Friday, March 28, 2008
March 28, 2008
Tested Over Time
By DAVID BROOKS
Barack Obama says: “John McCain is determined to carry out four more years of George Bush’s failed policies.” Obama is a politician, so it’s normal that he’d choose to repeat the lines that some of his followers want to hear. But before people buy that argument, I’d ask them to read three speeches.
The first was delivered by McCain on Sept. 28, 1983. The Reagan administration was seeking Congressional authorization to support the deployment of U.S. Marines in Lebanon. McCain, a freshman legislator, decided to oppose his president and party.
McCain argued that Lebanese society, as it existed then, could not be stabilized and unified by American troops. He made a series of concrete observations about the facts on the ground. Lebanon was in a state of de facto partition. The Lebanese Army would not soon be strong enough to drive out the Syrians. The American presence would not intimidate the Syrians into negotiating.
“I do not foresee obtainable objectives in Lebanon.” He concluded. “I believe the longer we stay, the more difficult it will be to leave, and I am prepared to accept the consequences of our withdrawal.”
This was not the speech of a man who thinks military force is the answer to every problem. It was the speech of one who conforms policies to facts. And it came a month before a terrorist attack that killed 241 Americans.
The second speech was delivered on Nov. 5, 2003. This was not a grand strategy speech. It was a critique of the execution of existing U.S. policy.
First, McCain wondered about the Pentagon’s publicity campaign in Iraq: “When, in the course of days, we increase by thousands our estimate of the numbers of Iraqis trained, it sounds like somebody is cooking the books.”
He then pointed out that the U.S. had not committed sufficient troops. He called for a counterinsurgency strategy in which U.S. forces would actually hold secure territory. “Simply put,” he said, “there does not appear to be a strategy behind our current force levels in Iraq, other than to preserve the illusion that we have sufficient forces in place to meet our objectives.”
He excoriated the arrogance of Paul Bremer and the Coalition Provisional Authority: “The C.P.A. seems to think that all wisdom is made in America, and that the Iraqi people were defeated, not liberated.”
This was the speech of a man, adjusting to changing circumstances, who was calling on the administration to adjust quickly as well.
The third McCain speech was delivered on Wednesday. It is as personal, nuanced and ambitious a speech as any made by a presidential candidate this year.
McCain noted that we are not only fighting a war on terror. The world is seeing a growing split between liberal democracies and growing autocracies. We are seeing a world in which great power rivalries — with China, Russia and Iran — have to be managed and soothed.
Moreover, the U.S. is not the sole hegemon. Power is widely distributed among many rising nations. McCain’s core purpose in the speech was to revive the foreign policy tradition that has jumped parties but that has been associated with people like Theodore Roosevelt, Henry Stimson, Dean Acheson, John Kennedy and Ronald Reagan.
In this tradition, a strong America is the key to world peace, but America’s role is as a leading player in an international system. America didn’t defeat communism, McCain said Wednesday, the American-led global community did. This is the tradition that Robert Kagan of the Carnegie Endowment has been describing for a decade.
McCain offered to build new pillars for that system — a League of Democracies, a new nuclear nonproliferation regime and a successor to the Kyoto treaty. In stabilizing Asia and the Middle East, he would rely more on democracies like Turkey, India, Israel and Iraq, and less on Mubarak and Musharraf.
Unlike the realists, McCain believes other nations have to be judged according to how they treat their own citizens. Unlike the Bush administration in its first few years, he believes global treaties cannot solely be evaluated according to a narrow definition of the American interest. The U.S. also has to protect the fabric of the international system.
McCain opened his speech with a description of his father leaving home on the day of Pearl Harbor, and then being gone for much of the next four years. He harkened back repeatedly to the accomplishments of the Truman administration.
In so doing, he signaled that the foreign policy debate of the coming months will be very different from the one of the past six years. Anybody who thinks McCain is merely continuing the Bush agenda is not paying attention.
Friday, March 28, 2008
"A Significant Increase In The Army and Marine Corps"
Posted by: Hugh Hewitt at 10:17 AM
In the blogger conference call today, McCain Senior Advisor Steve Schmidt outlined next week's "Service to America" tour. Senator McCain will be making speeches from McCain Field in Mississippi, Episcopal High School in Alexandria, Virginia, Annapolis, Maryland, Jacksonville and Pensacola, Florida. Each stop will underscore some aspect of the senator's life story, as well as the McCain family's many-generation commitment to the country's safety.
At the Jacksonville stop, the GOP nominee will call for a significant increase in the size of the Army and Marine Corps. I asked if the Navy would be part of the call for an expanded military, and Schmidt demurred until the senator speaks next week. It seems to me that a naval power needs more than the 280 ship Navy we are headed for.
Expansion of the military is a crucial issue for the fall campaign. The Jacksonville speech will thus be a very significant milestone in Campaign 2008.
Thursday, March 27, 2008
McCain 43/Clinton 46 in California... http://www.realclearpolitics.com/epolls/2008/president/ca/california_mccain_vs_clinton-433.html
McCain 40/Obama 49 in California... http://www.realclearpolitics.com/epolls/2008/president/ca/california_mccain_vs_obama-558.html
Wednesday, March 26, 2008
Missouri has voted for every elected President but one over the last 100 years (it's also the state I grew up in, so it's exciting to me that Sen. McCain is doing so well).
When I was five years old, a car pulled up in front of our house in New London, Connecticut, and a Navy officer rolled down the window, and shouted at my father that the Japanese had bombed Pearl Harbor. My father immediately left for the submarine base where he was stationed. I rarely saw him again for four years. My grandfather, who commanded the fast carrier task force under Admiral Halsey, came home from the war exhausted from the burdens he had borne, and died the next day. In Vietnam, where I formed the closest friendships of my life, some of those friends never came home to the country they loved so well. I detest war. It might not be the worst thing to befall human beings, but it is wretched beyond all description. When nations seek to resolve their differences by force of arms, a million tragedies ensue. The lives of a nation’s finest patriots are sacrificed. Innocent people suffer and die. Commerce is disrupted; economies are damaged; strategic interests shielded by years of patient statecraft are endangered as the exigencies of war and diplomacy conflict. Not the valor with which it is fought nor the nobility of the cause it serves, can glorify war. Whatever gains are secured, it is loss the veteran remembers most keenly. Only a fool or a fraud sentimentalizes the merciless reality of war. However heady the appeal of a call to arms, however just the cause, we should still shed a tear for all that is lost when war claims its wages from us.
I am an idealist, and I believe it is possible in our time to make the world we live in another, better, more peaceful place, where our interests and those of our allies are more secure, and American ideals that are transforming the world, the principles of free people and free markets, advance even farther than they have. But I am, from hard experience and the judgment it informs, a realistic idealist. I know we must work very hard and very creatively to build new foundations for a stable and enduring peace. We cannot wish the world to be a better place than it is. We have enemies for whom no attack is too cruel, and no innocent life safe, and who would, if they could, strike us with the world’s most terrible weapons. There are states that support them, and which might help them acquire those weapons because they share with terrorists the same animating hatred for the West, and will not be placated by fresh appeals to the better angels of their nature. This is the central threat of our time, and we must understand the implications of our decisions on all manner of regional and global challenges could have for our success in defeating it.
President Harry Truman once said of America, “God has created us and brought us to our present position of power and strength for some great purpose.” In his time, that purpose was to contain Communism and build the structures of peace and prosperity that could provide safe passage through the Cold War. Now it is our turn. We face a new set of opportunities, and also new dangers. The developments of science and technology have brought us untold prosperity, eradicated disease, and reduced the suffering of millions. We have a chance in our lifetime to raise the world to a new standard of human existence. Yet these same technologies have produced grave new risks, arming a few zealots with the ability to murder millions of innocents, and producing a global industrialization that can in time threaten our planet.
To meet this challenge requires understanding the world we live in, and the central role the United States must play in shaping it for the future. The United States must lead in the 21st century, just as in Truman’s day. But leadership today means something different than it did in the years after World War II, when Europe and the other democracies were still recovering from the devastation of war and the United States was the only democratic superpower. Today we are not alone. There is the powerful collective voice of the European Union, and there are the great nations of India and Japan, Australia and Brazil, South Korea and South Africa, Turkey and Israel, to name just a few of the leading democracies. There are also the increasingly powerful nations of China and Russia that wield great influence in the international system.
In such a world, where power of all kinds is more widely and evenly distributed, the United States cannot lead by virtue of its power alone. We must be strong politically, economically, and militarily. But we must also lead by attracting others to our cause, by demonstrating once again the virtues of freedom and democracy, by defending the rules of international civilized society and by creating the new international institutions necessary to advance the peace and freedoms we cherish. Perhaps above all, leadership in today’s world means accepting and fulfilling our responsibilities as a great nation.
One of those responsibilities is to be a good and reliable ally to our fellow democracies. We cannot build an enduring peace based on freedom by ourselves, and we do not want to. We have to strengthen our global alliances as the core of a new global compact — a League of Democracies — that can harness the vast influence of the more than one hundred democratic nations around the world to advance our values and defend our shared interests.
At the heart of this new compact must be mutual respect and trust. Recall the words of our founders in the Declaration of Independence, that we pay “decent respect to the opinions of mankind.” Our great power does not mean we can do whatever we want whenever we want, nor should we assume we have all the wisdom and knowledge necessary to succeed. We need to listen to the views and respect the collective will of our democratic allies. When we believe international action is necessary, whether military, economic, or diplomatic, we will try to persuade our friends that we are right. But we, in return, must be willing to be persuaded by them.
America must be a model citizen if we want others to look to us as a model. How we behave at home affects how we are perceived abroad. We must fight the terrorists and at the same time defend the rights that are the foundation of our society. We can’t torture or treat inhumanely suspected terrorists we have captured. I believe we should close Guantanamo and work with our allies to forge a new international understanding on the disposition of dangerous detainees under our control.
There is such a thing as international good citizenship. We need to be good stewards of our planet and join with other nations to help preserve our common home. The risks of global warming have no borders. We and the other nations of the world must get serious about substantially reducing greenhouse gas emissions in the coming years or we will hand off a much-diminished world to our grandchildren. We need a successor to the Kyoto Treaty, a cap-and-trade system that delivers the necessary environmental impact in an economically responsible manner. We Americans must lead by example and encourage the participation of the rest of the world, including most importantly, the developing economic powerhouses of China and India.
Four and a half decades ago, John Kennedy described the people of Latin America as our “firm and ancient friends, united by history and experience and by our determination to advance the values of American civilization.” With globalization, our hemisphere has grown closer, more integrated, and more interdependent. Latin America today is increasingly vital to the fortunes of the United States. Americans north and south share a common geography and a common destiny. The countries of Latin America are the natural partners of the United States, and our northern neighbor Canada.
Relations with our southern neighbors must be governed by mutual respect, not by an imperial impulse or by anti-American demagoguery. The promise of North, Central, and South American life is too great for that. I believe the Americas can and must be the model for a new 21st century relationship between North and South. Ours can be the first completely democratic hemisphere, where trade is free across all borders, where the rule of law and the power of free markets advance the security and prosperity of all.
Power in the world today is moving east; the Asia-Pacific region is on the rise. Together with our democratic partner of many decades, Japan, we can grasp the opportunities present in the unfolding world and this century can become safe — both American and Asian, both prosperous and free. Asia has made enormous strides in recent decades. Its economic achievements are well known; less known is that more people live under democratic rule in Asia than in any other region of the world.
Dealing with a rising China will be a central challenge for the next American president. Recent prosperity in China has brought more people out of poverty faster than during any other time in human history. China’s newfound power implies responsibilities. China could bolster its claim that it is “peacefully rising” by being more transparent about its significant military buildup, by working with the world to isolate pariah states such as Burma, Sudan and Zimbabwe, and by ceasing its efforts to establish regional forums and economic arrangements designed to exclude America from Asia.
China and the United States are not destined to be adversaries. We have numerous overlapping interests and hope to see our relationship evolve in a manner that benefits both countries and, in turn, the Asia-Pacific region and the world. But until China moves toward political liberalization, our relationship will be based on periodically shared interests rather than the bedrock of shared values.
The United States did not single-handedly win the Cold War; the transatlantic alliance did, in concert with partners around the world. The bonds we share with Europe in terms of history, values, and interests are unique. Americans should welcome the rise of a strong, confident European Union as we continue to support a strong NATO. The future of the transatlantic relationship lies in confronting the challenges of the twenty-first century worldwide: developing a common energy policy, creating a transatlantic common market tying our economies more closely together, addressing the dangers posed by a revanchist Russia, and institutionalizing our cooperation on issues such as climate change, foreign assistance, and democracy promotion.
We should start by ensuring that the G-8, the group of eight highly industrialized states, becomes again a club of leading market democracies: it should include Brazil and India but exclude Russia. Rather than tolerate Russia’s nuclear blackmail or cyber attacks, Western nations should make clear that the solidarity of NATO, from the Baltic to the Black Sea, is indivisible and that the organization’s doors remain open to all democracies committed to the defense of freedom.
While Africa’s problems — poverty, corruption, disease, and instability — are well known, we must refocus on the bright promise offered by many countries on that continent. We must strongly engage on a political, economic, and security level with friendly governments across Africa, but insist on improvements in transparency and the rule of law. Many African nations will not reach their true potential without external assistance to combat entrenched problems, such as HIV/AIDS, that afflict Africans disproportionately. I will establish the goal of eradicating malaria on the continent — the number one killer of African children under the age of five. In addition to saving millions of lives in the world’s poorest regions, such a campaign would do much to add luster to America’s image in the world.
We also share an obligation with the world’s other great powers to halt and reverse the proliferation of nuclear weapons. The United States and the international community must work together and do all in our power to contain and reverse North Korea’s nuclear weapons program and to prevent Iran — a nation whose President has repeatedly expressed a desire to wipe Israel from the face of the earth — from obtaining a nuclear weapon. We should work to reduce nuclear arsenals all around the world, starting with our own. Forty years ago, the five declared nuclear powers came together in support of the Nuclear Nonproliferation Treaty and pledged to end the arms race and move toward nuclear disarmament. The time has come to renew that commitment. We do not need all the weapons currently in our arsenal. The United States should lead a global effort at nuclear disarmament consistent with our vital interests and the cause of peace.
If we are successful in pulling together a global coalition for peace and freedom — if we lead by shouldering our international responsibilities and pointing the way to a better and safer future for humanity, I believe we will gain tangible benefits as a nation.
It will strengthen us to confront the transcendent challenge of our time: the threat of radical Islamic terrorism. This challenge is transcendent not because it is the only one we face. There are many dangers in today’s world, and our foreign policy must be agile and effective at dealing with all of them. But the threat posed by the terrorists is unique. They alone devote all their energies and indeed their very lives to murdering innocent men, women, and children. They alone seek nuclear weapons and other tools of mass destruction not to defend themselves or to enhance their prestige or to give them a stronger hand in world affairs but to use against us wherever and whenever they can. Any president who does not regard this threat as transcending all others does not deserve to sit in the White House, for he or she does not take seriously enough the first and most basic duty a president has — to protect the lives of the American people.
We learned through the tragic experience of September 11 that passive defense alone cannot protect us. We must protect our borders. But we must also have an aggressive strategy of confronting and rooting out the terrorists wherever they seek to operate, and deny them bases in failed or failing states. Today al Qaeda and other terrorist networks operate across the globe, seeking out opportunities in Southeast Asia, Central Asia, Africa, and in the Middle East.
Prevailing in this struggle will require far more than military force. It will require the use of all elements of our national power: public diplomacy; development assistance; law enforcement training; expansion of economic opportunity; and robust intelligence capabilities. I have called for major changes in how our government faces the challenge of radical Islamic extremism by much greater resources for and integration of civilian efforts to prevent conflict and to address post-conflict challenges. Our goal must be to win the “hearts and minds” of the vast majority of moderate Muslims who do not want their future controlled by a minority of violent extremists. In this struggle, scholarships will be far more important than smart bombs.
We also need to build the international structures for a durable peace in which the radical extremists are gradually eclipsed by the more powerful forces of freedom and tolerance. Our efforts in Iraq and Afghanistan are critical in this respect and cannot be viewed in isolation from our broader strategy. In the troubled and often dangerous region they occupy, these two nations can either be sources of extremism and instability or they can in time become pillars of stability, tolerance, and democracy.
For decades in the greater Middle East, we had a strategy of relying on autocrats to provide order and stability. We relied on the Shah of Iran, the autocratic rulers of Egypt, the generals of Pakistan, the Saudi royal family, and even, for a time, on Saddam Hussein. In the late 1970s that strategy began to unravel. The Shah was overthrown by the radical Islamic revolution that now rules in Tehran. The ensuing ferment in the Muslim world produced increasing instability. The autocrats clamped down with ever greater repression, while also surreptitiously aiding Islamic radicalism abroad in the hopes that they would not become its victims. It was a toxic and explosive mixture. The oppression of the autocrats blended with the radical Islamists’ dogmatic theology to produce a perfect storm of intolerance and hatred.
We can no longer delude ourselves that relying on these out-dated autocracies is the safest bet. They no longer provide lasting stability, only the illusion of it. We must not act rashly or demand change overnight. But neither can we pretend the status quo is sustainable, stable, or in our interests. Change is occurring whether we want it or not. The only question for us is whether we shape this change in ways that benefit humanity or let our enemies seize it for their hateful purposes. We must help expand the power and reach of freedom, using all our many strengths as a free people. This is not just idealism. It is the truest kind of realism. It is the democracies of the world that will provide the pillars upon which we can and must build an enduring peace.
If you look at the great arc that extends from the Middle East through Central Asia and the Asian subcontinent all the way to Southeast Asia, you can see those pillars of democracy stretching across the entire expanse, from Turkey and Israel to India and Indonesia. Iraq and Afghanistan lie at the heart of that region. And whether they eventually become stable democracies themselves, or are allowed to sink back into chaos and extremism, will determine not only the fate of that critical part of the world, but our fate, as well.
That is the broad strategic perspective through which to view our efforts in Iraq and Afghanistan. Many people ask, how should we define success? Success in Iraq and Afghanistan is the establishment of peaceful, stable, prosperous, democratic states that pose no threat to neighbors and contribute to the defeat of terrorists. It is the triumph of religious tolerance over violent radicalism.
Those who argue that our goals in Iraq are unachievable are wrong, just as they were wrong a year ago when they declared the war in Iraq already lost. Since June 2007 sectarian and ethnic violence in Iraq has been reduced by 90 percent. Overall civilian deaths have been reduced by more than 70 percent. Deaths of coalition forces have fallen by 70 percent. The dramatic reduction in violence has opened the way for a return to something approaching normal political and economic life for the average Iraqi. People are going back to work. Markets are open. Oil revenues are climbing. Inflation is down. Iraq’s economy is expected to grown by roughly 7 percent in 2008. Political reconciliation is occurring across Iraq at the local and provincial grassroots level. Sunni and Shi’a chased from their homes by terrorist and sectarian violence are returning. Political progress at the national level has been far too slow, but there is progress.
Critics say that the “surge” of troops isn’t a solution in itself, that we must make progress toward Iraqi self-sufficiency. I agree. Iraqis themselves must increasingly take responsibility for their own security, and they must become responsible political actors. It does not follow from this, however, that we should now recklessly retreat from Iraq regardless of the consequences. We must take the course of prudence and responsibility, and help Iraqis move closer to the day when they no longer need our help.
That is the route of responsible statesmanship. We have incurred a moral responsibility in Iraq. It would be an unconscionable act of betrayal, a stain on our character as a great nation, if we were to walk away from the Iraqi people and consign them to the horrendous violence, ethnic cleansing, and possibly genocide that would follow a reckless, irresponsible, and premature withdrawal. Our critics say America needs to repair its image in the world. How can they argue at the same time for the morally reprehensible abandonment of our responsibilities in Iraq?
Those who claim we should withdraw from Iraq in order to fight Al Qaeda more effectively elsewhere are making a dangerous mistake. Whether they were there before is immaterial, al Qaeda is in Iraq now, as it is in the borderlands between Pakistan and Afghanistan, in Somalia, and in Indonesia. If we withdraw prematurely from Iraq, al Qaeda in Iraq will survive, proclaim victory and continue to provoke sectarian tensions that, while they have been subdued by the success of the surge, still exist, as various factions of Sunni and Shi’a have yet to move beyond their ancient hatreds, and are ripe for provocation by al Qaeda. Civil war in Iraq could easily descend into genocide, and destabilize the entire region as neighboring powers come to the aid of their favored factions. I believe a reckless and premature withdrawal would be a terrible defeat for our security interests and our values. Iran will also view our premature withdrawal as a victory, and the biggest state supporter of terrorists, a country with nuclear ambitions and a stated desire to destroy the State of Israel, will see its influence in the Middle East grow significantly. These consequences of our defeat would threaten us for years, and those who argue for it, as both Democratic candidates do, are arguing for a course that would eventually draw us into a wider and more difficult war that would entail far greater dangers and sacrifices than we have suffered to date. I do not argue against withdrawal, any more than I argued several years ago for the change in tactics and additional forces that are now succeeding in Iraq, because I am somehow indifferent to war and the suffering it inflicts on too many American families. I hold my position because I hate war, and I know very well and very personally how grievous its wages are. But I know, too, that we must sometimes pay those wages to avoid paying even higher ones later.
I run for President because I want to keep the country I love and have served all my life safe, and to rise to the challenges of our times, as generations before us rose to theirs. I run for President because I know it is incumbent on America, more than any other nation on earth, to lead in building the foundations for a stable and enduring peace, a peace built on the strength of our commitment to it, on the transformative ideals on which we were founded, on our ability to see around the corner of history, and on our courage and wisdom to make hard choices. I run because I believe, as strongly as I ever have, that it is within our power to make in our time another, better world than we inherited.
Tuesday, March 25, 2008
Thank you for joining me here today. I just returned from a trip overseas that included assessing the state of affairs in Iraq, the Middle East, and Europe. I will have more to say on those important issues in the days and weeks to come.
While I was traveling overseas, our financial markets experienced another round of upheaval. This market turmoil leaves many Americans feeling both concerned and angry. People see the value of their homes fall at the same time that the price of gasoline and food is rising. Already tight household budgets are getting tighter. A lot of Americans read the headlines about credit crunches and liquidity crises and ask: “How did we get here?” In the end, the motivation and behaviors that caused the current crisis are not terribly complicated, even though the alphabet soup of financial instruments is complex. The past decade witnessed the largest increase in home ownership in the past 50 years.
Home ownership is part of the American dream, and we want as many Americans as possible to be able to afford their own home. But in the process of a huge, and largely positive, upturn in home construction and ownership, a housing bubble was created.
A bubble occurs when prices are driven up too quickly, speculators move into markets, and these players begin to suspend the normal rules of risk and assume that prices can only move up - but never down. We've seen this kind of bubble before - in the late 1990s, we had the technology bubble, when money poured into technology stocks and people assumed that those stock values would rise indefinitely. Between 2001 and 2006, housing prices rose by nearly 15 percent every year. The normal market forces of people buying and selling their homes were overwhelmed by rampant speculation. Our system of market checks and balances did not correct this until the bubble burst.
A sustained period of rising home prices made many home lenders complacent, giving them a false sense of security and causing them to lower their lending standards. They stopped asking basic questions of their borrowers like "can you afford this home? Can you put a reasonable amount of money down?" Lenders ended up violating the basic rule of banking: don’t lend people money who can’t pay it back. Some Americans bought homes they couldn't afford, betting that rising prices would make it easier to refinance later at more affordable rates.
There are 80 million family homes in America and those homeowners are now facing the reality that the bubble has burst and prices go down as well as up.
Of those 80 million homeowners, only 55 million have a mortgage at all, and 51 million are doing what is necessary – working a second job, skipping a vacation, and managing their budgets – to make their payments on time. That leaves us with a puzzling situation: how could 4 million mortgages cause this much trouble for us all?
The other part of what happened was an explosion of complex financial instruments that weren't particularly well understood by even the most sophisticated banks, lenders and hedge funds. To make matters worse, these instruments - which basically bundled together mortgages and sold them to others to spread risk throughout our
capital markets - were mostly off-balance sheets, and hidden from scrutiny. In other words, the housing bubble was made worse by a series of complex, inter-connected financial bets that were not transparent or fully understood. That means they weren't always managed wisely because people couldn't properly quantify the risk or the value of these bets. And because these instruments were bundled and sold and resold, it became harder and
harder to find and connect up a real lender with a real borrower. Capital markets work best when there is both accountability and transparency. In the case of our current crisis, both were lacking.
Because managers did not fully understand the complex financial instruments and because there was insufficient transparency when they did try to learn, the initial losses spawned a crisis of confidence in the markets. Market players are increasingly unnerved by the uncertainty surrounding the level of risk, liability and loss currently in the financial system. Banks no longer trust each other and are increasingly unwilling to put their money to work. Credit is drying up and liquidity is now severely limited – and small business and hard-working families
find themselves unable to get their usual loans.
The net result is the crisis we face. What started as a problem in subprime loans has now convulsed the entire financial system.
Let's start with some straight talk:
I will not play election year politics with the housing crisis. I will evaluate everything in terms of whether it might be harmful or helpful to our effort to deal with the crisis we face now.
I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers. Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy.
In our effort to help deserving homeowners, no assistance should be given to speculators. Any assistance for borrowers should be focused solely on homeowners, not people who bought houses for speculative purposes, to rent or as second homes. Any assistance must be temporary and must not reward people who were irresponsible at the expense of those who weren’t. I will consider any and all proposals based on their cost and benefits. In this crisis, as in all I may face in the future, I will not allow dogma to override common sense.
When we commit taxpayer dollars as assistance, it should be accompanied by reforms that ensure that we never face this problem again. Central to those reforms should be transparency and accountability.
Homeowners should be able to understand easily the terms and obligations of a mortgage. In return, they have an obligation to provide truthful financial information and should be subject to penalty if they do not. Lenders who initiate loans should be held accountable for the quality and performance of those loans and strict standards should be required in the lending process. We must have greater transparency in the lending process so that every borrower knows exactly what he is agreeing to and where every lender is required to meet the highest standards of ethical behavior.
Policies should move toward ensuring that homeowners provide a responsible down payment of equity at the initial purchase of a home. I therefore oppose reducing the down payment requirement for FHA mortgages and believe that, as conditions allow, the down payment requirement should be raised. So many homeowners have found themselves owing more than their home is worth, because many never had much equity in the house to begin with. When conditions return to normal, GSEs (Government Sponsored Enterprises) should never insure loans when the homeowner clearly does not have skin in the game.
In financial institutions, there is no substitute for adequate capital to serve as a buffer against losses. Our financial market approach should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital.
I am prepared to examine new proposals and evaluate them based on these principals. But I think we need to do two things right away. First, it is time to convene a meeting of the nation's accounting professionals to discuss the current mark to market accounting systems. We are witnessing an unprecedented situation as banks and investors try to determine the appropriate value of the assets they are holding and there is widespread concern that this approach is exacerbating the credit crunch.
We should also convene a meeting of the nation's top mortgage lenders. Working together, they should pledge to provide maximum support and help to their cash-strapped, but credit worthy customers. They should pledge to do everything possible to keep families in their homes and businesses growing. Recall that immediately after September 11, 2001 General Motors stepped in to provide 0 percent financing as part of keeping the economy
growing. We need a similar response by the mortgage lenders. They've been asking the government to help them out. I'm now calling upon them to help their customers, and their nation out. It's time to help American families.
More important than the events of the past is the promise of the future. The American economy is resilient and diverse. Even as financial troubles weigh upon it other parts of the economy hold up or even continue to grow. I have spoken at length in other settings about the need to keep taxes low on our families, entrepreneurs, and small businesses; to make the tax code simpler and fair by eliminating the Alternative Minimum Tax that the middle class was never intended to pay; to improve the ability of our companies to compete by reducing our corporate tax rate, which today are the second highest rates in the world;to provide investment incentives; to control rising health care costs that threaten the budgets of our businesses and families; to improve education and training programs; and to ensure our ability to sell to the 95 percent of the world’s customers that lie outside U.S. borders.
These are important steps to strengthen the foundations of the millions of businesses small and large that provide jobs for American workers. There is no government program or policy that is a substitute for a good job. These steps would also strengthen the U.S. dollar and help to control the rising cost of living that hurts our families. These are important issues in this campaign and the debate with my Democrat rivals. But I will get my chance to talk further another day. Now I look forward to hearing from our small business owners – the very
lifeblood of our economy.
Monday, March 24, 2008
John McCain continues to lead both potential Democratic opponents. McCain leads Barack Obama 49% to 41% and Hillary Clinton 50% to 42% (see recent daily results). New polling shows McCain leading both Democrats in Georgia and Arkansas.
Feuding Democrats have handed Senator John McCain the gift of time. How well he uses it may determine his chance to beat them in November.
At the moment, Republicans can savor protracted warfare between Senators Hillary Rodham Clinton and Barack Obama. As the Democratic rivals trade attacks, Mr. McCain, already the presumptive Republican nominee, has crept ahead of both in national polls.
Friday, March 21, 2008
Sen. McCain is in the UK and Europe this week. He visited with the Prime Minister and with David Cameron, the leader of the opposition Conservatives yesterday. He had this to say about the British/US alliance, and the sacrifices of British fighting soldiers in Iraq and Afghanistan:
Wednesday, March 19, 2008
Tuesday, March 18, 2008
Friday, March 14, 2008
With polls in Pennsylvania giving Senator Clinton an average 16 pt margin the Democratic nomination, and these kind of attacks, promise to continue until August.
Thursday, March 13, 2008
I just received the following email from the campaign explaining their most important takeaways:
----- Original Message -----
From: Patrick Hynes firstname.lastname@example.org
To: Patrick Hynes email@example.com
Sent: Thu Mar 13 07:07:33 2008
Subject: WSJ: McCain, GOP May Have Cause For Hope
Important take-aways from the new WSJ/NBC poll:
* Despite a tarnished Republican brand, Sen. John McCain enjoys a remarkably strong image ratio of 47 Fav/27 Unfav.
* A couple findings in the new poll capture how conflicted Americans are. By a 13-point margin, 50% to 37%, registered voters say they would prefer a Democrat to be elected president. When asked to choose specifically between Arizona Sen. McCain and either Democrat, the results in each case are a statistical tie.
* "Americans can visualize John McCain behind the desk in the Oval Office," said Mr. [Democratic pollster Peter] Hart.
* The issues environment remains very treacherous for Republicans as a whole.
Wednesday, March 12, 2008
After a stop in New York last night, Sen. (Pres. Nominee) McCain heads to the Middle East and European capitals to show off his massive foreign policy credentials.
I predict this very strong suit of Pres. Nom. McCain will show through this month as he explains his pro-American foreign policy that garners respect from our allies and fear from our enemies. (As opposed to fear from our allies and false respect from our enemies)...
Then he will tour the country on a biographical tour, to introduce himself to the country as the Pres. Nom... Hail to the hero!!
Sunday, March 9, 2008
The more that America learns about Sen. McCain's biography in forums such as this, the more I trust Sen. McCain will become the popular American hero he deserves to be... and ultimately that he might serve her a little while longer as the Commander in Chief.
The money and national political network that come with being a nominee will allow McCain to build the kind of operation his team had begun to put together last spring, when overspending left the campaign nearly broke. In that sense, his campaign will get an upgrade. Still, all signs point to a strong year for Democrats, and McCain will be outspent by the Democratic nominee, whether Hillary Clinton or Barack Obama, next fall.
So while McCain's effort will begin to take on the qualities of a real general election campaign, he intends to preserve much of the insurgent character that helped him get this far. Either way, it will be unconventional and, at the beginning, nonideological.
After a quick "thank you" tour of New Hampshire, McCain plans to kick off the new phase of the campaign by not campaigning at all. At least not overtly. Later this month, he will spend more than a week overseas, with stops in Europe and the Middle East. His advisers say that while McCain is going chiefly to assess progress in these areas, he will also reinforce an important campaign message as the Obama-Clinton fight continues. "While those two are throwing deck chairs at each other, he'll look like the president," says a senior adviser to McCain.
Friday, March 7, 2008
The journey from that moment [the campaign's collapse last July] to capturing the Republican nomination Tuesday night was propelled by many factors beyond McCain's control. McKinnon said it was like drawing to an inside straight over and over.
The Iraq troop "surge," which McCain had advocated, gained support. Former Arkansas Gov. Mike Huckabee emerged as a serious candidate and beat former Massachusetts Gov. Mitt Romney in Iowa. Former New York Mayor Rudolph W. Giuliani essentially pulled out of New Hampshire, clearing McCain's way. Romney abandoned South Carolina, helping McCain to victory there, which gave him the momentum to win Florida.
But before all that, McCain's comeback was largely engineered by a team that grew out of the summer collapse, who are jokingly called the "Sedona five" because of their strategy sessions at McCain's Arizona cabin.
Thursday, March 6, 2008
Here is the poem in it's entirety:
Out of the night that covers me,
Black as the Pit from pole to pole,
I thank whatever Gods may be
For my unconquerable soul.
In the fell clutch of Circumstance
I have not winced nor cried aloud.
Under the bludgeonings of Chance
My head is bloody, but unbowed.
Beyond this place of wrath and tears
Looms but the Horror of the shade,
And yet the menace of the years
Finds, and shall find me, unafraid.
It matters not how strait the gate,
How charged with punishments the scroll,
I am the master of my fate:
I am the captain of my soul.
Wednesday, March 5, 2008
Tuesday, March 4, 2008
Monday, March 3, 2008
McCain's Economy Platform: Big Tax Cuts, With Caveats
By BOB DAVIS March 3, 2008; Page A1
WASHINGTON -- Imagining how John McCain, the Navy war hero, would play the role of commander in chief has been easy. Imagining how John McCain, the policy maverick, would lead as chief executive of the U.S. economy has been tougher.
In a wide-ranging interview last week, Sen. McCain offered the most-detailed account to date of his thinking on economic issues.
The all-but-certain Republican presidential nominee cast himself as a defender of the Bush tax cuts he voted against, but added caveats to a "no new taxes" vow he made on a Sunday television talk show two weeks ago.
On Social Security, the Arizona senator says he still backs a system of private retirement accounts that President Bush pushed unsuccessfully, and disowned details of a Social Security proposal on his campaign Web site.
Sen. McCain said the Federal Reserve should cut interest rates now to bolster the economy, but added that as president, he couldn't be so explicit on monetary policy. "Presidents have to be careful so they're not perceived as putting undue political pressure on the Fed," he said. "So I would certainly be more careful than I am today."
With the U.S. economy softening, he said he might have "a couple of fireside chats with the American people because of what we see in the [consumer] confidence barometers." But he added that the most potent economic stimulus would be to assure Americans that taxes won't go up in the future and to "call for a meaningful -- and I mean meaningful -- approach to simplifying the tax code so that it's fairer and flatter."
Those who know him well expect that a McCain presidency would be hard to categorize -- a conservative populist who acts by instinct rather than economic ideology. For businesses, that could make him hard to predict; for opponents, hard to pin down. In his 25 years in Congress, the Arizona senator has defined himself on economic issues more by his adversaries than by overarching economic principle.
"Sometimes he sees excesses in government and sometimes he sees excesses in the corporate world, and both make him sick," says John Raidt, a longtime McCain policy aide.
As chairman or senior Republican member of the Senate Commerce Committee -- which oversees old-line industries such as railroads as well as businesses such as the Internet -- he has squeezed broadcasters to hand back valuable airwaves and cable companies to let consumers pay for individual channels, rather than having to buy an expensive bundle. Despite these fights, media industries now are among his biggest campaign contributors, realizing that even if he loses the presidency, he'll still have a big say in their businesses as a lawmaker.
But his congressional assignments haven't forced him to wrestle with broader issues of tax, monetary and Social Security policy.
Retirees' Nest Egg
A centerpiece of a McCain presidential bid in 2000 was a plan to divert a portion of Social Security payroll taxes to fund private accounts, much as President Bush proposed unsuccessfully. Under the plan, workers could manage the money in stocks and bonds themselves to build a nest egg and, at retirement, also receive reduced Social Security payments from the government. Proponents say the combination of the nest egg and government payouts could give a retiree more than the current system, but opponents say the change would undermine the Social Security system.
'I'm always for less regulation. But I am aware of the view that there is a need for government oversight.'
Sen. McCain's 2008 presidential campaign Web site takes a different view, proposing "supplementing" the existing full Social Security system with personally managed accounts. Such accounts wouldn't substitute for guaranteed payments, and they wouldn't be financed by diverting a portion of Social Security payroll taxes.
Mr. McCain's chief economic aide, Douglas Holtz-Eakin, a former head of the Congressional Budget Office, says economic circumstances forced changes concerning Social Security policy. Vast budget surpluses projected in 2000 evaporated with a recession, the Bush tax cuts and the cost of responding to Sept. 11.
As a result, the McCain campaign says the candidate intends to keep Social Security solvent by reducing the growth in benefits over the coming decades to match projected growth in payroll tax revenues. Among the options are extending the retirement age to 68 and reducing cost-of-living adjustments, but the campaign hasn't made any final decisions.
"You can't keep promises made to retirees," says Mr. Holtz-Eakin, referring to the level of benefits the government is supposed to pay future retirees. "But you can pay future retirees more than current retirees."
Asked about the apparent change in position in the interview, Sen. McCain said he hadn't made one. "I'm totally in favor of personal savings accounts," he says. When reminded that his Web site says something different, he says he will change the Web site. (As of Sunday night, he hadn't.) "As part of Social Security reform, I believe that private savings accounts are a part of it -- along the lines that President Bush proposed."
Sen. McCain says that as president he would start negotiations with Democrats to fix Social Security. The program's trustees say by 2041, projected tax revenues will cover only three-fourths of currently promised benefits.
On the Democratic side, the two contenders have been far from clear what they would do also. Sen. Barack Obama has said he would raise the ceiling on wages subject to the Social Security payroll tax to boost revenue, but he hasn't specified the size of the tax increase. Sen. Clinton calls for personal investment accounts on top of existing Social Security, similar to what the McCain campaign Web site suggests, but she hasn't laid out how she would fix the program's looming insolvency.
Fine Line on Taxes
On taxes, Sen. McCain is walking a fine line between courting keep-taxes-low Republicans while insisting he is the candidate of fiscal discipline. Two weeks ago, ABC's George Stephanopoulos asked him on "This Week" if he were a "'read my lips' candidate, no new taxes, no matter what?" referring to a pledge made by President George H.W. Bush, which he later broke. "No new taxes," Sen. McCain responded. "But under circumstances would you increase taxes?" Mr. Stephanopoulos continued. "No," Sen. McCain answered.
Asked in The Wall Street Journal interview to clarify, Sen. McCain softened that stance. "I'm not making a 'read my lips' statement, in that I will not raise taxes," he says. "But I'm not saying I can envision a scenario where I would, OK?"
Behind the scenes, his campaign is searching for ways to pay for Sen. McCain's tax proposals. In addition to extending the Bush tax cuts, the 71-year-old candidate would slash the corporate income-tax rate from 35% to 25% at a cost to the Treasury of $100 billion a year, estimates Mr. Holtz-Eakin.
In all, his tax-cutting proposals could cost about $400 billion a year, according to estimates of the impact of different tax cuts by CBO and the McCain campaign. The cost will make it difficult for him to achieve his goal of balancing the budget by the end of his first term.
To pay for the cut in corporate tax rates, Sen. McCain is considering eliminating some corporate tax breaks listed by a bipartisan tax reform panel appointed by President Bush, who ignored its report. The panel outlined different ways to change the tax code to spur U.S. competitiveness.
Among the candidates for elimination are a 2004 break for manufacturers -- written so broadly that it includes computer software makers, construction firms and architects -- a low-income housing credit, and tax breaks for life-insurance companies, credit unions and exporters. Undoing those breaks would raise a maximum of around $45 billion a year, still leaving a big hole.
"There could be a fairer, flatter tax proposal that I might embrace, that you might look at the minutiae of it and say, well, that's going to increase somebody's taxes," he says. "But they eliminate the inequities, the complexities, and all of the things that characterize our tax code today."
Sen. McCain began to prepare himself for campaigning on economics late in 2005 when Mr. Holtz-Eakin and conservative Kevin Hassett, a veteran of the 2000 McCain campaign, started sending him four-page weekly briefing papers on tax reform, trade and other issues. Sen. McCain also consults with business and political leaders including Cisco Systems Inc. Chief Executive John Chambers; former Republican Texas Sen. Phil Gramm, a deficit hawk; and former Republican vice presidential candidate Jack Kemp, who hails from the deficits-don't-matter side of the party.
Sen. McCain rarely makes a public appearance without supporters with strong business or economic pedigrees, such as former Hewlett-Packard chief Carly Fiorina or Mr. Kemp. At town-hall meetings earlier in the campaign, he sometimes turned over economic questions to them.
As a presidential candidate, Sen. McCain has faced hostility from the political right because he voted against two rounds of Bush tax cuts. "I voted against the tax cuts because of the disproportional amount that went to the wealthiest Americans," he said on NBC's "Meet the Press" in January. He also said the tax cuts weren't matched by spending restraints, as he had wanted.
Now, given the worsening economic situation, he says it's important to fight to extend the tax cuts, which are set to expire in 2010.
While other candidates were scrambling in January to put together stimulus plans to boost flagging consumer spending, he proposed long-term tax cuts which could take years to come into law. "In the shorter term, if you somehow told American businesses and families, 'Look, you're not going to experience a tax increase in 2010,' I think that's a pretty good short-term measure," he says.
Sen. McCain also favors making corporate tax credits for research-and-development permanent and eliminating the alternative minimum tax. The AMT was designed years ago to keep the wealthy from using deductions to avoid paying taxes altogether, but, unless altered, will ensnare a growing number of middle-class taxpayers.
To show he can control spending, Sen. McCain cites his long record as a spending hawk, who battles sweetheart deals between the Pentagon and defense contractors, as well as projects that lawmakers of both parties cram into appropriations bills -- "earmarks," in budget lingo.
Congressional earmarks total $18 billion a year, according to the Taxpayers for Common Sense, a Washington, D.C., research group -- and each has a member of Congress who will ferociously fight to keep that spending going. Mr. Holtz-Eakin, the McCain adviser, says that earmarks actually cost $60 billion a year, counting programs that started in earlier years and get funded year after year.
Another source of spending cuts eyed by the McCain campaign is a White House hit list of underperforming or redundant programs. But again, the numbers are relatively small -- $18 billion annually -- compared to the cost of Sen. McCain's tax plans, and the programs include housing loans, education grants, and water projects popular with Congress.
The uncertainty involved in estimating the future costs of wars in Iraq and Afghanistan also could make it hard for him to make his budget targets. The CBO estimates spending on the wars at about $145 billion this fiscal year, which ends Sept. 30.
Sen. McCain's admirers say that by running for president as a spending hawk, he will tilt the politics of Washington in favor of spending restraint, in the same way George W. Bush's promotion of tax cuts during the 2000 campaign helped him build momentum for his plan. "If he proposes [a balanced budget] and doesn't get it, that doesn't mean it won't have a positive effect of having a lower series of deficits that there otherwise would be," says Barry Anderson, a former senior budget officer during Republican and Democratic presidencies.
Taking On Industry
Another question is how Sen. McCain would regulate business. He has fought with the drug industry to allow the importation of pharmaceuticals from Canada and permit the government to negotiate over drug pricing; tangled with broadcasters to force them to hand over transmission channels so they can be used by police and fire departments and other users; and taken on the airline industry over a consumer-rights bill, among other slugfests.
But some lobbyists in industries he has targeted are sanguine, figuring Sen. McCain won't focus much on issues such as drug importation once he has a bigger stage. One member of Sen. McCain's health-care task force, which endorsed drug importation, was a former McCain aide, Sonya Sotak, who lobbies against drug importation in her day job as an Eli Lilly lobbyist. "I don't impose my professional views on the senator," she says.
During his years at the Commerce Committee, Sen. McCain became the focus of lobbying from the telecommunications and health-care industries, given his focus on those fields. Now, health professionals, lobbyists, and individuals in the computer, television and movie industries are among his largest industry contributors, says the nonpartisan Center for Responsive Politics.
The law firm of Philadelphia-based Blank Rome LLP, which lobbies for cable company Comcast Corp. and drug company Abbott Laboratories, among others, is among Sen. McCain's largest contributors. The firm's employees have donated $188,000 to him, according to the center.
"My desire to support McCain has nothing to do with any client of my law firm," says David Girard diCarlo, the firm's chairman. Former Democratic vice presidential candidate Geraldine Ferraro, who backs Sen. Clinton, is a senior official at Blank Rome, which has raised $113,000 for the Democratic presidential candidate.
Sen. McCain's biggest regulatory effort is likely to come in the field of climate change. Along with independent Connecticut Sen. Joseph Lieberman, who was then a Democrat, Sen. McCain introduced the earliest version of a cap-and-trade system in 2003, and the pair have refined their ideas since. Under their plan, the government sets emissions goals. Companies that can't meet their targets must buy permits to produce carbon dioxide, either from companies that produce less CO2 than they are permitted, or from the government.
The system may require a large regulatory apparatus.
In the latest McCain-Lieberman version, the government would auction off carbon-emission permits. According to Harvard economist Robert Stavins, such sales could raise $50 billion to $100 billion a year.
An Energy Department analysis says Sen. McCain's plan raises energy prices so much that it would reduce economic growth.
"I hear this interesting argument that somehow this would cost more money to our economy," says Sen. McCain. But, "I am absolutely convinced that innovation, technology, and using the entrepreneurship of America will come up with technologies which will save money, be a boon to our economy, and clean up our environment." He's unlikely to get much argument on this from his Democratic opponents; Sens. Obama and Clinton co-sponsored Sen. McCain's legislation.
Saturday, March 1, 2008
So, we're going to sit down and negotiate with our harshest enemies, but tell Canada, one of our closest allies, we are unilaterally pulling out of NAFTA?
As Sen. McCain said today, national security and trade issues are: "interconnected with each other." "One of our greatest assets in Afghanistan are our Canadian friends. We need our Canadian friends, and we need their continued support in Afghanistan."
This sort of rhetoric is even making the Democratic leaders in Congress (the ones actually responsible for running our government currently) uncomfortable:
At an event Monday at George Washington University, a moderator asked four House Democrats if any thought it "practical" or a "good idea" to reopen and renegotiate Nafta.
The crew, led by Democratic Caucus head Rahm Emanuel, stared uneasily into the middle distance before submitting "no."
"We'll see if word gets to Ohio," joked the moderator. It didn't, and that's got some grown-ups in the party nervous.
On this issue, a little straight talk is necessary...
UPDATE: McCain's reaction from Texas as covered by the New York Post...