Some Republicans think about erecting a bigger tent, but...

If Republicans get drubbed in the election, which way will they go? Will they keep trying to energize their base -- or will they return to the "big tent" approach that prevailed in the Reagan years? In a new piece, Kimberley Strassel, the Wall Street Journal's Potomac Watch columnist, argues for the big tent -- or at least a bigger tent.

Some other Republican thinkers -- like David Frum and David Brooks -- are saying the same thing, but the passionate believers who rally the base aren't yielding. They are already preparing to hoist SARAH PALIN IN 2001 banners.

Ideologically, the GOP is going through the same agonies that gripped the Democrats after their New Deal-Fair Deal-Great Society big-government programs didn't work in an America whose aspirations were increasingly middle class and geography increasingly suburban.

"Joe the Plumber" incantations will rouse the Republican base, but they don't address problems like how to dig out from a financial crisis that circles the globe, re-energize the U.S. economy and create more winners than losers (like auto workers) and enact an immigration law that balances strictness with openness. That's just for starters.

Sadly, John McCain came to the presidential race with a political history that suggested he would enlarge the GOP tent. But he shaped his campaign to appeal to the base. Why such a political maverick would have made such a conventional move is puzzling. As Washington Post columnist Anne Applebaum said in her "Why McCain Lost Me" piece earlier this week, McCain is no die-cast base politico. Maybe he went with the base because he felt he had to keep proving himself to the diehards who were cool toward him -- until he chose Palin.

If the election goes as the polls are forecasting, the Republicans will not only have to decide which direction to go in -- hunker in with the base or build a bigger tent -- but who will lead them in the struggle to a solution. If Palin is leading the base, who will be her opposite?

Obama talks to the "undecideds"; can McCain match him?

The Obama 30-minute infomercial was a shrewdly spent $4 million worth of campaign money. Its primary target was those "undecideds" who probably amount to less than 10% of the electorate, but because of the tightening race, may truly decide who will be the next President.

The main vibe I picked up from the show was that Obama is a guy who doesn't get rattled easily, if at all, even when the subject is what he calls America's biggest economic challenge since the Great Depression. With many Americans feeling the pangs of panic, those who tuned in or watched replays had to be struck to the calmness and steadiness that Obama projected.

With less than five days of electioneering left, the McCain campaign will have to act fast to make a counter-appeal to the undecideds. It'll have to be better than the "socialism" label that GOP ads have tried to pin on Obama. It should be woven around McCain -- why this war hero and courageous senator is the best person to be President in these dark times. It's a powerful message, but it may be too late to deliver it.

In polls, Obama's blue line keeps going north, and McCain's red line south

It's easy to get carried away by polls when they seem to back up what you wish for. Still, I was struck by the uniform pattern of state polls trending for Obama, as compiled by Real Clear Politics. In 12 "battleground" states, polling charts show a consistent pattern -- Obama's blue line rising and McCain's red line falling. Sometimes the blue line flattens out, but since September, in all 12 states -- including GOP strongholds like North Carolina and Missouri -- it never yields to the red line. Even in Indiana, which Bush won by more than 20 percentage points in 2000 and 2004, the blue line is now on top, albeit slightly (46.8% to 46.5%).

To find battleground states that are still polling for Bush, you have to go to the West or Deep South, but in some of those -- Montana and Georgia in particular -- Obama's blue line grows stronger.

GOP bloggers like Hugh Hewitt cherry-pick the rare national poll that shows the presidential race tighter than the composite of state polls, which typically are based on more respondents. There are also the warnings, like this one aimed at the mainstream news media, that voters might "pull a Truman" on Nov. 4 and leave the polls looking like confetti on the convention floor the morning after.

There is still a week left in the campaign, and McCain and the GOP could unleash a multi-megaton accusation at Obama aimed at suddenly reversing the steady upward path of that blue line. After Bill Ayers and "spreading the wealth around," what might that be?

With Stevens now a convicted felon, what will reformer Palin do if he won't step aside?

So Ted Stevens, the longest-serving member of the U.S. Senate, is now a convicted felon. The Republicans are being ground down by an amazing string of bad luck. Stevens can appeal and keep his case going for several years, during which he could probably continue to serve in the Senate, assuming he wins on Nov. 4. While the Democrats are hungry for as big a Senate majority as they can get, they might prefer to see Stevens choosing to hold on by his finger nails -- a desperate act that could turn off undecided voters everywhere, not just in Alaska, and move them toward Obama and Democratic congressional candidates on Nov. 4.

Sarah Palin is in yet another predicament in her short national political life. If Stevens decides to keep running for office despite his conviction, will she -- the acclaimed reformer who took on her own party in Alaska -- oppose that decision? If she says no to Stevens, she's got a good chance of turning his scandal into a net plus for her party --and for her and her running mate John McCain's chances in the White House race.

Interesting!

A Republican warns Republicans, but is anyone listening?

How McCain's post-convention campaign strategy -- to re-energize the deeply conservative GOP base -- is wrecking not only his chances but those of many incumbent Republican members of Congress is mournfully laid out in this Washington Post op-ed by David Frum. Author of the recent book "Comeback: Conservatism That Can Win Again," Frum is resigned to the Democrats capturing the White House, but he thinks it's not too late for his party to hold on to enough of its Senate seats so it can thwart what it considers the worst of Democratic tax-and-spend legislation.

Even Democrats might see the wisdom in their party not controlling Pennsylvania Avenue from one end to the other. But with about 10 days remaining in the campaign, will McCain and GOP strategists step back from their suicidal march that could cost them what should be secure Senate seats in North Carolina, Minnesota and Oregon? It's possible Republicans could even lose their contested seat in bright red Georgia.

Talking about what he'd do if he lost, McCain said no problem, he'd just go back to Arizona and be a senator again. But if he and his party keeps pushing the campaign to the base-pleasing right, some of his colleagues in the Senate may not be able to do the same.

Is Palin the next Reagan?

If Obama wins -- and I join the big and increasing crowd of guessers who thinks he will -- what fortune awaits Sarah Palin? Her future is very bright, according to this blog post in the New Republic. I nod at all the points that are made. Palin is a political animal, she is a quick study and she has that je ne c'est quoi quality. But is she a 21st century Reagan?

I say no -- at this point. Palin, for all her formal gifts, remains too aligned to, too imprisonend by, her GOP base. Reagan was no one's prisoner. He and his LA-based advisers knew where they wanted to take the Republican Party. It was not with a Goldwater road map.

In her campaign speeches, Palin is talking the standard line of the GOP base -- when she should be at least giving some hints of where she would take the party post-2008 (after the Obama victory).

A Rovian culture war won't make it. Too many people -- too many people who are supposed to be in the vanguard of the GOP faithful, like the socially conservative working class -- are being so ground down by the economy.

Look at Joe the (Non-) Plumber. McCain and the GOP tried to make him into a hero fighting against Democratic tax policies. Joe says Obama's tax policies would penalize him if he carries out his dream of buying the plumbing firm where he works and makes more than $250,000 a year. But in metro Toledo, Ohio, where Joe lives, the central issue is not how to make $250,000+ a year and avoid taxes. It's people already unemployed, the under-employed or the likely to be without a job soon as the auto industry continues to downsize. Most working families make under $40,000 a year. While Joe is talking economic fantasy -- making the kind of money that only 2% of Americans make -- thousands of Toledo area residents, even those who are employed, are struggling to buy groceries, pay for health care and cope with foreclosure.

Palin addresses none of these issues in her speeches or statements. As the economy goes deeper into recession, Toledo area workers and their families will suffer even more. Joe-the-(non)- Plumber tropes, even if they're delivered by an accomplished public speaker like Paylin, will not increase their salaries or find them jobs.

'Joe the plumber is me': An encounter in a looking-glass world

Byron York, a National Review writer who can't be easily pigeon-holed into any right-wing media box, captured a revealing "Joe the Plumber" encounter at a recent McCain rally in Prince William County, Virginia.

York provides the backdrop:

"In recent days, the Joe the Plumber phenomenon has taken on a deeper meaning for McCain’s audiences, for two reasons. First, he is a symbol of their belief that Barack Obama is going to raise their taxes, regardless of what Obama says about hitting up only those taxpayers who make more than $250,000 a year. They know Wurzelbacher doesn’t make that much, and they know they don’t make that much. And they’re not suspicious because they believe that someday they will make $250,000, and thus face higher taxes. No, they just don’t believe Obama right now. If he’s elected, they say, he’ll eventually come looking for taxpayers who make well below a quarter-million dollars, and that will include them."

The focus of York's piece is documented immigrant Tito Munoz, a native of Colombia, who's "disgusted" with the media and its coverage of Joe the Plumber:

“Why the hell are you going after Joe the Plumber? Joe the Plumber has an idea. He has a future. He wants to be something else. Why is that wrong? Everything is possible in America. I made it. Joe the Plumber could make it even better than me….I was born in Colombia, but I was made in the U.S.A.”

The reporter who tries to answer Munoz -- Mother Jones magazine's David Corn, who has done highly regarded investigative digging into "Plamegate" and other Bush administration misdeeds -- is portrayed as being no match for Munoz and his indictment of the media.

"Joe the Plumber is me!" shouts Munoz at Corn. Is he? Munoz thrusts all his documentation, including U.S. passport, in Corn's face. But let's say Munoz was from Lucas County, Ohio, and that he was a plumber -- a licensed one. Then, in the economic downturn, there are fewer plumbing jobs, and Munoz loses work to outfits like Joe's firm because Joe, being unlicensed, can charge less for a job. Would Munoz then be shouting "Joe the Plumber is me!"? Who would he be madder at -- unlicensed plumbers who can cut into his earnings or a President Barack Obama whose tax policies, Munoz fears, with no evidence, may some day clip more dollars from his paycheck?

Paulson's bailout team should start culling insolvent banks

This is an interesting interview in the WSJ with a monetary expert who who is not only a scholar of the earlier big financial crash -- the Great Depression --but was around when it happened. She is Anna Schwartz, who co-authored, with Milton Friedman, "A Monetary History of the United States" in 1963. Since 1941, Ms. Schwartz has been on the staff of the National Bureau of Economic Research in New York City. At age 92, she was a teenager when Wall Street crashed in 1929.

Ms. Schwartz fears Treasury Secretary Paulson and his team will use federal bailout money to try to make weak banks solvent. I hope her fears are misplaced. As she emphasizes, the problem is not liquidity -- the Federal Reserve and Treasury have flooded the banking system with liquidity -- but solvency. Solvency is the ability of a financial institution to withstand a rush against its deposits and other funds. If an institution is leveraged, say, 40 to 1, it has little chance of surviving panic withdrawals, regardless of injections of bailout cash it may receive.

It shouldn't take Paulson and his team that much time to size up an institution's ability to stay solvent. Experts have pointed out that Fannie Mae has all the tools that are needed to calculate the value of so-called "toxic" securities and weigh them on balance sheets. Those institutions that are over-leveraged should not get any bailout money. There are 5,250 banks and saving banks insured by the FDIC, more than enough to survive a solvency evaluation and provide adequate credit for personal and business customers.

Let the culling begin.

Would you want an un-licensed non-plumber fixing your pipes?

It's understandable that conservative bloggers would defend Joe the Non-Plumber. But Hugh Hewitt's Townhall.com and Michelle Malkin are taking their case to ridiculous extremes. This is Bill Dyer aka Beldar on Townhall: "Why would Barack Obama think that someone running a successful small plumbing business might not be able to make as much as the $273k salary his wife made as an administrator for the University of Chicago Hospitals?" One obvious reason is that Michelle Obama prepared herself for such a job by earning undergraduate and law degrees. Joe Wurzelbacher, on the other hand, didn't complete the apprentice plumber's course he needs to earn the basic license that he needs to practice the craft in the State of Ohio. Wurzelbacher says he doesn't need a license because he works for a licensed plumber and does only residential work -- a claim that the plumbers' union and Lucas County, Ohio, authorities dispute. But in any case, would a homeowner be comfortable knowing that the guy fixing his leaking water pipes or hot water heater wasn't even a licensed apprentice, much less a journeyman? If Wurzelbacher can't complete the basic apprentice course, how can he be serious about buying the shop for which he works -- never mind how, with his $40,000 salary (according to court records), he'd be able to get even a government-supported SBA loan to buy and build a plumbing business that would earn him his goal -- $250,000+ profits.

Wurzelbacher is a great talker, but business-wise, he doesn't seem to know how to take the first step toward realizing his dream. As he himself says, "There's a lot I've got to learn." Instead of pumping him up as a heroic small businessman, why don't Malkin, Hewitt and his other idolaters lay off and let him learn?

http://www.msnbc.msn.com/id/27207215

Joe the Non-Plumber vs. the plight of millions of working-class Americans

Funny thing about "Joe the Plumber." That's not his name and he isn't a plumber. His first name is Samuel, and because he doesn't have a license, the State of Ohio says he can't call himself a plumber.

Another funny thing: Samuel (Joe) Wurzelbacher, based on his income -- $40,000, according to recent court records -- would receive a bigger tax reduction under Obama than he would under John McCain, who has adopted the Ohioan as his tax-plan hero.

There doesn't appear to be any danger that Joe the Non-Licensed Plumber will have to pay taxes on an income above $250,000 -- the ceiling for Obama's tax breaks. If the plumbing company that he said he was interested in buying delivered that kind of boodle, it would have a price tag of at least $1 million (four times profit). In actuality, the two-man company, which operates out of the garage behind the house of its owner, had sales of $100,000 last year, and a likely income (after expenses) of about $6,000, according to a Wall Street Journal story.

What's frustrating about this story is that for about 24 hours America, and a big chunk of the rest of the world, was obsessing about one man's concern about his taxes going up on an income he didn't and wouldn't have. Meanwhile the tax plight of millions of Ohioans and other Americans who make less than the median income of $30,000 and get 15.3% in FICA scooped off the top of their paychecks goes ignored.

McCain does better, but was it enough?

McCain had his best debate last night. But after 90 minutes of poking and prodding, he didn't succeed in knocking Obama off his calm and cool perch. He opened by stressing how "angry" Americans are. But as MSNBC commentator Chris Matthews pointed out, Americans, coping with a financial crisis that's still playing out, are more fearful than they're angry.

McCain himself was angry, but with the temperamentally even Obama just a few feet away, the Republican candidate's thrombotic face was an unsettling visual. I think a lot of voters, particularly the undecided, are thinking about the consequences of a 72-year-old man pacing about the Oval Office in a semi-perpetual state of high dudgeon.

McCain did score points by riffing about "Joe the Plumber,"
who, in a campaign encounter with Obama outside of Toledo, Ohio, a few days ago, expressed concern about paying higher taxes under Obama if he bought his employer's business, which "makes $250,0000 to $280,000 a year." Obama's ceiling for his tax decreases to wage earners is $250,000.

But debating what Joe Wurzelbacher would actually pay under the Obama tax plan is fruitless without knowing specifics. Are Wurzelbacher's numbers for the company's net income as a business (subject to 35 percent federal taxes) or for what his personal income would be from the business?

Wurzelbacher says he would expand the plumbing business if he bought it. That would earn him tax credits of $3,000 per each new employee for a maximum of two years under Obama's plan.

Politico.com is now reporting that "Samuel J. Wurzelbacher" has a lien of $1,182.92 for unpaid taxes against him in Lucas County, Ohio, which includes the Toledo area.

Will McCain show he's a 'great man'?

They may be premature, but the political obituaries for McCain's presidential campaign are starting to appear. Even some conservatives are looking into the abyss. Michael Gerson, the former Bush speechwriter, sees McCain as a "great man" who was "ambushed by history."

But if McCain is a great man, why didn't he shape the history that confronted him? That's what great political leaders -- Lincoln, Roosevelt, Truman, Reagan -- did. McCain, in contrast, seems to have morphed into an impulsive erratic, not always coherent pol in the last stage of his campaign. His choice of Sarah Palin as running mate -- just as the tsunami of the financial crisis was creating its first ominous ripples -- is not just laughable but scary. His "suspension" of his campaign to get back to Washington and on top of the bailout turned into a charade. After initially insisting that the "fundamentals" of the American economy were intact, McCain is now producing a new, major fix on what looks like a daily basis.

His opponent, Obama, has been no model of leadership in the financial crisis, but, as even Republicans are noticing, his calmness is reassuring in the fearful public climate.

The presidential debate tonight may be McCain's last chance to prove he has greatness in him. He's being urged to use the time to "expose" Obama. But that's not greatness, that's just another campaign pit stop -- the last one.

A sign the financial crisis may be receding

This is very interesting news about those damnable credit default swaps that, we've been told, would make the Great Depression look like the opening act for Global Meltdown 2008.

We'll see as the markets open Monday. My guess is that the overall crisis, bad as it is, will subside, and in a relatively orderly way, this week. Credit is indeed the lubricant for the global economy -- but it is not the economy itself. Consumers continue to consume, and that's not going to stop (apart from the temporary suspension of buying cruises and $150 bottles of perfume). Producers are ready to continue to meet market demands. If producers can't get credit from conventional avenues, they will, driven by demand, find other means. Supply and demand is a more powerful market force than credit, especially in an economy where there's no shortage of capital, like right now.

The problem is that in the current global climate of panic/fear, capital is being hoarded.

We'll see how long trillions of dollars, euros and other currencies remain hoarded when demand and supply predominate. I think not very long.

A bold move for McCain to stop his slide

How about this McCain "Hail Mary," courtesy of Mickey Kaus:

• Tearful Sarah Palin gives press conference to withdraw as VP. Presents herself as the victim of a sexist, elitist media that has drunk the Obama Kool-Aid. Can’t bear to be a distraction any longer, but promises to be back once she’s cleared her name in Alaska.

• A shaken and angry McCain accepts her resignation. The base is in flames. The McCain camp seemingly in disarray.

• A news cycle later - McCain is back with Romney as his new pick for VP. Announces that Romney’s job will be to work exclusively on the fallout from the financial meltdown. He’s the only man with the CV to get the US out of this mess.

Banks need solvency more than liquidity

The $700 billion bailout is not calming markets and freeing up credit. What banks and other lending institutions urgently need, more than cleaner balance sheets, are fresh injections of capital. Solvency, not liquidity, is the paramount problem, as many critics of the bailout legislation have pointed out. But the bailout, as economist Nouriel Roubini points out, has language that's sweeping enough to let the U.S. Treasury recapitalize banks as well as buy up the "toxic" securities that helped trigger a financial crisis that's gone global. That's the route Britain has taken. The problem in the U.S. is that $700 billion may not be enough to do the job. It may take something like $1 trillion. But postive results are likely to come faster. There would be fallout, though -- an unknown number of banks would not be strong enough to merit recapitalization, and thereby go under. That could give giant-sized survivors a financial oligopoly when the crisis settles down.

Obama and McCain: 90 minutes of ho-hum

Obama won the debate, CBS News says its panel of undecided voters concluded -- 40% to 26%, with 35% calling it a draw. If Obama won, I think, it was because he looked more vigorously presidential. Between his POW injuries and plain old age, McCain is not as smooth and agile as a man 25 years younger.

Strangely, McCain didn't take his gloves off -- the pledge his campaign chiefs made Monday. But the result was a debate that, overall, was as boring as it was proper. Moderator Tom Brokaw, unbecomingly officious, several times prevented the candidates from making on-the-fly rebuttals -- until Obama finally used his oversized mike as a kind of club to extract a couple of unscheduled minutes.

Obama started strong, but in the last 30 minutes was like a racehorse who, running a couple of lengths ahead, decides to coast to the finish line. McCain started slowly, but made the most of the last third of the 90-minute town-hall-type session, where undecided voters threw screened questions at the candidates.

The only new thing that came up was McCain's proposal for $300 million in federal aid to homeowners who are losing their property to foreclosure. This is the kind of legislative initiative that McCain should have showed when the financial crisis detonated last month.

'World wreckage,' or not?

Earlier today, Marketwatch.com splashed the phrase "World Wreckage" in the headline on the the plunge in stock prices. That was when the DJIA was down 700 points and heading further south. But when the bell rang at 4 o'clock, the wreckage was about 370 points. Markets are indeed falling -- but is it "free fall," to use another Marketwatch phrase from the trading day?

These are, as we are constantly reminded, terrible times, and the financial contagion is spreading from Wall Street globally. But scores of countries continue to produce products and services that people want -- I'm not talking about ocean cruises or $150 bottles of perfume. Can that supply and demand be brought to a halt because this investment company or that bank has too much debt (real or not) in relation to its assets?

Fear is a powerful force when owned money is involved. But it is not a force stronger than the engines of production in China or India or Brazil, much less than those in industrialized countries.

The factory workers in Guangzhou, and the worldwide consumers of their products, probably won't be heard as panic selling captures the markets, but the force of those and billions of other transactions will prevail sooner or later -- and I think it will be sooner.

Maybe why McCain-leaning states are now bending toward Obama

In every battleground state where McCain had an edge, Obama is steadily moving ahead. Florida (with its big 27 Electoral Votes) and North Carolina may be the most dramatic reversals, but there are also Michigan -- from which McCain has decided to pull out -- Ohio and Nevada.

The economy surely is the biggest factor, but in at least two cases -- Florida and Nevada (i.e. Las Vegas, Reno) -- I think likely voters are reacting in particular to the battering that home values have taken in those states. While home prices are down 15-20% nationwide, they're down much more steeply in those two states, where residential real estate activity was hyperactive until a year ago. So millions of homeowners who have not gone into foreclosure or delinquincey are finding their biggest investment is worth less today than it was several years ago. If this trend continues -- as the experts say it will for at least a year -- many homeowners who were not part of the subprime crisis will see their biggest investment zeroed out.

As homeowners in Florida, Nevada and other hyperactive states watch this happen, they will react -- in fact, they are already reacting: The GOP lean-ers among them are migrating to Obama, hoping, in their financial straits, that he and the Democrats will do more for them than de-regulators McCain and the GOP.

People do indeed vote their pocketbook.

Why Wells Fargo resumed its hot pursuit of Wachovia

I wondered what propelled the Wells Fargo counter-deal to acquire Wachovia Corp., but this Washington Post story explains why. The tax law change described in the story apparently will cost the federal government more than it might have paid in providing a safety net for Citigroup in its earlier move to buy the Charlotte-based banking giant after Wells Fargo seemed to have dropped out of the bidding -- which the Wall Street Journal's story today says wasn't the case, after all.

A risky but necessary debate gambit for McCain

John MccCain is down to his final option, and it looks as if he'll play it: going after Barack Obama's character. Sarah Palin will not close the gap between McCain and his Democratic opponent. The Sarah Palin Show enthuses the disheartened GOP base, and is wonderful media theater, but it doesn't do much for McCain among the undecideds, who, as they shrink, are choosing Obama more often. McCain's millstone is the economic crisis, which will hang from his neck, and his party's, for the rest of the campaign.

But McCain might still win with an attack on Obama's Achilles' heel -- his character. His attack must be as daring as it is forceful. The place to launch it is the presidential debate Tuesday night. McCain should go through his usual campaign tropes for the first 75 minutes, winning a point here, losing a point there. Then, with maybe 15 minutes to go, he should simply abandon the debate format, and announce that it's time for the candidates -- he and Obama -- to put aside their campaign props and talk to the American people about who they are. That's what happened in the fateful election of 1860, when Lincoln ran against Northern Democrat Douglas, who had defeated him in the senatorial race two years earlier. This time Lincoln was "Honest Abe" and "the Railsplitter" -- nicknames which, for all their placard spin, spoke to character.

Let McCain arbitrarily begin the 75th moment of the debate talking about character, starting with himself. He can and should acknowledge, with mortifying examples, his streaks of tempestuousness and righteousness. Then he can talk about what he and his supporters see as the larger side of his character -- the courage, steadfastness and faith in God, country, comrades and family that sustained him for five and a half years in the Hanoi Hilton. He should also cite -- thankfully, not pridefully -- his willingness to conciliate, which made him a leader in America's rapprochement with Vietnam. Finally he can talk about his maverick spirit that has sometimes earned him enemies within his own party.

Finally he should turn to Obama, and invite him to do the same. If Obama demurs, or moderator Tom Brokaw says, "Let's move on to the next question," McCain should say, no, the American people need to see their presidential candidates put a mirror to their characters. The candidates have given scores, hundreds, of speeches, with pre-packaged sound bites. Just this one time -- with maybe a quarter of all Americans in front of their TV -- let them talk revealingly about their inner core, where campaign managers and speechwriters can't reach.

If Obama choose to do so, fine -- voters can decide who they want to trust running America in such a parlous period. Maybe the young and smart Democrat will, on the fly, provide the most important chapter to his hitherto selective biography. But if he still demurs, and Brokaw still tries to get to the next unimportant debate question, McCain should stop the proceedings in its tracks, and ask his opponent about Jeremiah Wright -- even though, months ago, McCain said any more criticism of the Obama-Wright connection was off-limits. How could it be, McCain should ask, that Obama could sit in the pew of Trinity United Church of Christ for 20 years and not have heard his pastor utter any of his racist rants, his denunciations of the middle class, his repudiation of Martin Luther King Jr.'s message of reconciliation? If Obama couldn't cope with Jeremiah Wright, how could he deal with Vladimir Putin or Mahmoud Ahmadinejad or Hugo Chavez?

There would be a big risk in McCain trying to derail Tuesday night's debate. If he allowed himself to become self-righteous -- as he has too many times during the campaign -- he could end up a big loser. But in this time of major economic crisis and when this country is engaged in three wars (against terror and in Iraq and Aghanistan), Americans might be ready to listen to their presidential candidates talk about the two men behind the political posters.

Postscript: Palin, on a campaign stop Saturday, said Obama, according to a Page One story in the New York Times, "sees America as imperfect enough to pal around with terrorists who targeted their own country." The Times piece was about William Ayers, a founder of the Weatherman group in the 1960s that plotted bombings against the Pentagon, U.S. Capitol and other major targets. Now Ayers is a professor of education at the University of Chicago. The Times piece said Ayers and Obama's "paths have crossed sproadically" since they met at a school reform meeting in 1995, "but the two men do not appear to have been close" since then. It looks as if it would be a stretch to use Ayers as a major reason to question Obama's character. The 20-year Obama-Rev. Wright relationship is a whole other story.

The economic fate that awaits Sarah Palin's future son-in-law

A high school dropout earns 25 percent less than a graduate ($30,202 vs. $40,112), U.S. Census Bureau numbers show. This is the economic fate that awaits 18-year-old Levi Johnston, who, in several months, will be the father of Bristol Palin's baby. Will Johnston decide to return to high school and get his diploma, so he can be an adequate breadwinner for his soon-to-be family of three? Will Sarah Palin, Bristol's mother, use some of her hockey mom's pit-bull tactics (with or without lipstick) to push Johnston in that direction?

The Sarah Palin Show, Courtesy of Gwen Ifill

First Hockey Mom Sarah Palin did indeed dominate the "debate" between her and her Democratic opponent Joe Biden. But only because moderator Gwen Ifill let Palin get away with deflecting questions and launching into rehearsed riffs about "greed" on Wall Street and what she'd do about the energy crisis.

Palin offered this revealing view on getting her message out:

"I like being able to answer these tough questions without the filter, even, of the mainstream media kind of telling viewers what they've just heard. I'd rather be able to just speak to the American people like we just did."

But Palin's pre-packaged messages are no improvement over any filtering by the mainstream media. We supposedly got the real deal from her Thursday night, according to these gasps of admiration from Hugh Hewitt and Michelle Malkin. But everything she said, except the "you betcha's," was carefully rehearsed earlier this week in preparation sessions at McCain's home in Sedona, Ariz.

Despite being given complete freedom to say her own thing during the 90-minute evening, Palin didn't quite get the the morning-after verdicts McCain's team was hoping for. A CNN poll had Biden winning 51 to 36.

Why is Wachovia's loan portfolio suddenly less toxic?

Less than a week ago, Wachovia Corp. was supposedly in such bad shape that it agreed to sell its banking division to Citigroup for $2.16 billion, with the federal government agreeing to financial support if Wachovia's portfolio of bad loans proved more toxic than estimated. Now Wells Fargo is buying all of Wachovia for $15.1 billion -- and with no federal safety net.

Could this new deal mean that the overall banking crisis is not as bad as it's portrayed?

The purchase price is above the $10 billion Wells Fargo offered last weekend before it backed out, reportedly because it was concerned about the particular health of one of Wachovia's mortgage portfolios. So what gives?

Today's news stories about Wells Fargo's change of mind offer no clues. Even the Wall Street Journal, which has been delivering sterling coverage of the financial crisis, was pro forma in its coverage.

Let's see how this interesting story unfolds.

LATER DEVELOPMENT: This WSJ piece provides some new information.

The bailout and the end of "Reaganism": That's not the whole story

I agree with much of what the Washington Post's very liberal op-ed columnist Harold Meyerson says in his take on the big picture to be drawn from the financial crisis.

This is the end of Reaganism -- to a degree. It's the end of ideologically driven economic theory -- a lot of which came from Arthur Laffer, Reagan's somewhat weird promoter of "supply-side" economics, and some of which came from disciples (acolytes?) of Milton Friedman and his (University of) "Chicago School."

Reagan was much more than his economic theory -- so it's wrong for Democrats (and columnist Meyerson) to use the current financial crisis to try to pull down his reputation and break it into pieces a la the Saddam Hussein statue in Baghdad's Firdous Square in 2003.

The financial markets do need more regulation. But regulation alone is a simplistic answer. Look at how Wachovia was saved from a bank run that very well could have triggered a national, and maybe international, catastrophe. The successful outcome -- Citibank buying most of Wachovia's assets -- was an impressive example of the federal government working with the private sector -- with no evidence of the public regulators being heavy handed. Indeed, the regulators, in this case, were quite savvy and prescient -- and fast moving enough to put together a plan in the early hours of Monday morning (Sept. 29) before the markets opened.

Unfortunately, the Wall Street bailout -- even though it was originally penned by Treasury Secretary Paulson, the former CEO of Goldman Sachs who, pre-financial crisis, sang the praises of deregulation -- is, in its evolving legislative form, way too regulatory. As so many critics, including myself, have said, it's an undesirable "bailout" when what Wall Street and the rest of America need are a "workout." (I latched onto that catch phrase before Republican free-market zealots in the House.)

Was does that mean?

It means that the government injects money into Wall Street, but with these conditions:

First, the Street's financial institutions consider holding on to "toxic" mortgage securities that they believe can become marketable as the real estate regains its health over the next five years.

Second, in the case of securities that are judged to be hopeless, the institutions that hold them will, with federal financial support of their balance sheets, dump them at a salvage price.

Third, the federal government's aid to troubled institutions will be guided by how honestly they seek to meet legitimate credit requests, both private and public.

None of these conditions implies imposition of heavy-handed regulation on Wall Street. We don't need bureaucratic stifling. As Reagan or Friedman -- or, for that matter, John Maynard Keynes, whom liberals revere -- would agree, wealth is created and enlarged by private enterprise. Government should be a vigilant participant in economic activity, but when it tries to play quarterback or coach -- like Paulson & Co. did -- look out.

Of course we can't achieve the desirable outcome without Congress doing more major work on the terribly drafted -- and named -- "bailout." But we can't rely on Capitol Hill's leaders alone. Presidential candidates Obama and McCain need to weigh in -- and not just with platitudinous rhetoric. I've repeatedly argued in this blog for them to do get down to the details. A new Washington Post editorial makes the case more effectively than I ever could.

A further thought: The workout ultimately will have to include not only Wall Street but all of us. We Americans, whichever side or end of Main Street we may live on, have often been spending beyond our means. We got second mortgages to live more largely. The cruise-ship industry has thrived so gaudily mostly, I bet, through major mad money found through second mortgages. We borrowed with gusto against our credit cards. Think about those TV commercials for credit cards -- conferring respectability on living on debt upon debt -- at sometimes 24% interest (which of course is never mentioned in the commercials).

The odds are that Congress will pass the bailout in its essentially bad form. But by early next year, I'm sure, we'll know we need to move ahead to a workout -- by and for all of America. Maybe we should get ready by reaching out our hands to each other, from sea to shining sea.