This was first posted at MotherJones.com....

During the White House press conference Wednesday night marking the hundredth day of his historic presidency, Barack Obama was asked not one question about the Afghanistan war or the multiple-trillion-dollar federal bailout of the financial system. He managed to tout his many achievements--passing the $800 billion stimulus package, winning congressional approval of budget that devotes record amounts to health care and clean energy, initiating the withdrawal of troops in Iraq, signing legislation to boost the number of children covered by health insurance, banning the use of torture--without having to explain or justify perhaps the two most controversial (and perhaps problematic) big-ticket items of his high-wire presidency. Was that just good luck?

These one hundred days have been something a blur--or, at least a policy blur. There is too much to keep track off, too much to juggle.

The questions put to Obama covered a wide range of substantial matters. (Nothing on the Air Force One fly-over of New York or the dog, though Jeff Zeleny of The New York Times did ask what about the presidency has "enchanted" Obama.)

Okay, now I'm officially scared.

Ever since I did an article reporting how former Senator Phil Gramm slyly prevented the regulation of credit default swaps, I've worried about the shadow economy of financial derivatives--financial instruments bought and sold by large financial institutions off public markets, often to hedge or cover their wild and woolly speculation.

Now, The Motley Fool guys are pointing out that the trillions of dollars being devoted to the various financial bailouts--$13 trillion, by their count--comprise not much more than a drop in the bucket when compared to the total (and shaky) derivatives markets. Writing about Treasury Secretary Timothy Geithner's plan to mop up toxic assets held by big financial firms and other bailout initiatives, one of their site's bloggers notes

Fools may be right to question whether any amount of money will prove sufficient to sate the hunger of this deleveraging beast. According to the Bank for International Settlements, the notional value of over-the-counter derivatives worldwide reached a mind-boggling $684 trillion last summer. That's more than six times the scale they had reached by 2002 when Warren Buffett dubbed derivatives "financial weapons of mass destruction".

Perhaps the trillions pledged can plug the leaks from subprime mortgages and failed auto loans, but can we reasonably expect to keep a derivatives market afloat that is at least eight times the size of a contracting global economy? I don't know, but I sure hope Bernanke and Geithner do....

To be clear, a sizable disconnect remains between the number of casino chips presently in play and the pile from which more chips may be drawn as needed.

Wow. What if this derivatives market needs bolstering? It does seem too large to be propped up. (Imagine holding back a tsunami.) But what if it does collapse? I don't know. So much of derivatives activity is complex and opaque, and apparently few people truly understand it. But my hunch is, an implosion of a $684 trillion dollar market won't be good.

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For months, I've been waiting for populist rage at the economic collapse and the subsequent bailouts to explode and cause political fallout. In fact last September I thought there was a chance John McCain, looking for a game-changer, would oppose the (first) Wall Street bailout as a conservative populist and reboot and reenergize his campaign. McCain made a few head fakes in that direction, but ultimately he chickened out.

In the months since, politicians on both sides of the aisle have bitched and moaned about Wall Street and the assorted bailouts under way, but no one has truly ignited a populist crusade against those big-money players who have ruined the economy and their pals in Congress. In January, a consultant told me that he had conducted focus groups with Americans of different economic standing, different party affiliations, and different levels of education, and that he had found that few of them were willing to express any anger at either Washington or Wall Street. Many, he noted, had said that perhaps they had spent too much money on things they really didn't need. He was quite surprised by this. No matter how hard he tried to stir up populist resentment--with loaded questions--he couldn't get that sort of a rise of these people.

So where's all the outrage? MSNBC's First Read newsletter has an interesting take on this:

Rage Against The Machine: Anger at Wall Street and at America's financial institutions has been simmering for a while now -- the numerous bailouts, Bernie Madoff, and Jon Stewart vs. CNBC have been just a few examples. But with the news over the weekend that AIG, 80% of which is now owned by the federal government, is awarding millions in bonuses to executives has most likely turned that anger into a furious boil. As the New York Times' Nagourney writes, this populist backlash presents a huge challenge for an Obama administration that might have to hand out additional bailouts to further stabilize the banking industry. ("The biggest risk is that we don't have the political will," Fed chairman Ben Bernanke warned last night on "60 Minutes." "We don't have the commitment to solve this problem, and that we let it just continue.") But the populist rage also might present a bigger challenge to the political party that's more associated with big business, less regulation, and tax cuts for the wealthy. In fact, if there was a time for the Obama administration and Democrats to push to let the Bush tax cuts to expire, to press for the Employee Free Choice Act (or "card check"), or to institute new regulations, this is the time, right? Still, now's a time when everyone in Washington is suddenly going to be channeling his/her inner-populist. Who will have the most credibility doing it? As for the short term, Congress is going to want a pound of flesh (and then some) from AIG. Obama also will discuss AIG during his remarks today.

The White House does have to make a careful calculation. It does not want to end up on the wrong side of a populist wave. And Obama and his aides know this; recall his not-yet-detailed proposal to cap executive compensation and perks. But at the same time, Obama has to fix the system--which means he has to work with the institutions that caused the damage. It's tough to bash and build at the same time. (Obama, no doubt, will be slamming AIG for awarding bonuses to the execs who lead the company to ruin.) The Obama gang has demonstrated that it can thread political needles. But this will continue to be a tough one. Moreover, there will continue to be an opening for Republicans--if any have the spine to go for it.

I have a day of medical stuff to do today--nothing serious--so I'll be brief.

Remember weeks ago, when a small number of public voices were counseling to go slow on the $700 billion bailout for Big Finance? They said there was--despite Treasury Secretary Hank Paulson's urgent pleas--no need to rush. They said that Congress ought to hold hearings and examine various alternatives to Paulson's blank-check plan. They said that the Bush administration and the Democrats in Congress (including then-presidential candidate Barack Obama) were merely throwing money at a problem without proceeding in a deliberate manner. You can see here for examples of such naysaying.

Well, they (which includes me) were right. Take a gander at the top of the front page of The Washington Post. To the right, you will find a story reporting:

Treasury Secretary Henry M. Paulson Jr. announced a series of moves yesterday that redefine the federal government's $700 billion rescue plan for the financial industry in order to tackle what he called a dire situation in the consumer credit markets.

In recasting the program, the Treasury no longer plans to buy troubled assets from financial firms, the idea initially presented to the country, but instead will offer aid to banks and other firms that issue student, auto and credit card loans in part by jump-starting the market that provides financing for these companies.

That is, Treasury is taking those hundreds of billions of taxpayer dollars Congress gave it and now using it in a completely different manner than it said it would. Maybe this will be a better deployment of those bucks. Maybe it won't. But shouldn't there have been some public debate or discourse about the shift? Whose money is it, anyway?

Next, shift your eyeballs slightly to the left, and you will see a related article reporting:

In the six weeks since lawmakers approved the Treasury's massive bailout of financial firms, the government has poured money into the country's largest banks, recruited smaller banks into the program and repeatedly widened its scope to cover yet other types of businesses, from insurers to consumer lenders.

Along the way, the Bush administration has committed $290 billion of the $700 billion rescue package.

Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed.

"It's a mess," said Eric M. Thorson, the Treasury Department's inspector general, who has been working to oversee the bailout program until the newly created position of special inspector general is filled. "I don't think anyone understands right now how we're going to do proper oversight of this thing."

Get the picture? The program was misdirected, is being redirected, and has no oversight. By the way, it will probably cost more than the $700 billion first mentioned.

It is a mess. A gigantic mess. Just one of the several George W. Bush (with the help of Congress) is bequeathing Obama. The new president and his people better have some good ideas for making it work better. For even though it was made in the Bush administration, if this quasi-con game continues along this present course after January 20, Obama will own it.

Remember when Bill Clinton in 1996 pronounced "the era of big government is over"? Liberals were incensed that a Democratic president would bolstered Conservative Talking Point No. 1 and would accept the fundamental tenet of Reaganism.

Well, it turned out Clinton was sure wrong about that. Today, Big Government is on the march, with a Republican administration spending hundreds of billions of dollars to bail out Wall Street and to partially nationalize banks. So while we wait for the final presidential debate of 2008, here's a question to ponder: is Reaganism dead? Short answer: you betcha. From Bloomberg:

My take on the second debate, first posted at MotherJones.com....

Last Thursday, during a McCain campaign town hall meeting in Denver, one participant stood up and challenged the GOP presidential candidate: "When are you going to take the gloves off?" His fellow McCain supporters in the downtown hotel roared with approval. "How about Tuesday night?" John McCain replied, referring to his second debate with Obama.

How about not? The McCain campaign in recent days has pumped up its effort to delegitimize Barack Obama, with its top strategist apparently calculating that McCain cannot vanquish Obama if the election is about issues. At a recent rally in a California suburb, GOP vice presidential nominee Sarah Palin declared "Our opponent...is someone who sees America, it seems, as being so imperfect, imperfect enough, that he's palling around with terrorists who would target their own country." (This was a reference to Obama's past association with Bill Ayers, the former Weather Underground radical who became an education expert). And on Monday, McCain delivered a blistering attack on Obama that was loaded with inaccuracies and distortions. So one expectation among the politerati was that McCain would continue swinging--or thrashing--at the second debate. Work in Bill Ayers. Refer to Jeremiah Wright. Depict Obama as shifty and untrustworthy.

That did not happen. McCain, trailing Obama in the polls, mainly trained his fire on policy matters. He did continue to hurl misrepresentations at Obama. (As the debate proceeded, I received 40 emails from the Obama campaign making this point.) For instance, McCain once again claimed that Obama has voted 94 times to raise taxes, a charge that has been widely debunked by various factchecking outfits. But there was no frontal assault on Obama's character--and only one or two slight digs on his qualifications. The debate was more high-minded than anticipated. But it demonstrated a tough reality for McCain: he is out of sync with his own campaign. He cannot pull the trigger, when his advisers seem to believe a machine gun blast is needed.

Obama and his campaign are fully integrated. He calls for a break from the past eight years on both domestic and foreign fronts and famously urges fundamental change. As a new face--and a black man--he sure does represent change. He is his message. And his campaign for over a year and a half has not had to go through any strategic lurches or had to reconfigure either its candidate or its core pitch. That's not true on the McCain side. His campaign has been nothing but lurches. And the most recent one--a turn toward even more negative campaigning--undercuts his old and now practically worn-out reputation as a straight-talking maverick. So come Debate II, McCain was confronting a tough choice: damned if he does (go negative) and stalled if he doesn't.

Deciding to forego the nasty stuff, McCain relied on policy differences to hammer Obama. The problem: Obama's policy prescriptions are not unpopular.

The main reason the $700 billion bailout bill failed in the House is that the Republican leaders, who were working with the Democratic leaders to pass the bill, could not count. They did not round up enough of their comrades for the bill; one hundred and thirty-three House GOPers said nyet to what some of them considered to be socialism. But the bill also failed because 95 House Dems would not go along with Hank Paulson's Billions-for-Bad-Paper plan, when alternative approaches were worth considering. (I refer to some of those options here.) And a leader of a subset of these Democrats--dubbed the Skeptics Caucus--has been Representative Brad Sherman.

Sherman attracted several dozen members to a series of meetings and briefings this past weekend, as the bill was being negotiated by others. As he left Congress after the vote on Monday, he told me that the most effective argument he made was that the bailout bill was darn weak when it came to recouping the taxpayers' $700 billion. He cited a memo he circulated among colleagues that pointed out that taxpayers were not likely to see that money--either in profits from a future selloff of the bad assets the Treasury would buy from Big Finance Firms or in a revenue bill (meaning some sort of tax on the finance industry). In other words, he challenged Paulson and his own party leaders on a fundamental of the bill: this is not a handout, but a timely investment.

What's going to happen now? The safe bet is that the D and R leaders in the House will tweak the bill or offer enough inducements to individual members (a bridge, anyone?) to win over 13 members to insure passage of the legislation. That is, there won't be a wholesale revision of the basics. So the revenue issue may remain hot. And Sherman expects to come back to Washington later this week to keep the battle going. Here's the memo he disseminated:

TAXPAYERS HIGHLY UNLIKELY TO RECOUP ANY OF THE COSTS -- Brad Sherman 9/29/08

We know that the Bailout Bill allows million-dollar-a-month salaries to executives of bailed-out firms, and it allows hundreds of billions to be used to buy toxic assets currently held by foreign investors. But we are told: "don't worry, this $700 billion bill won't cost us anything. We will get it all back next decade through a revenue bill."

I. Section 134 of the Bailout Bill merely says that the President must submit a revenue bill to Congress in 2013 that recoups from the financial industry the taxpayers' net losses.

a. If the President has any revenue ideas he actually likes, he would submit them to us anyway.
b. If the President submits revenue ideas only because he is forced to by Section 134, he will send it to us with a note saying that he believes they are bad for the country, and reserves the right to veto.
c. The Bailout Bill does not automatically enact any revenue increases, nor protect a revenue bill from filibuster or veto.

II. Congress is unlikely to pass a tax increase bill of hundreds of billions of dollars in 2013.

a. Tax increase bills are anathema to many.
b. 41 Senators can block the plan. We're giving Wall Street enough money to hire 4100 lobbyists.
c. In recent years, Wall Street has easily defeated every attempt to close every loophole that they exploit, no matter how pernicious-even the abusive use of Cayman Island tax havens by hedge fund managers, who thereby pay zero tax.

III. Any tax on the financial industry would make the good banks pay a huge tax so we can recoup what we gave to the bad banks.

a. Section 134 says the tax will be on "the financial industry." It does not provide for a tax on just those firms that received bailout payments.
b. A bank that doesn't get a bailout payment still pays the tax.
c. Community banks and perhaps credit unions will also be subject to the tax, so we can recoup what we gave to Wall Street.

IV. It is impossible to draft a tax that hits only those firms that received bailout payments, and even more impossible to draft one that taxes each bank in proportion to how much money we lost on its toxic assets.

a. There are no provisions to even keep track of losses on each asset purchased as it is managed over the years. Assets purchased from several
banks will be pooled, managed, and sold together, and we can never know how much we lost on assets purchased from any one bank.
b. If three banks in the year 2013 have the same income and size and operations, they will all pay the same tax-even if one got no bailout payments, a second got a million dollars, and a third got a billion dollars.
c. Many bailed-out firms won't exist in 2013.

1. Some will go under.
2. Some bailed-out firms are only shell companies. Example: Assume the Bank of Shanghai has $30 billion in toxic assets. It will sell these to the tiny subsidiary it has incorporated in California. The subsidiary will then sell these to the Treasury in 2009, and will be dissolved long before 2013.
3. Many bailed-out firms will still be unprofitable in 2013.
4. Some bailed-out firms will move offshore before 2013.

d. The whole purpose of the bill is to improve the balance sheets of the bailed-out firms. If particular bailed-out firms owe us the money they receive, they would have to list this as a liability, and the bill would fail to improve their balance sheets.

In 2013 we will not pass a tax bill that imposes hundreds of billions of dollars of taxes on the financial services industry, including those banks that got no bailouts, community banks, and credit unions. A tax bill imposed only on those entities that got bailout payments is impossible to draft, and contrary to the purposes of the Bill.

If it were easy to pass a bill to recoup hundreds of billions of dollars through taxes to be imposed in 2013 and thereafter, then provisions imposing such taxes would be in today's bill.

Wall Street gets their money now, and we get it back never.

The below item was posted shortly before the House voted against the $700 billion Big Finance bailout 228 to 225. Ninety-five Democrats joined 133 Republicans to bring down the bill. And Representative Brad Sherman was one of those Democrats.....

For my money, the $700 billion bailout plan is being rushed through Congress with too much haste. There's been little debate of the plan's basics and not much consideration of alternative approaches to the administration's preferred choice: buying up the bad paper of Big Finance firms that screwed up royally. Yet few in Washington--including John McCain and Barack Obama--want to go out on a limb. Any politician who stands up to Wall Street and opposes this thing has to fear being blamed should the plan not go through and the financial meltdown worsen. In politics, there's safety in numbers. So if everyone jumps aboard and this plan doesn't work out, nobody stands to lose politically. It's the safe political play: get on the train with everyone else.

But there are some legislators who are saying, slow down. House Republicans tried to put on the brakes last week. But their alternative--cut taxes--was a non sequitur. On the Democratic side, Representative Brad Sherman has pulled together a Skeptics Caucus. He drew 30 or so House Democrats to meetings on the weekend. Not enough to block the Paulson Express. But not an insignificant number. And Sherman released a memo detailing his objections to the bailout.

Since there's not much media coverage of the Slow-Down crowd, allow me--as a public service--to post the full document right here, The taxpayers need more, not less, of a debate, before allowing the Bush Administration to start a $700 billion spree.

From Rep. Sherman:

A review of the first Obama-McCain debate, originally posted at Mother Jones....

No memorable exchanges. No historic zingers. No gotchas. The much-anticipated first face-off between Barack Obama and John McCain resolved little. Neither candidate strayed from their usual briefing books. The talking points were recycled. McCain blasted Obama for being a rookie in the ways of national security. Obama questioned McCain's judgment, notably his initial support for the Iraq war.

They both played it safe. Especially when it came to the hot topic of the night: the $700 billion bailout plan for Wall Street. It was no surprise that moderator Jim Lehrer would lead off with the issue, even though the focus of this debate was supposed to be foreign policy. And in his first question, Lehrer asked each candidate to state where he stands on the "financial recovery plan." Neither would get specific. Obama cited the need to move "swiftly" and "wisely." He called for effective oversight of the plan, taxpayer protections, and guarantees the money spent would not reach the pockets of CEOs. He pointed to the current meltdown as evidence of the failure of economic policies supported these past eight years by George W. Bush and McCain. It was standard fare.

McCain noted he was heartened by the bipartisan negotiations under way in Washington. He, too, cited the need for accountability. He mentioned the possibility of adding a provision to the package that would allow the federal government to offer loans to troubled institutions rather than buy their bad paper. Neither one, though, fully endorsed the plan--or raised any objections. Asked if he would vote for it, McCain said, "I hope so." It was a strong signal he would not be mounting any from-the-right populist crusade against the proposal.

But each candidate exploited the bailout queries. Obama tried to tie McCain to Bushonomics. McCain hailed his own efforts to curtail pork-barrel spending on Capitol Hill. Obama slapped him for focusing on $18 billion in earmarks while supporting $300 billion in tax breaks for corporations and wealthy individuals. McCain accused Obama of being a tax-hiker. Obama countered--correctly--that his tax plan provides far more relief for taxpayers making less than $250,000 a year than does McCain's proposal.

It was as if they were eager to talk about any economic issue other than the details of a gargantuan bailout that may or may not work and that may or may not be popular come Election Day.

On foreign policy, the candidates dished out the expected lines. McCain touted the surge in Iraq and slammed Obama for having ever doubted the wisdom of the wonderful General David Petraeus. Asked for the lesson of Iraq, McCain said, rather inelegantly, "You cannot have a failed strategy that will then cause you to nearly lose a conflict." Obama assailed McCain for supporting Bush's grand distraction and having failed to recognize that the job in Afghanistan ought to have been finished first. He connected the ongoing Iraq war bill--$10 billion a month--to the nation's current economic woes.

On Iran, McCain derided Obama for wanting to hold talks with President Ahmadinejad (whose name he mispronounced a few times before getting it right), claiming such a move would practically send a signal that the United States approves of a second Holocaust. Obama defended his policy of engagement, noting that there were other Iranians to speak to besides Ahmadinejad and that the Bush administration has recently broadened its diplomatic approach when it comes to the ol' Axis of Evil. McCain claimed Obama had been indecisive at first in reacting to the conflict in Georgia. Obama echoed McCain's tough stance against Russia, but cautioned that the United States could not revive a Cold War approach because it still has to deal with Russia on the pressing matter of loose nukes.

In talking policy, both men came across as knowledgeable. McCain truly perked up when he got the chance to discuss the strategic importance (as he sees it) of the Caucasus region. Obama demonstrated confidence in his ability to challenge McCain on the strategic importance of the Iraq war. But, indubitably, many viewers of the debate would score these exchanges in accordance with their preexisting opinions of the two candidates. As for those knotty undecideds, there was no specific assertion that an analyst could point to and say, "This is going to stir them."

Once the debate ended, the television commentators immediately tried to assess the impression each conveyed. McCain did come across as somewhat condescending. He barely looked at Obama and almost seemed annoyed to have to be talking foreign policy with that other guy. He tried to put Obama down by charging that Obama did not know the difference between a tactic and a strategy. He slapped him for not supporting funding for the troops. (Obama voted against an Iraq war funding bill that did not have a timetable for withdrawal--just as McCain voted against a funding bill that did.) And McCain sent one straight shot at Obama, saying, "I don't believe that Senator Obama has the knowledge or the experience" to be commander in chief.

That was no knockout punch. And Obama kept his now-famous cool. He did not swing too hard at McCain. Several times during the debate, Obama said that McCain was "absolutely right" about the point under discussion. Obama did question McCain's temperament, noting that McCain had threatened extinction for North Korea and had once jokingly sung a song about bombing Iran. But McCain, in response, pointed to his opposition to Ronald Reagan's deployment of Marines in Lebanon as proof he can be trusted to make prudent decisions about war. (That is, he's no warmonger.) McCain noted he wears a bracelet honoring a U.S. soldier killed in Iraq as a reminder of his pledge to that soldier's mother to do all he can to insure her son's death was not for naught. Obama replied that he, too, wears a bracelet--given to him by the mother of another fallen soldier who asked him to make sure no other parent loses a son in vain. He was calm; McCain was pugnacious. How that plays is hard to assess. It's truly a matter of taste.

There was much buildup for this debate. For weeks, members of the politerati looked forward to it as a defining moment in the campaign. The big question: would Obama be able to display commander-in-chief cred? Then McCain's shenanigans--pulling out, jumping back in--added to the drama. The big question: would he be prepared? And would Obama be able to take advantage of the last-minute shift to economic matters? But the debate ended up a straightforward affair, with no twists, no turns. Commentators could score it any way they wanted. Obama held his own on national security affairs, so give him the nod. McCain did the same on economic matters, so maybe he won over the 27 American voters who have yet to decide. You can look at it this way: given that Obama has been ahead in the recent polls, McCain lost by failing to beat him to a bloody pulp. Or this way: McCain survived what many analysts considered to be a bad week for him.

In any event, it's on to the next main attraction: the Biden-Palin duel on Thursday. Then there will be two more Obama-McCain debates. But who knows what other crises will hit between now and November 4 that will force the candidates to react to the real world? In fact, this past week demonstrates that the candidates' responses to events beyond their control may be more important in determining the outcome of this election than the debates. Fancy that: reality trumping political theater. It happened this past week. And in the next six weeks, it could do so again.

There's no crying in baseball. And there's no time-outs in presidential campaigns. Yet John McCain is asking for that. On Tuesday afternoon, he called for putting off the first scheduled presidential debate this Friday so he can suspend campaigning, head to Washington, and work on the financial bailout package.

This is a guy who's missed a ton of votes in the Senate throughout his presidential campaign and who just days ago called for shoving the current mess on to the lap of a commission. Actually, given that the world doesn't stop for crises--and that sometimes there's more than two or three items on a president's radar screen--this week would be a pretty good test for a candidate. He has to prep for a debate and participate in bailout deliberations.

In a brief--very brief--statement, McCain said the nation must "set politics aside." He invoked 9/11 and the coming together that occurred following that attack. "We must show that kind of patriotism now," he declared. But why is postponing the debate patriotic? And how long should the delay be? If Congress is going to get this package right, it could take weeks. Is McCain suggesting no debates transpire for that period of time?

And how about this for an idea? If McCain is too busy to show up on Friday night, perhaps he could send Sarah Palin. And Obama could dispatch Joe Biden. That would at least be a true test of their ability to fill in.

By the way, after McCain made his announcement, the Obama campaign sent out this note:

At 8:30 this morning, Senator Obama called Senator McCain to ask him if he would join in issuing a joint statement outlining their shared principles and conditions for the Treasury proposal and urging Congress and the White House to act in a bipartisan manner to pass such a proposal. At 2:30 this afternoon, Senator McCain returned Senator Obama's call and agreed to join him in issuing such a statement. The two campaigns are currently working together on the details.

That's a mature way to handle this situation. In a subsequent appearance before reporters, Obama said that when he and McCain talked at 2:30 on Wednesday afternoon, McCain told him he was considering whether they ought to delay the debate. Obama informed the reporters that he thought McCain was "mulling" it over. But after the call, McCain, without any further discussion with Obama, went public with his proposed time-out. How patriotic.

"I think we should continue to have the debate," Obama said. "....We've both got big planes...They can get us from Washington to Mississippi pretty quickly."