NEWSWEEK: Media Lead Sheet/October 20, 2008 Issue (On Newsstands Monday, October 13, 2008).

COVER: The Bright Side (p. 26). Newsweek International Editor Fareed Zakaria writes an essay looking at how there may be good things for the United States' economy in the long run to come out of the current crisis. "Amid all the difficulties and hardship that we are about to undergo, I see one silver lining. This crisis has-dramatically, vengefully-forced the United States to confront the bad habits it has developed over the past few decades. If we can kick those habits, today's pain will translate into gains in the long run." He writes that two decades of easy money and innovative financial products meant that virtually anyone could borrow any amount of money for any purpose. "At some point, the magical accounting had to stop ... The United States-and other overleveraged societies-has now gotten the wake-up call from hell. If we can respond and change our behavior markedly, this might actually be a blessing in disguise."

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(Photo: http://www.newscom.com/cgi-bin/prnh/20081012/NYSU005 )

"The Anatomy of Fear" (p. 31). Senior Editor Daniel Gross reports on the impact of the fear in the economic crisis. In recent weeks, the emotions expressed by the people in finance include anxiety, panic, rage, and resignation. "In the past several weeks, we've witnessed a 24/7, digital run on financial institutions as investors, banks, corporations, borrowers and lenders worry that their assets simply aren't safe. This panic has shown similar dynamics to previous ones. But due to the rapid shift in the structure of the global financial system, it's also completely different. As a result, the amount of selling and declines are far greater than would be warranted by the erosion in the fundamentals."

http://www.newsweek.com/id/163478

TECTONIC SHIFTS-DAN LYONS: "Down in the Valley" (p. 34). Senior Editor Dan Lyons writes that Silicon Valley has suddenly realized that the collapsing economy means trouble for tech companies too. Especially at risk are the new startups created in the wake of the last dotcom crash in 2001. The signal traits of these Web 2.0 companies are cutesy logos, odd-sounding names and flimsy business plans based on a vague notion of luring millions of people to free Web sites and someday selling advertisements. Some have raised enough venture-capital funding to survive for a year or more. Some may be able to raise more from venture backers, albeit at onerous terms. But many are going to flame out. The correction is long overdue.

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"OK You Two, What Would You Do to Solve This Mess?" (p. 42). Senior Editor Michael Hirsh reports on the teams of economic advisers for Barack Obama and John McCain and looks at how both of them are handling the economy. Since the crisis began, Obama has gotten tight with the Bill Clinton "A-Team"-Larry Summers, Robert Rubin, Laura Tyson-who now routinely travel with him. McCain conducts occasional phone conferences with anywhere from seven to 30 business people and economists who review his campaign material.

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THE MONEY CULTURE-DANIEL GROSS: "People Who Live in Glass Hauser" (p. 20). Gross writes that in recent weeks, there has been gloating in Europe during the spectacle of American bankers falling on their faces. The reckless pursuit of profits, a disdain for regulation, manic risk-taking has led to widespread embarrassment. But now the clog is on the other foot. Germany has been forced to bail out the nation's second-largest property lender. Iceland has seized several banks. Britain unveiled an expensive plan to inject up to $88 billion of capital into proud financial institutions like Barclays. Several European countries have hastened to boost deposit insurance.

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POLITICS: "Ready, Aim, Fire!" (p. 48). Science Columnist Sharon Begley writes that the fine tradition of negativity and attacks in politics goes back to the nation's founding document. By the count of political scientist John G. Geer of Vanderbilt University, 70 percent of the statements in the Declaration of Independence are attacks on England. Although conventional wisdom among academics and political junkies had been that sleazy ads and dirty campaigning depress voter turnout, both lab experiments and analyses of actual elections show that the effect on turnout is more nuanced.

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POLITICS: "No Prize to the Noble Leader" (p. 52). White House Correspondent Holly Bailey profiles McCain adviser Steve Schmidt, who is in charge of the day-to-day campaign and who is tired of reporters saying he's Karl Rove's "protege"-the implication being that he is willing to do anything to win. Schmidt learned in 2004 what it means to play rough when your candidate is behind. Now, four years later, he is back at it. McCain is down in the polls, and the candidate has struggled to get a consistent message across to voters. When that happened in 2000 and 2004, Rove unleashed meaner speeches and uglier campaign ads. Under Schmidt's direction, McCain is doing the same.

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CAMPAIGN 2008: "Shivs You Can Believe In" (p. 54). Senior White House Correspondent Richard Wolffe and Investigative Correspondent Michael Isikoff report on Obama's chief strategist David Axelrod. The real test for any strategist is how to calibrate the positive and the negative. With Obama up by 11 points (52 to 41 percent) in the new Newsweek Poll, Axelrod wants to maintain the "brand"-a candidate who can appeal in red and blue states, who can pull people together, who aims for a more noble sort of politics-while also showing that Obama's tough enough to govern in a dangerous and uncertain world.

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BETWEEN THE LINES-JONATHAN ALTER: "Crushed by the Elephant" (p. 55). Senior Editor and Columnist Jonathan Alter writes that in a season of ironies, "the greatest of all might be that John McCain lacks the toughness to get elected president." He had his best chance during the summer, but he wasn't tough enough to remake the Republican Party in his own image. Alter writes that the free-market party of Reagan is dead and the resentment party of Nixon (in the form of ugly attacks unleashed by McCain and Sarah Palin) may find that its best days are behind it. "Where is the party of McCain? The man who survived five and a half years as a Vietnam POW and a thousand political battles is being crushed by a dying elephant."

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CULTURE: "Hoist One Last Glass" (p. 60). London Reporter William Underhill reports that in Great Britain, something essential to the national character is disappearing. Britons fear that one of their most beloved institutions, the neighborhood pub, is dying. Five pubs go out of business every day, leaving empty spaces in the communities they once served. For the first time in nearly 1,000 years, more than half the country's villages have gone dry. The soaring price of beer has cut consumption to the lowest since the Great Depression.

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