Tales from the Trail

In the words of Aristotle: “one swallow does not a summer make, nor one fine day; similarly one day or brief time of happiness does not make a person entirely happy.”

Nevertheless, Democrats might not be feeling quite so down in the dumps today, as evidence comes in that in early voting (allowed at election offices and satellite locations in 32 states) the Democrats are off to a stronger-than-expected start. It is impossible to tell how people actually voted, but Democrats do appear to be showing up in greater numbers in some key states than some had feared. But things are still not going as well for them as in 2008.

The “enthusiasm gap” is expected to be one of the Democrats’ biggest handicaps in the midterms, this early evidence, and rallies next weekend by Jon Stewart and Stephen Colbert, notwithstanding.

If you want to understand the disillusionment about President Barack Obama among his former supporters, our World Affairs Columnist Bernd Debusmann reminds us today of the soaring rhetoric he employed back when he won the Democratic nomination in June 2008.

“If…we are willing to work for it, and fight for it, and believe in it, then I’m absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs for the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal; this was the moment when we ended a war and secured our nation and restored our image as the last best hope on earth.”

Before heading off to enjoy your weekend, I would encourage you to take a look at Emily Kaiser’s special report on income inequality in the United States, and a growing body of opinion that links high levels of income inequality with financial crises.

It may not be a coincidence, many economists believe, that income inequality in 2007, just before the latest crisis hit, reached its highest level since before the Great Depression. Read on.

And in other news, as they say in the business, Dan Quayle’s son can spell potato.  Ben is vying to represent the Third Congressional District in Arizona, where he has come under fire for being too young and inexperienced to hold office. But as our blog reports, at least he passed the spell test. 

Washington Extra is going to let our correspondents do the talking today. So instead of listening to my meanderings, check out these five stories: 

-          Mark Hosenball’s special report on Christine O’Donnell and her money problems. Her tense relationship with mainstream Republicans and her floundering campaign have led big-time donors to shun her, albeit quietly. Read here.

-          John Whitesides’ story on how big Republican gains in the governors’ races on November 2 could dramatically reshape the U.S. political landscape for a decade, giving the party an edge on next year’s redrawing of congressional district boundaries and in the 2012 presidential race. Here.

In the immortal words of  Jonathan Swift (paraphrasing Erasmus and Hamlet) “Every dog must have his day.”

According to our correspondent Andy Sullivan, Blue Dog Democrats may have had theirs already. His report from Vermillion, South Dakota suggests the Blue Dogs may be a dying breed, their centrist brand of conservatism in danger of being swept away by the Republican tide in the midterms.

The original Dogs were actually yellow, of course, from a Southern nickname for party loyalists who would vote for a yellow dog if it were on the ballot as a Democrat. The Blue Dog Coalition took its name from the view that members’ moderate-to-conservative ideas had been “choked blue” by the party in the run-up to the 1994 election. (Suggestions for alternative color schemes gratefully received at the Democratic National Committee.)

The Tea Party takes pride in its belief in the importance and centrality of the Constitution of the United States. Indeed, Senate Republican candidate Christine O’Donnell has been reported as referring to the document as a “covenant” based on “divine principles”.

So there was some disbelieving laughter from the audience in Delaware today when O’Donnell showed she did not know the contents of the First Amendment. “Where in the Constitution is the separation of church and state?” she asked Democratic opponent Chris Coons.

“The First Amendment does?” O’Donnell went on to ask. “Let me just clarify: You’re telling me that the separation of church and state is found in the First Amendment?” Watch the whole eight-minute exchange here, part of a debate about whether schools should teach intelligent design or evolution.

French Finance Minister Christine Lagarde said today she was not “in the mind or the mood for war”, describing it as “totally inadequate, inappropriate and unnecessary.” Phew.Global finance chiefs met over breakfast in Washington, just as the September employment report showed the U.S. economy was still shedding jobs and sent the dollar tumbling to a 15-year low against the yen. How about that to focus the mind.

The question is whether they can come up with some form of words at the IMF meetings over the weekend to calm the markets, to show that they are determined to address the imbalances that underlie the tensions over currencies.

Foreign exchange intervention by the Chinese to keep the yuan low is, after all, only part of the story.  The bigger problems are the uneven pace of global economic growth, the weakness of the U.S. economy that is fuelling the dollar’s decline, and the export-oriented policies of many other countries.

The Justice Department has stepped into the fray today over reports that the country’s largest mortgage lenders may have evicted tens of thousands of borrowers from their homes with little or no scrutiny of their documents.  The lenders are accused of using “robo-signers” to approve foreclosures en masse, like GMAC official Jeffrey Stephan, who has testified to signing some 10,000 documents a month.

The number of foreclosures has slowed significantly since state officials began investigations into the practice in recent weeks, but this may be of scant comfort to the housing market as long as the uncertainty lingers, with a possible backlog of pending foreclosures hanging over the market.

The practice raises yet more questions about regulation of the financial industry, and plays into the narrative of inadequate oversight of greedy bankers undermining the economy, a narrative which lay behind the administration’s reform of financial regulation. But it also highlights the failure of the White House and Dodd-Frank to properly address one of the biggest issues behind the economic collapse, namely the housing market and reform of Fannie Mae and Freddie Mac.

Returning home from a fascinating week in Haiti today, and meetings with the prime minister, UN mission chief, aid workers, business leaders and middle class and poor Haitians.

In a sense, Haiti is another test case for the international aid and development effort. A disaster on the scale of the January earthquake — striking a poor country with a weak government and private sector — has highlighted all the well-known pros and cons of the international aid effort, which now seems to run much of the country and economy. 

Today, there is very little malnutrition, epidemics and major disturbances have been avoided and healthcare for most Haitians is better than before the quake struck, all major achievements.

Like schoolchildren gazing out the window on a sunny June day, Congress can’t wait for that final bell to ring. But lawmakers still need to hand in a final term paper before they can skip out the door. Instead, they’re asking the teacher for an extension.

Before lawmakers head home on Wednesday or Thursday to campaign for reelection, they must pass a temporary spending bill to make sure the government can keep its lights on for the next several months.

Beyond all the speechifying, the basic job of Congress each year is to pass 12 spending bills that cover government operations for the fiscal year that starts Oct. 1. Each year, pretty much, they get the job done several months late. That plays havoc with federal agencies, which must continue to operate on last year’s budget while implementing this year’s operations.

President Barack Obama was jubilant at the bill signing for the small business lending legislation, but with just slightly more than a month to go before the election, voters appear consistently unmoved by White House attempts to lift the economy.

The president acknowledged that the small business bill came after a “long and tough fight,” and he castigated Senate Republicans – well, all but the two who bucked their party – for standing in the way.

Be on the lookout for the Reuters/Ipsos poll on Ohio tomorrow, you can find it on our midterm election page.