Wall Street blues

They came so close on Capitol Hill. Ignore the tosh about Pelosi’s pre-vote speech. If that’s all it took to put the Republicans off voting to try to save their financial system from imminent meltdown… Country First, anyone?

Yes, it is all about stopping the financial system imploding and the credit from drying up altogether. We can expect more bank failures now, and not just in the US. If we’re — yes, we’re in this too — lucky, the collapse of credit world-wide won’t precipitate a major recession. And we’ll get a revised version of the failed plan before too long, as Robert Reich suggests. If we’re lucky. (Hat-tip Daily kos.)

If we’re unlucky we get a full-blown depression. But we don’t know about that, because there aren’t a lot of models for a situation this extreme.

It’s not about the fat cats. But for many ordinary people, the idea that the fat cats would benefit was repugnant. (Initially at least. Rasmussen reported today that “Opposition to bailout plan falls dramatically”.) And there being an election in a couple of months, some congresspersons put saving their ass before saving their country.

Hell, who do you think finds the idea of giving money to the rich most objectionable? The liberals, or the people who skew tax-cuts to the super-rich?

Okay, there were the Republican Study Committee conservatives who came up with the idea of insuring the toxic debts (mortgage-backed securities not already insured) and somehow magicking away the cost. The proposal was a one-pager.

At the end of the day, any banking system collapse requires recapitalisation to avoid credit drying up and economic disaster, as the IMF’s study of 124 banking crises and responses shows.

I personally don’t think that buying toxic assets is the best solution, but then, what do you expect from Bush? There are other models, and the best outcome would be for the US legislators to consider some of the others. But quick. And without the spoiler interfering again.

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Looking Presidential

Presidential

“Sen. Barack Obama expressed confidence Monday that lawmakers would come through with a financial rescue package… [telling] voters at a campaign event in Denver, Colorado, that it’s important to “stay calm, because things are never smooth in Congress.””

Not Presidential

“McCain’s campaign accused Democrats of injecting politics into the American economy… “Barack Obama failed to lead, phoned it in, attacked John McCain and refused to even say if he supported the final bill. … This bill failed because Barack Obama and the Democrats put politics ahead of country.””

Note that McCain also “phoned it in”, tried to take credit for the congressional deal before it passed failed — such a maverick! –, refused to “even say if he supported the final bill”, and failed miserably as a leader, being unable to convince his own people to support their own President’s proposal.

Update: only hours after trying to pin the blame on Obama for his own side failing to support the bailout deal that he was supposed to have fixed, McCain says:

“Now is not the time to fix the blame, it’s time to fix the problem.

Oh, that’s so presidential.

The subsurface campaign: US & NZ

Today’s LA Times carries a piece by Columbia University professor of journalism and sociology Todd Gitlin that provides a vivid and sharply drawn analysis of the symbolic import of the presidential election. Read it!

Gitlin starts from the premise that:

“The true campaign is the deep campaign, the subsurface campaign, which concerns not just what the candidates say but who they are and what they represent — what they symbolize.”

This idea will be familiar to regular readers of this blog. What makes this contest intriguing, says Gitlin, is that the current campaign pitches a candidate who fits a tried and true mythical stereotype — the grizzled, plain-spoken, straight-shooting John Wayne-type — against someone who mixes up the stereotypes twenty-first century style, and can’t be pinned down. Gitlin’s conclusion is spot on. This is the underlying contest:

“So that’s the clash. McCain, the known quantity, the maverick turned lawman, fiery when called on to fight, an icon of the old known American story of standing tall, holding firm, protecting God’s country against the stealthy foe. Obama is the new kid on the block, the immigrant’s child, the recruit, fervent but still preternaturally calm, embodying some complicated future that we haven’t yet mapped, let alone experienced. He is impure — the walking, talking melting pot in person. In his person, the next America is still taking shape.”

“The warrior turned lawman confronts the community organizer turned law professor. The sheriff (who married the heiress) wrestles with the outsider who rode into town and made a place for himself. No wonder this race is thrilling and tense. America is struggling to fasten a name on its soul.”

This seems a fair description. By contrast, while New Zealanders’ shared identity continues to evolve, the process is much less conflicted than stateside (Orewa 1 and the Maori Party notwithstanding). Instead, New Zealanders seem to be pondering whether to stick with the modest (and fair) achievements of the past nine years, or venture just a little more aggressively into the world.

Like Obama, Clark embodies an oddly contradictory amalgam; no nonsense, no-frills, presbyterian farmer’s daughter and Vietnam protester, policy nerd and steely tough political operator. In many ways this mix gelled with what the country was looking for in 1999, after 15 years of neo-liberal attacks on kiwi decency, fairness and social cohesion, not to mention the bumbling incompetence of Jenny Shipley’s ill-fated administration.

Key’s narrative is much more straight-forward and appealing, in a traditional way. State House kiwi boy makes good in tough, competitive New York. Like Clark, this narrative also embodies competence — hence Labour’s attempts to define the election as about trust, as in 2005 — but is more contemporary.

National have utilised this more future-oriented symbolism to an extent, but much less so than I anticipated. Perhaps that’s because they feel less need. Plant the seeds of anxiety — outward migration, wage gaps with Australia — and let the narratives do the work.

Obama wins debate

Well, yeah, I would say that. Both campaigns are claiming victory too. So why do I say Obama won?

It’s not as simple as who was on the offensive most, as some (generally Republican) commentators think. McCain was on the offensive more, and Obama missed some opportunities to push substantive points. Often, however, the lasting effect comes from the almost subliminal — subliminable if you’re the President — messages picked up by the watchers from the body language and general demeanour of the debaters.

There is evidence that voters perceived Obama as winning. In a CNN poll of more than 500 US voters (4.5% margin of error), a large majority (51% to 38%) of Americans say Obama was the victor (“Who did the best job in the debate?”). He was also considered better able to handle the economy (58% to 37%) and Iraq (52% to 47%).

Further, a CBS poll of undecided voters who watched the debate found 40% thought Obama won, 22% thought McCain and 38% thought it a tie. Of those  uncommitted voters polled, 46% said their opinion of Obama got better tonight, and 32% said their opinion of McCain got better. Like the CNN poll, 68% voters thought Obama would make the right decision about the economy, to 41% for McCain. But 48% thought Obama would make the right decisions about Iraq to 56% for McCain.

If this judgement holds up in the other polls (and given the margins I can’t see why it shouldn’t) then this is a major victory for Obama. Those who thought it a fairly even contest may be influenced by the poll findings and the overall judgement come out in Obama’s favour.

At another level it’s a clear victory for Obama. He is ahead in the polls and arguably only needed to put up a good showing and avoid gaffes. But his major hurdle in this election is the lingering doubts some democrats and independents have about his readiness. He looked presidential. Very presidential. Best of all, he held his own with an experienced adversary who was playing on his own turf — foreign affairs.

Readiness was the main line of Republican attack, and it failed. Miserably. McCain even managed to anagonise the unaligned “independent” voters in one focus group by being so patronising.

Remember, debates have only a very small immediate effect, unless there is a major “sound-bite” blunder. Neither candidate blundered. but McCain needed to win, gave it all he had, and Obama walked away looking presidential. Something he needs to do.

Updates:

Election looking better by the day

The US election that is. It’s been a thrilling three weeks. We’ve seen the Palin/convention bounce that put McCain ahead in the polls for about ten days or so, the Palin effect fade and, as the financial crisis hit over the past week, Obama move to new highs. It’s been like riding in the front car of a roller coaster (which I, unsuspectingly, did the first time, in Houston).

Further analysis. When the third party candidates are taken into account–and, as 1992 and 2000 showed, it’s not clever to ignore them–Obama’s lead has been wider since the two candidates crossed in the polls about a week ago. Today, Obama’s RealClearPolitics average lead is 4.2%, but 4.8% with the third party candidates added in.

And this trend is likely to continue. Today, the Rasmussen Reports daily Presidential Tracking Poll (which tends slightly to favour the Republican candidate) has Obama 5 points ahead.

Most importantly, the tide is shifting in Obama’s favour in the states where he needs the votes most. In recent days, RealClearPolitics has moved Minnesota, New Mexico, Colorado and Michigan from toss up to “leaning Obama.” Bush took New Mexico (5 Electoral College votes) and Colorado (9 EVs) in 2004.

Today Rasmussen shows McCain’s lead down to a single point in Ohio and Florida. Best of all, Obama has raced to a 5-point lead in Virginia, solidly Republican in recent presidential elections, but a top Obama target with 13 EVs. Even giving McCain Ohio and Florida, RealClearPolitics Electoral College Map with no toss-ups has Obama ahead 286 EVs to 252. Pollster.com has Obama at 229, McCain at 174 and 135 hanging in the balance.

There has been some movement to, or continuing support for McCain in states which weren’t likely to be competitive, where polls are rarely taken before the campaign proper, and where there aren’t many EVs at stake: Montana, West Virginia and Maine.

What next? Some argue that with all this volatility, today’s debate has emerged as a “crucial test“. But they always say that, despite previous debates having limited impact. Close analysis of past elections’ data reveals that the effects of the debates are in the order of two to three percentage points. In a race this close, those couple of points could make all the difference.

I’ll be there

WHAT: Drinking Liberally Auckland City
WHO: You and any of your left-leaning comrades
WHEN: 7.30pm, Wed 24th September
WHERE: London Bar, cnr Wellesley & Queen Sts (opposite Civic). The entrance to the bar is around on Wellesley St, you need to go up the stairs and we will probably be congregating at the far end by the stage, fiddling with the sound and setting up video.
WITH: Margaret Wilson – retiring Speaker of the House, architect of the Employment Relations Act, and down-right interesting person. She’ll be sharing her thoughts and observations from her 30 years at the sharp-end of NZ’s political scene.
COST: Free, just need to keep yourself fed and watered.

More on cell-phone skew

I posted in July about the Pew Research Center’s findings that non-inclusion of cell phone respondents “modestly affects” poll estimates of voting support in the US presidential race

They’ve done another poll with cell respondents included, and updated their findings. Their key finding is unchanged. Including cell respondents makes a little difference–some 3% in the September poll (see table below).

But they are now able to combine the data from the July and September polls to look more closely at the differences between young people responding on land-lines and cells. This is important because one way that the pollsters overcome the problem of excluding cellphone only respondents–as is the case in NZ–is to weight the data. But if they use the young respondents on landlines to weight the data, then they are skewing the estimates to the extent that there is a difference between young land-line and cell phone respondents.

The tuning fork election

Well, jafapete took off for Waiheke and it seems he’s not coming back. AndrewE has suggested that he drowned himself in a pail of ale after realising that Helen has no principles. Not quite. More on that later. This post’s for Andrew.

Last night’s Robert Chapman Lecture “Polls versus Expectations – Howard’s End in Australia and are there lessons for New Zealand?” was interesting, mostly because it is always good to stand back and contemplate recent history for patterns you might have missed. In this we were assisted by Australian election commentator Antony Green.

The crux of his analysis is to be found in the tuning fork graph that he used (courtesy wikipedia) which shows polling results since the last election:

Green noted that in the 2004 and 2005 elections in Australia and NZ, the polls had been very volatile, and that when that is the case it is easier for an incumbent government with waning popularity to turn things around during the election campaign. He didn’t state the converse so explicitly, but I shall.

Like the PM and many others, I can count Bob Chapman amongst my mentors. Many have commented on Bob’s grasp of the finer detail, but it was his capacity to distill this vast knowledge into easily understood wisdom that I valued most. (“The best ideas are the big, simple ideas”, he said once.) Bob always maintained that if the opinion polls clearly had one party ahead of the other for a year or more before an election campaign, then the party that had enjoyed the lead would win. This has always proved to be the case.

So the message from the graph above is clear, even if it’s not in tune with my sentiments.

There were some valiant attempts to avoid the message last night. “What about all the people who didn’t have landline phones, worked evening shifts, etc?” Green patiently explained that pollsters weighted their data to compensate for these known biases as best they could. After all, they have a lot to lose if they get it wrong. “What about the extra 100,000 unenrolled voters ferried to the polls in South Auckland?” asked another, seemingly oblivious to the tuning fork graph in front of her, or maybe not able to convert the percentages into numbers.

However, as Green noted, in an MMP context National’s higher vote need not necessarily lead to their taking government. It is also quite possible, for example, that National holds office as a true minority government, with the Maori Party sitting on the cross-benches vetoing anti-Maori or anti-low paid legislation, but not bringing the government down.

As I look at the tuning fork, that second-best scenario is some consolation.

After the glitz, US voters still don’t get the full story

I’m off to Waiheke for a couple of days. Back Saturday morning. By then Winston Peters will most likely have been sacked, or resigned, but it won’t affect anything much in and of itself. So I’m looking forward to resting and enjoying some of the delights that Waiheke has to offer. (That doesn’t include Business Roundtable indoctrination conferences.)

In the meantime, ex-pat political consultant Neil Stockley shares his thoughts on the US presidential election in a guest post.

So, the Republicans and Democrats have finished their conventions. Which of the candidates, John McCain or Barack Obama, is telling the strongest story?

The answer is, neither.  That may explain why they are, in effect, tied in the latest opinion polls.

Since he first ran for the Republican nomination in 2000–-and got wasted by the Bush-Rove attack machine–-McCain’s narrative has been about a straight-talking, maverick Republican who took on his own party, over taxes, campaign finance reform, climate change, environmental regulation, stem cell research and immigration. The message is that he could rise above party and clean up Washington.

By the beginning of this year, however, McCain had moved back to the right, for instance on oil drilling, to immigration to tax cuts for the wealthy. Hardly surprising, that’s where the votes were in the Republican primaries. Over the summer, the new, conservative McCain took on some of Bush’s team and got nasty, trying to paint Obama as an out-of-touch, elitist, snob –- not “one of us”. This sort of toxic politics oozed through the Republican convention. McCain’s gang continued to play on what they see as voters’ resentment at liberal political elites who seem to look down on them. Paul Krugman has brilliantly dissected the sheer cynicism of this Nixonian ploy.

Then, in his (mediocre) convention speech on Thursday night, Americans mainly saw the old John McCain, speaking with quiet civility about fighting corruption, acknowledging that the Republicans “had lost the trust” of the American people and deploring “the constant partisan rancour that stops us from solving” problems. Senator McCain promised to reach out to “any willing patriot [and] make this government start working for you again” to use “the best ideas from both sides” and “ask Democrats and independents to serve with me.”

As E.J. Dionne jr. points out, the Republican nominee no longer embodies this narrative:

. . . because McCain has capitulated to the very Washington he condemned [on Thursday] and is employing the very tactics that were used ruthlessly and unfairly against him when he first ran for president eight years ago.

McCain is trying to run with these two different narratives by, in the words of the New York Times, “talking loftily of bipartisanship [while] allowing his team to savage his opponent.” The latter will be Sarah Palin’s one of main jobs, with her deliberate distortions of Barack Obama’s policies, eloquence and record. (McCain also questioned his opponents’ patriotism and Obama’s position on energy.) The logic is a bit strained but this gambit worked – just – for George W. Bush. How’s that for cynicism?

There’s more: McCain and co. will also try to bridge these two narratives by using an even bolder one: “reform”, which became the watchword of the Republican convention, appearing no fewer than 11 times in McCain’s own speech. They are trying to steal Obama’s “change” narrative.

Where the story runs aground though is that it’s not exactly clear what McCain’s “reform” means. Jonathan Weisman of the Washington Post says:

“In McCain’s attempt to fire up the Republican base without losing his “maverick” image, calls for reform have come to mean a pledge to “change” Washington — with little explanation of what that change would be or how that change would take effect. “

Is “reform” in Washington about programmes, systems, or governing style?  We haven’t been told.  And:

“It does not appear to have much to do with campaign finance reform, immigration reform, reforming the selection and confirmation of judges — all issues that McCain had something to do with and have helped define his career in the Senate.”

The reason is obvious: these issues would drive wedges between McCain and the conservative voters, lobbies and dollars that he needs. And what would he do for people struggling with rising bills and worried about losing their jobs?

That leaves McCain’s story only half built. Successful narratives aren’t just about personal stories and records, which McCain’s speech emphasised. They are also about issues and policies, framed these days as “solutions”. The two need to work together, with the candidate’s (or party’s) persona making the policy narrative more authentic.

Obama should have the edge. His promise of change is more credible. He can embody that narrative. [click here] He is new to Washington, unlike McCain, and the Democrats have been out of the White House for nearly eight years. But his economic narrative has still not struck a chord with voters.

The conservative pundit Michael Barone believes that both candidates have a problem:

“The Obama convention contended that the Democratic nominees understood people’s woes from personal experience and that their programs would provide economic security. But the substance of those programs — refundable tax credits (i.e., payments to those who pay no income tax) and a national health insurance option — are unfamiliar to voters, and their details can be hard to explain.

“The McCain convention’s thesis is that higher taxes on high earners in a time of slow growth will squelch the economy (this was Herbert Hoover’s policy, after all).

These assertions, too, are unfamiliar to voters. And, up to this point in the campaign, neither party has set out its programs clearly (or characterized the other side’s fairly).”

On energy, the other big issue of the campaign so far, this is playing out in the much the same way.

Neither Obama nor McCain will prevail until they have got their narratives together, the policy and the personal.

When “no” means “no credibility”

Sad. Winston Peters continues to maintain his innocence to the last. He has told Parliament’s Privileges Committee that at all times during the Glenn donation saga, “when I said no it was no.”

He denies asking Glenn for a donation in the telephone call in December 14 2005 of which has produced the telephone record, and today had his personal assistant recount her recollection. there had been a phone conversation, but he says he can’t recall talking about money.

Instead, he claims that Glenn wanted a roving trade ambassador’s role similar to Mike Moore’s. That may be true, although I suspect it would have been a part-time role similar to Angelina Jolie’s UNHCR Goodwill Ambassador work. It’s not as though Glenn needs the money that desperately. Hell, he’s been doing his best to give it away!

Oh, and Peters says he wants to be judged “by decent New Zealanders who understand justice”.

Prime Minister Clark has said Mr Glenn’s evidence was “deeply disturbing”. She is carefully considering Peters’ responses tonight and is expected to announce tomorrow whether she is sacking Peters from his ministerial positions. She had already pointedly refused to rule out making such a decision before the Privileges Committee rules. Given Peters’ hollow response to the hard evidence put up by Glenn, she doesn’t really have much choice.