I’m not sure whether Scott or Paul will be live-blogging tonight’s debate; I’m going to do it, but not continuously.
The first question goes to Obama, and he loses no time peddling the canard that the current financial crisis is the result of free-market policies. Until the last day or two McCain has been unwilling to engage this debate. He’d better do it now, or he has no chance.
McCain’s first answer on the economy strikes me as a bit rambling. He mixes in oil prices, taxes and a new program to buy up mortgages. It’s not clear (to me, anyway) exactly what he’s talking about.
Obama keeps talking about cutting taxes for 99 percent of the people–close to half of whom don’t pay any income taxes as well. Again, McCain needs to engage this nonsense.
9:12–McCain is talking about Fannie Mae and Freddy Mac and their connections to Obama and the Democrats. Freddy and Fannie were the catalysts; some of us stood up against it, while others took a hike. McCain is going after Obama in what seems a friendly, low-key manner. Probably the way he has to do it in a town hall setting.
Obama says biggest problem was deregulation of the financial system. What deregulation is he talking about? The financial sector is heavily regulated, which has been part of the problem. But if you didn’t know better, Obama probably sounds plausible.
9:20–Obama is railing against the federal deficits. This always amazes me–he voted for Democratic budgets that would increase the deficit further. Not to mention the “stimulus” program that was intended precisely to increase the current deficit.
9:22–McCain is doing a pretty good job of contrasting his record on spending with Obama’s. One thing, though–is it just me, or is McCain wheezing or short of breath or something?
9:31–Obama is for offshore drilling now, but still doesn’t mention nuclear power.
9:32–If, like me, you didn’t understand what McCain was talking about with respect to buying up bad mortgages, his campaign just sent out this outline of the plan he is proposing tonight:
AMERICAN HOMEOWNERSHIP RESURGENCE PLAN
John McCain will direct his Treasury Secretary to implement an American Homeownership Resurgence Plan (McCain Resurgence Plan) to keep families in their homes, avoid foreclosures, save failing neighborhoods, stabilize the housing market and attack the roots of our financial crisis. Americaâ€™s families are bearing a heavy burden from falling housing prices, mortgage delinquencies, foreclosures, and a weak economy. It is important that those families who have worked hard enough to finance homeownership not have that dream crushed under the weight of the wrong mortgage. The existing debts are too large compared to the value of housing. For those that cannot make payments, mortgages must be re-structured to put losses on the books and put homeowners in manageable mortgages. Lenders in these cases must recognize the loss that theyâ€™ve already suffered.
The McCain Resurgence Plan would purchase mortgages directly from homeowners and mortgage servicers, and replace them with manageable, fixed-rate mortgages that will keep families in their homes. By purchasing the existing, failing mortgages the McCain resurgence plan will eliminate uncertainty over defaults, support the value of mortgage-backed derivatives and alleviate risks that are freezing financial markets.
The McCain resurgence plan would be available to mortgage holders that:
Â· Live in the home (primary residence only)
Â· Can prove their creditworthiness at the time of the original loan (no falsifications and provided a down payment).
The new mortgage would be an FHA-guaranteed fixed-rate mortgage at terms manageable for the homeowner. The direct cost of this plan would be roughly $300 billion because the purchase of mortgages would relieve homeowners of â€œnegative equityâ€ in some homes. Funds provided by Congress in recent financial market stabilization bill can be used for this purpose; indeed by stabilizing mortgages it will likely be possible to avoid some purposes previously assumed needed in that bill.
The plan could be implemented quickly as a result of the authorities provided in the stabilization bill, the recent housing bill, and the U.S. government’s conservatorship of Fannie Mae and Freddie Mac. It may be necessary for Congress to raise the overall borrowing limit.
9:39–I wonder how many people will mind that Obama refused to answer the question about Social Security and Medicare reform and instead gave the rebuttal he had wanted to deliver earlier on the dueling tax plans.
9:44–I suppose there is no point in trying to explain to a television debate audience that you don’t create wealth by subsidizing inefficient production of energy. It’s discouraging to hear McCain talking about global warming, but at least he got in some good shots on nuclear power. Only now Obama says he’s in favor of it too! The guy is completely shameless.
9:46–Predictably, Obama repeats the Democrats’ canard that the U.S. has only 3% of the world’s oil reserves but uses 25% of its petroleum. Most people don’t understand that in the U.S., “reserves” is a term of art, regulated by the SEC. People think “reserves” equals oil in the ground. It doesn’t. Oil that can’t be accessed under current law, like oil in the outer continental shelf or ANWR, isn’t counted in that 3%. As we legalize drilling, we will increase our “reserves.”
9:54–Usually I dislike hearing just about all politicians talk about health care, but McCain sounds good, I think. I suspect his talk about patient choice and portability resonates with lots of people.
10:06–On to foreign policy. Obama’s greatest skill is his ability to project a moderate, reasonable persona. I’m not sure the television audience is seeing a lot of difference between the candidates on these issues. So far, anyway. McCain says that Obama was wrong about Georgia, but doesn’t explain why, and I doubt that many viewers know.
10:10–Obama says he’s the candidate in favor of killing bin Laden and crushing al Qaeda. Remarkable. I wonder what his nutroots followers make of the new, Republicanized Obama.
10:12–Obama doesn’t want to follow the rules. I wonder whether this will rub some viewers the wrong way.
10:26–The debate is winding down with talk about foreign policy. To listen to the candidates you wouldn’t think there is a lot of difference between them. This can’t be what Obama’s Democratic primary supporters had in mind, but it certainly is the right course for him in political terms.
What’s the bottom line? McCain performed well, I think, subject to some concern that he may have come across as pretty old. Obama showed, in the first debate and again tonight, that he too can come across well under pressure. He’s no longer stammering and indecisive as he once was on the stump. On the whole, he’s a plausible rogue and I suspect that he passed muster with most people who aren’t knowledgeable about the issues. McCain did fine, but I don’t think anything happened that will significantly affect the momentum of the campaign.
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