Three hours later, flush with a feeling of bipartisan cooperation, Bush convened his Cabinet Room meeting with the congressional leaders, his economic advisers, and the two presidential candidates. It was a disaster. After hearing Bush warn that “this sucker could go down”—meaning the entire American economy—without passage of the bailout, the meeting degenerated into partisan bickering. The leading House Republican, John Boehner, suddenly offered a totally different bailout plan that the solid GOP conservative House members had overwhelmingly privately backed earlier—more a free-market plan, steering away from a government intervention in the markets that they believed was a path toward socialism. Swiftly, optimism turned to despair. The meeting degenerated into a display of anger, bitterness, and recrimination eclipsing even what a polarized nation’s capital had witnessed in recent years. Shortly after the meeting ended, a melodramatic scene took place in the Roosevelt Room. There, Paulson knelt on one knee before Speaker Pelosi. He appealed to her not to “blow it up” by withdrawing Democratic support from the rescue plan. “It’s not me blowing this up,” said the Speaker, who felt betrayed, “it’s the Republicans.” During the forty-minute meeting with the president, participants inside the room, who quickly reported to the press, observed that John McCain was mainly silent, with virtually nothing to offer, while Barack Obama had asked a series of sharp questions. McCain had not saved the day. His rescue was not triumphal.
And then he shifted again. The next morning he said he would, after all, participate in the first presidential debate that Friday night—another sudden change in course that brought him harsh new criticism. Some critics compared his race to Washington, and then his retreat, as a desperate “Hail Mary pass” that had failed. Others said that “what at first had looked like a brilliant political gambit had turned into a nightmare.”
The stakes could not have been higher for both candidates as they took the stage at the University of Mississippi in Oxford. For McCain, it was an opportunity to calm doubts he was impulsive, even erratic. His test was to persuade those watching about his leadership qualities after two weeks of zigs and zags over the economy. For Obama it was a chance to reassure voters that he had the strength and temperament to be commander in chief. In order to win he had to make voters feel comfortable about him.
The Friday night debate proved to be a turning point. For ninety minutes, more than fifty-three million people were able to form strong impressions about which candidate might make the best president. What viewers saw was a cool, composed Barack Obama, in command of facts and seemingly at ease on the stage. In John McCain they saw someone who repeatedly dismissed his opponent. “I honestly don’t believe that Senator Obama has the knowledge or experience” to be president, he said at one point. Most disconcertingly, McCain was unwilling even to look into Obama’s eyes. When the debate was over, nearly all polls gave Obama a decisive edge, USA Today/Gallup by 52 to 35 percent. CNN gave Obama a 51 percent to 38 percent lead. It wasn’t a knockout, but it seemed to signal the moment when Obama crossed the threshold to answer the “is he ready” question.
Meanwhile, in Washington more frantic meetings were being held to rebuild support for the rescue plan, now scheduled for a crucial House vote Monday. Sunday night, Bush put more of his presidential prestige on the line. “This plan sends a strong signal to markets around the world that the United States is serious about restoring confidence and stability to our financial system,” he said. “Without this rescue plan, the costs to the American economy could be disastrous.”
At that point, it was widely reported that the bipartisan forces would prevail in Monday’s House vote. The consequences of rejection were too dreadful to contemplate, or so it was believed.
But the rejection came. By a vote of 228 to 205 the bailout lost. Not a single Republican voted for it, and when their leaders met reporters afterward, they seemed to blame Pelosi for having delivered a partisan speech in the closing moments of the debate. On Tuesday morning, September 30, 2008, spread across the front page of the Wall Street Journal were two bold eight-column headlines:
BAILOUT PLAN REJECTED, MARKETS PLUNGE, FORCING NEW SCRAMBLE TO SOLVE CRISIS
and its lead story:
WASHINGTON—The House of Representatives defeated the White House’s historic $700 billion financial rescue package—a stunning turn of events that sent the stock market into a tailspin and added to concerns that the U.S. faces a prolonged recession if the legislation isn’t revived.
By the time the markets closed on the day of the vote, the Dow Jones Industrial Average had sustained its biggest point drop in history.
In another page one headline that day, the Washington Post offered a glimpse at the trauma the financial meltdown was causing Americans everywhere:
RETIREMENT SAVINGS LOST $2 TRILLION IN 15 MONTHS
The economic crisis was spiraling. The country was in shock. Global markets tumbled. The International Monetary Fund warned the spreading crisis could push several advanced economies into recession. For the first time since the Great Depression, the Federal Reserve said it would bypass ailing banks and lend directly to American corporations. Repeatedly, President Bush appeared before the TV cameras—twenty times in all during those September days, according to a CBS tally—to try to calm the markets. Each time they ignored him and continued their downward plunge. Finally, on October 3, the $700 billion bailout bill passed Congress—but by then more than confidence was shaken. Global markets fell further. The president of the World Bank, Robert B. Zoellick, warned that the global system might have reached “a tipping point,” a moment when crisis mushrooms into “a full-blown meltdown and becomes extremely difficult for governments to contain.”
Economic conditions were becoming even more dire. Financial historians, with longer memories, compared the unfolding panic to great collapses of the past: the Dutch tulip mania of the 1630s, the South Sea Bubble of 1720, the panics of 1825 and 1907, the crashes of 1929 and 1987. By the end of the first week in October, history had been made. Over those five days, the Dow recorded the biggest weekly percentage drop in its 112-year history, surpassing the record set during the Great Depression for the week ending July 22, 1933.
Of many analyses produced during this critical period, one deserves special notice—a Wall Street Journal op-ed column by Daniel Henninger on Thursday, October 16th, three weeks before the election. Henninger is a true-blue conservative and deputy editorial page editor of the most influential conservative paper in America.
If John McCain loses the election, Henninger wrote, he can trace it to the six days starting September 24, when he suspended his campaign, to September 29th when the House GOP defeated the first Paulson plan to rescue the American financial system. “Neither Mr. McCain nor the GOP is likely to recover from those dramatic days,” he wrote. “Call it the Katrina Dysfunction Syndrome. . . . But make no mistake: The infighting over the Paulson Plan among conservatives—always looking for an excuse to bolt the McCain candidacy—neutralized Mr. McCain at the exact moment that the U.S. electorate was focusing like a laser on the crisis. The need for immediate action was manifest and undeniable. . . . Amid all this, on Monday Sept. 29th, House Republicans voted to defeat the rescue plan.”
McCain wasn’t the only loser. His Republican Party was so divided that it was incapable of contributing to a solution when the nation faced a grave crisis. Obama and the Democrats were the clear beneficiaries of this Republican disintegration. And those GOP actions came when, as Henninger wrote, “the terrified stock market cratered, wiping out individual voter wealth. Four very long days elapsed before Congress approved the plan, but, as with Katrina, voters will only remember the days when the GOP didn’t act.”
CHAPTER TWENTY-EIGHT
Endgame
“I am crazy addicted to this new dramedy on CBS. I love this show!”
—Daily Show host Jon Stewart, speaking of Katie Couric’s interviews of Sarah Palin
From the beginning, there was one overriding ques
tion about the election of 2008: Could Barack Hussein Obama reassure voters he had the temperament, values, and strength to be president of the United States? During the unnerving days in September, when the markets collapsed, fear spread throughout the country, and doubts arose about John McCain’s erratic behavior, the answer to that question had decisively shifted in Obama’s favor.
A month before the election, an NBC News/Wall Street Journal survey found that voters who thought the economy most important were supporting Obama by fifteen points. By a wide margin, voters said McCain’s handling of economic issues made them feel less confident about him. By an equally wide margin, Obama was seen as the candidate who could best handle the issues of housing, the economy, and energy. The voter assessments of McCain grew even worse. They had negative views of the suspension of his campaign to return to Washington and deal with the economic crisis, especially after his waffling about whether to participate in the first debate. Peter Hart wrote in his analysis of those latest numbers, “Up to now, the fundamentals have not translated into a winning position for Barack Obama. In this poll, in large measure due to what voters perceive as an erratic approach by John McCain, those fundamentals have translated into an Obama lead.”
Then Sarah Palin again commanded the headlines, but this time not with any positive effect. Now she became a pure negative, and the object not only of new controversy, but also of mockery. Since the GOP convention, when she had become a political meteor, overshadowing McCain and nearly everything else about the campaign, her candidacy had crested. It started to descend at the very time when McCain’s campaign became more imperiled.
On the day McCain suspended his campaign, Palin appeared on CBS News in the first of a series of interviews with anchor Katie Couric, following a far more gentle encounter with Sean Hannity of Fox News. The Couric interviews took place during the same week Palin was to meet world leaders at the United Nations to enhance her limited foreign policy credentials and prepare for her upcoming vice presidential debate with Joe Biden.
The Couric interviews also came as the McCain-Palin campaign was being criticized for sheltering her from the media. She had held no press conferences and a miscommunication between her team and McCain’s resulted in an embarrassing scene with Afghani President Hamid Karzai: Her handlers had blocked reporters from listening to or filming the opening minutes. Reporters savaged her; it was a terrible start to a difficult week.
The CBS agreement called for Couric to interview Palin over several days to give her greater visibility. In retrospect, that schedule only extended the pain. The Sarah Palin who appeared with Couric was far from the poised and confident politician who had been drawing huge crowds. She was hesitant, halting, and ill at ease. Worst of all, she appeared uninformed.
Early in the interview, Couric pressed Palin to justify her campaign’s claim that McCain would restore vigorous government regulation of the financial sector and other parts of the economy. Couric asked her to cite examples of when McCain had sought to regulate the economy, other than his efforts to put restrictions on mortgage giants Fannie Mae and Freddie Mac. After several false starts and pressed by Couric, Palin replied, “I’ll try to find you some and I’ll bring them to you.” Asked what she meant when she cited the proximity of Russia to Alaska as an example of her foreign policy expertise, Palin replied that “Alaska has a very narrow maritime border between a foreign country, Russia, and on our other side, the land boundary that we have with Canada. It’s funny that a comment like that was kinda made to—I don’t know, you know—reporters.”
Couric interrupted: “Mocked?” “Yeah,” Palin said, “mocked, I guess that’s the word, yeah.” Asked to explain how that demonstrated her foreign policy credentials, Palin answered, “Well, it certainly does because our, our next-door neighbors are foreign countries, there in the state that I am the executive of.” Couric kept pressing. “Have you ever been involved in any negotiations, for example, with the Russians?” Palin mentioned trade missions, then veered to national security: “As Putin rears his head and comes into the airspace of the United States of America, where do they go? It’s Alaska. It’s just right over the border. It is from Alaska that we send those out to make sure that an eye is being kept on this very powerful nation, Russia, because they are right there, they are right next to our state.”
A few days later, more of Couric’s Palin interviews were broadcast. They were even more devastating. Asked the name of a Supreme Court case, other than Roe v. Wade, with which she disagreed, Palin drew a blank. “Hmmm,” she began, pausing briefly. “Well, let’s see. There’s—of course in the great history of America there have been rulings that there’s never going to be absolute consensus by every American. And there are those issues, again, like Roe v. Wade, where I believe are best held on a state level and addressed there. So you know, going through the history of America, there would be others, but.” Can you think of any? Couric asked. All Palin could say was, “Well I would think of any again that could best be dealt with on a more local level, maybe I would take issue with.”
Another seemingly straightforward question brought another baffling answer. “When it comes to establishing your worldview, I was curious, what newspapers and magazines did you regularly read before you were tapped for this to stay informed and to understand the world?” Palin replied, “I’ve read most of them, again, with a great appreciation for the press, for the media.” “Like what ones, specifically?” Couric asked. “Um, all of them, any of them that have been in front of me over all these years,” Palin said. “Can you name a few?” Couric asked. “I have a vast variety of sources where we get our news, too,” Palin said. “Alaska isn’t a foreign country, where it’s kind of suggested, it seems like, ‘Wow, how could you keep in touch with what the rest of Washington, D.C., may be thinking and doing when you live up there in Alaska?’ Believe me, Alaska is like a microcosm of America.”
Her poll numbers began to sag. Press reviews were harsh. James Rainey of the Los Angeles Times wrote, “Her third nationally televised interview, with CBS anchor Katie Couric, found Palin rambling, marginally responsive and even more adrift than during her network debut with ABC’s Charles Gibson.” Some conservative commentators were particularly unforgiving. “I think she has pretty thoroughly—and probably irretrievably—proven that she is not up to the job of being president of the United States,” David Frum, a former Bush White House speechwriter, told the New York Times. Conservative columnist Kathleen Parker called for Palin to step aside. “Palin’s recent interviews with Charles Gibson, Sean Hannity and now Katie Couric have all revealed an attractive, earnest, confident candidate. Who Is Clearly Out Of Her League,” she wrote. Jon Stewart couldn’t get enough: “It is October, people, the fall television season is here. I am crazy addicted to this new dramedy on CBS. I love this show!” he said one night. “It is like the first season of Lost, only it makes less sense. And when these two get together, I don’t want to miss a minute of it. I love cliffhangers! It’s the ‘Who shot J.R.?’ of interviews. Will the Alaskan governor bring me examples, or will we forget all about it because we don’t really give a [expletive bleeped over TV] if she has the examples? We just want to see her fumble around some more.”
Even inside the McCain campaign, those sympathetic to Palin were alarmed by the Couric interviews. Her answer to the question about the Supreme Court left them bewildered. She had often railed about the Exxon Valdez case, but did not have the presence of mind to bring it up. Her answer to what she read was equally distressing. Anyone could have handled that question, her advisers agreed. Instead, they concluded, she had taken offense at what she perceived was an affront to Alaskans, wilderness people cut off from the rest of the world. Schmidt believed the Couric interviews represented one of the worst performances ever by a candidate for national office. Not only were the interviews damaging, but their afteref fects created declining support among crucial swing voters that she was supposed to attract. Palin’s appeal now encompassed little
more than the Republican base. One senior campaign official said of her performance, “The last couple of weeks of September it degraded. I don’t know if it was irretrievable but it was unretrieved.”
Palin blamed Nicolle Wallace for the Couric interviews because Wallace had once worked for CBS. Wallace told us later, “I like and respect [Couric] a ton. But I would never give her an interview for any reason other than it was the best decision for the campaign at the time. Obviously, in hindsight, it wasn’t the one where our candidate did the best. So if I could take it back, sure I would. . . . It was just ill-timed and unfortunate scheduling.”
Another problem with the Couric interviews was that Palin didn’t seem to be preparing for them. Instead, she let herself become distracted, understandably perhaps, by her meetings with world leaders at the United Nations. But she was also oddly determined to finish a questionnaire for tiny Alaska newspaper, the Matsu Daily Frontiersman. Her concern about how to answer that paper’s questions led to squabbling among her advisers and even to Palin’s implied threat that preparing for Couric could wait until the newspaper questionnaire was completed. Apparently Alaska was much on her mind. She worried constantly about her standing at home and, one official said, demanded that the campaign take a poll to see how her popularity was holding up. When told she was still in good favor at home by Schmidt’s reading of the poll, she expressed doubt that she was being told the truth, this official said, infuriating Schmidt.
The Battle for America 2008 Page 43
