The prospect that the US Treasury will become even a partial stakeholder in American financial institutions has drawn several media outlets and observers to write an epitaph for free market capitalism. Under the headline "The End Of American Capitalism?," the Washington Post reports "the worst financial crisis since the Great Depression is claiming another casualty: American-style capitalism." The Post adds that "the notion of government ownership in the financial sector, even as a minority stakeholder, goes against what market purists say they see as the foundation of the American system."
The Washington Post reports that "increasingly pushed against the wall, some European leaders have begun to say out loud what many seem to have been thinking all along: that the original fault lies with the Bush administration and a hands-off, free-market dogma that led it to stand aside when the venerable Lehman Brothers investment house started to crumble." Meanwhile, the Christian Science Monitor reports from Berlin, "Now here in Europe, long a bastion of distrust toward unfettered capitalism, there's a question running underneath the financial crisis: Is the era of 'anything goes' free markets over?"
The proposal that drew the gloomy references was a rapidly constructed proposal to allow the Treasury to buy shares in banks. The Financial Times reports the US was "under pressure to rush out a bank recapitalisation plan to reassure the markets after yesterday's dramatic late plunge in stock prices. US officials were hoping to have some time to finish the plan but analysts said they could be forced to act immediately." Meanwhile, says the AP, "Treasury Secretary Henry Paulson told reporters that Treasury was moving quickly to implement the $700 billion rescue effort and he specifically mentioned reviewing ways to bolster the capital of banks."
On its front page, the Wall Street Journal reports the US "is weighing two dramatic steps to repair ailing financial markets: guaranteeing billions of dollars in bank debt and temporarily insuring all US bank deposits." The Journal adds that "if the two moves come to fruition they would mark the government's most extensive intervention yet in the financial system, as officials ponder increasingly far-reaching measures to stem the sprawling crisis." A second Wall Street Journal story says the Treasury Department "has begun canvassing financial executives to gauge their interest in participating in a program that would inject capital into banks," in a move that highlights "how quickly officials are shifting gears as the financial turmoil deepens."
The Washington Post reports, "Unlike in the case of American International Group, which had to surrender an 80 percent stake to the government in order to secure a massive loan, Treasury officials are considering taking non-controlling equity stakes in banks that accept the cash infusions, likely in the range of 10 or 15 percent, the sources said." The New York Times, in an analysis piece titled "Analysts Welcome Latest Plan, But Have Concerns," reports industry analysts "said government-held equity positions in private banks would represent a major new exercise of government power, and that most banks would only seek such aid if they had nowhere else to turn."
The CBS Evening News said "that $700 billion rescue package really hasn't been put to work yet, at least not most of it. The government hasn't started buying up those bad mortgage loans and isn't going to for at least a few weeks. So that still has yet to kick in." The Christian Science Monitor reports James Barth, a senior finance fellow at the Milken Institute in Santa Monica, CA, says "there is precedent for the government (and, by extension, US taxpayers) in effect becoming a shareholder in private financial institutions in a bid to save them." Said Barth, "We did it during the bailout of the savings and loans in the 1980s, when the government took equity warrants in the institutions."
President Bush will address the nation Friday morning, a day after stock markets again fell precipitously. However, some reports question whether the President's effort will have a positive effect with investors. The Wall Street Journal reports this morning "stocks fell for the seventh straight trading day on Thursday, continuing what amounts to a slow-motion crash that has pulled the market down more than 20% over that brief period." The drop was "driven by deepening fears about the banking system, and the spillover effects it may have on the rest of the economy." The AP notes that Thursday alone "US stock market paper losses totaled $872 billion," and adds "the value of shares over all has tumbled a stunning $8.33 trillion since last year's high." The Dow "ended the day at its lows, finishing down 678.91, or 7.3 percent, at 8,579.19."
Yesterday's precipitous slide on Wall Street dominated TV and print media, and colored the coverage of other stories -- from the Treasury Department's efforts to stem the credit crisis to the presidential campaign. Noting the market plunge, the New York Times reports that "despite unprecedented steps by policy makers around the world to defuse the financial crisis, fear is spreading that a deep global recession is at hand." ABC World News said "many people are asking, what is it going to take to make this stop?"
AFP says "stocks went into a new tailspin as panic took hold again," while the Washington Post reports "fear and foreboding took hold on Wall Street yesterday." In a similar report, the Washington Times refers to a "ghastly...plunge," in which "previously strong sectors like energy and technology succumbed to the panic that has shattered financial and consumer stocks." The Los Angeles Times, which headlines its front-page story "Nightmare on Wall Street," the Wall Street Journal, the Financial Times and USA Today run additional stories on yesterday's numbers.
The AP refers to "seemingly bottomless pit of despair that has swallowed up $8.3 trillion in shareholder wealth during the past 366 days," while McClatchy says that "while all eyes Thursday were on Wall Street's plunge, its cause is being felt across America as the snowballing financial crisis sends an already weak economy into an accelerating decline." NBC Nightly News said "even reports the latest move to shore up the system may include the U.S. Treasury pumping money directly into US banks and taking a stake in them did not get any traction with investors."
Council of Economic Advisers Chairman Ed Lazear said on CNN's Situation Room (10/9, Roberts), "We're in a situation right now where we need to act quickly, but we also need to get things right. ... The one thing that we're seeing right now that concerns us is that these problems are broadly based. This is no longer just the financial sector. We're seeing it in all sectors right now. And that reflects the fact that investment and capital is the lifeblood of American business." On Fox News' Your World, Lazear said, "I'm certainly worried that the markets are reeling from the shock to the financial sector. There's no doubt about it. ... We need to get things moving again. But I think the uncertainty that's involved during this transition period is causing problems for the market."
NBC Nightly News added the President "will try to reassure Americans everything that everything is being done that can be done," but "the problem with that is everything that they have done or even talked about doing has gotten a thumbs down from the markets." ABC World News said Bush "has spoken publicly about this crisis about a dozen times since the bailout plan first surfaced. Most of those times, the market has gone down."
The AP refers to a new Bush "effort to calm the crisis," noting he will deliver his statement in the Rose Garden. Bush "is not expected to announce any new policy decisions, White House press secretary Dana Perino said." The Washington Post reports the President "has said little publicly during this week's prolonged market dive," and Bloomberg News quotes Perino saying Bush "will address the nation...to tell Americans they should remain 'confident' amid falling stock markets and a worldwide credit crisis."
Democrats To Promote New Stimulus Package The Hill reports House Speaker Nancy Pelosi "and other Democratic leaders will hold a meeting Monday with a group of economists, as part of a continuing effort to pressure Republicans and President Bush to support an economic stimulus package."
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President Bush yesterday signed an executive order to smooth the transition to the next president. The AP reports the order "turns the keys to the White House over to whomever is elected president on Nov. 4." White House press secretary Dana Perino "said Bush's order was designed to help coordinate efforts already under way to ensure a seamless transition. She said Bush wants to make sure the next president's team has everything it needs to hit the ground running."
The Hill notes the order "creates a Presidential Transition Coordinating Council, consisting of several high-ranking members of the president's staff and headed by White House Chief of Staff Joshua Bolten." The Washington Post report "the team will be chaired by White House Chief of Staff Joshua B. Bolten and will include at least 14 other senior officials such as the attorney general, the national intelligence director and the national archivist, according to the order."
The Wall Street Journal says the council "will meet for the first time next week," tracking "recommendations of the 9/11 commission, as well as legislation that Congress passed in late 2004. In part, the moves reflect officials' recognition that developed countries could be at greater risk of attack during times of political transition." The New York Times reports, "An administration official said Mr. Bush had repeatedly raised the question of transition in staff meetings in light of national-security threats."
Breaking a story that's generating extensive print coverage this morning, ABC World News reported last night, "The Bush Administration has maintained surveillance powers given to the National Security Agency are only used to monitor terror suspects in a time of war. But now, two former US intelligence operators have come forward telling ABC News that they and others listened in on the private intimate phone calls of hundreds of American citizens." The two intercept operators "say they listened to the overseas private phone calls of American journalists, humanitarian workers and soldiers in Iraq."
The Washington Post, however, reports that "while declining to give specifics, an NSA spokesman said some of the allegations were currently under investigation, while others had been 'found to be unsubstantiated.'" The Post also reports that a "US intelligence official familiar with the reports noted that two internal investigations, by the inspectors general of the NSA and the Army, were unable to substantiate the allegations."
The AP also reports Bomgardner's comments, adding that Mark Mansfield, spokesman for CIA Director Mike Hayden, who headed the NSA during the period in question, said, "At NSA, the law was followed assiduously. The notion that General Hayden sanctioned or tolerated illegalities of any sort is ridiculous on its face." On its website, ABC News reports NSA Director Lt. General Keith B. Alexander "declined to directly answer any of the allegations made by the whistleblowers."
The New York Times, meanwhile, reports that it "was unclear whether the intercepts the two former intelligence officers described were part of the program of surveillance without warrants that President Bush approved shortly after the 2001 terrorist attacks," which "he and other officials said...intercepted only calls of people believed to be linked to Al Qaeda."
Senate May Investigate Allegation. On Capitol Hill, ABC World News reported, "the Chairman of the Senate Intelligence Committee, Jay Rockefeller, said the ABC allegations were extremely disturbing and said his committee is already looking into them." Rockefeller, reports the Washington Post, said, "Any time there is an allegation regarding abuse of the privacy and civil liberties of Americans, it is a very serious matter."
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Sen. John McCain continued his attack on Sen. Barack Obama's character and candor yesterday, the AP reports, saying on the campaign trail yesterday that questions about his ties to '60s radical Bill Ayers "are part of a broader issue of honesty." It was, says the AP, "his strongest personal criticism since his faltering campaign began casting Obama as an unknown and unacceptable candidate." The CBS Evening News reported both McCain and Gov. Sarah Palin "attacked" Obama for his ties to Ayers. McCain was shown saying, "Sen. Obama said he was just a guy in the neighborhood. We know that's not true." Palin said, "Are we receiving straight answers from our opponent?" In his interview with ABC World News, McCain was asked why "in recent days" he has "focused" on Obama's "character," McCain said, "Well, I'm not sure that's character. What I think it is, is, does he have the experience and the knowledge and judgment and has he made the right decisions and has he told -- been candid with the American people. I think that's important. They certainly know me." The Politico notes that the RNC is also up with an ad targeting Obama over his Ayers ties.
The New York Daily News adds, "Team Obama ripped McCain for the assault. 'It's now clear that John McCain would rather launch angry, personal attacks than talk about the economy,' said Obama spokesman Tommy Vietor."
Media Reports Express Alarm Over GOP Crowds' Fervor, Anger With the Ayers story receiving extensive coverage on both TV and print media, a number of reports last night and this morning expressed alarm over the reaction of the crowds when the Ayers issue is brought up by McCain or Palin. The New York Times, for example, reports this morning that "what has been most striking about the last 48 hours on the campaign trail is the increasingly hostile atmosphere at Mr. McCain's rallies, where voters furiously booed any mention of Mr. Obama and lashed out at the Democrats, Wall Street and the news media." ABC World News reported on McCain's rally in Milwaukee yesterday, and says "some folks in the audience got pretty riled up. Our reporters on the scene said the mood was as passionate as anything they've seen during the campaign." NBC Nightly News reported that in Wisconsin, "a vocally pro-McCain crowd urged the senator and...Palin to get even tougher against Obama." The Wall Street Journal says "someone yelled 'Off with his head' at a rally Wednesday" for McCain and Palin in Pennsylvania. Later in Ohio, "a man stood outside a rally holding a sign that said 'Obama, Osama.' At a rally in Jacksonville, Fla., on Tuesday, someone in the crowd wore a T-shirt depicting...Obama wearing a devil mask."
The Wall Street Journal reports, "Top McCain campaign officials are grappling with how far to go with negative attacks" on Obama "in the final weeks of what is turning into a come-from-behind effort. ... Some McCain campaign officials are becoming concerned about the hostility that attacks against Sen. Obama are whipping up among Republican supporters."
Sen. Barack Obama on Thursday stepped up his criticism of John McCain's $300 billion mortgage rescue plan. McClatchy reports Obama yesterday "slammed" McCain's "new mortgage rescue plan in a television ad and on the stump in Ohio, calling it a 'risky idea' that would take advantage of taxpayers, adding that it's an example of his opponent's 'erratic behavior.'" The CBS Evening News showed Obama saying, "A few weeks ago, he put out a plan that basically ignored homeowners. Now, in the course of 12 hours, he's ended up with a plan that punishes taxpayers, rewards banks, and won't solve our housing crisis." The Washington Post reports Obama said McCain's "mortgage rescue plan 'punishes' taxpayers and rewards lending institutions that created the crisis, while McCain charged that his opponent's response showed a lack of concern for homeowners."
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Barack Obama continues to hold the lead over John McCain in national tracking polls of the presidential race: The Gallup daily presidential tracking poll of 2,761 registered voters taken October 6-8 shows Obama leading McCain 52%-41%, the same as the previous day, marking his widest lead in the polling series.
The Rasmussen Reports automated daily presidential tracking poll for October 9 shows Obama leading McCain 50%-45%, down from 51%-45% on the previous day.
The Battleground tracking poll of 800 likely voters taken October 6-8 shows Obama leading McCain 48%-45%.
The C-Span/Zogby daily presidential tracking poll of 1,203 likely voters taken October 6-9 shows Obama leading McCain by 48%-43%.
The Diageo/Hotline daily presidential tracking poll of 852 likely voters taken October 6-8 shows Obama leading McCain 47%-41%.
Obama Holds Small Lead In Two Ohio Polls An American Research Group poll of 600 likely Ohio voters taken October 4-7 shows Obama leading McCain 48%-45%. A Strategic Vision (R) poll of 1,200 likely Ohio voters taken October 6-8 shows Obama leading McCain 48%-46%.
Obama Up In Pair Of Florida Surveys A Strategic Vision (R) poll of 1,200 likely Florida voters taken October 6-8 shows Obama leading McCain 52%-44%. A Rasmussen Reports automated poll of 700 likely Florida voters taken October 8 shows Obama leading McCain 50%-47%.
Obama Up By 1 In Minnesota An American Research Group poll of 600 likely Minnesota voters taken October 4-7 shows Obama leading McCain 47%-46%.
Obama Up 8 In Virginia A Public Policy Polling (D) survey of 917 likely Virginia voters taken October 6-7 shows Obama leading McCain 51%-43%.
Poll Shows Tight Race In North Carolina A Rasmussen Reports automated poll of 700 likely North Carolina voters taken October 8 shows Obama leading McCain 49%-48%.
Obama Up 8 In West Virginia An American Research Group poll of 600 likely West Virginia voters taken October 4-8 shows Obama leading McCain 50%-42%.
Obama Up Big In New Hampshire An American Research Group poll of 600 likely New Hampshire voters taken October 6-8 shows Obama leading McCain 52%-43%.
McCain Holds Edge In Missouri An American Research Group poll of 600 likely Missouri voters taken October 4-6 shows McCain leading Obama 49%-46%.
McCain Up 7 In Indiana A Rasmussen Reports automated poll of 500 likely Indiana voters taken October 7 shows McCain leading Obama 50%-43%.
Obama Holds Big Lead In Michigan A Rasmussen Reports automated poll of 500 likely Michigan voters taken October 8 shows Obama leading McCain 56%-40%.
McCain Up 5 In Montana An American Research Group poll of 600 likely Montana voters taken October 6-8 shows McCain leading Obama 50%-45%.
McCain Up Big In Texas An American Research Group poll of 600 likely Texas voters taken October 5-8 shows McCain leading Obama 57%-38%.
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Jay Leno: "Obama says there is nothing to the accusations of a friendship with '60s radical Bill Ayers. He says Ayers is a person he knew early in his career but now plays no role in his campaign. You know, kind of like the Clintons."
Jay Leno: "Hey, how many are worried about Iran's nuclear enrichment program? How many are worried about that? How many more worried about our CEO enrichment program?"
David Letterman: "I like John McCain. He looks like a guy would you see wandering around Walgreens looking for the dye gel."
David Letterman: John McCain "looks like the guy at Home Depot who mixes paint."
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