There Is Awesome, There Is Win...

...and there is this.



Obama needs to hire these guys. I don't know for what yet, but he does. He just does.

Zandar's Thought Of The Day

So, the GOP House contingent has decided that it will be the party of no quarter, no compromise, no retreat, and no surrender.

And the party of no chance of winning, too. "We voted against trying to fix this because America is perfectly fine."

I too welcome the larger Democratic majority in 2010.

Self-Defeating Prophecy

Obama signed into law today the Lily Ledbetter Fair Play Act, which among other things:

"...covers pay discrimination based on gender, race, national origin, religion, age and disabilities."

Of course this is a major problem because...

Some Republicans and business leaders have expressed concern the measure could trigger an explosion of lawsuits based on old claims, discourage employers from hiring women and undermine efforts to stem the recession.

So, Republicans argue that a law mandating among other things gender equality is bad and unneccesary in the free market because, and if I'm reading this correctly, there's already so much existing gender discrimination ingrained in the workplace that employers will have no choice but to break the law and discriminate against people based on gender in the future.

What a great bunch of guys, those Republicans.

Helpful Governor Is Helpful

Oh look, Blago's defending himself at his impeachment trial today.

He said there's been a "rush to judgment and an evisceration of presumption of innocence."

The governor said the prosecution has not proven the allegations, which are based on a criminal complaint released by federal authorities in December, when he was arrested on federal corruption charges.

"How can you throw a governor out of office on a criminal complaint, and you haven't been able to show or prove any criminal activity?" he asked.

Well, there is the whole "conduct unbecoming the Governor" thing. If they decide to impeach you on that, your appearance on The View this week pretty much cements that right there.

If It's Thursday...

...it must be time for a record number of Americans on the unemployment rolls and the worst drop in new single-family home sales in 15 years.

We're nowhere near the worst of times, folks. Not yet.

In Which Zandar Answers Your Burning Questions

Jennifer "Low-Hanging Fruit" Rubin asks: "Why do Democrats insist on dressing down in the White House?"

Zandar's answer: "Because it annoys conservatives who imply that Obama is somehow lessening the prestige of the office of the Presidency by not wearing a jacket unlike the moron who actually profaned said office over the last eight years by not following the Constitution he was sworn in to protect."

By Jove He's On To Something

Josh Marshall takes a look at this morning's NY Times story on Obama's "bad bank solution" to the financial crisis and plays the chessboard ahead a couple of moves (emphasis mine).

The message they're clearly sending is: we're not going to 'nationalize' the banks.

What I wonder, though, is whether or not we're running into a semantic dead end that is obscuring some more pertinent questions.

The core problem is that many, perhaps most of our major financial institutions are insolvent. They have more liabilities than assets. A functioning financial system requires solvent banks. And only the government has the resources to manage the massive recapitalization to get the key institutions back on their feet. At that level of generality, the issue assumes a degree of clarity.

You'd think that, but the reality is clarity is the enemy of the current financial system and the evidence is that the Obama financial team agrees with that assessment. Clarity in this situation is in fact the last thing the guru of Obama's current financial team wants to see. Former Clinton Treasury Secretary Robert Rubin was the mentor of Tim Geithner and was the guy behind the curtain for getting Clinton to sign the Gramm-Leach-Bliley Act.

Rubin's latest complaint? Telling the truth about the sharply decreasing value of toxic derivative assets banks are holding, which is basically the accounting practice of valuing these assets at what the market last paid for them, is known as "mark-to-market". And Rubin apparently is blaming this practice for the economy right now.

Robert Rubin, who quit his post as senior counselor at Citigroup Inc. this month, said an accounting rule forcing companies to mark down assets every quarter to reflect market value has “done a great deal of damage.”

“I spent my whole life at Goldman Sachs believing in mark- to-market accounting, and having said that, if you look at the experience from the last two years, I think mark-to-market accounting has led to terrible vicious cycles in asset prices,” Rubin, the former U.S. Treasury secretary, said during a discussion at the 92nd Street Y late yesterday.

Companies including Citigroup and American International Group Inc. say mark-to-market, also known as fair-value accounting, doesn’t work when few buyers are willing to trade assets like subprime mortgages. Proponents such as the U.S. Financial Accounting Standards Board say the rule adds to transparency and gives investors information about companies.

Rubin joined Citigroup in 1999. Earlier this month, he announced he won’t stand for re-election to the board. Rubin, 70, proposed that a “reserve” accounting standard be adopted, which drew applause from the audience.

Citigroup received a $45 billion bailout from the U.S. government after reporting more than $85 billion of credit losses and writedowns from investments tainted by the subprime-mortgage crisis.

People ask me "Zandar, why do you think Obama's stimulus package is going to fail?" The answer? The people giving Obama economic advice are the people who learned the game from guys like Robert Rubin. If Rubin says "Gee, wouldn't it be great if banks and other companies could pretend the toxic derivative crap on our books was worth what we think it should be worth and not the actual market value" and invent billions, if not trillions of assets out of thin air, then you have to honestly consider that Obama's crack team of financial nerds will try to convince the President that this is somehow a really, really good idea.

If Obama buys that idea, our economy is over. As it is, the 'bad bank" idea already on the front burner is a terrible one, because as Josh Marshall points out:

What that sounds like is that we'll nationalize most of the banks because we have no choice. But we'll allow the current management to run the nationalized banks and the current shareholders to own the nationalized banks.

What am I missing?

Nothing, really. That is most certainly the "logical" endpoint of the plan, banks that have their bad debts nationalized and assets privatized, under private control, with privately held stockholders.

But you combine Bad Bank with the end of mark-to-market, and the results would be catastrophic. The government under bad bank would have no choice but to overpay for the toxic crap on banks' books, and then the banks can turn around and get themselves right into the exact same mess again. Meanwhile, the American taxpayer gets stuck with a government bank full of exactly nothing. It's a back-door bailout of the banks...again.

As I've said time and time again about Obama's econ team, they are made up of the people who helped get us into this mes over the last decade or so. What makes anyone think they will be able to provide an objective solution that's good for the American people, much less a solution that actually works?

Not me. When Bad Bank fails, what then?

StupidiNews!

• The Postal Service is considering going to a five day delivery schedule.
• Russia's Vladimir Putin has some strong words for the US at Davos.
• Obama's decision to name former The Hartford exec Neal Wolin as economic legal counsel is causing an ethics stir.
• JP Morgan Chase CEO Jaime Dimon wants you to shut up about nationalizing banks already.
• Today's kids multitask more, but have more limited critical reasoning skills according to one study.

I Reject Your Reality And Substitute One Of My Own

The new reality of the House: Republicans bravely mustered their ranks and in a show of pure legislative will unanimously rejected the President's stimulus package.

They still lost by fifty-six votes.

Here endeth the lesson.

Dear America:

"Well, your new guy is nice and all, but if you don't mind we're going to go back to bombing the shit out of Gaza now. Thanks for stopping in."

--Benjamin Ben-Eliezer, Israeli Security Cabinet

Holder Cuts A Deal

A week ago, Eric Holder proclaimed loudly that "waterboarding is torture" and the GOP promptly held up his Senate Judiciary committee confirmation vote.

Until today. The committee just passed Holder this morning on a 17-2 vote. What gives? Justin Elliott smells a deal. (emphasis mine)

Sen. Kit Bond told the Washington Times today that Attorney General nominee Eric Holder privately "gave me assurances he is looking forward" on the issue of prosecutions of former Bush officials who authorized torture or operatives who carried out the policy.

The paper paraphrases Bond's remarks this way: that "Mr. Holder assured [Bond] privately that Mr. Obama's Justice Department will not prosecute former Bush officials involved in the interrogations program."

But Bond's quoted remarks are not quite so clear cut:

[Bond] added, "I was concerned about previous statements he made and others had made. He gave me assurances that he would not take those steps that would cause major disruptions in our intelligence system or cause political warfare. We don't need that kind of political warfare. He gave me assurances he is looking forward."

Mr. Bond also said, "I believe he will look forward to keep the nation safe and not look backwards to prosecute intelligence operators who were fighting terror and kept our country safe since 9-11."

Gee, there's a shocker. The GOP is crowing that Holder won't touch Bush, nor will he touch those who tortured in his name.

Which makes Obama and Holder an accessory to war crimes. It's not like Kit Bond has anything to lose politically, he's retiring in 2010.

Change you can believe in?

[UPDATE] Senate Judiciary Chairman Pat Leahy calls bullshit on the whole thing.

The implication of the piece is fairly clear: Holder promised Bond to eschew prosecutions, and Bond promised not to block his nomination. Sen. Patrick Leahy (D-VT), chairman of the Judiciary Committee -- which approved Holder today -- strongly denied that such an exchange could have occurred.

"It would be completely wrong if a senator said, 'I'll vote for you if you promise to withhold prosecution of a crime'," Leahy told me. "No senator would make a request like that. It'd be improper."

"Maybe Governor [Rod] Blagojevich [D-IL]" would have sought such an assurance, Leahy quipped. He never specifically referenced Bond, who declined to answer questions about the Times piece while leaving the Senate chamber this afternoon.

This keeps getting more interesting all the time. So why did the GOP stop blocking Holder then?

Gratitude From The Sharks

Dunno how I missed it, but this one is outright ludicrous. (h/t John Cole).

Three days after receiving $25 billion in federal bailout funds, Bank of America Corp. hosted a conference call with conservative activists and business officials to organize opposition to the U.S. labor community's top legislative priority.

Participants on the October 17 call -- including at least one representative from another bailout recipient, AIG -- were urged to persuade their clients to send "large contributions" to groups working against the Employee Free Choice Act (EFCA), as well as to vulnerable Senate Republicans, who could help block passage of the bill.

Bernie Marcus, the charismatic co-founder of Home Depot, led the call along with Rick Berman, an aggressive EFCA opponent and founder of the Center for Union Facts. Over the course of an hour, the two framed the legislation as an existential threat to American capitalism, or worse.

"This is the demise of a civilization," said Marcus. "This is how a civilization disappears. I am sitting here as an elder statesman and I'm watching this happen and I don't believe it."

It gets worse. If there's any doubt that our capitalist system is broken, infected with greed and contempt for working Americans, corrupt to the core, and self-serving and self-perpetuating, read on.

Donations of hundreds of thousands, if not millions, of dollars were needed, it was argued, to prevent America from turning "into France."

"If a retailer has not gotten involved in this, if he has not spent money on this election, if he has not sent money to [former Sen.] Norm Coleman and all these other guys, they should be shot. They should be thrown out their goddamn jobs," Marcus declared.

Earlier he argued: "As a shareholder, if I knew the CEO of the company wasn't doing anything on [EFCA]... I would sue the son of a bitch... I'm so angry at some of these CEOs, I can't even believe the stupidity that is involved here."

Audio of the conference call, which was obtained by the Huffington Post, is excerpted throughout this piece to provide a clearer insight into the pitched battle surrounding the Employee Free Choice legislation. At one point, relatively early in the call, Marcus joked that he "took a tranquilizer this morning to calm myself down."

"This bill may be one of the worst things I have ever seen in my life," he said, explaining that he could have been on "a 350-foot boat out in the Mediterranean," but felt it was more important to engage on this fight. "It is incredible to me that anybody could have the chutzpah to try and pass this bill in this election year, especially when we have an economy that is a disaster, a total absolute disaster."

Brian Marcus is a complete scumbag. Still think CEOs give a damn about the people who work for them? These guys are here plotting to destroy what's left of the right to collective bargaining in this country at a time when a vast majority of American workers have no job security, no right for recompense, and no way to better their situation.

But Marcus is right about one thing: people like Brian Marcus have presided over the demise of civilization as we know it. They just want us to pay for their mistakes and greed.

The fact the GOP and CEOs are doing everything they can to defeat the Employee Free Choice Act should let you know just how important it is to pass it.

Irony Detection Failure

I swear, Commentary's Jennifer Rubin is about the easiest target I could possibly come across. Today, she's moaning about the stimulus.

It is hard to conclude that the Democrats were actually trying to meet the President’s stated goals. There is little wonder that the President and Democrats want this voted on fast. If lawmakers, not to mention the public, figure out what’s in this they might have second thoughts. If they slow down and actually read what is in the bill, they could get the idea this is essentially one big political payoff, not a serious economic plan – and certainly not one that is targeted or temporary, as Democrats promised. (This might account for the administration’s failure to make the bill accessible despite promises of “transparency.”)

Despite the fact that Rubin (as usual) is dead wrong about both the content and the transparency of the bill, the fact anyone from the conservative side of the aisle is complaining about being railroaded into passing a bill too quickly without being able to read the fine print is hysterical in a post-PATRIOT Act world, not to mention Bush asked for the same exact fast-tracking on the TARP legislation a couple months ago.

But that hasn't occured to Rubin. Apparently, a lot of things fail to occur to her. Bonus stupidity:

What about those Democrat Blue Dogs who are supposed to be concerned about fiscal discipline? One Republican adviser was blunt, “They are all bark and no bite, and they always cave to Pelosi in the end even though the media always gives them credit for talking a good game.” We’ll see if some of the Democrats in competitive seats have the nerve to go up against the new President. I’m betting only a handful do.

Hey Blue Dogs, wake up. The GOP still hate you and will do everything they can to destroy you...so why bother to help them do it like you've been doing for the last two years?

Unemployment Jackpot

Don't trust unemployment figures. They're not telling you nearly the whole truth.

The number the news gives you is only roughly the percentage of the work force that are actively on unemployment benefits. It's not counting the people who have exhausted those benefits and are still trying to find a job, those who have stopped looking for work altogether, and those who are "underemployed"...people who are only working less than 20 hours a week and want to work full-time and are not in school. These folks are called "marginally attached workers" and are not counted by the unemployment numbers you see in the papers...the Labor Department's "U3" figure.

The much broader number the Labor Department has that DOES include marginally attached workers, called the "U6" in labor parlance, is the key to understanding how bad things really are. The worse a recession gets, the worse the non-U3 numbers get too.

For December, the U6 was 13.5%, not the 7.2% U3, and a lot of folks believe even the U6 is too low to be an accurate picture of how many folks are truly employed, as the U6 only counts the civilian work force, and not government layoffs.

The labor department changed how it counted everything back in 1990 under Poppy Bush. That's the reason you're seeing these ridiculously low unemployment rates under Dubya and Clinton...they were pretty much fake. If we were still using the old formula for unemployment, the real rate for December 2008 would have been over 17%. That's how many people are really out of work right now or underemployed, more than one in six people.

If you go on that rule of thumb that the real unemployment rate is about 2x to 2.4x the published national U3 number, the state unemployment numbers are horrifying.

States with the highest unemployment rates in December 2008:

1. Michigan, 10.6 percent
2. Rhode Island, 10 percent
3. South Carolina, 9.5 percent
4. California, 9.3 percent
5. Nevada, 9.1 percent
6. Oregon, 9 percent
7. District of Columbia, 8.8 percent
8. North Carolina, 8.7 percent
9. Indiana, 8.2 percent
10. Florida, 8.1 percent

Remember folks, these are the massaged U3 numbers, and in case of Michigan and RI, they are above ten percent...meaning that by our rule of thumb, real unemployment in those states are closer to the 20-24% range. Florida's 8.1 percent means a reality of 16-20%. California's 9.3% is 18-22% actual unemployment...and given California has about one seventh of the total population of the US, that's frightening.

In other words, there's already evidence that the real unemploment rate in this economy is far, far worse than anybody's willing to really admit. We're often told that our economy is nowhere near the Great Depression right now...with an "unemployment rate of 7.2%", we have a long way to go to the figure (actually a guesstimate) given for the worst years of the Depression Era...25% unemployment.

But we're not that far from the reality of 25% unemployment right now, today, in states like Michigan, RI, and California.

If the national U6 number keeps rocketing up as it has been in the last six months, it could reach 20% nationally by the end of the year. It's at 13.5% now.

A 20% national U6 number would mean a real, national unemployment rate of roughly 25%...depression era unemployment. And as I've pointed out, Michigan and other badly hit states will be at those Depression era numbers very, very soon.

If not already. The next batch of unemployment figures will be out next week. Stay tuned.

StupidiNews!

• The Obama stimulus package faces a full House vote today.
• The fate of Karl Rove's most recent Congressional subpoena could rest in the hands of Obama.
• Newly minted Homeland Security Secretary Janet Napolitano has ordered a US border review...of Canada.
• The Treasury's "bad bank" plan could come as early as next week.
• A new climate study suggests it may already be too late to stop global warming.