By Pat Nolan, Senior Vice President, Dye, Van Mol & Lawrence Public Relations
September 26, 2008
THE MESS IN WASHINGTON; INSIDE POLITICS DOES METRO; KURITA GOES TO COURT & ENGLISH FIRST AT IT AGAIN
It's hard for me to argue with someone like Warren Buffett, who, over the years, has made more money in the stock market and with his other investments than there are stars in the sky.
But his analogy that the country is facing an economic "Pearl Harbor" because of the current meltdown on Wall Street and in the other financial markets is just a bit off the mark to me.
I see the current situation more as an economic "Katrina", aided and abetted by some of the same hapless folks in Washington that so badly mishandled the real Hurricane Katrina and its aftermath just a few years ago.
We've actually had many more warnings that this pending economic implosion could likely occur than we did that the Japanese were going to attack us. But we deregulated anyway, and looked the other way the last few years while Wall Street invented financial tools that even they didn't understand, other than it made them a lot of money. All this helped spread a financial poison through our economy that now threatens the entire country and even the world.
But even when it was becoming more and more apparent what was happening, that the economy was not "fundamentally sound" as both President George Bush and GOP Presidential candidate John McCain were both claiming as recently as just a few weeks ago, the response in Washington (including from the Democratically-controlled Congress) has been piecemeal at best. "Just let us bail out AIG or Fannie Mae or Freddie Mac or several of the big bond houses or banks on Wall Street, and things will stabilize and get better", the administration said. But that didn't work.
Now, when the administration is ready to try a more comprehensive effort to cut out the cancer gnawing at our economic vitality (those mortgage-based securities), they have no credibility to sell it, and taxpayers, especially conservatives, are in revolt over its price tag ($700 billion +) and the precedent of this much government intrusion into the private sector.
Even the Bush administration's first effort at this latest bail-out legislation showed its failure to understand the situation. It made little sense to send up a bill to Congress that was so lax on things such as: oversight and transparency to monitor how the money would be spent; protection of the taxpayers to recoup any profits and pay down the debt; protection of mortgage holders facing foreclosure, not just Wall Street; and finally, some way to limit those way-too-high salaries and golden parachutes for those private industry officials whose decisions aided and abetted this crisis in the first place.
The Bush administration asked for bi-partisan cooperation in this matter and they got it...large elements of both parties lambasted the original bill. I am joking a bit about this, but here could be a reason why the original Bush bill got panned. When Congress usually gets an important bill from the White House, it is hundreds, if not thousands of pages long. It sometimes arrives in the middle of the night, and no one has read it except the lobbyists who wrote it. But a bill only two or three pages long is something a congressman or senator might just read and decide to do something about it. J They certainly were not going to buy into a plan that basically boiled down to: Give the Secretary of the Treasury a blank check ($700 billion) and we will get back with you later.
Indeed, over the last few days, Democrats and Republicans, especially in the Senate, have worked to add several of the safeguards they felt were needed to make this legislation more acceptable. In fact, yesterday (September 25) it even looked like it might be the final bill for approval. But instead, a meeting at the White House to finalize the bailout deal turned out to be an angry shouting match as House Republicans refused to go along and started talking about their own new plan that would rely on providing government insurance on these bad debts rather than just having Washington buy them out.
That fueled the flames of partisan politics, especially with both presidential candidates present at the meeting. John McCain, continuing to show the flare for the dramatic, if not the most unusual moves in recent presidential campaigns, even announced he was suspending his campaign (although so far, he doesn't seemed to have really done that) to come back to Washington and devote all his time to solving the crisis. McCain even said he would not go to the first presidential debate tonight (September 26) unless the economic crisis resolved.
But some problems immediately developed for the GOP candidate, especially when he cancelled an appearance on David Lettermen's late night show on CBS Wednesday. McCain reportedly told Letterman that he had to cancel and was going to the airport immediately. Instead he stayed in New York almost another 24 hours, including during an interview with Katie Couric (oh well, at least for Letterman, it was on his network). But McCain's apparent lack of candor has clearly angered Letterman, who has raged about it on the air for the last several days.
McCain's suggestion to postpone the debate was also not well received. It got a negative reaction from folks in Mississippi who were hosting and paying big bucks ($5 million) to put on the debate (with criticism also coming from some of the top Republican political leadership there). Most voters, as reflected in the polls, did not like the idea, either.
That gave some advantage to Democrat Barack Obama who looked a lot more presidential when he said now more than ever the voters needed to hear from the candidates in a debate, and that besides, presidents need to learn how to multi-task. Not surprisingly, McCain has now reconsidered and will be at the debate at Ole Miss.
When McCain did finally get to D.C., he found another challenge awaiting him: which bailout plan will he support or can he put one together on his own? Despite his reputation as a maverick who can work with both parties, that may not work this time. Democrats would to be loathe to support any McCain bill for fear of helping his presidential campaign. House Republicans might have some interest in joining McCain, but without Democratic help the vote numbers for passage aren't there. That leaves as a current alternative, only the plan the President (you remember him, George W. Bush, he used to be the leader of the GOP) has crafted along with the Democrats and some Senate Republican support (including it appears Tennessee's Senators Lamar Alexander and Bob Corker).
But if McCain does vote for that, he is likely putting in danger his newly won support from the conservative Republican base, which he just gained a few weeks ago by putting Sarah Palin on his ticket. Losing that support and enthusiasm would like mean the end for McCain's overall presidential campaign.
Palin herself seems to be losing steam out on the campaign trail. Already conservative columnists such as David Brooks, George Will and David Frumm have questioned her qualifications to be on the ticket and now CNN (September 26) reports that conservative columnist Kathleen Parker is saying Palin should step down from the ticket. Parker, just a few weeks ago an early and strong supporter of Palin, bases her call for the VP candidate to step aside, on several recent one-on-one media interviews , in which she says Palin has shown she is "out of her league" on the national stage. Ouch!
Getting back to the economy and the pending bail out plans, there is the possibility that McCain sits it out and doesn't support any plan. But that might be hard to do and still look like a leader and a president, especially if the plan works and the economy begins to revive. Of course, any new plan Congress passes could fail, and McCain might look pretty smart, but that might be at the cost of the entire economy tanking first.
But regardless of which bail-out plan the Congress approves, there is still the need to persuade a very skeptical public that this is, at the very least, the best of a lot of bad options. Usually, when a President speaks to the nation about a matter of grave concern, the people rally behind him. If you believe congressman who say their e-mail and phone calls are still running strongly against the bailout idea, that doesn't seemed to have worked this time, even with the President using words I never thought I'd hear a leader of the United States say such as, "panic", which is a phrase I remember reading in my history books, when people described a depression in the 19th Century.
It seems to me public reaction to this financial mess has been very much under-reported by the media. Polls have been all over the lot. Some shows strong support overall for a bailout, others showing significant opposition and little confidence it will work. The public may also not fully understand what's at stake. For most of us, even since the Wall Street meltdowns of the last couple of weeks and the limited bail-outs that have already occurred, life has seemingly gone on as usual. People in Nashville, for example, have likely been much more concerned about where they could find gas for their cars in recent days than about the availability of credit.
But, if everyone agrees (and I think they do), that matters are so serious a real credit crunch is coming for the entire economy unless we act soon, then we may not know what kind of trouble we are all in until after it hits, and then it may be too late to act.
So Congress appears ready to stay in Washington until a solution is reached, passing up its planned recess to go home (September 26) and campaign for re-election. How long will that take? The weekend? Next week? Longer? Who knows? But what else can they do? And why does a crisis like this always come to a head right before Congress is about to go home (you know, just like all the problems and difficulties that come up at work every time you are ready to take some R&R)? J
When the calendar turns to late September and October in a presidential year, and particularly on the eve of the first presidential debate, all eyes and media interest are usually totally on the candidates and what they will say. But here's proof again that the 2008 campaign is different from anything that has ever come before: right now everything the candidates do or say right is playing second fiddle to an unpopular, lame duck President and an equally, unpopular, lame duck Congress trying to work out some plan that will help the country, and maybe the world, avert an economic catastrophe.
My guests on INSIDE POLITICS this week are Mayor Karl Dean and two members of the Metro Council, Madison Councilman and Budget & Finance Committee Chair, Jim Forkum, and Council Member at Large (and Schools Committee chair) Megan Barry.
We talk with them about the first year of their terms and what lies ahead in what looks to be a very busy 2009.
Local government is already feeling the uncertainty of the economic challenges we face nationally. When we taped this show, Mayor Dean was planning to unveil his new plan for capital projects this coming week, but that is now being delayed until the markets stabilize. Metro already faces capital fund issues because several projects (a rumor in the Council says up its to a $100 million worth of projects) have been mothballed because of lack of funds. These are projects previously given final approval by the administration of former Mayor Bill Purcell and last Council.
With these new economic challenges now before the country, how much longer will these projects be delayed? And how will the Mayor handle moving ahead with some of his own new projects, while leaving these previously approved proposals on hold?
Capital needs are just one of many issues we talk about on the show, including later this year: How to deal with the need for a possible multi-year, water-sewer rate hike; a new storm water fee; a property tax increase, and the list goes on.
You can watch INSIDE POLITICS every weekend on the NEWSCHANNEL NETWORK:
7: 00 PM Friday, September 26 NEWSCHANNEL5 PLUS Comcast Channel 50
5:00 AM Saturday, September 27 NEWSCHANNEL5 PLUS
5:30 PM Saturday, September 27 NEWSCHANNEL5 PLUS
5:00 AM Sunday, September 28 NEWSCHANNEL5- WTVF-TV
5:00 AM Sunday, September 28 NEWSCHANNEL5 PLUS
12:30 PM Sunday, September 28 NEWSCHANNEL5 PLUS
Please join us!
OFF TO COURT
As we speculated she might in our last column, incumbent State Senator Rosalind Kurita of Clarksville is doing everything she can to try and keep her seat. That now includes filing a lawsuit in federal court.
Kurita's narrow 19-vote primary victory over Tim Barnes was invalidated by Democratic party officials concerned about what the Barnes campaign thought were organized efforts to discourage Barnes voters from casting ballots for him, while encouraging Republicans to vote to for Kurita.
This has set off a firestorm of protest by some voters who feel disenfranchised by the primary results being tossed aside. It has also encouraged Kurita to run as a write in candidate in November against Barnes. That's a long shot in most cases, as casting a write in vote is usually more bother than voters want to fool with when they go to the polls.
The lawsuit is seen an additional way for Kurita to fight back. She is asking the judge to place her directly on the ballot and remove Barnes. Things may not move quickly enough for that to happen (especially since some absentee ballots have already been sent out and early voting starts in about 3 weeks). But the case could still linger on after the election and could even set off a multi-faceted battle over who will represent District 22 in the State Senate (Montgomery, Houston & Cheatham Counties).
The fight would include not only the candidates but possibly the federal courts and the Senate itself, which under the State Constitution, is the final judge of the fitness of its members to serve.
With the Senate divided by party right now, the District 22 seat could be crucial to the leadership of the next Senate, especially since Senator Kurita crossed party lines to elect Republican Ron Ramsey Speaker of the Senate and Lt. Governor almost two years ago. Things could be that close again and the District 22 outcome on who sits in that seat most critical again in 2009.
So given all that, why do I see so many in the media acting like they are surprised that top GOP Senate leaders are holding a fund raiser to help Kurita? She has been on the outs with many Democrats ever since she voted for Ramsey. Remember that old saying in politics: "My enemy's enemy is now my friend." Enough said.
To no one's surprise, Councilman Eric Crafton has generated the voter signatures he says he needs to put his English First Metro Charter amendment on the ballot for a possible special election January 22 of next year.
It was kept off the upcoming November ballot because the courts ruled it did not comply (by two days) with some timing regulations on how often charter amendments from voter petition drives can be considered for a vote.
Crafton says because of the court ruling, it's really Metro's fault it will cost taxpayers $350,000-plus to hold the election. He has also changed the verbiage of his amendment to make it possible for the Metro Council to amend his English First requirement. But that's not likely to persuade any of his opponents, frankly.
Is there also another question Metro can raise about the special election request? Right now, the number of signatures required to call a special election is just 2,500, based on 10% of the vote in the last general election which was in August. But since the special election vote is in January should the number of signatures needed to be based on the election in November when hundreds of thousands of Nashville voters will be coming to the polls for the presidential election?
I don't know if the Metro Legal department is exploring that issue. It not much more of stretch to me than what it argued to keep English First provision off the November ballot because of timing issues.
But maybe Metro has had enough of legal maneuvering and it's time to vote. Given the mood in the community on this, it will likely pass, I think. However, it may not pass if those pushing the idea don't do a better job of mobilizing their supporters than they did with a "surprise rally" in favor of the English First idea held the other day.
The idea was to generate a large group to embarrass Mayor Karl Dean and Governor Phil Bredesen when they attended a fundraiser for State Senator Joe Haynes. Why they chose the Haynes event is weird. He has had no involvement in this matter and has even passed some fairly tough legislation to deal with illegal immigrants. Maybe it was the only place they thought they could find Dean and Bredesen together?
But things did not go well. The "surprise rally" was leaked out to the media, and according to press reports, only about 5 people showed up (despite free doughnuts and coffee). And no one present at the rally would take credit for organizing it.