Put on the Brakes
As noted in the previous post, I'm quite convinced that some drastic action needs to be taken to avoid a cascading and debilitating series of crises. But the more I look at this plan, the more wrongheaded it seems. But if I'm understanding this deal, the taxpayers are going to pony up close to a trillion dollars to take bad debts off the hands of financial institutions who were foolish enough to make the deals in the first place. And in exchange, I think the tax payers get nothing? Sebastian Mallaby makes the good point that this is radically different than the S&L Crisis RTC which was liquidating the assets of thrifts that had already gone belly up -- paid the ultimate price, as it were. And as the insurer on the accounts, the government inherited the assets anyway. It was just a matter of selling them off. But here the point is to take these bad debts off these companies' hands so they can go back to being profitable businesses. This is moral hazard on steroids if I'm understanding this right.
Also, according to the Journal, finance industry lobbyists are already giving orders to Republican hill staffers not to allow any meaningful reforms or protections for taxpayers. So, just the money. No strings attached.
House Republican staffers met with roughly 15 lobbyists Friday afternoon, whose message to lawmakers was clear: Don't load the legislation up with provisions not directly related to the crisis, or regulatory measures the industry has long opposed."We're opposed to adding provisions that will affect [or] undermine the deal substantively," said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, whose members include the nation's largest banks, securities firms and insurers.
A deal killer for the group: a proposal that would grant bankruptcy judges new powers to lower the principal, interest rate or both on a mortgage as part of a bankruptcy proceeding.
Late Update: Mulling this more and listening to the insights in your emails, the key clearly is how much the government pays for these distressed assets. They may be bad debts. But that doesn't mean they have no value at all. Bought at the right prices and given time on the books -- which the government is uniquely in a position to allow them to do -- the government could even turn a profit on some of them. But the key is at what price they're bought and whose get bought. That seems like precisely the kind of process that requires oversight and accountability to make sure the taxpayer doesn't get fleeced.
Dancing on the Edge of the Abyss Update: Paul Krugman has a post up that I think tracks basically along the lines I've raised -- only from the viewpoint of someone who has a profound understanding of these things rather than no understanding at all. He says, no deal.
Yep, It's Crap Update: I can't seem to find any of the people who I respect thinking the bailout plan, as presented, is a good idea.
--Josh Marshall
Before We Jump In
There are subjects I know a lot about and others I know very little about. And the high-wire financial mess we're currently in falls clearly into the latter category. But I know enough to be troubled that we appear ready to give upwards of a trillion dollars in unfettered and unreviewable spending authority to the ... let's face it, the Bush administration, the folks who did such a bang up job in Iraq and New Orleans.
This morning a friend told me it's like the Iraq War all over again -- Shock & Awe, followed by an occupation of Wall Street, and all with no exit plan.
In all seriousness, Paulson seems like a very able guy. And without a roadmap in hand, he appears at least to have avoided catastrophe so far. But let's take a moment to realize just how much money we're talking about.
It is probably inevitable in such cases that the public gets stuck with a lot of the bill for the recklessness and perhaps even criminality of the people who got us into this mess. Even if it is their 'fault', we (as a country and its citizens) are simply too bound up with the consequences of their actions to let them play out in an unfettered manner.
But we need both some orderly system of decision making and some conditions imposed on the people, and the industries, that brought us into the ditch.
Here's a note received today from one TPM Reader ...
The current proposal for the bailout -- $700 billion to be used however the administration chooses to use it -- should not be allowed to pass in its current form. This is the same administration that has mismanaged Iraq, DOJ, Katrina. Why can they be trusted to preside over this in a way that is even-handed and for the benefit of the taxpayers? As Krugman and Atrios have pointed out, if insolvency rather than liquidity is the real problem, then this may not even fix the problem. Even if there is some modest stimulus package appended to the bill, the bill will still be a bad idea if it gives such unprecedented and unchecked power to the Bush administration.It would be great if you guys could lead a push -- like the anti-SS privatization one from a couple of years ago -- to impose limits and rules on the bailout. The Dean Baker post on your site is a good proposal and maybe it makes sense to press congressman to agree to elements of it, particularly the caps on executive comp which has gone completely out of control here. It also makes sense to regulate the CDS market -- $65 trillion in it, more than in banks, with no transparency.
Make those who are to be rescued agree to some conditions so that this will not happen again. Otherwise, this is basically giving Wall Streeters (who are to be fair friends with both parties) a lot of money for nothing in exchange.
We'll be publishing more of your emails. So please let us know your thoughts.
--Josh Marshall
Election Central Saturday Roundup
Barack Obama attacks John McCain on Social Security, warning voters in Florida that the financial crisis would have led many people to lose their retirement money under such a system. That and other political news in today's Election Central Saturday Roundup.
--Eric Kleefeld
Lipstick on a Pig in a Poke
TPM Reader CR:
Please please be against this bailout. I cannot begin to think of all the myriad reasons why this bailout as it is being floated is a bad idea of the most colossal of proportions, but I will try.Why are there no [details], because it will be a pig in a poke. There will be a bums rush just like when Bush tried to pressure Congress into passing the Protect America Act. They will wait until right before the election and try and jam the Democratic party up and say that if they do nothing then we are all going to Hell in a hand basket. There will be nothing good about this plan unless you are a big banking and insurance CEO. What a surprise!
While the Resolution Trust Corporation was a moderately well regarded solution to the 80's S&L scandal, this proposed idea does not, and almost certainly will not be similar, though its proponents will claim it is. The RTC took over failed banks and sold off the banks' assets. Very simple. It was simply an enormous bankruptcy trustee.
The crucial difference here is that this bailout will not be taking over failed banks, just taking over the bad debts of the failed banks. So the banks will be able to live on and be free to do the exact same thing all over again. I cannot think of a worse philosophical, policy, or practical solution than this.
You have banks and investment houses that lobbied Congress to remove restrictions on their activities and now their own activities have loaded them down with the crushing weight of bad debt from which they all profited handsomely before they got stuck holding the pile of s**t. ...
If we are going to subsidize taking over these bad debts, then we should be taking over the entire banks and liquidating them. Period.
TPM Reader BC:
Why do I have the feeling that this bail out of the financial system is going to be the market equivalent of the Patriot Act? We're in a crisis which gives the Bush Administration an opportunity to push legislation through Congress with little or no debate. In six months from now, how many "little surprises" are we going to find out about? Gifts to the industry or Bush Administration that got inserted into a bill that was approved without being read -- let alone, thoroughly examined -- by most members of Congress. I agree something needs to be done but do we really trust the people that brought us this mess to develop an optimal solution? Our financial markets operated safely and successfully for over half a century under the Glass-Steagall regime. Since we started deregulation, it has been crisis on top of crisis. Democrats should not agree to any bail out that does not include reintroduction of regulatory safeguards and effective oversight. Unfortunately, I have heard almost nothing from them except for Barney Frank. That leads me to conclude that they will be a.) unprepared to present a plan and/or b.) unable to articulate it in a way that can win public support.
TPM Reader TC:
Is it just me? With this last enormous bail out of our Wall Street Investors/Corporate America, I have this picture in my mind of these cartoon Republicans sweeping out the last of the people's money from the vaults. It took eight years, but they managed to get it all. The War/Private Contractors, the Oil Companys, the deregulation and fleecing of America. These Republicans started their tour of duty eight years ago with the coffers overflowing, flush with cash.
--David Kurtz
Innovative Products
John McCain: "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."
Late Update: Obviously, to rejigger that wonderful line, this is not excellent news for John McCain. If the Obama folks are smart -- and they are -- they'll ride this one all the way to the election. But among ourselves let's admit that you could only be surprised by this statement if you were willfully ignorant to what McCain and his key advisors believe. Remember, his top economics advisor is former Sen. Phil Gramm, the legislative architect of the banking and financial services deregulation that led to the current crisis. And his health care proposals are all off-the-rack Heritage Foundation-style initiatives based on the premise that people have too much, not too little insurance. The only thing jarring about the statement is the degree to which it has been overtaken by events as McCain now tries -- a la Palin the Earmark-Killer -- to rebrand himself as a Mr. Wall Street oversight and transparency when he's been pushing deregulation for 25 years.
--Josh Marshall
Can You Spare Us A Minute?
Let me ask you a favor. It helps TPM bring you more breaking videos you want to see, costs you nothing, and takes only ten or fifteen seconds. Please take a moment, go to our TPMtv page at Youtube and subscribe by clicking on the yellow 'subscribe' button on the upper left.
Many of you are fans of our four day a week TPMtv episodes. Starting in early October, TPMtv will be moving from the 'Veracifier' channel on Youtube to our TPMtv channel. So you'll want to make sure to subscribe to TPMtv to continue getting updated.
So if I haven't already convinced you, please take a moment and go over to the TPMtv Youtube page and subscribe to our TPMtv channel so you won't miss a single episode.
--Josh Marshall
Highlightin' the Bogosity
We've got more on the pay cut that Sarah Palin claims she took as mayor. Bottom line is that she was still making more when her term ended than when it began. Greg Sargent has the details.
--David Kurtz
His Standard MO
Did John McCain just make his first edge toward that (hollow) apology that Joe Klein says he'll never accept?
(To be clear: Joe was referring to McCain's established pattern of engaging in sleazy or dishonest behavior knowing he can latter come back to the Washington bigs, moral hat in hand, for absolution.)
So after running the sleaziest and most dishonest campaign in modern presidential campaign history, now McCain 'regrets' the negativity.
--Josh Marshall
Classic McCain
John McCain will tell you that if you're against government bailouts of the private sector, he's your man. But check out McCain's track record on the three major bailouts engineered by the Fed this year alone:
John McCain, on the Bear Stearns bailout (March 2008):
"Asked whether the Fed went too far in helping Bear Stearns, McCain said: "It's a close call, but I don't think so." He said he doesn't support federal bailouts unless it has catastrophic effects on the entire financial marketplace and there were indications that a Bear Stearns failure would have rippled across the entire economy."
McCain, on the Freddie Mac/Fannie Mae bailout (July 2008):
"With combined obligations of roughly $5-trillion, the rapid failure of Fannie and Freddie would be a threat to mortgage markets and financial markets as a whole. Because of that threat, I support taking the unfortunate but necessary steps needed to keep the financial troubles at these two companies from further squeezing American families."
McCain, earlier this week on the AIG bailout:
"Now on the bailout itself, I didn't want to do that. And I don't think anybody I know wanted to do that. But there are literally millions of people whose retirement, whose investment, whose insurance were at risk here. They were going to have their lives destroyed because of the greed and excess and corruption."
Fair enough. But here's what McCain had to say about bailouts just this morning:
U.S. Republican presidential candidate John McCain admonished the Federal Reserve Friday to get out of the business of bailouts and get back to managing money supply and protecting the purchasing power of the dollar."The Federal Reserve should get back to its core business of responsibly managing our money supply and inflation," the Arizona senator told a group of business leaders in Wisconsin, an electoral battleground state.
"It needs to get out of the business of bailouts."
Once the Fed gets through with all these bailouts McCain is supporting, it better get back to its real business!
--David Kurtz
It's All Schumer's Fault
Sen. Ted Stevens (R-AK) is trying to get TV stations in Alaska to stop running the DSCC's ads against him -- so far without success.
--David Kurtz
Telling
If Sarah Palin removed her public safety commissioner for cause (and not because he refused to fire her ex-brother-in-law) why does she consider what a jerk her ex-brother-in-law is to still be the other side of the Trooper-Gate story?
--David Kurtz
On Offense on GOP Voter Suppression
From a longtime reader ...
A week ago, as the McCain campaign continued to drive the media narrative and consolidate its lead in the polls, you wrote:"...I take it that their position now is that they're not going to get knocked off their game. Instead they're staying focused on the ground game in the dozen and a half states where they believe the race will be won or lost....So we're left to take it on faith that they know what they're doing, without having much way of seeing for ourselves."
It's a fair point. And though it's tempting now to dismiss the last few weeks as a rapidly-dissipating bounce, and to applaud the Obama campaign for sticking to its game plan, the truth is that we don't know much more about how the campaign is unfolding on the ground than we did a week ago. If the polls didn't tell the whole story then, they're not much more enlightening now.
With that in mind, it's worth paying attention to a little-noted development this week in Michigan. The Obama campaign filed suit in state court to block the GOP's "Lose your home, lose your vote" scheme, a plan to challenge the eligibility of voters whose homes have entered foreclosure - despite the fact that many remain resident in those homes.
It's a typical GOP disenfranchisement campaign, and it's nice to see the Obama folks taking a proactive position.But the really interesting part of the filing is the effort by the Obama campaign to demonstrate, in a court of law, that this behavior is "part of a broader state and nationwide campaign by the Republican Party to suppress the vote." And, upping the ante, the filing alleges that "Defendant Republicans have a long history of engaging in coordinated, systematic campaigns to suppress and deny the right to vote of American
citizens. Those campaigns are often targeted at various racial groups, language minorities, or individuals of low or modest economic circumstances whom Defendant Republicans believe are unlikely to support them in political campaigns."The filing is aimed at a particularly egregious and politically ill-advised initiative. Not only are the Republican claims here tendentious, but they're targeted at a sympathetic group - largely white, financially-struggling voters, caught up in the economic crisis.
But the suit invites the court to go a step further - to recognize a persistent pattern of egregious misconduct; to find that this is a local instance of a state and national campaign; and in so doing, to link this initiative with other, less politically toxic drives.The court is more likely to rule narrowly than to recognize those claims in its decision. But by intervening directly in a local case, the Obama campaign is signaling that a national campaign to disenfranchise voters will receive a national response. And by reframing a technical debate over local election laws as a broader discussion of fundamental rights, the Obama campaign has already won. The GOP has long employed the chimerical notion of "voter fraud," and preyed upon unpopular groups
like students, non-Anglophone Americans and ex-felons. But they made a strategic miscalculation by going after homeowners suffering foreclosures. And by linking this effort at disenfranchisement to the others, the Obama campaign is going to make them pay.
(The filing is here.)
--Josh Marshall
Election Central Morning Roundup
Sarah Palin's campaign staff declines to say whether the vice president is part of the executive branch or the legislative branch. That and the day's other political news in the TPM Election Central Morning Roundup.
--David Kurtz
Spain Goof Consensus Emerges
After a day of gasps, guffaws and eyes rolled over John McCain's decision to reassign Spanish Prime Minister Zapatero to run an unnamed country in Latin America, it seems we are arriving at a rough consensus about what happened and what part of it matters.
As I posited earlier today, the most logical conclusion is that McCain simply didn't understand the question and tried to wing it. It may have been due to fatigue, lack of attention, confusion or simply an inability to penetrate the interviewer's fairly thick accent, or perhaps a combination of one or more of the above. It is only if you insist on the preposterous assumption that McCain fully understood and grasped what the interviewer was asking him (i.e., the position of McCain's foreign policy advisor Randy Scheunemann) that you have to conclude that McCain believes that Spain is a country in Latin America which may be bent on America's destruction.
In itself mishearing or misunderstanding a question isn't the worse thing in the world, though being too proud to ask for the question to be repeated and going with the assumption that the mystery leader must be some Hugo Chavez type character out of Woody Allen's Bananas does suggest a certain recklessness of character.
The McCain campaign might simply have said that he was on the phone and didn't understand. But they're obviously unwilling to do that since they've staked so much of his candidacy on his foreign policy chops.
In any case, a consensus appears to be emerging that the really shocking lapse was not the original gaffe but how the campaign chose to deal with it. Rather than copping to the goof, they decided to stick to the nonsensical statements and risk, should McCain win in November, significant damage to our relations with a major NATO ally. Coming to basically similar conclusions are Newsweek, Joe Klein in Time, Chris Orr at The New Republic and many others.
So to restate, I think the simplest explanation is that McCain didn't understand what he was being asked. And instead of trying to clarify, he assumed the interviewer, who had already asked him about Chavez and Castro, must be quizzing him on some other Latin American strongman who was up to no good. As so often with McCain, he tried to wing it. I think the available evidence is consistent which much less generous readings of the event. But this read is plausible. And Scheunemann, whose lack of experience in press work was painfully on display today, acted with characteristically knuckle-headed aggression and doubled-down on McCain's nonsensical statement.
And whatever the misunderstanding, let's face it. When a president or presidential nominees gets confused in an interview, appears to say that a European country is in the Western Hemisphere and inadvertently makes highly belligerent statements toward a major ally, that's a big problem.
(ed.note: For more on the Inane On Spain controversy, check out Americablog, where John Aravosis has been on the story all through the day.)
--Josh Marshall
Is He Catching Fib Bug From McCain?
Georgian President Saakashvili denies hiring Washington lobbyists ...
President Saakashvili has strongly denied that his administration was in any kind of "lobbying relations" with Randy Scheunemann, a foreign policy advisor of the Republican presidential candidate, John McCain.He was asked about the matter at the BBC's HARDtalk, when President Saakashvili was speaking about the huge support Georgia had in the United States.
"We've been getting huge support from the U.S. administration," he said and added that this support was coming not only from President Bush and his administration, but also from the both presidential candidates in the United States.
When saying this, an anchor, Stephen Sackur, interrupted Saakashvili and asked him: "Nobody would deny it for one second, that you have fantastic PR in Washington and many supporters, some say that partly because you spend millions of dollars on lobbying and PR in Washington not least with Mr. McCain's chief foreign policy advisor [Randy Scheunemann], he has received lot of money in his strategy organization [Orion Strategies] from your government; so you do have PR friends, but when it comes to practicalities what have the Americans have actually done for you to stop the Russians doing what they want on your territory?""You've just sounded like Mr. Putin right now," Saakashvili responded with smile on his face. "What millions of dollars? What lobbyist?.. We do not have millions of money to spend for anything especially for lobbying."
Needless to say, Saakashvili had McCain's foreign policy Scheunemann on the payroll until quite recently. And he still retains Scheunemann's firm.
(ed.note: Special thanks to TPM Reader AR for the tip.)
--Josh Marshall
Ahem, We Know Where You Live
The McCain camp is muscling the local press covering Trooper-Gate in Alaska.
--David Kurtz
Punk'd
Wow, Time's Michael Scherer might want to dial in on the Social Security policy debate a bit more thoroughly next time. Ouch. Not pretty. (He doesn't seem to know any of the backstory about privatization, private accounts, personal accounts, etc. ... Did I mention 'ouch'?
--Josh Marshall
TPMtv: Inside McCain's Spanish Fly
We've been bringing you the latest through the day. Now in today's episode of TPMtv, you can hear John McCain's Spain goof and the two reasons why the explanation from his top foreign policy adviser just doesn't add up ...
Full-size video at TPMtv.com.
--Josh Marshall
Not Ready for Prime Time
Ouch ... (from CNN) ...
Sarah Palin likes to tell voters around the country about how she "put the government checkbook online" in Alaska. On Thursday, Palin suggested she would take that same proposal to Washington."We're going to do a few new things also," she said at a rally in Cedar Rapids. "For instance, as Alaska's governor, I put the government's checkbook online so that people can see where their money's going. We'll bring that kind of transparency, that responsibility, and accountability back. We're going to bring that back to D.C."
There's just one problem with proposing to put the federal checkbook online - somebody's already done it. His name is Barack Obama.
--Josh Marshall
Our Economy Is FUN-damental!
At TPMCafe Reed Hundt, former FCC chairman, takes us through a series of charts and graphs that show some of the most troubling trends in the American economy.
He writes: "At least when Bush came in, he was dealing with a huge surplus. He frittered it away. But McCain has nothing to fritter away."
--Lila Shapiro
Wow ...
From the Post:
Putnam Investments has closed a $12.3 billion money-market fund to limit losses to its investors, the large mutual fund company said today. The highly unusual announcement is the latest sign that tremendous financial pressures are now threatening even some of the safest kinds of investments.The Prime Money Market Fund was open only to institutional investors. Putnam said in a statement that its board decided to close the fund last night after receiving a large number of redemption requests. The company said it could honor those requests only by selling assets at a loss, reducing the value of the remaining shares.
Putnam said it decided instead to liquidate the fund and spread any losses evenly among all the investors. "We wanted to treat all shareholders equally," said spokeswoman Laura McNamara. She said it was "premature" to discuss how much of a loss, if any, shareholders will incur.
--David Kurtz
Another Chink in the Bio
Did Sarah Palin really take a pay cut as mayor, as she claims?
--David Kurtz
What They're Saying ...
It seems the Post's Karen DeYoung isn't buying Randy Scheunemann's line that McCain wasn't confused just hardcore (from an online chat this morning) ...
McCain seemed sort of foggy in the interview, much of which was about U.S. relations with Latin American baddies Hugo Chavez and Evo Morales. Then interviewer asked about Zapatero and McCain seemed to be winging it, appearing to think that Zapatero was the leader of someplace in Latin America and reciting the same rote answer as for the others about not meeting with leaders who don't support freedom and the U.S.
Meanwhile, Joe Klein thinks it's not such a hot idea to put "a chill in the relationship with one of our NATO allies simply because McCain misheard a question."
Meanwhile, Marc Ambinder gave Randy Scheunemann another bite at the apple after it became clear that McCain said precisely the opposite in April of what Scheunemann says he intended to say yesterday. Saith Schuenemann ...
In this week's interview, Senator McCain did not rule in or rule out a White House meeting with President Zapatero, a NATO ally. If elected, he will meet with a wide range of allies in a wide variety of venues but is not going to spell out scheduling and meeting location specifics in advance. He also is not going to make reckless promises to meet America's adversaries. It's called keeping youtr options open, unlike Senator Obama who has publically committed to meeting some of the world's worst dictators unconditionally in his first year in office.
So saying he might meet with Zapatero might amount to making "reckless promises to meet America's adversaries"? It's not easy being as deep in a hole as Randy is at the moment. But America's adversaries? He might want to take a glance back at the NATO charter, which of course commits the United States to treating any attack on Spain as an attack on America. He's really willing to create a diplomatic incident just to avoid admitting that McCain got confused about what he was being asked. On the other hand, I guess Randy's nonchalance about binding NATO treating obligations puts his insistence on getting Georgia into NATO into a rather different light.
For the moment I guess he's sticking to the line that McCain actually has Spain on probation as a potential member of the Axis of Evil 2.0. And on this US News has some helpful follow up.
--Josh Marshall
Good Luck With That
Former Sen. George "Macaca" Allen (R-VA) will be a featured speaker at a minority outreach rally Virginia Republicans have thrown together.
--David Kurtz
Correction of the Day
From the NYT:
Editors' Note: September 18, 2008An earlier version of this article cited two sources who were said to have been briefed on a conversation in which John J. Mack, chief executive of Morgan Stanley, had told Vikrim S. Pandit, Citigroup's chief executive, that "we need a merger partner or we're not going to make it." On Thursday, Morgan Stanley vigorously denied that Mr. Mack had made the comment, as did Citigroup, which had declined to comment on Wednesday.
The Times's two sources have since clarified their comments, saying that because they were not present during the discussions, they could not confirm that Mr. Mack had in fact made the statement. The Times should have asked Morgan Stanley for comment and should not have used the quotation without doing more to verify the sources' version of events.
Ouch.
--David Kurtz
Chin-Scratching Big Think on McCain's Zapatero Gaffe
Okay, a moment to take stock on the embarrassing McCain gaffe. As noted earlier, despite the fact that McCain repeatedly suggests that Spain is a country in Latin America, McCain's foreign policy advisor Randy Scheunemann, insists that McCain wasn't confused, knew exactly who Zapatero was and meant every word of what he said. So with the McCain campaign sticking to its guns, let's review the possibilities of what happened here.
Option #1: McCain is so addled he not only doesn't know who Zapatero is but doesn't even know where Spain is located.
Option #2: McCain was not confused but actually meant his very belligerent comments about Spain and the Zapatero government (Scheunemann's line).
Option #3: Through some mixture of confusion and inability to understand the interviewer's accent, McCain was confused about who he was talking about and decided to wing it, assuming that the person he was being asked about was some other left-wing strong man from Latin America and answering with the standard boilerplate about standing up to America's enemies.
So let's run through the options. I do think McCain's age and sharpness are real issues and legitimate campaign issues. But while I think it's possible that McCain's doesn't remember who 'Zapatero' is, I obviously don't believe that in a calm moment he wouldn't be able to locate Spain on a map. So let's rule out option one is a possible but unlikely option.
So what about option #2? It's true that the neocons around McCain really do not like Zapatero. There are several nonsensical reasons but it at least started with his position against the Iraq War -- and the fact that he shortcircuited right wing efforts to exploit the ghastly Madrid train bombings. So it is true that they don't like him. But this option isn't credible either for two and possible three reasons. First, in the exchange, McCain repeatedly refers to Spain as a country in Latin America. So if Randy really wants to stick to this explanation, he needs to explain why McCain thinks Spain is a country in Latin America, which I assume he doesn't want to do. You just can't have it both ways. Either he misunderstood at some level what he was being asked or he has a presidential disqualifying level of ignorance about geography. The second reason is that back in April McCain explicitly said that he wanted to move past earlier disagreements with Spain and said specifically that he wanted to Zapatero to visit him at the White House if he is elected president. So even if we set aside the geographical confusion, McCain's camp would need to explain why he's changed his policy 180 degrees since April. A possible third explanation is that McCain would not take such a confrontational stance toward a NATO ally. But let's be honest, I wouldn't put it past him. Still, one and two are dispositive.
So we're on to option #3. Some version of option #3 is the only credible answer. Whether it was because of ignorance, confusion or inability to understand what the interviewer was saying, McCain clearly didn't understand what he was being asked. And rather than stop and say, I didn't understand your question, could you restate it?, (Or, who are you referring to?) he decided to wing it and assumed he was being asked a question about another Latin American strong man bad guy. This is simply the only credible explanation that takes account of all the evidence. I think it's a generous read to conclude that the only issue was that McCain couldn't understand the interviewer's accent. But it's definitely possible. Even that, though, puts McCain in a pretty bad light.
Equally bad, Randy Scheunemann would rather further inflame Spanish-American relations by ridiculously insisting that McCain knew exactly what he saying than admit the obvious -- that he didn't understand the question. It wouldn't be that surprising. But given McCain has premised his whole campaign on foreign policy experience they've clearly decided it would simply be too damaging to admit he was either a) confused, b) ignorant or c) reckless enough to spout off aggressive remarks when he didn't even know who he was being asked about.
--Josh Marshall
Not Buyin' It
Jonathan Martin, who covers the Republican side/McCain campaign for The Politico takes a look at McCain's Zapatero gaffe and doesn't seem to be buying the McCain camp's explanation.
--Josh Marshall
Let's Play Stump the Candidate!
Check out Sarah Palin last night getting cocky at the first town hall meeting where she was prepared to take questions from the audience: "And if you want specifics with specific policy or countries, go ahead and you can ask me. You can even play stump the candidate if you want to!"
Specific countries? Now that's some grasp of foreign policy:
It should be noted that McCain quickly stepped in after this and Palin was not subjected to a quiz.
Good first question: Which continent is Spain on?
--David Kurtz
Enough Free Passes, Says EM
TPM Reader EM ...
Enough. John McCain should not get a free pass on this one. On a cynical level, can you imagine if this had been said by either Obama, Biden--or for that matter, Palin?I'm astonished by the amount of rationalizing and excuses being put out there on this "gaffe." Yeah, I suppose the possibility of being confused by the line of questioning, the accent is plausible for you and me but for the potential POTUS--I don't think so. Furthermore, Spain was attacked by the same terrorist group that orchestrated 9/11. Does pulling the troops out of Iraq trump that? Honestly? Our relationship with this European ally is that precarious.
Scheunemann ratcheted up the bravado. I say we call them on it. He and his campaign have reminded us time and time again of his foreign expertise compared to Obama's. McCain needs to explain.
--Josh Marshall
Randy Gives it His Best Shot
The Washington Post has gotten hold of McCain's Spain goof. And McCain advisor Randy Scheunemann has sent the Post an email suggesting that McCain knew exactly who Zapatero was and was simply repeating the neocon anti-Zapatero line.
Now, I was away Tuesday and Thursday, so I still want to come back to whether Scheunemann was working with bamboozler Amir Taheri on his made-up Obama-Iraq piece. So we'll get back to that.
But on this, nice try, Randy. I don't doubt that Scheunemann and his neocon pals still have it in for Zapatero for pulling his troops out of Iraq. I admit it is difficult to believe that McCain either doesn't know who Zapatero is or doesn't know which continent Spain is currently a part of. And we can question the wisdom of a major party presidential candidate suggesting that a major NATO ally might be part of his Axis of Evil -- along with Hugo Chavez. But Randy's attempted save here does not add up. If McCain knew who Zapatero was, why did he repeatedly refer to him as a Latin American leader? Spain is not in Latin America. I'm certain of it.
I mean, maybe McCain did know exactly who he was talking about and just got confused about Spain being a country in Latin America. But I'm not sure that's much better.
Read the transcript or listen to the interview. The most logical explanation of this gaffe is that McCain got asked about Zapatero right after being asked about Chavez, Castro and Morales. Not remembering who Zapatero was, he assumed he must be some other Latin American tinpot dictator and answered the question accordingly. We could be generous and assume he was just upping the ante on the normal neocon line. But by repeatedly referring to Spain as a country in Latin America, McCain just doesn't make that interpretation tenable for any fair-minded reader.
Face it, he got confused.
Late Update: We're getting a flood of good emails interpreting what happened here. The most generous interpretation we're hearing is that McCain couldn't understand what the interviewer was saying -- she's a native Spanish speaker speaking in an accented English, though she says repeatedly she's talking about Spain. Rather than ask her to clarify he decided to wing it, assuming she must be talking about some other Latin American bad guy. I think there's a good chance this is what happened. (I don't think that if you actually walked up to McCain today and asked him whether Spain is in Europe or Latin America that he wouldn't know. But on the fly he did seem to get confused.) But I don't think this puts him in a very good light. And, needless to say, this interpretation is entirely inconsistent with Scheunemann's suggestion that McCain knew exactly who he was talking about and just wanted to stick it to Zapatero. Whether he got confused about who Zapatero was or was too proud to admit he didn't understand the question, he still shot from the hip and insisted that Zapatero, the Prime Minister of a major NATO ally country, is from Latin America. He's not ready for prime time.
--Josh Marshall
Election Central Morning Roundup
Obama has a new TV ad running tying McCain to George W. Bush, the troubled economy, and Bush's efforts to privatize Social Security, but so far it's been limited to airing in Michigan. That and the day's other political news in the TPM Election Central Morning Roundup.
--David Kurtz
Embarrassing
Well, we've heard the interview now. And John McCain either doesn't know who the Prime Minister of Spain is, thinks Spain is a country in Latin America, or possibly both.
In case, you haven't seen our updates from last night, yesterday John McCain was interviewed on the Florida affiliate of Spanish radio network Union Radio. And in the interview McCain appeared not to know who the Prime Minister of Spain was and assumed he was some anti-American leftist leader from South America.
After the interviewer presses him a couple times on the point and tries to focus him on the fact that Prime Minister Zapatero isn't from Mexico and isn't a drug lord either McCain comes back at her saying, "All I can tell you is that I have a clear record of working with leaders in the Hemisphere that are friends with us and standing up to those who are not. And that's judged on the basis of the importance of our relationship with Latin America and the entire region."
Then there's a moment of awkward pause before she says. "But what about Europe? I'm talking about the President of Spain."
McCain: "What about me, what?
Interviewer: "Are you willing to meet with him if you're elected president?"
McCain: "I am wiling to meet with any leader who is dedicated to the same principles and philosophy that we are for humans rights, democracy and freedom. And I will stand up to those who do not."
At this point, the interviewer gets tongue-tied presumably because she can't get over McCain not knowing what Spain is.
--Josh Marshall
El Cid -- in English
The original untranslated English version of John McCain's interview with Radio Caracol Miami has now been released.
Have a listen (the key passage about Spain starts at 2:58 in):
At first it sounds like McCain is taking a hard neocon line against Prime Minister Zapatero, but as the interviewer continues to press the point, it becomes pretty obvious that McCain has no idea who she's talking about.
His broad, generic answer is clearly meant to cover Latin American leaders generally, known and unknown -- sort of a blanket "we'll stand up to tinpot dictators" -- even if they happen to be NATO prime ministers.
--David Kurtz
Big of Him
Spanish Prime Minister Zapatero on McCain not knowing who he is (from Time)...
As for Zapatero himself, the prime minister is apparently taking this latest attack to his ego with characteristic equilibrium. McCain may not know who Spain's leader is, but Zapatero promised to work with the new administration "whatever it is."
--Josh Marshall
A Little More of the Original
A final update of the evening on McCain's uber-gaffe.
There's some unclarity whether the interviewer was done by a Spanish reporter or a Spanish language reporter Caracol from 1260 in Miami. I suspect they may have had some joint arrangement since they both appear to claim it as their own exclusive. Or perhaps the local station in Miami is working as the affiliate of the Spanish radio network.
That doesn't change the underlying story. But TPM Reader RC points out that if you go to the Caracol1260 website and scroll down below the fold to the section of audio links on the left under the headline "Hoy por Hoy", these folks have their own version of the recording. They spliced the Spanish translations in differently. And in the way they did it, you can hear much more of McCain's actual English. It's still a bit difficult to hear McCain since the translator is speaking simultaneously. But you can hear most of what he says. It's pretty clear that McCain doesn't remember who Zapatero is. And he keeps referring to his approach to Latin America even after the interview keeps pointing that she's asking him a question a Spain, which is actually in Europe.
(ed.note: Another point about this version of the interview audio, Caracol seems to have completely dubbed out the interviewers voice in exchange for a translator speaking in Spanish. If you listen to the other version from the Spanish radio channel, it's clear that the original interview was entirely in English. The Caracol version also appears to cut portions of the the exchange. So we still need to hear the unaltered recording of the exchange.)
--Josh Marshall
The Rain In Spain Mainly Falling on McCain
To recap, tonight we've been discussing Sen. McCain's bizarre interview in which he appeared not to know who Spanish Prime Minister Zapatero was and, in an effort to wing it, assumed he must be another left-wing, anti-American leader from Latin America. In the Spanish press analysis of the interview, at least, many seem uncertain whether McCain even knows where Spain is, though that strikes me as a bit excessive.
Just how this will get played in the American press will be interesting to see because it cuts to two of McCain's key vulnerabilities -- the first being his apparently rather shaky foreign policy experience if can't identify the leader of a major NATO ally and the second being what I guess we would call declining mental acuity.
Now, bear in mind that so far we've only been able to clearly hear the audio of the interview in the translations provided by the Spanish radio station that conducted the interview. But the interview, which was conducted entirely in English, was recorded. I'd assume that if this story gets any traction some media outlet here will prevail on the Spanish news organization to release the English language recording of the interview.
All of the Spanish language speakers I've heard from who've listened to the interview think there's no doubt that McCain just got confused and didn't know who Zapatero was or possibly didn't even know where Spain was. But again, in the released audio, you just hear the translator, with the original English sufficiently far in the background as to be largely inaudible. So we probably won't know just what happened until we hear the original.
--Josh Marshall
Oy
Well, it doesn't appear to have registered in the American press yet. But the story keeps bubbling in the Spanish press about McCain's bizarre gaffe about the Spanish Prime Minister. Here's the front page cut out from the Spanish news channel that did the interview. They've talked to the interviewer now. Her take? McCain didn't know who Zapatero was ...
Late Update: So McCain is the candidate with the foreign policy experience ready to lead on day one. But he doesn't know who the leader of Spain is. He gets confused in an interview, apparently thinking Zapatero is someone from Latin America who is an enemy of the United States and manages to create a minor international incident.
Later Update: Here's another Spanish press reax. In Spain, there seem to be two lines of thinking. The great majority appear to think the McCain was simply confused and didn't know who Zapatero was -- something you might bone up on if you were about to do an interview with the Spanish press. The assumption seems to be that since he'd already been asked about Castro and Chavez that McCain assumed Zapatero must be some other Latin American bad guy. A small minority though think that McCain is simply committed to an anti-Spanish foreign policy since he's still angry about Spain pulling it's troops out of Iraq. Finally, a few of those who lean toward the first view speculate that McCain may have confused Zapatero with the Zapatista rebel group in Mexico.
Even Later Update: One representative reader response, from among many ...
I listened to the interview. The characterization is correct. I originally gave McCain the benefit of the doubt, thinking that he was just snubbing Zapatero (something that would be welcomed by the Spanish right). When I was there, there was a lot of agitation among Spanish conservatives because Zapatero was ignoring the country's relations with the U.S. and making overtures to more leftist countries in the Latin America--Cuba, Venezuela, Bolivia (all the countries mentioned in this interview before Spain). There was even a controversy because Zapatero sat down when the U.S. flag was passing by in a parade. I believe his excuse was "his legs were tired." So I figured McCain was giving the Zapatero the cold shoulder in the same manner as the Bush administration has done.After listening to the interview, however, I agree with the characterization that McCain was unaware of our relations with Spain, or even the country's geographical and political position. When asked about meeting with Zapatero and the country's relationship with the U.S., McCain ignored the question and went into some boilerplate about America's friends and enemies and analyzing relations (think Palin and the Bush Doctrine). Then, he tried to transition his answer into more friendly territory, discussing President Calderon's government in Mexico. He never really addressed Spain, but pushed right into commenting about Mexico. The interviewer actually tried to redirect him several times (again, think Charlie Gibson and Palin), until she actually stated that she wasn't talking about Latin America anymore, but rather Europe. For whatever reason, McCain responded to this question by repeating what he said before about analyzing America's relationships with our friends and enemies.
Seriously, this was pretty bad.
--Josh Marshall
El Cid! (More on Mccain's Liberation of Spain)
We wanted to give you an update on the post below where we described Sen. McCain's latest gaffe in which he seemed to suggest that he might not be willing to meet with Spanish Prime Minster Zapatero because he is among those world leaders who want to harm America.
The story is already getting picked up pretty quickly in the Spanish press. And the way it's being interpreted in the Spanish press is that McCain got confused about the fact that Spain is a country in Europe, rather than a rogue state in Latin America.
Our review of the audio suggests the same conclusion. In the interview, McCain is asked about Hugo Chavez, the situation in Bolivia and then about Raul Castro. He responds to each of these with expected answers about standing up to America's enemies, etc. Then the interviewer switches gears and asks about Zapatero, the Spanish Prime Minister. And McCain replies -- very loose translation -- that he'll establish close relations with our friends and stand up to those who want to do us harm. The interviewer has a double take and seems to think McCain might be confused. So she asks it again. But McCain sticks to the same evasive answer.
This is obviously a story that's difficult to get a handle on because of multiple layers of translation and retranslation. So I would ask that those of you who are speak Spanish fluently to review this article in El Pais and the audio in the post below, and let us know any other information you find.
--Josh Marshall
Welcome to Hardball
Rep. Eric Cantor (R-VA) gets taken to the woodshed by Chris Matthews:
--David Kurtz
Losing It
Did John McCain really just suggest that the Prime Minister of Spain might be one of America's enemies? One of those international leaders he'd refuse to meet with?
Does he want to liberate Spain too?
The passage in question is at the end of the interview linked here (with translation into Spanish) ...
--Josh Marshall
Worst Lede Ever?
From the AP:
John McCain embraces and expels Washington like an accordion player belting out a song.Squeeze in and he touts his vast knowledge of the capital city. Draw out and he casts himself a reformer bent on changing its ways.
--David Kurtz
Raising the Temperature
Obama gets a more assertive riff going here on the economy and John McCain's remarkable story of being brought up by a pack of lobbyists but turning out to be a reformer:
--David Kurtz
Can't Make This Stuff Up
McCain supporting Hillary Clinton backer Lady Lynn Forester de Rothschild, international financier who splits her time between homes in New York and London, says she can't support Obama because he's "an elitist" ...
In an interview with CNN this summer, Forester did not hide her distaste for eventual Democratic presidential nominee Barack Obama."This is a hard decision for me personally because frankly I don't like him," she said of Obama in an interview with CNN's Joe Johns. "I feel like he is an elitist. I feel like he has not given me reason to trust him."
Forester is the CEO of EL Rothschild, a holding company with businesses around the world. She is married to international banker Sir Evelyn de Rothschild. Forester is a member of the DNC's Democrats Abroad chapter and splits her time living in London and New York.
Sounds like a natural McCain supporter.
More of this the better. Can we arrange for Cruella de Ville's and Richie Rich's endorsement of McCain too? Even Endicott Billionson?
--Josh Marshall
We'll Be Watching
Sarah Palin goes mano-a-mano with Sean Hannity starting tonight. Here's a preview:
--David Kurtz