WP: On Economy, Unlikely Allies Forge Winning Strategy

The relationship between Treasury Secretary Henry M Paulson Jr. and Massachusetts Rep. Barney Frank is about to be tested. Frank, along with Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.), is championing Washington’s most aggressive response to the rising tide of foreclosures that has dragged down the nation’s economy — a $300 billion plan to help thousands of distressed homeowners. The White House has declared its opposition to the bill. But Frank plans to tie it to some of the administration’s top housing priorities in hope that Paulson will help him push the package across the president’s desk, reports Lori Montgomery and David Cho:

WALL ST JOURNAL: PREPARE FOR MORE ECONOMIC PAIN

The worst of the financial pain may have passed, but the economic pain could be just starting.

The nation’s financial markets have rallied since early March, with stocks up and yields on risky corporate and mortgage-backed bonds falling relative to safe U.S. Treasurys. Optimists got an added boost Friday from a government report that U.S. unemployment fell in April.

But history suggests celebration may be premature. It’s common in a crisis for markets to hit bottom long before the economy does. That’s because markets are forward-looking and because economic weakness is the way the underlying imbalances that produced a crisis are corrected.

“The financial crisis is usually an expression of broader problems in the economy,” says Harvard University economist Kenneth Rogoff, who along with Carmen Reinhart of the University of Maryland, recently wrote a history of financial crises back to the 1300s. “It’s a mechanism that exacerbates and deepens the recession, but it’s seldom the trigger.”

WATCH: ANOTHER PROTEST AT BEAR STEARNS

NEW REPUBLIC QUESTIONS HOME OWNERSHIP MANIA

n the midst of the subprime crisis, there’s an important question that analysts and policymakers have neglected: Did so many people need to own homes in the first place? The dream of home ownership has long been part of the American experience, but, as the federal government steps in to artificially support borrowers and lenders with tax credits that encourage more spending or with public spending that keeps over-indebted borrowers in unaffordable homes, we ought to consider whether it’s time to wake up from that dream.

Indeed, we ought to consider what role the federal government has played in creating this mess. By stimulating home ownership while failing to account for the reasons home ownership is valuable to society, Washington has simply sought to buy our votes with our own debt. As the subprime crisis accelerates and threatens to spread through prime and near-prime markets, policymakers face a watershed moment. To keep us from an economic nightmare, they need to replace the dream of home ownership with policies that actually increase wealth — not just the illusion of it.

FALLOUT FROM FINANCIAL CRISIS:

Fiscal Pressures Lead Some States to Free Inmates Early

WP: NEW YORK — Reversing decades of tough-on-crime policies, including mandatory minimum prison sentences for some drug offenders, many cash-strapped states are embracing a view once dismissed as dangerously naive: It costs far less to let some felons go free than to keep them locked up.

POLITICS ON THE EVE OF THE NC AND INDIANA PRIMARIES

ZOGBY POLL: Obama Leads by 8 Points in NC; Race Still Very Tight in Indiana Undecideds in both states remain high, as likely voters wait for last minute to commit to Clinton or Obama:

MARK CRISPIN MILLER ON BALLOT PURGES IN INDIANA—

In April 2008 when Indiana Secretary of State Todd Rokita announced the release of “record high” voter registration rolls, with 4.3 million voters set to vote in the Tuesday May 6 primary, he didn’t mention that a whopping 1,134,427 voter registrations have been cancelled.

Now, the voter rolls are supposed to be tidied up prior to each election. Indiana’s last general election was in Nov. 2006, and they have had a slew of special and general elections since then. So how
have 1.1 million voters — 26 percent of the current statewide list — escaped the voter registration cleanup squad? Who are these million voters and where do they come from?

One quarter-million of them come from just two northwestern Indiana counties: Lake and Porter. Lake County reports purging 137,164 voters and neighboring Porter County cancelled out 124,958 voters.

Lake County, the home of Gary, Indiana, has spawned the Jackson Five and a great old musical (The Music Man) and has been referred to as “the second most liberal county in America.” Lake County also has one of the heaviest concentrations of African-American voters that you’ll find anywhere in the USA.”

Hmmmmmmmm?

ELECTIONS AND MEDIA

HOWARD KURTZ-WP: OBAMA’S CHILLY SPRING

The man who tried to soar above politics has been brought back to earth by the same media organizations that helped fuel his spectacular rise. After more than a year of mostly glowing coverage, Barack Obama is having to defend his relationship with the Rev. Jeremiah Wright, his temerity in not sporting a flag pin, even his arugula-loving, bad-bowling, let-me-eat-my-waffle persona that fostered what Newsweek has branded “the Bubba Gap.” “The media have decided to get tougher on Obama,” says St. Petersburg Times media critic Eric Deggans. “There was so much talk about him getting such an easy ride that some journalists got tired of it.” When the Illinois senator denounced his former pastor last week, it followed days of saturation coverage of Wright’s inflammatory, sometimes eccentric remarks. The press, which was slow to recognize the importance of the Wright controversy — videotapes of his sermons could have been purchased months earlier — was no longer willing to dismiss the reverend as a sideshow.

Still, says David Greenberg, a Rutgers University professor of journalism and history, the coverage could be far worse. For journalists, he says, “there has been a real infatuation with Obama that has served as almost an unconscious restraint” as many became “taken with the idea of demonstrating their tolerance and America’s tolerance by electing a black candidate.”

ANDREW TYNDALL HAS MORE ON MEDIA TURN ON OBAMA

Now, if Obama wins, it will be despite his coverage in the mainstream media, not because of it.

Proof comes from Tyndall Report’s analysis of the most mainstream of the mainstream media, the broadcast networks’ weekday nightly newscasts. In April, the tone of the coverage of Barack Obama and Hillary Rodham Clinton was roughly equally negative–but Obama suffered twice as much of it.

It is easy to trace the gradual spread of negative questions about Obama’s candidacy. They started on YouTube with soundbites from sermons from his longtime pastor Jeremiah Wright. Those clips spread to cable with Fox News Channel in the vanguard. Then Obama’s reference to bitter and clinging small town voters surfaced in The Huffington Post’s own Off the Bus section. They were all wrapped up together on ABC News’ so-called Gotcha Debate in Philadelphia with its notorious first 45 minutes of issue-free questioning.

What is notable is that April was officially the month when these themes finally crossed over to the mainstream media, to those most risk-averse venues for establishment journalism, the broadcast network news. When Barack Obama had a thoroughgoing negative month on the evening newscasts then he can by no stretch be dubbed a media darling. CBS’ Dean Reynolds stated it flatly as he rounded out his network’s coverage on the last day of April: “Obama’s campaign has had a rough spell, from his big loss in Pennsylvania to the reemergence of his outspoken former pastor.”

AD AGE: OBAMA TAKES STAR TURN IN REPUBLICAN ADS

[Commentary] Barack Obama’s campaign has spent more than $70 million to air more than 121,000 campaign ads. But the ads starring Obama that his campaign is not paying for are attracting the most attention. Recently, we have seen candidates, interest groups and a state political party all using Obama’s quotes, pastor and likeness in an attempt to attack their opponents. This is nothing new. As long as there have been politicians, they’ve tried to link their opponents, in a game of guilt by association, to identifiable and polarizing political figures. What this trend shows is that the “movement” atmosphere that once surrounded Obama and made him appear untouchable has now seemingly disappeared, at least in some parts of the country. Conservative candidates, the Republican party and right-wing interest groups are not going to hesitate to use Obama’s likeness as a way to denounce and triangulate Democratic opponents. This may be something Democratic super delegates consider when deciding which candidate to support. Of course, the bad news for John McCain and the Republicans is that Democrats will still have Bush and Cheney to counter with in ads this Fall.

Pew Research Center for the People & the Press: Gen Dems: The Party’s Advantage Among Young Voters Widens

Trends in the opinions of America’s youngest voters are often a barometer of shifting political winds. And that appears to be the case in 2008. The current generation of young voters, who came of age during the George W. Bush years, is leading the way in giving the Democrats a wide advantage in party identification, just as the previous generation of young people who grew up in the Reagan years — Generation X — fueled the Republican surge of the mid-1990’s.

In surveys conducted between October 2007 and March 2008, 58% of voters under age 30 identified or leaned
toward the Democratic Party, compared with 33% who identified or leaned toward the GOP. The Democratic
Party’s current lead in party identification among young voters has more than doubled since the 2004 campaign,
from 11 points to 25 points.

THE MONITORS OF NEWSHOUNDS REPORT: WHAT FOX NEWS IS COVERING

Melanie: On April 28, Neil Cavuto - speaking about Barack Obama - guaranteed that the Reverend Jeremiah Wright would be “the gift that keeps giving.”
http://tinyurl.com/3sqbgs

- The next day Cavuto implied that the right would scrounge for dirt on Obama even if it had to interview the 6,000 congregants in Obama’s church.
http://tinyurl.com/52h4lv

Donna: Little mention was made of the Republicans in the story of the DC Madam’s suicide last week. We can be sure that if Democrats had been named, this story would go on forever.
http://tinyurl.com/5b2mqe

After weeks of covering Reverend Wright on Studio B, I did this article saying that the story was, in fact boring. The next show had no mention of Reverend Wright. Was Fox worried that boring = ratings?