Who is to blame for the bailout paralysis?

This was not a good moment to be reminded that the separation of powers, and the hypersensitivity of the US Congress to public opinion, sometimes have drawbacks. It would have been better to pass an imperfect bailout plan promptly than come up with an improved version after a delay of days or, heaven forbid, weeks--always assuming that it is improved, in the end, and does eventually pass. (I say more about this in a recent column for National Journal.)

Whatever gets voted through is not going to be the last word on the subject in any case. Nothing like it. The plan will be revised on the run for months and maybe years. Prompt and basically sound action with broad political support was the order of the day. The country's politicians were incapable of it.

All the principals deserve a share of the credit for this truly astonishing shambles. The administration, in the first place, failed to prepare Congress for legislation of this kind. The possibility that something like TARP would be needed was easily foreseeable once Bear Stearns collapsed--which was months ago--if not long before. Yet the bailout plan was thrown together in a matter of hours and presented to Congress in an absurdly abbreviated form that said, in effect, authorize us to spend $700 billion as we see fit, or else. That was ridiculous--but no more ridiculous than embarking on a debate about the details of the plan, let alone about basic principles, as the credit system stood on the verge of complete breakdown.

It was an even graver mistake to take public opinion for granted. The implications of the meltdown for ordinary Americans were not promptly or persuasively spelled out. In another tactical miscalculation, the administration also talked up the scale of its rescue, the better to reassure the markets, rather than talking it down--as it could have done, by pointing out to the general public that the eventual cost of the action would likely be far less than $700 billion, and that there was at least the possibility that the taxpayer would come out ahead. This was a nicety left to the financial press to explore.

The president's intervention--his almost comical attempt to exercise leadership--was worthless, at best. When George W. Bush recommends a course of action, you can feel support for it leaching away as he speaks.

The presidential candidates and their respective surrogates utterly failed to respond to the urgency of the situation. They put politics first, using the crisis to underline their campaign talking-points and to put the other side at a disadvantage, rather than uniting to back a plan that both candidates appeared to support (well, I think they supported it: this was not always clear). If they had appeared alongside President Bush and had passionately affirmed the need for the plan without equivocation or political point-scoring, I dare say the outcome would have been different. It was more important to the Obama campaign to underline the failures of the Bush administration, and to associate McCain with that failure. It was more important to the McCain campaign to distance itself from the administration and find things in Obama's position to disagree with.

Facing a public unconvinced of the need for action and boiling with rage at the idea of using taxpayers' money to help the bandits of Wall Street, Congress too capitulated. By the time the vote came round, both party leaderships in Congress were backing the deal. Yet 133 Republicans and 95 Democrats voted against it (with 65 and 140, respectively, voting in favor). Many of the members voting against face difficult re-election battles in November.

The Republican leadership blamed Nancy Pelosi's stridently partisan speech recommending the measure for the strength of Republican opposition. On one level, this is a ridiculous complaint: in the end the Republicans are responsible for their own votes. Yet as I listened to Pelsosi's speech my heart sank. I do think it remarkably disingenuous to say (as Barney Frank, Larry Summers and many other Democrats subsequently did) that it would be outrageous for a Congressman to change his mind on the substance of a bill just because he was embarrassed by a speech. Good heavens, that would be to behave like...like a politician. Don't tell me a Congressman might sink that low.

Wavering Republicans, like wavering Democrats, needed cover to vote for a bill they did not like and that many of their constituents were objecting to. Pelosi chose to rub the Republicans' faces in the mess. Twelve votes needed to switch to get the thing done. If Pelosi had struck a bipartisan note, I bet the measure would have passed.

Who is to blame? All of the above. It is a comprehensive failure of leadership. And Washington wonders why much of the country holds politicians in contempt.

The Oxford debate

After the last couple of days, McCain badly needed to win Friday's debate. My immediate feeling was that he didn't even manage a draw.

Obama was on fine form. He did not meander. His responses were calm and focused. He never looked rattled. He seemed comfortable with the issues and unthreatened by his opponent--sufficiently unthreatened to be generous to McCain now and then, an effective Clintonian (Bill) touch. McCain was prickly, rarely looking in Obama's direction, repeatedly accusing him of failing to understand the issues--a difficult charge to make stick with Obama looking so assured. McCain's aggression seemed to me at times to betray a lack of confidence. He had his moments; still, I thought it was a comfortable win on points for Obama.

Now and then I found myself thinking, "Remind me, what is it that they disagree about?" Health care, for sure, but that subject as usual came and went very quickly. Taxes? Again, yes, though both are pitching themselves as tax-cutters. Spending? Harder to say. McCain has his hatchet, Obama his scalpel: they both claim to be fiscal conservatives, intent on getting value for money. Who knows what that would mean in practice? McCain as always tried to make a mountain out of the earmarks molehill--saying it was emblematic of a wider culture of fiscal abuse--but I don't know if that was very successful. He did score a hit on Obama's support for the energy bill, but how many people watching know enough about that pork-laden legislation for the point to have registered?

As ever it was clear that they are guided by different ideologies. McCain is relatively pro-business, pro-market; Obama, despite the intellect and the pragmatic mindset, shows a wide streak of anti-business populism. But the debate did not really get at the practical implications. Questioned about the bail-out, for instance, they were unwilling to get into the details of their differences, if any. I'm sure Obama scores points with his simplistic "blame it all on deregulation", and McCain's pro-business prejudices are a handicap right now. But when the financial regulatory system comes to be made over, it will be a question of getting the quality of regulation right, not the quantity.

Turning to foreign policy, both men seemed intent on exaggerating what in practice might be rather slight differences. McCain still refuses to admit that the Iraq war was a mistake; Obama still refuses to admit that he was wrong about the surge. But that is the past. Looking ahead, McCain wants to wind US forces in Iraq down as soon as circumstances allow; Obama wants a timetable of sorts, but is not promising to get troops out by a certain date regardless. Both want to pour more forces into Afghanistan. Are their positions really so far apart? The long debate about meeting enemies "without preconditions" seemed to me entirely about semantics rather than the nuts and bolts of practical diplomacy. Either administration would make overtures to Iran or North Korea if it thought it might get results; neither would fly the president in for a chat without having a good idea in advance what the outcome would be. Dealing with Russia? Both men want Georgia and Ukraine in NATO.

Their characters and temperaments are very different, of course, but we already knew that. McCain goes by instinct and (yes) experience, Obama more by intellect and calculation. Ideally, one would have all of the above. Forced to choose, I prefer the latter, but can see there are pros and cons on both sides.

I thought the debate moved off the financial crisis too quickly, though it was not for want of effort by Jim Lehrer, who I thought did a superb job as moderator--relaxed, funny, courteous, self-effacing. (So it can be done.) I wanted to applaud as he cheerfully kept pressing his question about which aspects of their plans would have to change in order to pay for the bailout. McCain talked about a spending freeze ("it should be considered"). Obama acknowledged that some of his proposals might have to wait, but would not say which (and then listed all the main ones as so important they should go ahead regardless). Neither candidate, it seems, has given thought to the fiscal implications of the bailout. Perhaps this is a good thing. If either were to do that, they might wonder if they really want to win.

McCain's worst day

Everything that could go wrong did go wrong for McCain on Thursday. He stands implicated in the stalling of the financial rescue plan. His proposal to postpone Friday's planned television debate ended up looking like a cheap political ploy, intended either to break Obama's renewed momentum, push back the Palin-Biden debate, or even let McCain hide from his opponent. And that second theory, strained as it may seem, was made to look plausible by Palin's truly dismal performance in part two of her television interview with Katie Couric.

Was this the same Palin who gave the convention speech--or even the less-than-stunning Palin of the Charles Gibson interview? She was simply awful. In response to straightforward questions, she was scared, rambling, incoherent, and at times completely unintelligible. She looked stupid. She gave her critics everything they could have wished.

Exactly what happened during the White House talks about the rescue package is unclear. Both sides were certainly playing politics--but there can be no doubt that the Democrats won the contest. McCain wanted to seize the initiative, look presidential, and get credit for bringing forth an agreement. The Democrats wanted to deny him that success (by announcing prematurely that a deal had been done), and to force him to reverse himself over Friday's debate. McCain was dished because neither he nor the House Republicans who blocked the revised package could explain why they had done so: at any rate, they had no intelligent alternative to suggest. McCain apparently sat quiet through most of the meeting. He put politics aside and rushed back to Washington for this?

If I were McCain, I'd be dreading the next batch of polls. What does he do to retrieve the situation? I don't know that it can be retrieved. Staying away from Friday's debate is not going to help. He needs to turn up and win.

The economy and the campaigns

When I read this piece of a few days ago by Michael Barone, arguing that "the old rule that economic distress moves voters toward Democrats doesn't seem to be operating," I found it somewhat persuasive. He argued that blame for the crisis cannot easily be pinned on Republicans alone, and that voters may fear that taxes will rise faster under Obama than they would under McCain (regardless of the fact that Obama is promising more tax relief for most Americans than McCain), which in turn would be more bad news for the economy. But a new poll this morning seems to say otherwise.

Turmoil in the financial industry and growing pessimism about the economy have altered the shape of the presidential race, giving Democratic nominee Barack Obama the first clear lead of the general-election campaign over Republican John McCain, according to the latest Washington Post-ABC News national poll.

Just 9 percent of those surveyed rated the economy as good or excellent, the first time that number has been in single digits since the days just before the 1992 election. Just 14 percent said the country is heading in the right direction, equaling the record low on that question in polls dating back to 1973.

More voters trust Obama to deal with the economy, and he currently has a big edge as the candidate who is more in tune with the economic problems Americans now face. He also has a double-digit advantage on handling the current problems on Wall Street, and as a result, there has been a rise in his overall support. The poll found that, among likely voters, Obama now leads McCain by 52 percent to 43 percent. Two weeks ago, in the days immediately following the Republican National Convention, the race was essentially even, with McCain at 49 percent and Obama at 47 percent.

It's just one poll, but still. I do think Obama is handling the crisis much better than McCain--not because he is suggesting better remedies (he continues to say little), but because his instinct to reflect before opening his mouth and his impeccable taste in advisers are both working to his advantage.

These factors I think are much more important than the supposed popularity of standard Democratic positions on economic management. Unlike McCain, Obama offers no instant bold responses, needing to be qualified or withdrawn or forgotten soon after. As ever, he looks calm, methodical and unruffled--and has his picture taken in conference with Paul Volcker, Bob Rubin and Larry Summers, who command wide respect. His response may be thin, so far, on content, but it is an altogether more reassuring posture than his rival's tendency to hasty and exaggerated certainty.

This difference of intellectual temperament has often been seen as one of Obama's biggest drawbacks, including by many of his own supporters. Sometimes his altitude over the issues, and his reluctance to commit himself to simple straightforward positions, have indeed hurt him. But the complexities of the crisis are putting those traits in a much better light.

The wrong kind of bail-out?

An excellent column by Sebastian Mallaby looks at the unfolding Fed-Treasury plan and finds it wanting:

The plan is being marketed under false pretenses. Supporters have invoked the shining success of the Resolution Trust Corporation as justification and precedent. But the RTC, which was created in 1989 to clean up the wreckage of the savings-and-loan crisis, bears little resemblance to what is being contemplated now. The RTC collected and eventually sold off loans made by thrifts that had gone bust. The administration proposes to buy up bad loans before the lenders go bust. This difference raises several questions.

The first is whether the bailout is necessary. In 1989, there was no choice. The federal government insured the thrifts, so when they failed, the feds were left holding their loans; the RTC's job was simply to get rid of them. But in buying bad loans before banks fail, the Bush administration would be signing up for a financial war of choice. It would spend billions of dollars on the theory that preemption will avert the mass destruction of banks. There are cheaper ways to stabilize the system.

In the 1980s, the government did not need a strategy to decide which bad loans to take over; it dealt with anything that fell into its lap as a result of a thrift bankruptcy. But under the current proposal, the government would go out and shop for bad loans. These come in all shapes and sizes, so the government would have to judge what type of loans it wants. They are illiquid, so it's hard to know how to value them. Bad loans are weighing down the financial system precisely because private-sector experts can't determine their worth. The government would have no better handle on the problem.

In practice this means the government would make subjective choices about which bad loans to buy, and it would pay more than fair value. Billions in taxpayer money would be transferred to the shareholders and creditors of banks, and the banks from which the government bought most loans would be subsidized more than their rivals. If the government bought the most from the sickest institutions, it would be slowing the healthy process in which strong players buy up the weak, delaying an eventual recovery. The haggling over which banks got to unload the most would drag on for months. So the hope that this "systematic" plan can be a near-term substitute for ad hoc AIG-style bailouts is illusory.

I'm a little reluctant to second-guess the proposal put together by Bernanke and Paulson because I don't know everything the Fed knows about the fragility of the credit markets and the urgency of the case. But I agree that the RTC analogy is wrong, and the column is surely right about the problems the Fed-Treasury plan faces. The article goes on to mention separate alternative proposals by Charles Calomiris and Raghuram Rajan. Both stress the need to recapitalise the banks. Calomiris would do it through government purchases of equity, Rajan through mandatory rights issues and a prohibition of bank dividend payments.

You can read fuller statements of these interesting proposals here and here on Martin Wolf's FT economists' forum. (Be sure to read Willem Buiter's comments on each article as well.) These ideas definitely have attractive features--but, to put it mildly, they are not without difficulty and involve complications of their own. For instance, Rajan says:

I suggest restricting the rights requirement only to well-capitalised entities. This may seem like penalising shareholders of well-performing companies. But in fact these are institutions that could use more capital very profitably in buying underpriced assets, and taking over weaker financial companies. Authorities could also reward these companies by facilitating acquisitions, possibly through favourable tax treatment. By contrast, forcing weak companies to issue rights risks tanking an already fragile share price, and is not a risk worth taking at this juncture.

Agreed: but how do we define a "well-capitalised entity" for the purposes of this mandate? If the bar is set too low, the "risk not worth taking" in that last sentence comes into play. Calomiris says:

To ensure that MPS [Matched Preferred Stock--his proposal for government purchases of equity] is only supplied as truly needed from a systemic standpoint, and to limit any abuse of the taxpayer-provided subsidy, the private sector would also be required to act collectively to help recapitalize undercapitalized banks, and share the risks associated with recapitalizing banks.

Specifically, to qualify for MPS assistance from the government, a bank would have to first obtain approval from "the Syndicate" of private banks (including the major institutions who would benefit from the plan as well as others who would benefit from the reduction in systemic risk) to commit to underwrite common stock of the institution receiving MPS in an amount equal to, say, at least 50 per cent of the amount of MPS it is applying for (at a price agreed between the Syndicate and the bank at the time of its application fro MPS). The Syndicate would share the underwriting burden on some pro rata basis. To support that underwriting, the Syndicate would have access to a line of credit from the US government (and from other countries' governments, if non-US banks participate in the MPS system)... For banks participating in the MPS plan that are based outside the US, foreign governments would have to provide the MPS investments. Presumably, those foreign governments would also provide the credit line commitment to the syndicate for its underwriting of common stock.

Much as I like this plan in principle, I don't think I would celebrate simplicity as one of its chief virtues.

It will be interesting to see whether Congress insists on a debate of these and other alternative strategies, or concentrates merely on larding the Paulson-Bernanke approach with additional subsidies for distressed home-buyers.

The crisis and the election

My Monday column for the FT looks at the implications of the financial crisis for the election, and beyond.

Every four years, despite ample evidence to the contrary, the US celebrates the myth of presidential omnipotence - of the office, at least, if not its occupant. The country is looking for the one man or woman who can do the biggest job in the world, take the 3am phone calls and use those awesome powers to set to rights all that is wrong, from the war on terror to indiscipline in schools, from economic inequality to the state of the roads. It is a cherished illusion. In 2008, the worst financial crisis since the 1930s has shattered it before the new president is even in the job.

The technocrats are in charge - Hank Paulson at the Treasury and Ben Bernanke at the Federal Reserve - and even they are making it up as they go along. President George W. Bush appeared briefly last week, noting that the country was worried about the current financial difficulties and saying, as though this were important information, that he shared those concerns. Wisely, he did not affect to take command of the situation (you thought the collapse of Lehman was a blow to confidence).

Over the weekend, Congress became deeply involved, because the Fed-Treasury plan to take bad assets off the balance sheets of banks and non-bank financial institutions will require congressional action. Even as the issue thus became intensely political, the president was off to the side - and will stay there, even if wheeled in to chair some meetings. What is true of the president is more true of the presidential candidates.

The rescue of Bear Stearns in March should have woken the authorities up to the possible need for a more systematic approach to the subprime meltdown, and it should have persuaded Barack Obama and John McCain to get a grip on the elements of financial regulation so that they could express a view on that matter. But every one acted as though the crisis would blow over, at least until after the election. That is why the Fed and the Treasury are having to put together a complicated and expensive regime for the resolution of bad assets - in the space of hours and under extreme duress. It is why Mr Obama and Mr McCain are obliged to play politics rather than having anything helpful to say.

You can read the rest of the article here.

A new RTC? Not like the old RTC

Massive injections of central-bank liquidity and talk of an RTC-like agency to absorb potentially vast quantities of bad assets gave the markets respite, but one wonders for how long. I remember writing about the S&L crisis and the role of the Resolution Trust Corporation nearly 20 years ago. The notion that the RTC is a model or precedent for the kind of action now being contemplated is questionable. The RTC swallowed hundreds of little thrifts whole. It was not primarily a selective buyer of bad assets from huge ongoing entities. And the assets it acquired through this process were much simpler (hence easier to value and dispose of) than the assets in question today. This is to say nothing of the scale. The S&L crisis seemed enormous in scope at the time. It was puny compared to the situation requiring resolution today.

Looking back from this distance, one thinks of the RTC as a success. That may be its principal virtue as a "model": it offers reassurance. At the time, however, the entire episode was a slow-motion mess, and politically fraught throughout. Almost from the beginning, the RTC was underfunded; more than once, its own collapse for lack of resources seemed imminent; and it was the subject of occasionally bitter, invariably partisan bickering for years. Democrats in Congress were usually reluctant to provide the additional funds requested by the Bush (senior) administration.

One thing the episode does underline--and this is far from reassuring--is the inescapably political character of a comprehensive, as opposed to ad hoc, response. Why was it the Fed, and not the Treasury, that quasi-nationalised AIG (not a bank but an insurance company, over which the Fed has no direct oversight responsibility)? Because the Fed has elastically-defined emergency powers that the Treasury does not. Deleveraging an entire financial system under duress is a protracted fiscal operation. In moving from instant-response-to-crisis mode to a comprehensive resolution regime which will have to be in place at huge expense for years, the Fed can no longer be the prime mover. And the Treasury will need legislation--not just whatever might be rushed through Congress next week or the week after, but on a continuing basis right through the next administration--to provide the authority and the cash for its actions.

When you look at the RTC model that way--take the current problem in all its seeming intractability; now give Congress a leading role--it is not so reassuring. But it will have to be that way. There is no alternative.

Some light relief: Damien Hirst

I am a huge admirer of Damien Hirst. Not of the art, which is rubbish, but of the sheer productivity and exuberance he brings to his life's work of fleecing rich idiots. "Oh Damien, you're a genius. Screw me over again." "Why not," he says, munching a bacon butty.

Global financiers, concerned about the markets and their stressed portfolios, can be relied upon to keep springing for yet another dead animal in formaldehyde, or some spots or butterflies or buckets of medicine bottles. The remorseless brainless repetition is surely part of Hirst's joke. Nothing cheered me up this week so much as reading about how well his auction of more than 200 works, each of them painstakingly produced in factories occasionally visited by the artist, had gone. Nearly $200m for this stuff? It's wonderful. I don't begrudge him a cent.

Best of all is the lack of deceit or embarrassment over what is going on. The man invites journalists to his factories. They look around, then talk of his stature as an artist without laughing: I'm not whether sure they are in on the joke, or the butt of it.

In London Mr Hirst presides over two large industrial units producing the butterfly-wing pictures and his photo-realist paintings. In the Gloucestershire countryside he leases two wartime aircraft hangers for the manufacture of the spot paintings, the spin works and the formaldehyde tanks. He also has a large workshop and an exhibition studio. More than 180 people work for him, creating Damien Hirsts. Two specialists oversee the formaldehyde unit, which on a visit in July contained four dead ponies, a wild boar, an upended cow and, in good "Godfather" style, a horse's head in a plastic bag.

In the workshop three women were talking about the "Hedgehog", a device attached to a Hoover. It is a small plastic tube with 20 holes cut into it in which are inserted cut-down cigarettes, some ringed with lipstick. Switch on the Hoover and, hey presto, instant cigarette butts for lot 134 (top estimate, £300,000). In another workshop, three fabricators were painting precisely measured round circles at regular intervals on a white background. These are the famed spot paintings that Mr Hirst says were inspired by playing snooker. The fabricators choose which color each spot is to be, and use ordinary household paint to apply the shades. The butterfly pictures are made by fabricators who are given the dimensions needed, but are otherwise left to themselves to choose the colors and designs they want. Having given his final approval--sometimes, one fabricator says, only by looking at a photograph--Mr Hirst signs and dates the back of the work.

I love it that the fabricators choose the spots' colors. (Could they not also choose the shapes? This would only add to Mr Hirst's stature, and the market value of the work.) He is selling batches of autographs at $200m a throw--with the added pleasure of knowing that a dead cow will soon be stinking out some plutocrat's palace. Please do not suspect me of sarcasm. I offer him my sincerest congratulations.

Interesting times

Not long ago, as this financial crisis continued to worsen, I criticised the Fed at one point for seeming to panic (when it cut interest rates further and faster than expected) and the Treasury for attempting to delay the inevitable (over Fannie Mae and Freddie Mac). Today I owe both of them a commendation for acting prudently and decisively.

In an astonishing sequence of events, the government has nationalised Fannie and Freddie; has let Lehman go to the wall; showed it was willing to see Merrill Lynch go the same way; has all but nationalised AIG; and has held firm, for the moment, on interest rates. Without knowing what the Fed and the Treasury knew--especially about the systemic consequences of an AIG bankruptcy--it is impossible for an outsider to be sure, but all of these, I think, were good calls.

The bravest thing was to stand aside and watch Lehman crash. This was necessary not so much to draw a line in the sand, as some analysts put it--after all, one day later, the AIG intervention stepped over that line--but to affirm in the starkest possible way the government's reluctance to put taxpayers' funds at risk. Because of Lehman, and AIG notwithstanding, the Treasury and the Fed can credibly say that shocking financial collapses will be allowed to happen so long as the systemic consequences can be contained. If there is to be any hope even of mitigating the moral hazard unleashed by the current phase of unavoidable crisis management, this was a crucial message to send.

Denying Wall Street an immediate further cut in interest rates was brave too; and this also made sense. Before much longer, the Fed might be glad that it conserved a while longer what little powder remains in its arsenal.

We will see what the markets make of the AIG intervention in due course--but the immediate verdict on Lehman and interest rates was encouraging. Monday's fall in share prices was bad but by no means terrifying, and the market rallied the next day. The dismantling of Lehman's business had not caused instant paralysis, and was proceeding in orderly fashion. The authorities were surely braced for a far worse response, and are bound to think that they got off lightly.

All this, and a presidential election too. The bewildered candidates are doing what they must: trying to give the impression that they understand what is going on (something that eludes the people in the middle of it all) while mocking the proposals of the other side (which in practical terms are indistinguishable from their own). John McCain is so far seen as the loser in this, partly because his statement that the economy is "fundamentally strong" is seen as a gaffe, and partly because Barack Obama is a little more trusted by voters on economic issues. Bad economic news is thought to be to the Democrat's advantage.

I doubt this should be taken for granted, and not just because Mr Obama's lead on economic competence has diminished, oddly enough, of late. Attacking Mr McCain's comparative optimism should not be taken too far: voters look to a leader for reassurance. Also, there is a germ of truth in the claim that the economy is fundamentally strong: who would have believed that the past year's financial stresses could have failed, as yet, to drive the economy deep into recession? In its own way, this is remarkable.

When it comes to short-term remedies, I see little or no disagreement between the campaigns. Neither has attempted to second-guess this week's initiatives. The Obama campaign is leaning heavily, and with much justification, on blaming the Bush administration for what has happened. But Mr McCain's new "change Washington" strategy may have put enough distance between him and the White House to blunt this attack.

So far as the future is concerned, both campaigns agree that financial regulation will need to be tightened up. And whoever is president will confront a fiscal outlook (an undeniable legacy of the Bush administration's incontinence) that is quickly going from bad to much, much worse. Neither campaign has come close to acknowledging the limits to the government's ability to socialise the losses of its crippled new acquisitions while simultaneously priming the Keynesian pump with tax cuts and enormous new programs of public works--all from a base of chronic fiscal indiscipline. If you were wondering what turn the crisis might take next, that would be one place to look.

Democrats in a hole, and still digging

My Monday column for the FT returns to the way the Democrats are mishandling the campaign. And it notes that the Republicans are doing the same, after their own fashion. Here it is:

If Barack Obama loses this election to John McCain - something which, for the first time, I regard as a real possibility - history will point to August 29 as the pivotal moment. That was when Mr McCain announced that Sarah Palin would be his running-mate, and when livid Democrats and their friends in the media voiced their feelings about her and much of the electorate, and gravely harmed their candidate's prospects.

For Mr McCain to win the election against the odds that faced him pre-Palin - with the economy in the tank and the incumbent Republican president setting records for unpopularity - would be sensational enough. For this to happen because of his vice-presidential pick, a decision that is usually of next to no consequence, beggars belief. The Democrats had to bring all their resources to getting themselves into this fix. They proved equal to the task.

As I argued last week, Mr Obama's own initial reaction to the Palin nomination was exactly right. All the party had to do was follow his lead. Mr Obama, in effect, would give her enough rope; her inadequacies would reveal themselves in due course; it cost nothing, in the meantime, to be courteous, and to keep pressing on the issues, where the Democrats still enjoy an advantage with most voters. Ms Palin's first television interview last week, an adequate but far from stellar performance, affirmed the wisdom of that course.

But the Democratic talking-heads had to exult in their disdain for Ms Palin and all she represents - namely, a good part of the electorate whose support Mr Obama needs. In the space of a few days, they irreversibly damaged Mr Obama's candidacy and transformed this election.

Subsequent developments reflect poorly on both parties, in my view. Are the Democrats learning, and trying to correct their error? No, for the most part, just the opposite. Are the Republicans pressing their advantage with a confident, principled campaign focused on the issues that matter? Again, no.

Certainly, the Democrats can see they are in a hole. Somehow, though, the word has gone out: "Keep digging." Mr Obama is also urged to be less cool and lose his temper. Voters adore an angry candidate, you see. "Dig faster, and be more angry," is the advice coming down from the political geniuses who decided it was a fine idea to laugh at Ms Palin in the first place. A recurring television image in the past few days has been the split-screen contrast between a serenely smiling Republican operative and a fulminating red-faced Democrat about to have a stroke.

Efforts to smear the governor proceed at a frantic pace. My guess would be that there are now more journalists on assignment in Alaska than bothered to turn up for the Republican convention in St Paul, sifting through dustbins, interrogating Palin family acquaintances (extra credit for those with a grievance) and subjecting Ms Palin's expenses claims to a fanatical scrutiny which I dare say their own record-keeping, or that of most senators, might not withstand.

Of course, they will find things. They may even find something important. But the sheer swarming zeal for trivial malfeasance and family embarrassments is rapidly raising the bar for impropriety. I think that many voters - and not just committed Republicans - find this whole spectacle disgusting, so on top of everything else Ms Palin is now getting a sympathy vote.

Among seasoned Democratic politicians, the picture is more mixed. Joe Biden, the vice-presidential nominee, appears to get it. His stump speech has started to include obliging remarks about Ms Palin, which suggests he is approaching the forthcoming television debate in the correct frame of mind. If he can stay polite and respectful while laying bare the gaps in Ms Palin's knowledge and experience, and by highlighting her positions on social issues, which are unappealing to many centrists, he can undo some of the damage of recent days.

But compare this with the comment of Carol Fowler, chairman of the South Carolina Democratic party, who said late last week that Ms Palin's main qualification for office was that she has not had an abortion. Brilliant! Even now, with the polls giving their verdict, there is much more like that. And Democrats wonder why they cannot get the debate back on to their issues.

Republicans are not going to help them do it while things are going so well for them. This may be understandable, but let us be clear - this is not to their credit. If Mr McCain were the kind of leader he claims to be, he would want to be elected for his platform. His policy proposals, not his vapid commitment to "change Washington", would be to the fore. More than this, he would also want to bind the country together, and restore its moral strength and sense of purpose. He would strive to be a unifier. Mr Obama makes that claim, with seeming sincerity, and it is the best thing about his candidacy.

Democrats will deny it, but they opened this new front in the culture war by their response to the Palin nomination. The mess they are in is their own fault. They still seem intent on driving significant numbers of women and moderates over to the other side and Mr McCain's political instinct is doubtless to help this rift in the electorate widen further. It could be a winning strategy. But good politics is not the same thing as responsible leadership. I intend it as a compliment to Mr McCain when I say that if his means to victory in this election is to divide the country, it is a victory he should not want.

Palin's interview with Charles Gibson

I thought she did all right--a good, adequate performance, but no more. I doubt that it will have changed many minds. People inclined to like her saw nothing much to alarm them; people inclined to dislike her saw nothing that will have impressed. I think that many viewers, like me, will have regarded Gibson's tetchy, unfriendly, weary, inquisitorial demeanour--that constant frown, as if to say, "remind me why I am talking to YOU?"--as off-putting, and therefore helpful to the accused. She is under intense pressure, obviously. I think she deserves high marks for unflappability--and that, heaven knows, is a good thing in a vice president (or president).

I agree with Jim Fallows, though, that the combination of little knowledge, incuriosity, and an unduly decisive temperament is very dangerous. Bush underlines that danger, to be sure. What one wants is self-assurance that understands its limits, and some appreciation of the need to balance ends and means. I still don't know what to make of Palin in that regard. There are some worrying signs.

I don't go along with the view that her answers on the "Bush doctrine" were a serious misstep, however. True, she did not know what that term meant. The fact is, it means different things to different people. If Gibson had put that question to me, my answer would have been: "It depends what you mean by the Bush doctrine." In effect, that was what she said. And it deserves to be noted (as Jim points out, but with a kindly lack of emphasis, calling it a minor error) that Gibson himself apparently does not know what it means.

GIBSON [impatiently]: The Bush doctrine as I understand it is that we have the right of anticipatory self-defense, that we have the right to a preemptive strike against any country that we think is going to attack us. Do you agree...?

No, Charles. That is not what the Bush doctrine means. The right of anticipatory self-defence is already enshrined in international law. Countries do not have to wait until they are attacked to legitimately defend themselves. The Bush doctrine advances the notion of preventive war: the right to attack not in order to defend yourself against an imminent assault, but to deal with less certain, more distant but still possibly mortal threats.

Whatever you think about the Bush doctrine, people who laugh at Palin for failing to know what it is really ought to make sure they understand it themselves.

Lipstick on a pig

One wonders how much lower this election can sink. The furore over "you can put lipstick on a pig, but it's still a pig" sets a new benchmark. The idea that Barack Obama seriously intended to call Sarah Palin a pig is surely absurd. Yes, it was a stupid thing to say; and yes, many people in his audience enjoyed the implication; but I would be amazed if it was not just an injudicious unscripted remark. The Republican outrage over it is wholly synthetic. The Democratic outrage over the Republican outrage is mostly synthetic too--though not entirely, because there is some genuine anger over the way the race is going mixed in.

The Democrats urgently need to get a grip on this. When they rage at unfair Republican tactics, part of that fury unavoidably spills over into anger at the electorate for being so gullible as to fall for it. Far better to rise above this sort of stuff, and radiate confidence that the electorate will see through it. If Obama gets angry at the electorate, or can even be plausibly accused of it, he is finished.

I don't know whether I find Camille Paglia infuriating or compelling--often, I suppose, both at the same time. I thought this piece for Salon was excellent, despite the obligatory weirdness. I find her views on abortion inexplicable, and I'm not sure what it could ever mean to call nature "fascist" (as she does later on in the article), but I think she makes some very astute observations about the race.

The over-the-top publicity stunt of a mega-stadium for Obama's acceptance speech at the Democratic convention two weeks ago was a huge risk that worried me sick -- there were too many things that could go wrong, from bad weather to crowd control to technical glitches on the overblown set. But everything went swimmingly. Obama delivered the speech nearly flawlessly -- though I was shocked and disappointed by how little there was about foreign policy, a major area where wavering voters have grave doubts about him. Nevertheless, it was an extraordinary event with an overlong but strangely contemplative and spiritually uplifting finale. The music, amid the needlessly extravagant fireworks, morphed into "Star Wars" -- a New Age hymn to cosmic reconciliation and peace.

After that extravaganza, marking the 40th anniversary of Martin Luther King Jr.'s epochal civil rights speech on the Washington Mall, I felt calmly confident that the Obama campaign was going to roll like a gorgeous juggernaut right over the puny, fossilized McCain. The next morning, it was as if the election were already over. No need to fret about American politics anymore this year. I had already turned with relief to other matters.

Wow! Wham! The Republicans unleashed a doozy -- one of the most stunning surprises that I have ever witnessed in my adult life. By lunchtime, Obama's triumph of the night before had been wiped right off the national radar screen. In a bold move I would never have thought him capable of, McCain introduced Gov. Sarah Palin of Alaska as his pick for vice president. I had heard vaguely about Palin but had never heard her speak. I nearly fell out of my chair. It was like watching a boxing match or a quarter of hard-hitting football -- or one of the great light-saber duels in "Star Wars"... This woman turned out to be a tough, scrappy fighter with a mischievous sense of humor.

Conservative though she may be, I felt that Palin represented an explosion of a brand new style of muscular American feminism. At her startling debut on that day, she was combining male and female qualities in ways that I have never seen before. And she was somehow able to seem simultaneously reassuringly traditional and gung-ho futurist. In terms of redefining the persona for female authority and leadership, Palin has made the biggest step forward in feminism since Madonna channeled the dominatrix persona of high-glam Marlene Dietrich and rammed pro-sex, pro-beauty feminism down the throats of the prissy, victim-mongering, philistine feminist establishment.

Palin made sense to me as a VP choice, even though I did not think she would draw support from disappointed Clintonistas, or have more than a moderate appeal for centrist women. The polls suggest I was wrong on both points. It will be interesting to see whether this lasts when she is forced to explain her views on social issues, and how she might act on them as VP or president--as she presumably will be in the debate with Biden, if not before.

More on Democrats and respect

As promised in my previous post, some examples of the hundreds of messages I am getting about this article. (I know you only have my word for it, but I promise you these instances are quite representative. And something to bear in mind perhaps if you are sceptical about the writers' bona fides is that these extracts are, as I say, from emails and not from comments on the blog intended for publication.)

The divorce [between working class Americans and Democrats] started long ago, about the time of George McGovern. His candidacy drove my father, for example, to vote Republican for the first time in his life. As for myself, I strongly oppose most of the policies of the Republicans, but, frankly, being in the same room with liberal Democrats and listening to them talk, alienates me, too. The arrogance and condescension is so thick you could cut it with a knife.

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I was a liberal once, serving as general counsel of the Peace Corps..., and it was some years later that the attitude you so aptly describe began to really alienate me from my former allegiance. It wasn't so much the policies, although I've also moved to the center/right over the years, as it was the smugness, the patronizing attitude, and the almost pervasive hypocrisy that made the left intolerable. You give them credit for being well-intentioned, and I think you're right, but they're getting awfully mean this year.

One of the ironies is that I'm not really a member of the right either. The left drove me out, but I'm not comfortable with a lot of the conservative positions. The one thing that makes the right fundamentally more acceptable, though, is that for all their faults, the right wing politicians by and large do not think they are smarter than the left or the people of this country. The left is utterly convinced that the only reason others don't agree with them is that they're too stupid. Unfortunately for the left, the people are at least smart enough to pick up this attitude.

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[Good piece] on Palin. I say this as someone who would like to see Obama win. I'm amazed at how ugly and counterproductive the behavior you describe on the part of of out-of-touch media/lefty blogs etc has been.

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I am a Democrat and African-American and I found your article to be dead-on accurate. You could detect the snideness of liberal Democratic reactions a mile away. I find that Democrats from those parts of the US not located on the coasts tend to understand this, too. If you support his campaign you can only hope that it does not fall for this same mindset - something that so far they have avoided doing, hence its appeal in the Midwest and the West.

I want to reflect more carefully on the many emails I've received that take issue in a thoughtful and courteous way with my argument (as opposed to merely screaming about my duplicity, stupidity, ethnic origins and intellectual corruption) and I will come back to the subject again. But here is part of an email from a dear and esteemed American friend that I wanted to post and respond to straight away.

You are painting the entire Democratic party with the same brush thereby doing to them exactly what you are accusing them of doing to the Republicans. Being in (and from) small town America, I am constantly amazed at the thoughtful discussions I have had with both Republicans and Democrats on the candidates with no personal attacks or animosity expressed. It has been really interesting - very different than the last few elections. Perhaps the column needs to be more directed to the media.

The second thing that annoyed me is the final paragraph: "It will be hard. They will have to develop some regard for the values that the middle of the country expresses when it votes Republican. Religion. Unembarrassed flag-waving patriotism. Freedom to succeed or fail through one's own efforts. Refusal to be pitied, bossed around or talked down to. And all those other laughable redneck notions that made the United States what it is."

Except for the religious reference (I cannot abide mixing politics and religion), I can't understand why you think that these are primarily Republican traits (I don't like "values" references either). I think of everyone who told me how they cried during Obama's speech (me included) because they felt hope and that surge of patriotism that they had been missing. And I know of no one who isn't proud to succeed or fail on their own, or refuses to be pitied, bossed around or talked down to. I know you are making a point but I think this paragraph took away from the power of the piece.

Well said, Jana. I certainly intended no disrespect to grass-roots Democrats: my complaint is chiefly addressed to the party's spokesmen--Obama is the exception--and advocates in the media. I believe they are letting the wider liberal movement down. I will say, though, that good-natured discussions between ordinary Democrats and Republicans might be harder to find in Washington DC, New York City and other metropolitan liberal redoubts than they are for you in Idaho.

As for the idea that those values or cultural affinities are widely shared or even universal, this has not been my experience. Obviously I am moving in the wrong circles, but the metropolitan liberal, in my experience, regards overt religious identity as vulgar, and evangelical Christianity as an infallible marker of mental retardation. Flag-waving patriotism is seen as a joke and an embarrassment. My point about refusal to be talked down to, and so on, was not intended to imply that only Republican voters think that way. What I was trying to say is that the liberal elite seems to forget that ordinary Republican-leaning Americans are proud people who want to be treated with some respect, that they are in fact entitled to it, and that their insistence on it is a quintessentially American idea.

Democrats must learn some respect

My column in yesterday's FT prompted more emails from readers than any other article I have written. I usually get 10 or 20 letters or emails. I got hundreds about this one and they're still coming. I expected to get a few from Republicans praising me (they would ignore the positive things I say about Democrats in general and Obama in particular) and a few from Democrats attacking me (these would be spluttering and furious: "are you kidding me? are you kidding me?", and so on). And so I did. But these were outnumbered--vastly outnumbered--by emails from ex- or wavering Democrats who say they feel disappointed or betrayed by the party's spokesmen and advocates. Who knew this strand of opinion even existed? Later today I'll post one or two examples, together with responses to critics who made good points and some further thoughts on the subject. Here is the piece:

Democrats must learn some respect

This article is not the first to note the cultural contradiction in American liberalism, but just now the point bears restating. The election may turn on it.

Democrats speak up for the less prosperous; they have well-intentioned policies to help them; they are disturbed by inequality, and want to do something about it. Their concern is real and admirable. The trouble is, they lack respect for the objects of their solicitude. Their sympathy comes mixed with disdain, and even contempt.

Democrats regard their policies as self-evidently in the interests of the US working and middle classes. Yet those wide segments of US society keep helping to elect Republican presidents. How is one to account for this? Are those people idiots? Frankly, yes - or so many liberals are driven to conclude. Either that or bigots, clinging to guns, God and white supremacy; or else pathetic dupes, ever at the disposal of Republican strategists. If they only had the brains to vote in their interests, Democrats think, the party would never be out of power. But again and again, the Republicans tell their lies, and those stupid damned voters buy it.

It is an attitude that a good part of the US media share. The country has conservative media (Fox News, talk radio) as well as liberal media (most of the rest). Curiously, whereas the conservative media know they are conservative, much of the liberal media believe themselves to be neutral.

Their constant support for Democratic views has nothing to do with bias, in their minds, but reflects the fact that Democrats just happen to be right about everything. The result is the same: for much of the media, the fact that Republicans keep winning can only be due to the backwardness of much of the country.

Because it was so unexpected, Sarah Palin's nomination for the vice-presidency jolted these attitudes to the surface. Ms Palin is a small-town American. It is said that she has only recently acquired a passport. Her husband is a fisherman and production worker. She represents a great slice of the country that the Democrats say they care about - yet her selection induced an apoplectic fit.

For days, the derision poured down from Democratic party talking heads and much of the media too. The idea that "this woman" might be vice-president or even president was literally incomprehensible. The popular liberal comedian Bill Maher, whose act is an endless sneer at the Republican party, noted that John McCain's case for the presidency was that only he was capable of standing between the US and its enemies, but that should he die he had chosen "this stewardess" to take over. This joke was not - or not only - a complaint about lack of experience. It was also an expression of class disgust. I give Mr Maher credit for daring to say what many Democrats would only insinuate.

Little was known about Ms Palin, but it sufficed for her nomination to be regarded as a kind of insult. Even after her triumph at the Republican convention in St Paul last week, the put-downs continued. Yes, the delivery was all right, but the speech was written by somebody else - as though that is unusual, as though the speechwriter is not the junior partner in the preparation of a speech, and as though just anybody could have raised the roof with that text. Voters in small towns and suburbs, forever mocked and condescended to by metropolitan liberals, are attuned to this disdain. Every four years, many take their revenge.

The irony in 2008 is that the Democratic candidate, despite Republican claims to the contrary, is not an elitist. Barack Obama is an intellectual, but he remembers his history. He can and does connect with ordinary people. His courteous reaction to the Palin nomination was telling. Mrs Palin (and others) found it irresistible to skewer him in St Paul for "saying one thing about [working Americans] in Scranton, and another in San Francisco". Mr Obama made a bad mistake when he talked about clinging to God and guns, but I am inclined to make allowances: he was speaking to his own political tribe in the native idiom.

The problem in my view is less Mr Obama and more the attitudes of the claque of official and unofficial supporters that surrounds him. The prevailing liberal mindset is what makes the criticisms of Mr Obama's distance from working Americans stick.

If only the Democrats could contain their sense of entitlement to govern in a rational world, and their consequent distaste for wide swathes of the US electorate, they might gain the unshakeable grip on power they feel they deserve. Winning elections would certainly be easier - and Republicans would have to address themselves more seriously to economic insecurity. But the fathomless cultural complacency of the metropolitan liberal rules this out.

The attitude that expressed itself in response to the Palin nomination is the best weapon in the Republican armoury. Rely on the Democrats to keep it primed. You just have to laugh.

The Palin nomination could still misfire for Mr McCain, but the liberal reaction has made it a huge success so far. To avoid endlessly repeating this mistake, Democrats need to learn some respect.

It will be hard. They will have to develop some regard for the values that the middle of the country expresses when it votes Republican. Religion. Unembarrassed flag-waving patriotism. Freedom to succeed or fail through one's own efforts. Refusal to be pitied, bossed around or talked down to. And all those other laughable redneck notions that made the United States what it is.

John McCain's speech

Even allowing for the fact that one does not expect soaring oratory from John McCain, his closing speech to the convention was disappointing. He had a hard act to follow after Sarah Palin, but that is no excuse because there was no need to match that for excitement. Instead he had to do two main things, in my view, each of them readily achievable. First and most important, he had to affirm the party's appeal for votes to the wide middle of the US electorate. Second, he needed to offer some specific domestic policies, and contrast them favourably with the Democratic agenda. He gestured vaguely in both directions, but nothing more.

The speech concentrated mainly on his biography--again. One hesitates to say this because McCain is an authentic hero; his bravery is something that very few of us, least of all this writer, could ever aspire to match; and knowing what inner resources he brings to his candidacy is of course an essential part of his appeal--but how many times does this story need to be told? This week his audience has heard it over and over again. Endless repetition must eventually dull its impact. His heroism and his capacity for sacrifice in the service of his country are unquestioned. By the end of the week, it could have been left at that.

Reaching out to the centre should have been regarded as a priority because of the Palin nomination. For the moment, that looks like a great success: she gave an amazing speech and, to the consternation of the Democrats and a large part of the US media, triumphantly vindicated McCain's decision to select her. But Palin is a social conservative. Yes, maybe she can bring in centrists as well: that possibility makes her an instant force to be reckoned with in American politics. But right now it is no more than a possibility. She has energised the base--that much is certain--but her views on abortion and other social issues will alarm many centrists who might have been leaning to McCain. Having delighted the base, he needed to rebalance the ticket by moving deftly to the centre himself. Securing the base was necessary but not sufficient: the Republicans cannot win without independents.

Mr McCain, one imagines, would prefer victory to glorious defeat. Yet his centrist gestures were confined mostly to underlining his maverick instincts, his taste for bipartisanship, his willingness to go against party orthodoxy, and his appealingly frank criticisms of what the Republicans had achieved, or failed to, during the Bush years. All that was fine, as far as it went, but much too general. Give us examples. Offer some reassurance that this will not be the right-wing ticket that the Palin nomination suggests it could be. Yes, that would have risked disappointing the hall, but the hall has been very well catered to this week and it was a risk worth taking.

More detail was needed in its own right, too, not just to rebalance the ticket. Once Palin blew the doors off the convention on Wednesday, bringing the torrent of derision over her nomination to an abrupt halt, lack of specific proposals in the Republican platform became the principal line of criticism--and unlike the response to the VP pick, this was a well-aimed attack. In his own superb speech at the end of the Democrats' convention, Obama took pains to list a series of specific policies. McCain needed to match that or better. He not only failed to do so, but he made the gap all the more obtrusive with the part of his speech that mentioned by name families and individuals that were struggling for one reason or another. McCain said he would honour them and work for them. Good, but how, exactly?

Not for the first time, it occurred to me that McCain's biggest mistake in this campaign has been in failing to develop a market-friendly proposal for universal health care. Mitt Romney did it in Massachusetts so do not tell me a Republican cannot go there. That plus Palin would have given him a shot at the base and at independents too. It would have cemented his appeal to middle America, which is much preoccupied with the worsening failure of the US health care system. Not to mention, it would have been the right thing to propose on the merits. If he had done this, I think I would be betting on McCain-Palin right now. Ceding the issue to the Democrats, in my view, was a mistake in every way. And I groaned to hear his attack on Obama's health plan, falling back on the old "socialised medicine" line, which is a travesty.

Sarah Palin's speech

Astonishing. It was a fine convention speech--but, reading the text, no better than very good. What was just sensational, far exceeding my expectations, was the delivery. After the thrashing she has received from press and television in the past few days, knowing what was at stake for the party and for John McCain as she stood at the podium, with a good part of the nation watching and waiting for her to trip, her composure and self-assurance were simply amazing. Who could fail to be moved by this? And it was even more impressive than it looked, because the waves of adulation from the audience kept interrupting her momentum: they did not know it, but at times the audience was making it harder for her. Yet she never looked hesitant or thrown. She paused when she had to and controlled the timing. She actually seemed comfortable. If ever there were a political natural, we saw one tonight.

It was not a safe speech, though at the beginning, when she was talking mainly about McCain, I thought it was going to be. She had a pair of difficult acts to follow, because both Mike Huckabee and (especially) Rudi Giuliani gave terrific barnstorming speeches before she came on. (Let's not dwell on Mitt Romney's bizarre contribution.) She not only touched on her own biography, in ways sure to delight small-town Americans across the land, she also asserted her command, as the governor of an oil-producing state, of the energy debate. Had Democrats forgotten that this is a key issue in the election, and one on which they are trailing the Republicans in public opinion?

I was surprised that she dared to attack Obama-Biden on national security and foreign policy, where her credentials are weak: here she was saying, I'm not afraid of you. In fronting her own executive experience, comparing it favorably (and not without justification) with Obama's, she dared to mock the Democratic nominee. That too was a risk, because mockery easily backfires--ask the Democrats about that tonight--and it paid off. All the barbs--"he has written two memoirs but not one piece of legislation," and so on--went home.

Well, the Democrats have a problem. They had a few days of calling her a clueless redneck, a stewardess, a nonentity, and she has hurled that back in their bleeding gums. (If I were Joe Biden, I'd start practising for October 2nd right now.) Even before tonight's speech, they had backed off the "no experience" strategy, because (as the Republicans intended) that was sending shrapnel in Obama's direction. Their line right now is their default mode, that McCain-Palin is four more years of George Bush. But this too is a completely untenable strategy, since the Republican ticket now looks stunningly fresh to voters, as fresh in fact as Obama-Biden. Where they will have to end up is obvious: McCain-Palin is an extreme right-wing ticket. It is a team that will prosecute the culture war against all that is decent and civilized in the United States: that must be the line.

Aside from further surprises in her biography, this--not her supposed inexperience--is the vulnerability that Palin has brought to the McCain candidacy. We need to hear her questioned on those issues. How unbending a social conservative is she? So much as to frighten the independents McCain needs? McCain is not a culture warrior. That is not the campaign he wanted to fight. At the moment, however, this factor seems massively outweighed in electoral terms by the excitement she has brought to the campaign. The party cannot believe its luck. They want to win again, and suddenly they think they can.

What one next wants to know is how Americans at large react to what they saw tonight. I will be surprised if they were not very impressed.

Update: CNN on why the speech was a problem for McCain: "Well, he has to speak tomorrow night, and as we know, he is no governor of Alaska." Flexibility you can believe in from the best political team on television.

Thompson, Lieberman and day one in St Paul

The first full day of the Republican convention--the schedule was put back from Monday because of Hurricane Gustav--went off smoothly. President Bush was beamed in from the White House, and Fred Thompson and Joe Lieberman were the other headliners. No sign yet of Sarah Palin, due to speak on Wednesday, and the subject of almost every conversation in the margins of the event. Whatever the rest of the country may think of her, whether she proves to be an asset or a liability to the McCain campaign, her selection has generated extraordinary excitement and enthusiasm here.

At the same time, though, her arrival on the ticket threw the first day's pace off a little. With Palin nowhere to be seen, day one, as they say, buried the lede. The idea was to devote it to introducing John McCain, but is any American politician less in need of an introduction?

The tributes were well enough done. True, Bush's reference to McCain's spirit being more than a match for the "angry left" was a bit puzzling. (Does anybody even in this hall think that Obama represents the angry left?) But Thompson's funny, punchy speech had everybody asking, why wasn't he like that during the primaries? Aside from the sustained ovation for a fallen soldier, Thompson got the biggest cheer of the night. ("And we need a president who doesn't think that the protection of the unborn or a newly born baby is above his pay grade.") His speech even had a morsel of policy content (taxes are a bad thing), which otherwise would have been entirely absent from the day. But there was nothing very surprising and, thanks to Palin, it all seemed a little beside the point.

Lieberman's speech certainly ought to have seemed surprising, but his apostasy is old news. Eight years ago, this man was Al Gore's running-mate; now here he was speaking up for the Republican nominee. He rested his case on the fact that McCain is an extraordinary man and these are extraordinarily dangerous times. But he said little to elaborate. He got a round of applause for Bill Clinton--no mean feat with this crowd--when he contrasted Clinton's occasional willingness to work with Republicans with Obama's record. And he got one big laugh: "If John McCain is just another partisan Republican, I am Michael Moore's favourite Democrat." If I had been just another of the partisan Republicans packing the hall, I might have been a little insulted by that, but the audience either failed to make the connection or was in a generous frame of mind.

Most Democrats by now detest Lieberman, of course, but one other thing he said might persuade those who don't to get with the program. He not only praised McCain's support for the surge of forces into Iraq (fair enough), but contrasted this with Obama's "voting to cut off funding for our American troops on the battlefield". That was tendentious at best, and the most aggressive attack on Obama of the day. Obama has never argued for funding to be cut off; he wanted a timeline for withdrawal attached to the funding. He did vote against a funding bill that failed to include such a provision; but then Lieberman himself, and most Republicans, also voted against a funding measure that did include such a provision. One way or another, almost everybody has voted against funding for the troops. Lieberman's charge was unfair, and did not sit well with his appeal for one-nation bipartisanship.

And then again, there is Palin. Lieberman, widely thought to have been McCain's first choice for VP (McCain is said to have switched because the base would not wear it), applauded the selection. "Governor Palin, like John McCain, is a reformer. She's taken on the special interests and the political power-brokers in Alaska and reached across party lines to get things done. The truth is, she is a leader we can count on to help John shake up Washington. That's why--that's why I sincerely believe that the real ticket for change this year is the McCain-Palin ticket." Lieberman and McCain see eye to eye on national security. But Lieberman is pro-choice on abortion, and a social liberal in other respects as well, whereas Palin is a social conservative. Genuine though his admiration for McCain may be, stretching his endorsement to the whole ticket seemed a stretch too far.

One last observation. Barring breakdowns later in the week, the Republicans have won the platform war hands down. The Democrats had their cheesy game-show set followed by the much-derided Greek column thing. The Republicans have a clean, reflective stage in front of an enormous high-definition screen, used so far to excellent effect. If I were with the DNC, I'd find out who was responsible and book them for 2012.

The Palin nomination

I was unsure how the pregnancy of Sarah Palin's daughter would affect social conservatives' view of the governor's nomination for VP, but they seem to be taking it in their stride. If anything they are seeing it as a positive--more proof that Mrs Palin is a good and supportive mother. At any rate, they say, it is nobody's business but the family's.

The other good news for the McCain campaign is that many Democrats are mishandling the issue as badly as they mishandled the nomination in the first place. There is a tone of exultation over the Palin family's difficulties that will strike many centrists, and decent people regardless of ideology, as repellent. Again, to his enormous credit, Obama himself was the exception. What a class act he is. He reminded reporters that he is the son of an unmarried mother, said the families of candidates and especially their children should be off-limits, and told the press to drop the story. It won't of course: it will mine it for all it is worth. But Obama said the right thing and gave every sign of meaning it.

Continue reading "The Palin nomination" »

Balanced tickets

Jay Cost has an interesting take on McCain's choice of Sarah Palin for VP. I mostly agree  with him (except that I think he is wrong to say, in passing, that Obama should have chosen Clinton over Biden).

I think many people are surprised to discover that McCain intends to carry a positive message into the fall. Many of us had assumed that this election would be a referendum on Barack Obama, with McCain serving as an inoffensive backup for those too unsure of the junior senator from Illinois. Just a few weeks ago, I used this logic to argue that McCain should select Mitt Romney, as he was the best among the viable picks to go after Obama.

John McCain clearly does not share this view of the race. By picking Palin, he is signaling that he intends to win this election not just by attacking Obama, but by offering an affirmative message of his own.

What is that message? It is that he represents change, too. It's not the "drastic" change that Obama represents, but rather "common sense reform" (scare quotes reflect what we will hear from McCain-Palin, not non-partisan reality). McCain is indicating that he, too, is a candidate whose election would alter the status quo - not as much as Obama's election would, but alter it nonetheless.

Indeed, it is interesting to consider the two tickets. The fresh but inexperienced candidate is at the top of the Democratic ticket; the experienced pol who, even after all these years, "calls it like he sees it" is at the bottom. With the GOP, it's reversed. These tickets are mirror images of one another. The message to voters from McCain? If you're unhappy with the status quo in Washington, but are worried that Obama-Biden would be too drastic a change, vote McCain-Palin.

So, the public gets a pretty sophisticated choice this year. It's not a choice between change versus more of the same. It's a choice between degrees of change. I like this. And while I have no idea how Palin will play, I like that McCain believes he has to offer something positive and new to win.

In my Monday column for the FT, I argue that the Palin pick, though an enormous risk,  may well have been a risk worth taking. I'll post the column after the jump.

Continue reading "Balanced tickets" »