain said outright that he would seek to make Andrew Cuomo, the Democratic attorney general of New York state, his head of the SEC.

[...]Cuomo's office responded that such talk was inappropriate in light of its own probes into the current market turmoil. But it may well be inappropriate in another way.

It's illegal for presidential candidates to promise or pledge an appointment before the election. Here's the relevant language from the United States Code:

Whoever, being a candidate, directly or indirectly promises or pledges the appointment, or the use of his influence or support for the appointment of any person to any public or private position or employment, for the purpose of procuring support in his candidacy shall be fined under this title or imprisoned not more than one year, or both; and if the violation was willful, shall be fined under this title or imprisoned not more than two years, or both.

This idiot can't seem to get anything right.

Every day, another financial institution shutters its doors. Over 600,000 thousand U.S. jobs have been lost so far this year. Gas, food, and health care prices are through the roof. The writing is on the wall: the American economy is teetering on the edge of collapse, and American families are paying the price.
But despite the mounting evidence that deregulation has been a major contributing factor in the current financial crisis, John McCain wants to implement the same, failed Bush-McCain economic policies on our health care system.

[...]On Sunday, the Washington Post[...]John McCain wrote that "Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation."
"You would think that the 'going out of business sales' on Wall Street would demonstrate what can happen when there is no watchdog keeping an eye on big business," said Andy Stern. "Now, John McCain wants our health care system run the same way. Aren't families struggling enough?
"I guess it should come as no surprise that someone who supported George Bush 90 percent of the time and has insiders and lobbyists running his campaign thinks our banking system should be considered a model for success."

Rush Limbaugh Interview with FOX's Van Susteren: Transcript (9-19-08)

Limbaugh was interviewed by Greta Van Susteren for the FOX News program, 'On The Record.' Read the transcript.

VAN SUSTEREN: All right. Explain to me -- I know that you -- what you've said is that you are different from -- or you take different positions on some things from Senator McCain. But can you tell me specifically in this ad where it is that he's trafficking in prejudice?

LIMBAUGH: Where he's trafficking in prejudice?

VAN SUSTEREN: Yes. What was it that was in the ad?

LIMBAUGH: What's in the ad is that he claims that I said Mexican illegal immigrants are dumb and stupid, which I didn't say. And he also takes an excerpt from a commentary I did in which I was parodying Mexican law, Mexican immigration law, in which I said, while going through Mexican immigrant law, immigrants to Mexico have to shut up, you can't participate in the political process, or get out.

He portrays both those comments as about illegal immigrant. One of the comments was made to a caller 1993. The other was from a "Morning Update" commentary I did in 2006. So the prejudice is trying to make these Hispanic audience members watching this ad think I hate them, think I dislike them, think I want nothing to do with them. I've never said that. I have never in any way, shape, matter or form said illegal immigrants are dumb and stupid. I have never told them to shut up and get out, not once!

Now, I don't know what you call that, if you want to just call it lies, but it's certainly prejudice because he's trying to gin up anti- American sentiment, anti-Republican sentiment with lies to people who are - - may be illegal in the country, may be legal or what have you -- but he's pitting groups of people against each other left and right here, and that's -- I mean, I don't know what you'd call it. It's not even just prejudice, it's bigotry. It's flat-out racism.

VAN SUSTEREN: Well, what the campaign -- at least from what you tell me about the interview with Tammy Haddad is that they are trying to align you and Senator McCain together and use your statements and take your statements out of context to poison against Senator McCain. Now, you don't agree with Senator McCain on immigration. Are there other issues that separate the two of you?

Watch Greta's interview with Rush: Pt 1 | Pt 2 | Pt 3

LIMBAUGH: Yes, but let's -- let me focus on this one because you just nailed one of the biggest fraudulent aspects of the ad. They're trying to compare -- they're trying to -- they lie about what I said, take it totally out of context, and then say that this represents McCain's view. Now, one thing that the Hispanics of this world know is that McCain was for total amnesty. He was for comprehensive reform. He does not share one opinion of mine, other than now he's come around on closing the borders first. And that's an -- he's insulting the intelligence of these people.

[...]RUSH LIMBAUGH, RADIO TALK SHOW HOST: And there's other things that I disagree with on Senator McCain. I'll give you one right now, and it's a minor one. We are going through this Fannie Mae and Freddie Mac thing. We are going through the Wall Street problems and the accountability, and so forth. And senator McCain gave a speech in Green Bay today, and a couple of days ago he said the same thing. And I understand the populist tendency here, because people are upset, to bash Wall Street and to join the chorus that Wall Street is corrupt and full of a bunch of people, but that's not the case. I don't think that bashing Wall Street when the Democrats are already doing that is a way for Senator McCain to separate himself.

What he ought to do is what he did in Green Bay this morning, which is to attack the people responsible for the Fannie Mae disaster, and that's all Democrats. It's Chris Dodd, it's Barney Frank, it is Barack Obama, it is Franklin Rains, in is Jim Johnson, people associated with the Obama campaign. I understand the temptation to start ripping into Wall Street because people instinctively fall into that so-called "class envy" susceptibility to this. But I think that it's a mistake. I think can distinguish himself better by attacking the people who are really- He is running against Democrats, he's running against Obama. He's not running against Wall Street. Wall Street, I don't know what we're going to close out today, but Wall Street is probably going to finish the week higher than where it started. Imagine that. It's a lesson to staying calm and cool. I also wish he hadn't thrown Chris Cox under the bus, the Securities Exchange Commission guy, saying he would have fired him. Cox had nothing to do with this. This is a tendency of Senator McCain's to look at himself as Teddy Roosevelt and take on anybody he things is a robber baron. And I wish he would take some of that back and just focus on who he's really running against, the people trying to destroy him.

Obama, McCain on '60 Minutes': Transcript (9-21-08)

Read the full transcript of the interviews of both Barack Obama and John McCain.

Scott Pelley: If you were President of the United States tonight and you were going to make an address to the nation regarding this economic emergency, what would you say?

John McCain: I would tell the American people that we're in tough times. This certainly isn't a Great Depression, don't get me wrong - lay out the problem and the cause of the problem they're badly frightened right now. And we've gotta get their trust and confidence back.

Pelley: Should they be badly frightened?

McCain: I think they should be deeply concerned about the fact that innocent Americans that don't work on Wall Street and don't work in Washington are the victims of the greed, the excess, and, yes, in some cases, corruption. There's a social contract that Adam Smith talked about between capitalism and the people. That contract has been broken. It's been broken by greed and access, aided and abetted by a government in Washington that's dominated by special interests and corruption.

Pelley: Are we in a recession?

McCain: Sure. Technically I don't know. Unemployment is up. Wages are down. Home foreclosures are incredibly high. Those people, they don't care whether technically we're in a recession or not. The fact is they're hurtin'. And they are hurting very, very badly.

Pelley: In 1999 you were one of the senators who helped pass deregulation of Wall Street. Do you regret that now?

McCain: No, I think the deregulation was probably helpful to the growth of our economy.

McCain has been an advocate of deregulation most of his career, but Thursday he endorsed the biggest bailout in history - a plan for the government to take on the bad debts of financial institutions.

"We're gonna take over these bad loans. We're gonna take over these bad - these bonds and we're gonna keep you alive. And we're gonna have the taxpayer help you out. But when the time comes and the economy recovers then anything that's gained back is gonna go to the taxpayers first. I'm not saying this isn't gonna be messy. And I'm not saying it isn't gonna be expensive. But we have to stop the bleeding," the senator said.

Pelley: But why would you let the Wall Street executives…

McCain: I'm not.

Pelley: …sail away on their yachts and leave this on the American taxpayer?

McCain: Well, it's not the greedy Wall Street people that I worry about, although I am, like most Americans, frankly, enraged. It's basically a Ponzi scheme, as you know, that sooner or later was gonna collapse. And I'd like to get that money back from them. But we've gotta fix the average citizen who's the innocent bystander that is in danger of losing their pensions, their 401(k)'s, their IRAs. Their very life savings are at risk here.

Pelley: You have called for the firing of the head of the Securities and Exchange Commission, the federal government organization that oversees the markets.

McCain: Yes. You know, and by the way, that technically he can't be, quote, fired. But I'll tell you, when I'm president, if I want somebody to resign, they resign.

Pelley: I'm curious. If you wanna fire Chris Cox, the chairman of the SEC, who would you replace him with?

McCain: This may sound a little unusual, but I've admired Andrew Cuomo. I think he is somebody who could restore some credibility, lend some bipartisanship to this effort.

'FOX News Sunday' Transcript (9-21-08)

Read the transcript.

WALLACE: If you hear some Democrats talk about a stimulus package — infrastructure, you know, a variety — unemployment relief, a variety — even a bailout to the auto companies. Are you going to "Christmas tree" this bill?

SCHUMER: No, we will not "Christmas tree" this bill. The times are too urgent. Everyone has their own desires and needs. It's going to have to wait.

Now, as for a stimulus package, I think that is — the economy is sinking. Unemployment, 6.1 percent. Many of us believe we need a stimulus package. Many of us believe this is the appropriate time to do it before Congress adjourns. We can't wait three months.

WALLACE: As part of the bailout?

SCHUMER: But it doesn't necessarily have to be part of the bailout. That's something that's being decided right now.

And I think our leaders both in the House and Senate are coming to the conclusion it should be alongside the bailout, but not part of it.

WALLACE: Senator Kyle, can you live with the kind of add-ons that Senator Schumer is talking about?

KYL: Well, first of all, I think that he is correct to say that these things should not be added on to this particular bill.

Related Post:

• Paulson, Bloomberg on Meet The Press: Transcript (9-21-08)

Paulson, Bloomberg on Meet The Press: Transcript (9-21-08)

Read the full transcript:

MR. BROKAW: Well, let's talk first of all about how this happened. Is it as a result of speed and the complexity of these instruments now, and the fact that no one really has their hand on the instruments that they're selling, they just pass them along?

SEC'Y PAULSON: Tom, that is one of the reasons. There have been excesses, I said, for a long time. We have overcomplexity. Mortgages are now securitized, sliced and diced, put into tranches, sold all over the world. There is a great deal of risk into this--in, in the system. That is one of the reasons. As I said, there's just been irresponsible practices. Borrowers have done things that were irresponsible also. But there's a lot of, a lot of mistakes made.

[...]SEC'Y PAULSON: Tom, there are a lot of questions, and I can understand there are a lot of questions. This is an urgent matter, and we need to move very quickly. But let me get to the first question. Yes, the cost. You know, I don't like the fact the taxpayer's being put in this position, but the numbers that are being used, which are--you know, we're talking about hundreds of billions of dollars--remember, this is not an expenditure, this is money that is being used to purchase these assets, as you said, these illiquid mortgage assets, which are very difficult to value. They will be held, and then they will be resold at some time. And so we can't determine what the cost is today. That's going to be based upon how quickly the economy recovers, what happens in the mortgage market. But I can assure you the cost won't be anything like what is put out to buy these investments and these assets. And when the assets are sold, the money will come back into the treasury.

But, again, this in not a position where I like to see the taxpayer. But it is far better than the alternative. The situation we had last week, where credit markets were frozen--you know, the stock market, the average American watches the stock market. They watched the stock market drop about 1,000 points and then recover on the news of this plan. But what they don't see is what's going on in the credit markets. And when companies can't borrow money and--this has a big impact on everyone. It's difficult to get jobs, it hurts people's budgets, retirement savings. This is a serious situation, and we need to avoid this.

-Related Post:

• 'FOX News Sunday' Transcript (9-21-08)

Obama Speech in Daytona, Florida: Transcript (9-20-08)

Read the full transcript.

I know how hard the women of this country are working. I know the anxiety so many of you are feeling right now, as we stand in the midst of the most serious financial crisis of our time. We've seen three of America's five largest investment banks fail or be sold off in distress. Our housing market is in shambles, and Monday brought the worst losses on Wall Street since the day after September 11th.

Everywhere you look, the economic news is troubling. But for so many of you, it isn't really news at all. You've seen your home values falling, gas prices rising, and bills piling up month after month. So you're working longer hours, or working more than one job just to get by. And then there are the jobs you do once the workday ends. Jobs like paying the bills, buying the groceries, making the dinner, doing the laundry, enforcing the bedtimes - the jobs you don't get paid for, but that hold our families together. Jobs that still, even in the year 2008, too often fall to women.

So I know these are difficult days. But here's what I also know. I know we can steer ourselves out of this economic crisis. That's who we are. That's what we've always done as Americans. Our nation has faced difficult times before. And at each of those moments, we've risen to meet the challenge because we've never forgotten that fundamental truth - that here in America, our destiny is not written for us, but by us.

But another thing I know is that we can't steer ourselves out of this crisis by heading in the same, disastrous direction. We can't change direction with a new driver who wants to follow the same old map. And that's what this election is all about.

Yesterday, my opponent, Senator McCain, gave a speech in which his big solution to this worldwide economic crisis was to blame me for it. This is a guy who's spent a quarter century in Washington. And after spending the entire campaign saying I haven't been in Washington long enough, he apparently now is willing to assign me responsibility for all of Washington's failures. I think it's pretty clear that Senator McCain is a little panicked, and that at this point, he is willing to say anything, do anything, change any position, violate any principle to try and win this election. And that is sad to see. That's not the politics we need.

So let's be clear.

There's only one candidate who - just this week - said a line he's repeated 16 times on this campaign - quote - "the fundamentals of our economy are strong."

There's only one candidate who's called himself "fundamentally a deregulator" when deregulation is part of the problem. My opponent actually wrote in the current issue of a health care magazine - the current issue - quote - "Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation."

So let me get this straight - he wants to run health care like they've been running Wall Street. Well, Senator, I know some folks on Main Street who aren't going to think that's a good idea.

There's only one candidate whose choice for Treasury Secretary is a man who thinks we're in a "mental recession" and has called the United States of America a "nation of whiners."

There's only one candidate whose campaign is being run by seven of Washington's most powerful lobbyists.

And folks, it isn't me.

I don't take a dime from Washington lobbyists and special interests. They do not run my campaign. They will not run my White House. And they will not drown out the voices of the American people when I'm President of the United States.

So when John McCain says that lobbyists "won't even get past the front gate" at his White House, my question is - who's going to stop them?

Those seven lobbyists?

His campaign manager?

The economic advisor, who got a $40 million golden parachute when she was fired as a CEO?

Or maybe the 26 advisors and fundraisers who lobbied for Fannie Mae and Freddie Mac?

I mean, give me a break.

The same day my opponent attacked me for being associated with a Fannie Mae guy I've talked to for maybe 5 minutes in my entire life - the same day he did that - the head of the lobbying shop at Fannie Mae turned around and said wait a minute - "when I see photographs of Senator McCain's staff, it looks to me like the team of lobbyists who used to report to me."

Folks, you can't make this stuff up.

Bush Wall Street Bailout will Cost U.S. $1 Trillion

While most Americans are left to fend for themselves after the current financial collapse, powerful Wall Street investment bankers and big business get saved. This proves once and for all that a government that is supposed to represent us doesn't. And despite the rhetoric to the contrary, the corporations aren't against socialism as long as they are the beneficiaries.

FEDERAL OFFICIALS and congressional leaders will hash out a bailout of the nation's financial system this weekend that, with measures already taken, could add $1 trillion to the national debt, by some estimates.

The plan, under which the government would buy defaulted mortgages from distressed lending institutions, is intended to help prevent a financial services industry meltdown, improve the availability of credit and stave off further deterioration of the overall economy.

"This needs to be big enough to make a real difference and get to the heart of the problem," Treasury Secretary Henry Paulson said Friday.

Paulson would only say that the cost of the rescue plan could run into the hundreds of billions. Some in Congress and on Wall Street are concerned that the new plan and other recent financial industry rescues could add alarmingly to the national debt - now $9.7 trillion.

We have to pay for the excesses of the financial industry and the failure of the lap-dogs-of business to regulate them.

Sen. Richard Shelby, the senior Republican member of the Banking Committee, talked about the overall pricetag this morning on ABC's Good Morning America.

"I figure it'll be at least a half a trillion," Shelby says. "But when you look at what the Fed has already done, and the extension of power to Treasury to deal with Fannie Mae and Freddie Mac, I believe we're talking about a trillion dollars."

But it is not clear whether the "rescue plan" will even work. Remember how the government response to the housing collapse was to give the public a tax rebate check. That obviously didn't amount to much while driving up the debt/deficit even further. This from a British perspective.

This is what we might call the $1trillion question. That's $1,000,000,000,000, by the way. It is a little like surgery. The US government has amputated the gangrenous leg of the banking system to save the patient. But it is now preparing to graft the infected limb on to the body politic of America. The US taxpayers will be lucky if they do not feel distinctly unwell as a result of this little experiment.

The truth is that simply buying the banks' worthless securities has been an option, if an unpalatable one, for the authorities since the credit crunch began a year ago. All the plans to lend against these assets, such as the Bank of England's Special Liquidity Scheme, and other "injections of liquidity", were temporary solutions, born out of a hope, if not an expectation, that the crisis would not be prolonged.

We know better now. What the American authorities have done is the only sure way to protect the banking system against further destabilisation. Short-selling or not, left to their own devices, the markets would sooner or later force more banks into the arms of the taxpayer anyhow. It is a sad day when hard-pressed citizens find themselves subsidising private banks for their stupid mistakes. But that is what's happening in the US, and it will surely be done here. The Bank of England hates the notion; but Gordon Brown may well feel that he has no choice.

So for the banks and their shareholders and staff, the US rescue plan is already working, and it will save the wider economy from yet more damage. It is less clear whether it will end the credit crisis or preserve America's fast disappearing economic hegemony.

Vermont Candidate Would Prosecute Bush for Murder, War Crimes

There are some out in government who have the integrity and guts to call for Bush's punishment for his war crimes. This President attacked a country without provocation (it's called the Bush Doctrine) and caused the deaths of 10s of thousands, including 4 thousand American troops. He is a criminal who should be prosecuted by the World Court just like other war criminals. It won't happen but it is the right thing to do.

Lots of political candidates make campaign promises. But not like Charlotte Dennett's.

Dennett, 61, the Progressive Party's candidate for Vermont Attorney General, said Thursday she will prosecute President Bush for murder if she's elected Nov. 4.

Dennett, an attorney and investigative journalist, says Bush must be held accountable for the deaths of thousands of people in Iraq — U.S. soldiers and Iraqi civilians. She believes the Vermont attorney general would have jurisdiction to do so.

She also said she would appoint a special prosecutor and already knows who that should be: former Los Angeles prosecutor Vincent Bugliosi, the author of "The Prosecution of George W. Bush for Murder," a new book.

"Someone has to step forward," said Dennett, flanked by Bugliosi at a news conference announcing her plan. "Someone has to say we cannot put up with this lack of accountability any more."

Dennett and two others are challenging incumbent Attorney General William Sorrell, a Democrat, in the Nov. 4 election.

Even some prominent conservatives like Andrew Sullivan agree (he is quoting a writer):

Conservative commentators have already warned against any future US prosecution, arguing that—reprehensible as the treatment of some detainees was—those responsible did not have criminal intent. The argument is unpersuasive on the facts, because Secretary Rumsfeld and others were warned by senior Pentagon civilian and military lawyers, including the navy general counsel, Alberto Mora, that their policies would violate the law.

Of course there are plenty on the left who agree that Bush should be held responsible.

Any attempt to hold high U.S. officials responsible for war crimes likely “will require time and effort but is nevertheless of urgent importance,” an authority on international law said today.

Amy Bartholomew, an associate professor of law at Carleton University , Ottawa , Canada , told a conference seeking prosecutions of President George W. Bush and his aides for war crimes that aggression by "the world's most powerful state" must be punished just as less powerful countries are punished.

Palin, McCain Iowa Speech Transcript (9-18-08)

Read the full transcript.

I'd like to give you a little straight talk, a couple of minutes of straight talk. We need reform in Washington and Wall Street. The financial markets are in crisis. Times are tough. Enormous strain is being put on American families and individuals in this country. I know that the events unfolding can be difficult to understand for many Americans. The dominos that we have seen fall this week began with the corruption and manipulation of our home loan system. The reason this crisis started was the abuses that took place within our home loan agencies, Fannie Mae and Freddie Mac, and -- and within our home loan system.

Two years ago I warned this administration and Congress that regulations for our home loan agencies that you know of and barely heard of, Fannie Mae and Freddie Mac, needed to be fixed. But I'm sorry to stand before you and tell you that nothing was done.

You know, Senator Obama talks a tough game on the financial markets, but the facts tell a very different story. He took more money from Fannie and Freddie than any senator except the Democratic chairman of the committee that regulates them. (Boos.) He put -- he put the chief executive officer of Fannie Mae -- excuse me, of -- yes, of Fannie Mae, who helped create this disaster -- he put that Democratic -- of the -- in charge of the selection process for who he was going to select for vice president of the United States. (Boos.) You know what, former -- Fannie's former general counsel is a senior advisor to his campaign. Whose side do you think he's on?

When I pushed legislation to reform Fannie Mae and Freddie Mac, Senator Obama was silent. He didn't lift a finger to avert this crisis. While the leaders of Fannie and Freddie were lining the pockets of his campaign, and they were sowing the seeds of the financial crisis we see today, and they also enriched themselves with millions of dollars in payments, that's not change; that's what's broken in Washington today, my friends. (Cheers, applause.)

My friends, I've got to give you a little more straight talk. There was no transparency in the books of the Wall Street banks. Banks and brokers took on huge amounts of debt and they hid the riskiest of all investments. Mismanagement and greed became the operating standard, while regulators were asleep at the switch. The regulators were asleep, my friends; they were not working for you.

The primary regulator of Wall Street is the Securities and Exchange Commission -- we call the SEC -- kept in place trading rules that let speculators and hedge funds turn our markets into a casino. They allowed naked short selling, which simply means you can sell stock without ever owning it. They eliminated last year an important rule called the uptick rule, that has protected investors for 70 years. Speculators pounded the shares of even good companies into the ground.

The chairman of the SEC serves at the appointment of the president, and in my view has betrayed the public trust. If I were president today, I would fire him. (Cheers, applause.)

We can't wait any longer for more failures in our financial system. Structures like the Resolution Trust Corporation that dealt with the failed savings and loan industry were designed to clean up the system and worked. Today we need a plan that doesn't wait until the system fails.

I'm calling for the creation of the Mortgage and Financial Institutions Trust, the MFI. The priorities of this trust will be to work with the private sector and regulators to identify institutions that are weak and take remedies to strengthen them before they become insolvent. For troubled institutions, this will provide an orderly process through which to identify bad loans and eventually sell them.

This will get the Treasury and other financial regulatory authorities in a proactive position instead of reacting in a crisis mode to one situation after the other. The MFI will enhance investor and market confidence, benefit sound financial institutions, assist troubled institutions, and protect our financial system, while minimizing taxpayer exposure. Tomorrow I'll be talking in greater detail about the crisis facing our markets, and what I'll do as president to fix this crisis and get our economy moving again. We have to do it for you and for America. (Cheers, applause.)

Senator Obama has never made the kind tough reform we need today. His idea of reform is what his party leaders in Congress order him to do. You know, we tried for bipartisan ethics reform, and he walked away from it because his bosses didn't want real change. I know how to make the change that Senator Obama and this Congress is afraid of. And I've fought both parties -- I've fought both parties to shake up up Washington, and I'm going to do it as president. (Cheers, applause.)

AUDIENCE: (Chanting.) John McCain! John McCain! John McCain! John McCain! John McCain! John McCain! John McCain! John McCain! John McCain! John McCain! John McCain!

SEN. MCCAIN: You know, my friends, those same congressional leaders who give Senator Obama his marching orders are now saying, incredibly, that this mess isn't their fault and they aren't going to take any action on this crisis until after the election. (Boos.) Senator Obama's own advisers are saying that the crisis will benefit him politically. My friends, that's the kind of me-first, country- second politics that are broken in Washington. (Cheers, applause.) My opponent sees an -- my opponent sees an economic crisis as a political opportunity instead of a time to lead. Senator Obama isn't change, he's part of the problem with Washington. (Cheers, applause.)

When AIG was bailed out, I didn't like it, but I understood it needed to be done to protect hardworking Americans with insurance policies and annuities. Senator Obama didn't take a position. On the biggest issue of the day, he didn't know what to think. He may not realize it, but you don't get to vote present as president of the United States. (Cheers, applause.)

While Senator Obama and congressional leaders don't know what to think about the current crisis, we know what their plans are for the economy. Today, Senator Obama's running mate said that raising taxes is patriotic. (Boos.) Raising taxes in a tough economy isn't patriotic. It's not a badge of honor. It's just plain dumb. (Laughter, cheers, applause.) Billions in tax increases that Senator Obama is proposing would kill even more jobs during tough economic times. I'm not going to let that happen. (Cheers, applause.)

I've seen tough times before and I know how to shake up Wall Street and Washington, and I'll get this economy moving. I'll lead through this crisis by fighting for you. (Cheers, applause.) And when I am president, we'll be stronger than ever before.