Feed on Posts or Comments 16 December 2017

2008 Election &Conservatives &Fiscal Policy Richard Falknor on 18 Sep 2008 08:59 am

Keeping Palin front and center – even as Congress dithers

UPDATE September 19 from the WSJ! “Well, that was fast. As we went to press last night, Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke were on Capitol Hill asking Congressional leaders to help them create a new federal resolution agency to arrest the financial panic.With Congress set to leave town next week, Treasury wants everyone to agree by Sunday. That would be a Congressional land speed record, but there’s nothing like a looming election to concentrate a politician’s mind.” Read it all here.

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As Wall Street continues to churn, Daniel Henninger here warns against wasting Palin while Soren Dayton at thenextright.com urges that “Palin should talk about management and government reform.”

WSJ columnist Henniger argues – – –

“The credit-market turmoil is serious, but no campaign has the information Treasury or the Fed are using to work the problem.

Rather than be dragged into the path of the financial storm, the McCain campaign especially needs to refocus on its postconvention momentum. It needs to worry about wasting the political capital Gov. Sarah Palin deposited in the Bank of McCain three weeks ago.

Once Mr. McCain picked Mrs. Palin as his running mate, he demoted ‘experience’ and elevated a government ‘reform’ message. It was the right thing to do. Presidential voters are ambivalent about Beltway-marinated senators like Mr. McCain and Joe Biden. John McCain’s edge is his famous reputation as a reform maverick. So far, though, he is not casting his reform message in large enough terms.

Washington is arguably at its lowest ebb in the public mind since before World War II. Join that fact to Sarah Palin’s personally gutsy and professionally strong reform credentials, and Mr. McCain has the chance to offer voters a reform presidency in historic terms.” (Underscoring Forum’s.)

Thenextright blogger Soren Dayton here similarly urges here:

It seems to me that she should adopt a positive message . . .that bottles together government reform, government competence, management, etc. Jonathan Martin notes that she already mentions government reform on the stump. I see several advantages to this.First, this scratches an itch that the American people actually have. They saw Katrina. They saw Iraq. They see right now the mismanagement of the financial system regulatory framework. She can bring up examples from her own time as governor cutting budgets, etc.

Second, it attacks one of her perceived weaknesses by focusing on her strengths. Barack Obama and his campaign attack her for not having experience (never mind that he has less). By talking about what she has done here, it addresses that uncertainty. This does not weaken the reform message.

Third, it expands the positive contrast with the other ticket. With John McCain, we have leadership and reform. Palin has reform and adds management. This is in contrast to ‘change’ (and what?). This is more meat on the bones of the McCain-Palin ticket. At the same time, this inverts the ‘experience’ attack by talking about the category of government experience that none of the other national candidates have.
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Imagine how this might work. A big event on government management rolling out some plans and bio material. Carli Fiorina, Mitt Romney, Rob Portman and others could validate it with examples of their own government management. An event every other week through the end of the campaign.

Meanwhile the Wall Street Journal editorial staff — “The Fed and AIG” — continue to sound the alarm here:

“The first recourse going forward is for Treasury to help Morgan Stanley and other endangered institutions find new private capital, or, better, private merger partners. Merrill Lynch took itself off the run list by selling to Bank of America. More than a few Merrill shareholders griped about the price, but they did much better than AIG holders will with their 80% dilution to Uncle Sam.

If that fails, then the best and perhaps only recourse is to create an entity on the order of a new Resolution Trust Corporation. Such an agency could become a buyer at a fair and transparent price for distressed debt, as well as the workout home for institutions like AIG that failed because of accounting rules and bad subprime debt but retain great underlying value. (See Zachary Karabell here.)

The details are crucial to making this work right — to avoid political meddling, for example, and to make sure it has an end date. But until home prices stabilize, it may be the only way to stop the panic and serial nationalizations.

We’re told Treasury has a proposal ready to send to Congress, but that the Members have told Mr. Paulson they don’t want to see it until after Election Day. Mr. Paulson fears that if he does call for action and Congress refuses, then the contagion would be even worse. Well, how much worse can it get than a failure or two a week of a major financial institution? The sooner a resolution agency is up and running, the fewer banks will fail and the lower the ultimate cost to the taxpayer.

Mr. Paulson ought to tell Congress that this authority is essential to stopping a panic, and that the need is urgent. If Harry Reid and Nancy Pelosi say they can’t do it until December or later, then they can take responsibility for the nationalizations to come.” (Underscoring Forum’s.)

Unfortunately we have learned that there are members of both parties in Congress who don’t want to step up to the plate for needed action now. 

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