Fingers Pointing: Jittery markets make for volatile politics

By Rick Klein:

A fat finger can do a whole lot of damage. And not just to 401(k)s.

It may not register on the scale of this week’s disasters, but the stock market’s jumpiness is just a small glimpse of where we are with the economy. New job numbers aren’t going to change any of those facts, at least not yet.

All eyes will be on the Dow, a day after, as we learn again that the economy is about as stable as an oil spill off the Gulf.

That makes the politics surrounding it even less stable. The populist mantle is still up for grabs -- witness the financial reform bill that’s made for strange bedfellows, amendment by amendment -- and forces outside Washington’s immediate control are still set to dictate some fate.

Something triggered something big on Wall Street. It won’t take much to trigger something else sometime soon.

Picking up the pieces, after a bizarre day on the markets: “At least part of the sell-off appeared to be linked to trader error, perhaps an incorrect order routed through one of the nation’s exchanges,” The New York Times’ Graham Bowley writes. “But the speed and scale of the plunge -- the largest intraday decline on record -- seemed to feed fears that the financial troubles gripping Europe were at last reaching across the Atlantic. Amid the rout, new signs of stress emerged in the credit markets.”

When you move that finger away: “Some of the dramatic fall and rise of the Dow today could have been aggravated by technical glitches and weird trading patterns. But officials and market watchers say that the threat from Europe could significantly crimp what has been a fairly good recovery. Some economists say it is akin to the Asian financial crises that gripped the markets more than a decade ago,” The Washington Post’s David Cho reports. “The question is whether we -- now out of the fire of Wall Street's financial crisis of our country's own making -- are confronting a new peril out of Europe.”

Ezra Klein, at his Washington Post blog: “What you're seeing here is a very, very fragile market. There's so much unknown risk out there -- notably, but not solely, in Europe -- that quick movements are sending everyone running for the door. That is to say, we're seeing the return of financial-crisis psychology, where people fear because they don't know.”

The Wall Street Journal’s Brett Arends: “Athens burns. Europe panics. Something funny happens in the market. The Dow plunges nearly 1,000 points in a few minutes. Is this 2008 all over again? Should you panic? Bail while you still can?”

ABC’s Jake Tapper, on the White House reaction: “They see what happened on Wall Street yesterday as part of what they call a backdrop of fear created by this Greek debt crisis,” Tapper said on “Good Morning America” Thursday. “He may be calling some European leaders later today.”

A great backdrop for some Friday jobs numbers.... President Obama will speak on the economy at 11 am ET, from the Rose Garden.

“The forecast is considerably brighter than at any time in the last two years,” ABC’s Karen Travers and Matthew Jaffe report. “For the first time since the recession began in 2009, the nation is expected to see job growth for two straight months. The consensus prediction is that employers will have added around 190,000 jobs to their payrolls last month. Just that prediction alone is welcome news for a country that lost 8.2 million jobs since January 2008. But it is also welcome news for the White House and Democrats in Congress hoping to hang onto their own jobs with elections coming up this fall.”

On the Hill -- the slow, slow walk: “The U.S. Senate yesterday rejected two significant changes to its financial-overhaul bill, voting down restrictions on a proposed consumer-protection bureau and a plan that would have forced the largest banks to shrink in size,” Bloomberg’s Alison Vekshin reports. “Senators also rejected Ohio Democrat Sherrod Brown’s proposal to restrict the size of banks, a move that would’ve required the nation’s six largest banks, including Citigroup Inc. and Bank of America Corp., to shrink. It was rejected in a 61-33 vote.”

“With senators ready to offer 100 or more amendments, time will become the point of conflict. Senate Majority Leader Harry Reid, D-Nev., says he wants to wrap the bill up by the end of next week. Republican leader Mitch McConnell of Kentucky wants to take his time,” the AP’s Jim Kuhnhenn reports. “But the movement so far suggests the bill is clearing a path for itself toward passage.”

Fed audits (lite), coming soon: “Sen. Bernie Sanders' proposal to audit the Federal Reserve is rolling toward passage this evening as support in Washington grows,” ABC’s Z. Byron Wolf and Matthew Jaffe report. “The amendment, long sought by independent Sen. Sanders and House libertarian Republican Ron Paul, was tweaked today to narrow its scope, a move that helped it gain the backing of Senate Majority Leader Harry Reid, Banking Committee boss Chris Dodd, and the White House. It will be attached to the Wall Street reform bill.”

“The compromise, endorsed by Senate Banking Committee Chairman Christopher Dodd (D., Conn.) and the Treasury, would require the Fed to disclose more details about its lending during the financial crisis. It would also require a one-time audit of those loans and a one-time review of Fed governance,” The Wall Street Journal’s Sudeep Reddy and Michael R. Crittenden report.

Looking for the populist hot hand: “Here's an alternate narrative: Democrats did spend the past year threatening to unleash hell and all its furies on the financial sector, and in response a petrified Wall Street rushed to buy protection with millions of dollars in Democratic campaign tithes,” Kimberley A. Strassel writes in her “Potomac Watch” column. “The party in power then produced legislation that -- while bad in many, many ways -- is something the biggest players can live with.”  

Fiscal discipline: “President Obama, in his latest effort to signal fiscal responsibility against the rising debt, plans this month to ask Congress to give him and future presidents greater power to try to delete individual items from spending bills,” Jackie Calmes writes in The New York Times.

Teeing up Saturday -- where Sen. Bob Bennett, R-Utah, learns his fate, and may be part of that story that’s on repeat through the fall.

“Now engaged in a fierce battle to keep his job, Bennett, 76, is hearing from incensed Republican delegates that they want a fighter. They want someone to publicly and loudly combat what they see as the excesses of the Obama agenda,” Matt Canham writes in the Salt Lake Tribune.

“I do my best to give them anger and passion when I'm talking to them one on one,” Bennett tells Canham. “I don't necessarily toot my horn in the way I think most politicians do and I apparently have paid the price for it. I'm trying to repent.”

Alex Pappas, in the Daily Caller: “Republican Utah Sen. Bob Bennett -- who polls show to be the underdog against Tea Party-backed challengers -- could become the state’s first incumbent senator to lose his party’s nomination since the 1940s at this weekend’s GOP convention. The convention may yield the first high-profile example of outing the insiders.”

Bennett, to USA Today’s Kathy Kiely: “The single most overriding issue is anger at Washington.”

Ripples: “The scenario of a loss by Bennett -- a genteel appropriator who has a mostly conservative voting record but supported the Troubled Asset Relief Program and is seeking a fourth term after saying he’d serve only two -- has sparked a wave of melancholy over the possible departure of a highly respected behind-the-scenes player and close adviser to Senate Minority Leader Mitch McConnell,” Politico’s Jonathan Martin writes. “And for those who must face the voters this year, the notion that a straight-shooting party stalwart like Bennett would become the first establishment scalp claimed by insurgent conservatives has sparked something else — fear of reflexive voting against any and all incumbents.”

Ron Brownstein with the big picture, at National Journal: “If the budding economic recovery accelerates, the GOP’s rightward march could leave it on shaky ground with voters focused more on results than ideology. It’s possible such a dynamic could help Democrats in November (especially in affluent districts), but it’s more likely to lift Obama in 2012. The president has almost certainly overestimated the public’s tolerance for government activism and will probably need to pivot toward reforming and streamlining Washington. But however well Republicans perform in 2010, a party too narrow for Specter, Crist, and maybe Bennett will face a tough challenge building a presidential majority coalition in 2012, when economic distress could be easing and the electorate swelling with more young people and minorities.”

In Hawaii -- getting out? “Despite spending more than $300,000, frustrated House Democrats may abandon efforts to win a special election in Hawaii after quiet diplomacy failed to end a high-level party feud that threatens their prospects,” the AP’s David Espo reports.

"The local Democrats haven't been able to come together and resolve that, so we'll have to re-evaluate our participation," said Rep. Chris Van Hollen, D-Md., chairman of the Democratic Congressional Campaign Committee.

In Pennsylvania -- getting tough: “Looks Like Those Bush Ads Worked,”John L. Micek reports in the Allentown Morning Call. Sen. Arlen Specter and Rep. Joe Sestak “are in a statistical dead heat in this morning's Morning Call/Muhlenberg College tracking poll. The two Democrats are at 43 percent each in the poll of 410 likely primary voters, with 13 percent undecided. Just yesterday, Specter held a 45-40 percent lead, with 14 percent undecided.”

Of those other calamities... “The oil spill is reaching far beyond the Gulf Coast and deep into American politics in an important election year,”Steven Thomma and David Lightman write for McClatchy Newspapers.“It's calling into question President Barack Obama's proposal to open new offshore areas to oil drilling. It's complicating already difficult efforts to pass a controversial bill aimed at curbing climate change. It's also all but certain to become a major issue in many of this fall's campaigns for control of Congress.” 

White House adviser Carol Browner, on Bloomberg Television’s “Political Capital With Al Hunt” this weekend: “This accident, this tragedy, is actually heightening people’s interest in energy in this country and in wanting a different energy plan.”

More on drilling -- FireDogLake.com uses President Obama’s own words (and recent pictures from the Gulf) against him, in a new ad: “Spill Here, Spill Now.”

Terror politics: “Senator Scott Brown responded to the attempted Times Square bombing yesterday by cosponsoring a bill that would allow the United States to strip Americans of citizenship if the government determines that an individual supported or joined a terrorist group,” The Boston Globe’s Farah Stockman and Matt Viser report. “But a host of scholars and fellow lawmakers, including the House Republican leader, Representative John Boehner of Ohio, immediately questioned the constitutionality of the proposal, saying it was at odds with a half-century of Supreme Court precedents that ruled that citizenship can be relinquished only voluntarily.”

White House Press Secretary Robert Gibbs, per ABC’s Jake Tapper: “I have not heard anybody inside the administration that's been supportive of that idea.”

Coming Sunday, on “This Week”: “Attorney General Eric Holder sits down with This Week anchor Jake Tapper in his first Sunday morning interview to share the latest on the investigation. ... And, in a This Week EXCLUSIVE interview, former New York Mayor Rudy Giuliani explains why he thinks the accused bomb suspect should be declared an enemy combatant.”

SCOTUS maneuvering, with a pick possible any day now, and the smart money on early next week...

Sen. Jeff Sessions, R-Ala., the ranking Republican on the Senate Judiciary Committee, bringing the Obama agenda into the hearing room:“As government continues its rapid expansion, Americans are looking for judges in the mold of Chief Justice John Roberts, not Justice John Paul Stevens. They are looking for judges who will stay true to our Founders' vision instead of imposing their own. They are looking for judges who recognize the limits on government power; who restrain themselves to the text of the Constitution; and who will defend the rights of all citizens without bias, without prejudice and without hesitation.”

From the other side: “THE SUPREME COURT: CORPORATE AMERICA’S NEWEST SUBSIDIARY?” reads the ad from MoveOn, Alliance for Justice and People for the America Way, set to run in The Washington Post next week (The New York Times turned it down), with a judge wearing corporate logos for the likes of Enron, Wellpoint, and Goldman Sachs. “Americans need a Justice who will dispense justice to Americans, not protect corporate profits at our expense.”

Over where the politics is way more fun -- we’re hung, in Great Britain:

“As counting wrapped up in the few dozen seats yet to declare, David Cameron's Tories were on course to become the largest party in the Commons but about 20 seats short of the 326 needed for a majority,”Philippe Naughton and Roland Watson report in The Times of London.“[Gordon] Brown made clear that he had no intention of giving up power easily – his passage through Britain's most famous front door at 7am was a symbolic reminder that he remains Prime Minister and has the constitutional right to form a government. Nick Clegg, the Liberal Democrat leader, admitted that his party had had a disappointing night, losing seats to both the Tories and Labour despite the excitement it had generated during the campaign.”

“Britain faced electoral stalemate on Friday and possibly days of wrangling to form a new government despite significant gains by the opposition Conservatives and damaging losses for Prime Minister Gordon Brown,” The New York Times’ John F. Burns and Alan Cowell writes. “Without an unassailable victory, [David] Cameron — and the country — could be heading for days of agonizing uncertainty as the two main parties set about trying to outmaneuver each other for power.”

Back home ... meet the birthers: “Fourteen percent of Americans say without prompting that they think Barack Obama was born in another country, rising to one in five when those with no opinion are offered that as a possibility. But for many it’s not a firm belief – and some appear not to hold it against him,” ABC’s Gary Langer writes.

“And perhaps surprisingly, about a third of so-called ‘birthers’ nonetheless approve of Obama’s work in office and express a favorable opinion of him personally. Still it’s mostly Obama critics who suggest he was born abroad; two-thirds of those who express that view also disapprove of his work in office and view him unfavorably overall. That, along with other data, supports the notion that some of this view is an expression of antipathy toward Obama, rather than a firm belief he was born in another country.”

Sarah Palin vs. ... tea partiers? ABC’s Teddy Davis: “Sarah Palin’s decision to break with Tea Party activists in California and to endorse Carly Fiorina for Senate has been met with grumbling from some on the Right who support Assemblymember Chuck DeVore. Palin is now using an update to her Facebook page to try to quell the unrest by touting Fiorina’s ‘pro-life, pro-traditional marriage, pro-military, and pro-strict border security’ credentials.”

Alienating her base? “Former Alaska GOP Gov. Sarah Palin's endorsement of Carly Fiorina in California's Senate race has prompted a fervent blowback on her Facebook page, long Palin's safe haven for delivering her message,” Politico’s Andy Barr writes. “The revolt is coming from Palin supporters who also back Chuck DeVore – a tea party favorite who is campaigning against Fiorina in the Republican primary.”

T-Paw, falling/rising, with the state Supreme Court knocking down spending cuts: “It's been a bad week for Minnesota Governor Tim Pawlenty. Of course, it's also been a good week for Republican Presidential Contender Tim Pawlenty,” Gerald Seib writes in his “Capital Journal” column. “In sum, this week's events define what Mr. Pawlenty is: a classic, fiscally conservative Midwestern Republican governor. In a period of voter discontent, Republicans have two years to decide whether that's the right stuff for the times.”

After prom -- award season. Tammy Haddad’s WHCA.com hands out honors to, among others, Rahm Emanuel, Dan Pfeiffer, Tony Romo, Morgan Freeman, Bob Barnett, Greta Van Susteren and John Coale.

The ONE campaign does Mother’s Day -- in six words per entry. Sen. Al Franken, D-Minn.: “She's loved you from the beginning.” Dana Perino: “Carrying heaviest loads with lightest hearts.” Sen. Kay Bailey Hutchison, R-Texas.: “Mothers determine our quality of life.” Rep. Lois Capps, D-Calif.: “Healthy Mothers Today, Healthy Children Tomorrow.”

New partnership -- welcoming Chris Cillizza, Dan Balz, Karen Tumulty, Anne Kornblut, and others at The Washington Post to the “Top Line” family, starting Monday.

The Kicker:

“In Utah the only ‘anybody’ they can vote against who happens to be there turns out to be me.” -- Sen. Bob Bennett, R-Utah, on what it means to be in Washington these days.

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May 7, 2010 in 2010 , The Note