Thursday, December 23, 2010

Last Call

Rahmbo lives!

Rahm Emanuel is a Chicago resident and therefore can run for mayor, the Chicago Board of Election Commissioners ruled Thursday.

The unanimous ruling in favor of the former White House chief of staff comes after board hearing officer Joe Morris ruled early Thursday morning that Emanuel’s name should remain on the ballot even though he moved to Washington D.C. in 2009 to work for President Obama. After a hearing later in the morning, the board affirmed Morris’ decision that Emanuel didn’t lose his residency status and therefore can continue his campaign.

Board Commissioner Richard Cowen said the ruling was based on the fact that Emanuel never abandoned his residence in Ravenswood, which he established long before he and his family moved and rented out his home. Cowen said that although state law requires candidates to live in the state for a year prior to the Feb. 22 election, he said case law states that candidates only need to be physically present in the city to establish residency in the first place — not to continue it. Emanuel clearly intended to return to Chicago all along, Cowen said.

There's a reason why folks want him off the ballot:  he's going to win easily in February.  The downside is I expect Republican Sen. Mark Kirk to start giving Hizzoner Rahmbo a damn hard time, along with every other Republicans yelling "Chicago Way politics!" like it means something.

Ignore them.

Have Yourself A Merry Little Moosemas

And a Murkowski New Year.  Obama needs to be sending one ex-Republican Senator in particular some flowers.

Lisa Murkowski isn’t gunning down caribou on national TV like that other famous Alaskan, but the Republican lawmaker is going rogue in the Senate just weeks after staging the most stunning back-from-the-dead political win of the 2010 cycle.

Murkowski is already showing a fierce independent streak, becoming the only Republican to cast votes on all four items on President Barack Obama’s wish list: a repeal of “don’t ask, don’t tell,” a tax-cut compromise, the START deal and cloture for the DREAM Act.

The lame-duck votes capped a strange political odyssey for the Alaska Republican — one that started Aug. 31 when she conceded the GOP primary to tea-party-backed Joe Miller, continued when she resigned her leadership job in September and ended when she waged Alaska’s first successful statewide write-in bid to retain her seat.

Now, she heads back to the Senate with a fresh six-year term without owing much to either her home state party establishment or her Washington leadership. 

How important was Murkowski's backing of Obama's initiatives in the lame duck session?  Her 4 for 4 voting record puts her ahead of some 18 Democratic senators who broke ranks with the President at least once on those four issues.   She was the only returning Republican senator to vote for the DREAM Act.  The rest of the Republicans who did are all retiring or were defeated in primaries.

So yeah, Lisa Murkowski is the new Lady from Maine.

And none of this would have been possible without a generous contribution by one Sarah Palin, who backed Joe Miller's primary efforts to sink Murkowski.  How's that hopey changey thing workin' out for ya, sweetheart?

Perhaps Obama should send her some caribou sausage and a thank you note too.

Meanwhile, Palin's ignoring all the "I helped Obama's legacy" stuff and wants to have her ghost writer slap Iran some more to make herself feel better.

But we also need to encourage a positive vision for Iran. Iran is not condemned to live under the totalitarian inheritance of the Ayatollah Khomeini forever. There is an alternative — an Iran where human rights are respected, where women are not subjugated, where terrorist groups are not supported and neighbors are not threatened. A peaceful, democratic Iran should be everyone's goal. There are many hopeful signs inside Iran that reveal the Iranian people's desire for this peaceful, democratic future. We must encourage their voices...

By bombing the crap out of them!  Just like Iraq, where the grateful populace will greet their liberators with flowers and not an 8-year civil war between Sunni and Shiite.


Zandar's Thought Of The Day

The 111th Senate did set at least one new record:  63 filibusters broken by 60-vote cloture motions, two more than the 110th.

If you're wondering why Dems are all of a sudden smitten with the idea of reforming Senate rules, check out this chart, passed along by a Democratic source.

Over the last two years, Dems broke more filibusters than any Senate in recorded history. In fact the only other Senate that comes close was the last Senate, right after the GOP lost its controlling majority on the Hill.

In fact Republicans have filibustered over 275 times in the last 4 years, and of the 275 cloture motions, 213 got a vote and 124 of those cloture votes passed.  That's more than twice as much in the prior four years.

Nancy Pelosi got legislation through the House.  The silly 60-vote cloture rule killed hundreds of laws in the Senate.  Yeah, maybe it's time for filibuster reform.

In Which Zandar Answers Your Burning Questions

CNBC headline:

Just How Freaked Out Should You Be About A ‘Muni Meltdown’?

Well gosh, do you live in a city, county, or state in the United States? Do those governments provide public services that you use, such as road maintenance, police, fire protection, schools, public safety, sanitation and water?

Then yes, you might want to pay attention right about now.

And For His Next Trick...

Julian Assange is going to master the mysterious art of disappearing from Earth.  The best part of the trick is he's not going to be the one performing the magic act.

WikiLeaks will release top secret American files concerning Israel in the next six months, its founder Julian Assange disclosed yesterday.

In an excusive interview with Al Jazeera, Assange said only a meagre number of files related to Israel had been published so far, because the newspapers in the West that were given exclusive rights to publish the secret documents were reluctant to publish many sensitive information about Israel.

“There are 3,700 files related to Israel and the source of 2,700 files is Israel. In the next six months we intend to publish more files depending on our sources,” said Assange in the nearly one-hour interview telecast live from the UK.

Asked if Israel had tried to contact him though mediators, Assange said, “No, no contacts with Israel but I am sure Mossad is following our activities closely like Australia, Sweden and the CIA.

The Guardian, El-Pais and Le Monde have published only two percent of the files related to Israel due to the sensitive relations between Germany, France and Israel. Even New York Times could not publish more due to the sensitivities related to the Jewish community in the US,” he added.

And you thought screwing with Bank of America was a bad idea?  Now he wants to air Israel's dirty laundry?  Well, if you thought the calls to assassinate Assange were loud before, you've not seen anything yet.  You have to hand it to the guy, if he's trying to become a martyr in the digital age, he's well on his way to ending up in a pine box.  Already he's being blamed for the end of corporate e-mail.

Balls of polycarbonate steel, that one.  Odds on him and WikiLeaks seeing 2012 just got a whole hell of a lot shorter, however.  Personally?  Yeah, I wouldn't want to be pissing on the Mossad right now, if they feel it would be better for Israel to zap the guy, they will end him.

That's A Roman Holiday, Indeed

Two embassies in Rome were attacked by bombs this morning, the Swiss and Chilean embassies were targeted and a third suspicious package was dealt with at the Ukrainian embassy.

The first explosion, a package bomb at the Swiss Embassy, seriously wounded the person who opened it, police said.
A second bomb exploded at the Chilean Embassy shortly afterwards, wounding one person, who was taken to a hospital, according to police.
And a "suspicious package" was found at the Ukrainian Embassy in the Italian capital, police said, but it turned out not to be dangerous.
Police were fanning out to check all embassies and consulates in Rome, they said. Many countries have two diplomatic missions in the city -- one to the Italian state and a separate one to the Vatican.
Bomb threats were phoned to City Hall and to another government office in Rome, the mayor's office said. No bombs have been found in either location.
There has been no claim of responsibility for the attacks.
The bombings come a day after police blanketed Rome in heavy security due to student demonstrations. 

Not sure who's behind this, but whoever it is, you're not helping.

Also, who bombs the Swiss Embassy?  Seriously?  That's just mean.  More on this as it comes in.

Classic Big Casino Games

And I'm not talking baccarat here.  Via John Cole comes this story of bankers winning a 1000 to 1 bet they couldn't lose and the 300 million Americans who lost it as a result (emphasis mine):

Two years before the financial crisis hit, Merrill Lynch confronted a serious problem. No one, not even the bank's own traders, wanted to buy the supposedly safe portions of the mortgage-backed securities Merrill was creating.

Bank executives came up with a fix that had short-term benefits and long-term consequences. They formed a new group within Merrill, which took on the bank's money-losing securities. But how to get the group to accept deals that were otherwise unprofitable? They paid them. The division creating the securities passed portions of their bonuses to the new group, according to two former Merrill executives with detailed knowledge of the arrangement.

Moral hazard for the win, folks.  Merrill turned their mortgage cole slaw factory into snake oil salesmen, paying them huge bonuses to buy stuff their own traders wouldn't touch.  The traders racked up millions.  The company went under and was bought out by Bank of America.

Within Merrill Lynch, some traders called it a "million for a billion" -- meaning a million dollars in bonus money for every billion taken on in Merrill mortgage securities. Others referred to it as "the subsidy." One former executive called it bribery. The group was being compensated for how much it took, not whether it made money.

The group, created in 2006, accepted tens of billions of dollars of Merrill's Triple A-rated mortgage-backed assets, with disastrous results. The value of the securities fell to pennies on the dollar and helped to sink the iconic firm. Merrill was sold to Bank of America, which was in turn bailed out by taxpayers.

What became of the bankers who created this arrangement and the traders who took the now-toxic assets? They walked away with millions. Some still hold senior positions at prominent financial firms.

And they're busy setting up the same Big Casino games again, because they know they can play all they want to and that the government will bail them out ten times out of ten.  Same games, different firm, same results.  These guys get the cash, we get the bill.  And the Wall Street reform passed will only address a tiny fraction of this mess.

The next crash crisis is coming.  My guess is that it'll be sooner rather than later, and this time it will be blamed on the taxpayer for daring to have Social Security when everyone knows our economy has to go towards paying off the moral hazard tables at the Big Casino.  Hell, as it is Republicans are going to de-fund the Consumer Financial Protection Agency, so that small fraction will go to zero.

And the next time the banks go busted, we'll get the check and told we have to take the cuts.  Felix Salmon sums it up:

Merrill’s antics are the reductio ad absurdum of bonus culture, and show why it’s so silly for investment banks to pay multi-million-dollar bonuses and reckon that they’re protecting their long-term franchise at the same time. Not everybody was as egregious as this. But the differences between Merrill and other investment banks were only of degree, not of kind.

And a degree of being caught, too.

If It's Thursday...

New jobless claims flat, down 3k to 420k, but the big chunk of data is durable goods for November, revised downward from 3.3% in October to -3.1%.  Ouch.

Continuing claims down to 4.064 million.  Not a good sign, still deflationary especially in conjunction with home prices still falling.

More Thursday numbers from Asariel over at the Great Redoubt.

Wrapping Up The 111

The 111th Congress has been gaveled to a close, and looking back on the last two years, Obama and the Democrats did score some massive legislative wins.  The President remarked on the last two years yesterday.

“We are not doomed to endless gridlock,” Mr. Obama said.

Speaking to reporters before leaving for a 10-day vacation in Hawaii, Mr. Obama hailed the flurry of accomplishments, including Wednesday’s approval of a new nuclear treaty with Russia.

He called the treaty “the most significant arms control agreement in more than two decades” and the top national security priority of the first half of his presidency.

“With this treaty our inspectors will also be back on the ground with Russian nuclear bases,” Mr. Obama said. He called the 71-26 vote a “powerful signal to the world.”

But Mr. Obama rejected an opportunity to gloat about the successes of the past several weeks by declaring himself the “comeback kid,” telling a reporter that the results are “not a victory for me. It’s a victory for the American people.”

In fact, the president appeared to go out of his way to suggest that Americans would see from him more of the kinds of compromises that led him to cut a deal with Republicans on the extension of tax cuts for the middle class and the wealthy.

“A lot of folks in this time predicted that after the midterm elections, Washington would be headed for more partisanship and more gridlock,” Mr. Obama said. Instead, he said, Washington politicians decided that it was time to find common ground.

“That’s a message that I will take to heart in the new year, and I hope my Democratic and Republican friends will do the same,” he said.

So, hope you appreciated the good times.  I assure you come January, the same people who said Obama didn't do enough will be happy for his veto pen.

Pension Tension

Since state and local governments refuse to raise taxes, their local pension funds are drying up and even vanishing.  All we seem to hear is that local government retirees have to accept cuts, but one city in Alabama simply stopped paying pension checks two years ago when it got into trouble despite that being against state law.  And Pritchard, Alabama is the future of millions of government employees.

Since then, Nettie Banks, 68, a retired Prichard police and fire dispatcher, has filed for bankruptcy. Alfred Arnold, a 66-year-old retired fire captain, has gone back to work as a shopping mall security guard to try to keep his house. Eddie Ragland, 59, a retired police captain, accepted help from colleagues, bake sales and collection jars after he was shot by a robber, leaving him badly wounded and unable to get to his new job as a police officer at the regional airport.

Far worse was the retired fire marshal who died in June. Like many of the others, he was too young to collect Social Security. “When they found him, he had no electricity and no running water in his house,” said David Anders, 58, a retired district fire chief. “He was a proud enough man that he wouldn’t accept help.”

The situation in Prichard is extremely unusual — the city has sought bankruptcy protection twice — but it proves that the unthinkable can, in fact, sometimes happen. And it stands as a warning to cities like Philadelphia and states like Illinois, whose pension funds are under great strain: if nothing changes, the money eventually does run out, and when that happens, misery and turmoil follow.

It is not just the pensioners who suffer when a pension fund runs dry. If a city tried to follow the law and pay its pensioners with money from its annual operating budget, it would probably have to adopt large tax increases, or make huge service cuts, to come up with the money.

Current city workers could find themselves paying into a pension plan that will not be there for their own retirements. In Prichard, some older workers have delayed retiring, since they cannot afford to give up their paychecks if no pension checks will follow.

So the declining, little-known city of Prichard is now attracting the attention of bankruptcy lawyers, labor leaders, municipal credit analysts and local officials from across the country. They want to see if the situation in Prichard, like the continuing bankruptcy of Vallejo, Calif., ultimately creates a legal precedent on whether distressed cities can legally cut or reduce their pensions, and if so, how.

“Prichard is the future,” said Michael Aguirre, the former San Diego city attorney, who has called for San Diego to declare bankruptcy and restructure its own outsize pension obligations. “We’re all on the same conveyor belt. Prichard is just a little further down the road.” 

In other words, cities are trying to figure out from a legal standpoint if they can just slash or eliminate completely pension checks to retirees.  And before you say "Yeah, screw those guys" remember, these workers paid into pension funds for decades, on top of Social Security taxes.  It would be like your employer of 30+ years saying "Sorry, we don't have the money to pay your 401(k).  You're on your own.  It's politically unpopular for us to pay it out to you in retirement and we're not going to raise 401(k) payments on our current workers to fund your bill.  Go work at Wal-Mart."

Not exactly a situation you or a loved one would want to be in, yes?  And yet over the next few years, local, county and state workers are going to find out the hard way the pensions they were promised and paid into for years aren't going to be paid back, and may not be paid back at all.

Think about that when you say "Better them than raise my taxes one dime."

Social Security is next.

[UPDATEKen at Down With Tyranny also sees the writing on the wall for public employee pensions.

The colleague who passed along this NYT story commented: "Prichard, Alabama is going to be used as a model for voiding contractual commitments made to retired public workers. Once again, contracts for working Americans are worth shit, unlike contracts for Wall Street executives who broke the economy."

Ain't that the truth.


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