Last Call

I'm glad to see that five months and change in, El Rushbo believes Obama will earn a second term.

Remember, Rush Doesn't Like Al Franken Too Much

So it's no surprise that the man that wrote Rush Limbaugh Is A Big Fat Idiot is now having his election being compared to Ahmedinejad's recount by....A Big Fat Idiot.

Expect the poor, poor Republicans to continue to claim the mean black man is keeping them down.

Al Versus Norm, Part 1242

It's over. Minnesota's Supreme Court has unanimously ruled that Al Franken is the winner.

The courts finds that "Al Franken received the highest number of votes legally cast and is entitled under Minn. Stat. § 204C.40 (2008) to receive the certificate of election as United States Senator from the State of Minnesota." This means that when Franken is ultimately seated, the Democrats will have 60 seats and be able to beat any Republican filibuster if they stay completely united (though good luck with that, obviously.)

It's been seven and a half months since Election Day, and five and a half months since the seat went vacant after Coleman's term expired -- but the state's process of recounts and litigation is now over, barring the unlikely event of a higher authority stepping in and forcing them to do more. Franken has won by 312 votes, out of roughly 2.9 million -- a difference of 0.011%.

The big question now is what comes next. Will Coleman concede, or will he take another path -- as national GOP leaders like Sen. John Cornyn (R-TX) have urged -- and take this to federal courts, where he might try to get an injunction against Franken receiving a certificate of election? And if Franken does get his certificate, will the Senate GOP attempt to filibuster its acceptance?

Given the stakes of health care and cap and trade, you'd better believe that the GOP won't let this die however. It may be over, but I seriously doubt it's over over. Will Franken be seated? That's up to Republican Gov. Tim Pawlenty. As recently as Sunday, Pawlenty strongly hinted that he would do whatever the courts decided, meaning that unless Coleman files a federal case, the pressure to seat Franken will be overwhelming.

What will Norm do now?

[UPDATE 3:30 PM] Several press conferences this afternoon, Gov. Pawlenty, Franken, and Coleman will all be giving pressers here in the next couple hours. Over at Hullabaloo, D-Day seems to have the come to the same conclusion I have:

Tim Pawlenty has said all along that he would certify the winner of the election if the Minnesota Supreme Court told him to do so. They have now told him. But all along he gave himself an out, that he would certify it as long as another court didn't tell him to stop pending another appeal. Coleman could proceed to the federal courts at this point, and national Republicans have been happy to bankroll him on that fruitless quest and keep Al Franken out of the Senate as long as possible. It's a good investment for them. Also, Senate Republicans could actually filibuster Franken's entry into the Senate, even with a signed certificate.

I'm skeptical that this will conclude so smoothly from here.

The additional penalty to Coleman and the GOP is almost nil at this point, and the Democrats have a lot more to lose right now. As D-Day says, it's a good investment for the Republicans.

I've personally said all along the Roberts Court was looking for a case to make some serious judicial activism over, and Coleman's federal appeal would most certainly be a blockbuster in bench legislation should they agree to take it up. I'm fully expecting Coleman to take it to the next level, for Pawlenty to slime his way out of signing Franken's certificate, and for Al Franken to twiddle his thumbs long enough to miss being a yes vote for health care and climate change legislation.

This situation has "go for broke" written all over it. We know Coleman won't rule out a Federal appeal, he's said as much. If I'm a Republican, I'm thinking "Why not? What do we have to lose?"

[UPDATE 4:13 PM] Against all odds, Norm Coleman has in fact conceded to Franken, putting this to a definitive end.

Senator Al Franken is official. I was wrong about Coleman. In the end he did the right thing. Shame it only took him seven months to do it.

Your Sins Caused The Economic Meltdown

No, really. That's the theory, and Oklahoma Republicans want a resolution stating that it's all Obama's fault.

Recently, Rush Limbaugh explained (if it were not already obvious) how Obama economic policies were the cause of Republican Gov. Mark Sanford’s affair with a beautiful Argentinian woman. But what caused the economic problems that caused the stimulus package that aroused Gov. Sanford? Oklahoma Rep. Sally Kern has finally answered that question: our sins. Kern has drafted a resolution that puts the current economic crisis squarely on the backs of libertines and godless people who have produced a moral crisis. This includes Obama’s refusal to “uphold the long held tradition of past presidents in recognition of our National Day of Prayer.”

You may recall Kern from his viral video ranting about gays, here. Now, she has gone macro economic in showing how free sex can destroy the free market. It is like the lost chapter of Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations. Of course, one must remember that, like his successor Kern, Smith held forth on both moral and economic theories with his publication The Theory of Moral Sentiments. [Richard Posner's Economics and Reason doesn't count and proved far less exciting than its title].

In the resolution below, Kern’s resolution declares in pertinent part:

WHEREAS, we believe our economic woes are consequences of our greater national
moral crisis; and
WHEREAS, this nation has become a world leader in promoting abortion,
pornography, same sex marriage, sex trafficking, divorce, illegitimate births, child abuse, and many other forms of debauchery; and
WHEREAS, alarmed that the Government of the United States of America is forsaking the rich Christian heritage upon which this nation was built; and
WHEREAS, grieved that the Office of the president of these United States has refused to uphold the long held tradition of past presidents in giving recognition to our National Day of Prayer; and
WHEREAS, deeply disturbed that the Office of the president of these United States
disregards the biblical admonitions to live clean and pure lives by proclaiming an entire month to an immoral behavior;

It appears that divorce is “a form of debauchery.”

Of course, one has to ignore that fact that the crisis began under President George Bush who was a favorite of the religious right. Obviously, there was a bit of anticipatory economic damnation. Ironically, in a recent article in the Washington Post, it was disclosed how both Sen. Jon Ensign and Sanford frequented a little known house on Capitol Hill dedicated to prayer and specifically the National Prayer Day.

I would think God/Goddess/Allah/Flying Spaghetti Monster/Ceiling Cat would actually be more angry at people who did things in Their name that were clearly hypocritical and full of bullshit, but who am I to intepret the will of your average deity?

In The End, She's Still A Republican, Folks

Which is the major problem with Sen. Olympia Snowe of Maine.

Snowe, R-Maine, said she's working with Sen. Chuck Schumer, D-N.Y., to establish that kind of a framework in the bill expected to emerge next month from the Senate Finance Committee.

In an Associated Press interview in Portland, Snowe said it would be unfair to include a government-run health insurance option that would take effect immediately.

"If you establish a public option at the forefront that goes head-to-head and competes with the private health insurance market ... the public option will have significant price advantages," she said.

Now, understand that the esteemed Senator from Maine considers a competitive public option health insurance plan that would compete with private plans and have the buying power of the government behind it allowing it to offer health care coverage at a lower cost to the American people to be a serious problem.

This is because Olympia Snowe is a Republican. She understands very clearly what passing a plan like this would do to her party, which is crush the holy hell out of it for the next generation or so. Ergo, she is resorting to telling the truth. It would indeed give the public option a significant price advantage, which is indeed the entire point of the public option.

Republicans don't want you to have that option. Period. It would be wonderful for the country. It would be a political disaster for Republicans. Ergo, you can't have a public option on health insurance.

Thus endeth the lesson.

The Specter Of Deflation

For quite some time now I've been saying that the short term problem stemming from the financial crisis and the real estate collapse is deflation and not inflation. Massive amounts of wealth disappearing from stock markets and home prices is a massive deflationary pressure. Here in America, Helicopter Ben is printing money and selling US Treasury debt by the boatload, increasing the money supply and combating the trillions lost in deflationary wealth loss.

In Europe however, the problem is the opposite.

Prices in the 16-nation zone fell 0.1% in the past year, Eurostat said. The inflation rate had been 0% in May.

Inflation in the eurozone has been dragged down by lower energy and food prices, and by falling demand for goods from companies and households.

The European Central Bank's target rate for inflation is just below 2%.

Some analysts fear that this is the start of a period of deflation for the eurozone.

Deflation is considered damaging to an economy as consumers tend to delay making purchases until prices fall further. Without consumer spending to stimulate growth, economic output falls.

"There are plenty of reasons to believe that the annual decline of 0.1% in June is just the beginning of a downward trend," said Daniele Antonucci from Capital Economics.

"At this stage, we expect negative inflation rates for the next six months or so. With factory gate prices falling, wage growth likely to slow sharply and a big amount of spare capacity in the economy, core inflation will decelerate considerably."

This is terrible news, really. Deflation is far worse for an economy than inflation, and people tend to foget that strictly from a GDP standpoint, the Eurozone economy is the world's largest, bigger than even the United States.

That means the shape of the global economy will not be dictated by the pace of America's recovery, but by the pace of the Eurozone's recovery. And right now, it's looking like the Eurozone is headed straight down the tubes into multiple quarters of deflation. This will only serve to delay any real recovery in the global economy. The worst part is the European Central Bank's head, Jean-Claude Trichet, refuses to take any steps to fight deflation because he's too worried about inflation.

In other words, any improvement in the U.S. economy will be more than offset by the Eurozone's deflationary spiral.

You've Got To Be Kidding Me

Bye, Mark.

South Carolina Gov. Mark Sanford is admitting more encounters with his Argentine mistress than he previously has disclosed.

In a lengthy, emotional interview with The Associated Press, the governor described seven meetings with the woman, including their first in 2001. Sanford says there have been five over a 12-month period, including two multi-night stays with her in New York.

It was the first disclosure of any get-togethers with her in the United States and contradicted a public confession last week during which he admitted to a total of four encounters in the past year.

No way he stays after this. What little goodwill the guy had was entirely based on his "heartfelt confession" which now turns out to have been another lie of omission. He's going to get the hook soon.

Beat The Clock

Five states, including California, are facing government shutdowns at midnight tonight unless emergency budget measures are passed.

The last time Indiana missed its deadline for passing a budget and had to shut down the government was during the Civil War.

But on Monday, as lawmakers raced to hammer out an agreement over school funding, state agencies began preparing 31,000 workers to be temporarily out of a job. Republican Gov. Mitch Daniels has warned residents that most of the state's services -- including its parks, the Bureau of Motor Vehicles and state-regulated casinos -- would be shuttered unless a budget is passed today.

Indiana is one of five states -- along with Arizona, California, Mississippi and Pennsylvania -- bracing for possible shutdowns this week as time runs out for lawmakers to close billion-dollar gaps in their fiscal 2010 budgets.

Of the 46 states whose fiscal year ends today, 32 did not have budgets passed and approved by their governors as of Monday afternoon, according to the National Conference of State Legislatures.

Although the majority of those are expected to pass eleventh-hour budgets, the fiscal futures of a handful remain uncertain, said Todd Haggerty, an NCSL research analyst.

"It's a lot of states that are coming down to the wire," Haggerty said. "It's far more than we've seen in the past, and it's because of the state of the economy."

Since 2002, only five states have been forced to shut down their governments. Some of the closures were brief: In 2007, Michigan's doors were closed for four hours before lawmakers passed emergency measures that bought them time to close a $1.75-billion deficit.

"What's different now is that the recession has eroded tax revenues across the country," Haggerty said. Collectively, he said, states are wrestling with budget deficits totaling $121 billion.

In California, state finance officials will begin issuing IOUs on Thursday if lawmakers and the governor cannot agree on a way to close a $24-billion shortfall. The IOUs would go to local governments, vendors, taxpayers and college students receiving state financial aid. California has issued such IOUs only one other time -- in 1992 -- since the Great Depression.

In Arizona, which has never missed its constitutional budget deadline, officials are battling over how to resolve a $3-billion gap.

Almost all of the other states have budget shortfalls either this fiscal year or next as well. This battle will be played out across the country as Republicans cry "cut taxes and cut spending!" and Democrats yell "We must preserve government services!" Something will have to give, and it's only a matter of how many people are hurt, not if.

Castling The King Four Games Ahead

The state of Arizona is looking at the health care chessboard and is castling its king early, putting a ballot initiative on the vote for 2010 that will exempt the state's citizens from any federal health care mandates.

Voters in Arizona will decide next year whether residents will be subject to mandates in the pending health care reform that President Barack Obama and congressional Democrats are promoting.

At least five other states – Indiana, Minnesota, New Mexico, North Dakota and Wyoming – have considered proposals to take pre-emptive action against the pending federal mandates, but those proposals have either not made it out of committee, failed to get enough votes from one side of the legislature, or are still being crafted.

Only the Arizona Legislature introduced an initiative (HCR2014), which if passed, would amend the state constitution to codify that no resident would be required to participate in any public health care option. Arizonans will vote on the initiative in November 2010.

“HCR2014 is proactive and will protect patients’ fundamental rights,” Arizona State Rep. Nancy Barto, a Republican, said in a statement. “We are a front-line battle state to stop the momentum of this powerful government takeover of your health care decisions. Health care by lobbyists thwarts your rights and can be stopped here.”

The main issue is the core of the Obama health plan – a government run or “public option” – to compete with private health insurers. Some state lawmakers fear such legislation would force residents to buy into the public plan.

“The eyes of the nation will be on Arizona next year to see what happens,” Christie Herrera, director of the Health and Human Services Taskforce with the American Legislative Exchange Council, told CNSNews.com. “If this succeeds in Arizona, other states will take notice and push harder.”

No, never mind the fact that 1) there's no health care plan yet, 2) there's no public option yet, 3) there's no mandate that you have to have health care yet. Arizona is already up to step 5, which is a voter referendum picking a state's rights battle over an issue that doesn't exist yet.

Never mind that Arizona's huge retirement community already means a much higher than normal percentage of the population is already on government-run health care...it's called Medicare. Clearly Arizona Republicans are gearing this up as one of those Tenth Amendment Versus Obama The Tyrant battles that are all the rage in Wingnutland recently, despite the fact that the whole thing is silly beyond belief. It's the equivalent of agreeing to a series of chess matches with an opponent, and then immediately stating that in game 4 at some point you're going to castle queenside, even though the first three games haven't even started yet.

But the point here is of course to frame the argument that Obama's public option is nothing more than health care tyranny. It's the same idea behind "Obama's going to take our guns away, buy guns now!" mentality that has kept gun stores out of stock since November. By framing everything as the people versus the Tyrant Obama, concentrating on the so far nonexistant mandate issue instead of affordable health care for all Americans issue, the Republicans are changing the debate from health care for all versus cost, to mandates versus freedom and liberty.

It's classic wingnut fare, change the terms of the battle from the big issue to "Is Obama the anti-christ or just pure evil?" It all goes back to the truly mean, violent, apocalyptic streak behind all these protests and whatnot, the people in this country who see Barack Obama as the Enemy of America, people so threatened by a black man as President that they see him as an existential threat to America's very continued daily operation, a threat somehow so dire that it must be excised like cancer.

Indeed, there's a whole cottage industry of wingnut fantasy involving fighting the evil tyranny of a liberal administration. They love the idea. It turns them on. It didn't matter to them that Bush really was a tyrant, only that they think Obama is one.

Watch. This one will pick up momentum as the health care debate rages on.

[UPDATE 12:10 PM] And let's not forget that this just keeps devolving into "Us vs. Them" and there are people that are perfectly happy to view America in that way.

Judicial Activism On The Way?

Slate's Rich Hasen argues that the campaign finance decision not handed down yesterday by the Supremes is by far the most important, especially since the court is taking the extremely rare step of rehearing the case in September and greatly expanding the scope of the argument well beyond the original case.

In a Supreme Court term that has had its share of surprises, the court saved one of the biggest for last. Rather than publish an opinion at the end of the term as expected in an obscure campaign finance case, Citizens United v. FEC, the court issued a rare order for reargument of the case in September (before the usual start of the term). At that point, the court will consider whether to overrule its two previous decisions that in 1990 and 2003 upheld limits on corporate spending in federal elections.

Given the dynamics of the court, there is a great chance the justices will use the opportunity to overrule limits on how much money corporations can spend supporting candidates—whether or not Judge Sonia Sotomayor is confirmed in time to hear the case in September. In the Voting Rights Act case the court considered last week, the court ducked the constitutional question in favor of narrow statutory interpretation. In contrast, in Citizens United, the court is likely to address the constitutional questions head-on, and the outcome likely will not be good for supporters of reasonable campaign-finance regulation.

The case itself, Citizens United vs. FEC, was supposed to be about whether or not a documentary slamming Hillary Clinton produced during the 2008 campaign was a documentary or if it constituted a film-length campaign ad, subject to provisions of the McCain-Feingold campaign finance laws. By instead rehearing the case and expanding the scope of the decision, it's clear to Hagan that the Supreme Court is planning to overturn Mc-Cain-Feingold as unconstitutional and that they plan to do it before the 2010 campaign season gets underway.

My personal feelings are that Obama's financial juggernaut in 2008 was the straw that broke the camel's back, rendering the need for McCain-Feingold a moot point. Why have the laws when you can skip public financing and bury your opponent with private cash? If anything, Obama's fundraising prowess showed the need to have these laws eliminated and allowing all sides virtually unlimited campaign financing. Nobody expects either party to use public financing in the presidential race in 2012...ergo why put the handcuffs on it?

I don't agree with it, but I have to admit that Rich Hagan sees this coming a mile away. It's judicial activism at its finest, the Supreme Court almost certainly plans to legislate from the bench here. Conservatives will no doubt scream to high heaven about such use of the unaccountable Judiciary in making our laws, yes?

Sanford And Stunned

The calls for SC Republican Gov. Mark Sanford to resign are getting significantly more serious as they are coming now from his own party.

Three more Republicans in the South Carolina state legislature spoke out against Mark Sanford on Monday and said the best thing for the governor to do in the wake of last week’s scandal is resign.

At a local Chamber of Commerce breakfast in Cherokee County, GOP House members Lanny Littlejohn, Dennis Moss and Steve Moss each told the audience that Sanford has lost the credibility to steer the state’s economy through the final 18 months of his term following revelations of an extramarital affair.

Reached by phone, each legislator confirmed their comments at the breakfast. All argued that Sanford has simply become too much of a distraction for the state and can no longer devote his full attention to the troubled economy. South Carolina has the third highest unemployment rate in the nation.

“When business leaders start moving to South Carolina, they want to see somebody they can have confidence in,” Littlejohn told CNN. “If you lie to your family and you lie to your friends, you lie to anyone.”

As a matter of fact, the pressure to resign just got turned on full blast on Monday.

South Carolina Lt. Gov. Andre Bauer said Monday he would be open to a scenario in which he would assume the governorship but not run for the state's top office in 2010 if Governor Mark Sanford decides to resign in the coming weeks.

Bauer said that arrangement would help tamp down some of the political jockeying among other Republicans who are likely to run for governor next year as they decide how to respond to revelations about Sanford's extramarital affair. Other candidates include state Attorney General Henry McMaster, Rep. Gresham Barrett and state Rep. Nikki Haley.

"We are at an impasse now because it's all about 2010 and the next governor's race, and I don't see anyone being an adult," Bauer told CNN in an exclusive interview.

Bauer is one of several Republicans plotting a run for governor, but his rivals worry that a Sanford resignation – which would elevate Bauer to the governorship – might give Bauer an advantage in next year's governor's race because he would be running as an incumbent. Sanford is term limited and is not allowed to run for re-election in 2010.

He said he had discussed the idea of not running in 2010 with GOP leaders in the Senate, many of whom are staunch opponents of Sanford.

"What it would do is it would get the politics out of it," Bauer said. "The people that are so concerned for their own political future about running for governor, would no longer be worried if I came in and became governor, because I would just say. 'You know what? This is bigger than politics. I will go and lead in for the next 18 months and not run for re-election.'"

If your own party is openly discussing a deal where the new pecking order after your resignation is being set, you are political toast. Mark Sanford is being given an out. I suspect his own party is making it clear that if he does not accept this out, he will be impeached. That's the implied threat. You notice Democrats in South Carolina aren't saying a thing, they are staying well out of the way and letting the SC GOP eat itself, that's very, very smart on their part. I suspect that Sanford will resign, and will resign soon. Nobody in the SC GOP is coming to his defense at this point. Newspapers are calling for him to step down, state lawmakers from his own party are calling for him to step down, the Lt. Gov. of his own party is offering to not run for the job in 2010 if he steps down...folks, decisions are being made and Mark Sanford is not involved in them. He's out of options. He'll be stepping down, possibly before the end of the week.

It's time to go, Mark. Game's over. I'm not in the "advice to GOP" game, but at this point I'd have to say "Salvage what dignity you have and take the deal."

Politico's Jon Martin on the other hand says that Sanford won't resign, and that Lt. Gov. Andre Bauer is just trying to earn points, especially since Sanford is telling his supporters that "God's plan" is to have Sanford finish his term.

We'll see. My money's on Sanford being forced out.

StupidiNews!

• American forces in Iraq have officially withdrawn from Iraq's cities as the country celebrates National Sovereignty Day.
• Russian troops are conducting war games near the border with Georgia as a "clear warning".
• The EPA has released a list of dangerous coal ash waste sites in ten U.S. states.
• Revised first quarter numbers show the U.K.'s economy shrank far more than expected.
• Over 80% of the world's spam email was sent by hijacked botnet PCs in June.

There's A Catch

CNBC's Dennis Kneale declares the Great Recession over. "Dow 10,000 here we come."

What he doesn't tell you is that the Dow will hit 10,000 again sometime around late 2011 or early 2012, not to mention a good year plus of double-digit unemployment. Or longer.

We've got a whole lot of puttering back and forth in the 7,000-9,999 territory to go for the next couple years, kids. Look, things aren't going to go back to where they were in 2005. Not for a long, long time, and in the case of some economic factors, never.

The Scalia Point

In the other major Supreme Court ruling, Justice Antonin Scalia's love of state's rights overcame his love for all things corporate as he tore into the Bush administration's banking regulatory practices.

The 5-4 ruling by the high court was unusual. Justice Antonin Scalia, arguably the most conservative jurist, wrote the majority's opinion and was joined by the court's four liberal judges.

The five justices held that contrary to what the Bush administration had argued, states can enforce their own laws on matters such as discrimination and predatory lending, even if that crosses into areas under federal regulation.

Justice Clarence Thomas, writing for the four dissenters, argued that laws dating back to the nation's founding prevent states from meddling in federal bank regulation. He was joined by Chief Justice John G. Roberts and justices Anthony Kennedy and Samuel Alito.

The ruling angered many in the financial sector, who fear it'll lead to a patchwork of state laws that'll make it harder for banks and other financial firms to take a national approach to the marketplace.

"We are worried about the effect that this ruling could have on the markets," said Rich Whiting, general counsel for the Financial Services Roundtable, a trade group representing the nation's 100 largest financial firms, in a statement. The decision "hinders the ability of financial services firms from conducting business in the United States. Even worse, it will cause confusion for consumers, especially those who move from state to state."

It's funny. Conservatives are usually all about states' rights over the Federal government unless it interferes with companies making money in which case "it hurts consumers" who they would normally never give a shit about.

In this case however, Scalia's so conservative his Federalist instincts kicked in.

Go fig.

Lindsey Graham, Are You Kidding?

Has the GOP fallen to the point where Lindsey Graham failing to burst into flame on national TV this weekend means "that he is ready to take more of a leadership role"? Honestly? Village stupidity aside, you don't get more mediocre than Lindsey Graham, John McCain's Faithful Sidekick.

Then again, who else does the GOP have that is A) actually in Congress, B) is not currently in a scandal, and C) can go on national TV without bursting into flame?

The really sad part is, Lindsey there wins this contest by default. It's that bad for the GOP right now.

[UPDATE 4:47 PM] And let's not forget who is currently leading the GOP, and why the GOP (and the Village) is so very eager to put forth the meme that anyone other than El Rushbo is in charge.

100,000 Reasons The CRA Didn't Cause The Housing Crisis

Yesterday I mentioned the vampire-like lie that the "Community Reinvestment Act caused the housing collapse" would not die, as John Carney brought it up again. I gave Barry Ritholtz the kill yesterday, and today he's put up $100,000 of his own money to debate any and all comers on this.

Well, its time to put up or shut up: I hereby challenge any of those who believe the CRA is at prime fault in the housing boom and collapse, and economic morass we are in to a debate. The question for debate: “Is the CRA significantly to blame for the credit crisis?”

A mutually agreed upon time and place, outcome determined by a fair jury, for any dollar amount between $10,000 up to $100,000 dollars (i.e., for more than just bragging rights).

The nonsense rhetoric blogged about has no cost to those pushing these discredited memes — but interferes in the societal attempts to understand how these problems arose and then how to fix them. Perhaps this will help clarify the issue by forcing those with partisan agendas to stand behind their claims.

Which of the many “CRA was a major factor” proponents have the courage of their conviction to step forward?

My money's on Barry. Big time. John Carney, Megan McArdle, Jim Pethokoukis, let's see your hands...

...Felix Salmon at Reuters reports that Carney wants to take up Ritholtz on his offer. Let the games begin.

7,800 Weekends At Bernie's

Because 150 years is a long, long time.

U.S. District Judge Denny Chin said Madoff's breach of trust was massive, and that he lied to investors and to the SEC to buy homes, yachts and pay country club fees. He called the maximum sentence symbolic.

"Not a single letter was submitted in support of Madoff," Chin said. "Not friends, not family. That is telling."

Prosecutors sought a 150-year sentence for the multi-billion dollar fraud scheme, while the federal probation department recommended 50 years.

Madoff's attorney Ira Sorkin had tried to argue that both proposed sentences were excessive.

While Madoff, dressed in a dark suit, white shirt and tie, sat with his head down and his back to his victims as they delivered their testimony, he stood and faced them during his statement and apologized.

"I cannot offer an excuse for my behavior," Madoff said. "How do you excuse deceiving investors and 200 employees? How do you excuse lying to my sons and two brothers? How do you excuse lying to a wife who stood by me for 50 years and still stands by me? There is no excuse for that. I made a terrible mistake."

He went on to say he left a legacy of shame for his family.

Nine victims offered heart-wrenching testimonies earlier in the day, asking for the judge to deliver the maximum sentence. Said Burt Ross, who lost $5 million in the scheme, "Commit Madoff to prison for the rest of his life. May Satan grow a fourth mouth where Madoff can spend the rest of eternity."

Yeah. 65 billion dollars? There's a special place in hell for Bernie...but before he gets there, there's a special place in prison for the guy too.

SCOTUS And The Ricci Case

D-day reviews the Supreme Court's 5-4 decision overturning the New Haven firefighters' reverse discrimination case, vacating the decision of nominee Sonia Sotomayor.

What's notable is that this case was previously decided by the 2nd Circuit Court of Appeals by a three-judge panel that included Sonia Sotomayor. And so now we'll hear all about that honky-hating judge reversed again (how does this affect her "reversal rate"?) and the manly men of the Supreme Court helping out those poor white firefighters who worked so hard to pass that test.

Except that Courts of Appeals, who generally follow prior precedent in cases like this, cannot make the sweeping changes that can be made at the SCOTUS level. Far from being a slave to "empathy," Sotomayor followed the law available to her in concurring with the majority decision on her Court. In fact, as Sam Alito wrote in his concurrence today, "But 'sympathy' is not what petitioners have a right to demand. What they have a right to demand is evenhanded enforcement of the law . . . And that is what, until today's decision, has been denied them." The Second Court had no precedent on which to rely to offer that enforcement, and if Sotomayor reversed the District Court ruling in Ricci, she would have been relying on sympathy. Which is what her critics say she always relies on.

What is also often overlooked is that Sotomayor's decision in the Ricci case was part of a unanimous three-judge decision to do so. There was no existing precedent here, so kicking this up to the Supreme Court in order for them to craft one was the right thing for Sotomayor to do. One was then crafted and handed down today, in a close 5-4 decision. If Sotomayor had sided with the firefighters at the appellate level, it would have literally been a case of being an "activist judge" which conservatives hate so much.

But again, being an activist judge (the only honest definition is "a judge that crafts a legal precedent through a decision") is apparently exactly what conservatives want, for they are applauding this decision and the legal precedent it now creates. Activist judges are fine as long as they make precedent that conservatives agree with.

Zandar's Thought Of The Day

At the current rate of logic decay since the NY Times hired Ross Douthat, he should reach his own event horizon of suck sometime in September and collapse in on his own stupidity.

His columns keep getting worse (this week he's blaming Mark Sanford's affair on post-feminist liberal elites) and yet he seemingly is able to reach new nadirs seemingly without any effort. That takes work, people.

DiFi To Progressives: Drop Dead

California Sen. Dianne Feinstein may be a Democrat, but she doesn't seem to give a damn about criticism from the Left on health care reform.

Senator Dianne Feinstein has already taken a hammering from Dems and health care reform advocates for casting doubts on the prospects of President Obama’s health care reform efforts. MoveOn, for instance, aired an ad against her in California, demanding she show some leadership and fight harder to get the president’s reform plan passed.

Now Feinstein has hit back at the criticism from the left in an article about lefty groups targeting Dems for waffling on key components of health care reform:

“I do not think this is helpful. It doesn’t move me one whit,” she said. “They are spending a lot of money on something that is not productive.”

That sharply dismissive tone won’t exactly smooth over tensions.

I'm with Atrios on this one: Progressives don't matter in Washington other than something to be mocked or derided, but even the craziest tinfoil batshit GOP theories get regular airplay and are treated with respect by the Village.

Part of that is the progressive movement's fault (MoveOn.org's disastrous "General Betrayus" attack comes to mind) but that's like maybe 5% of it. The other 95% is the Village, having spent 20+ years in a Washington where progressives simply didn't matter in the least. Now that they do, the Village hasn't gotten the memo. Just because the people swept the Democrats into power doesn't mean the rules of the Beltway have changed at all. Once the Village realized it had the power to make or break politicians, they decided they like the ones that sucked up the most. DiFi has been around since 1992, and her idealism was burned from her by the GOP revolution of 94.

It's still high school popularity to her. She knows how the game is played, and how the game is won. And to her, the conservatives still run the cool kids clique.

Kroog Versus The Stupid

Paul Krugman takes on climate change deniers that voted against ACES, aka the GOP.

To fully appreciate the irresponsibility and immorality of climate-change denial, you need to know about the grim turn taken by the latest climate research.

The fact is that the planet is changing faster than even pessimists expected: ice caps are shrinking, arid zones spreading, at a terrifying rate. And according to a number of recent studies, catastrophe — a rise in temperature so large as to be almost unthinkable — can no longer be considered a mere possibility. It is, instead, the most likely outcome if we continue along our present course.

Thus researchers at M.I.T., who were previously predicting a temperature rise of a little more than 4 degrees by the end of this century, are now predicting a rise of more than 9 degrees. Why? Global greenhouse gas emissions are rising faster than expected; some mitigating factors, like absorption of carbon dioxide by the oceans, are turning out to be weaker than hoped; and there’s growing evidence that climate change is self-reinforcing — that, for example, rising temperatures will cause some arctic tundra to defrost, releasing even more carbon dioxide into the atmosphere.

Temperature increases on the scale predicted by the M.I.T. researchers and others would create huge disruptions in our lives and our economy. As a recent authoritative U.S. government report points out, by the end of this century New Hampshire may well have the climate of North Carolina today, Illinois may have the climate of East Texas, and across the country extreme, deadly heat waves — the kind that traditionally occur only once in a generation — may become annual or biannual events.

In other words, we’re facing a clear and present danger to our way of life, perhaps even to civilization itself. How can anyone justify failing to act?

Well, sometimes even the most authoritative analyses get things wrong. And if dissenting opinion-makers and politicians based their dissent on hard work and hard thinking — if they had carefully studied the issue, consulted with experts and concluded that the overwhelming scientific consensus was misguided — they could at least claim to be acting responsibly.

But if you watched the debate on Friday, you didn’t see people who’ve thought hard about a crucial issue, and are trying to do the right thing. What you saw, instead, were people who show no sign of being interested in the truth. They don’t like the political and policy implications of climate change, so they’ve decided not to believe in it — and they’ll grab any argument, no matter how disreputable, that feeds their denial.

Indeed, if there was a defining moment in Friday’s debate, it was the declaration by Representative Paul Broun of Georgia that climate change is nothing but a “hoax” that has been “perpetrated out of the scientific community.” I’d call this a crazy conspiracy theory, but doing so would actually be unfair to crazy conspiracy theorists. After all, to believe that global warming is a hoax you have to believe in a vast cabal consisting of thousands of scientists — a cabal so powerful that it has managed to create false records on everything from global temperatures to Arctic sea ice.

Yet Mr. Broun’s declaration was met with applause.

But the GOP refuses to care. To them, wrecking the climate by the end of the century is somebody else's problem, and there's no reason to burden today's current leaders with a problem that won't be felt for a hundred years. It'll cost too much to do it, and really who cares, we'll all be dead by then anyway.

Why ruin our economy now because there's an unproven chance we might wreck the planet later, Republicans declare.

Well that's just it. This is something that can't be put off. The numbers are getting worse, accelerating the pace of decay in the system. At this point, some are already saying the steps that Waxman-Markey seeks to take are too little, too late, and that far more drastic measures need to be taken now if there's any hope.

But Republicans could care less. Remember, they are the party that rejects science, and sees science as inimical to Man's God-Given Dominion Over Earth. Many of them simply say "God will fix the problem, thinking that man can affect the climate is arrogance to the point of elevating men above God."

The thing is, I know plenty of people who are devoutly religious and say yes, we're being terrible stewards of the earth God has given us. We're wrecking the place, and people are concerned. I absolutely agree with Kroog's point: the anti-science GOP is latching on to any argument they can make up to stop any action on addressing climate change.

They're on the wrong side of history on this one.

Hotel California

Via CalcRisk, property values of hotels in California are down a staggering 50 to 80% from 2007 peak values.

No market or brand is immune in this downturn. In reviewing the hotels in default or foreclosed on, we found that over 75% of the loans originated from 2005 to 2007. During this period, over 2,500 California hotels either refinanced or obtained new purchase loan financing. Unfortunately, based on today’s market values, we estimate that none of these hotels have any equity remaining. The unprecedented decline in room revenues (California is down 21.5% year-to-date) combined with the jump in cap rates has resulted in a massive loss in values. We estimate that values are currently 50-80% lower than at the market’s peak in 2006-2007.

I don't care who you are, that's a bloodbath across the board. Entire hotel chains are on the verge of collapse. Some have already filed for bankruptcy. More will follow.

The commercial real estate bust is in full swing now, and there's no end in sight.

StupidiNews!

• Bernie Madoff will be sentenced today, the man behind the biggest financial scam in U.S. history faces up to 150 years in prison.
• The U.S. is warning that the coup that ousted the President of Honduras will leave that country "isolated".
• As tomorrow's troop withdrawal deadline in Baghdad approaches, all sides say Iraq is ready.
• The housing sector continues to face dire problems despite stimulus money and tax credits.
• Britain's major record label trade group says it should have embraced Napster ten years ago.

Last Call

How many times must people drive a stake through the bullshit that is "Broke-ass black people caused the housing collapse" anyway? The Community Reinvestment Act (CRA) did not cause the housing depression. Greed did.

Barry Ritholz kills this garbage once again:

Assume arguendo that CRA legislation forced banks into making high risk, ill advised loans. And, let’s further assume a huge percentage of these government mandated mortgages have gone bad. The buyers who could not legitimately afford these homes or otherwise qualify for other mortgages have defaulted, and these houses are either in default, foreclosure or REOs.

What would this alternative nation look like?

Given the giant US housing boom and bust, this thought experiment would have several obvious and inevitable outcomes from CRA forced lending:

1) Home sales in CRA communities would have led the national home market higher, with sales gains (as a percentage) increasing even more than the national median;

2) Prices of CRA funded properties should have risen even more than the rest of the nation as sales ramped up.

3) After the market peaked and reversed, Distressed Sales in CRA regions should lead the national market downwards. Foreclosures and REOS should be much higher in CRA neighborhoods than the national median.

4) We should have reams of evidence detailing how CRA mandated loans have defaulted in vastly disproportionate numbers versus the national default rates;

5) CRA Banks that were funding these mortgages should be failing in ever greater numbers, far more than the average bank;

6) Portfolios of large national TARP banks should be strewn with toxic CRA defaults; securitizers that purchased these mortgages should have compiled list of defaulted CRA properties;

7) Bank execs likely would have been complaining to the Bush White House from 2002-08 about these CRA mandates; The many finance executives who testified to Congress, would also have spelled out that CRA was a direct cause, with compelling evidence backing their claims.

So much for THAT thought experiment: None of these outcomes have occurred.

Zero.

In reality, the precise opposite of what a CRA-induced collapse should have looked like is what occurred. The 345 mortgage brokers that imploded were non-banks, not covered by the CRA legislation. The vast majority of CRA covered banks are actually healthy.

As the Master Control Program famously said, "End of line." Good old fashioned greed killed the housing market. The CRA is nothing more than a convenient dupe, when it turns out it might have actually been the only positive thing going on in the entire housing market during the Bush years.

Just A Little Closer To The Truth

Steve Benen comes a bit closer to the truth of the GOP and health care reform:

Maybe now would be a good time to remind the relevant players that there are different political parties for a reason. Democrats and Republicans are -- I hope you're sitting down -- supposed to disagree.

They have very different policy agendas, driven by different worldviews. That they're struggling to agree on how to pass the most sweeping overhaul of the health care system isn't surprising; that they're trying to overcome this is.

A.L. noted this week:

For as long as I can remember, the Democratic party has fought to increase the government's role in providing health care coverage for Americans while the Republican party has fought to reduce the government's role. The Democrats are responsible for Medicare, Medicaid, and S-CHIP; the Republicans fought all of those initiatives. On a policy level, the Democrats believe that the best health and cost outcomes can be achieved by increasing access and encouraging widespread use of routine and preventative medical care. Republicans, on the other hand, have routinely identified the problem as over-consumption of care. Their proposals to fix the system inevitably involve significant deregulation with the goal of encouraging the use of high-deductible policies to try to discourage personal consumption of health care. Nearly every Democrat (including the blue dogs and "centrists") believes this to be bad policy.

In other words, there is virtually no common ground between the parties. The parties don't even see eye-to-eye regarding basic goals and policy assumptions.

There's nothing wrong with this. It's nice and pleasant when both sides can agree, and President Obama probably hoped the situation was so severe, Republicans would put aside many of their preconceived ideological objections to reform, and work in good faith towards obvious, common-sense solutions. That's not going to happen, of course, but that's not necessarily awful. The political system expects the parties to argue with one another. It's a feature, not a bug.

It looks like the opposition party is going to criticize and object to the Democrats' health care reform effort. That's what opposition parties do -- they oppose.

Sen. Jay Rockefeller (D-W.Va.) asked the other day, "[D]o you want to be non-partisan and get nothing? Or do you want to be partisan and end up with a good health- care plan? That is the choice."

The process will probably go much smoother once negotiators come to grips with this.

And from there, it's just a couple small steps to the realization that the GOP never, ever, ever will accept health care reform in any way. There's a big difference between simply opposing the plan and actively working to destroy it by any means necessary. Steve has finally accepted the former, but the trick is of course that the GOP is actively engaged across the board in the latter.

If Obamacare passes, the GOP is done for a generation. I've said that for quite some time now. Any Democrat behind passage can turn to their constituents and say "Democrats helped get you and your family health insurance. What have the Republicans done for you? They did everything they could to try to stop this." And the voters will nod their heads and go "You're right. Thank you."

They know it's a generational bribe, but it's a necessary and useful one. One in six Americans lacks health insurance. The Republicans will never spend a dime to fix that. Ever.

So the Republicans are scared, truly frightened. This is why we're seeing such hateful, over-the-top rhetoric and accusations against Obama, such an ardent effort to dehumanize the President and his supporters as something less than American, something less than human, as Those Who Are The Enemy. If Obama is successful on health care, he'll go a long way towards dismantling the Pretty Hate Machine that has sprung up since 1990 or so. Most importantly, he'll prove that government can actually help the people.

The Republicans can't afford that. They've bet the farm on using fear and hatred to control America for far too long. If Obama comes along and dismantles that, they have nothing. They become powerless.

It has to die, or the GOP does. It is, quite honestly, an existential battle.

John Boehner Has Quite A Mouth On Him

He used it to try to basically filibuster the ACES bill and to swear at it, calling it a "pile of shit".

Minority Leader John Boehner (R-Ohio) had a few choice words about House Speaker Nancy Pelosi's (D-Calif.) landmark climate-change bill after its passage Friday.

When asked why he read portions of the cap-and-trade bill on the floor Friday night, Boehner told The Hill, "Hey, people deserve to know what's in this pile of s--t."

Using his privilege as leader to speak for an unlimited time on the House floor, Boehner spent an hour reading from the 1200-plus page bill that was amended 20 hours before the lower chamber voted 219-212 to approve it.

Eight Republicans voted with Democrats to pass the bill; 44 House Democrats voted against it.

Pelosi's office declined to comment on Boehner's jab. But one Democratic aide quipped, "What do you expect from a guy who thinks global warming is caused by cow manure?"

Thers at Whiskey Fire on the other hand has a much worse (better?) pottymouth.

A Possible Coup

The BBC is reporting that the President of Honduras has been arrested and detained by that country's army in what one of his supporters is calling a military coup.

President Manuel Zelaya's secretary said he had been taken to an airbase outside the capital, Tegucigalpa.

Mr Zelaya, elected for a non-renewable four-year term in January 2006, wanted a vote to extend his time in office.

The referendum, due on Sunday, had been ruled illegal by the Supreme Court and was also opposed by Congress and members of Mr Zelaya's own party.

Reuters news agency reports that soldiers fired teargas at about 500 supporters of Mr Zelaya who had gathered outside the presidential palace, as air force jets flew over the capital.

Early on Sunday, a reporter for the Associated Press news agency said he had seen dozens of troops surround Mr Zelaya's residence.

The arrest comes after President Zelaya defied a court order that he should re-instate the chief of the army, Gen Romeo Vasquez.

The president sacked Gen Vasquez late on Wednesday for refusing to help him organise a referendum.

Mr Zelaya, who under current regulations leaves office next January, also accepted the resignation of the defence minister.

The referendum was to ask the population if they approved of a formal vote next November on whether to rewrite the Honduran constitution.

Seems Zelaya wanted to pull a Hugo Chavez and the Honduras military was having none of it. We'll see where this goes.

Thanks, Republicans!

And for once, I mean that. Eight Blue State Republicans were the difference in passing ACES (Waxman-Markey) last night, 219-212. Eight folks who saw that the planet is headed into peril and did the right thing. Eight Republicans who are now considered to be targeted traitors to be removed by Malkinvania and the Wingers, complete with a nice little wanted poster.

Needless to say, the GOP war against itself continues unabated. It's unclear if the bill will pass in the Senate at this point, the Senate would actually have to write one (they've been busy with health care.)

Still, two week recess, then Sotomayor, health care, ACES and more this summer.

StupidiNews, Weekend Edition!

• The House passed the Waxman-Markey climate change bill with Republican help, 219-212.
• The White House has drafted an executive order allowing for indefinite detention of some Gitmo prisoners.
• A hard-line sermon from a top Iranian cleric could signal a major escalation in the continuing crackdown against dissidents.
• The FDIC seized five more failing banks, pushing this year's tally to 45 busted financial institutions.
• The passing of Michael Jackson nearly took the internet with it.

The Cost Of Climate Change Legislation

Via Yggy, the true cost of Waxman-Markey:

That little orange bit? That's the actual cost to the economy. But that will apparently destroy the entire economy if we introduce the "most regressive taxation" in the history of the known universe. Once again, Republicans are full of hot air...the kind that might wreck the planet.

But the GOP can only fight the truth with lies, lies, lies.



And yet, the GOP wonders how they lost Washington.

Michael Jackson

...is still dead.

Can we move on, please?

What Is It With Detroit, Anyway?

Detroit City Council President Monica Conyers (the wife of Democrat Rep. John Conyers) pleads guilty to bribery charges.

Monica Conyers, the president pro tem of the Detroit city council -- and the wife of Rep. John Conyers, the powerful chair of the US House Judiciary committee -- has pleaded guilty to conspiracy to commit bribery, which is punishable by up to five years in prison.

The Detroit Free Press reports:

The federal plea document released today cites two instances in late 2007, in the days surrounding the approval of the now-infamous Synagro Technologies sludge-hauling contract, when Conyers accepted cash bribes from a Synagro consultant.

Other court documents have said Conyers took at least two bribes of $3000 each, among other bribes.

The paper adds:

In both cases cited in the court documents today, Conyers was handed the cash in an envelope by a individual representing Rayford Jackson, a Detroit businessman doing work for Synagro who pleaded guilty to bribery earlier this month.

Conyers had raised suspicions by strongly opposing the 2007 sludge-hauling contract for Synagro before abruptly switching her position and voting in favor of the deal.

Bad all around, and just plain stupid. As many problems as Detroit has had politically and economically, it deserves much better politicians across the board. The Kwame Kilpatricks and Monica Conyers of the world just aren't cutting it, which goes to show you yes indeed you can have corrupt African-American Democrats in addition to crooked white Republicans...political greed and power lust knows no race, gender, or political affiliation.

And stupid is still stupid.

In Which Zandar Answers Your Burning Questions

Ezra Klein asks:

The issue isn't that insurance companies are evil. It's that they need to be profitable. They have a fiduciary responsibility to maximize profit for shareholders. And as Potter explains, he's watched an insurer's stock price fall by more than 20 percent in a single day because the first-quarter medical-loss ratio had increased from 77.9 percent to 79.4 percent.

The reason we generally like markets is that the profit incentive spurs useful innovations. But in some markets, that's not the case. We don't allow a bustling market in heroin, for instance, because we don't want a lot of innovation in heroin creation, packaging and advertising. Are we really sure we want a bustling market in how to cleverly revoke the insurance of people who prove to be sickly?

We already have one. As a matter of fact, that's how the insurance companies make money and always have. If they don't pay up, they win and we lose.

Once again, I fail to see how driving private health insurance companies out of business would in the long run be a bad thing.

StupidiNews!

• Embattled SC Gov. Mark Sanford plans to return to work today despite calls from his fellow Republicans to resign.
• The House is ignoring President Obama's first veto threat and easily passed a $550 billion Pentagon budget measure.
• California's budget fight has devolved into a "political game of chicken" between Republicans and Democrats.
• China is once again calling for a world "super reserve currency" to replace the U.S. dollar's global role.
• Australia's controversial national web filter technology may end up blocking video games, too.

Goodbye, Michael

Turning into a hell of a day for celebrities. Michael Jackson too has reportedly died today.

Entertainer Michael Jackson has died after being taken to a hospital on Thursday after suffering cardiac arrest, according to multiple reports including the Los Angeles Times and the Associated Press. CNN has not confirmed his death.

Jackson, 50, had been in a coma at the hospital, sources told CNN.

Brian Oxman, a Jackson family attorney, said he was told by brother Randy Jackson that Michael Jackson collapsed at his home in west Los Angeles Thursday morning.

Family members were told of the situation and were either at the hospital or en route, Oxman said.

Fire Capt. Steve Ruda told CNN a 911 call came in from a west Los Angeles residence at 12:21 p.m.

Ruda said Jackson was treated and transferred to the UCLA Medical Center.

Ironically, today happens to be my parents' birthday (yes, both of them, it's rather romantic and I'm convinced it's how they've stayed together for nearly 40 years now, it's not like they can forget each other's birthday.)

Beginnings and endings today.

Tech Support For Tehran

No really, that's John McCain's brilliant plan: to get better internets for Iran!

Three U.S. senators said Thursday they will introduce legislation funding a package of assistance to help get around the Tehran regime's information block.

"The Iranian government recognizes that Internet is a threat to its stranglehold over society and is trying to impose its repressive controls over it," Sen. John McCain, R-Arizona, said. "The legislation would authorize funds to ensure that Iranians have the hardware, software and other tools to evade the censorship and surveillance of the regime online."

McCain joined fellow Sens. Joe Lieberman, D-Connecticut, and Lindsey Graham, R-South Carolina, at a news conference to announce the legislation, which they said is an effort to support the Iranian people.

I have an idea, boys. How about we worry about getting Americans better internet first?

Another Milepost On The Road To Oblivion

Because the GOP is out of fresh reasons to hate Barack Obama, the Village provides some. He's just too perfect, the asshole.

Let’s be honest: Barack Obama is better than you are.

He’s a better father — taking breaks from running the world to cheer on his daughters at soccer and basketball games.

He’s a better husband — zipping his wife off for dinner in New York and Paris.

He’s got a better diet — nibbling on vegetables from his homegrown garden to keep his love handles in check.

And he’s got a terrific jump shot.

You? Not so much.

Why haven't we impeached this inhuman monster already?

Why We Must Have A Public Option

Because the private health care options we pay for now are all about profits for insurers, not about getting care.

Health insurers have forced consumers to pay billions of dollars in medical bills that the insurers themselves should have paid, according to a report released yesterday by the staff of the Senate Commerce Committee.

The report was part of a multi-pronged assault on the credibility of private insurers by Commerce Committee Chairman John D. Rockefeller IV (D-W.Va.). It came at a time when Rockefeller, President Obama and others are seeking to offer a public alternative to private health plans as part of broad health-care reform legislation. Health insurers are doing everything they can to block the public option.

At a committee hearing yesterday, three health-care specialists testified that insurers go to great lengths to avoid responsibility for sick people, use deliberately incomprehensible documents to mislead consumers about their benefits, and sell "junk" policies that do not cover needed care. Rockefeller said he was exploring "why consumers get such a raw deal from their insurance companies."

The star witness at the hearing was a former public relations executive for major health insurers whose testimony boiled down to this: Don't trust the insurers.

"The industry and its backers are using fear tactics, as they did in 1994, to tar a transparent and accountable -- publicly accountable -- health-care option," said Wendell Potter, who until early last year was vice president for corporate communications at the big insurer Cigna.

Potter said he worries "that the industry's charm offensive, which is the most visible part of duplicitous and well-financed PR and lobbying campaigns, may well shape reform in a way that benefits Wall Street far more than average Americans."

Insurers make paperwork confusing because "they realize that people will just simply give up and not pursue it" if they think they have been shortchanged, Potter said.

Sen. Mike Johanns (R-Neb.) questioned the government's ability to make matters clearer, saying federal regulation of mortgage disclosures has made the documents that borrowers encounter in real estate transactions "hopelessly complicated."

Potter's successor as spokesman for Cigna said the company strongly disagrees "with the suggestion that, motivated by profits, the insurance industry has deliberately attempted to confuse or unfairly treat covered individuals."

"At CIGNA we are committed to improving the current system," spokesman Chris Curran said by e-mail.

The report released yesterday alleges that insurers have systematically underpaid for out-of-network care. The issue had been brought to light previously in litigation, committee hearings and other investigations, including a probe by New York Attorney General Andrew M. Cuomo. But as politicians and interests groups clash over the current effort to overhaul the nation's health-care system, it took on new relevance.

Cuomo described it last year as "a scheme by health insurers to defraud consumers by manipulating reimbursement rates."

Many Americans pay higher premiums for the freedom to go outside an insurer's network of doctors and hospitals. When they do, insurers typically pay a percentage of what they call the "usual and customary" rates for the services. How insurers determine the usual rates had long been opaque to consumers and difficult if not impossible for them to challenge.

As it turns out, insurers typically used numbers from Ingenix, a wholly owned subsidiary of the big insurer UnitedHealth Group. Ingenix had an incentive to produce benchmarks that low-balled usual and customary rates and shifted costs from insurers to their customers, the report said.

Ingenix got its data from the same insurers that bought its benchmark information, the report said. Insurers that contributed information to Ingenix often "scrubbed" their data to remove high charges, and Ingenix further manipulated the numbers, removing valid high charges from its calculations, the report said.

Several reactions to this article:

Casinos have nothing. Nothing. On insurance companies. You want to talk about rigging the game so the house always wins? Casinos make their money off pulling in large numbers of losers with money. Insurance companies do the same, only they get to collude with all the other insurance companies to make sure nobody wins. Ever. Insurance companies are the only business I can think of where they actively pursue the model that doing the job you pay them for is the worst outcome possible, and it should be avoided at all costs.

What is it with Republicans saying "We're not convinced that government can do this function better. Ergo, we refuse to let government try." That is literally their answer to every problem. They complain that government will put health insurance companies out of business. I fail to see how that would be a bad thing. After all, the problem is the current health care system is broken and requires radical change. The radical change the Republicans want to provide is doing absolutely nothing and letting insurance companies continue to defraud customers at a cost of billions every year, not to mention lives.

We must have a public option. Without it, nothing even begins to count as reform.

Goodbye, Farrah

Several news outlets are reporting at this hour that actress Farrah Fawcett has lost her battle with cancer.

More on this as it comes in.

[UPDATE 1:16 PM] The LA Times has the obit.

Farrah Fawcett, who soared to fame as a national sex symbol in the late 1970s on television's campy "Charlie's Angels" and in a swimsuit poster that showcased her feathery mane and made her a generation's favorite pinup, died today at 62, according to Reuters.

Fawcett, whose celebrity overshadowed her ability as a serious actress, was diagnosed with a rare anal cancer in 2006.

Three months after she was declared cancer-free in 2007, doctors at UCLA Medical Center told her the cancer had returned, spreading to her liver, and she repeatedly sought experimental treatment in Germany.

As an actress, Fawcett was initially dismissed for her role as Jill Munroe in "Charlie's Angels," one of the "jiggle" series on ABC-TV in the late 1970s.

But she transformed her career and some popular perceptions in 1984 with "The Burning Bed," a television movie about a battered wife that brought her the first of three Emmy nominations. She further established herself as an actress in the play and later feature film "Extremities," about a rape victim who takes revenge on her attacker.

For many, the poster of her wearing a wet one-piece swimsuit and a blinding smile endured.

"If you were to list 10 images that are evocative of American pop culture, Farrah Fawcett would be one of them," Robert Thompson, a professor of television and popular culture at Syracuse University, told The Times. "That poster became one of the defining images of the 1970s."

Cancer is always a tough battle, especially to have it go into remission and then come back to claim you like that. Wishes go out to the family and friends.

Yes, Even Scalia Thought This Was Crap

Amazingly enough, the Roberts court sent down an 8-1 decision that school officials strip searching 13-year old girls just might be mildly unconstitutional.

In a closely watched case filled with poignant facts, the court ruled 8-1 that Arizona school officials violated student Savana Redding's Fourth Amendment rights when they searched her down to her bra and underpants. Officials were looking for pain relievers, which they didn't find.

"The content of the suspicion failed to match the degree of intrusion," Justice David Souter wrote for the majority.

The ruling involving Redding, who's now a college student, has been anticipated by schools nationwide, which must balance concerns about student privacy with adult fears of drug abuse and school violence.

The Safford Middle School nurse and administrative assistant who searched Redding in October 2003 told her to remove her stretch pants and T-shirt. They then directed her to pull her bra to the side and shake it, and to pull out the elastic on her underpants.

They were looking for prescription-strength ibuprofen and over-the-counter naproxen, which another student had suggested might be hers.

"What was missing from the suspected facts that pointed to Savana was any indication of danger to the students from the power of the drugs or their quantity, and any reason to suppose that Savana was carrying pills in her underwear," Souter wrote.

The "combination of these deficiencies was fatal" to the legitimacy of the search, the court concluded. This ruling is likely to clarify for other school administrators nationwide how and when intrusive searches of students might be conducted.

Oh, and guess who thought the school was perfectly within its rights to arbitrarily strip search an honor student based on hearsay evidence?

Justice Clarence Thomas was the only member of the court to decide that the search of Redding was reasonable.

Yeah, not like ol' Clarence there has anything against women. Look, if even Scalia thinks the school was wrong, you're out on the windy, windy limb by your lonesome in legal hell, CT.

Still, I hope this puts an end to zero tolerance in schools. There is a limit, and children in schools are still human beings, not prisoners.

Still Crazy After All These Weeks

It's nice to know that with all the chaos going on this summer in the economy and in Iran and the middle East, Michele Bachmann's delusional rants are disturbingly consistent.



Don't ever change, and I mean that.

Default, Cali Style Part 2

Martin Weiss of Weiss Research says that California defaulting on its $59 billion in debt is "unavoidable".

In a new report, Weiss has some rather blunt advice for California muni investors: "Sell all California paper now!" His reasoning? California is facing a $24 billion budget gap with no obvious way to close it.

The state has appealed to Washington for a federal bailout, but it got a cool response from the Obama Administration. The next step is draconian cuts in state services and payroll, but Weiss says that will only deepen the "depression" in California, where the unemployment rate is 11.5%, by further cutting into tax revenue.

Asked to put odds on California defaulting on its $59 billion in outstanding general obligation bonds, Weiss doesn't hedge. "It's unavoidable," he tells Fortune.

If he's right, the impact on investors would be far broader and deeper than Bernie Madoff, General Motors (GMGMQ) or any of the other investment implosions that have occurred over the past year. Municipal bonds tend to be a retail product, which means that those most affected by a large muni bond default are not endowments, banks, or foreign governments but mom-and-pop investors.

A California default would be especially devastating for two reasons: Munis have generally been viewed as a safe haven and California is the nation's largest issuer of tax-exempt bonds. According to Morningstar, assets in California muni bond funds now total $46 billion -- with billions more of California bonds held in national muni funds and individual bond portfolios.

In other words, should California miss a payment, the muni market turns into a chum factory during Shark Week, not to mention California's credit would be through, leaving the state unable to float more bonds without a heavy cost. Everyone out there who invested in California bonds would be holding increasingly worthless paper, and that $24 billion gap would end up growing as tax revenues are eaten up by credit costs.

In other words, California would no longer be a going concern without a bailout. It's not a question of if anymore, but when. One seventh of the population of America and 55 electoral votes will have long memories of internal state politics, but the national reponse to Cali's current disaster may have a much larger impact on everyone.

Even Republicans aren't going to write off California. They may not want to bailout, but you'd better believe they'll have to give one out.

If It's Thursday...

Jobless claims and continuing claims actually went back up from last week to 627,000 and 6.74 million, respectively. Not good. The new normal is still pretty bad. Here's the killer part of the article:

Millions of Americans also are receiving jobless benefits through a federal extension enacted by Congress last year. For the week ending June 6, more than 2.4 million people received benefits under the extension, which adds 20 to 33 weeks on top of the 26 weeks typically provided by states.

About 288,000 people also are receiving benefits under state emergency programs, bringing the total jobless benefit rolls to nearly 8.8 million that week. The extended benefits data lags initial claims by two weeks.

So yeah, more and more people are falling into those unemployment benefit extensions and state emergency fund black holes.

It's only going to get worse, too.

Facing The Consequences

While many of us are struggling just to keep it together month after month, the news this summer in London's financial community is BAB...bonuses are back.

BAB stands for Bonuses are Back, and its arrival in the lexicon of the Square Mile is evidence that bankers are once again looking forward to bumper payouts, just eight months after the sector faced meltdown and governments worldwide were required to prop them up.

It is universally accepted that the vast rewards available to bankers for taking huge risks were the root cause of the crisis, but nevertheless Goldman Sachs's 28,000 staff – 5,400 of them in London – are now looking forward to the biggest payouts in the bank's 140-year history. Credit Suisse, Deutsche Bank, Barclays Capital, JP Morgan and Morgan Stanley are also anticipating bumper profits.

Even Royal Bank of Scotland, which is now 70% owned by the UK taxpayer and was supposed to restrict the way it pays bonuses, is back in bonanza mode. In March, a key executive was awarded millions of shares and options, already worth more than £8m. This week it emerged that the new chief executive, Stephen Hester, has a £15m pay package.

Just months after showing staff the door there's a hiring frenzy in the investment banks. Business is booming – in no small part as a result of the financial chaos caused by the bankers. The bond markets are hectic as a result of governments' need to finance their deficits, while economic problems have created (profitable) volatility in the foreign exchange markets. Even guaranteed bonuses have made a comeback.

And of course they have the money to do this. We gave it to them through counter-party deals. We spent tens of billions bailing out the likes of AIG, who turned around and gave that money to the banksters. They are having the best year on record in 2009. They're driving up yet another massive bubble in the markets to try to make the green.

They've gone right back to the same behavior that created the collapse in the first place, because they know if this current bubble pops, the world's governments have no choice but to bail them right back out again or face the complete financial ruin of the globe. The time of Permanent Moral Hazard is upon us.

Banks are right back at the gambling table, only this time they have taxpayer money. They'll keep it all, too. Billions and billions in free taxpayer money to make massive profits and to keep playing the game, that's all that matters now.

We exist to pay the banksters to make stuff up to get rich from. The rest of us are just peons and serfs...and nobody dares to cross the feudal lords that run the world.

And when this bubble pops just like all the others, then what? When what little middle class wealth is decimated by this new bubble and Americans have nothing...then what?

StupidiNews!

• Iranian protests to honor those who have died have been postponed from today as the crackdown continues.
• Spanish lawyers are still looking to proceed with the prosecurtion of Bush officials for war crimes.
• California's massive budget shortfall may lead to the state soon issuing IOUs instead of checks.
• Irish banks face nearly $50 billion in losses over the next year due to the Celtic Tiger's collapse.
• A new study shows the more you tweet, the more you buy music on the net.

Zandar's Thought Of the Day

Which is more "dead" politically after the events of the last week:

• Mark Sanford's 2012 presidential candidacy
• President Obama's policy towards the current Iranian regime
• The Waxman-Markey Bill (American Clean Energy and Security Act of 2009)
• Health care reform that includes a public option

My inner cynic says not a one is a going concern right now, frankly.

Appalachian Trail Seems Like An Odd Name For A Mistress, Must Be Portuguese

Mark Sanford: Ditched his security detail, flew to Argentina, didn't inform his Lt. Gov where he was going, had his staff lie to everyone about it, oh, and cheated on his wife, too.

South Carolina Gov. Mark Sanford admitted Wednesday, amid speculation over his whereabouts for the last several days, that he has been engaged in an extramarital affair with an Argentinian woman.

"I've been unfaithful to my wife," Sanford told a news conference in Columbia, the state capital. "I developed a relationship with what started as a dear, dear friend from Argentina."

His voice choking at times, Sanford apologized to his wife and four sons, his staff and supporters, and said he would resign immediately as head of the Republican Governors Association. The affair was discovered five months ago, Sanford said.

The South Carolina governor had not been seen in public since June 18. When questioned, Sanford's staff had told media outlets that he was hiking in the Appalachian Trail. But Sanford was spotted Wednesday in Atlanta's Hartsfield-Jackson International Airport.

The South Carolina governor said he had been in Buenos Aires, Argentina.

You stay classy, Republican presidential hopefuls!

Sarah Palin wins the GOP nomination by default in 2012 because she's literally the only Republican not thinking with the wrong head.

[UPDATE 3:36 PM] As BooMan says, the affair isn't the problem, but leaving the state with no contingency plan and no contact info in case an emergency happened most certainly is. It quite frankly amounts to dereliction of duty of the office of the executive...an impeachable offense.