If this report is accurate it is bad news indeed for the McCain campaign:

Presented with 30 options for new economic measures, Sen. John McCain (R-Ariz.) has – at least for now – chosen none of them. His campaign had been planning to roll out new proposals this week that would be aimed at restoring confidence in financial markets and encouraging investors to return. On Sunday, hours before attending a big strategy meeting at McCain campaign headquarters, Sen. Lindsey Graham (R-S.C.) told Bob Schieffer on CBS’ “Face the Nation” that McCain was planning “a very comprehensive approach to jump-start the economy, by allowing capital to be formed easier in America by lowering taxes.” But when the meeting ended, so did plans for a new economy push. The campaign now says no new policy announcements are planned. Participants in the meeting refused to say what happened.

. . .

The news dismayed McCain supporters and surrogates, who had thought the fresh policy would help him gain traction on the campaign’s most vital issue, and dilute the impression that he was relying solely on attacks in the home stretch.

Which is worse, to fritter away a summer with no comprehensive tax and economic plan or to “tease one” now in the final stretch and then fail to deliver? If anything sums up the intellectual bankruptcy, the organizational disarray and the resulting frustration of the McCain supporters this is it. If someone were trying to convey a sense of hopelessness and lack of executive skill they would be hard pressed to do “better” than this.

McCain refuses to fully engage Obama on character issues. He is unwilling or unable to come up with a comprehensive alternative economic vision. So are we back to running on his biographical wonderfulness? Oh, and as a top Republican insider pointed out to me, he could at least have mentioned in his “reset the campaign” speech today two key arguments for his candidacy: national security and judges. But not even that was possible.

No, McCain has not yet lost and the race may narrow simply because Barack Obama remains such a problematic figure. But it won’t be because of anything McCain has done. In fact, he hasn’t done much of anything to convince voters to vote for him — other than point to Obama and say “He’s worse.”

J.E. Dyer, on Abe Greenwald:

There is a great risk of focusing on these issues instead of the real one, which is that direct military confrontation is not how Russia will approach undermining US leadership, and US policies, in global security. The Russian navy doesn’t have to be good enough to confront the US Navy, or perform the US Navy’s job. It only has to be good enough to get to Venezuela – or Cuba, or Syria, or perhaps Libya; or, in the near future (I predict), Iran.The USSR’s global MO was not direct military confrontation with the US in the Cold War, but patronage of proxy states that opposed our policies at a regional and local level. Soviet patronage both emboldened and strengthened Moscow’s clients, and blunted our own objectives and approaches, since we considered opposing Moscow’s clients to be the same thing as opposing Moscow. We weren’t terribly worried about Moscow’s surface navy. But the USSR was nuclear armed.

It is superficial to take comfort from the undeniable fact that Russia’s navy is much less well-equipped, well-maintained, and competent than ours. What we should worry about is Moscow is sending that navy to Venezuela – AND proposing to “cooperate” with Venezuela on a nuclear capability for Caracas; nominally, of course, a matter only of building reactors for energy.

Naturally Russia considered it necessary to make a port call in Libya on the way to Venezuela. Russia was able to use ports in Algeria, Libya, and Egypt during the Cold War, as well as station ships in Syria and the former Yugoslavia. Moscow doesn’t want to see these venues on the Mediterranean denied to her by improved relations among these nations with the US. Russian businessmen are today improving the naval port of Tivat, now in Montenegro (former Yugoslavia), and Russian ships, including the Russians’ sole aircraft carrier, have made port calls in Syria the last couple of years, reviving maritime ties that languished after the break-up of the Soviet Union.

But Russia knows there are limits to her projection of power in maritime venues. We should not be suckered by our own understanding of that into thinking that Russia needs to operate on our model to achieve objectives. Rather, we should be focused on Russia’s patronage of NATIONS in areas vital to our national interests, and the harbinger that naval visits constitute of Russian power projection, through supporting those nations in their opposition to US policies and influence. We have no need to care much about a small Russian naval task force visiting Venezuela, or Russian reconnaissance aircraft stationed there. But we need to care very much about Russian backing for Hugo Chavez’s visions of armament – including nuclear – and his already-documented tendency to support and foment unrest in Central America. The same can be said of Iran, the 800-pound gorilla of the Persian Gulf region; of Libya, with her long, strategically significant frontage on the chokepoint-infested Mediterranean; of Syria, with her own Mediterranean frontage and proximity to the Suez Canal and the Greek-Turkish maritime antagonisms; and of Cuba, still 90 miles from our shores, and well-placed to base a menace to shipping in the Gulf of Mexico, and US natural resources.

Single tragic events can rarely change history. Even more rarely can such events change history for the better. But this is nonetheless what may have happened on the night of Friday, October 10th, when the infamous Austrian right-wing extremist Jörg Haider died in a car crash on the eve of one of his greatest political triumphs.

Controversial from the start of his public career, Haider came to be known internationally–and beloved by many domestically–for his off-color remarks about the Nazi era. At a commemoration for veterans of the SS, Haider once remarked: “It is good that there still are decent people in our world who have a character which stands by its convictions even in the face of the strongest counter-current; people who have remained faithful to their convictions until the present day.”

This remark was not what in American political discourse is known as a gaffe. Quite on the contrary, it was part of a deliberate–and worryingly successful–strategy to exploit Austria’s deeply ambivalent relationship to its Nazi past for political gain. This strategy included coded references which in Austria’s political discourse were plain as day. Like, for example, Haider’s persistent invocations against the machinations of U.S.-based “East Coasters” (in plainer language: New York Jews).

Haider’s enjoyed a huge success in 1999, when, under his leadership, the populist FPÖ (Freedom Party of Austria) became Austria’s second-strongest party in an upset election which shook the foundations of the country’s political establishment. The conservative ÖVP (Austrian People’s Party) agreed to a coalition government with Haider’s party. In protest, the then-14 EU countries reduced intergovernmental contacts with Austria to a bare minimum, and Israel recalled her ambassador.

But Haider’s most impressive triumph came as recently as September 28th. After breaking with the FPÖ–the party he himself had led and refashioned–in 2005, Haider founded his own movement, the Alliance for the Future of Austria (BZÖ). Building on his power base as the Prime Minister of Carinthia, Austria’s southernmost federal state, Haider, against the odds, turned the BZÖ into a national political force in its own right. At the recent national elections, his movement carried off 10.7% of the vote. Then, only few days before his sudden death, Haider celebrated an unexpected rapprochement with the FPÖ. Taken together, the populist movements either shaped or founded by Haider were once again Austria’s second-biggest political force–and seemed in a stronger position than ever.

The question, then, is: how will Austria’s–and Europe’s–far Right movements fare after Haider? Does his death matter? The tentative answer: yes. Far-right movements are a pan-European phenomenon. The strength of right-wing extremism is worrying in Austria, Switzerland, France, Italy, Germany, and even liberal Denmark. Yet such movements have (so far) failed to gain the kind of deep-rooted support in the population which assures voter loyalty beyond the demise of a totemic figurehead. The French voted for the charismatic Jean-Marie Le Pen more than for his disreputable Front National; similarly, the Swiss are seduced more by the magnetism of Christoph Blocher than by the policy platform of his Swiss People’s Party. Same goes for the Danish Pia Kjaersgaard and her Danish People’s Party. For all their strength, the European far-right movements continue to be dependent on their leaders. At a time when Le Pen is evidently beyond his prime and the very fact of their political success is increasingly giving Blocher and Gianfranco Fini (of Italy’s Alleanza Nazionale) the appearance of being old-style apparatchiks, this poses serious challenges to their movement. Haider, with the looks of a model and the easy charm of a ski instructor, probably was the European right’s greatest political talent. His death, tragic as it is, opens a strategic bracket of opportunity to anti-extremist forces in Austria and beyond.

The question is whether moderate parties will be able to seize upon this opportunity. Europe’s center-left and center-right have seemed, frankly, out of ideas in recent decades. Their lackluster politics-as-usual has been unable to retain the loyalty of their traditional electorates. On top of this, they have lacked a vision for how to combat the rise of worrying forces like those that found a voice in the BZÖ. Now, with much of the far right’s personnel in disarray or decline, Europe’s centrists have been handed a golden opportunity to wage a proactive battle for hearts and minds. Once another set of Haiders arrive on the scene, they will face, with any luck, a strong defense–and find it far more difficult to gain their former political purchase. It is up to the moderate political establishment to act now and convert this tragedy into a reason for guarded optimism.

Vali Nasr thinks we should ask for Iran’s help with Russia:

Many have assumed that Russia can help solve the Iran problem, but few have considered that the reverse is also true. Iran is important to Russia’s game plan and how Moscow weighs its options going forward. That makes talking to Iran an essential part of America’s plans for containing Russia.

For Russia, an isolated Iran in conflict with the West is a boon. With Iran’s rich gas reserves off limits, Russia can hold Europe hostage and divide NATO while also creating linkage between its support for international pressure on Iran and Western response to its aggression in the Caucasus.

Washington cannot resist a Russian sphere of influence stretching from the Black Sea to Aral Mountains unless it plays the Iran card to its advantage. That means dropping its objection to the flow of Iranian gas to Europe, and engaging Iran in talks on security and stability of the Caucasus.

To Nasr’s credit, this approach does at least have the benefit of offering Iran an identifiable incentive: gas sales to Europe. This is considerably more realistic than the directionless “common ground” approach. However, the problem with this plan can be found in Nasr’s own words:

This provides the United States with an opportunity. Washington has already understood Iran’s importance to achieving American goals in Afghanistan and Iraq. It engaged Tehran over Afghanistan’s future in 2001 and over Iraq’s security in 2007. The high-stakes game in the Caucasus similarly justifies talking to Iran.

Continuing to consult Iran before we proceed with foreign policy initiatives produces two dangerous results. First, it further emboldens Iran and makes the case for their legitimacy as a world power. The fact that America incorporated Iran as a problem-solver on questions about Afghanistan and Iraq gives credence to the suggestion that we should now engage Iran about Russia. Doing so would make the case for consulting the mullahs on some other future predicament, and so on. This is legitimacy by contrition, and it’s a slippery slope upon which we never should have embarked in the first place. It didn’t start with the present U.S. administration, either. Bill Clinton, for example, conveyed his private assent to Iranian arms sales in the Balkans, hoping it would help turn the tide in the war-torn region. That it did no such thing is my second point.

When we ask for Iranian help on geopolitical challenges, we get headaches. For all our engagement with Tehran about Afghanistan, Iran still protected Taliban and al-Qaeda leaders. For all our engagement with Iran about Iraq, it was the punishment inflicted on Iranian backed militias by American and Iraqi forces that produced a change in behavior. And even now, some of those militias have likely switched from fighting forces to “social service” organizations for reasons of recruitment and stealth. This is because Iran functions more as a radical cause than a state. And that reality has rendered any American diplomatic effort moot since 1979.

Finally, Nasr’s plan is predicated on the notion that an Iran with nuclear weapons is tolerable. If he believes that, why does he so narrowly define our goals in Iran? If we’re going to accept Iranian nukes, we might as well open up relations completely. Let’s trade freely, sell them equipment and technology and all the rest. That Nasr doesn’t suggest this casts suspicion on his premise. It’s clear he understands the potential catastrophe of Iran’s ambitions, and that makes his argument both morally and strategically incoherent.

Nasr frames his case with the claim that “Barack Obama has been right all along.” Not only would it be wrong to engage Iran today for the reasons outlined above, but Obama first pledged to talk to Iran without preconditions over a year ago. The Russian circumstances described by Nasr only came into effect this summer. It would seem to me being “right” should at least take into account the dimension of temporal reality.

Commenting on a conference of former world leaders in Tehran, Gordon correctly notes that all this support for former Iranian president Mohammad Khatami is somewhat misplaced:

Iran’s president is hardly the most powerful figure in the country’s amorphous political system, and he does not control key regime elements, including those responsible for the nuclear weapons program.

And even if Khatami had some influence, we should not delude ourselves about his genuine desire to change the course of Iranian history. And not just in terms of internal change–it was under Khatami, after all, that student movements were brutally crushed. When it comes to the nuclear file, one should never forget that, assuming that the NIE was accurate–a big if, of course–Iran chose to suspend its military nuclear program in 2003 under intense outside pressure. Khatami was then in his sixth year as president. If he knew anything at all about nuclear plans, he was hardly bothered by the presence of a nuclear military program in the backyard, even as he was ostensibly promoting his “alliance of civilizations” around the world.

Today, a star-studded cast of former leaders from Asia, Africa, and Europe met in Tehran at a conference sponsored by Mohammad Khatami, the former Iranian president. Khatami is expected to challenge Mahmoud Ahmadinejad in his reelection bid next June, and the presence of Kofi Annan and others at the Conference on Religion in the Modern World is seen as their endorsement of the event’s sponsor in the presidential contest. Besides the former U.N. Secretary-General, attendees included a former Irish president, a former Italian prime minister, a former French prime minister, a former Portuguese president, a former Sri Lankan president, a former Sudanese prime minister, and a former UNESCO director general.

“This conference has nothing to do with presidential elections,” Khatami told reporters. Of course. But the timing of the visits of the foreigners was hardly coincidental, coming during a period of speculation in Iran as to who will challenge Ahmadinejad. “Our homeland Iran is in danger,” said Mostafa Tajzadeh, a reformist figure. “Khatami has to run in the upcoming elections to save Iran from catastrophe and destruction.”

If the former president could do that, we would all be wearing Khatami campaign buttons and making donations. But Iran’s president is hardly the most powerful figure in the country’s amorphous political system, and he does not control key regime elements, including those responsible for the nuclear weapons program. Even if Khatami is elected to his old post, the change in administration would hardly constitute a change in the regime-Supreme Leader Ayatollah Ali Khamenei would remain in charge, after all–and it might just make things worse by putting an acceptable face on an abhorrent government. During his two-term presidency, Khatami often clashed with the more radical elements in the regime and mostly lost, disillusioning his supporters and delegitimizing the reformists.

Khatami is expected to announce his candidacy in February. And when he does he will undoubtedly attract support from other nations that hope to see a more moderate Iran. There is, in general, nothing wrong with encouraging the more modern elements in Iranian society, but at some point–well before the election–we need to know whether Khatami will acknowledge the existence of the nuclear weapons program and how he feels about it.

Too often we encourage moderates in a hardline society on the assumption that engagement in the long run will bring needed change. With Iran just months from acquiring all the knowledge needed to build a nuclear weapon, we cannot afford to rely on the tiresome generalities of good intentions-for which Kofi Annan is famous. We need to know what Khatami intends to do and when he will do it.

Joe Biden said it again today: “We will end this war.” Referring to Iraq neither he or Barack Obama ever say “win.” They never even say “secure the gains.” One hopes they don’t really believe their campaign hooey. They must understand victory is nearly at hand, and all that is required is a patient transition and a deliberate plan for insuring that violence does not resurface, right? We really don’t know, but at some point the rhetoric becomes reality and he, his supporters and the overwhelmingly Democratic Congress will act accordingly.

This all might be a good topic for the final debate: why is “end” always the goal and not “win”? What does that message transmit to our enemies? Perhaps Obama will surprise as he did in the last debate with his JFK-esque “go anywhere and do whatever we need to prevent genocide” doctrine. Or does that just apply outside of Iraq?

You’re right, Emanuele. When Israel sent notorious murderer Samir Kuntar to Hezbollah for two dead soldiers in July, it all but guaranteed that the price for Gilad Shalit’s release would rise significantly. But Jerusalem’s apparent openness to dealing Hamas “more than one Kuntar” suggests something more fundamental: that Israel has entirely given up on short-term military options vis-à-vis Hamas, and is willing to accept defeat.

This is truly astounding. After all, Israel has never lost anything to Hamas–not diplomatically, and not militarily. Indeed, in stark contrast to the inconclusive 2006 Lebanon war that was perceived as a Hezbollah victory, Israel soundly defeated Hamas during the second Intifada: it assassinated its top leaders; hampered its movement of weapons and personnel throughout the occupied territories; and achieved meaningful international cooperation for countering Hamas’ fundraising capabilities. Even following Hamas’s victory in the 2006 Palestinian parliamentary elections, Israel mostly succeeded in pushing the west to boycott the Hamas government–a boycott that was only strengthened following Hamas’s June 2007 coup in Gaza.

Moreover, there’s also the issue of timing. Why would Israel prepare for such a painful prisoner swap now? Within the next week or so, Tzipi Livni will likely assume office as Israel’s next prime minister, and has promised to intensify peace efforts with Palestinian President Mahmoud Abbas. Naturally, giving Hamas “more than one Kuntar” in exchange for Shalit would be a disaster for these already improbable negotiations, as Hamas would be significantly strengthened.

At the time of Israel’s most recent prisoner swap with Hezbollah, Daniel Gordis offered the deal’s most eloquent defense: in Israel–where every young adult serves in the military–costly prisoner swaps critically reinforce soldiers’ confidence, and are thus worthwhile “mistakes.” However, this logic cannot apply to Israel’s dealings with Hamas, even when a living soldier–as opposed to two bodies–remains in captivity. As Iran and Hezbollah have intensified their threats towards Israel in recent weeks, it is impossible to see how handing a victory to Hamas–an otherwise losing organization–would strengthen Israelis’ resolve.

Last month, Iranian President Mahmoud Ahmadinejad told the Los Angeles Times that recent American military actions have plunged the world into financial meltdown. There’s no real logic here, so just hang on and go with it:

The U.S. government has made a series of mistakes in the past few decades … The imposition on the U.S. economy of the years of heavy military engagement and involvement around the world … the war in Iraq, for example. These are heavy costs imposed on the U.S. economy … The world economy can no longer tolerate the budgetary deficit and the financial pressures occurring from markets here in the United States, and by the U.S. government.

And the Swedes gave it to Krugman! Anyway, in a bit of delightful news, it turns out that plummeting crude oil prices have thrown Iran’s already dismal economy into a serious tailspin. To combat the 50% price drop, Tehran implemented a 3% sales tax in September. Last week, Iranian market traders, or bazaaris, went on strike in protest:

The strikes began last week in the provincial cities of Isfahan, Tabriz and Mashad.

Led by the dealers in gold and jewellery, gradually they gathered momentum, and spread to carpet and textile dealers.

Three thousand of them are reported to have marched on the governor’s office in Isfahan. Some are even reported to have attacked a branch of the government-owned Bank Saderat.

The bazaaris are an influential constituency in Iran, and they actually got the tax suspended. But what’s exciting is that they’re still protesting. Traders who were ordered back to work by police are pulling stocks from their windows and covering up displays.

Though, it’s still hard to get too excited about economic pressure as a possible diplomatic facilitator for change in Iran. There are too many improbably massive “ifs”: If a genuine sanctions regime could be organized (including China and Russia), if all countries involved stuck to the plan, if Iran tried imposing more taxes, and if civil unrest were so violent as to defy the Iranian police state, we may have something to talk about. But as it stands, such Iranian dissatisfaction is little more than an embarrassment for the half-wit dictator/puppet who came over here to lecture us on global economics.

Those expecting a new and improved version of John McCain’s economic vision will be disappointed by today’s speech in Virginia. There is no innovative middle class tax cut, or any breakthrough investment initiative for the 21st century. But there is a persuasive contrast between his own plan–lower taxes,  market-oriented healthcare, a discretionary spending freeze, and free trade–and Barack Obama’s agenda. As some people have been urging, he comes flat out and says: “The last President to raise taxes and restrict trade in a bad economy as Senator Obama proposes was Herbert Hoover.”

If he continues to pound home these contrasts and grills his opponent at the debate (e.g. How much is that fine for those who won’t comply with your heathcare mandate? Why wouldn’t you want to make our corporate tax rates competitive?), he might yet make some headway, Is it too long in coming and lacking pizazz? Maybe. But voters taking a final look at the candidates are going to judge the substance of their messages–not the timing.

Nobel Prize winning economist Paul Krugman:

I don’t want us to move to East Germany. I just want us to move to France.

Funny: according to a new Reader’s Digest poll, 52% of France is interested in moving to the U.S. Maybe that’s because France’s unemployment rate is at a low of 8%, and America’s is at a high of 6.1%. America’s GDP per capita is $45,800. France’s is $32,600. But those are facts, and facts ceased to matter around the time President Bush decided to actually fight back against those bent on destroying the West. What matters now–and what gets Americans prizes–is apologizing on behalf of your country for not being complacent socialists. Meanwhile, Europeans continue to harbor dreams of living the good life in America. Congratulations, Mr. Krugman!

Rachel Sklar of the Huffington Post has launched an attack on those who criticized Newsweek last week for its decision to run a cover photo of Sarah Palin in extreme closeup without the benefit of retouching. “Let’s just state for the record that we’re in crazyland at the outset.,” Sklar writes.

Let me explain what “retouching” is, for those who have yet to learn how to do it yourself with digital photo programs. News photographs are taken by high-speed cameras; those photographers capture dozens and dozens of images for every single one used. The cameras, which magnify, capture distracting and unflattering aspects of everyone — a weird grimace, an eye half-rolled up. In the case of photographs of women, they capture facial inconsistencies even through make-up — a stray hair growing in an unflattering place, a pitted cheek.

The retouching of photos is almost precisely analogous to the experience everyone has when he goes on television — makeup, often very heavy makeup, is used to offset the unflattering aspects of TV studio lighting. A man’s bald pate is patted down with powder to make sure it doesn’t shine. Everyone has his hair brushed and even teased. Women often get the full blow-dryer treatment and a form of spray-on makeup that is called (just like photo retouching) “air-brushing.”

The Palin image on the cover of Newsweek captures skin mottles and hairs she had not yet plucked from her lip.  The editorial purpose of not doing the standard work of retouching is to show “the real Sarah Palin” — and since Newsweek’s editorial package is extremely unflattering, so is the photograph. It is, therefore, an intentional effort to uglify her. And pointing that out is not “crazyland,” as Ms. Sklar thinks it is.

But if she is so sure, then I have this challenge for her. Rachel Sklar does a lot of television. I think she should go on television without any makeup on. For several weeks, she should appear without makeup or hairstyling help, until the number of people who see her equals the number who will see Sarah Palin on the cover of Newsweek in every airport and newsstand in the country.  Oh, and run an unretouched photo of herself, in extreme closeup and in ful size, with her column. And then come back and tell us how it was for her.

Hamas has told Israel that it expects a higher reward for the release of Gilad Shalit than previously discussed. The reason given? Israel released Samir Kuntar in its deal with Hezbollah to return home the bodies of two Israeli reservists last spring. Hamas now expect the same standards to be applied to its own prisoner deal. Shocker! Who would have guessed?

The truth is, this development was entirely predictable and in line with the ways of the region. No matter how tragic the plight of Goldwasser and Regev’s families was, the Israeli government in all likelihood knew that the two kidnapped reservists were dead. By giving away such a high price for two dead soldiers, Israel has made it incredibly more costly to free a living one. I am not sure how this predicament reflects the application of the code of conduct of Israel’s Defence Forces, but given the code’s emphasis on the sanctity of human life, it seems safe to suggest that freeing Shalit should always been a priority for Israel’s government. It is a sad indication of where things stand in Israel today that this government has just made it more difficult for itself to fulfil the principles it purportedly claims to uphold.

Ehud Barak of the Israeli Labor Party has made his choice. And it was not an easy one. As I wrote here a couple of weeks ago, Barak has a long-term interest in destroying the Kadima Party before it destroys Labor. But, as I also mentioned, “the politics of the day might dictate all kinds of decisions”–and this time, for Barak, it was the decision to join Tzipi Livni’s coalition:

Barak’s associates said their major achievements pertain to the defense minister’s role in the next government and to the level of control he will be exercising on key issues, including diplomatic contacts with the Syrians and Palestinians.

Whether this can be considered an achievement is a matter of debate. One might easily argue that every Defense Minister in every government has a de facto high level of control when such issues are under discussion. All Barak got was the formalization of this control. But with it, he also got his next headache: if Barak cooperates with Livni in advancing the peace process, it will be easier for his political rivals to make two arguments: 1) That Livni is as good as Barak–hence, there’s no need to elect him (and Labor), or 2) That Barak, like Livni, represents the agenda of the Left–hence, the people wanting to see a more hawkish political agenda need to vote for other parties. If Barak chooses the other way, and battles Livni over peace initiatives, he will also have a problem: Within the dovish camp he might be seen as the wrong leader, and Livni may well be the candidate of the Left when elections are called.

Having said all that, it is clear that by joining the coalition Barak did not solve any of his political problems, but rather decided to play for time. The core problem Labor now faces is this: When Kadima was formed, it was assumed that the centrist Party would make life difficult for the hawkish Likud (after all, Kadima was formed first and foremost by and for Likud’s Ariel Sharon). But with time it appears that Likud was able to maintain its identity–by staying out of the government–while Labor has become the party most closely identified with the creation of Kadima:

Labor no longer has any message that makes it unique in the public’s eyes; it has no flag to fly for voters to see. Kadima has robbed it of the rubric of security activism accompanied by diplomatic moderation, and has positioned itself as the party that favors negotiations, as opposed to Likud, which opposes the peace process. Ehud Olmert’s declarations in an interview with [the paper] Yedioth Ahronoth, in which he called for a withdrawal from all the territories, were more far-reaching than most statements made by Labor’s leaders. Labor cannot present a more left-leaning agenda.

The game now moves to another field: the one of the religious Shas Party. If Shas joins the coalition, it will face growing pressures from the Right over the real or imagined concessions the government will be making in the peace process. Likud leader Binyamin Netanyahu visited rabbi Ovadiya Yosef of Shas today and tried to convince him to stay out of the forming coalition. If Shas stays out, this will be a left-leaning coalition, a problem both for Livni and Barak. They do not want to be seen as the politicians of concessions without having the political cover of Shas. Is Shas goes in, Likud will go after its voters, trying to make them either restless (thus, forcing their leaders out), or abandon ship (thus, making Likud much stronger in the next round of election).

In the meantime, Shas is very insistent:

The Shas representatives told their counterparts in Kadima that the party opposes any negotiations on Jerusalem in any way, shape or form and will not sit in a government that has on its agenda diplomatic talks on Jerusalem.

This will be quite difficult to achieve in a Livni-Barak government committed to the Annapolis process. Thus, what’s true for Barak is now true for Shas. Its leaders can either stay out of the government in the hope that a new election round will be called, or play for time: Join the government now, and leave it later, when political pressures mount to an unbearable level.

Taking all these pressures and calculations into account–and whatever Shas decides to do–it’s quite easy to reach one last conclusion. The Livni government will also have one of two choices: being active politically but unstable, or playing for time, like everybody else. Livni can only survive for the next two years (as she pledges to do) by being very careful in handling the delicate peace talks. Complains from all quarters (starting with the Palestinians) are likely to follow.

I just watched Neel Kashkari, the Treasury guru in charge of the multi-facted rescue effort, explain on CNBC what is going on and what the government is up to. A couple of points are clear: the purchase/auction of mortgage-backed securities, which was at the heart of the bailout, is only one of many tools. Itseems to be receding in importance. The emphasis now is clearly on the direct purchase of equity in financial institutions. And second, they haven’t really begun to do anything. It is a massive task to build the rules, gather information, and staff up seven different groups charged with everything from homeownership preservation plans to government oversight. It  is not surprising that the markets haven’t reacted, since we are not yet out of the start-up phase.

Bottom line: There are a lot of very smart people trying lots of different things. The goal is to loosen credit and restore confidence. And there is reason to believe the coordinated efforts of the European banks in cutting rates and pursuing parallel plans to take equity stakes in banks may help. But make no mistake: This will take a long time to get up and running.

Mark Steyn waxes: “But, if the combination of gazillions of dollars in illegal foreign donations, Acorn’s Dig-Up-The-Vote operation, a doting media that would embarrass Kim Jong-Il and the Republican nominee’s inability even to speak up on issues where he was right all along (like Fannie Mae), if all that is now unstoppable, I will be proud to have lost with Sarah Palin, who (unlike Brooks and Buckley) runs a state bigger than most European Union nations, has fought an honorable campaign, and has been responsible for such energy and enthusiasm as the ticket can muster.” I can see the bumper stickers now: ” Don’t blame me–I voted for Palin.”

The Ayers story slowly gains traction — if Barack Obama ever gave a complete account nof their relationship and stuck with it the story might fade but the shiftiness only fuels speculation.

GOP angst about the McCain team is bubbling over: make character an issue or don’t, come up with a comprehensive economic plan or don’t. It’s the indecision and half-heartedness that are so frustrating. Few would quibble with Bill Kristol’s assessment that “it’s really become a pathetic campaign in the sense that there’s no strategy.” (It’s tempting to go one step further and “fire the campaign.”)

Scott Johnson argues that we should take Barack Obama’s dovish national security pronouncements seriously — and that McCain should highlight them.

Ben Smith fairly explains that the nastiness isn’t only on one side. And why isn’t it that the most vile slurs against Palin don’t generate a raft of “hatred against women” stories?

In case you didn’t think his on-screen behavior was objectionable enough, now Chris Matthews is using his MSNBC beat to test run his Senate campaign while in Pennsylvannia. Enough already.

One way of looking at it: “It seems odd that the people of Minnesota would infer from an economic crisis that they should send a baggy pants comedian to the Senate, but I suppose a panic consists, in part, of irrational behavior on a large scale.”

McCain finally finds the “divided government” argument. It’s a compelling one for Independents who don’t trust either party and have seen Nancy Pelosi in action.

Sarah Palin has a wig named after her — at Sheitel.com, no less.

As the race card pops up in campaign coverage once more, it might be worth mulling whether “there is something incongruous in examining the racism in a group that plans on voting more than 40 percent for a candidate of a different color, while ignoring a bloc expected to vote within its color lines almost exclusively.” It is hard to comprehend why allegations concerning Obamas ties to a white domestic terrorist couple or the corrupt, fraud-soaked ACORN have anything to do with race — unless of course the standard is that any criticism of Obama amounts to racism.

I’m not alone in surmising that McCain’s campaign isn’t about anything because he has no core governing philosophy: “He’s been running for president, more on than off, for almost a decade, but his determination hasn’t had much to do with a highly defined ideology, program or set of policies. What underlies his ambition are values: service, patriotism, duty, honor.” That’s all well and good, except if the country needs a defined ideology, program or set of policies to guide us through an economic trauma.

What the heck is McCain still doing in Iowa? If he wanted to campaign in a state with a double-digit deficit, he could have stayed in Michigan and avoided some awful press.

Barack Obama certainly has a genius for picking political opponents. First, Hillary Clinton chose “experience” over “change” as a theme and sat atop the most dysfunctional presidential campaign ever seen. She didn’t hone in on Reverend Wright nor plan for post-February 5 primaries. She didn’t organize caucus states. When she finally got her act together and a theme — fighting for the little guy with a robust economic plan — it was too late.

Then along comes John McCain. For awhile he runs on biography. Then he comes up with some clever ads to debunk Obama’s popularity and fixes on energy policy. But he doesn’t hone in on Reverend Wright and lets the summer and all of September pass before Bill Ayers, ACORN and the rest of the Obama three-ring Leftist circus make an appearance. Like Clinton, he waits political eons to come up with an overarching economic message ( we are promised one this week). In the meantime he goes to war with the media (Steve Schmidt sounds eerily like Howard Wolfson yelling at the media to do their job), but not personally with his opponent.

Is there some political stun-gun which Obama uses to numb his opponents? It is hard to fathom how not just one, but two opponents could be so haphazard in their approach. Maybe both Hillary and McCain couldn’t in their heart of hearts believe the American people in their infinite wisdom would take seriously an inexperienced, far-Left neophyte with an aversion to specific policy recommendations for very serious problems. But if so, they severely underestimated voters and their willingness to extend him the benefit of the doubt and to accept the most minimal descriptions of both his past affiliations and future plans.

In the case of McCain, we are told over and over again that no matter what McCain did it was an impossible year for a Republican, made more impossible by the financial meltdown. That might be the case. But regardless of the poll numbers no one can look at the McCain effort and say “You can’t fault them for lack of a creative vision!” Or, “They sure set out a viable game plan and executed it with gusto!” Certainly, you can fault the “campaign” — a group of advisors, consultants and staff people. But ultimately the blame — just as it did with Hillary Clinton — rests with the candidate.

It is hard to know what to make of John McCain’s pep talk before Virginia supporters and staff. He is going to “whip” Barack Obama at the next debate, but “respects” Obama. And “the people want knowledge and they want vision”? Oh heck, McCain’ll give “that to America.” (Which – the knowledge or the vision?) Meanwhile, Sen. Lindsey Graham promises some more economic plans are on the way — a “comprehensive economic approach.”

It would be nice to believe that in the bottom of the ninth with two outs McCain will come to bat and hit one out of the park — drilling Obama on his troubling associations and truthfulness about the same, on Democrats’ responsibility for sheltering Freddie Mac and Fannie Mae, and on Obama’s plans for a tax increase in a recession/depression. A “comprehensive economic appraoch” from McCain would be delightful.

Yet the obvious question arises: is it too late, all too haphazard and scattered? At some point it becomes exhausting if not comical. It would have been nice had all of this determination and focus emerged a month or so ago. Voters might have been more receptive to his message. And the first two debates might have helped narrow, rather than cement, the gap in the polls. Still, if we are going to see all this, the last few weeks of the race might be less depressing for Republicans than the previous three.