McCain Channeling Truman: An American Tradition

As whacky as this presidential campaign has been, it still complies with a few constants in political campaigning. Good thing. There have been so many surprises, twists, turns and reversals in this campaign voters are suffering electoral whiplash. Twin Peaks  was less confusing than this campaign.

So thank the political heavens for the constants. The Republican nominee, Senator John McCain, can be counted on to attack his rival as a “tax-and-spend” liberal (that the McCain campaign has gone further to call him a socialist is mere icing on the traditional tax-and-spend cake.)  Senator Barack Obama, meanwhile, can be counted on to accuse his rival of championing “trickle down” economics that favor the rich.

The vice presidential nominees, Governor Sarah Palin and Senator Joe Biden, are doing their best to keep to maintain historical continuity. They both are expert attack dogs. And both tend to make statements that need clarification. For example, Governor Palin didn’t mean there were parts of the country that are unAmerican, even though that’s what she said. And Senator Biden’s comment that Senator Obama will be tested with a foreign policy crisis didn’t mean Senator McCain wouldn’t be, too. 

Another hallowed tradition is also being played out. As election day draws closer, the candidate most likely to lose begins invoking the spirit of President Harry Truman. Specifically, they claim the mantel of President Truman’s come from behind win over Governor Thomas Dewey.  (This is where I’d insert the famous photo of President Truman holding the Chicago Daily Tribune edition with the headline “Dewey Defeats Truman,” if I knew how to do that).

First, a word of caution. As I’ve written before, I don’t believe the polls are accurate this year. Further, I think there’s a legitimate scenario that leads to a McCain victory. Still, Senator McCain’s road to the White House looks awfully potholed, so it’s fallen upon him to maintain the tradition of the Truman analogy.  And maintain the Truman tradition he has. “My friends,” he said, as he often does, “when I pull this thing off, I have a request for my opponent. I want him to save that manuscript of his inaugural address and donate it to the Smithsonian so they can put it right next to the Chicago paper that said ‘Dewey Defeats Truman.’” (Senator McCain was referring to a New York Times storythat noted how John Podesta, now heading up Senator Obama’s transition team, drafted an inauguration speech earlier this year — when he was a supporter of Senator Hillary Clinton. OK, now back to our original posting.)

There are variances on the Truman tradition, but they all involve the candidate most likely to fail claiming that the only poll that counts is the one on election day and that the media/pundits/opponents/nay sayers/ etc. are going to be surprised. It’s a long tradition. Time magazine in 1996 collected several examples. Among them:

“I don’t care what the polls say. I’m going to take this case to the American people like Truman did.” So said President Geroge H. W Bush before losing to soon-to-be-President Bill Clinton 370 electoral votes to 168.

“Harry Truman was a fighter, and so am I. My friends, this election is up for grabs.” That was then Governor Michael Dukakis before losing, 426-to-111 electoral votes, to President Bush.

No doomed underdog appears to have gone further than Senator Bob Dole, who ended his 1996 presidential campaign in the shadow of the Truman legacy, saying, “We’re approaching the end of a very historic campaign, that for many months I’ve traveled all over this country to spread my message about the future of America, and like all worthy causes, this one was done without its challenges. At times, many wondered whether my voice would be heard….  So it is fitting in the final hours of this campaign that I have come here to Independence, Missouri, the hometown of Harry Truman, a plain-spoken man, who defied the odds and challenged the prevailing wisdom and dared to trust the people.”  Senator Dole lost to President Clinton in the electoral college 479-to-159.

As CNN and other news organizations turn their electoral maps blue, be prepared for Senator McCain to ramp up his argument that he’ll surprise them all and win. He may actually pull it off even if it’s usually a sign of impending disaster. Whatever the outcome, we owe him our thanks for continuing an American tradition, one that has served the country, if not our losing candidates, well.

Senator Palin. President McCain. An October Surprise.

OK. This will never happen, but it’s fun to think about. And considering all the twists and turns in the presidential campaign so far, this one isn’t so far fetched. After all, it only results in Governor Sarah Palin becoming a United States Senator and Senator John McCain winning the presidency. What could be so hard?

Here’s the key elements of this October Surprise:

1. With the conviction of Senator Ted Stevens today on all seven of the corruption counts he faced, Alaskan Republicans are faced with the prospects of backing a felon on election day. Polls already show the Democrat, Anchorage Mayor Mark Gegich, to be ahead. In political circles, being convicted of seven felonies is “unhelpful.”
2. Governor Palin is dragging down the Republican presidential ticket. Although she’s rallied the base she’s failed to help Senator McCain with the independent and swing voters he needs. By selecting Governor Palin, however, Senator McCain has demonstrated his willingness to compromise his principles in order to assuage the conservative wing of his party. In other words, he’s paid his dues.

Holding on to the Alaskan Senate seat is critical to Republicans. If Democrats attain a 60 seat majority they can stop filibusters and make the Republican minority in the upper house nearly irrelevant. At the same time, the McCain-Palin ticket is cruising for a bruising.

Drastic times require drastic measures.

Here’s what should happen: the Alaska Republican Party should demand Senator Stevens resign from his nomination for the Senate. It should ten request, in the strongest terms, that Governor Sarah Palin return to Alaska to run in his place. Senator McCain should then replace Governor Palin with former Pennsylvania Governor and Homeland Security Secretary Tom Ridge. While pro-life conservatives will go ballistic with the usually pro-choice Governor Ridge on the ticket, the move should put Pennsylvania in play and provide a boost in toss-up states like Indiana, Virginia, Missouri and Ohio. As Senator McCain reminds voters of his no-tax, straight talking, national security credentials, his surrogates would remind conservative Republicans that President McCain will appoint Supreme Court Justices to their liking. 

The result: well, who knows? But do Republicans have anything to lose? The chances of holding onto the Alaskan Senate seat has fallen to zero. The odds of keeping the White House are long. But this last minute shuffle would create a brand new dynamic. The confusion and chaos would leave no room for Senator Barack Obama to make his closing argument for the presidency. Meanwhile, the sheer audacity of the move would demonstrate Senator McCain’s willingness to take new approaches to big problems.

And it sure would be fun.

What if McCain Had Kept Talking — and Acting — Straight?

Always a bad sign: Senator John McCain has come to comparing his campaign to the come-from-behind win by President Harry Truman in 1948. While Senator McCain has solidified the Republican base behind his candidacy, his standing with independents is surprisingly poor. Surprising, because Senator McCain had spent decades in Congress fostering a maverick, straight talking image that should have had a natural appeal to non-partisans in the electorate. His failure to connect with these voters now is a blunder straight out of Marketing 101.

Senator McCain had a strong brand leading into the general election. He was perceived as an independent maverick, willing to take on his own party and talk straight to the American people. If he had stuck to this image, in both word and deed, he might not be playing catch-up with eight days to go before election day. Just as consumers feel uncertain about a product that changes its attributes suddenly, voters don’t take well to a candidate who changes dramatically as November approaches. Yet the vehemence with which Senator McCain has distanced himself from his (former) brand is remarkable.

It began in the primary. Having attacked leaders in the Religious Right in 2000 he now embraced them. Having proven his “straight talk” bona fides by attacking President George Bush’s tax cuts, especially on high income Americans, as foolish and misguided, he now supported them. Having promised a positive campaign on the issues he attacked his opponent, Senator Barack Obama, as an empty suit celebrity.

There were still glimpses of the old Senator McCain on display. His call for 10 town hall debates with no moderator was brilliant. If accepted by Senator Obama it would have changed the tenor of the entire campaign. His attacks on Senator Obamafor failing to keep his promise to accept federal funding was on point and, even better, reminded voters of Senator McCain’s commitment to campaign reform. His response to supporters in a town hall meeting that they need not fear an Obama presidency was noble.

Senator McCain’s campaign, however, is consistent only in its inconsistency. It seems unable to focus on any one theme for more than a few days. So instead of emphasizing the maverick Senator McCain, he put on display the erratic Candidate McCain, talking about everything and everyone from Brittany Spears to William Ayers and socialism to buying up mortgages.

What undermined Senator McCain’s brand with finality, however, was the selection of Governor Sarah Palin as his running mate. On the surface this seemed like a bold and unorthodox move. Nominating a popular governor with a demonstrable record of reform and of fighting corruption made sense. That she was a woman made the move even more exciting. From a short term political perspective, that Governor Palin secured the core of the GOP for Senator McCain’s candidacy was a huge win.

Yet it also did more to push independent voters away than any other act Senator McCain took in this campaign. After blistering attacks on Senator Obama for lacking the experience to be commander-in-chief, Senator McCain selected a running mate even less qualified. Her conservative political views put her outside the mainstream where independent voters reside. Misstating her record concerning earmarks made Governor Palin out to be a hypocrite and Senator McCain to be either ill informed or a liar.

Selecting a running mate is the only “presidential” decision a presidential candidate makes before the election. It’s the best window voters have into what their administration might look like. Selecting someone has unqualified to be president as Governor Palin undercut Senator McCain’s image. Defending her required the campaign to contort reality (you can see Russia from Alaska — well, yes, from an island Governor Palin has never visited). Contrast this with Senator Obama’s choice of Senator Joe Biden. No one questions his qualifications to be president. It was a solid, unflashy selection. It showed Senator Obama wanted a vice president who would be a part of his inner circle, who would be willing to challenge him, someone who would make him a better president.

Does anyone think Governor Palin will be a part of President McCain’s inner circle? Does anyone really think she could challenge him on a broad range of issues? And if she did, would a President McCain care? Does anyone think that in selecting Governor Palin as his running mate, Senator McCain put country first?

Senator McCain had to pretend the answers to all these questions were yes. As the answers are, for most independents, a resounding “no,” doing so contradicted Senator McCain’s hard won brand. Couple this with his erratic response to the economic meltdown (claiming the fundamentals of the economy are sound followed by a recognition the economy was in crisis just hours later) and an over-the-top, nasty and negative campaign, and the straight talking, honest politician disappears behind a haze of smoke and mirrors.

For the fun of it, imagine Senator McCain had selected someone less exciting, but more qualified, than Governor Palin. Governor Charlie Crist of Florida or former Pennsylvania Governor and Homeland Security Secretary Tom Ridge come to mind. The GOP base would have been furious (especially over Secretary Ridge, who is generally pro-choice), but it would have bolstered the McCain Brand. Either selection would be consistent with Senator McCain’s image. Either would be appealing to independent voters. The Republican base might have torpedoed a McCain-Crist or a McCain-Ridge ticket. But would they really sit idly by and let Senator Obama waltz into the White House? It’s unlikely.

Senator McCain might still win this election. If he loses a large part of the reason will be the superior campaign and message of Senator Obama and the economic crisis, two factors he couldn’t control. But a contributing factor will be his own doing. Senator McCain is responsible for turning his back on who he was and what he once stood for.

As Noted: Don’t Believe the Polls

Everyone treats them as pronouncements from on high, but this year pre-election polls are especially questionable. This year, I believe the polls will be especially unrealiable. A quick review of RealClearPolitics.com illustrates the problem. On October 22nd, a CBS News/NY Times polls shows Senator Barack Obama leading Senator John McCain by 13 percentage points. Rasmussen Reports reports the lead is seven percent. Gallup offers two polls: a “traditional” poll showing a four percent lead and an “expanded” one showing a six percent lead. Reuters/C-Span/Zogby has Senator Obama ahead by 12 percent and  Hotline/FD shows him leading by just five percent.

How can six polls released on the same day have such disparite results? It’s one thing for polls to be unreliable predictors of what will happen on election day. It’s another to be all over the map on the same day. What’s going on here?

Alan Fram of the Associated Press provides some answers in an article well worth reading. The all news stations have to talk about something and poll results are a favorite topic. After all, it has numbers. You have one person winning and another losing. It’s a heck of a lot simpler to cover than tax policy.

So, since you’re going to be hearing and reading a lot about polls from now until November 4th, you might as well understand why every poll should be read with vast quantities of salt. It doesn’t make them any more reliable, but it does help them taste better.

A McCain Razor Thin Win or an Obama Landslide?

A lot has been going Senator Barack Obama’s way of late. The economic turmoil is sweeping independents his way. Second thoughts about the selection of Governor Sarah Palin is pushing Republicans his way. His campaign coffers are full. The Republicans look desperate. And he’s received the endorsement of perhaps the most admired individual in American politics, former Secretary of State Colin Powell. While I’ve made clear my belief that the polls this year are less reliable than usual, based on state-by-state polls, Obama is leading in states totaling more than the 270 electoral votes he needs to win on election day. All of which explains why Senator John McCain could win this election by an extremely narrow margin.

To see why, take a look at the CNN Electoral Map Calculator.  The Calculator applies various polling data to award states’ electoral votes to a candidate ifthe election were held today. (Last I checked, however, the election is not being held today). This is important. Being ahead in politics is like paper profits — or losses — in the stock market. Until you sell the stock, the gain or loss is meaningless. And unless you maintain your lead through election, the early polls don’t matter.

Based on their interpretation of various polls, CNN’s calculator shows Senator Obama leading in states with enough electoral votes to exceed the 270 he needs to win. Specifically, they indicate the Democratic candidate is leading in states with 277 electoral votes, his Republican opponent Senator McCain is ahead in states with 174 and there are six states, totalling 87 electoral votes, which are too close to call.

Let’s look at those six states, moving west to east (all poll referenced below were taken on October 19th or earlier):

1. Nevada, where Real Clear Politics’ poll of polls shows Senator Obama ahead by just 2.3 percent;
2. Colorado, where the Real Clear Politics poll average has Senator Obama ahead by 5.4 percent;
3. Missouri, where RCP poll average shows Senator Obama ahead by 2.7 percent;
4. Ohio, where Senator Obama’s lead in the RCP poll of polls is 2.8 percent;
5. North Carolina,where Senator Obama is ahead by only 1.5 percent in the RCP poll average; and
6. Florida, where Senator Obama leads by 2.0 percent in the RCP poll of polls.

All six of these states went for President George W. Bush in 2004. If these polls are close to being right (a very big if) a shift of just one and one-half percent of voters from Senator Obama to Senator McCain would bring five of the states into the Republican column. A move by just three percent of those supporting the Democrat to Senator McCain would bring along the sixth state. This would be great news for the McCain-Palin ticket, but not great enough. Even with all 87 electoral votes from these toss-up states Senator Obama would still win on November 4th, 277 electoral votes to 261.

Running the board to take all six toss-up states won’t be easy, but it is certainly possible. These are traditionally red states and Senator McCain and the Republican Party have the resources to contest all of them. A gaffe or stumble by Senator Obama or his running mate, Senator Joe Biden, could result in the minor swings required. So could independent campaign committees hammering away on Reverend Jeremiah Wright, William Ayers or other hot button, Swift Boat worthy attacks.

If Senator McCain were to sweep the toss up states, the next president could be decided by Virginia. Currently, Real Clear Politics show Senator Obama ahead there by 8.0 percent (and the most recent poll used in the average shows the Democrat ahead by only six percent. If only four percent of those favoring Senator Obama switch to Senator McCain, the Republican nominee would win the White House with 274 electoral votes.

The last time Virginia went for the Democratic ticket was in 1964. While an influx of more liberal and independent voters in the suburbs of Washington, DC has helped elect Democrats to the Senate and the Governor’s office, down state is still conservative. There’s a large military presence in the state which should also help Senator McCain. Again, it won’t be easy. A gaffe by the Democrats combined with a strong get-out-the-vote effort by the GOP, however, could deliver the state’s electoral vote to Senator McCain.

There’s a lot of ifs in this scenario. But it does show that even two weeks before the election, there’s a chance we’ll be swearing in President McCain and Vice President Palin come January. Significantly, they could achieve their electoral college win while losing the popular vote, but it’s still a win — just ask President Bush.

Of course, it could go the other way. Senator Obama could win all the toss-up states and defeat Senator McCain 364-to-174 in the electoral college. That’s called a landslide. Even the more likely scenario of Senator McCain holding on to Missouri and North Carolina for the Republicans would result in a 338-to-200 win for the Democrats — arguably still a mandate. 

Anything can happen in the next two weeks: an international incident; a botched interview; more bank failures; more brazen political attack (whether true or not); the list goes on and on. Being ahead on October 21st does win elections. It’s what happens on election day that matters. And this election day, November 4th, Senator McCain could win small or Senator Obama might win big.

Any way you look at it, it’s not over yet.

Why Meg Whitman Should Be Obama’s Treasury Secretary

Whether it’s Republican Senator John McCain or Democrat Barack Obama taking the oath of office next January, the new president will be facing a huge economic mess. No rescue plan and bail out the world’s governments can throw at crisis will be an instant cure. The problem is huge, the solutions complicated and change comes slowly. This means who the new president chooses as his Treasury Secretaary takes on critical importance from both a policy and a political perspective.

It’s not that the Treasury Secretary will be the new president’s primary economic advisor. The president will be getting input from numerous sources, both from inside and outside the White House. While the Treasury Secretary will be only one of several developing policy, second only to the president, this person will be the Administration’s financial leader.

This is certainly the case today. Newsweek magazine has described the current Treasury Secretary, Henry Paulson, as the “face of American capitalism” and “the nation’s most powerful leader.” Secretary Paulson is clearly the General in the Administrations battle to resolve the economic meltdown. Given President George W. Bush’s low standing with the public and his lame duck status, the Secretary has eclipsed the President in terms of visibility and influence.

A new president, whether that be Senator McCain or Senator Obama, will be more visible and in command. Yet the economy is only one of the challenges the country faces. The president will serve as commander-in-chief of the war to save the economy, but the Treasury Secretary is likely to remain the general. What kind of person should the new president look for to fill this role?

Ideally, the new Treasury Secretary will understand Wall Street, but not be a part of it. Wall Street barons are the bad guys in this drama. It’s asking too much of the public to trust one of them to don the white hat and save the day. Any insider is going to have too much baggage to be effective and credible when it comes to selling tough choices to Congress and the American people.

Someone closer to Main Street would have a far better chance of pushing through innovative and controversial cures for what ails the economy. Instead of someone good at manipulating capital, the new Treasury Secretary should be someone good at using it to create jobs and build an enterprise. This person should be entrepreneurial, but have a sophisticated understanding of the nation’s economy, it’s impact on every day Amercians and on the world. The incoming Treasury Secretary should have demonstrated the capacity to make tough decisions, articulate a vision and lead an organization.

Politically, the selection for the Treasury cabinet post should symbolize change. The American people should immediately understand that business as usual is over. The appointment should demonstrate the new president’s willingness to think outside the box, to consider new ideas and new approaches. Yet, at the same time, the Treasury Secretary must be credible and solid.

Most good CEOs (and there are some good ones out there) fit this description. They will have worked with Wall Street, but are not a part of it. They understand how policy decisions made in Washington have a practical impact on people across America. There’s a large pool of credible current and former CEOs the next president can call on.

However, none fit the bill as well as former eBay President and CEO Meg Whitman. You can’t get more Main Street than eBay. It’s the digital avenue on which millions of Americans set up stores, shop and transact business. Nor can you get further away from the Wall Street than the Silicon Valley. The former creates wealth by dreaming up new and increasingly esoteric instruments that are designed to manipulate capital; the latter create capital by bringing dreams to life that provide jobs, create wealth and changes the way we live and work.

Ms. Whitman was at the center of the new technology economy for 10 years. When she started there in 1998 the company had 30 employees and revenues of more than $4 million. It’s a lot bigger now. She’s not only been in the marketplace, she helped create one of the worlds biggest marketplaces. That she would, I believe, be the nation’s first woman Secretary of the Treasury is also a plus — she’s not just one of the good old boys.

When asked during the second presidential debate who he would consider for Treasury Secretary, Senator McCain offered Ms. Whitman as a strong possibility. This isn’t surprising in that she is a Republican who has become a trusted, senior adviser to Senator McCain on the economy. Ironically, these facts make her a strong choice for Senator Obama, too. Reaching across the aisle to someone who was close to his opponent would demonstrate Senator Obama’s intention to move beyond old politics. It would symbolize the Obama Administration’s intent to lead a united, bi-partisan effort to get our financial house in order.

It makes sense for Ms. Whitman, too. She’s talked about running for Governor of California in 2010, but that could quickly end her political career. Democrats will have the edge in that race and several strong willing to seize that advantage. Ms. Whitman would be well funded (she is, after all, a billionaire) and a fresh face. She might even have the support of termed out Governor Arnold Schwarzenegger. Even then, success is far from certain. And a loss in her first political foray could make a comeback all the harder.

Serving as Secretary of the Treasury , however, would give Ms. Whitman a chance to build a powerful, positive image as someone capable of dealing with complex challenges. While she’s well known today in some circles, it would make her a national figure with all the stature that entails. Better yet, serving in a Democratic administration would burnish her “post-partisan, above politics” credentials, always a good thing in California politics.

Nor does Ms. Whitman need to rush into state politics. She is only 52 years old. California will still be here if her goal is to be Governor. In the meantime, she’s an ideal choice for either President McCain or President Obama to help save the country.

McCain’s Choice: Anger or Dignity

I’ve worked in fair number of campaigns over the years, most — but for the record, not all — losing ones. Some were cliffhangers. My first campaign, back in 1972 when I was a teenage press secretary, nearly elected the first woman to California’s State Senate, Cathy O’Neill. She lost by a percent, less than what the Peace & Freedom Party candidate polled. It wasn’t until nearly 6:00 am the morning after election day we knew for sure we’d lost.

I was also there at the dawn of the Bradley Effect. That was when Joe Trippi, later campaign manager of former Governor Howard Dean and a senior aide to former Senator John Edwards, put down the phone and told then Mayor Tom Bradley that, in spite of the pre-election day polls, he was not going to win the California Governor’s race in 1982.

These are not fond memories.

Neither were the big losses, of which there were more than a few. These are the ones in which the candidate knows in his or her heart that the race is over, but needs to find the strength to keep on campaigning through election day. It’s a test of their character, poise and commitment to something beyond themselves, but it boils down to a simple choice: do they go out flailing or with dignity? 

The former approach involves often ugly attacks at the opponent, the media, and anyone (and everyone) else who comes within reach of the candidate. The candidate and his or her inner-circle just can’t believe they’re going to lose. They assume it’s a trick. That the other side cheated. Or the Fates cheated. The inevitable loss is not their fault and they want the world to know it.

In the dignified version of acknowledging defeat, candidate becomes more introspective. He or she seems to recall why they got into the fray in the first place. Instead of winnin at all costs, they focus on why they should have won. They shift from doing whatever it takes to win, to doing what’s right to preserve their standing and reputation. It’s a campaign that moves from looking for the next headline to being able to look at oneself in the mirror. In many ways, it’s the most honest period of the campaign.

Senator Hillary Clinton veered between both approaches as her campaign against Senator Barack Obama wound down earlier this year. In the end, however, she displayed her best attributes. Losing somehow freed her to speak more from the heart, to present the ideas and positions she’d long delivered from scripts by rote in a more sincere and meaningful way.

Senator McCain is fast approaching his moment of truth. He’s a smart politician. While he sees himself as the ultimate Comeback Kid, he knows winning is a long shot. His campaign has given up on Michigan. The lift from selecting Governor Sarah Palin continues to rally the core, but is becoming a drag when it comes to independents. In the final month of the campaign he’s forced to shore up support in normally safe Republican states like Virginia and North Carolina. Leading voices in his own party are suggesting his campaign is floundering. And now some of the pundits and pollsters are claiming Senator Obama is a single state away from an Electoral College majority. While I’ve written before about why the polls in this campaign should be discounted, the sheer weight of so many polls tracking the Democratic candidate’s accelerating momentum cannot be ignored.

Senator McCain’s can still hope to strike a surprising blow during the last presidential debate at Hofstra University on Wednesday night. But he’s debated Senator Obama twice already and knows the odds of a game changing result are slim.

And that’s when we’ll see the direction in which Senator McCain moves. Last week he gave conflicting clues. He let his campaign, including his running mate, make ugly, personal charges against Senator Obama. The charges went beyond questioning his judgment — they were accusations of treason by someone who fails to see America the way Senator McCain’s supporters do. The charges looked a lot like flailing and Senator McCain seemed to encourage it. His angry side was on display.

Then there was the meeting in Minnesota in which Senator McCain stood up to his own booing followers to declare Senator Obama to be a “decent, family man” and “a person that you do not have to be scared of as president of the United States.” In demanding respect for an opponent he clearly does not like personally, Senator McCain displayed the fairness and character for which he was widely admired prior to this presidential campaign.

And that’s the choice Senator McCain will soon need to face. Shortly after Wednesday’s debate, assuming no surprises there or elsewhere, Senator McCain will sit down with his advisers and face reality: his long-held dream of being President of the United States is unlikely to be realized. Yet, for the sake of his party and for his supporters, he will need to continue to continue a grueling campaign schedule of rallies, town hall meetings and  interviews. He’ll have to decide whether he wants to spend the end game as an angry politician or a dignified statesman. He will need to decide if he wants to tear the country apart or help mend it back together.

When forced to decide, my guess is he’ll take the high road. He’ll continue to insist he’s best qualified to be president. He’ll continue to point out his opponent’s failings. Yet he’s shown he’s capable of doing both in a way that maintains the principles he’s stood for throughout most of his career. In taking this path, he’ll make his points in ways that enhances his stature when he returns to the Senate, much like Senator Clinton did.

And while this approach will disappoint his most ardent supporters, it will be the right thing to do because it puts his country. It might even add to his vote total come election day.

Can Republicans Remain Relevant in U.S. Senate

As Republican hopes of retaining the White House dim in the face of an increasingly desperate campaign by Senator John McCain, the party faces an even greater threat — becoming irrelevant in Congress, and specifically, in the United States Senate. It all comes down to whether the GOP can retain at least 41 seats in the upper house, The odds are with them, but it’s a far from uncertain result. Reducing their chances is Senator McCain’s campaign  consistent attacks on all incumbents in Washington. The worsening economic crisis only makes electoral matters worse for the GOP.

Today the Senateis narrowly divided: 51 Senators caucus with the Democrats; 49 with the Republicans. Two of those siding with the Democrats are actually independents. Senator Bernie Sanders is a self-described democratic socialist, but throughout his long Congressional career has been considered a Democrat when it comes to electing leadership and committee assignments. The other independent is Senator Lieberman, a life-long Democrat who was defeated in his party primary in 2006, but was reelected to the Senate as an independent. He is a strong and vocal supporter of Senator McCain and, while he has been restrained in criticising the Democratic nominee, Senator Barack Obama, he’s let loose with a few salvos.

With 49 Senators, Republicans can exert significant influence on legislation, confirmations and the political landscape as a whole. They need just one vote to prevail on an issue since Vice President Dick Cheney would break a tie. Through the filibuster, any 41 of them can stop the Senate from taking any action on a measure. And they’ve successfully wielded this procedural weapon over 90 times in the past two years. Were the threat of a fillibuster to disappear, Democrats could, if they desire and can remain unified, push any vote through the Senate without restraint.

Consequently, 60 is the magic number and Democrats are getting very close to reaching it. 35 Senate seats are up for election this year. When the dust settles,  Congressional Quarterly predicts at least 56 will be Democrats and only 41 Republicans. Three contests, in North Carolina, Minnesota and Mississippi, are too close to call. This assumes both the independent Senators continue to caucus with the Democrats.

What should make Republicans especially nervous is that four of the seats Congressional Quarterly place in the GOP column are only leaning in that direction. One of those is in Oregon where Senator Gordon Smith is being pressed by the state House Speaker, Jeff Merkley. The polls listed on Real Clear Politics, taken in late-September, show Representative Merkley ahead, although narrowly. The economic downturn and the coattails of Senator Obama could flip this seat to the Democrats. Coupled to a sweep of the toss-up contests and the Democrats would be at 60, just one surprise away from the magic number.

Ironically for Republicans, Senator McCain and his running mate, Governor Sarah Palin, are harming their chances of winning close Senate races. The GOP running mates have incessantly attacked the Washington culture, condemning Republicans for championing change, but failing to do so. To listen to Senator McCain and Governor Palin, there’s no incumbent in Congress who deserves reelection.  Being hammered by your Democratic opponent is bad enough. To have the top of your own ticket pile on is horrific — and can result in a surprise come election day.

Winning in Oregon, sweeping the three seats where there’s no favorite is a big challenge for Democrats, but it’s certainly a possibility. Doing so would make Senator Lieberman especially powerful. Democrats are angry with him for so visibly and vocally supporting Senator McCain’s presidential bid. Many would like to kick him from the caucus, which would result in his losing the chairmanship of the Senate Governmental Affairs committee.

Yet exacting revenge on the Connecticut Independent could deprive Democrats of their super-majority, creating a 59-41 partisan split in the Senate. This would enable a united GOP caucus to retain just enough power to exert influence. Given this situation, the Democrats might be willing to forgive Senator Lieberman his partisan sins. Indeed, being the determinative vote on breaking a filibuster would make Senator Lieberman extremely powerful in Washington.

Senator Lieberman and the Republican Party, however, better hope there’s not two surprises on November 4th. If Democrats reach 60 seats without the help of Senator Lieberman, the independent lawmaker and his friends in the GOP could well become witnesses to history, not participants in it.

McCain Campaign Failing To Put Country First

At the heart of Senator John McCain’s presidential campaign is the claim that he “puts country first.” He brags he has never put political considerations before what’s right for the country. (We can debate whether there have been exceptions). An important corollary to the principle of putting country first is unifying the nation. So Senator McCain often points out the many times he’s worked with Democrats on contentious issues. What’s sad is that Senator McCain’s current campaign strategy not only fails to put country first, it puts the country in danger.

The McCain campaign has unleashed numerous and serious attacks against his opponent, Senator Barack Obama. Attacks on an opponent are nothing new and can be legitimate. What Senator McCain’s campaign is doing, however, transcends what’s acceptable. It is increasingly ugly, divisive and dangerous.

Senator McCain’s running mate, Governor Sarah Palin, is pounding away at Senator Obama for his relationship with William Ayers, a founder of the domestic terrorist group, the Weather Underground. She has talked about his affiliation with the Reverend Jeremiah Wright, whose anti-American rhetoric nearly torpedoed Senator Obama’s campaign in the primaries.

Raising these associations in order to question Senator Obama’s judgement is fair game. A would be president needs to demonstrate Judgement and that includes the kind of people they associate with. That Senator Obama has repudiated both Mr. Ayers and Reverend Wright is his campaign’s responsibility to put forward.

Governor Palin, however, is questioning more than Senator Obama’s judgement. She questions his patriotism. She is presenting him as an “other,” so different from mainstream America that he can be considered a traitor. As reported by the Associated Press and others, Governor Palin accused Senator Obama of being someone “who sees America, it seems, as being so imperfect, imperfect enough , that he’s palling around with terrorists who would target their own country.” She describes him as someone who does not see “America like you and I see America. We see America as a force of good in this world. We see an America of exceptionalism.” By implication, Senator Obama must see America as an unexceptional force for evil. In contrast to “us,” he must be unpatriotic. And he certainly must be different.

It’s not just the running mates who have descended to this low level of campaigning. Again from the Associated Press: In Florida on Monday before Governor Palin spoke and in Pennsylvania today before both Senator McCain and Governor Palin gave speeches, partisans warming up the crowd referred to the Democratic nominee as “Barack Hussein Obama.” Senator McCain, back in February, was so incensed by this tactic that he personally repudiated them when this happened in Ohio. (This time the campaign issued statements saying it does not condone this “inappropriate rhetoric”). The reason is that it’s “widely viewed as an effort to link Obama to radical Islam even though he is a Christian with no such ties.”  

Some McCain-Palin supporters are embracing this rhetoric and all it’s implications. During Senator McCain’s speech in Pennsylvania today, members of the audience shouted out “socialist,” terrorist” and “liar” when he mentioned Senator Obama. And here’s how how Dana Milbank in the Washington Post describes what happened during a speech by Governor Palin in Florida earlier this week.

“In Clearwater, arriving reporters were greeted with shouts and taunts by the crowd of about 3,000. Palin then went on to blame Katie Couric’s questions for her ‘less-than-successful interview with kinda mainstream media.’ At that, Palin supporters turned on reporters in the press area, waving thunder sticks and shouting abuse. Others hurled obscenities at a camera crew. One Palin supporter shouted a racial epithet at an African American sound man for a network and told him, ‘Sit down, boy.’” Another man in the audience apparently yelled out “Kill him!” during her speech, although it was unclear whether he was referring to Senator Obama or Mr. Ayers.

That death threats and cries of treason would be voiced at a Governor Palin rally is not surprising. Her speeches ooze with scapegoating. Hatred is a logical consequence of her words. It’s a tactic used in many countries, many times, when times get harsh — focus the people’s anger on the “others,” those who are unlike them and can be blamed for causing the problem. In America, at one time or another, the “others” have included the Chinese, the Irish, the Japanese, welfare cheats, illegal immigrants, and African Americans. In Germany in the 1930s it was the Jews.

Demonizing opponents is not putting one’s country first. It is not pulling the country together to deal with serious problems. It’s the exact opposite. It elevates those who hate and diminishes those who would unite us. It hides problems and builds anger. It divides the populace and undermines our ability to stand on common ground. Especially in light of the current economic crisis, it is playing with matches in a cellar swamped by gas.

Again, questioning Senator Obama’sjudgement, attacking his record, criticising his proposals, mocking his experience; these are all legitimate lines of attack for the McCain campaign to take if that’s what it wants to do. It’s the Obama campaign’s job to counter those charges. But Senator McCain’s campaign generally, and Governor Palin specifically, goes far beyond that tactic to a place beyond what’s legitimate. 

Senator Joe Biden today called Governor Palin’s rhetoric “mildly dangerous.” That is an understatement. It is unAmerican. It is unacceptable.  It is divisive and extremely dangerous. If Senator McCain truly believes in putting his country first he would put a stop to it. By failing to do so, he makes clear that his own personal ambition is more important to him than America. That is both a shame and shameful.

Understanding Credit Default Swaps is Understanding the Meltdown

We’ll hear a lot of talk about the reason for the current economic meltdown during tonight’s debate between Senators John McCain and Barack Obama. There will be talk about regulation and deregulation, who did what to or for or against Fannie Mae and Freddie Mac, who could have prevented what. And, hopefully, we’ll hear a bit about Credit Default Swaps. Because while there may be many reasons for the markets’ current ails, Credit Dafault Swaps (or “CDS’s”) is clearly a leading culprit.

The problem is that understanding what they are and how they work is challenging, to say the least. For those who want to understand the nuances of what will no doubt be an erudite and idea-focused debate, understanding CDS’s is important. Fortunately, there are some resources that can make them a bit less opaque.

The best explanation of what CDS is and why they matter was on This American Life. On Sunday, the NPR radio show offered “Another Frightening Show About the Economy.” Act Two focused on Credit Default Swaps and, through examples and straightforward language, actually made them understandable. I highly recommend giving them a listen.

Matthew Phillips at Newsweek explained not only how Credit Default Swaps work, but how they came into being. The article is appropriately entitled, “The Monster That Ate Wall Street.”  Back in March, Janet Morrissey at Time magazine described CDS’s back in an article prophetically titled, “Credit Default Swaps: The Next Crisis?”  Not surprisingly, Wikipedia has an entry on Credit Default Swaps, too.

Again, “This American Life” does the best job of putting an understanding of CDS’s in reach for most of us. For those willing to risk it, however, here’s my understanding:

Company A loans $1 billion to Borrower B. There’s a small risk that Company B won’t make good on the loan, so Company A goes to Insurer C and buys a Credit Default Swap. For a percentage of the face value each year, Insurer C agrees to pay off the loan to Company A if Borrower B defaults (let’s use 10% as the cost of the CDS). This sounds like a good deal to Company A so they pay the premium. Insurer C is going to make $100 million a year so long as Borrower B doesn’t default.

Then the economy gets rough and the risk of Borrower B defaulting has gone up. Insurer C gets nervous and seeks a CDS of it’s own from Insurer D. Insurer D is willing to take on the risk, but it wants a higher premium for the higher risk — let’s say 15%. Since Insurer C probably has lots of CDS’s lying around, passing off the risk on some of them makes good financial sense. There’s nothing stopping Insurer D from reselling the CDS. In fact, what actually happened is that most company’s playing in this rarified altitude, bought and sold lots of these Credit Default Swaps. In fact, the value of the CDS’ grew to be 10 times the value of the loans they insured against.

The problem is that at the end of the road, someone was left holding the “ultimate” CDS. When you unravelled all the buying and selling, someone was obliged to pay someone else if some other guy defaulted. The most amazing fact: because Credit Default Swaps are contracts between two parties and are not regulated by any government, no one really knows how many of these things are floating around out there.

When the defaults started flowing in, a lot of these ultimate Credit Default swaps were held by AIG, the world’s largest insurer. When it couldn’t make good on its obligations, the dominoes were threatening to fall. That’s why the Department of the Treasury bailed out AIG. This house of cards was about to fall and the $85 billion was the glue intended to keep it standing.

Fair warning, this is my interpretation only and should not be confused with the facts. I make no warranty that what I explained here is really right. I do guarantee it’s an oversimplification. I strongly advise you to take a look (or listen) to the resources listed above. It’ll make listening to the debate, assuming they do get around to substance, a bit more comprehensible.

Post Debate Notice: OK, Credit Default Swaps didn’t come up even once in the debate. So much for my predictive powers. But, it’s good to know about these things in case you’re ever trapped in an elevator with someone and you run out of interesting things to talk about.

Another Post-Posting Notice: erdosfan was kind enough to offer some corrections and clarifications on this post. To see his comment, please click on the “comment” link, below.