x Abu Dhabi, UAEWednesday 24 January 2018

Financial crisis overshadows the first presidential debate

In their first one-on-one encounter John McCain and Barack Obama each displayed their own strengths and avoided making any fatal mistakes but neither took risks in advocating a solution to the crisis on Wall Street. Negotiators in Washington hope to release on outline of their $700 billion rescue plan by Sunday evening as fears for the global economy become grim. In the US presidential election, Sarah Palin's candidacy suffers from increasingly severe scrutiny.

From Washington The Wall Street Journal reported that: "Key House and Senate negotiators were scheduled to meet Saturday afternoon to iron out the final details of a $700 billion rescue package for Wall Street, with a goal of being able to announce a final agreement before Asian markets open Monday morning. "Senate Majority Leader Harry Reid in an appearance on the Senate floor, said there are only a 'handful of issues still lingering' for lawmakers to finalise. He said he hopes Congress and the Bush administration can at the very least release an outline of the bailout plan by Sunday evening to send a reassuring message to global stock markets." In The Daily Telegraph, Ambrose Evans-Pritchard wrote: "Even if Congress backs the Paulson bail-out, the $700 billion blast cannot save the US, Britain or the world from the deepest economic slump since the Thirties. If Congress balks, God help us. The credit system is suffering a heart attack. Inter-bank lending is paralysed. Funds are accepting zero interest on US Treasury notes for the first time since Pearl Harbour, because no bank account is safe. "Wherever you look - dollar, euro, sterling Libor (the rate at which banks lend to each other), or spreads on credit derivatives - the stress has reached breaking point. If borrowers cannot roll over the three-month loans that are the lifeblood of business, they will default en masse. " 'Money markets are imploding. If no action is taken very soon, there is a significant risk that the global economy will collapse,' says BNP Paribas. Almost every trader says much the same thing. So does US treasury secretary Hank Paulson, who as Toby Harnden reports, literally dropped on bended knee to beg help from Democrats on Capitol Hill." The Los Angeles Times said: "The root of this crisis is the housing market's collapse, but the shock waves are reaching well beyond the real estate market and are threatening to make a full-blown recession inevitable. " 'If it keeps going and the authorities don't find a way to stop the contagion, it will hit the economy harder than anything we've had to absorb in decades,' said Lou Crandall, chief economist at Wrightson ICAP, a research firm in Jersey City, New Jersey. "With nowhere else to turn, Wall Street and business executives are pressing Congress on the bailout plan, despite doubts that it will have the desired effect of quickly restoring confidence and spurring ailing financial institutions to lend again. " 'Every day that it's delayed, it hurts,' said John Castellani, president of the Business Roundtable, which represents large US companies. 'The credit markets are frozen, and the longer that happens the greater the damage to the economy.' " The New York Times reported: "The chairman of the Securities and Exchange Commission, a longtime proponent of deregulation, acknowledged on Friday that failures in a voluntary supervision program for Wall Street's largest investment banks had contributed to the global financial crisis, and he abruptly shut the programme down. "The SEC's oversight responsibilities will largely shift to the Federal Reserve, though the commission will continue to oversee the brokerage units of investment banks. "Also Friday, the SEC's inspector general released a report strongly criticizing the agency's performance in monitoring Bear Stearns before it collapsed in March. Christopher Cox, the commission chairman, said he agreed that the oversight programme was 'fundamentally flawed from the beginning.' " 'The last six months have made it abundantly clear that voluntary regulation does not work,' he said in a statement. The programme 'was fundamentally flawed from the beginning, because investment banks could opt in or out of supervision voluntarily. The fact that investment bank holding companies could withdraw from this voluntary supervision at their discretion diminished the perceived mandate' of the programme, and 'weakened its effectiveness,' he added." After the Democratic candidate Barack Obama and his Republican opponent John McCain met in the first of three presidential debates, The Wall Street Journal said: "What neither man showed was any real insight about our financial market issues, or any political courage in offering a solution. Perhaps this is rooted in the traditional calculation not to make a mistake in a close race. But if Americans were looking for guidance on how we got here and where to go from here, they didn't find it last night." In Slate, John Dickerson observed: "Looming over the two men was an enormous American eagle with the traditional arrows in one claw and olive leaves in the other. It was fitting that McCain stood under the arrows. It's not that all his answers favoured military action. But he clearly had a martial cast to his posture as he took tough stands against Russia, Iran, and North Korea. That's his worldview. The question is whether that's the way the swing voters he needs to convince see things. In the post-Iraq world, polls show that Americans are wary of using military force to protect the national interest. Swing voters, who almost by definition tend to embrace a more moderate view, are probably closer to Obama's worldview as it was framed in the debate." CNN reported: "A national poll of people who watched the first presidential debate suggests that Barack Obama came out on top, but there was overwhelming agreement that both Obama and John McCain would be able to handle the job of president if elected. "The CNN/Opinion Research Corp. survey is not a measurement of the views of all Americans, since only people who watched the debate were questioned and the audience included more Democrats than Republicans. "Fifty-one per cent of those polled thought Obama did the better job in Friday night's debate, while 38 per cent said John McCain did better. "Men were nearly evenly split between the two candidates, with 46 per cent giving the win to McCain and 43 per cent to Obama. But women voters tended to give Obama higher marks, with 59 per cent calling him the night's winner, while just 31 per cent said McCain won. " 'It can be reasonably concluded, especially after accounting for the slight Democratic bias in the survey, that we witnessed a tie in Mississippi tonight,' CNN Senior Political Researcher Alan Silverleib said. 'But given the direction of the campaign over the last couple of weeks, a tie translates to a win for Obama.' " Congressional Quarterly reported: "The 'post-game show' on this debate may be a little less intense than is often the case for presidential debates, because it occurred in the midst of fast-shifting news cycles. "The networks, while providing some recap of the debate Saturday morning, largely shifted their focus back to the volatile and uncertain debate in Washington over proposals to stem an economic crisis by bailing out major portions of the nation's financial sector - an issue that had dominated the week's news and even for a time called into question whether the debate would be held as scheduled. "CBS News and Knowledge Networks conducted a nationally representative poll of approximately 500 uncommitted voters reacting to the debate in the minutes after it happened. "Thirty-nine per cent of uncommitted voters who watched the debate tonight thought Barack Obama was the winner. Twenty-four per cent thought John McCain won. Thirty-seven per cent saw it as a draw. "Forty-six per cent of uncommitted voters said their opinion of Obama got better tonight. Thirty-two per cent said their opinion of McCain got better." In The Washington Post, columnist Eugene Robinson said: "we in the commentariat tend to forget that the electorate always, and I mean always, sees a presidential debate very differently from the way we see it. If you read the papers in the fall of 2000, for example, you learned that Al Gore wiped the floor with George Bush in their encounters - but voters thought otherwise. Demeanor and body language have been important in every debate I can think of, so I can't imagine why they wouldn't be important in this one. The candidate who projects affability and optimism is usually seen to have bettered the candidate who projects resentment and gloom. If that is the case with tonight's debate, Obama won and McCain lost."

The Palin factor

While the candidacy of Sarah Palin as John McCain's running mate initially set the Obama campaign off balance, in the wake of the financial crisis doubts about her viability are emerging across the political spectrum. In Congressional Quarterly, Jeff Stein wrote: "In recent days, conservatives have been circulating an e-mail equating Palin's meager executive experience with that of Theodore Roosevelt, who had been governor of New York for only two years when William McKinley picked him as his running mate in 1900. "Like Palin, the colorful, outspoken patrician was ridiculed by his opponents. "But there the comparison ends. Roosevelt, who traveled widely, had a passionate, omnivorous intellect. "He wrote 35 books on subjects ranging from wildlife to the history of the American West. He had been a combat unit commander - the famous Rough Riders - in Cuba, and an assistant secretary of the Navy. "Equating him to Palin is obscene. But if a comparison be made, it is this: Roosevelt knew what he was talking about. "Palin is a babe in the woods. And the wolves are ready." Having been lambasted by commentators outside the conservative camp, Ms Palin is now facing criticism from closer to home. Syndicated columnist Kathleen Parker wrote: "Palin's recent interviews with Charles Gibson, Sean Hannity and now Katie Couric have all revealed an attractive, earnest, confident candidate. Who Is Clearly Out Of Her League. "No one hates saying that more than I do. Like so many women, I've been pulling for Palin, wishing her the best, hoping she will perform brilliantly. I've also noticed that I watch her interviews with the held breath of an anxious parent, my finger poised over the mute button in case it gets too painful. Unfortunately, it often does. My cringe reflex is exhausted. "Palin filibusters. She repeats words, filling space with deadwood. Cut the verbiage and there's not much content there. Here's but one example of many from her interview with Hannity: " 'Well, there is a danger in allowing some obsessive partisanship to get into the issue that we're talking about today. And that's something that John McCain, too, his track record, proving that he can work both sides of the aisle, he can surpass the partisanship that must be surpassed to deal with an issue like this.' "When Couric pointed to polls showing that the financial crisis had boosted Obama's numbers, Palin blustered wordily: 'I'm not looking at poll numbers. What I think Americans at the end of the day are going to be able to go back and look at track records and see who's more apt to be talking about solutions and wishing for and hoping for solutions for some opportunity to change, and who's actually done it?' "If BS were currency, Palin could bail out Wall Street herself. "If Palin were a man, we'd all be guffawing, just as we do every time Joe Biden tickles the back of his throat with his toes. But because she's a woman - and the first ever on a Republican presidential ticket - we are reluctant to say what is painfully true." After Ms Palin had her first encounters with world leaders gathered in New York last week, The Australian reported: "Pakistan's new President has raised eyebrows in the conservative Islamic nation after lavishing Republican vice-presidential candidate Sarah Palin with gushing praise during a meeting in New York and suggesting he give her a hug. "Flirting outrageously, by all accounts, Asif Ali Zardari showered compliments on John McCain's running mate, causing her to blush as he told her she was 'even more gorgeous' than he had expected and that 'now I know why the whole of America is crazy about you'. "Not done - those who know him say he is never done when it comes to complimenting women he admires - Mr Zardari, on his first major trip abroad, went further. "When an official suggested they pose again for photographers, he told Ms Palin: 'If he's insisting, I might hug (you).' " 'You are so nice. Thank you,' Ms Palin responded." In Pakistan's The News, commentator Mosharraf Zaidi wrote: "The fact that the nearly senile John McCain chose her as a running mate is bad enough, but whatever compelled President Zardari, head of a country of 172 million people, to meet with her, head of a state of less than 700,000 people, in the first place? He should have refused to meet her altogether. Such meetings are better left to leaders of small countries like Columbia and imaginary places like Henry Kissinger's foreign policy expertise. The only reason for meeting Palin would be to provide her ammunition to fight back against Joe Biden at the first vice-presidential debate next week. But with Barack Obama already having started the whole dirty business of cross-border attacks on Pakistani soil, did Pakistan really need to irk the Democratic Party any further? The meeting itself may have been excusable, but President Zardari's charm offensive on Ms Palin was, well, offensive. The neoconservatives don't mind being rife with institutional sexism, which is why they continually deny free press access to Ms Sarah Palin - but what excuse does the husband of a global feminist icon have for his faux pas? Imagine what would have happened had President Zardari used the lines he used on Ms Palin, on a real politician, with real credibility, like say Hillary Clinton?"