Underfunded

The Washington Post has an article about McCain's closing advertising push, noting 

The desire for parity on television comes at the expense of investment in paid boots on the ground," said one top Republican strategist who has been privy to McCain's plans. "The folks who will oversee the volunteer operation have been told to get out into the field on their own nickel."

This has been the central strategic issue of the campaign.  McCain has suffered from being far behind Obama in money throughout the race. During the primaries, when McCain was down to a skeleton staff, Obama was opening field offices and developing ground forces in both primary and caucus states.

During advertising the general, McCain has caught a double-whammy. Not only is he limited to his federal matching funds (which is more than he could have raised), he's getting no support to speak of from 527 organizations. Not only does this stretch his ad dollars still more thinly, but the campaign iteself has to own all the most loathsome tactics that have been adopted.

Translation?  He never sold his candidacy to the base.  The campaign did everything they could, even picked a "whack-job" for Vice President, and he still isn't getting the love.  Worse, no matter how heinous the tactic, he is still being criticized for going too easy on Obama from his right.  

From, the beginning this was going to be a national media campaign, with expectations of a lot of earned media from a press corps that adored him.  Kowtowing to the base not only cost McCain that critical adoration, but has turned also him into a figure of scorn and mockery in much of the traditional media.

It may not have mattered, though. Even if he had spurned the base, put Lieberman on the ticket, won the floor fight that his staff said would ensue and run a positive campaign, he'd still be the same terrible, incoherent candidate advocating a failed foreign and domestic policy regime.

Saddest news of all for the Republicans is that he probably was also their best shot.

The New Normal for Credit Markets

I'm still in the wilds of Northern New England,  online for just a half hour or so in the morning, lagging by a day on the NYT, and getting most of my news from NPR.

Yesterday was the day for the Media to make the case that Main Street really IS in trouble if taxpayers don't make an income transfer from the bottom four quintiles to the top decile,  in the amount of $700 billion, off-budget, of course.  Only stuff like CHIPS is on budget.

Yesterday David Leonhardt. invoked the Depression, citing the experience of Fed Board member Frederic Mishkin's grandfather's experience.  He tried to make the case that there is some enormous risk for ordinary citizens that they just don't understand.  

He failed. Like all the other arguments we've heard, the mechanisms that will affect Main Street are left undefined, and the way in which purchasing toxic waste will "restore confidence" and open up credit markets are still unstated.

Closing graf:

But in the end, this really isn’t about Wall Street. It’s about reducing the risk that something really bad happens. It’s about limiting the damage from the past decade’s financial excesses. Unfortunately, there is no way to accomplish that without also extending a helping hand to Wall Street. That is where our credit markets are, and we need them to start working again.

“We are facing a major national crisis,” as Meyer Mishkin’s grandson says. “To do nothing right now is to do what was done during the Great Depression.”

The only evidence for this grave situation presented is that Wachovia went under.  Wachovia indeed went under, was bought out, and all depositors' money is safe.  All we seems to get from the "financial press" is hyperbolic restatements of the bailout backers.

On "public" (whole lotta advertising there) radio yesterday, there were two interesting stories.  The first was with local bank officials, who say they have been unaffected. As long as Fannie and Freddie are still in busines, one banker said,  his mortgage supply is unlimited, and his lending practices have not changed.  The president of Chittenden Bank pointed out that Vermont banks have continued to follow prudent banking practices, knowing their business customers, and staying away from mortgage securities. He anticipates no difficulties.

The second story had to do with the drying up of credit for consumers looking for loans.  This was a national story. The report said, echoing a New York Times piece from the day before, that people with sub-prime credit ratings were having a hard time getting an auto loan.  And. the report said, if your credit rating is bad, you may not be able to get a mortgage without a downpayment, of as much as "three to five percent."

WTF?

This is something I actually found worrisome. It seems like the irresponsible practices of the last decade or so--of lending money to risky borrowers with inadequate collateral  is going to be established as the normal state of affairs. It seems insane, to me anyway, for a banker to make a long term loan funded by short term borrowing (demand deposits, savings accounts etc) without some substantial skin in the game from the borrower. If the "restoration of credit markets" means the resumption of making high risk loans, then our troubles are not going away any time soon.