The Crackup

I've been watching this looming conservative crackup with interest for about a year. The three legs of their stool - the fundie theocrats, the economic royalists, and the neocons - have been made more manic by a culture of demonizing liberals and branding them as abberant, and a loss was sure to break wide the fissures between those three competing sects. In the primaries there was no consensus whatsoever - each leg of the stool lined up with their own candidate - and you could just see that this wouldn't hold together. And while I didn't think it would get this nasty this soon, that's exactly what's happened. Listen to Rush Limbaugh trying to blame moderate Republicans (like there are any left) and "intellectualoids" (no shit, his expression) for their problems:

In that sense, it was said the only opportunity this party has to regain power is John McCain. Only John McCain can get moderates and independents and Democrats to join the Republican Party, "and we can't win," these intellectualoids said, "if that didn't happen." Well, the latest moderate Republican to abandon his party is William Weld, the former governor of Massachusetts who today endorsed the Most Merciful Lord Barack Obama. He joins moderate Republican Colin Powell. He joins former Bush press spokesman Scott McClellan. He joins a number of Republicans like Chuck Hagel, Senator from Nebraska ...

Now, I wish to ask all of you influential pseudointellectual conservative media types who have also abandoned McCain and want to go vote for Obama (and you know who you are without my having to mention your name) what happened to your precious theory? What the hell happened to your theory that only John McCain could enlarge this party, that we had to get moderates and independents? How the hell is it that moderate Republicans are fleeing their own party and we are not attracting other moderates and independents?

... When I saw the Weld thing today I smiled and I fired off a note to all my buddies and I said, "Wait, wait, wait, wait, wait! How can this be? How can this be? This is the kind of guy that our candidate was supposed to be attracting, and we were supposed to be getting all these moderates from the Democrat Party," and we will, by the way. We're going to get some rank and file, average American Democrats that are going to vote for McCain. But these hoity-toity bourgeoisie... Well, they're not the bourgeoisie, but... Well, they are in a sense. They're following their own self-interests, so I say fine. They have just admitted that Republican Party "big tent" philosophy didn't work. It was their philosophy; it was their idea. These are the people, once they steered the party to where it is, they are the ones that abandoned it.

Never has anti-intellectualism been so finely distilled. The theocons are training their fire on moderates as well. As if these so-called "latte conservatives" even exist. They created this monster and are part of its core. Now, suddenly as the ship goes down they don't want to be a part of it. And the right-wing populist wants to cast them off. More than anything, this is about loyalty:

Jim Nuzzo, a White House aide to the first President Bush, dismissed Mrs Palin's critics as "cocktail party conservatives" who "give aid and comfort to the enemy".

He told The Sunday Telegraph: "There's going to be a bloodbath. A lot of people are going to be excommunicated. David Brooks and David Frum and Peggy Noonan are dead people in the Republican Party. The litmus test will be: where did you stand on Palin?"

Mr Frum thinks that Mrs Palin's brand of cultural conservatism appeals only to a dwindling number of voters.

He said: "She emerges from this election as the probable frontrunner for the 2012 nomination. Her supporters vastly outnumber her critics. But it will be extremely difficult for her to win the presidency."

This was inevitable without Palin and McCain - conservatives never take responsibility for their own actions, and they would have scapegoated everyone but themselves for this potential realignment. But the obvious tension at the top of the ticket is exacerbating this, and well before the election to boot. McCain and Palin have split on Ted Stevens. They've split on this very damaging wardrobe story, with the RNC thrown in as well. McCain staffers are openly calling Palin a whack job. And this is just embarrassing.

I’m sympathetic to Eskew and Wallace, and not just because they’re decent people. They’ve held their tongue from leaking what a couple of McCain higher-ups have told me—namely, that Palin simply knew nothing about national and international issues. Which meant, as one such adviser said to me: “Letting Sarah be Sarah may not be such a good thing.” It’s a grim binary choice, but apparently it came down to whether to make Palin look like a scripted robot or an unscripted ignoramus. I was told that Palin chafed at being defined by her discomfiting performances in the Couric, Charlie Gibson, and Sean Hannity interviews. She wanted to get back out there and do more. Well, if you’re Eskew and Wallace, what do you say to that? Your responsibility isn’t the care and feeding of Sarah Palin’s ego; it’s the furtherance of John McCain’s quest for the presidency [...]

I’ve heard from one well-placed source that McCain has snubbed her on one long bus ride aboard the Straight Talk Express, to the embarrassment of those sitting nearby. It has surely been implied to the governor that she should be eternally grateful to have been plucked from obscurity. And yet the high water mark of John McCain’s campaign for the presidency unquestionably began on September 3, when Palin gave her nomination speech—and ended precisely twelve days later, when McCain went off-script—I have that on the authority of the person who participated in the writing of said script—and told an audience that he still believed the fundamentals of the economy were strong.

I love that the signature failing of the McCain campaign was an ad-lib.

Even the state parties are fighting with their standard-bearer, which almost never happens.

So obviously, that's harmful. But watching this almost with a scientific curiosity, I would say that McCain and Palin are almost irrelevant to the fundamental disconnect between the legs of the Republican stool in this modern era. The seething hatred of liberals, and the revised "Arkansas Project II" that we'll see hounding Barack Obama will keep them together, but that's not a path to a viable political majority. That path is closed off for the time being, and thinking the answer lies in insufficient loyalty or too much moderation is a path to disaster.

Now after the election I guess the legs of the stool are going to get together for a confab.

The decision to waste no time in plotting their moves in the post-Bush era reflects the widely-held view among many on the right, and elsewhere, that the GOP is heading toward major losses next week.

One of the topics of discussion will be how to fashion a "national grassroots political and policy coalition similar to the out Reagan years," said the attendee, a reference to the development of the so-called New Right apparatus following Jimmy Carter's 1976 victory and Reagan's election four years later.

"There's a sense that the Republican Party is broken, but the conservative movement is not," said this source, suggesting that it was the betrayal of some conservative principles by Bush and congressional leaders that led to the party's decline.

They really still don't get it. To be honest, there probably isn't a way out right now. They'll have to spend some time in the wilderness. And the lonely staffers will have to go get some real jobs. But one thing Republicans aren't likely to forget is how to be an opposition party. They will bond together by frustrating a Democratic agenda, and they'll be very skilled at it. It allows them to look askance at their problems.

The Sadness Of Alan Greenspan

Today our ex-Master of the Universe had his "nobody could have anticipated" moment.

Former Federal Reserve chairman Alan Greenspan called today for imposing some of the same sorts of regulations on mortgage securities he resisted when he was in office, acknowledging that the current financial crisis had exposed "a flaw" in his view of how the world and markets function.

The absence of significant controls on how mortgages are repackaged into larger and more complex securities has been cited as a central cause of the current financial crisis.

In testimony before the House Government Oversight Committee, Greenspan said that as a result of the current situation the United States is heading for a "significant rise in layoffs and unemployment" and a continued downturn in home values as the world works through a crisis that is "broader than anything I could have imagined."

Greenspan, who called the current financial crisis a "once-in-a-century credit tsunami," said that he remained "in a state of shocked disbelief" that banks and investment firms did not do a better job of analyzing the risks involved with investing in home mortgages extended to less creditworthy borrowers.

Under questioning from Rep. Henry Waxman (D-Calif.), the committee chairman, Greenspan acknowledged that the failure of that expected self-regulation represented "a flaw in the model" he used to analyze economics. "I was going for 40 years or more on the perception that it was working well."

Here's that key moment.



Is he really this stupid? He predicated his entire economic philosophy on the premise that greedy people wouldn't act greedily? This free market fundamentalism might work in computer simulation, but in the business world you pretty much have people who want to get ridiculously rich as a matter of projecting power. Also, to suggest that Greenspan had just nothing to do with hyping adjustable rate mortgages and deregulation is absurd. This is his problem and he ought to be slow roasted for it.

If men were angels, no laws would be necessary, to borrow a phrase. But regulation exists for creeps like this:

CONVERSATION OF THE DAY....Between Rahul Dilip Shah and Shannon Mooney, a pair of analysts at the credit rating agency Standard & Poor's, chatting via IM back in 2007:

RDS: btw: that deal is ridiculous

SM: I know right ... model def does not capture half of the risk

RDS: we should not be rating it

SM: we rate every deal

SM: it could be structured by cows and we would rate it

I actually don't think Greenspan is this dumb, he just wanted to let the party keep going until he retired or died so he wouldn't have to be pinned with the blame. Tough break, Alan.

Digby is great on this.

Being able to pass on all your risk to someone else while personally coming out on top is a pretty glaring and obvious flaw in the system unless you think that wealthy people are too wise and moral to ever do such a thing. The only people who believe that are Randians and Joe the Plumber. Everybody on Wall Street certainly seemed to know the score and acted accordingly [...]

Uncle Alan is in his 80s and he's just learned that his heroes aren't what he thought they were after all. No wonder he's in a state of "shocked disbelief." It's a wonder he didn't keel over.

I know people are focused on Hank Paulson and what a poor job he's doing, but focus some attention back on this Randian fool Alan Greenspan. He deserves to have his entire reputation destroyed.

Pointing One Finger Outward Means Three Are Pointing Back At Yourself

The wingnuts are really ramping up this blame of the Community Reinvestment Act of 1977 (I always like to put the date in there, just to show how ridiculous it all is) for the current financial crisis. It's bunk. What actually happened is that the tech bubble popped and there was a lot of global investment money that needed a place to go, so the financial industry packaged these mortgages and created a demand for them, which led to lax lending regulations, so they could give out more mortgage-backed securities, which led to more demand, etc., to create a new bubble. And now we're seeing this one pop. Despite the complexity of the financial instruments, it's pretty simple. But the wingnuts don't want simple. They want to muddy the waters and reduce the blame to the darkies.

In fact, even if this was about loaning to the "wrong" people the Bush Administration was in the position to stop it. But the "homeownership rates are high" talking point was valuable in a struggling economy with stagnating incomes, and their Wall Street friends were making bank, so they let it happen.

But it wasn't. The CRA has nothing to do with this crisis.

• The CRA was passed in 1977—over 25 years before subprime loans came into vogue. So the timing is wrong.

• The CRA only covers commercial banks and savings-and-loan institutions—not other forms of mortgage-offering enterprises. Fact is, most subprime loans weren’t made by the lenders subject to CRA.

Fannie and Freddie aren't to blame either:

• Fannie and Freddie did not guarantee and securitize subprime loans. Such loans didn’t meet their conforming loan standards. In fact, as the subprime market was building, Fannie and Freddie lost market share because they were under stricter standards. Thus, their participation in the secondary market did not assist in the creation of the subprime market.

• It’s true, however, that Fannie and Freddie were damaged by the subprime crisis because everyone in the housing sector was damaged by falling home prices and, more significantly, the two companies branched out into a broader investment portfolio. In that portfolio were included mortgage-backed securities that hurt all of those who purchased them. Fannie and Freddie weren’t the biggest players in this and, most importantly, started this practice very late in the game. In fact, the subprime market had already started to go bad when they started their purchases (which speaks poorly for Fannie and Freddie’s decision making, but precludes them from responsibility for the crisis).

• Fannie and Freddie were supposed to be more closely supervised than other lenders—with their own regulator, which was supposed to keep a special eye on them because they are important institutions. Those regulators, who were part of the Bush administration, failed along with the rest of the Bush regulatory apparatus to stop the problem.

Of course, it's a lot easier to blame the victims of predatory lending instead of the predators themselves. It's easier to cast blame instead of taking the hard look inward. In this brilliant essay, Thomas Frank says that the GOP instinct for blame-evasion is world class:

This is a movement, after all, that blandly recasts its greatest idols as traitors once their popularity has crashed; that routinely sloughs off responsibility for . . . well . . . anything since, by its logic, conservatism has never really been tried in the first place. Consider in this respect Mitt Romney's remarkable speech to the Republican convention a few weeks ago, in which he rallied his party against Washington -- a place his party has controlled, to one degree or another, for nearly three decades -- by listing the city's various institutions and crying, "It's liberal!"

Or consider the way the House Republicans torpedoed the bailout bill a few days ago. The real reason they did it was almost certainly to evade responsibility for an unpopular measure but the announced reason seemed designed to convince the nation's 7-year-olds -- because Nancy Pelosi said something mean.

On economic questions the standard exculpatory maneuver is even simpler. When some free-market scheme blows up, one needs only find an institution of government in close proximity to the wreckage and commence accusing.

And the reaction to being called on this lie on the right is to stick their fingers in their ears and pretend they never heard it.

It's entirely possible, indeed probable, that nothing proposed is a solution to this crisis we face - if housing values continue to plummet, which they should in a functioning economy to deflate the bubble, all the trickery in the world won't be sufficient. But the key conservative goal here is to elude responsibility, for responsibility might mean having to actually change their practices and have their free-market fundamentalism collapse upon them.

McCain's Bitter-gate

By now you may have heard that McCain's top economic adviser, former Senator Phil Gramm, thinks that all of you pathetic "hard-working people" who don't appreciate the value of concentrating money in the hands of the super-rich are just a bunch of whiners.

In an interview with the Washington Times, Phil Gramm, a former Texas senator who is now vice chairman of UBS, the giant Swiss bank, said he expects Mr. McCain to inherit a sluggish economy if he wins the presidency, weighed down above all by the conviction of many Americans that economic conditions are the worst in two or three decades and that America is in decline.

"You've heard of mental depression; this is a mental recession," he said, noting that growth has held up at about 1 percent despite all the publicity over losing jobs to India, China, illegal immigration, housing and credit problems and record oil prices. "We may have a recession; we haven't had one yet."

"We have sort of become a nation of whiners," he said. "You just hear this constant whining, complaining about a loss of competitiveness, America in decline" despite a major export boom that is the primary reason that growth continues in the economy, he said.

As S,N notes, this is the "let them eat cake" Antionette-ism that has been at the heart of the Republican Party since the Gilded Age. Their entire project is to view the federal Treasury as a bank holding the money for their wealthy contributors until they decide to dole it out to them. So they construct policies that benefit the top one-half of 1%. When you hear about The Wrecking Crew, this is their objective.

Fantastic misgovernment is not an accident; nor is it the work of a few bad individuals. It is the consequence of triumph by a particular philosophy of government, by a movement that understands the liberal state as a perversion and considers the market the ideal nexus of human society. [...] Its leaders laugh off the idea of the public interest as airy-fairy nonsense; they caution against bringing top-notch talent into government service; they declare war on public workers. [...] The ruination they have wrought has been thorough; it has been a professional job. [...] There is so much money in conservatism these days that Karl Rove rightly boasts, "We can now go to students at Harvard and say, 'There is now a secure retirement plan for Republican operatives.'" [...]

Like Bush and Reagan before him, John McCain is a self-proclaimed outsider, but should he win in November he will merely bring us more of the same: an executive branch fed by, if not actually made up of, lobbyists and other angry, righteous profiteers.

The McCain campaign, already rocked by the candidate calling the Social Security system as a concept a disgrace (and trying to backpedal furiously to little effect), has no idea what to do with this latest example of letting the economic royalist slip show. At first, and let us not forget this, they stood by the remarks.

The McCain campaign is working hard to distance itself from statements made by economic adviser Phil Gramm describing the current economic downturn as a "mental recession" and saying America had "sort of become a nation of whiners."

But in an initial statement published by Politico and then, seemingly, removed from its site, a McCain campaign aide actually stood by Gramm's remarks, saying the interview as a whole was merely meant as a preview of the Senator's economic agenda.

"Mr. Gramm was simply saying that we are laying out the economic plan this week," the piece quoted a "McCain official" as saying. "The plan is comprehensive, providing immediate near-term relief for Americans hurting today as well as longer-term solutions to get our economy back on track, secure our energy future and deliver jobs, prosperity and opportunity for the next generation. We're laying out that plan this week with an emphasis on the critical importance of job creation, and it's been a great success so far."

And Sen. Obama took McCain to task for these comments.

"One of Senator McCain’s top economic advisors may think that when people are struggling with lost jobs, stagnant wages, and the rising costs of everything from gas to groceries, it’s merely a ‘mental recession’. And Senator McCain may think it’s sufficient to offer energy proposals that he admits will have mainly ‘psychological’ benefits. But the American people know that our economic problems aren’t just in their heads. They don’t need psychological relief -- they need real relief -- and that’s what Barack Obama will provide as President," Obama spokesman Bill Burton writes.

I seem to remember a very large scandal played off of one Obama quote at a private fundraiser, about how "bitter" rural voters cling to God and guns. Gee, here we have the top economic adviser to the Republican nominee saying that any American facing the real costs of failed conservative economic policies, struggling to pay for gas or health care or food, trying to keep their job in an era of stagnant wages and rising costs, trying to keep their home in the midst of crisis, is a "whiner." The media might want to look up from their barbecue and cornbread and pay attention. This is a major Kinsley-esque gaffe, which is what happens when someone tells the truth about their objectives. McCain and his fellow travelers don't care about the economic problems of 99% of America.

Economic Royalists Still Dismissive Of Average American's Struggles

Two moments on the Sunday sows yesterday typified why a Democratic takeover of the Presidency and additional gains in Congress are nearing so close to reality - Republican spinners remain in total denial about the impact of failed conservative economic policies.

In an eye-popping statement on ABC's This Week, George Will told us that we're all doing much better than we were eight years ago, and shut up-a-you face, nervous ninnies, and let the free market do its job and reap untold fortunes (for a select few, of course). The astonishing transcript:

REICH: I don’t think you can separate economic security from national security. This is why I find John McCain’s position so interesting, because he wants to and needs to separate himself from Bush, a failed presidency, particularly if you look at the polls. And yet, on Iraq and on the economy, he is going beyond what George Bush has done. I mean, his tax cuts are beyond anything that –particularly for the wealthy—beyond anything that George Bush has proposed or did implement.

WILL: But Bob, today we have a bifurcated economy. The export sector is doing wonderfully, it’s pulling the country along, and the Democratic Party is raising doubts about its commitment—indeed, it’s affirming its lack of commitment—to free trade.

Now it is true that I think there is a disjunction in the public mind without precedent in 200 years of American history. We’ve always assumed that the very process—the dynamic market capitalism—produces increased national wealth simultaneously produced increased family and individual security. Now the doubt is that today’s capitalism on steroids, if you will, globalized capitalism increases national wealth, but undermines family and individual security which will produce a great flinch from free economics.

REICH: That’s exactly the point. That’s exactly the problem, George. Americans now have lost their faith in free trade; they’ve lost their faith in economic growth because they haven’t seen the benefits of it. It’s all gone to the top. That’s why Obama’s tax cuts for the middle class and for the poor are so critical for this campaign.

WILL: Because friends like you are misinforming the country by saying that they have not seen benefits. Even housing, Bob, housing today after the big decline, the average American house is worth a third more than it was in 2000.

REICH: George Will, you tell average Americans that they are better off today than they were in 2000-2001…

WILL: I will.

REICH: …and they will not believe you.

It's almost not worth arguing this point. Just let George Will on a national speaking tour telling everybody in the country how well they're doing, empirical evidence notwithstanding. I'd be willing to bankroll that tour if I weren't an American trying to pay for $4.50 a gallon gas and seeing my home value and purchasing power shrink.

(Will is also lying about so-called "free trade" - its benefit on prices is only on relative prices, good for people who buy things but bad for people who make things. And while America is moving toward a model of only buying things, it's beyond obvious that such a model is unsustainable.)

But for those who think that it must be only Will who is overlooking stagnant wages, growing unemployment, flat investment portfolios and inflation on necessities, let me direct you to another high-profile confab from yesterday:

WILLIAMS: One last point on this economic thing. I think if you say to most Americans that the tax cut is going — is simply a matter of not continuing President Bush’s tax cuts in 2010, they don’t view that as raising taxes.

That’s the wealthy who might say that, but it’s not on average people who are feeling higher gas taxes. It’s not on average people who have to pay more for food.

It’s almost like you guys are out of touch with what ordinary Americans are going through in this country at this time. People want government to respond to need and not simply to talk about more tax breaks for the rich and for big corporations.

HUME: (sarcastically) That’s what McCain’s doing, for sure. He’s saying, I want more tax cuts for big corporations, and I want the rich to get richer off the tax code. Oh, what baloney. That’s not what it’s about at all.

WILLIAMS: Well, where’s the pro-growth? If we have 5 percent –the other day we had the biggest jump in unemployment in this country in 20 years.

HUME: Juan, right. You know what that came from? People coming out of school for the summer, and they’re going into the job market.

WILLIAMS: Oh, come on.

HUME: We’re at 5.5 percent unemployment.

WILLIAMS: Right.

HUME: By historical standards, that is remarkably low. The growth policies and particularly the tax cuts that were passed in this administration have, I think, unquestionably helped this economy through some severe blows — 9/11, Hurricane Katrina, and so forth — to the point now where despite a predicted recession the economy is still managing to eke out a little bit of growth.

That’s a strong economic performance, on balance, and not a particularly good argument for allowing the tax cuts that were…

WALLACE: All right.

WILLIAMS: Nobody’s saying that. Justice Hume thinks that ordinary Americans aren’t feeling any pain.

WALLACE: I’m going to gavel you down.

WILLIAMS: Please.

Chris Wallace must have heard the shouting from the IFB in his ear to cut off the economic royalist telling them that the sky is actually red and the grass is blue.

Out of touch is an understatement. Americans are not so studious in tax policy that conservatives can't get away with telling some sweet little lies, like the pervasive statement that America "has the world's 2nd-highest corporate tax rate," which ignores all of the tax credits and deductions that makes the effective corporate tax rate the 4th-lowest among industrialized nations (and don't get me started about the offshore tax havens - in 2000 61% of corporations paid NO TAXES AT ALL).

But when you try to use the big lie - that actually the economy is going quite swimmingly and nobody's feeling any pain - that's where conservatives run into the brick wall of their own failed policies. You can't tell someone who has to stretch his budget more for basics that they're doing just fine. You can't tell someone who's home is in foreclosure that the fundamentals are strong. You can't look at the significant upsurge in bank robberies this year and make no connection to the broader economy.

And since royalists are wired to believe that what's good for the rich is good for everyone, since they are so convinced of conservative myths like how lower taxes equals increased revenue, or how the wealthy always convert their tax breaks into job creation and not trust funds, they're going to keep throwing out these fictions. They're going to keep telling Americans to their face that their empty bank accounts are actually full.

And Robert Reich is correct - "they will not believe you."

The Royalist And The Neoliberal

The New York Times takes a look at the economic programs of both Barack Obama and John McCain and finds them both to hold doctrinaire ideological positions.

For all the efforts of Senators John McCain and Barack Obama to portray themselves as willing to break with party orthodoxy to get things done, the economic debate that opened their general election campaign this week previews a classic clash. It is a battle between Republican supply-side economics and a Democratic tradition that uses government levers to try to reduce inequality and spur the economy.

Mr. McCain, who once opposed the Bush tax cuts in part because they favored the wealthy, has now made extending those cuts a central plank in his economic plan, which is based largely on the Republican credo that tax reductions stimulate the economy. And he is pushing another strain of fiscal conservatism that has not been much in evidence of late: a call for smaller government and a vow to cut pork-barrel spending.

He often adds a dash of populism, speaking against excessive corporate pay packages on Tuesday, and has pushed for a gasoline-tax reprieve. And while Mr. McCain has portrayed his tax cuts as benefiting the middle class, most of the benefits would go to the wealthy and to corporations, including his calls for the elimination of the alternative minimum tax.

Mr. Obama often speaks of the traditional liberal goal of trying to redistribute the tax burden to reduce economic inequality, and at least in his public pronouncements has not emphasized the market-friendly, deficit-reduction aspects of the economic approach credited to former President Bill Clinton and former Treasury Secretary Robert E. Rubin in the 1990s. Mr. Obama’s plan would raise taxes on those making more than $250,000 by allowing Mr. Bush’s tax cuts on top earners to expire, and he has signaled that he would consider increasing the current cap on income subject to the Social Security payroll tax.

He has also proposed, for instance, more spending on providing access to health care, which critics say would widen the deficit when coupled with tax cuts. While Mr. McCain asserted in a speech in Washington on Tuesday that under Mr. Obama’s tax plan Americans of every background would see their taxes rise, Mr. Obama’s plan calls for cutting taxes on people earning less than $75,000 a year and for eliminating federal income taxes on elderly citizens who make less than $50,000 a year.

I think they get it half right. McCain is certainly following in the economic royalist tradition of the hard right. He wants massive tax cuts based on - not a credo - the myth that tax cuts add revenue by spurring the economy. He believes in wealthy corporations getting wealthier, and he thinks that a $200,000 annual salary is not rich. He's going to use the same tired refrain that "my opponent will raise your taxes" while he seeks to redistribute wealth upward. His sensitivity to runaway spending masks the fact that he himself has requested and taken $60 million in porkbarrel projects, and that he wouldn't touch the sacred defense budget, the biggest source of waste that the government funds. It's more of the same profit taking for the rich under a McCain Administration.

The Obama economic philosophy is a little harder to understand. He's not a populist, and he sits pretty squarely in the Robert Rubin tradition of neoloiberalism, at least in part. He's trying to maintain the free market but make sure that, in a time of great economic dislocation and disruptive change, that there is some measure of protection given to those in the middle who suffer because of that disruption, and that the "burdens and benefits of globalization are fairly distributed." Matt Stoller explains it further.

The central challenge of his strategy is that while he believes that we are undergoing a fundamental structural shift in our global economy, the changes he is proposing, with the exception of health care, are somewhat small-bore. This makes sense when you examine his economic team in a bit more detail. The big news on that front is that Hamilton Project denizen and neoliberal economist Jason Furman is Obama's newest economic advisor. Steve Clemons a noted, "To some degree, Furman manifests the interests and perspective of perhaps the leading neoliberal force in politics today, Robert Rubin." Furman is not Rubin, but Clemons thinks that he is "an essential spear-carrier of Rubinomics."

Furman's defense of Walmart as a 'progressive success story' provides an element of caution to the good news about Obama's strength as a candidate. I am not ringing alarm bells about Obama as a NAFTA loving centrist, or suggesting that Furman is a bad choice for an advisor. I know and like Austan Goolsbee, and Furman is probably a highly intelligent and open-minded policy advocate. Additionally, the economic debates have moved far beyond that, and he's likely to pull as much of his policy ideas from Cass Sunstein and Richard Thaler's Nudge with its behavioral economics frame of 'choice architecture', or 'libertarian paternalism' in which the government gently slopes the choices we face in ways that are good for us, without banning bad choices outright. Opt-in, opt-out, and default choices, for instance, are significant and substantial forces in governing our society, and my guess is that Obama believes strongly in making small adjustments for big impacts.

Furman's appointment has raised the ire of some on the left, but it's worth noting that Republicans have gone so far to the right and shown the ultimate failure of an unregulated free market that the Rubin forces and the more liberal economists have moved substantially leftward. When you have Senate Republicans filibustering any energy bill that doesn't solely address the crisis through drilling, when you have Republicans in general only interested in tax cuts without paying for them, I can understand why the NYT would say that both sides are ideological. Only the Obama camp represents about 99% of the spectrum of economic opinion, and McCain that tiny 1%.

Some of those mainstream Democratic ideas, like extending unemployment insurance, are mainstream because they work. In fact, Republicans know they work, because half of them are about to break and vote for the bill. Common-sense measures like this, like a windfall profits tax on oil companies, like a donut-hole approach to Social Security, like fairness in trade, like the Employee Free Choice Act, fit into a coherent argument because the right has retreated to a small, radical corner on the economic front. So Obama can get away with rhetorical brilliance like this.

... We did not arrive at the doorstep of our current economic crisis by some accident of history. This was not an inevitable part of the business cycle that was beyond our power to avoid. It was the logical conclusion of a tired and misguided philosophy that has dominated Washington for far too long.

George Bush called it the Ownership Society, but it’s little more than a worn dogma that says we should give more to those at the top and hope that their good fortune trickles down to the hardworking many. For eight long years, our President sacrificed investments in health care, and education, and energy, and infrastructure on the altar of tax breaks for big corporations and wealthy CEOs – trillions of dollars in giveaways that proved neither compassionate nor conservative.

And for all of George Bush’s professed faith in free markets, the markets have hardly been free – not when the gates of Washington are thrown open to high-priced lobbyists who rig the rules of the road and riddle our tax code with special interest favors and corporate loopholes. As a result of such special-interest driven policies and lax regulation, we haven’t seen prosperity trickling down to Main Street. Instead, a housing crisis that could leave up to two million homeowners facing foreclosure has shaken confidence in the entire economy.

I understand that the challenges facing our economy didn’t start the day George Bush took office and they won’t end the day he leaves. Some are partly the result of forces that have globalized our economy over the last several decades – revolutions in communication and technology have sent jobs wherever there’s an internet connection; that have forced children in Raleigh and Boston to compete for those jobs with children in Bangalore and Beijing. We live in a more competitive world, and that is a fact that cannot be reversed.

But I also know that this nation has faced such fundamental change before, and each time we’ve kept our economy strong and competitive by making the decision to expand opportunity outward; to grow our middle-class; to invest in innovation, and most importantly, to invest in the education and well-being of our workers.

If that's not liberal enough for people, I don't know what more he can say.

The Huckabee Double Bind

Were it not for the Bhutto assassination, I think this hit piece on Mike Huckabee would have been a pretty big story, and it still might be. The fact that the Huck is still giving paid speeches for up to $25,000 while running for President is at the least unseemly. What's more, his reply that "unlike people who are independently wealthy, if I don’t work, I don’t eat,” when he's getting $25 grand per speech, and after a litany of stories about loads of gifts and perks he took while Governor of Arkansas, is just out of touch.

Huckabee is clearly getting a mess of oppo research thrown his way by those who control the money strings in the Republican Party and who fear his populist rhetoric. He's so short on cash that he had to leave Iowa a week before the caucuses to raise money in Florida. And now Novakula is spreading that the insiders have drifted to John McCain as the "last man standing" to challenge the Huckabee campaign.

And this of course shows what a bind the GOP is in with this nomination. Either the torrent of negative ads and information stops Huckabee, at which point his social conservative base, which is already none too happy with getting nothing but lip service from the party all these years, gets so depressed that they either stay home in November or back a Judge Roy Moore-type third-party candidate; or, Huckabee prevails, and the GOP winds up with a candidate completely at odds with major portions of the rest of its base, particularly the econocons and neocons.

We've been expecting this train wreck for some time, and Huckabee became the match that lit the tinderbox. We even see these "damned if you do, damned if you don't" scenarios within the Huckabee campaign itself.

Hispanic activists who viewed former Arkansas Gov. Mike Huckabee as a voice of moderation on illegal immigration say they've been taken aback by the hard-line stance he's adopted as a presidential candidate.

While governor, Huckabee gained favor with Hispanic leaders by denouncing a high-profile federal immigration raid and suggesting some anti-illegal immigration measures were driven by racism. He advocated making children of illegal immigrants eligible for college scholarships.

Huckabee's Republican presidential rivals have tried to make an issue of the scholarship plan, portraying him as soft on illegal immigration, an important issue for many GOP voters.

Huckabee responded this month by unveiling a plan to seal the Mexican border, hire more agents to patrol it and make illegal immigrants go home before they could apply to return to this country.

He's also touted the support for his candidacy of the founder of the Minuteman Project, an anti-illegal immigration group whose volunteers watch the Mexican border.

Though he still defends the scholarship provision, Huckabee's new tone bothers Hispanic leaders like Carlos Cervantes, the Arkansas director of the League of United Latin American Citizens.

"He's trying to be tougher on immigration than we've ever seen him before," Cervantes said. "That's kind of worrisome now. He was willing to work with the communities. I don't see that he's willing to work with us now."

The Republican coalition isn't likely to survive this Presidential election. I've seen more "I'll never vote for x" stories on the right than ever before. In a sense, Mike Huckabee might be the greatest gift progressives have received in a generation.

Peggy Noonan Admits Republican Voters Are Idiots

My friends, we are witnessing, in slow motion, the crackup of the fragile Republican coalition. And it's delightful to watch.

The two main groups in conflict are the economic royalists, the conservatives motivated by greed and keeping their dominance over the poor, and the theocrats, motivated by making state-sponsored religion the law of the land, removing gays from the country and banning abortion. There's always been an uneasy truce between these two camps, but the 2008 election is putting them in conflict. And the best example of this is Peggy Noonan's column in today's Wall Street Journal.

Noonan's subject was Mitt Romney's highly offensive speech on (how there's not enough) faith in America. It was very clear that, far from being a speech about the separation of church and state, it was about how you better have a church, so long as Mitt Romney wants to be the state. Today the Romney campaign refused to acknowledge whether or not atheists have a place in America. And Peggy Noonan speculates why Romney, who represents more of the economic royalist wing, felt the need to insult people who don't share this feeling of faith. By the way, Noonan liked the speech because she essentially likes Romney, but she lets her slip show at the end:

There was one significant mistake in the speech. I do not know why Romney did not include nonbelievers in his moving portrait of the great American family. We were founded by believing Christians, but soon enough Jeremiah Johnson, and the old proud agnostic mountain men, and the village atheist, and the Brahmin doubter, were there, and they too are part of us, part of this wonderful thing we have. Why did Mr. Romney not do the obvious thing and include them? My guess: It would have been reported, and some idiots would have seen it and been offended that this Romney character likes to laud atheists. And he would have lost the idiot vote.

My feeling is we've bowed too far to the idiots. This is true in politics, journalism, and just about everything else. (emphasis mine)

La Noonan couldn't have made it more clear than that; theocrats and so-called "values voters" are idiots, whose intolerance doesn't fit with the model of America. Of course, if any Democrat said this, there would be pure outrage. But that Noonan said it reflects the strain between the theocons and the econocons.

We can also see this in the attacks on Mike Huckabee that we've seen this week. They were incredibly coordinated and transparent. All of a sudden, every traditional media outlet ran with the Wayne Dumond story. When's the last time you saw any giant news story triggered by something in the Huffington Post? It doesn't happen. This was clearly opposition research run amok, as suddenly the royalist wing saw Huckabee, a charismatic theocon, as a threat. We're now seeing the Club for Growth drop ads in Iowa and South Carolina. These ads pretty much are the manifestation of this breakdown in the Republican coalition.

We've heard talk about a third-party candidate from the theocon wing entering the race if Rudy Giuliani or someone insufficient to their beliefs were named the nominee. We're seeing how the other side of this battle fights back; through insults and negative ads. Economic royalists think they own the GOP. They aren't taking kindly to the theocon wing thinking they deserve anything more than lip service.

This is going to be a full-fledged crack-up, and it's about time. It's great news as we move forward toward a more progressive nation.