How to Lose with Class

No sarcasm here, because that's actually what Terry McAuliffe did last night after last night's blowout loss:

This email hit inboxes less than three hours after the polls closed in Virginia:

Earlier, I called Creigh Deeds and congratulated him on becoming the Democratic nominee for Governor. And I told him something that I know you all will agree with: he MUST be the next Governor of Virginia. Creigh Deeds will carry on the proud tradition of Mark Warner and Tim Kaine, and he will get Virginia's economy back on track.

Bob McDonnell, on the other hand, has done everything he could to stand in the way of Virginia's progress. He voted "no" on Mark Warner's budget reform. He said "no" to Tim Kaine's transportation reform. He even said "no" to President Obama's economic stimulus plan, rejecting $125 million of your taxpayer money that is now going to other states.

With Bob McDonnell sitting on millions of dollars in his bank account, Creigh Deeds needs our help to gear up for the general election. So please, make a contribution to his campaign and help continue the progress we've made over the last seven years.

Click here to contribute to Creigh Deeds' campaign.

I have been following politics for about half of my lifetime. And I have never seen a vanquished candidate in a primary exhort his supporters to financially support the primary winner within hours of the polls closing in the election.

This is particularly impressive when you consider how his former boss handled her primary loss about a year ago:

Senator Hillary Rodham Clinton took the stage before supporters Tuesday night and finally asked the question that so many people had been posing: “What does Hillary want?”

She listed some policy goals and demanded respect for her supporters. But she did not really answer her own question, demurely suggesting instead that it was up to her backers to advise her by e-mail on what she should do next.

What the crowd gathered at Baruch College in Manhattan for her final primary night celebration wanted was clear, from those outside chanting “Denver, Denver,” urging her to go all the way to the party’s convention in August, to those inside interrupting her speech with shouts of “Yes, she will! Yes, she will!”

And while Mrs. Clinton reminisced about her campaign and talked of a need to unite the party, she did not concede, and indeed did not acknowledge that her rival, Senator Barack Obama, had passed the threshold of delegates needed to secure the nomination.

Now that a year has passed and she's been named secretary of state for reasons I will never understand, it's easy to forget just how truly disgusting her campaign was.

And Just like That... Geithner's Plan Was Gone

News came out in an under reported story last week:

The Federal Deposit Insurance Corp. indefinitely postponed a central element of the Obama administration’s bank rescue plan Wednesday, acknowledging that it could not persuade enough banks to sell off their bad assets.

In a move that confirmed the suspicions of many analysts, the agency called off plans to start a $1 billion pilot program this month that was intended to help banks clean up their balance sheets and eventually sell off hundreds of billions of dollars worth of troubled mortgages and other loans.

Many banks have refused to sell their loans, in part because doing so would force them to mark down the value of those loans and book big losses. Even though the government was prepared to prop up prices by offering cheap financing to investors, the prices that banks were demanding have remained far higher than the prices that investors were willing to pay.

Robert Kuttner goes further to describe why the plan failed, and where it leaves us:

First, the government has bent the accounting rules to allow the banks to carry nearly worthless securities on their books at their nominal full value. The Wall Street Journal ran a terrific investigative piece June 3 on how the banking lobby and legislators of both parties pressured the Financial Accounting Standards Board (FASB) to suspend its rules requiring assets to be carried on banks' books at their current market value.

With this change, banks had no incentive to sell these deeply depressed securities at anything like their actual market value. So if a speculator, armed with Fed funding and a government guarantee against losses was prepared to take a speculative flyer in a bond by bidding, say, 30 cents on the dollar, the bank was not prepared to sell at less than 90. Hence, no deal.

Second, some hedge funds and private equity companies sniffed around these deals and concluded that they weren't worth the bad publicity or government scrutiny if the deals resulted in big windfall profits (the only kind that hedge funds pursue).

Cooking the books to inflate the value of depressed securities also explains how zombie banks like Citigroup could pass the government's "stress tests" with flying colors. Citigroup, which has depended on $45 billion in straight government cash and hundreds of billions more in guarantees, was found by the stress-testers from the Fed and the Treasury to need only $5 billion more to be adequately capitalized. This is, of course, preposterous if you value the junk on its books accurately.

The failure of Geithner's plan is actually good news for those of us who don't believe in rewarding speculating hedge fund managers with a trillion dollars of taxpayer money. The plan was immoral, and while it's a setback for the administration, it's good news that they get sent back to the drawing board. With Geithner and Summers in charge who knows what you're gonna get, but you'd think it would be better than their first effort.

If You Live In Virginia...

Please do me a favor and don't vote for this guy:

That is all.

The Case For Joe Sestak

For some time now, I've tried to make the case for just how much Arlen Specter sucks.

What I haven't done is make the case for his challenger, Congressman Joe Sestak, and what positives he brings to the table regardless of Arlen Specter's sucking. Luckily, Chris Bowers knows the race and offers a great endorsement:

Sestak is an extraordinarily relentless campaigner--I have honestly never seen anyone better than him on this front. His constituent services are, from what I understand, possibly the best in the entire Congress. His biography and resume are difficult, if not impossible, to match. Further, he is significantly more progressive than Specter according to all voting scorecards. Also, despite the standing ovations in front of the party leadership, there was a stronger anti-Specter undercurrent at the state Democratic committee this weekend then I think most news reports are indicating. You are talking about hundreds of people who spent thirty years trying to defeat Specter, after all.

I don't think many people are Democrats just for the sake of Democrats accumulating more power. People become Democrats because of the causes and ideals represented by the party. An octogenarian Senator who switched parties to save his job and who fails to cross even the bare minimum threshold on many of these causes and ideals is simply not why people are Democrats. The insider relationship that Governors and other high ranking party officials care about are irrelevant to the rank and file. In a campaign this high profile, most high ranking endorsements won't matter much, either. People want cheaper health care, and they don't want elections decided for them behind closed doors.

This is going to be a very close, election. I'm one Pennsylvania Democrat, state committee member, and former union organizer, who is throwing his lot with Joe Sestak.

Once we get Sestak's official announcement, the craziest and most significant primary since Lamont/Lieberman begins.

The Train of Thought Lounge: Nirvana

I tend to listen to music in waves, picking up on various artists or groups or genres for a certain period of time, then moving on to find new music or rediscover old favorites, before often times migrating back to what I listened to before. Sometimes these phases last a couple of months, sometimes a couple of years. Maybe I'm not the only one who experiences music this way, but at any rate I can't explain why I do it.

And so, I can't explain exactly why I've been listening to Nirvana's MTV Unplugged album from 1993 so much recently, but I have. Here, for your viewing and listening pleasure, is their cover of the Meat Puppets' "Oh, Me."

Obama at 137 Days!

All those attempts to evaluate Obama's presidency at 100 days were kind of lame, mainly because FDR started the first 100 days thing, and since we haven't exactly elected many people of his caliber in the last 80 years, it doesn't usually lead to flattering comparisons. And besides, 100 days is a pretty arbitrary time to evaluate someone anyway, since Obama has mostly been laying the groundwork for stuff that will happen later on the legislative calender.

But today's earlier post got me thinking: You know what's not an arbitrary time to evaluate the President? 137 Days!

What would you call his high point and low point over the first 137 days of what will (hopefully) be 8 years as president?

As I said in the earlier post, my high point would have to be his strong stand against Israel's attempts to expand settlements, and his reaction to the political backlash that followed. A rule I've learned following US politics is that you should always expect politicians to cave to AIPAC at all times, no matter the issue, no matter the reason, and no matter how awesome that politician may be in other areas. So when politicians actually do take a stand against that lobby, it should be seen as a major act of political courage. While putting up real opposition to Israel on the creation of new settlements may not seem like a huge deal, it's the first time in at least in my lifetime that a US leader has actually said "no" to Israel on a legitimate issue, and then not backed down to the political pressure that followed. Definitely the high in my book, and a great sign for the potential resolution of the Israeli/Palestinian conflict.

As you might have guessed from reading this blog, my low point would have to be the handling of the banking crisis. Considering that Obama has followed a center-right path on economic issues throughout is career and campaign, I was fully prepared for center right economists to populate his cabinet. Unfortunately we got something much worse with two people who have direct responsibility for the financial crisis in both their actions and their devotion to the failed ideology that caused it. This has led to a series of awful decisions, topped by "Geithner's toxic asset plan" which amounts to a trillion dollar transfer of wealth from the US Treasury to the pockets of hedge fund managers. I'd say that qualifies as a low.

What are your thoughts at this all important juncture of day 137?

It's All About Israel/Palestine

When reading the reactions to Obama's speech yesterday, you wonder why our stance in the Israel/Palestine conflict doesn't get the attention that it deserves as central source of disagreement between the US and the Muslim world. The Iraq war was a huge source of tension and our involvement in Afghanistan remains an issue to a lesser degree, but at the end of the day, our our unconditional support of Israel's extremely unpopular foreign policy will be the most important issue in that relationship. Politico analyzes the applause (or non-applause) lines:

Similarly, when Obama talked about “America’s strong bonds with Israel” and said that bond “is unbreakable” there was no applause.

The crowd was far more receptive, erupting into applause and shouts, when Obama moved on to the plight of the Palestinian people and said: “So let there be no doubt: the situation for the Palestinian people is intolerable. America will not turn our backs on the legitimate Palestinian aspiration for dignity, opportunity, and a state of their own.”

“The only resolution is for the aspirations of both sides to be met through two states, where Israelis and Palestinians each live in peace and security,” Obama said to applause.

But the lines that followed were met by a vast stillness. “Palestinians must abandon violence,” Obama said. “Violence is a dead end. It is a sign of neither courage nor power to shoot rockets at sleeping children, or to blow up old women on a bus. That is not how moral authority is claimed; that is how it is surrendered.”

Obama was repeatedly interrupted by applause, however, when he said the following: “At the same time, Israelis must acknowledge that just as Israel ’s right to exist cannot be denied, neither can Palestine’s. The United States does not accept the legitimacy of continued Israeli settlements. This construction violates previous agreements and undermines efforts to achieve peace. It is time for these settlements to stop.”

Juan Cole:

I think he may be reading too much into some moments of silence, but he is absolutely correct that Obama's even-handedness in defending Israel would not have been and was not popular. Arab publics think that Israel has been doing something criminal to the Palestinians, and they can't understand why the international community condones it.

This makes Obama's refusal to engage in the usual US/Israeli Kabuki dance even more encouraging. The reality of the situation is that our relations with the Muslim world won't significantly improve until our role in the Israeli/Palestinian conflict changes. If he keeps up his actions on that front, he has the potential to change the way the US is seen throughout the world for generations. His willingness to confront Israel's hard line stance on the settlements has been (in my opinion) the most impressive achievement of his presidency so far. There's a long, long road ahead, but his actions on this issue so far make the future look extremely bright.