As NBC Nightly News reported last night, the Bush Administration has confirmed reports that Undersecretary of State William Burns "will attend a weekend meeting with Iran's chief nuclear negotiator. The meeting is part of ongoing efforts to persuade Iran to stop its nuclear program." Burns, however, "will reportedly be there, not to negotiate, but to listen." Several media outlets this morning examine the motives behind what is perceived as clear shift by the Administration one that is said to have infuriated the President's conservative allies. The Washington Post reports Secretary of State Condoleezza Rice "pushed for the move in a meeting on Monday of Bush's top aides, and Bush's support suggests he increasingly is determined to put aside a possible military strike in an effort to reach a deal to end Iran's nuclear program in his final six months in office." While Administration officials yesterday insisted that "the same bottom line" remains, the Post says "the diplomatic lines have become sufficiently hazy that if negotiations start in earnest, Iran will also be able to claim a diplomatic victory."
In a news analysis, the Financial Times says the decision to send Burns to this weekend's talks "would have been a big one for any president during the past three decades," but for Bush, "the volte face was a significant one." Though Bush "ultimately decided to go along with the arguments of many of his underlings," the Times says it "is not an outcome that will necessarily please Vice President Dick Cheney, who was already unenthusiastic" about a recent deal with North Korea.
McClatchy refers to a "major shift," while ABC World News called Bush's decision "a major turnaround," and added that while the White House "is insisting this is not negotiating...the fact is, they are sitting down at the table with the Iranians, and that's a first for the Bush Administration." In its analysis, the New York Times sees a "double policy shift": First, the Administration "has decided to abandon its longstanding position that it would meet face to face with Iran only after the country suspended its uranium enrichment." And second, "an American partner at the table injects new importance to the negotiating track of the six global powers confronting Iran." The Financial Times and AFP run similar reports this morning.
Obama: Bush Coming Around To His Views The Hill reports "the White House on Wednesday adamantly denied" Barack Obama's "claim that the US is negotiating with Iran by sending a high-level diplomat to a meeting with an Iranian official this weekend." Obama said that "by sending...Burns to Geneva to meet with the Tehran emissary, the White House has 'shifted course' from refusing to negotiate with the country, the Illinois senator said in a statement." While "White House press secretary Dana Perino declined to address Obama's comments specifically, she told reporters repeatedly that there has been no change in policy and there will be no negotiations with Iran unless the country suspends its enrichment of uranium, an act that would be verified by the International Atomic Energy Agency (IAEA)."
ABC World News noted the White House's objection to Obama's words, but added that "the fact is, they are sitting down at the table with the Iranians," which "is essentially what Barack Obama has been proposing." In fact, former Ambassador John Bolton "said this is like getting an Obama administration six months early. Now, the White House says this is very different. But it sure sounds like it's heading in that direction."
More doom and gloom about the US economy dominated media coverage last night and this morning, with some reports raising the specter of 1970s-style "stagflation." The Wall Street Journal notes "consumer inflation spiked to its highest level in 17 years, even as tentative signs emerged that an anemic economy may be starting to take the edge off oil prices." The consumer-price index (CPI) "rose 1.1% in June, the biggest monthly spike since September 2005, following the chaos of Hurricane Katrina. Prices last month were 5% higher than a year before, the Labor Department said, the biggest rise since 1991." Moreover, says the AP, "core inflation, the figure that excludes energy and food to measure other costs, rose by 0.3 percent in June, the fastest rise since January."
McClatchy refers to the CPI report as "another jolt of frightening news," adding "concern about the economy has muscled aside almost every other political issue. A new Associated Press-Ipsos poll, taken last Thursday through Monday, found that 77 percent of those surveyed thought the nation was on the wrong track; 16 percent said it was on the right track." And the Washington Post notes that in a separate report out yesterday, the Department of Labor said real wages dropped by nearly 1 percent in June, as the rise in prices more than offset a slight increase in wages."
All three network newscasts led with the inflation news. The CBS Evening News reported, "We wish we didn't sound like a broken record, but once again tonight there is troubling economic news. Americans are getting it from all sides." NBC Nightly News said, "We begin with today's announcement that the prices we're paying for just about everything have made their second biggest jump in nearly three decades." ABC World News reported "Wall Street seemed to shake off today's dismal news on inflation. But on Main Street, there is no avoiding it. CBS went on to interview "69-year-old Richard Driest, a GM retiree who learned this week that his health care benefits are disappearing," and "says he and his wife now have to dig deeper into their savings just to buy necessities." Dreist was shown saying, "You can't stop eating. So, you know. You can't stop buying the four dollar plus a gallon of gas."
The New York Times says "inflation has surged to proportions seen by some as threatening the stability of the American economy." The Financial Times, USA Today, AFP, Christian Science Monitor and Los Angeles Times run similar stories.
Good News On Oil Prices, Stocks The New York Times reports this morning, "concerns about a slowing economy and rising inflation pushed oil prices down sharply for a second day on Wednesday, an unusual dip in the oil price rally that began more than six years ago. The two-day decline totaled more than $10.50 a barrel, but analysts cautioned that it was still unclear how far prices would fall and that the respite may be temporary." McClatchy says "the cumulative drop of $10.58 a barrel for crude has sparked hopes that this year's steep rise in prices finally may be reversing." While "it's too early to say whether the sudden drop reflects the start of a massive selloff that could bring down oil prices on a sustained basis," oil "analysts think that the trend will be down soon, whether or not this week marks the turning point." The AP, meanwhile, reports "analysts are unsure whether the drop represents a long-term shift in sentiment or simply a brief correction to crude's months-long bull run."
The AP also reports "Wall Street at least temporarily shrugged off some of its many concerns Wednesday and bounded higher thanks to a drop in oil prices. The Dow Jones industrial average rose 276 points, or 2.5 percent, posting its best daily gain in three months. ... Broader stock indicators also rose Wednesday after fluctuating in the early going. The S&P 500 index advanced 30.45, or 2.51 percent, to 1,245.36, and the Nasdaq rose 69.14, or 3.12 percent, to 2,284.85. The Los Angeles Times notes that "two days after one of their worst-ever declines, financial stocks surged, thanks in part to unexpectedly strong results and a surprise dividend increase from Wells Fargo & Co., the biggest banking company on the West Coast." The Financial Times, Washington Post, Wall Street Journal, USA Today and New York Times run similar reports.
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The CBS Evening News noted in the lead to its top story last night that "the FBI is now investigating the failed bank IndyMac for fraud," and in a follow-up story, added that the probe "is one of twenty one ongoing investigations of the subprime mortgage industry." NBC Nightly News said "the FBI is trying to figure out if there's possible fraud with some loans, home loans, IndyMac made to some so-called risky borrowers. This as depositors are still arriving to try to find out if their money is safe and accessible."
In a story published by at least 93 media outlets, the AP reports, "It was not immediately clear how long the FBI's probe of the bank has been ongoing - or whether it was opened before last Friday's takeover of IndyMac by the Federal Deposit Insurance Corp. The investigation appears to be is focused on the company and not individuals who ran it, a law enforcement official told The Associated Press."
The Wall Street Journal reports, "The IndyMac investigation began shortly before the bank was seized last week, a law-enforcement official said." The Washington Times and Bloomberg News run similar reports.
Plan For Mortgage Giants In Trouble The Wall Street Journal reports "the Bush administration's hastily arranged strategy to stabilize Fannie Mae and Freddie Mac came under siege on Capitol Hill, as Republicans tried to slow it down and Democrats moved to marry it with a program the White House has threatened to veto." The Treasury Department and Democrats "want the proposal rolled into a housing-rescue package that was nearing completion last week before the plan came together over the weekend." Treasury Secretary Henry Paulson "held a closed-door meeting with House Republicans Wednesday evening, where he urged the lawmakers to support the legislation and emphasized the need to pass the bill quickly." The Washington Post notes Paulson "returned to Capitol Hill yesterday to quell a potential rebellion," and "according to participants in the closed-door meeting, he was peppered with sometimes hostile questions but steadfastly asserted that taxpayers would be protected and that the government's offer of assistance would be temporary and carefully prescribed."
The Hill says "a showdown over the housing bill between the White House and congressional Democrats took shape Wednesday after Democrats vowed to push forward a proposal that would help communities purchase foreclosed properties and the White House renewed its call to veto any bill containing that provision. ... Democrats were considering dropping the provision at the beginning of this week, but when the White House and Treasury Department sought new authorities in order to extend an unlimited line of credit to Fannie and Freddie, Democrats sensed leverage."
The New York Times reports this morning that the Interior Department yesterday "made 2.6 million acres of potentially oil-rich territory in northern Alaska available for energy exploration." But "it deferred for a decade any decision to open 600,000 acres of land north of Teshekpuk Lake that is the summer home of thousands of migrating caribou and millions of waterfowl. The decision will open up for drilling much of the northeast section of the Northeast National Petroleum Reserve-Alaska, holding an estimated 3.7 billion barrels of oil, Tom Lonnie, Alaska state director for the Bureau of Land Management, said in a conference call with reporters." The Financial Times notes the government "said the Alaskan land that will now be offered requires no other approvals and will be up for leasing in the autumn."
Both Parties Divided On How To Address Oil Prices Roll Call says "both parties in the House faced internal divisions over how best to deal with soaring gas prices Wednesday, with Republicans split over Speaker Nancy Pelosi's (D-Calif.) proposal to release oil from the Strategic Petroleum Reserve, while Pelosi faces growing pressure from Democrats who want her to allow votes on opening up more areas to oil drilling." While House Minority Leader John Boehner and Republican Conference Chairman Adam Putnam "came out hard against Pelosi's proposal to release a small portion of the nation's 700-million-barrel reserve...a number of Republicans have spoken out in favor of releasing some of the reserves as a way to scare off oil speculators and provide immediate relief." The New York Times adds that "despite increasing pressure from President Bush, a full-bore assault by Congressional Republicans and some anxiety among her own rank-and-file Democrats, Ms. Pelosi is not budging."
Timing Of Gore's Speech Raises Eyebrows The Hill reports Al Gore "hopes to put global warming back at the top of Washington's agenda Thursday, but some Democrats in Congress are questioning his timing when they are getting pummeled by Republicans over record gas prices." Gore "hopes to deliver a major speech on the environment at Constitution Hall in Washington" that increases focus on climate change nationally, but some Democrats wonder whether such as speech "might be exploited by Republicans who want to portray their ideological opponents as caring more about polar bears than Americans who have had to pay record prices for gasoline."
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The Wall Street Journal reports that Sen. Barack Obama heads out next week on a six-day foreign trip that is designed to bolster his foreign policy credentials and is "scheduled to commence in Amman, Jordan, on Monday followed by stops in Tel Aviv and Jerusalem and the capital cities of Germany, France and the United Kingdom." USA Today reports Obama's tour "threatens to turn into Obamapalooza." In contrast to the "low-key coverage" of John McCain's European and Middle East trip in March, Obama "will be accompanied by a campaign plane of reporters and trailed by three network broadcast anchors." McCain got some headlines, but did not have a traveling press corps." The Washington Post says the decision by the anchors is "adding their high-wattage spotlight to what is already shaping up as a major media extravaganza." The plan is for the interviews by Brian Williams of NBC, Charlie Gibson of ABC, and Katie Couric of CBS "to be parceled out on successive nights in different countries, giving each anchor a one-day exclusive."
The New York Times reports the heavy coverage "feeds into concerns in Mr. McCain's campaign, and among Republicans in general, that the news media are imbalanced in their coverage of the candidates." But network executives "said in interviews that, once again, the Democratic candidate was potentially benefiting from being a newer, untested politician." Paul Friedman, senior vice president of CBS News, said, "If this were John McCain's first trip to the war zone, that would be a story and we would cover it big time. This is Senator Obama's first trip - his positions and the public's perception of him on national security issues are important." However, the Chicago Tribune notes that Obama and Sen. Evan Bayh "traveled together in 2006 on a trip to Iraq and the Middle East."
Meanwhile, U.S. News & World Report reports that the trip "will most likely be a tightly scripted, controlled affair designed to minimize his potential to make a devastating gaffe, Democratic strategists predict. Some worry that any Obama stumble could intensify voter concern that he lacks the experience to be commander in chief, one of his main vulnerabilities. 'Look for carefully scripted statements and comments,' says a senior Democratic insider. 'I doubt he will be drawn into detailed discussions of sensitive topics with the media.'"
Sen. John McCain addressed the NAACP convention in Cincinnati yesterday, where he talked up his education agenda in front of an audience that is solidly behind his opponent. The Columbus Dispatch reports, "Undaunted by the challenge," McCain "attempted to convert an overwhelmingly black audience that solidly supports his Democratic opponent, bespeaking themes of economic and educational justice, and lathering on charm." McClatchy says that in a "humble address to the civil rights organization's 99th annual convention in Cincinnati, McCain spoke at length about wanting to improve education for children in black communities but said he favored paying for more children in bad public schools to go to private or charter schools." The AP reports McCain said "he will expand education opportunities, partly through vouchers for low-income children to attend private school," and said Sen. Barack Obama "is wrong to oppose school vouchers for students in failing public schools. It is time, McCain said, to use vouchers and other tools like merit pay for teachers to break from conventional thinking on educational policy." The Cincinnati Enquirer adds that after his speech, McCain "engaged in a lively town hall-style meeting with members, taking question on Midwest flooding, the kind of judges he would appoint, and the No Child Left Behind Act. He even argued with a woman who asked him to provide more money for Head Start programs, saying he would do - if there is 'monitoring, measurable success. There has to be a return on the taxpayer's dollars,' he said."
The CBS Evening News reported that McCain also had "words of praise" for Obama, while NBC Nightly News noted McCain was "greeted with a warm standing ovation" and "brought...plenty of praise" for Obama, saying, "Don't tell him I said this, but he's an impressive fellow in many ways."
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The AP reports Barack Obama "warned" yesterday "about the danger of 'fighting the last war' as he pledged to focus on emerging nuclear, biological and cyber threats if elected president." Obama "said two goals of his administration would be to secure all loose nuclear material during his first term, as well as rid the world of nuclear weapons." He also "said adhering to nonproliferation treaties would put pressure on nations such as North Korea and Iran." The Indianapolis Star says Obama spoke in light of "polls showing the public skeptical about his commander-in-chief credentials" and he was "flanked at the event by Indiana Sen. Evan Bayh and former Sen. Sam Nunn of Georgia -- potential running mates because of their foreign policy expertise and ability to win in states that historically support Republicans for president." Fox News Special Report saw the speech as part of Obama's "campaign to minimize Iraq's role in the overall war on terror." Obama "said if the US devoted just one month of the cost of combat operations in Iraq, estimated to be $10 billion, it could virtually wipe out the threat of weapons grade nuclear material falling into the hands of terrorists." But McCain's campaign "called the idea vacuuming up all loose nuclear material fanciful."
The Wall Street Journal reports that former HP CEO Carly Fiorina, a top adviser to Sen. John McCain's campaign, met Tuesday "with about 25 disaffected supporters of" Sen. Hillary Clinton in New York, at a "private home for more than an hour and a half," fielding "from Democratic women she described as 'intensely uncomfortable with the notion of a President Obama.'" The meeting, which "came at the behest of former Clinton supporters" and was with "prominent activists and fund-raisers."
The AP reports that if Sen. Barack Obama's "historic campaign to become the first black president boosts black turnout as drastically as he predicts, he could crack decades of Republican dominance across the South." An Associated Press analysis "of U.S. Census and voting data from the past four presidential elections shows a potentially dramatic impact should Obama fulfill his pledge to elevate black participation by 30 percent. That would add nearly 1.8 million votes in 11 Southern states, the analysis shows, enough to tip the balance in several that have been Republican strongholds."
Obama Ramps Up Effort In Virginia Meanwhile, Obama is clearly targeting one GOP state: Virginia. The Washington Post reports in a front page story that Obama's campaign announced yesterday that it is opening 20 more offices across the state, "an unprecedented effort by a presidential candidate and another sign that he plans to compete vigorously in a state that has been on the sidelines during past presidential contests." The offices "will be in nearly every medium-size city in the state," including in many "traditional Republican strongholds."
Investor's Business Daily reports an IBD/TIPP poll of 854 registered voters nationwide "taken last week" shows Sen. Barack Obama leading Sen. John McCain 40%-37%.
Obama Holds Wide Lead In Washington State A SurveyUSA automated poll of 666 likely Washington State voters taken July 13-15 for KATU-TV shows Sen. Barack Obama leading Sen. John McCain 55%-39%.
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Jay Leno: "With all this financial panicking going on, President Bush held a press conference and told everyone to take a deep breath. 'Take a deep breath.' That's a good advice, huh? The economy is tanking and he's giving Lamaze classes."
Jay Leno: "'Take a deep breath.' Isn't that what he told the people of New Orleans when the water was rising?"
Jay Leno: "The latest polls show Barack Obama and John McCain are dead even. Dead even. See, what happened was, Obama moved to the right and McCain moved to the left and they became the same person."
David Letterman: "Listen to this, John McCain has now vowed to capture Osama bin Laden. Well, by God, I'm glad that's settled."
Conan O'Brien: "This week, the Bush Administration added the one millionth name to the US terrorist watch list. The millionth name, yeah. So congratulations to Peggy Watkins of Phoenix, Arizona."
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