Dear America:

"This economy proves Obama is the worst President ever. The fact that he's not actually President yet is just semantics."

--Holman Jenkins, Wall Street Journal

Not So Fast

While I hate to be a humbug on Christmas Eve, it's worth pointing out that many of the predictions of a weak economic recovery in late 2009 are based on the housing market finally having bottomed out. The only problem with that is that the housing market shows zero signs of bottoming out at all, if anything the decline is accelerating.

The U.S. housing market took a sharp turn for the worse while Spain joined a growing list of countries in a recession that shows no sign of abating.

Existing U.S. home sales and prices both fell at a record pace last month, according to a report released Tuesday, further evidence that the financial turmoil which intensified in September was driving consumers deeper into retreat.

"The quickly deteriorating conditions in the job market, stock market and consumer confidence in October and November have knocked down home sales to another level," said Lawrence Yun, chief economist for the National Association of Realtors.

Sales of newly built U.S. homes slowed to the weakest level since 1991, according to separate figures from the Commerce Department.

We're getting closer and closer to that death spiral depression scenario every month, it seems. The housing market crash lowers consumer consumption, lower consumption causes layoffs, layoffs take more and more people out of their homes, and prices continue to fall as a result as more homes are put on the market and more buyers are taken out as credit requirements tighten.

At this point a gargantuan stimulus package, well above the trillion dollar mark, may be the last hope we have. All signs point to an even steeper pace of deterioration in early 2009.

As bad at this year has been, next year will be much, much worse.

[UPDATE] Just in time for Christmas, the weekly job numbers are out with new unemployment claims hitting a 26-year peak at 586,000. It'll get worse. Much worse.

Happy Holidays.

StupidiNews!

• President Bush has issued a few more Christmas pardons, but nothing controversial so far.
• Was the airplane death of Karl Rove's "IT Guru" an accident or something else?
• CIT and AmEx join the TARP bailout list to the tune of $6 billion.
• Despite death threats from insurgents, registration for Afghan elections continues.
• The notebook computer has finally overtaken the desktop PC globally in shipments.

The Stupid, It Burns Us

There's got to be some kind of award out there to give USA Today's DeWayne Wickham for sheer number of thinking people offended by his gobsmacking article comparing Rick Warren to (and I shit you not) Booker T. Washington.

At the beginning of the 20th century, Washington was one of this nation's most influential black leaders. His willingness to try to find common ground with whites who viewed — and treated — blacks as an inferior race made Washington someone presidents reached out to.

Theodore Roosevelt, especially, turned to Washington for advice on "the Negro problem." Taking counsel from "the great accommodationist," as Washington was called, was an act of steam control by the Republican president at a time when the racial divide was undeniably this nation's most explosive problem.

"In all things purely social we can be as separate as the fingers, yet one as the hand in all things essential to mutual progress," Washington said in an 1895 speech that established him as a black leader who was willing to temper the demands of blacks for racial equality.

Recently, Warren — who, like most evangelical leaders, disagrees sharply with Obama on social issues such as abortion and gay rights — sounded a similar note when he sought to assuage the concerns of those who question why he was asked to give the invocation.

"You don't have to see eye to eye to walk hand in hand," he said in a speech to a group of Muslims in California.

I don't know where to start, but let's go with this: Booker T. Washington stood up to and worked with a notoriously bigoted man in President Teddy Roosevelt, because even Roosevelt realized that the world was permanently changing in a post-Civil War industrial era. Somehow, that's exactly like Obama picking the notoriously bigoted Rick Warren out of raw political expediency!

Look folks, no matter what Obama does to reach evangelical voters, he won't get them. Not that he should stop trying to reach them: he is President of the entire United States. But Rick Warren is just a terrible attempt...and this article comparing him to one of the most influential black leaders in history manages to even be worse.

Walk Softly And Carry A Big Clinton

BooMan takes a look at the NY Times story on the future of diplomacy. Hillary Clinton is already pushing for a much more powerful State Department role in Obama's foreign policy apparatus.

Democrats are more culturally attuned to the State Department, but Carter and Clinton had weak secretaries. Hillary Clinton is not going to be a weak secretary. She is looking to expand the job and take over as much turf as possible. Ordinarily that might be a bad thing, but her power is going to be coming at the expense of the Defense Department (and to an indeterminate degree, the Treasury Department). Secretary Gates is voicing his support for an expanded diplomatic service, and his lame duck status and Republican roots make him institutionally incapable of competing with the former First Lady.

Why do I see this as good? Because it will mark a restoration of the State Department as the premier department of government. And that means that we won't shoot first and ask questions later. It means we will put a kinder face forward to the rest of the world. It means that State Department will regain its morale and that they'll be able to recruit the best minds. It's just good overall.

I happen to agree with BooMan on this one. The Times story makes it clear that a new era is dawning at Foggy Bottom.

As Mrs. Clinton puts together her senior team, officials said, she is also trying to carve out a bigger role for the State Department in economic affairs, where the Treasury has dominated during the Bush years. She has sought advice from Laura D’Andrea Tyson, an economist who headed Mr. Clinton’s Council of Economic Advisers.

The steps seem intended to strengthen the role of diplomacy after a long stretch, particularly under Secretary of State Colin L. Powell, in which the Pentagon, the vice president’s office and even the intelligence agencies held considerable sway over American foreign policy.

Given Mrs. Clinton’s prominence, expanding the department’s portfolio could bring on conflict with other powerful cabinet members.

Mrs. Clinton and President-elect Barack Obama have not settled on specific envoys or missions, although Mr. Ross’s name has been mentioned as a possible Middle East envoy, as have those of Mr. Holbrooke and Martin Indyk, a former United States ambassador to Israel.

The Bush administration has made relatively little use of special envoys. Secretary of State Condoleezza Rice has personally handled most peacemaking initiatives, which has meant a punishing schedule of Middle East missions, often with meager results.

Again, having the State Department run diplomacy and foreign relations is a good thing, and certainly a step in the right direction over Colin Powell's lies to the UN to justify invading Iraq and Condi Rice's frenetic scrambling that continues to accomplish nothing, both acting on the whim of the VP's office.

Then again, Clinton is still a war hawk and always will be. Although she's a definite improvement over Powell and Rice, that's just not saying much. Any competent diplomat would meet that low criteria. We need somebody committed to diplomacy and compromise, not Kissinger in a dress. It still remains to be seen if she'll actually promote Obama's policy...or worse, she will promote Obama's policy, and it turns out Kissinger in a dress is exactly what he wanted.

The Center of A Viper's Nest Indeed Contains A Serpent

While the Madoff case rages on, another case involving bank regulation is developing, this time a federal regulator has been removed from his job for pulling the strings behind IndyMac Bank.

The Office of Thrift Supervision has removed its west region director as a result of an inspector general's investigation into the collapse of IndyMac earlier this year, according to correspondence made public today by Sen. Charles Grassley (R-IA).

Darrel Dochow was fingered by the OTS inspector general as having approved a backdated capital infusion of $18 million into IndyMac by its holding company to stave off a downgrade in the rating assigned to the bank. A downgrading in its level of capitalization would have triggered additional regulatory restrictions on IndyMac, according to a letter to Grassley from OTS Inspector Eric M. Thorson.

This isn't the first time Dochow has been the regulator involved in a major banking collapse. A generation ago he resisted calls to shut down Charles Keating's Lincoln Savings and Loan before its collapse, which became notorious thanks to the Keating Five scandal.

Dochow's approval for the backdating came in early May and was intended to buttress the bank's capital position as of the end of the first quarter, March 31. The plan -- some details of which, Thorson concedes, remain unclear -- was discovered by the inspector general for the FDIC in documents held by IndyMac's auditor, Ernst and Young, and were turned over to Thorson's office.

So a former Keating Five figure was covering for a bank to the tune of $18 million instead of regulating it. Gee, that's not SOP for the Bushies. And the best part? There's even more of these back-dated capital infusions floating around still being investigated.

Thorson's investigation, which is ongoing, found that OTS allowed other thrifts to similarly backdate capital infusions, but the letter provides no additional details about those other cases.

If you've done something bad enough in the Bush administration in order to actually lose your job, then you're in serious trouble.

StupidiNews!

• The so-called Fort Dix Five have been convicted of conspiracy to kill US soldiers in New Jersey.
• Mexican drug gangs beheaded eight Mexican Army soldiers in a gruesome display.
• One economist puts the chance of economic depression in the US at 50%.
• Iran's President may be unpopular, but he's expected to win re-election in six months.
• Wall Street investors seem to be betting on GM to run out of gas for good.

Well If This Were A Novel...

Over at the Daily Beast, crime novelist, lawyer, and Chicago native Scott Turow dissects the Blagojevich case, and how he he sees the case against the Illinois Governor shaking out:

Some commentators have argued that the prosecution of Blagojevich, especially the charges that he was trying to sell Obama’s Senate seat in exchange for a job or massive campaign contributions, is not all that compelling. And it is surely true that it is hard for prosecutors to win cases of attempted bribery. So-called ‘crime in the head’—bad thoughts without outright bad conduct—does not tend to impress jurors.

But critics should not make the mistake of confusing a bare attempt case with the forthcoming indictment against Blagojevich. What Fitzgerald charged in the complaint is an astonishing and appalling pattern of extortion and bribery involving numerous completed crimes. Blagojevich awarded state contracts and state jobs to giant campaign contributors. The only real defense for Blagojevich is to blame those quid pro quos on his aides and fundraisers and claim he was clueless. And that dog will not hunt. Not only does the government have at least four witnesses who were deep in the scheme who will say that Blagojevich was fully knowledgeable, but the roster of witnesses of is all but certain to grow as Blagojevich intimates caught on the wiretaps make their own deals over time. Worst of all for Blagojevich is the venal chatter that came out of the governor’s mouth and was captured on the federal bugs that were in place for over a month. The man who called the President-elect of the United States a “motherfucker” because Mr. Obama’s team wouldn’t play ball, will be damned in the end by his own words and his unambiguous intent to profit from public office.

It's worth a read.

Looking For Heads To Roll

According to TPM, the revelations of the Bernie Madoff case has put the SEC in a "state of complete panic" :

The revelation that Bernard Madoff -- who himself had in the past served as an adviser to the SEC on electronic trading -- was running an alleged "$50 billion ponzi scheme" has rocked the SEC to its core, according to a current long-serving member of the commission's enforcement division.

"This has put the agency into a state of complete panic," the SECer told TPMmuckraker in an interview.

The source said that one associate director in the enforcement division had in recent days ordered junior staff to review every case that's been closed over the last few years, to ensure that violations weren't missed -- as they appear to have been in the 2006 investigation of Madoff. "There's a real paranoia around here," the source added.

With a new administration incoming, a new boss in Mary Schapiro who now has to prove she's tough enough to reform the SEC, a vowed plan to overhaul financial regulatory bodies in general and even a plan to combine agencies, the natives are indeed restless. That a lot of heads will roll from the Madoff case is the fear around the water coolers at the SEC, and rightfully so. Considering she's already got one strike against her as being too buddy-buddy with the types of folks she should be regulating after giving a job to Bernie Madoff's son at the regulatory agency she ran before, the axe is going to swing freely and there will be blood in the streets. It'll be a good show.

But in the end the real question is just how much new regulatory pressure Obama and Schapiro will be allowed to bring on Wall Street. My guess is more of the same: regulations barely enforced if at all by a brutally underfunded agency and an administration unwilling to go after the most egregious violators to "avoid hurting what economic growth is left". Schapiro will make a show of it, she has to. But in the end the transfer of wealth away from what's left of the American middle class to the super-wealthy will continue unabated, especially since the super-wealthy have lost trillions in vanished stock market value. They'll want it back. It'll come from us.

Guaranteed. After the sturm und drang, the status quo will roll on.

StupidiNews!

• Winter weather has stranded thousands of travelers in the northern US today.
• Dick Cheney insists wartime powers made all the Bush administration's actions legal.
• Holiday hanky-panky leads to September being the most popular birth month in the US.
• Another round of US missiles has hit the Pakistan border area.
• The Associated Press found exactly zero of 21 banks would confirm where the bailout trillions have gone.

Ugh.

Panthers lose in OT at the Meadowlands, 34-28. Missed figgy in regulation, 2 punts, Panthers still couldn't put it home when it counted.

We're in serious danger of a Manning vs Manning Super Bowl at this point.

Ugh.

Proving A Negative

Remember kids, if you're a wingnut, mankind's effects on global warming and climate change is completely disproved by the fact it snowed one day in Vegas this week. A couple inches in snow in Vegas is even more powerful evidence than a long-term, lake-killing drought in the Carolinas, for instance.

Being that stupid means never having to face the truth. Ignorance is indeed bliss.

Records? What Records?

Today's front page Washington Post story on Bush' s records raises more than just eyebrows.

Federal law requires outgoing White House officials to provide the Archives copies of their records, a cache estimated at more than 300 million messages and 25,000 boxes of documents depicting some of the most sensitive policymaking of the past eight years.

But archivists are uncertain whether the transfer will include all the electronic messages sent and received by the officials, because the administration began trying only in recent months to recover from White House backup tapes hundreds of thousands of e-mails that were reported missing from readily accessible files in 2005.

The risks that the transfer may be incomplete are also pointed up by a continuing legal battle between a coalition of historians and nonprofit groups over access to Vice President Cheney's records. The coalition is contesting the administration's assertion in federal court this month that he "alone may determine what constitutes vice presidential records or personal records" and "how his records will be created, maintained, managed, and disposed," without outside challenge or judicial review.

It's going to be a long, ugly battle. Perhaps Obama can compel Bush to comply, perhaps not. But unless the Democrats demand these records be released, it won't happen. And given the lack of spine on Capitol Hill, I'm thinking eight years of Bush lawbreaking will just get swept under the rug in the name of "pragmatism."

Of course, the Dems will act surprised when Obama is asked for every piece of communication ever conceived in his administration by the GOP in the name of "open government."

Geared Up To Drive Down

Terrence in DC takes a broad view of what the GOP aversion to unions (and especially their unbridled rancor towards the UAW) really means, and comes up with a pretty damn good theory: nothing conservatives do makes sense unless you accept the truth that their goal is to make America globally competitive by dramatically lowering our standard of living.

Anti-unionization, deregulation, and increased outsourcing are all hallmarks of contemporary conservatism. So, at least we know who to thank for our current situation. But that's the unspoken message of conservative economic philosophy in a globalized economy: the only way Americans can "compete in a global economy" as envisioned and delivered by conservatism is to accept a lower standard of living. As low as the market demands. How low? Read up on working and living standards in just about any country you can find on any label on just about anything in your own house.

Read the whole article, but the general theory is extremely sound.

Conservatives think that you are making too much money, and they are not. They see America as a country full of stupid, hungry locusts, but locusts necessary to provide the wealthiest their vast resources. In a republic such as ours, these masses still get some power. The conservative way to solve this dilemma is to destroy the infrastructure of upward mobility to keep the masses from using it.

Health care, college, even free time to explore our world: this is what conservatives must put out of our reach in order to maintain the yoke around us, and unionized labor represents the most direct and powerful method of fighting back. When the people take power through collective bargaining, they take power in other ways.

That's the real reason why unions must be destroyed in America. The dismal economic situation makes it all the more necessary and urgent to the powers that be. In the last eight years the American middle class has all but been destroyed. The GOP seeks to finish the job. More than anything else, that's the thing to remember.

Gentlemen, Behold! It Is Science!

Barry's weekly address today covers one of the most striking differences between this administration and the incoming one, namely not only a belief that science is valuable in and of itself, but that it is ultimately vital for the continued survival of America and the world.

President-elect Barack Obama on Saturday signaled climate change and genetic research will be among his top priorities when he takes office as he named White House science and technology advisers.

"Today, more than ever before, science holds the key to our survival as a planet and our security and prosperity as a nation," Obama said in a weekly radio and video address.

"It's time we once again put science at the top of our agenda and worked to restore America's place as the world leader in science and technology."

Obama's comments were a clear reference to President George W. Bush's administration which has been accused of downplaying scientific findings on climate change and genetic research.

Signaling a break with Bush's policies on global warming, Obama named John Holdren, an award-winning environmental policy professor at Harvard University, to head the Office of Science and Technology Policy and co-chair the president's Council of Advisors on Science and Technology.

Obama called Holdren "one of the most passionate and persistent voices of our time about the growing threat of climate change".

Holdren, 64, led the Pugwash Conferences on Science and World Affairs, an international group of prominent scientists that won the Nobel Peace Prize in 1995. He won a MacArthur Foundation "genius award" in 1981 for his arms control work, and a number of environmental science awards.

Holdren, a Washington Beltway insider, served as former president Bill Clinton's science and technology adviser in the 1990s.

I may talk about my problems with Obama on foreign policy and some of his advisory and cabinet choices, but in the end it's this that gives me hope that we have a chance to turn things around on this rock.

Imagine what a McCain/Palin administation would have continued to do to science.