Deep Insight Redux

by digby

I have posted dispatches over the last few months from a friend I call "Deep Insight" who has worked for many years in Democratic politics and has a keen sense of the lay of the land. (If I had known he was going to send this I probably wouldn't have bothered with my own, somewhat meandering post below). Anyway, here's what he sent me today on the state of the presidential race:

“We think electability is the Number 1 issue.”
George Stephanopolous’

This is certainly the media’s agenda. It is all personality politics and tactics rather than issues for this crowd. The media assumes what the GOP fall attacks will be and then introduces them to the public as “journalism.” No need to change the narrative, just replay the Nixon era debates. It is 1969, and here is the SDS.

Meanwhile, the economy is headed south into a recession. Unemployment is on the rise, as is inflation. Ninety percent of Americans think the economy is “not good or poor.” Ten percent of Ohioans are now on food stamps and the number of Americans nationwide on stamps has just set a record. This is the first time an economic expansion has ended and median family income is lower now than it was at the onset. Eighty-one percent of Americans think the country is on the “wrong track,” another record. By a 20-point margin over Iraq, the economy is now cited as the number one issue by voters.

The Fed has now become a merger and acquisitions specialist for investment banks. After the public has been put on the hook for $29 billion in highly questionable securities in the Bear Stearns debacle, there is an acknowledgement by the Treasury that there should be just a bit more regulation. Maybe start with minimum capital requirements in the investment banks and hedge funds. The political system has allowed this financial behavior to flourish, so now there are fig leaf reforms proposed by the Bush Administration. John Kenneth Galbraith once said that once the last of those who steered the country through the financial regulatory framework after the Depression were dead, the financial system would find a new way to implode. Capitalism, he explained, could not help itself.

The financial sector broadly defined is now over 20% of the economy. The addiction to risk and debt in the financial sector has dragged down the whole economy. Miracle returns at some private equity firms and hedge funds are built on cheap leverage. Meanwhile, the small investors saving for retirement are like lambs being led to slaughter. When measured in Euros since the peak in 2000, the Dow has lost nearly 40% of its value. Many of those baby boomers can forget about those extended European retirement trips.

Iraq remains a quagmire and now we have the Secretary of State openly taunting one of the Shiite clerics. This is just like George Bush and his infamous “Bring ‘em on.” But the Administration has managed to keep the war largely off the front page.

The last month has been difficult for the Democrats. First, the wild and reckless behavior of Elliot Spitzer ended his promising political career. The press was so busy with breathless details about the lady in question that there was little mainstream reporting about the role of Roger Stone, the GOP hit man in that saga. Stone allegedly headed a $2.2 million undercover effort complete with private investigators aimed at Spitzer. Stone then turned his information over to the FBI. The Bush Justice Department would never engage in partisan politics, of course, but let us see when the FBI next wiretaps an escort agency.

After Spitzer, the media turned to the Democratic race. CNN’s ratings are way up, so the endless back and forth is reported as breaking “news.” As Neil Gabler noted in the New York Times, “Joan Didion once described the Presidential campaign as a closed system staged by the candidates for the news media – one in which the media judged the candidate by how well he or she manipulated them, one in which the electorate were bystanders.”

This closed system has begun to unravel as voters go directly on line to share information with friends the way neighbors used to talk across the fence. The Internet now offers both quality hard news reporting and commentary as well as social networks. But it will not soon equal the news reporting of the New York Times foreign bureaus. The resources are not there. But the Internet has broken down the clout of the elite gatekeepers. Walter Lippman would roll over in his grave if he watched television news today. Much of it is sound and fury signifying nothing. But it does offer the distraction necessary to help McCain. Witness the questions at the recent ABC debate in Philadelphia.

Though his polling numbers have since rebounded, the Reverend Wright controversy has hurt Senator Obama. His outstanding speech dealing with the matter caused the media to stop the endless Wright replay for a while, but Reverend Wright will be back in GOP 527 ads in the fall. The cable guys will duly report it as part of the “controversy” of the day. Senator Obama will have to address the situation again, because the press will force the issue.

Senator Obama has rolled the dice that the country has fundamentally changed, and the public has finally seen through the GOP’s politics of deception and fear. He has little choice. On the other hand, the Republicans led by their right wing allies though will make his race and “foreignness” front and center. It will be the full right wing freak show aided by their friends in the mainstream media. Some days he will be a Muslim, others a black nationalist Christian. The GOP will try to make him Al Sharpton as he strives to remain Tiger Woods. The GOP’s hope is that 2008 will be a replay of the 1928 Hoover-Smith election. Prejudice against a Catholic worked then, and maybe it will work again with a mixed race man now. We know how well Hoover worked out.

Then there is the elitist charge. Despite his humble background and history as a community organizer, Senator Obama made the mistake of accurately describing the anger in small town America. No doubt, he now realizes that people will be taping him everywhere, even at his own private fundraisers. We now are treated to George Will, Bill Kristol and Mary Matalin playing down home populists on TV. In the same manner, the Bush father and son love pork rinds, slim jims and big belt buckles. Andover and Yale did not keep them from becoming the salt of the earth.

Attacks on Obama’s patriotism will also be a feature. The Republicans have lived off fake patriotism since McCarthy, so it will continue. The media loves this narrative. Unless one supports war without end with a flag pin attached to your lapel, your patriotism is suspect. This worked for George Bush in 1988 and his son in 2004, so the GOP will play it up again.

But Senator Obama has an enthusiastic and growing movement behind him. The people and grassroots money (about $240 million in the primary) will make a huge difference in the fall. The conservative grassroots has not responded with much enthusiasm for Senator McCain, but will likely come out in November.

As has been duly reported, there is a small window for Hillary Clinton to win the nomination. She can hope that Obama self-destructs or she wins several unexpected states remaining: Oregon, South Dakota, North Carolina and Montana. This scenario already gives her Kentucky, West Virginia, Indiana, and Puerto Rico. This seems highly unlikely. Her 9% victory in Pennsylvania ensures the Democratic race will go on. It seems it began a lifetime ago. Senator Clinton will still end the primaries behind in the popular vote and the delegate count. Without an utter collapse by Senator Obama, the math simply does not work. It remains very unlikely the super delegates will overturn these twin results of popular vote and pledged delegates.

It would be very helpful if the rhetoric could be dialed down between the candidates. There is a line where competition tips to “rule or ruin.” Senator Clinton gives an interview to Richard Scaife, who, if memory serves, paid for the $2.3 million in spadework for the impeachment of her husband. Scaife’s vanity newspaper then prints an article linking Obama to “black” crime and endorses her. If there is some short-term logic in this, what is the cost?

Clinton is an able Senator, and there has been blatant sexism in the news coverage. Her campaign, however, has made a number of strategic errors. No presidential campaign should ever employ a lobbyist/pollster as chief strategist, particularly one like Mark Penn who has an ideological point to prove. He played politics from a 1990s playbook for the general election. But after 8 years of George Bush, the electorate is in a far different mood and the Democratic primary electorate well beyond that. As E.J. Dionne noted, the Clinton campaign seems to have only 2 speeds – overconfidence and panic.

Though George Bush is at 25% job performance in one recent poll, the national media continues to treat him as a credible political figure. His legacy will include a nation up to its eyeballs in debt, declining real incomes, a needless and endless war in Iraq, institutionalized torture and diminished American stature worldwide. With so many manifest lies on so many subjects, it is easier to ask when did the Bush Administration ever tell the truth? In a recent survey of historians, 61% rate Bush as the worst president in American history. But as the press told us in 2000, he is a fun guy to have at a beer party. The underlying dynamics still favor the Democratic nominee in November. The public does not want a third Bush-like term.

John McCain has a positive favorable/unfavorable rating in a recent poll, but the Democrats have yet to lay a glove on him. Five years, countless lies and 4,000 American dead later, Senator McCain either doesn’t know or deliberately lies about Iran supporting Al-Qaeda in Iraq. This is in the tradition of George Bush being surprised about Sunni/Shiite historic animosity. If either of the Democratic candidates had made such a statement, it would have run endlessly on cable TV. Iran remains the main beneficiary of our invasion and occupation. A pundit noted, “We have created Iran’s dysfunctional little friend.”

McCain employs the media to cement his “maverick/independent” image. The Tim Russert/Chris Matthews “We are his base,” as Matthews said, school of corporate punditry will extol his manifest virtues until November. He received a standing ovation for a speech he recently gave at the Newspaper Publishers Convention. The Democratic nominee will face a mainstream media that consistently interprets or ignores events to favor McCain. His gaffes or temper tantrums will be glossed over. The media doesn’t actively “dislike” Obama as much as it did Al Gore. It dislikes Hillary but hopes to keep the Democratic race going as long as possible. But there is little doubt the Democratic nominee will have to defeat both McCain and the media in the fall.

As the ole perfesser would say, "indeed."