THE DEATH OF THE ECONOMY

THE BLUE FROGS

compiled by Dee Finney

The radio show came to an end and I was just relaxing in the chair, when there was a knock on the door. It turned out to be the same man who had just been on the radio.

I told him I had just been listening to his show and how much I had enjoyed it.

He thanked me and sat down in a comfortable living room chair to talk to me and my husband.

Another knock came at the door, and a very large woman arrived with a huge ice chest full of food and cold drinks and she brought all her kids with her - they were of all ages including several infants.

She said she had come for the party.

I hadn't been told about a party.  Other people started arriving and I got very upset.  I had been told nothing about a party and I hadn't made any preparations for one, hadn't cleaned the house, washed my hair, put on nice clothes ... nothing.  I was very upset to be treated in such a way by whoever had planned this party, so I got up from my chair and left the house.

As I walked down the porch steps, one of the women's daughters followed me out the door and deliberately dropped two babies down the steps in front of me.  Both babies fell on their heads, and one baby's head snapped it's neck and it's face turned blue for a moment but then rolled over it appeared okay again.

That made me even more upset how they treated the children.  I then saw a larger baby and it couldn't hold its head up and the head just lolled around when it looked old enough to crawl and maybe even walk. I wondered if that baby had been dropped on its head too.

I felt very distressed.

Out in the yard, I crossed a short bridge over a narrow creek and entered the yard of the house of the large woman, figuring if she was at my house, I'd sit in her quiet house - out of the ruckus that was going on at my house.

When I entered her house, I was so grossed out, I didn't know if I could stand being there.

There were little blue frogs, green frogs, slugs, and snails all over the floor and I couldn't walk at all without stepping on the little creatures.

These are Blue Poison Dart Frogs

In the middle of the hallway sat a small man in a canvas folding chair. He looked right at me and said, "The blue frogs mean, "The Death of the Economy."

I looked at him and said, "They remind me of reptilians."

He looked back at me and said, "You aren't supposed to know about the reptilians, but since you mentioned it, I can tell you. The reptilians are in charge of this world and are taking over."

Just then a couple of really tall men came into the room and the short man stopped talking. He couldn't talk in front of them.

I wanted to know what the tall men wanted in that house and whether they were up to no good, but they seemed to be trying to separate the blue frogs from the green frogs.  It didn't seem to matter much, there were so many  of them and they were in every room.

The large woman and her kids returned home and she told me that since I had come to her home, she would have to feed me there.

I didn't really want to eat in her house because the blue frogs were in everything and a little one even flipped into my right eye momentarily and fell out again.

I was really disgusted and decided to go back to my own home again which didn't have any blue frogs in it on the other side of the little bridge.

From the bridge I looked back towards where the little man had been seated and the little man was gone, but on the chair itself was his name printed -   NARRATOR.

Then in the air, I saw the dates:

October   2
October   3
October   4
October   5
October   6
October   7
October   8
October   9
October 10
October 11
October 12
October 13
October 14
October 15

Editor's Note:  The blue frogs are 'poison dart blue frogs'.
 

Has Blair got frogs on the mind?

Nothing particularly odd about that. Either he was doing it to win a bet or more likely, as any father will instantly confirm, because it was a present from one of his children - presumably whichever has the most well developed sense of humour.

But wait, what's this. The very same tie made another appearance on the day the prime minister was returned to Downing Street for his dreamt of historic third election victory.

Is this superstition, does the blue frog have magical powers, is there some hidden symbolism?

The most famous, or infamous, blue frog is the unsurprisingly named blue poison arrow frog found only in a remote area of the South American rain forest.

It is known as highly territorial, aggressive and, needless to say, poisonous to its enemies.

Or is there a more mundane explanation? Almost certainly.

Logical Reasoning and Limits to the Scientific Method
The scientific method is a rational, logical thought process that is used to figure out facts (the raw data) and sometimes truths (the actual meaning). All of the answers must be able to be proven.

• Inability to Measure the very Distant Past.
  Things deteriorate and some processes might not be observable to us as changing and therefore fully measurable. Some examples are:
   
  • Processes that have a long life cycle.
     
  • The activity curve of some processes will affect what we observe at different times.
    In their earlier stages, some processes change along an exponential line, but as they get older, the activity starts to decay along an almost flat line. This will not be observable as a change in the later stages if you can only observe a small period of its final stages.
     
• Senses. Our ability to recognize data to measure is limited by our senses. We assume that only what we can see, touch, hear, smell, taste and quantify are the whole set of collectable data.
   
• What is Known. Our experiments are limited by what we know and what we believe is knowable. After all, from the outset we are only measuring what is observable and what we think is possible.
   
• Technological Abilities. This affects our ability to make more precise tests and gather specimens that might be evidence.
   
• Measurement of the Physical Universe. Our ability to measure and interpret what we measure is limited by our instrumentation (which we use to extend the limits of our senses).
   
• Instrument Limitations. Our instrumentation is basically an enhancement of our senses. We therefore do not know what else is measurable and how to gather the data. Taking this into perspective, if everyone was blind and only blue frogs from a few square miles of the Amazon rain forest could see, we would be missing a large part of our world because we do not know that we are lacking something and we cannot deduce that this sense exists because we have not been able to hypothesize that it exists from things that are available to us. We could not guess the existence of color or of sight. Even now, knowing about color, it would be difficult for you to envision a brand new color. Anything you thought about would be an existing color.
   
• Corroborating Evidence. Until we know most of the facts and how things really work, we are not even sure what else could be corroborating evidence.
   
• False Assumptions. We assume that everything can be measured. We assume that we ought to be able to measure God if he exists. We assume that the scientific method is fool proof. We assume that our senses and instrumentation are adequate. We assume that we have the technology and the ability to solve these issues.
   
• The Human Factor. Despite the scientific obligation to be loyal only to the facts, the reality is that politics and prejudice do override our thought processes. This is why universities are not funding research on a young earth. They are there to foster learning. They are not a church for evolutionists.
   
• Scope. How can you tell that a law is universal when you have not traveled to all points in space and time, and you have not seen all scenarios under which it reacts. Such declarations are presumptuous.
   
• Circular Reasoning. Using an unproven idea to prove itself or using an unproven idea as fact in another unproven idea. Circular reasoning (also called "reasoning in a circle") is the basis of two evolutionary concepts: "natural selection" and "survival of the fittest."
  
  Tautology. A "tautology" means the useless repetition of an idea in different words, or a statement that is true because it includes all possibilities. ("Either it will rain tomorrow or it will not.") So tautologous thinking is a related way to describe some of the logical flaws in circular reasoning.
  
  These last two points show problems with logic and reasoning.

Ultimately this method is based on our limited knowledge about what is proof, what is provable and how a fact can be verified.
Instead of endless philosophical discussions to prove a point, experiment becomes the final arbitrator of truth, a successful approach. The issue becomes a bit sticky when discussing origins. How do we test the theory of evolution? We do not have the luxury of having a miniature universe with aeons of time in the corner of a laboratory. So this leaves both evolutionists and creationists in the same boat. No absolute way to objectively test their assertions. No eyewitnesses. Both are left to propose a model and then compare it with nature for consistency.

Types of Evidence. In conducting experiments and gathering data and formulating proofs, there are several types of evidence available. Some are more trustworthy than others because they are more objective and less open to personal interpretation. These are the major types of evidence:

 Eyewitness. Testimony from someone or something that was actually there when an event occurred. This may seem to be the most reliable evidence, but sometimes under highly emotional state and depending on the length of time from the incidence to the recording of the testimony, the truth may not be as accurate.

For example, if your eyewitness is human, people age and forget things and in cases of trauma, your mind may protect you from the facts. But something impartial and unemotional may record some of the facts but not all of the truth.

For example, a video camera could show all the visual and audio effects, but they cannot record feelings and motives or previous history.
» Material Witness. A person who may have information relevant for solving a case.
 

 Hearsay Evidence. A potential eyewitness who cannot be cross-examined. Hearsay evidence consists of statements made out of court by someone who is not present to testify under oath. The problem with this type of witness is that people can lie or misinterpret the meaning of a message.

For example, in considering ancient writings or descriptions about a topic - one cannot rule out the fact that these could be scientific observations, mythology, novels, stories for entertainment or religion, or if the account of the fact was influenced by popular culture or beliefs. Or if the interpretation of the artifacts is influenced by our desires, culture and beliefs.

 Anecdotal.

A type of hearsay evidence. These are facts you can guess by examining stories passed down from various people. These may not be eyewitness accounts. However, this does not tell you if the stories are based in reality or if it was crafted for entertainment or other purposes. Sometimes a true event is interpreted based on the people's religious beliefs or fears or knowledge of the world around them. These conclusions will often enter the stories as facts, but they are only the people's interpretation of the event. However, you can get certain information.
• Similarities in stories from widely separated cultures could suggest that the story originated from one source to which they both had contact sometime in the past. This does not mean that the stories were real events. It only means that they may have one common origin.
• Scientific observations that do not change perceptibly over the centuries, could give you a relative measurement of the amount of change or the cycle of the phenomena. For example, comets and other astronomical events.

 Testimonial Evidence. This is anecdotal evidence by an eyewitness or a recommendation because of personal experience. Currently most celebrity testimonals are not based on any experience but based on the reputation or public appeal of the presenter.

 Documentary Evidence. The eyewitness is a document in written or printed form. This document must be authenticated or have a trustworthy origin and chain of custody. Most legal documents are authenticated by signatures and eyewitnesses to the transaction. Anecdotal evidence may once have been documentary evidence for the ancient people. So the problem with this type of evidence is time. The more time has elapsed, the less confidence exists in their authenticity and veracity.

The Torah and the Bible are treated as anecdotal documentary evidence that are useful for cultural amusement but not statements of fact. Because modern man chooses not to believe in God, they choose to believe that these document are false.

 Experimental. With this method one tries to reproduce the facts by creating a similar situation and measuring conditions before the experiment and after. If it succeeds you may have proven that under the conditions of your experiments that certain events can occur. However, although experimental evidence could show that certain actions can produce certain effects, it cannot prove that in the past this situation existed, especially if the situation is highly unlikely and never observable in modern times. If it were possible to conduct all possible experiments to rule out the impossible then we could say with certainty what happened.

Rare natural processes observed in real time could also be counted as an experimental environment that is conducted by nature itself. They have the added testimony that this is a possibility, since it is not an artificial environment set up in a laboratory.
Demonstrative Evidence. This type of experimental evidence illustrates a point through charts, graphs, maps, illustrations and reenactments. It tends to simplify complicated situations or illustrate and assist verbal testimony.

 Circumstantial. Examining what remains after the fact. The interpretation of facts based on the physical evidence found after the incidence has happened and the original participants are gone. There is a danger that we could use current thinking and understanding to interpret the data. This is because the interpretation of circumstantial data is based on assumptions, common sense and all known experimental data.

 Common Sense. At first this may seem to be emotionally based and possibly limited by our knowledge and flawed interpretations. But it is not a private interpretation. Common sense therefore, is helpful as an arbiter over all the forensic and experimental evidence because it is based on years of experience shared by every one. Whatever gives the expert witness the right to speak about complicated scientific evidence, also gives every man the right to speak about common everyday occurrences.

 Expert Witness. Experts sometimes utilize hearsay and routinely express opinions. Through training and experience, they are better qualified to form an opinion. However, their knowledge is limited by the limits of science and their own capabilities. They are at best interpreting forensic and circumstantial evidence.

 Scientific (Forensic, Direct, Real, Physical). This is the equivalent of a scientific eyewitness. It is based on the examination of physical evidence left behind. Based on our ability to measure certain materials and knowledge about its rate of change under certain conditions, or statistical information on its frequency of occurrence. we can make very good guesses about what is most likely to have occurred. But it still involves some degree of circumstantial evidence evaluation because we must still interpret the meaning of the scientific facts.

 Mathematical. Calculations that show the impossibility of events in the past conforming to current observations.

 Statistical. This can probably be viewed as "mathematical" forensic evidence. Given all the data, the calculations are based on how likely an event will occur. DNA is statistical forensic evidence. The flaw is, we may not have all the data. But from experience (common sense) we may infer that given certain sets of facts that are based on common everyday occurrences, that only a rare unlikely event could change the conclusion.

FROM: http://teachinghearts.com/dre09creationnotes.html

Is the U.S. Talking Itself Into a Recession?

12-10-2007

Denise Holtby, Reed Construction Data

In the wake of the subprime mortgage crisis, many are calling the U.S. economy a house of cards on the verge of toppling. In a conversation with CanaData economist Alex Carrick, however, I was reminded that every economy risks collapse, but in general, because everyone has a vested interest in keeping the cards upright, a crash is unlikely.

Worry over the subprime crisis and the possibility of recession prompted the White House to announce a plan last week to help struggling subprime mortgage borrowers keep their homes in the wake of escalating mortgage rates.

While the plan calls for a five-year interest rate freeze, there are two catches. The plan is voluntary for mortgage lenders and only those homeowners not currently in arrears are eligible to participate. Borrowers who were coaxed into borrowing against the equity in their homes by “teaser” rates and lax credit terms and have since fallen behind on their mortgages will not see any relief.

The announcement does not force mortgage lenders to offer interest-relief to borrowers either, but the Federal government is promising to take regulatory steps to make the mortgage industry “more transparent, reliable, and fair.”

But do moves such as this one — and all of the anxiety currently building over the state of the economy — risk making recession a “self-fulfilling prophecy”? It could.

According to Mr. Carrick, even though the U.S. economy still has a lot of momentum, doom-and-gloom news on the financial front risks pushing the U.S. economy into recession, even though employment numbers are strong, the stock markets are down only slightly and consumer confidence has been only mildly affected by all of the hand-wringing.

(For more about Mr. Carrick’s take on the avoidability of a U.S. recession, check out this article “Recession in the U.S. is Avoidable”.)

In an article entitled “What halts home price deflation? Fear of losing a bargain” Mr. Carrick foresees the housing market stabilizing in 2008, as does the National Association of Realtors. This outlook means that the housing market should no longer be a drag on the U.S. economy as 2008 progresses.

If the Fed lowers its federal funds rate by 25 or 50 basis points in January and the holiday shopping season turns out to be a healthy one, then it’s safe to say that rumors of the “death” of the economy are highly exaggerated.

McCain's Economy Platform:
Big Tax Cuts, With Caveats

WASHINGTON -- Imagining how John McCain, the Navy war hero, would play the role of commander in chief has been easy. Imagining how John McCain, the policy maverick, would lead as chief executive of the U.S. economy has been tougher.

In a wide-ranging interview last week, Sen. McCain offered the most-detailed account to date of his thinking on economic issues.

The all-but-certain Republican presidential nominee cast himself as a defender of the Bush tax cuts he voted against, but added caveats to a "no new taxes" vow he made on a Sunday television talk show two weeks ago.

On Social Security, the Arizona senator says he still backs a system of private retirement accounts that President Bush pushed unsuccessfully, and disowned details of a Social Security proposal on his campaign Web site.

Sen. McCain said the Federal Reserve should cut interest rates now to bolster the economy, but added that as president, he couldn't be so explicit on monetary policy. "Presidents have to be careful so they're not perceived as putting undue political pressure on the Fed," he said. "So I would certainly be more careful than I am today."

With the U.S. economy softening, he said he might have "a couple of fireside chats with the American people because of what we see in the [consumer] confidence barometers." But he added that the most potent economic stimulus would be to assure Americans that taxes won't go up in the future and to "call for a meaningful -- and I mean meaningful -- approach to simplifying the tax code so that it's fairer and flatter."

Those who know him well expect that a McCain presidency would be hard to categorize -- a conservative populist who acts by instinct rather than economic ideology. For businesses, that could make him hard to predict; for opponents, hard to pin down. In his 25 years in Congress, the Arizona senator has defined himself on economic issues more by his adversaries than by overarching economic principle.

"Sometimes he sees excesses in government and sometimes he sees excesses in the corporate world, and both make him sick," says John Raidt, a longtime McCain policy aide.

As chairman or senior Republican member of the Senate Commerce Committee -- which oversees old-line industries such as railroads as well as businesses such as the Internet -- he has squeezed broadcasters to hand back valuable airwaves and cable companies to let consumers pay for individual channels, rather than having to buy an expensive bundle. Despite these fights, media industries now are among his biggest campaign contributors, realizing that even if he loses the presidency, he'll still have a big say in their businesses as a lawmaker.

But his congressional assignments haven't forced him to wrestle with broader issues of tax, monetary and Social Security policy.

Retirees' Nest Egg

A centerpiece of a McCain presidential bid in 2000 was a plan to divert a portion of Social Security payroll taxes to fund private accounts, much as President Bush proposed unsuccessfully. Under the plan, workers could manage the money in stocks and bonds themselves to build a nest egg and, at retirement, also receive reduced Social Security payments from the government. Proponents say the combination of the nest egg and government payouts could give a retiree more than the current system, but opponents say the change would undermine the Social Security system.

Sen. McCain's 2008 presidential campaign Web site takes a different view, proposing "supplementing" the existing full Social Security system with personally managed accounts. Such accounts wouldn't substitute for guaranteed payments, and they wouldn't be financed by diverting a portion of Social Security payroll taxes.

Mr. McCain's chief economic aide, Douglas Holtz-Eakin, a former head of the Congressional Budget Office, says economic circumstances forced changes concerning Social Security policy. Vast budget surpluses projected in 2000 evaporated with a recession, the Bush tax cuts and the cost of responding to Sept. 11.

As a result, the McCain campaign says the candidate intends to keep Social Security solvent by reducing the growth in benefits over the coming decades to match projected growth in payroll tax revenues. Among the options are extending the retirement age to 68 and reducing cost-of-living adjustments, but the campaign hasn't made any final decisions.

"You can't keep promises made to retirees," says Mr. Holtz-Eakin, referring to the level of benefits the government is supposed to pay future retirees. "But you can pay future retirees more than current retirees."

Asked about the apparent change in position in the interview, Sen. McCain said he hadn't made one. "I'm totally in favor of personal savings accounts," he says. When reminded that his Web site says something different, he says he will change the Web site. (As of Sunday night, he hadn't.) "As part of Social Security reform, I believe that private savings accounts are a part of it -- along the lines that President Bush proposed."

Sen. McCain says that as president he would start negotiations with Democrats to fix Social Security. The program's trustees say by 2041, projected tax revenues will cover only three-fourths of currently promised benefits.

On the Democratic side, the two contenders have been far from clear what they would do also. Sen. Barack Obama has said he would raise the ceiling on wages subject to the Social Security payroll tax to boost revenue, but he hasn't specified the size of the tax increase. Sen. Clinton calls for personal investment accounts on top of existing Social Security, similar to what the McCain campaign Web site suggests, but she hasn't laid out how she would fix the program's looming insolvency.

Fine Line on Taxes

On taxes, Sen. McCain is walking a fine line between courting keep-taxes-low Republicans while insisting he is the candidate of fiscal discipline. Two weeks ago, ABC's George Stephanopoulos asked him on "This Week" if he were a "'read my lips' candidate, no new taxes, no matter what?" referring to a pledge made by President George H.W. Bush, which he later broke. "No new taxes," Sen. McCain responded. "But under circumstances would you increase taxes?" Mr. Stephanopoulos continued. "No," Sen. McCain answered.

Asked in The Wall Street Journal interview to clarify, Sen. McCain softened that stance. "I'm not making a 'read my lips' statement, in that I will not raise taxes," he says. "But I'm not saying I can envision a scenario where I would, OK?"

Behind the scenes, his campaign is searching for ways to pay for Sen. McCain's tax proposals. In addition to extending the Bush tax cuts, the 71-year-old candidate would slash the corporate income-tax rate from 35% to 25% at a cost to the Treasury of $100 billion a year, estimates Mr. Holtz-Eakin.

In all, his tax-cutting proposals could cost about $400 billion a year, according to estimates of the impact of different tax cuts by CBO and the McCain campaign. The cost will make it difficult for him to achieve his goal of balancing the budget by the end of his first term.

To pay for the cut in corporate tax rates, Sen. McCain is considering eliminating some corporate tax breaks listed by a bipartisan tax reform panel appointed by President Bush, who ignored its report. The panel outlined different ways to change the tax code to spur U.S. competitiveness.

Among the candidates for elimination are a 2004 break for manufacturers -- written so broadly that it includes computer software makers, construction firms and architects -- a low-income housing credit, and tax breaks for life-insurance companies, credit unions and exporters. Undoing those breaks would raise a maximum of around $45 billion a year, still leaving a big hole.

"There could be a fairer, flatter tax proposal that I might embrace, that you might look at the minutiae of it and say, well, that's going to increase somebody's taxes," he says. "But they eliminate the inequities, the complexities, and all of the things that characterize our tax code today."

Sen. McCain began to prepare himself for campaigning on economics late in 2005 when Mr. Holtz-Eakin and conservative Kevin Hassett, a veteran of the 2000 McCain campaign, started sending him four-page weekly briefing papers on tax reform, trade and other issues. Sen. McCain also consults with business and political leaders including Cisco Systems Inc. Chief Executive John Chambers; former Republican Texas Sen. Phil Gramm, a deficit hawk; and former Republican vice presidential candidate Jack Kemp, who hails from the deficits-don't-matter side of the party.

Sen. McCain rarely makes a public appearance without supporters with strong business or economic pedigrees, such as former Hewlett-Packard chief Carly Fiorina or Mr. Kemp. At town-hall meetings earlier in the campaign, he sometimes turned over economic questions to them.

As a presidential candidate, Sen. McCain has faced hostility from the political right because he voted against two rounds of Bush tax cuts. "I voted against the tax cuts because of the disproportional amount that went to the wealthiest Americans," he said on NBC's "Meet the Press" in January. He also said the tax cuts weren't matched by spending restraints, as he had wanted.

Now, given the worsening economic situation, he says it's important to fight to extend the tax cuts, which are set to expire in 2010.

While other candidates were scrambling in January to put together stimulus plans to boost flagging consumer spending, he proposed long-term tax cuts which could take years to come into law. "In the shorter term, if you somehow told American businesses and families, 'Look, you're not going to experience a tax increase in 2010,' I think that's a pretty good short-term measure," he says.

Sen. McCain also favors making corporate tax credits for research-and-development permanent and eliminating the alternative minimum tax. The AMT was designed years ago to keep the wealthy from using deductions to avoid paying taxes altogether, but, unless altered, will ensnare a growing number of middle-class taxpayers.

To show he can control spending, Sen. McCain cites his long record as a spending hawk, who battles sweetheart deals between the Pentagon and defense contractors, as well as projects that lawmakers of both parties cram into appropriations bills -- "earmarks," in budget lingo.

Congressional earmarks total $18 billion a year, according to the Taxpayers for Common Sense, a Washington, D.C., research group -- and each has a member of Congress who will ferociously fight to keep that spending going. Mr. Holtz-Eakin, the McCain adviser, says that earmarks actually cost $60 billion a year, counting programs that started in earlier years and get funded year after year.

Another source of spending cuts eyed by the McCain campaign is a White House hit list of underperforming or redundant programs. But again, the numbers are relatively small -- $18 billion annually -- compared to the cost of Sen. McCain's tax plans, and the programs include housing loans, education grants, and water projects popular with Congress.

The uncertainty involved in estimating the future costs of wars in Iraq and Afghanistan also could make it hard for him to make his budget targets. The CBO estimates spending on the wars at about $145 billion this fiscal year, which ends Sept. 30.

Sen. McCain's admirers say that by running for president as a spending hawk, he will tilt the politics of Washington in favor of spending restraint, in the same way George W. Bush's promotion of tax cuts during the 2000 campaign helped him build momentum for his plan. "If he proposes [a balanced budget] and doesn't get it, that doesn't mean it won't have a positive effect of having a lower series of deficits that there otherwise would be," says Barry Anderson, a former senior budget officer during Republican and Democratic presidencies.

Taking On Industry

Another question is how Sen. McCain would regulate business. He has fought with the drug industry to allow the importation of pharmaceuticals from Canada and permit the government to negotiate over drug pricing; tangled with broadcasters to force them to hand over transmission channels so they can be used by police and fire departments and other users; and taken on the airline industry over a consumer-rights bill, among other slugfests.

But some lobbyists in industries he has targeted are sanguine, figuring Sen. McCain won't focus much on issues such as drug importation once he has a bigger stage. One member of Sen. McCain's health-care task force, which endorsed drug importation, was a former McCain aide, Sonya Sotak, who lobbies against drug importation in her day job as an Eli Lilly lobbyist. "I don't impose my professional views on the senator," she says.

During his years at the Commerce Committee, Sen. McCain became the focus of lobbying from the telecommunications and health-care industries, given his focus on those fields. Now, health professionals, lobbyists, and individuals in the computer, television and movie industries are among his largest industry contributors, says the nonpartisan Center for Responsive Politics.

The law firm of Philadelphia-based Blank Rome LLP, which lobbies for cable company Comcast Corp. and drug company Abbott Laboratories, among others, is among Sen. McCain's largest contributors. The firm's employees have donated $188,000 to him, according to the center.

"My desire to support McCain has nothing to do with any client of my law firm," says David Girard diCarlo, the firm's chairman. Former Democratic vice presidential candidate Geraldine Ferraro, who backs Sen. Clinton, is a senior official at Blank Rome, which has raised $113,000 for the Democratic presidential candidate.

Climate Change

Sen. McCain's biggest regulatory effort is likely to come in the field of climate change. Along with independent Connecticut Sen. Joseph Lieberman, who was then a Democrat, Sen. McCain introduced the earliest version of a cap-and-trade system in 2003, and the pair have refined their ideas since. Under their plan, the government sets emissions goals. Companies that can't meet their targets must buy permits to produce carbon dioxide, either from companies that produce less CO2 than they are permitted, or from the government.

The system may require a large regulatory apparatus. In the latest McCain-Lieberman version, the government would auction off carbon-emission permits. According to Harvard economist Robert Stavins, such sales could raise $50 billion to $100 billion a year.

An Energy Department analysis says Sen. McCain's plan raises energy prices so much that it would reduce economic growth.

"I hear this interesting argument that somehow this would cost more money to our economy," says Sen. McCain. But, "I am absolutely convinced that innovation, technology, and using the entrepreneurship of America will come up with technologies which will save money, be a boon to our economy, and clean up our environment." He's unlikely to get much argument on this from his Democratic opponents; Sens. Obama and Clinton co-sponsored Sen. McCain's legislation.

Write to Bob Davis at bob.davis@wsj.com

A: If they have a 401(k), then they are going to see those taxes deferred, and they're going to pay ordinary income when they finally cash out. So, that's a phony argument. You know, as I travel around the country, what I'm absolutely convinced of is that people recognize that if only 1% of the population is doing well, when we've got wage and incomes for the average worker actually going down during a period of economic expansion, much less economic recession, that something's being mismanaged. And they want a different approach. And that's what we're going to be offering them. John McCain is essentially offering four more years of the same policies that got us into this rut that we're in now.

• Create a Credit Card Rating System to Improve Disclosure:Provide consumers an easily identifiable 1-star to 5-star ranking of credit cards, based on the card's features. Credit card companies will be required to display the rating on all application and contract materials.
• Establish a Credit Card Bill of Rights to Protect Consumers:Obama will create a Credit Card Bill of Rights to protect consumers. The Obama plan will:
  • Ban Unilateral Changes
  • Apply Interest Rate Increases Only to Future Debt
  • Prohibit Interest on Fees
  • Prohibit "Universal Defaults"
  • Require Prompt and Fair Crediting of Cardholder Payments
• Cap Outlandish Interest Rates on Payday Loans and Improve Disclosure:Obama supports extending a 36% interest cap to all Americans. Obama will require lenders to provide clear and simplified information about loan fees, payments and penalties, and he'll require them to provide this information during the application process.

• Ensure More Accountability in the Subprime Mortgage Industry:Obama introduced comprehensive legislation over a year ago to protect consumers against abusive lending practices. Obama's STOP FRAUD Act provides the first federal definition of mortgage fraud, increases funding for law enforcement, and creates new criminal penalties for mortgage fraud.
• Create a Universal Mortgage Credit:Obama will create a 10% universal mortgage credit to provide tax relief to homeowners who do not itemize. This credit will provide an average of $500 to 10 million homeowners, the majority of whom earn less than $50,000 per year.
• Mandate Accurate Loan Disclosure: Obama will create a Homeowner Obligation Made Explicit (HOME) score, which will provide potential borrowers with a simplified, standardized borrower metric (similar to APR) for home mortgages. The HOME score will allow individuals to easily compare various mortgage products and understand the full cost of the loan.

Obama did vote against--and Clinton voted for--an amendment that would have placed a 30% cap on the interest rate that could be charged on any extension of credit. The amendment failed by a vote of 74 to 24 in 2005. When the amendment came up for a vote, Obama was standing next to Sen. Paul Sarbanes, D-MD, the senior Democrat on the banking committee and the leader of those opposing the landmark bill, which would make it harder for Americans to get rid of debt.

As for whether the 30% cap was too high, that's certainly a matter of opinion. Sen. Mark Dayton of Minnesota, sponsor of the amendment, said on the Senate floor that such a cap "is still consumer abuse" but is much better than rates of more than 300%, which he said were being charged by some loan operations in the country.

A: We account for every single dollar that we propose. This is one of the things that's happened during the course of this campaign, that there's a set of assertions made b Clinton and her husband, that are not factually accurate. Part of what the people are looking for right now is somebody who's going to solve problems and not resort to the same typical politics that we've seen in Washington. That is something that I hear all across the country. So when Clinton says I wasn't opposed to the war from the start or says it's a fairytale that I opposed the war, that is simply not true. Clinton asserts that I said that the Republicans had better economic policies since 1980. That is not the case. The viewers are concerned about is who's actually going to help the get health care, how are they going to get their kids going to college, and that's the kind of campaign I've tried to run.

CLINTON: I regretted voting for the bankruptcy bill and I was happy that it didn't get into law. By 2005, there was another run at a bankruptcy reform, motivated by the credit card companies and the other big lenders. I opposed that bill. There was a particular amendment that is very telling. It was an amendment to prohibit credit card companies from charging more than 30% interest. It was one of the biggest lobbyist victories on that very bad bill that the bankruptcy bill represented.

A: Over the last seven years, what we've seen is an economy that's out of balance because of the policies of George Bush and the Republicans in Congress. Not only do we have fiscal problems, but we've got growing inequality. People are working harder for less and they're seeing costs go up. So what I want to do is get the long-term fundamentals right. That means that we are investing in education & infrastructure, structuring fair trade deals, and also ending the war in Iraq. That is money that can be applied at home for critical issues.

Q: So a priority to balance the federal budget, or not?

A: We are not going to be able to dig ourselves out of that hole in 1 or 2 years. But if we can get on a path of sustained growth, end the war in Iraq, end some of the special interest loopholes and earmarks that have been clogging up the system, then I think we can return to a path of a balanced budget.

A: We have legislation that says that if, in fact, they are manipulating their currency--and I think there's no dispute that they are--that we need to take strong action. It's in the Banking Committee. I will say that it's actually a blunt tool. I'd prefer not doing this legislatively. The problem is we've had a president that has shown no leadership on it. So when I am in the White House, I will meet directly with the Chinese leadership and indicate we have to restore balance. And, by the way, we have to mobilize our allies, such as the European Union, to have that conversation with us. This is an imbalance that is not good for any economy over time. It's not sustainable, the trade imbalances that we have.

DODD: Yes, but we also need more liquidity in the market. It has seized up. You can't get a mortgage in America today.

OBAMA: We do need more liquidity, but we're going to have to not only help home owners who are going to be losing their homes as a consequence of this; we're going to have to make sure that we've got the kinds of tough regulation when it comes to financial instruments to make sure that people who have saved and are trying to get their own home for the first time are not hoodwinked out of it. And, unfortunately, the reason that we haven't had tougher regulation in part goes back to the issue of lobbying. This is where special interests have been driving the agenda. We have not had the kinds of consumer protections that are in place. That's why, when we have this debate about lobbying, we have to remind ourselves it has very real consequences.

The result is the most precarious budget situation we have seen in years. We now have an annual budget deficit of almost $300 billion, not counting more than $180 billion we borrow every year from the Social Security Trust Fund.

It is not the debt that is most troubling. The bulk of the debt is a direct result of the President's tax cuts, 47.4% of which went to the top 5% income bracket.

We can eliminate tax credits that have outlived their usefulness & close loopholes that let corporations get away without paying taxes. We can restore a law that was in place during the Clinton presidency--called Paygo--that prohibits money from leaving the treasury without some way of compensating for the lost revenue.

Proponents recommend voting YES because:

My amendment says we are going to take about $18 billion as a strong signal from the Congress that we want to support effective programs and we want the taxpayer dollars spent in a responsible way. My amendment doesn't take all of the $88 billion for the programs found by PART, realizing there may be points in time when another program is not meeting its goals and needs more money. So that flexibility is allowed in this particular amendment. It doesn't target any specific program. Almost worse than being rated ineffective, we have programs out there that have made absolutely no effort at all to measure their results. I believe these are the worst offenders. In the following years, I hope Congress will look at those programs to create accountability.

Opponents recommend voting NO because:

The effect of this amendment will simply be to cut domestic discretionary spending $18 billion. Understand the programs that have been identified in the PART program are results not proven. Here are programs affected: Border Patrol, Coast Guard search and rescue, high-intensity drug trafficking areas, LIHEAP, rural education, child abuse prevention, and treatment. If there is a problem in those programs, they ought to be fixed. We ought not to be cutting Border Patrol, Coast Guard search and rescue, high-intensity drug trafficking areas, LIHEAP, rural education, and the rest. I urge a "no" vote.

The CBC is focused on economic empowerment issues including:
• New Markets and Small and Minority Business Development. The CBC will seek to increase opportunities for minority and small and disadvantaged businesses by expanding contracting opportunities in the public and private sectors, increasing access to capital, creating tax incentives for capital improvements, removing outdated and restrictive regulatory barriers, and streamlining and enhancing procurement tools to encourage minority and small business utilization.
• Trade and Global Economic Empowerment. The CBC will work to ensure that the benefits of the dynamic global marketplace extend to minority businesses, and Africa and developing countries. To this end, the CBC will propose and support trade and investment initiatives designed to bridge the global digital divide, create jobs, improve infrastructure, promote sustainable development, and raise living and work standards for people of color around the globe. Moreover, the CBC will work to ensure that America’s international trade agenda and priorities also meet these goals.
• Increasing Affordable Housing Opportunities. The CBC’s goal is to increase the nation’s homeownership rates. Home ownership is one of the best wealth creation vehicles for minority families. We will work with lending institutions and community organizations to ensure that minorities are afforded every opportunity to realize the dream of owning a home.

Sen. DODD: Today we are facing a crisis in the mortgage markets on a scale that has not been seen since the Great Depression: over 2 million homeowners face foreclosure at a loss of over $160 billion in hard-earned home equity; over one out of every 5 subprime loans is currently delinquent. These high default rates have frozen the subprime and jumbo mortgage markets and infected the capital markets to the point where central banks around the world have had to inject liquidity into the system to avoid the crisis from spreading to other segments of the market.

One of the fundamental causes of this serious crisis is abusive and predatory subprime mortgage lending. The Homeownership Preservation and Protection Act of 2007 is designed to protect American homeowners from these practices, and prevent this disaster from happening again. The legislation will:

• realign the interests of the mortgage industry with borrowers to insure the availability of mortgage capital on fair terms both for the creation and sustainability of homeownership;
• establish new lending standards to ensure that loans are affordable and fair, and
• provide for adequate remedies to make sure the standards are met; and create a transparent set of rules for the mortgage industry so that capital can safely return to the market without bad lending practices driving out the good.

In the coming months, the housing crisis is going to get worse. We will need to continue to press lenders and servicers to provide real relief for homeowners threatened with foreclosure.

• Foreclosure Prevention Act of 2008 - refinance mortgages originally financed through a qualified subprime loan.
• Makes FY2008 appropriations for emergency needs of states and local governments to redevelop abandoned and foreclosed homes; and the Neighborhood Reinvestment Corporation for foreclosure mitigation activities.
• Helping Families Save Their Homes in Bankruptcy Act of 2008 - Authorizes a bankruptcy plan for individuals with regular income to provide for payment of such claim for a period of up to 30 years. Creates a principal residence homestead exemption for debtors over 55 years of age.
• Mortgage Disclosure Improvement Act of 2008 - Amends the Truth in Lending Act to set forth additional disclosure requirements governing any extensions of credit (not only mortgages) secured by the dwelling of a consumer.