AP - The now-bankrupt investment bank Lehman Brothers arranged millions in bonuses for fired executives as it pleaded for a federal lifeline, lawmakers learned Monday, as Congress began investigating what went so wrong on Wall Street to prompt a $700 billion government bailout.

AP - The two men who supposedly exemplified a different kind of politics are engaged in an increasingly bitter campaign as character attacks are emerging to compete with issues like the troubled economy.

AP - The government's $700 billion rescue, aimed at rebuilding economic confidence, appeared to sound a global alarm instead on Monday, triggering a fearful international sell-off as the U.S. began work on a plan that investors feared would be too little and too late to stave off a worldwide recession.

AP - Republican vice presidential candidate Sarah Palin expanded her attack on Democrat Barack Obama's character Monday to include his relationship with an incendiary former pastor as well as his ties to 1960s-era radical Bill Ayers.

AP - As a state senator, Democrat Barack Obama awarded $75,000 in government grants to a Chicago social service organization led by a rabbi who is also his wife's cousin, records show.

AP - An unemployed man with an advanced finance degree who was despondent over his own financial problems shot and killed his wife, three children, mother-in-law and then himself in an upscale home in a gated community, police said Monday.

AP - R. Kelly has won a $3.4 million award against his former tour promoter and is asking a Los Angeles judge to help him collect.

AP - B.J. Upton and these Tampa Bay Rays are headed home — to get ready for the American League championship series.

Reuters - Stocks slid for a fourth straight day on Monday, leaving the Dow below 10,000 for the first time in four years, on fears the global economy was hurtling into recession despite government efforts to contain the fast-spreading financial crisis.

Reuters - Governments around the world scrambled for new measures to contain the fast-spreading credit crisis as stock, bond and commodity markets bet on deepening uncertainty and a sharp downturn.

Reuters - Bank of America Corp, citing "recessionary conditions," on Monday halved its dividend and said it would sell at least $10 billion in new common stock to bolster its capital to offset rising loan losses.

Reuters - Republican John McCain and Democrat Barack Obama warmed up on Monday for a potentially crucial debate by unleashing another volley of personal attacks on each other's character in an increasingly ugly White House race.

Reuters - Wells Fargo & Co and Citigroup Inc agreed on Monday to a 44-hour truce in their fight over regional bank Wachovia Corp after a weekend of legal wrangling.

by Frank James

Treasury Secretary Henry Paulson Jr., who's bald pate has become a fixture on our TV screens in recent weeks, has tapped his similarly bald protege Neel Kashkari as bailout czar.

Kashkari, like Paulson, is a former Goldman Sachs investment banker, as well. And it's impressive that so much trust is being placed in the 35 year old assistant Treasury secretary for international affairs.

Here's an excerpt from the Wall Street Journal's story on Kashkari:

Mr. Kashkari, 35 years old, a Treasury assistant secretary for international affairs and a former Goldman Sachs Group Inc. banker, is expected to be named interim head of Treasury's new Office of Financial Stability as early as Monday. The position confers substantial power on Mr. Kashkari, who will oversee Treasury's effort to buy bad loans and other distressed securities clogging the books of financial institutions and making them reluctant to lend...

Mr. Kashkari originally trained as an aerospace engineer and worked on developing technology for NASA before earning an MBA at the University of Pennsylvania's Wharton School. He spent much of his tenure at Treasury helping Mr. Paulson stem the fallout from the housing correction. He helped implement an alliance of mortgage-industry players who joined last year to help homeowners in danger of foreclosure.

Mr. Kashkari was part of the Treasury team that negotiated the asset-repurchase program with Congress, putting in marathon sessions along with Robert Hoyt, Treasury's general counsel, and Kevin Fromer, the head of legislative affairs. He was also one of the originators of the plan. Last year, he and Phillip Swagel, assistant secretary for economic policy, crafted a proposal called "break the glass" -- referring to the emergency nature of using such a tool -- which envisioned Treasury buying bad loans and other assets.

Can hardly wait for Kashkari to appear before Congress so we can hear more details on the toxic-asset purchase plan.

Meanwhile, the Treasury Department issued guidelines for its selection of asset managers. as well as guidelines for an area that has many critics of the program concerned, the potential for conflicts of interest.

by Frank James

Sen. John McCain continued his try and sow seeds of doubt about Sen. Barack Obama in voters' minds. He was doing so much sowing in Albuquerque, New Mexico he was a veritable Johnny Appleseed of questions about Obama, indignantly asking not only where his rival came from but where he would lead the country.

It was pretty hard-hitting and if it was any indication of what we can expect tomorrow at the second presidential debate, then that event has the potential to be pretty heated.

Here's some of what McCain said:

SEN. MCCAIN: My friends, I set out on my own campaign for president many months ago. I promised at the beginning to be straight with the American people, knowing that even those who don't agree with me on everything would expect at least that much. I didn't just show up out of nowhere. (Cheers.) After all, America knows me. You know my strengths and my faults. You know my story and my convictions....

There are essential things we don't know about Senator Obama or the record that he brings to this campaign. (Cheers, applause.)

You know, we've -- we've all heard what he's said, but it's less clear what he's done or what he will do. (Cheers, applause.) What Senator Obama says today and what he's done in the past are often two different things. (Shouts from the audience.) He's often changed his positions in this campaign, and the best way to determine where he would really take this country is to examine where he has tried to take it in the past. (Shouts from the audience.)

My opponent has invited serious questioning by announcing a few weeks ago that he would, quote, "Take off the gloves." Since then, whenever I've questioned his policies or his record, he's called me a liar. Rather -- (booing) -- rather than answer his critics, Senator Obama will try to distract you from noticing that he never answers the serious and legitimate questions he's been -- (cheers, applause) -- but let -- let me reply in the plainest terms that I know. I don't need lessons about telling the truth to American people. (Cheers.) And were I ever to need any improvement in that regard, I probably wouldn't seek advice from a Chicago politician. (Cheers, applause.)

You know, my opponent's touchiness every time he's questioned about his record should make us only more concerned. For a guy who's already authored two memoirs, he's not exactly an open book. (Laughter, cheers, applause.) You know, it's -- it's as if somehow the usual rules don't apply, and where other candidates have to explain themselves and their records, Senator Obama seems to think he's above all that. Whatever the question, whatever the issue, there's always a back story with Senator Obama. All people want to know is: What has this man ever actually accomplished in government' (Cheers, applause, shouts.)

AUDIENCE MEMBER: Zero!

SEN. MCCAIN: What -- what does he plan for America'

AUDIENCE MEMBER: Zero!

SEN. MCCAIN: In short: Who is the -- who is the real Barack Obama'

You might think that a candidate whose performance has been described as erratic and unpredictable (i.e. the off and on campaign gambit and the Sarah Palin gambit) might be tread lightly when trying to cast his opponent as the risky one, but you would be wrong.

If anyone has seemed the more predictable of the candidates, Obama has. That has been one of the true paradoxes of the campaign. The younger less known candidate is the one who hasn't pulled any surprises while McCain has caused a lot of people to wonder if they really know him, to ask effectively "Who is the real John McCain'"

Anyway, that kind of observation messes up the narrative the McCain campaign is trying to lay down in this final 30-day stretch before the election.

So even though we observers of the McCain campaign are never sure where the McCain campaign is going to take us in any given week, expect to hear much more from McCain that it's Obama who is real variable in this race.

by Mark Silva

Last week's televised debate between Sarah Palin and Joe Biden may have been one of the best-watched ever, but apparently it didn't change too many minds about Palin.

While most voters surveyed hold a favorable view of Palin, the Republican vice presidential nominee, most also say that she is not qualified to serve as president, should that situation present itself - 52 percent said no in a Pew Research Center survey conducted over the weekend among people who had been surveyed before the debate. Basically the same number that said so before the debate.

Joe Biden, on the other hand, apparently did himself some good in the one vice presidential debate. The numbers holding a favorable view of the Democratic vice presidential nominee climbed from 54 to 63 percent after the debate - and the percentage of those surveyed saying that Biden is qualified to serve as president rose from 69 to 77 percent.

The new survey of 710 registered voters who had been interviewed the week before was conducted Friday through Sunday. . The survey also found that congressional passage of the financial market bailout on Friday did nothing to increase public support for it. "Overall, people who were interviewed over the weekend are even more divided as to whether this is the right thing or the wrong thing for the government to be doing (42 percent right thing vs. 39 percent wrong thing),'' Pew's Andy Kohut reports. "In the Sept. 27-29 survey, 45 percent said it was right for the government to invest billions of dollars to try to secure financial markets and institutions, while 38 percent said it was the wrong thing.'' Forty-one percent of all households tuned into the vice presidential debate, Nielsen has found - the second-most-watched of any presidential or vice presidential debate. And today, Nielsen reports that 61 percent of all households have watched at least one of the debates so far - the first one between presidential nominees Barack Obama and John McCain or the only one between Palin and Biden. Nielsen also has found that 30 percent tuned in to both debates. Older viewers, those 55 and older, accounted for the largest share of both debate audiences - 42 and 36 percent. The Biden-Palin debate, with its much larger audience (69.9 million watching, versus 52 million for Obama-McCain) drew a slightly younger audience - with a median age of 52, versus the median of 54 for Obama-McCain.

The second of three presidential debates comes Tuesday night, at 9 pm EDT.

by Frank James

Dave Mendell, a reporter who once covered Sen. Barack Obama and wrote the first biography of the Democratic presidential nominee, writes on the "Run-Up blog about the McCain campaign's use of fear-mongering:

As the first biographer of Barack Obama, I have often found myself in a position where few journalists find comfort: defending the honor of a politician.

Yet, over the past 14 months, ever since the release of my biography of Obama, I have fielded countless questions about Obama that clearly have been based in ugly racial or religious distortion, and I have felt it my obligation to help set the record straight. In doing so, occasionally I have been accused of being an Obama sympathizer. But if that's the price of spreading the truth, so be it.

On Saturday, Republican vice presidential candidate Sarah Palin accused Obama of "palling around with terrorists," a reference to Obama's acquaintance with Bill Ayers, a former member of the Vietnam War-era militant Weather Underground. This Swift Boat-style smear attack has been going on against him for more than year--but until now, we've just never heard it directly from the mouth of a political opponent.

"Senator McCain and his operatives are gambling that he can distract you with smears rather than talk to you about substance," Obama responded.

At the risk of being accused again of Obama partisanship, I must say that there's some truth in Obama's response. An underground effort to turn Obama into something he is not, to frighten Americans about a Manchurian candidacy, has been in place for some time. Fear, after all, is the most basic of human emotions, and political operatives have long used the power of fear to win elections, often with great success...

But a word to McCain's strategists: I think that any sustained effort to de-Christianize or de-Americanize Obama eventually will backfire. I believe that, deep down, Americans want to cast their votes not on fear, but on knowledge. Particularly at this precarious moment in our history, when we are staring at the potential collapse of the country's economic system, I have to think that voters will grow just as weary of these kinds of distortions as I have.

by Frank James

Richard Fuld, former chief executive officer of the extinct Lehman Brothers investment bank was on Capitol Hill today to answer questions about the demise of his firm and the huge pay packages he and other top executives received before Lehman filed bankruptcy.

What did Fuld say' Mistakes were made but not so much by him. Rather, he made investors who made bets against his company by short selling its shares the villains of the piece.

Fuld did say he wakes up in the middle of night to ask what he could have done differently to save the company. He also said he would be haunted by the fall of the House of Lehman for the rest of his life.

When House Democrats questioned why Lehman didn't get federal help to stay afloat like AIG for instance, Fuld indicated he shared that question.

But he pushed back numerous times. When Rep. Henry Waxman, chairman of the House Oversight and Government reform committee, asserted that Fuld received $500 million between 2000 and 2008 in compensation, Fuld didn't agree with that number, saying Waxman had overstated what he received in options.

He also pointed out that he didn't receive a golden parachute, didn't have a contract which guaranteed a payout on his exit and had millions of shares that weren't worth much on the day Lehman closed his doors. Wisely, he said he wasn't seeking the committee's sympathy and none was given.

There were a lot of questions from House members on why Fuld was telling investors even in the days before his company filed for bankruptcy protection that Lehman's capital position was strong.

His answer' Lehman's position was strong when he made such assertions. He gave a very technical answer to explain why this was so.

But lawmakers didn't buy his explanation. They read internal Lehman e-mails and memos which suggested that other of the company's executives were concerned about the Lehman's deteriorating financial position even if Fuld wasn't.

One of the most interesting lines of questioning was raised by Rep. Dennis Kucinich, the Ohio Democrat, who suggested in his questioning that Treasury Secretary Henry Paulson Jr., Goldman Sachs' former chief executive, might have allowed Lehman to go under as a favor to his old firm.

Fuld said he certainly hoped that wasn't the case but it probably wan't the first time that thought had crossed his mind.

by James Oliphant

According to the Hotline, a Florida county sheriff introducing GOP running mate Sarah Palin made sure the crowd knew Barack Obama's middle name.

"On Nov. 4, let's leave Barack Hussein Obama wondering what happened," Lee County Sheriff Mike Scott told the crowd at Germain Arena in Estero, Fla.

Palin apparently was not present when Scott made his remarks. She was at a fundraiser in Naples.

And NPR reports:

McCain rejected the pejorative use of Barack Obama's middle name after an Ohio radio host derisively used it during a McCain warm-up act back in February. Now that it's October, the stakes are much higher. Nonetheless, the campaign immediately sought to distance itself from Sheriff Scott's Hussein-ing.

Spokeswoman Tracey Schmitt responds, "We do not condone this inappropriate rhetoric, which distracts from the real questions of judgment, character and experience that voters will base their decisions on this November."

by Frank James

The Republican National Committee has been making noises for days about alleged political contributions from foreign nationals to the Obama campaign. That would be illegal if it happened and, of course, these charges are only that at this point.

Today, the RNC pulled the trigger on a complaint to the Federal Elections Commission.

Here's the release in which they announced their action:

RNC FILES FEC COMPLAINT AGAINST OBAMA CAMPAIGN

WASHINGTON - The Republican National Committee (RNC) today filed a complaint with the Federal Election Commission (FEC) against the Obama for America campaign addressing it's acceptance of foreign national and excessive contributions. The complaint demonstrates that the Obama campaign has failed to comply with federal campaign finance law in its fundraising. RNC Chief Counsel Sean Cairncross released the following statement today concerning the complaint:

"We believe Obama for America has knowingly accepted excessive contributions and donations from foreign nationals, and has failed to take the necessary remedial action required by law. We see this as a wide-scale problem and it appears the Obama campaign may be in substantial noncompliance with federal campaign finance laws. Barack Obama broke his word to the American people and refused to accept public financing, and now his campaign appears to be disregarding the rules and laws that govern federal campaigns. Senator Obama routinely mentions the word 'change' on the campaign trail, yet it seems the only changes he supports are ones that personally benefit his own political aspirations."

by John McCormick

ASHEVILLE, N.C. -- Sen. Barack Obama briefly ventured out from his presidential debate preparations a short while ago to offer some remarks on today's falling financial markets and take a few swings at his rival, Sen. John McCain.

"We woke up this morning and saw the markets are still in turmoil. Not only are we seeing the stock market go down but there is still great danger of the credit markets not responding and the contagion is spreading to all parts of the globe," Obama said, standing in a parking lot just outside the Vanderbilt Wing of The Grove Park Inn Resort & Spa.

"Europe is having some of the same problems....It is a reminder that the rescue package that was passed last week is not the end of our efforts to deal with the economy, it's just the beginning," Obama said. "I think it is very important for Secretary Paulson and Federal Reserve Chairman Bernanke to move swiftly and try to restore confidence as quickly as possible, and effectuate the plans based on the authority that has been given to them by Congress."

According to the pool report of his brief statement to reporters, Obama also called for an economic stimulus package that would "provide people with some relief from high gas prices, food prices, help state and local governments maintain their payrolls."

The Illinois Democrat said unemployment insurance should also be extended.

"We're going to have to then, move on an aggressive plan to deal with some of the underlying structural problems in the economy including the housing market," he said. "Now Sen. McCain and I have a debate tomorrow and obviously the American people are going to be anxious to hear from one of the two people that is going to be the next president and responsible for dealing with these economic problems and hear what their plans are."

Then, he went on the offensive.

"I was a little surprised over the last couple of days to hear Sen. McCain say, or Sen. McCain's campaign say, that we want to turn the page on the discussion of the economy, and a member of Sen. McCain's campaign saying today that if we keep talking about the economic crisis we lose," he said.

"I've got news for the McCain campaign, the American people are losing right now. They're losing their jobs. They're losing their health care. They're losing their homes. They're losing their savings," Obama said. "I can not imagine anything more important to talk about than the economic crisis and the notion that we'd want to brush that aside and engage in the usual political shenanigans and scare tactics that have come to characterize too many political campaigns, I think is not what the American people are looking for. So I'm going to keep on talking about the economy, I'm going to keep on talking about what we can do to strengthen the middle class and get our credit markets to settle down. I have confidence that we can solve this problem but we're not going to solve it with business as usual. We need fundamental change and that's why I'm running for president."

Obama then headed out for some photos and local media coverage at an establishment called the 12 Bones Smokehouse.

by Frank James

If Sen. John McCain's efforts to go after Sen. Barack Obama's character are having any negative effect on the senator from Illinois, it's not yet discernible in the latest Gallup overnight tracking poll which shows the Democratic presidential nominee leading his Republican counterpart by eight percentage points.

Here's what Frank Newport of Gallup writes:

PRINCETON, NJ -- Barack Obama leads John McCain among registered voters across the country by a 50% to 42% margin in Gallup Poll Daily tracking from Oct. 3-5, the tenth straight day in which Obama has held a statistically significant lead.

This ten-day stretch of a significant Obama lead is the longest since he became the presumptive nominee back in early June, and the longest for either candidate at any point in the campaign. (To view the complete trend since March 7, 2008, click here.) Today's result includes interviewing conducted Friday through Sunday, after the Oct. 2 vice presidential debate between Gov. Sarah Palin and Sen. Joe Biden, and after Friday's passage of a revised economic rescue plan to help alleviate the Wall Street financial crisis.

The results suggest that neither of these events had a significant impact on voter preferences.

Looked at broadly, Obama's percent of the vote has been within a very narrow range of 48% to 50% over the last ten days, and McCain's has been within an equally narrow range of 42% of 44% over the same time period. These results suggest that aside from normal sampling error, the underlying dynamics of the race have become quite stable, and underscore the degree to which there has been little meaningful change in the race in well over a week.

by Mark Silva

We may want to tuck this one away in the archives for that day, about two years from now, when people start thinking about the 2012 presidential election.

Women favor Democratic Sen. Hillary Clinton over Republican Gov. Sarah Palin by a margin of about two-to-one, a new poll shows.

Asked about a theoretical match-up between the Democratic senator from New York and the Republican governor from Alaska - though, as long as we're talking about the theoretical here, she could be the Republican vice president in this scenario - 600 women surveyed by an independent pollsgter for SheZoom.com picked Clinton. The national survey carries a potential margin of error of 4 percentage points, and raises a lot more questions as well, such as, why are they even asking this' The pollsters think it says something about the 2008 campaign underway:

"Hillary wins on all counts'' in the various questions posed by the survey, says pollster Mickey Blum, of Blum & Weprin, in a release from SheZoom.com. "When analyzing the data, we looked to see if there were areas in which Palin came out on top. But, on virtually every level, Hillary takes it. I think this primary season, this entire campaign, humanized her. In a lot of ways, she took a beating and kept her grace. And Americans, especially American women, like fighters.

"This poll shows just how much women identify with Hillary,'' Blum says. "Obviously, that's what the McCain campaign was looking to tap into with Sarah Palin. This polls shows that it hasn't worked, at least not yet."

Stacey Artandi, founder and CEO of SheZoom.com, says: "This election season has put two unique women in the spotlight in Sarah Palin and Hillary Clinton. On many measures, they couldn't be more different -- in their ideologies, their styles, and their experiences. Regardless of what happens in the November election, Senator Clinton and Governor Palin have changed the face of the political landscape for women.

"They will remain forces in the future,'' she says. "American women's answers to our questions give a sense of how we perceive Palin and Clinton, how well we relate to them, and perhaps a hint of what's to come."

Blum & Weprin Associates, Inc. is a non-partisan polling firm based in New York and specializing in public opinion polls for the media. Media clients include NY1 News, The Daily News, The New York Times, Newsday, NBC News, and The Dallas Morning News.

SheZoom.com bills itself as "a video website that targets women with a diverse range of programming, seamlessly combining originally produced content with partner and user generated content... Founded by Stacey Artandi, SheZoom provides a forum for women everywhere to share common ground and to showcase their talents.''

by Frank James

Anyone looking for a brilliantly accessible explanation of the turmoil facing the economy and the financial markets should listen to the outstanding explanatory programs done by Chicago Public Radio's "This American Life."

Over the weekend, the second installment of the program's examination of the financial-markets meltdown was aired on many public radio stations across the nation. Called "Another Frightening Show About the Economy" it's invaluable information, containing one of the best explanations of the role financial instruments known as credit-default swaps have in the present crisis.

When you're done with that, either listen to the first installment, "The Giant Pool of Money" which aired in May or read that show's transcript. It explains how earlier this decade a surplus of global investment capital ran out of things in which to invest which led to the "giant pool of money" finding creative and increasingly risky new ways to invest in mortgages.

Here's an excerpt from the first installment that gives a flavor for the reporting in it. Alex Blumberg: This is Glen Pizzolorusso, who was an area sales manager at an outfit called WMC mortgage in upstate New York. Just to repeat, he was making 75 to a 100 grand a month. That's over a million dollars a year. Glen was just out of college. His job was a lot like Mike Garner's, he was the same link in the chain, and Glen loved his job.

Glen Pizzolorusso: What is that movie' Boiler Room' That's what it's like. I mean, it's the cooling thing ever. Cubicle, cubicle, cubicle for 150,000 sq. ft. The ceilings were probably 25 or 30 feet high. The elevator had a big graffiti painting. Big open space. And it was awesome. We lived mortgage. That's all we did. This deal, that deal. How we gonna get it funded' What's the problem with this one' That's all everyone's talking about.

Alex Blumberg: And when Glen wasn't working, he was doing his next favorite thing, spending ... preferably in the company of, and this is his term, b-list celebrities:

Glen Pizzolorusso: We rolled up to Marquee at midnight with a line, 500 people deep out front. Walk right up to the door: Give me my table. Sitting next to Tara Reid and a couple of her friends. Christina Aguilera was doing some, I'm-Christina-Aguilera-and-I'm-gonna-get-up-and-sing kind of thing. Who else was there' Cuba Gooding and that kid from Filthy Rich: Cattle Drive. What was that kids name' Fabian Barabia' We ordered 3, 4 bottles of Cristal at $1000 per bottle.They bring it out, you know they're walking through the crowd, they're holding the bottles over their heads. There's fire crackers, sparklers. You know, the little cocktail waitresses. You know so you order 3 or 4 bottles of those and they're walking through the crowd and everyone's like: Whoa, who's the cool guys' We were the cool guys. They gave me the black card with my name on it. There's probably 10 in existence. You know' And that meant that I spent way too much money there.

Alex Blumberg: Glen had five cars, a 1.5 million dollar vacation house in Connecticut, and penthouse that he rented in Manhattan. And he made all this money making very large loans to very poor people with bad credit. Glen Pizzolorusso: We looked at loans. These people didn't have a pot to piss in. They can barely make a car payment and we're giving them a 300, 400 thousand dollar house.

Alex Blumberg: But Glen didn't worry about whether the loans were good. That's someone else's problem. And this way of thinking thrived at every step of this mortgage security chain. A guy like Mike Francis, from Morgan Stanley, he told me we bought loans, lots of loans, from Glen's company, and he knew in his gut they were bad loans. Like these NINA loans.

Mike Francis: No income no asset loans. That's a liar's loan. We are telling you to lie to us. We're hoping you don't lie. Tell us what you make, tell us what you have in the bank, but we won't verify' We're setting you up to lie. Something about that feels very wrong. It felt wrong way back when and I wish we had never done it. Unfortunately, what happened ... we did it because everyone else was doing it.

Alex Blumberg: It's easy to ignore your gut fear when you are making a fortune in commissions. But Mike had other help in rationalizing what he was doing. Technological help. Mike sat at a desk with six computer screens, connected to millions of dollars worth of fancy analytic software designed by brilliant Ivy league math geniuses hired by his firm, which analyzed all the loans in all the pools that he bought and then sold. And the software, the data ... didn't seem worried at all:

Besides being essential listening, these shows are very entertaining. And scary.

by Mark Silva

Republican vice presidential nominee Sarah Palin may be moving on:

From William Ayers, the Chicago college professor and onetime Sixties radical who has worked alongside Barack Obama in modern-day civic affairs, to the Rev. Jeremiah Wright, the former longtime pastor of Obama's church in Chicago whose incendiary remarks from the pulpit promoted Obama to renounce Wright and leave the church.

Campaigning through Republican strongholds of Gulfcoast Florida today, Palin continued her weekend theme of tying Obama to Ayers, who was a founder of the violent Weather Underground group blamed for several bombings during Vietnam War protests, when Obama was a child. Obama has denounced those activities.

Yet Palin also dialed back the attack today, calling Ayers "a former domestic terrorist.''

And in an interview with conservative New York Times columnist William Kristol published today, the Alaska governor suggested that there should be more discussion about Wright, who was Obama's pastor of 20 years at Trinity United Church of Christ in Chicago. Obama has denounced the pastor as well.

"Wright had appeared to be off limits for the McCain campaign ever since McCain himself condemned the North Carolina Republican Party in April for an ad that called Obama "too extreme" because Wright was his pastor, the Associated Press notes today. "Unfortunately, all I can do is, in as visible a way as possible, disassociate myself from that kind of campaigning," McCain said at the time.

But when Kristol pressed Palin about Wright, she replied, "I don't know why that association isn't discussed more, because those were appalling things that that pastor had said about our great country... To me, that does say something about character. But, you know, I guess that would be a John McCain call on whether he wants to bring that up."

At a morning rally in Florida today, Palin softened a line about Obama that she had employed in Colorado and California over the weekend: "This is someone who sees America as 'imperfect enough' to work with a former domestic terrorist who targeted his own country," Palin said of the Democratic presidential nominee.

On Palin's part, this marked a significant toning done of the weekend line, in which Palin had insisted that Obama "pals around with terrorists.''

Palin is campaigning from Naples and Clearwater to Pensacola today, Republican strongholds in a state that backed President Bush in 2004 but appears to be a toss-up in the 2008 election, according to recent opinion polls. Palin, popular with her party's base, could be a significant vote-getter in regions of the state heavily populated by active-voting Republican and also military retirees.

by Frank James

As Sen. John McCain's poll numbers have dropped and Sen. Barack Obama's have risen, the Republican nominee's campaign team have indicated they plan to relentlessly focus on Obama's character. This means we'll likely see more negative ads from McCain and from Obama as he responds.

The Democratic National Committee has a new ad of its own in which it uses McCain's own criticism of negative advertising, uttered during the 2000 presidential campaign, against him.

Here's the ad's transcript:

CHYRON: "John McCain... readying a newly aggressive assault on Sen. Barack Obama's character." [Washington Post, 10/04/08]

VIDEO: Montage of McCain attack ads

CHYRON: John McCain is "looking forward to turning a page on this financial crisis." [Washington Post, 10/04/08]

VIDEO: Montage of McCain attack ads

CHYRON: McCain Campaign's Ad Spending Now Nearly 100 Percent Devoted to Attack Ads [Talking Points Memo, 10/3/08]

MCAIN: "I'm John McCain and I approved this message."

MCCAIN: "Uh, I, I just have to rely on the good judgment of the voters not to buy into these negative attack ads. Sooner or later, people are going to figure out if all you run is negative attack ads you don't have much of a vision for the future or you're not ready to articulate it." [The NewsHour with Jim Lehrer, 2/21/2000]

CHYRON: John McCain: We Can't Afford More of the Same

by Frank James

This is dog-bites-man, I'll grant you, in other words, hardly a surprise. The New Yorker has endorsed Sen. Barack Obama in a piece called "The Choice" (kind of sounds like The One, no')

In a 4,172-word essay which may require more than one latte to get through, the New Yorker renders judgment on President Bush ("The Presidency of George W. Bush is the worst since Reconstruction... ,") links Sen. John McCain to that presidency, gives the Arizona senator his due for once fairly regularly bucking his party but declares those days over, then asserts that Obama, despite some weaknesses, is the man for this moment.

Here's the final paragraph in which the New Yorker's editors gather up the various strings of their previous arguments to weave their final pitch for an Obama presidency:

We cannot expect one man to heal every wound, to solve every major crisis of policy. So much of the Presidency, as they say, is a matter of waking up in the morning and trying to drink from a fire hydrant. In the quiet of the Oval Office, the noise of immediate demands can be deafening. And yet Obama has precisely the temperament to shut out the noise when necessary and concentrate on the essential. The election of Obama--a man of mixed ethnicity, at once comfortable in the world and utterly representative of twenty-first-century America--would, at a stroke, reverse our country's image abroad and refresh its spirit at home. His ascendance to the Presidency would be a symbolic culmination of the civil- and voting-rights acts of the nineteen-sixties and the century-long struggles for equality that preceded them. It could not help but say something encouraging, even exhilarating, about the country, about its dedication to tolerance and inclusiveness, about its fidelity, after all, to the values it proclaims in its textbooks. At a moment of economic calamity, international perplexity, political failure, and battered morale, America needs both uplift and realism, both change and steadiness. It needs a leader temperamentally, intellectually, and emotionally attuned to the complexities of our troubled globe. That leader's name is Barack Obama.

by John McCormick

ASHEVILLE, N.C. - In his most direct response so far to recent attacks on his character, Sen. Barack Obama said today that he is ready to have a debate over character with Sen. John McCain, if needed.

Speaking on the nationally syndicated Tom Joyner Morning Show radio program, Obama responded to attacks over the weekend by Republican vice presidential candidate Sarah Palin, who suggested Obama "pals around with terrorists," a reference to his Chicago acquaintance with former 1960s radical William Ayers.

"He engaged in these despicable acts 40 years ago, when I was 8 years old. I served on a board with him. And so now they're trying to use this as guilt by association," Obama said.

"I think the American people deserve better. I think they deserve a last four weeks that talks about the economic crisis," Obama continued. "But if John McCain wants to have a character debate, I'm happy to have that debate because Mr. McCain's record, despite him calling himself a maverick, actually shows that he is continually somebody who relies on lobbyists....He makes decisions, often times, based on what these lobbyists tell them him to do. That I think is going to be a lot more relevant to the American people than what somebody who is tangentially related to me."