Wednesday, July 16, 2008

the mccain campaign

Last week, Max Bergmann had a piece on The Huffington Post entitled, “The Week That Should Have Ended McCain’s Presidential Hopes.” It listed just a week’s worth of examples of the train wreck that the McCain campaign has become. Of course, the media has a financial interest in the campaign being a “dead-heat” or a “real horserace” – that is much better for ratings. It seems impossible for McCain to commit a “gaffe” no matter what manner of erroneous or contradictory nonsense comes out of his mouth (because a “gaffe”, by definition, is something that the media pundits pounce upon – which cannot happen to McCain). But at some point you can’t avoid getting the impression that he really is a rather weak candidate, to say the least.

Here are just a few examples from the past week or two (starting with the issue voters are most concerned about – the economy):

1/ McCain’s Fiscal Policies:

This is something that never seems to get any serious media attention, maybe because it involves really complex things like math rather than just people shouting slogans at each other. But McCain’s tax and spending proposals are ludicrous.

Back in February, McCain said he would balance the budget in his first term. Then, in April when he proposed a series of costly tax cuts for corporations and high earners, he abandoned that pledge and said he would balance the budget by the end of his second term (assuming he can live that long). Then, on Monday of last week, the McCain campaign reversed itself again and reaffirmed that he would, indeed, balance the budget in his first term. That was followed by an immediate “clarification” from McCain’s top economic advisor saying the commitment was to balance the budget by the end of a second McCain term.

This is all absurd. McCain has proposed to extend all of Bush’s tax cuts and add a bunch of other tax cuts for the rich, like lowering the maximum corporate tax rate from 35% to 25%. According to the non-partisan
Tax Policy Center, McCain’s tax cuts would add $4 TRILLION dollars to the federal deficit over 10 years. And that’s not including McCain’s proposed spending increases.

The McCain campaign has not explained how it would balance the budget while subtracting $4 TRILLION in revenue. As a means of balancing the budget, McCain has said he would veto all Congressional “earmarks”. But in the current fiscal year all Congressional “earmarks” total only
$18.3 billion (down 23% since Republicans lost control of Congress). “Earmarks” have become synonymous with “pork,” and while that is probably generally the case, not all are wasteful. An “earmark” just means that Congress has directed that spending be dedicated to a particular purpose or project. But even if every single “earmark” was eliminated, the savings wouldn’t total even 1/20th of the tax cuts McCain proposes.

As the Washington Post pointed out in an
editorial on Monday, McCain’s claims that he would balance the budget by 2013 don’t hold water. Indeed, they are not even remotely plausible. But, with few exceptions, that isn’t being reported. A multi-trillion gap in the math is treated as if was just a matter of opinion. If McCain says he will balance the budget, that is reported “objectively” with “balance” provided by an Obama spokesman or some other person on the “other side” saying otherwise.

On a related subject …

2/ Phil Gramm:

Give McCain credit. He has
admitted, “The issue of economics is not something I’ve understood as well as I should.” Unfortunately, he followed that by saying, “I’ve got Greenspan’s book.” Given the current fall-out from Greenspan’s credit-boosting policies, that isn’t exactly reassuring.

Even less reassuring is the fact that – at least until last week – one of his main economic advisors was former Senator Phil Gramm. As FORTUNE magazine reported in February (“
McCain’s econ brain”), “McCain's chief economic adviser - and perhaps his closest political friend - is the ultimate pure play in free market faith, former Texas Senator Phil Gramm.” The article went on to note that, “most of [McCain’s] current positions are vintage Gramm indeed”.

Of course, we all heard
Gramm last week dismiss our current economic problems as a “mental recession” and the country as a “nation of whiners.” Ordinarily, I would put this in the “gaffe” category – a typical media campaign distraction. But Gramm’s statement is representative of the view McCain himself has stated repeatedly:

January 2008:

“As far as putting additional money in taxpayers pocket, that's fine, because a lot of it is psychological. Because I agree the fundamentals of our economy is still strong.”

Back in
April 2008:

“[A] lot of our problems today, as you know, are psychological — the confidence, trust, the uncertainty about our economic future, ability to keep our own home. [A tax rebate] might give [the American people] a little psychological boost.”

At one of the Republican debates:

“On the issues of rebates, fine, part of this is psychological. Part of the problem we have of course in any recession is psychological.”

Watch McCain in his own words in this good little video.

What Gramm said was not a “gaffe” – it was a McCain talking point.

But even more relevant is Gramm himself. As Arianna Huffington has
pointed out, Gramm played a role in just about every disastrous economic policy of the past couple of decades:

“He's left his fingerprints on some of the worst economic debacles in U.S. history. He was a champion of energy deregulation, which gave us Enron and blackouts and price gouging. He was a champion of deregulating the savings-and-loan industry, the bailout of which cost taxpayers hundreds of billions of dollars.”

Gramm could be the subject of his own long dissertation. But to name just two of his achievements: He wrote into law the infamous "Enron loophole", allowing energy futures to be traded without federal oversight. Various investigations of the Enron collapse have pointed to this loophole as crucial to Enron's manipulation of the California energy market, which provoked an energy crisis in the state in 2000 and 2001. He was also behind the repeal of the Depression-era Glass-Steagall Act that separated commercial banking from investment banking and insurance services. That helped set in motion the whole unregulated parallel banking system that has expanded credit and spread risk throughout the global financial system in ways that we are only beginning to discover.

If you had to identify individuals responsible for the current credit crisis, Gramm would probably be second only to Alan Greenspan.

And this is (or was) (as FORTUNE noted) “McCain's chief economic adviser - and perhaps his closest political friend”.

3/ McCain: The Social Security system is an “absolute disgrace”:

At a town hall meeting in Denver, Colo., on July 7, McCain, said,

"I'd like to start out by giving you a little straight talk. Under the present set-up, because we've mortgaged our children's futures, you will not have Social Security benefits that present-day retirees have unless we fix it. And Americans have got to understand that. Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today. And that's a disgrace. It's an absolute disgrace, and it's got to be fixed."

This is one that the McCain campaign tried to dismiss as a “gaffe”. A McCain spokesman said, “"the disgrace is our failure to fix the long-run imbalance in Social Security.” But McCain himself made it clear in a
subsequent interview that is not what he meant: He wasn’t saying the problem was the “long-run imbalance”; he was saying that Social Security system itself, as it was established, is the problem: “Let's describe it [i.e. Social Security] for what it is. They pay their taxes and right now their taxes are going to pay the retirement of present-day retirees. That's why it's broken, that's why we can fix it.”

According to McCain, the problem with Social Security is that it is a taxpayer-funded, pay-as-you-go system. Of course, that ignores the Social Security Trust Fund. Who knew when the Greenspan Commission in the late ‘80’s raised payroll taxes to bring Social Security’s long-term finances into balance that it was all a scam and that all the surpluses the Social Security system has been running for the past several decades were meaningless. By the way, if you buy that logic, then raising taxes doesn’t help the “long-term imbalances” of Social Security – it is just another scam. Indeed, by that logic, there is NO WAY to bring it into balance long-term. All tax increases in the near term are meaningless in the long term. The only thing you can do is cut future benefits.

This is a subject beyond my immediate focus. But it is important because it was the basis of Bush’s attempted Social Security bamboozlement at the beginning of his current term. According to the
2008 report of Social Security Board of Trustees, the Social Security system as it is currently configured can pay 100% of promised benefits through the year 2041. The long-term actuarial short-fall actually decreased in the past year and is the smallest shortfall that has been projected since the trustees’ 1993 report. Even after 2041, with no changes, the Social Security system could still pay 78 percent of full promised benefits through the end of the 75-year projection window in 2082.

[If these numbers sound different from the scare stories you’re used to hearing from opponents of Social Security that is because they always deceptively lump together Social Security and Medicare. Medicare is an entirely different story. It has a HUGE long-term funding gap – made MUCH bigger by the Part D Medicare program enacted by Bush and the Republican Congress in 2005 without even discussion of any funding mechanism. The Medicare problem is part of the much bigger long-term problem of health care cost containment that is not limited to the public sector. But that is a whole separate topic and is not relevant to Social Security.]

So, according to McCain, it is an “absolute disgrace” that the Social Security system, without minor tweaks, will only be able to pay 78% of promised benefits between the years 2041 and 2082. Anyone concerned about Social Security’s long-term shortfall ought to be more concerned about the long-term fiscal impact of extending the 2001 and 2003 tax cuts – as McCain has promised to do. Making the Bush tax cuts permanent will cost more than three times as much, over the next 75 years, as the 75-year shortfall in Social Security. Now that is an “absolute disgrace.”

So, then, what is McCain really talking about? The same thing Bush was: His desire to dismantle the Social Security system as we know it.

For those with a short memory, here is a bit of McCain’s
history of supporting Bush’s attempt at “privatizing” Social Security:

Without privatization, I don’t see how you can possibly, over time, make sure that young Americans are able to receive Social Security benefits.” [C-Span Road to the White House, 11/18/2004]

“As part of Social Security reform, I believe that private savings accounts are a part of it — along the lines that President Bush proposed.” [Wall Street Journal, 3/3/2008]

Not only was McCain “a big booster” of Bush’s 2005 plan to privatize Social Security, but one of his top economic advisers, Carly Fiorina, recently told conservative radio host Bill Bennett that McCain “supports private accounts as one of the ways to reform the system” and that “he will continue to be supportive of those.”

But McCain is now denying that he was ever for “privatization” of Social Security. Last month he said, ““I’m not for, quote, privatizing Social Security. I never have been. I never will be.” Like Bush (and most other Republicans), he passes off that outright lie through semantics. They have simply ditched the term “privatization” down the memory hole (because the policy was so hugely unpopular when Bush proposed it) and are now calling the exact same policy “private accounts.”

Have you heard ANY of this discussed in the corporate media? Think McCain would stand ANY chance of winning Florida – to take one example – if it did? (It was actually Bush’s attempt to dismantle Social Security that began his precipitous fall in the polls, not the Iraq war.)

This commentary has already gone on much longer than I had intended. But here are just a few other items from the McCain campaign over the past week that should have ended his presidential hopes (per

4/ Iraqi leaders call for a timetable for U.S. withdrawal, McCain gets caught in a bizarre denial and flip flop. The Iraqis now want us to begin planning our withdrawal - McCain however wants to stay foooorrreeevvveerrrr. So what does McCain say - First, he refuses to accept Maliki's statement as being true. Then he concedes that it was an accurate statement, but was probably just a political ploy to curry favor with his own people and WOULD NOT influence his Determination to keep US troops in Iraq indefinitely. Yet, McCain in 2004 at the Council on Foreign Relations said that if the Iraqis asked us to leave, we would have to go. No matter what. But that was apparently a younger and less experienced John McCain. But let's just look at his comment that Maliki's statement is "just politics." If that is true, then it must also be true that the American military presence in Iraq is so unpopular with Iraqis that the government is forced to push for a timetable in order to survive at the ballot box. That's a reason to stay for 100 years….

5/ McCain's deficit plan includes bringing the troops home represents a major Iraq flip-flop. Speaking of the long-term military presence - a story that has gotten absolutely no attention is that McCain now believes the war will be over soon. The economic forecasts made by his crack team of economists predict that there will be significant savings during McCain's first term because we will have achieved "victory" in Iraq and Afghanistan. The savings from victory (ie the savings from not having our troops there) will then be used to pay down the deficit. The only way this could have any impact on the deficit in McCain's first time is if troop withdrawals start very soon. So McCain believes victory is in our grasps and we can begin withdraw troops from Iraq pretty much right away -- doesn't sound that different from Obama's plan does it. Someone should at least ask McCain HOW HE DEFINES VICTORY - and why he thinks we will achieve it in the next couple of years.

6/ McCain campaign misled about economists support. In the major press release the McCain campaign issued to tout its Jobs for America economic plan that would balance the budget in 4 years, it included the signatures of more than 300 economists who the campaign claimed to support the plan. Only problem is that the economists were actually asked to sign up to SOMETHING COMPLETELY DIFFERENT. Um, hello?

7/ McCain makes a joke about killing Iranians. Haha... that's just McCain being McCain. I am sure that is exactly how it is being reported in Tehran. This guy is running for President not to become a talk radio pundit. Yet according to the AP this was just a humanizing moment between candidate and spouse - I am not sure when joking about the deaths of civilians became humanizing.

8/ McCain demonstrates he knows nothing about Afghanistan and Pakistan. McCain said "I think if there is some good news, I think that there is a glimmer of improving relationship between Karzai and the Pakistanis." Pat Barry notes how crazy this comment is..."Just what "glimmer" is McCain talking about?? Maybe he's referring to President Karzai's remarks last month, which threatened military action in Pakistan if cross-border attacks persisted? Or maybe McCain is talking about Afghanistan's allegations that Pakistan's ISI was involved in a recent assassination attempt on Karzai? Maybe in McCain's world you could call that a silver-lining, but in reality-land I'd call it something else."

Any one of these incidents and comments would dominate the news cycle if they came from the Obama campaign. Yet McCain barely gets a mention. The press like to see themselves as political referees - neutral observers that call them like they see em'. But they want this to be a horse race and so all the calls right now are going one way. How else can you explain the furor last week over the Obama "refine" comment - which represented zero change in Obama's position on Iraq - and the "swift boat" mania over Wesley Clark's uncontroversial comments (psss... by the way McCain exploits his POW experience in just about every ad - yet he says he doesn't like to talk about it).

Finally, I would add:

9/ McCain “flip-flops” on gay adoption:

On Sunday, in a New York Times interview, McCain said he opposes gay adoption:

Q: President Bush believes that gay couples should not be permitted to adopt children. Do you agree with that?

Mr. McCain: I think that we’ve proven that both parents are important in the success of a family so, no I don’t believe in gay adoption.

Q: Even if the alternative is the kid staying in an orphanage, or not having parents.

Mr. McCain: I encourage adoption and I encourage the opportunities for people to adopt children I encourage the process being less complicated so they can adopt as
quickly as possible. And Cindy and I are proud of being adoptive parents.

Q: But your concern would be that the couple should a traditional couple.

Mr. McCain: Yes.

Yesterday, a spokesman said McCain supports gay adoption:

“[A]s an adoptive father himself, McCain believes children deserve loving and caring home environments, and he recognizes that there are many abandoned children who have yet to find homes. McCain believes that in those situations that caring parental figures are better for the child than The alternative."

10/ McCain cites current events in Czechoslovakia:

Yesterday, for the second time in two days, John McCain has referred to current events in “Czechoslovakia” – a country that officially ceased to exist in January of 1993. At a New Mexico town hall campaign event, McCain said:

“And I regret some of the recent behavior Russia that has exhibited, and I’ll be glad to talk about that later on including reduction in oil supplies to Czechoslovakia after they agreed with us on a missile defense system, etcetera.”

On Monday, McCain made virtually the same statement about recent Russian moves that troubled him, citing that country’s attempt to reduce “the energy supplies to Czechoslovakia.”

In a bit or Orwellian re-writing of history, McCain’s campaign sent reporters a statement on Monday evening, which quoted McCain calling the nation “the Czech Republic” twice.

Believe it or not, there’s more – just from the past couple of weeks. But you get the idea.

The McCain campaign is a train wreck – because McCain is a train wreck. And at some point people are going to begin to figure that out – despite the media’s best efforts to protect McCain and keep this thing a “horserace.”

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