On NBC's "Meet the Press" yesterday, former Secretary of State Colin Powell endorsed Sen. Barack Obama, a move the media today is seeing as both a major boost to Obama and a serious blow to Sen. John McCain. The New York Times reports in a front page story that Powell called Obama "a 'transformational figure' who has reached out to all Americans with an inclusive campaign and displayed 'a steadiness, an intellectual curiosity' and 'a depth of knowledge' in his approach to the nation's problems." The endorsement "was a major blow to Senator John McCain, who has been a good friend of Mr. Powell's for decades." The AP calls the endorsement "a stunning rejection" of McCain. USA Today says the "long-anticipated endorsement" is "perhaps the campaign's most coveted." McClatchy reports that "political analysts" said the endorsement "was a serious blow to McCain's candidacy, particularly in swing states with large numbers of undecided voters." The Wall Street Journal reports Powell's endorsement gave Obama a "major boost" and dealt "a blow" to McCain. The Politico says Powell's move "stunned both parties" and is "likely to help Obama convince skeptical centrists that he is ready to handle the challenges of commander in chief, and it undercuts McCain's argument that he is better qualified on national security issues."
NBC Nightly News says Powell's "decision to back Obama didn't take too many by surprise, but his reasons did," noting Powell's criticism of Sarah Palin, "who he claimed wasn't ready for the top job," and the "negative tone" of the McCain campaign. The Washington Post reports in a front page story that Powell "became the most prominent Republican to endorse" Obama. In a telephone interview, Powell said "his decision had been 'emerging since the conventions, when I heard the convention speeches, saw who the vice presidential candidates were and then watched the debates.'" Powell said, "'The real question...was whether to go public. ... I just felt I had to, and I crossed that bridge last week' after consulting with close friends and family members."
McCain Not Surprised On Fox News' "Fox News Sunday", Sen. McCain said, "I've admired and respected General Powell, we're long time friends. This doesn't come as a surprise but I'm pleased to have the endorsement of four former secretaries of states -- Secretary Kissinger, Baker, Eagleburger and Haig. But I respect and continue to respect and admire Secretary Powell."
Endorsement Seen As Powell Effort To Reshape Own Legacy The New York Times reports in a front page story that Powell's endorsement of Obama "represented his own transformative moment in a lifelong journey through war and politics. It was not only an embrace of a presidential candidate from the other party, but also an effort to reshape a legacy that he himself considers tainted by his service under President Bush." The endorsement "made clear Mr. Powell's dismay at the Republican Party. He said he felt that the party had become too conservative under Mr. Bush, and that Senator John McCain's campaign was not good for the country or its reputation around the world."
Limbaugh Suggests Race Played Role In Powell's Decision To Back Obama In a blog posting, The Politico reported that Rush Limbaugh said Powell's endorsement of Obama "appeared to be very much tied to Obama's status as the first African-American with a chance to become president. 'Secretary Powell says his endorsement is not about race,' Limbaugh wrote in an e-mail. 'OK, fine. I am now researching his past endorsements to see if I can find all the inexperienced, very liberal, white candidates he has endorsed. I'll let you know what I come up with.'"
The Wall Street Journal reports in a front page story that Sen. Barack Obama "set a new record for presidential fundraising in September, with more than $150 million in contributions, allowing him to swamp Republican rival Sen. John McCain in spending on advertising and organizing in the final days of the campaign." The New York Times adds Obama's campaign "has now raised more than $600 million, almost equaling what all the candidates from both major parties collected in private donations in 2004." NBC Nightly News says, "Essentially what the campaign says is this gives them money - I mean, with that much money, they almost have more money than there are ads left to buy on TV. But they can go into states where they wouldn't normally think about buying television advertisements, like in West Virginia, a state that's one of the reddest of the red, that they're going to start this week, or already have started." The Washington Post adds the Obama campaign "has raised so much money that it is considering passing some along to Democratic Party committees to try to help grow their majorities in Congress, according to a campaign source." The Chicago Tribune adds that Obama campaign manager David Plouffe "did not detail the contributions, beyond saying that the campaign had added 632,000 new donors to its rolls and that the average donation for the month was less than $100."
The media today sees the record cash haul as the effective end of the post-Watergate public financing system. The Los Angeles Times says Obama's small donors "are sealing the fate of the public finance system," while the AP says Obama's totals have "destined the current system of public financing to the trash heap." The "extraordinary sum vindicated Obama's decision. It also made a public finance system born after the excesses of the Watergate era look decidedly quaint."
McCain Predicts Obama's Fundraising Haul Will Lead To "Scandal" McCain, on Fox News Sunday, noted that Obama "raised $150 million...during the month of September -- completely breaking whatever idea we had after Watergate to keep the cost and spending on campaigns under control. ... And I can tell you this, that is unleashed now, in presidential campaigns, a flood of spending that will cause a scandal and then we will fix it again. But Sen. Obama...broke his word to me and American people when he signed a piece of paper, when he was the long shot candidate, that he would take public financing if I would."
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The Gallup daily presidential tracking poll of 2,798 registered voters taken October 14-16 has two likely voter models one (based on past voting behavior and current intention to vote) shows Obama leading McCain 49%-46%, while the second (based on current intention to vote) shows Obama up 51%-44%.
The C-Span/Zogby daily presidential tracking poll of 1,211 likely voters taken October 17-19 shows Obama leading McCain 50%-44%.
The Rasmussen Reports daily presidential tracking poll for October 19 shows Obama leading McCain 51%-45%.
The IBD /TIPP daily presidential tracking poll of 1072 likely voters taken October 14-18 shows Obama leading McCain 47%-42%.
The Hotline /Diageo tracking poll of 905 likely voters taken October 16-18 shows Obama up 48%-41%.
On NBC Nightly News, political director Chuck Todd said the new NBC electoral college map shows no "major changes, but let me point out a few things that folks should be aware of. As you see, we still have Obama just short of that magic 270 number. Here, it's sitting at 264, McCain at 163." Todd added, "The biggest problem now for McCain is the path to 270, it's still there, it's very narrow. He's trailing in Colorado, trailing in Virginia, trailing in Florida, trailing in Nevada. Any of those states could put Obama over the top."
McCain Up 1 In Ohio An NBC News /Mason-Dixon poll of 626 likely Ohio voters taken October 16-17 shows McCain leading Obama 46%-45%.
McCain Up 2 In Florida A SurveyUSA automated poll of 553 likely Florida voters taken October 16 shows McCain leading Obama 49%-47%.
McCain Leads In Two West Virginia Polls An NBC News /Mason-Dixon poll of 626 likely West Virginia voters taken October 16-17 shows McCain leading Obama 47%-41%. A Public Policy Polling (D) survey of 1,223 likely West Virginia voters taken October 16-17 shows McCain leading Obama 50%-42%.
Obama Up 12 In Wisconsin An NBC News /Mason-Dixon poll of 626 likely Wisconsin voters taken October 16-17 shows Obama leading McCain 51%-39%.
Obama Up In 2 Minnesota Polls A Minneapolis Star Tribune poll of 1,049 likely Minnesota voters taken October 16-17 shows Obama leading McCain 52%-41%. A SurveyUSA automated poll of 655 likely Minnesota voters taken October 16-18 shows Obama leading McCain 50%-44%.
Obama Up 24 In California A SurveyUSA automated poll of 615 likely California voters taken October 15-16 shows Obama leading McCain 59%-35%.
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While the Administration has been wary of describing the US economy as being in a recession, Ed Lazear, chairman of the White House Council of Economic Advisers, used the term in a weekend talk show appearance. On CNN's Late Edition, Lazear said that "some parts of the country...have much higher rates of unemployment and we are seeing what I think anyone would characterize as a recession." Noting that the "economy has slowed," Lazear added, "We've seen shock after shock: housing markets; oil prices going up to near $150 a barrel this summer; credit markets tighten."
The AP notes Lazear's use of the term "recession," which it says he White House "has been loath to use...both because the technical definition has not been met and because it carries such negative weight." The Washington Post also briefly notes Lazear's comments in its "Around the Nation" column.
Unemployment Spike Predicted According to the Financial Times, the US economy "appears to be plunging into what many experts believe will be its worst recession since 1982." Many experts "expect unemployment will soar from its current level of 6.1 per cent and worry it could go above 8 per cent. The Fed now thinks that unemployment will rise above 7 per cent and is likely to peak at about 7.5 per cent a level last seen in 1992."
The forecast for increased unemployment comes as the Wall Street Journal notes that Yahoo Inc. "is drafting significant cost-cutting plans to try to reverse its fortunes from the inside. ... The exact number of jobs to be eliminated remains unclear, though it is expected to exceed the 1,000 jobs that Yahoo announced it was cutting in January." The Financial Times also reports that "a wave of job losses has started to spread across California's Silicon Valley as the trademark optimism of the region's technology start-ups has turned to pessimism amid the financial market rout."
Meanwhile, USA Today reports, "Negotiators hope to finalize a merger agreement between General Motors (GM) and Chrysler before the presidential election and are lobbying for government financial assistance to help clinch the deal, says a source who has been briefed on the talks." The Wall Street Journal says analysts "estimate more than half of Chrysler's 66,000 employees would lose their jobs in a merger."
Dollar Continues To Strengthen The Wall Street Journal reports that rather than "sinking under the financial-sector bailout, the greenback is buoyant. That is a surprise to many who expected rising government spending and a tanking US economy to cripple the dollar. Instead, the dollar has benefited from the global flight from risky assets as well as the unwinding of bets made with borrowed cash."
During his appearance yesterday on CNN's Late Edition, Ed Lazear, chairman of the White House Council of Economic Advisers chairman, Ed Lazear, said it will take "a few months before we really see a significant impact" from the Administration's rescue plan for the financial markets, "but we've seen impacts already. What we're seeing is that banks are now willing to lend to one another. That's a huge plus for the economy because the big problem has been that banks have been unwilling to trust one another." The AP also reports that "there's certainly been fresh evidence the credit market has begun to thaw."
Paulson's Power To Force Lending Limited The Los Angeles Times reports Treasury Secretary Henry Paulson "tried to leave no doubts last week about how he expected America's banks to use the $250 billion the government is handing out as capital. No hoarding." No one "expects the Treasury to go as far as British authorities, who are mandating specific lending levels for banks that have been the subject of a government rescue plan there." However, "Treasury officials may not need the majesty of the law to bend banks to their will, industry experts say. A hint of their clout came last week, when Paulson muscled nine major banks into accepting injections of up to $25 billion from the $700-billion rescue plan approved by Congress last month, overcoming resistance from several institutions."
Democrats Said To Share Responsibility Newsweek's Robert Samuelson asks, "Would Clinton Treasury Secretary Robert Rubin have spotted the crisis sooner?" Samuelson notes that after leaving government, Rubin "landed at Citigroup as 'senior counselor.' He failed to identify toxic mortgage securities as a big problem in the bank's own portfolio. It's implausible to think he'd have done so in Washington. As recent investigative stories in The New York Times and The Washington Post show, the Clinton administration broadly supported the financial deregulation that Democrats are now so loudly denouncing."
The Washington Post, in an editorial, writes, "The Clinton administration, supported by then-Federal Reserve Chairman Alan Greenspan, refused to tighten regulations on financial derivatives. ... The 1999 repeal of the Glass-Steagall Act, a Depression-era law separating commercial banking and investment banking, passed with overwhelming bipartisan support in Congress and was signed into law by President Bill Clinton."
GOP Lobbyist Helped Kill GSE Reform The AP reports Freddie Mac "secretly paid a Republican consulting firm $2 million to kill legislation that would have regulated and trimmed" it and Fannie Mae. In the "cross hairs of the campaign carried out by DCI of Washington were Republican senators and a regulatory overhaul bill sponsored by" Sen. Chuck Hagel. DCI chief executive Doug Goodyear was hired by the McCain campaign "to manage the GOP convention in September."
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The Wall Street Journal reports, "A planned international summit on the financial crisis is turning into a debate over the future shape of capitalism, with European leaders favoring greater international oversight of markets, and US officials preferring the current model of national regulation." While French President Nicolas Sarkozy "repeated his call for a new global financial order" and a "world-wide solution," President Bush "emphasized the importance of improving individual countries' regulatory systems as a way to prevent a repeat of the current financial crisis."
The Christian Science Monitor notes that when President Bush "hosts a world financial summit in the coming weeks, one of the least multilateral American presidents in decades will set in motion what could result in a full reordering of the global financial system." The summit, adds the Monitor, "also underscores the degree to which a once go-it-alone presidency has shifted to embrace not only the necessity of international cooperation, but also a role of global leadership."
NBC Nightly News reported Sunday night that it "has learned that the world summit on the financial crisis announced" Saturday "by President Bush will likely take place shortly after the presidential election." The White House, it added, "says it will welcome the input of the president-elect."
The Wall Street Journal reports a group of Iraq's "top political leaders decided late Sunday they will forward to the country's cabinet this week a draft security pact with the US, marking another step toward approval of an agreement on the terms for a continued American military presence" in Iraq. The Political Council for National Security "didn't technically endorse the agreement, but decided simply to forward the draft...to Iraq's full cabinet for consideration."
AFP reports that "due to the ongoing negotiations with Washington over the pact," Prime Minister Nouri al-Maliki "has decided to postpone his visit to Australia scheduled for next week, his office said in a statement Sunday." The AP, meanwhile, reports Maliki's "ruling Shiite coalition withheld support Sunday for the proposed security pact...dealing a setback to American hopes of a speedy approval of the agreement." The New York Times similarly reports "several of the leading Iraqi political parties, including some that had negotiated the agreement, appeared to back away from quick approval."
The Washington Post says the "concerns voiced by Shiite lawmakers are the first major hurdle in what many US and Iraqi officials anticipate will be a contentious and drawn-out process." The Christian Science Monitor also reports from Baghdad that "opposition is growing here" to the draft agreement "after months of negotiations" and with "an end-of-year deadline looming." Opposition leader Moqtada al-Sadr, says the Monitor, "summed up much of the opposition to the draft in a statement read to thousands of supporters" over the weekend: "If they tell you that the agreement ends the presence of the occupation, let me tell you that the occupier will retain its bases. And whoever tells you that it gives us sovereignty is a liar."
The Wall Street Journal reports the "prospects of renewable-energy companies soared with oil prices, but the global credit crunch and the easing of energy costs have brought them back to earth with a thud. With banks reluctant to lend and their stock prices tumbling, many green-energy concerns are struggling to find the long-term funding they need to expand in a capital-intensive industry."
Meanwhile, the Washington Post reports on its front page that the sharp drop in oil prices "threatens a wide variety of game-changing plans to find alternatives to oil or ways to drastically reduce U.S. consumption. ... The credit crisis is compounding that threat by making it more difficult to finance capital-intensive projects, whether they are new auto assembly lines or solar panels or wind turbines."
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Jay Leno: "John McCain got some good news today. 'The Charleston Daily Mail' endorsed McCain, saying since he'll only be a one-term president, he can do the right thing to make tough decisions. When they told McCain they were only giving him four years, he said, 'That's great. My doctor only gave me two.' So, he's thrilled."
Jay Leno: "And this week, President Bush announced a $250 billion...plan for the government to directly buy shares of the nation's leading banks to make sure they're run properly. They're going to make sure they're run properly, yeah. Because one thing we know is that the people who gave us a $9 trillion debt, they know how to handle money."
Jay Leno: "And you can tell most of these banks have gotten their bailout money already. I went by my bank today. It had a big sign: 'Now making toxic loans again. Come on down.'"
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