Friday, July 18, 2008

Economic gloom spreads to Wall Street

What happened

Wall Street officially entered a bear market last week, in the midst of a number of gloomy signs for the U.S. economy. The Dow Jones Industrial Average closed more than 20 percent below its October peak, meeting the commonly accepted definition of a bear market. “It’s a validation that all hell has already broken loose,” said economist Keith Hembre. The sell-off was partly a reaction to skyrocketing energy costs, as oil hit a record high of $144.15 a barrel and a gallon of gas reached a national average of $4.11. Last month’s stock drop was the market’s worst June performance since the Great Depression.

The Labor Department reported that 62,000 people lost their jobs in June—the sixth straight month of job losses and the longest such period since 2002. Sales of new homes also dropped precipitously. Acknowledging that the credit crunch is not abating, the Federal Reserve this week extended a program to provide struggling investment banks with low-interest loans and readied new rules to restrict high-cost loans to people with poor credit. Fed Chairman Ben Bernanke said he now believes the economic slowdown will extend well into next year.

Economic issues dominated the presidential campaign. John McCain pledged to jump-start the economy by cutting taxes and balancing the federal budget within four years through spending cuts. Barack Obama said McCain’s approach would help only “big corporations and multimillionaires,” and he renewed his call for a $50 billion stimulus package for working families that includes a taxpayer rebate.

What the editorials said

“The economy has shifted into reverse,” said The New York Times. The 438,000 jobs lost this year won’t come back until consumer confidence improves, and that won’t happen as long as the housing crisis continues. The Fed’s moves could help, but Congress needs to stop playing politics and pass a foreclosure prevention bill. If Washington doesn’t act soon, “things will get worse before they get better.”

McCain’s policy of “competitiveness, prudence, and growth” is just what the doctor ordered, said National Review. It was heartening to hear him revive his promise to balance the federal budget, and he’s right that it can be done without raising taxes, as long as wasteful spending is targeted. But first, “he must get elected,” and he’ll have a hard time doing that unless he offers direct benefits to the middle class, such as their own tax cut.

What the columnists said

McCain’s economic plan is dependent on “a vast number of ‘magic asterisks,’” said Ed Kilgore in Salon.com. To make his numbers work, he promises undefined “reviews” of federal programs and, most laughably, counts the money we’ll save from achieving “victory” in Iraq and Afghanistan. Not that it matters—since the entire policy is built around private-sector-oriented reforms in health care, energy, and entitlements that no Democratic Congress would ever agree to. McCain isn’t making a serious proposal, he’s just trying to shore up the Republican base.

If you believe that any president “will instantly reverse the decline of housing prices, bring gasoline prices crashing back to earth, and generally kick the economy back into gear,” said Daniel Gross in Slate.com, “I’ve got some subprime mortgages I’d like to sell you.” History shows that the economy expands and contracts according to cyclical factors beyond any leader’s control. About the only thing a president can affect is “the short-term national mood about the economy.”

That mood is gloomier than it needs to be, said Chris Lester in The Kansas City Star. The 5.5 percent unemployment rate is nothing compared to the 10.8 percent peak of 1982, and our 4.2 percent inflation is dwarfed by 1980’s high of 14.76 percent. Even the housing crisis doesn’t really affect many ordinary people who bought their homes to live in, rather than as part of some “highfalutin” investment scheme. “It sometimes seems like we’ve completely forgotten what hard times really feel like.”

What next?

Wall Street rallied in response to the Federal Reserve’s actions and a slight decline in crude oil prices. But most analysts expect any recovery to be slow. Historically, it takes investors more than three years to recoup their losses after a bear market, said Adam Shell in USA Today. The current market is really only “a cub bear. The question now is whether the slide will turn into a grizzly bear.”

McCain: Why his campaign is in trouble

John McCain is getting frustrated, said William Kristol in The New York Times. The GOP’s presumptive presidential nominee, sources tell me, knows he’s losing ground to Democrat Barack Obama, and that Obama is generating most of the presidential race’s energy, momentum, and headlines. Some polls now show Obama opening a lead of more than 15 points. For McCain, this is immensely “galling”: Obama’s campaign is managing to make the inexperienced, one-term senator seem “more presidential” every day, while his own campaign has made a war hero and accomplished political warrior “seem somehow smaller.” The problem is simple, said Liz Sidoti in the Associated Press. Three months after he won the Republican primaries, McCain still has no coherent message. “He can’t seem to stick with a particular line of argument in favor of his candidacy for more than a couple of days.” Last week, he reshuffled his top staff for the second time in a year, bringing on a new campaign manager. There are still four months left before the election—plenty of time to change the dynamics of the race. Still, when McCain “calls himself an underdog, that may be an understatement.”

Republicans are getting worried, too, said Maeve Reston in the Los Angeles Times. They don’t understand why McCain hasn’t seized the political center he used to own. Instead, McCain seems torn between trying to appeal to independents and trying to convince conservatives that he’s one of them. In one recent stretch, he asked disgruntled Hillaryites to vote for him, then touted his anti-abortion views. He delighted conservatives by calling for offshore oil drilling and appalled them by professing deep concern about global warming. “There’s a lot of unease,” said one Republican strategist. “People generally like him. But when it comes down to getting excited about the candidate, it just isn’t there.”

“Republicans shouldn’t panic,” said John Fund in The Wall Street Journal Online. On most core issues, the country still leans right. History shows that as presidential elections draw nearer and voters really examine the issues, Democratic leads tend to melt away while Republicans surge. Michael Dukakis, let us not forget, once led George H.W. Bush by 17 points. The excitement over Obama’s “glitzy ‘hope and change’ rallies” will eventually fade, said Victor David Hanson in National Review Online. McCain will then have an opening to prove himself the steadier and wiser hand. Remember the Republican primaries? Much as the storied tortoise beat the hare, “the dead-last, written-off McCain eventually walked past all his front-running rivals.” It just may happen again.

Don’t bet on it, said Stuart Rothenberg in RealClearPolitics.com. After the Bush presidency, Americans have soured on Republican leadership. Polls show that voters see Democrats as more likely to bring improvements on nearly every issue, from the economy to Iraq to fiscal responsibility. McCain’s only hope, said Peggy Noonan in The Wall Street Journal Online, is that voters like and respect him, even if they’re down on the GOP. So his handlers should “let McCain be McCain,” His biggest mistake was to put on a straitjacket when he won the primaries—to become more cautious and formal. Mr. Maverick’s appeal has always been his biting, irreverent wit and his “unblinkered candor”—his willingness to say what other politicians won’t. If McCain rediscovers his “inner rebel,” he’s got a real chance. Just watch: Up until October, Obama will maintain a big lead in the polls. Then suddenly, “America will say, Hey, wait a second, are we sure we want that? And the race will tighten indeed.”

Wednesday, July 16, 2008

Why Andy Dick was arrested on sex and drug charges

What happened

Comedic actor Andy Dick was arrested early Wednesday morning on drug and battery charges after he allegedly pulled down a 17-year-old girl’s tank top and bra. The incident reportedly took place outside of a Buffalo Wild Wings restaurant in Murrieta, Calif., where Dick appeared to be intoxicated and was found to be in possession of Marijuana and Xanax. (AP)

What the commentators said

Andy Dick “has a reputation for crude behavior,” said the Associated Press. He’s reportedly “exposed himself to audiences at least twice,” and was “forcibly removed from the set of the show Jimmy Kimmel Live last year after he repeatedly touched guest Ivanka Trump without her permission.” And let’s not forget his arrest in 1999 for “possession of cocaine and marijuana after driving his car into a telephone pole.

”Yup, the great “wacktor” has been arrested again, said Perez Hilton, and the police report is hilarious. Not only did Dick allegedly grope a teenager, he also urinated in public and was identified in a curbside lineup. “Is a stint on Celebrity Rehab in his future?” If he’s lucky—he might be going to jail.

There’s really nothing funny about any of this, said Marc Rawden in the blog Cinema Blend. “Snorting coke and grinding up against unwilling kids half your age is creepy and sad.” And it’s hard to watch Dick “fall from loveable, quirky, over-the-top drama queen to haggard, drug-addicted has-been.” We really hope you get your life together, Andy—“we need less of this and more scene-stealing roles.”