How To Spot Bad Policy

Over at Political Animal, Publius gives us an easy, easy way to spot bad Obama policy.

Count me among the skeptical of Obama's new Afghanistan strategy. What really worries me is what I'll call the "reverse canary" problem. Simply put, the wrong people are too happy.

You're all familiar with the phrase "canary in the coal mine." The idea was that miners would bring canaries down into the mines as warning signals. When the air became toxic, the canaries would be affected first -- thus warning the miners of imminent danger.

With respect to the Afghanistan policy, the problem isn't that the "signaling" canaries are dropping dead. The problem is that they're too happy -- they're chirping with excessive mirth. Specifically, when Max Boot, Robert Kagan, Bill Kristol, and the Post editorial board are all excited about the policy.... well, it might be time to get out of the mine.

And that's the major, major problem with Obama's "We will defeat Al-Qaeda " policy in Afghanistan: it can't work. It weds us to another four, if not eight years in Afghanistan with precisely zero progress to show for it. The same idiotic "benchmarks" are in play, the same "surge" strategy is underway now, and the simple fact of the matter is Obama is running the Bush playbook in Kabul.

The difference now is we have a huge financial crisis on our hands, and there's simply no reason for us to be wasting time, money, and blood in Afghanistan anymore. The real problem is Pakistan, and will continue to be Pakistan, no matter what we do in Afghanistan.

Eventually somebody's going to come up with the observation that we're spending money rebuilding Afghanistan that we should be spending rebuilding America.

And So It Begins

Spain does what Obama so far has refused to do: it has opened a criminal probe into Bush-era torture policy targeting John Yoo, Doug Feith, Gonzo, and others.

The case was opened in the Spanish national security court, the Audencia Nacional. In July 2006, the Spanish Supreme Court overturned the conviction of a former Spanish citizen who had been held in Guantánamo, labeling the regime established in Guantánamo a “legal black hole.” The court forbade Spanish cooperation with U.S. authorities in connection with the Guantánamo facility. The current criminal case evolved out of an investigation into allegations, sustained by Spain’s Supreme Court, that the Spanish citizen had been tortured in Guantánamo.

The Spanish criminal court now may seek the arrest of any of the targets if they travel to Spain or any of the 24 nations that participate in the European extraditions convention (it would have to follow a more formal extradition process in other countries beyond the 24). The Bush lawyers will therefore run a serious risk of being apprehended if they travel outside of the United States.

Would that it only included Dick Cheney and George W. Bush. The same judge that brought Pinochet to justice is the same one presiding over this case. It will not be thrown aside. Spain is deadly serious about this, and it will not be the first country to want to lock up these war criminals...for that is what John Yoo and his ilk are: war criminals.

How will Obama respond to a NATO ally's extradition demands? Hopefully by having Eric Holder open his own criminal probe. Dday and Andrew Sullivan have more, and Double G has more on Britain's torture case against the CIA.

[UPDATE] Sunday's WaPo front-pager reveals that the torture regime failed miserably and completely at getting any useful intelligence.

In the end, though, not a single significant plot was foiled as a result of Abu Zubaida's tortured confessions, according to former senior government officials who closely followed the interrogations. Nearly all of the leads attained through the harsh measures quickly evaporated, while most of the useful information from Abu Zubaida -- chiefly names of al-Qaeda members and associates -- was obtained before waterboarding was introduced, they said.

Torture failed. The people who did it will be punished sooner or later. Obama should rid himself of the John Yoo playbook now before he ends up sharing the author's eventual fate.

Why Kroog Attacking Obama From The Left Is Important

Doug from Balloon Juice nails it:

What’s most important about Krugman right now isn’t whether he’s right or wrong but that he’s starting to get traction attacking Obama from the left. Obama’s stimulus package was, in my view, not as large as it should have been in large part because the debate was all about whether or not it was too big. The Geithner bank plan is drawing little scrutiny from the cable chatterers because Wall Street seems to like it and the Republicans are yet to produce their own alternative 19 page flow chart on the subject. In effect, for now, the economic debate in the mainstream media ranges from Geithner-Summers banksterism to Bachmann-Santelli-Shelby currency craziness/tax holiday idiocy/”let them fail” know nothingism. That is not a healthy situation.

I would go even further, right now the public discourse is limited to a Hobson's choice between Geithner's woefully incomplete bad bailout plan and fever-bright GOP insanity on the intellectual level of "glossolalia as financial policy". Needless to say, we need a third f'ckin choice, and that's where the Kroog comes in.

Is Krugman right? Is the Obama administration too beholden to Wall Street and to the status quo, trying to save a system that is beyond salvation? Does Obama have—despite the brayings of the right—too much faith in the markets at a time when prudence suggests that they cannot rescue themselves? We do not know yet, and will not for a while to come. But as Evan—hardly a rabble-rousing lefty—writes, a lot of people have a ‘creeping feeling’ that the Cassandra from Princeton may just be right. After all, the original Cassandra was.”

If Krugman's ideas start getting play, not only can the case be made for Plan N more succinctly, but as a useful comparison it only emphasizes how utterly useless (if not borderline absurdist) the Republican party really is right now. The ideas that Obama should be drawing from are coming from guys like Krugman on the Left, not the gaping maw of failure that is the Right in 2009.

Krugman gives the Left the credit and heft it has so sorely needed at a time when serious ideas are badly required, and serves to further expose the barking lunacy of the intellectually bankrupt Right.

[UPDATE] Dday is right on the money: "Krugman is fulfilling that role, opening what many have called the Overton window, moving the conversation away from the failed conservative ideas of the past."

[UPDATE 2] Oliver Willis adds:

It’s also worth noting what it takes for an outspoken liberal to get on the cover of a newsweekly. You have to be on a different side of an issue than a Democratic president.

So say we all.

Global No Confidence Vote: The Next Wave

The Dow has come roaring back 20% in the last three weeks and economic data on home sales, durable goods, consumer spending and retail sales have gotten better rather than worse. More than a few prognosticators believe March 2009 now represents the bottom of this recession, and that from here on out it's slow recovery...but recovery nonetheless.

Most analysts now agree, however, that there are some encouraging shafts of light after months of pitch-black news.

"The best news now is that despite the worst . . . daily litany of horrible news, the strongest renewed bank fears, despite all of that, we've got stocks today essentially where they were in October," said James Paulsen, chief investment strategist for Wells Capital Management, owned by the giant bank Wells Fargo.

In October, all three asset classes — stocks, bonds and commodities such as oil and farm products — were in freefall. Today, stocks are up roughly 20 percent in the past two weeks, the biggest such short-term rally since 1938.

"Despite some of the worst news, stocks have stopped deteriorating and have put in what I think is a relatively strong bottom," Paulsen said.

He's not alone in spying a glimmer of hope.

"I think the worst is behind us," said James Dunigan, the managing director of investment for PNC Wealth Management in Pittsburgh.

Dunigan points to recent better-than-expected data on retail sales, which bumped up in January and held in February, as well as an unexpected February increase in sales of existing homes. New data this week showed a 3.4 percent February increase in orders of durable goods — big-ticket expenditures — which added a dose of feel-good.

"You are starting to get some whiffs of that in some of the indicators that are starting to come out. . . . All of the news isn't as consistently bad as we saw," Dunigan said. "I don't think we need to get a lot of good news. We need to get some consistently less-bad news."

If you're willing to go with that theory, then good luck to you. All this month represents is a pause before the next phase of the storm: commercial real estate.

With loan defaults rising, analysts say the struggling commercial real estate industry is poised to fall into the worst crisis since the last great property bust of the early 1990s.

Delinquency rates on loans for hotels, offices, retail and industrial buildings have risen sharply in recent months and are likely to soar through the end of 2010 as companies lay off workers, downsize or shut their doors.

This is the true heart of the problem. The residential real estate crash has triggered massive unemployment and a commercial real estate crash, giving us another roller coaster to ride downwards over the next two years. Banks and retailers damaged by the current economy most likely will not survive this second phase, especially since the residential market has another 15-20% drop in prices to go. The commercial real estate crash will only be the second tidal wave to hit America just as we've struggled to the surface for oxygen.

Deutsche Bank's Richard Parkus projects delinquency rates will keep soaring to more than 3.5 percent by year-end and as high as 6 percent by late 2010. He says the industry's woes will be "at least of a similar magnitude as those that the commercial real estate faced in the early 1990s."

Drops in property values of 45 percent from a peak in late 2007 are possible, Parkus said, exceeding those of the early 1990s, as demand for office, retail and other commercial space plummets amid a worsening economy.

Adding credence to those gloomy predictions, the government said Thursday that the U.S. economy shrank at a 6.3 percent annual pace at the end of 2008, the worst showing in a quarter-century.

Funding for commercial loans virtually shut down last year as the financial system unraveled.

There was $12.2 billion in commercial mortgage debt issued last year, the lowest figure since 1991 and down 95 percent from 2007, according to a report by Reis.

Making matters worse, about $216 billion in loans are coming due through 2012.

When the companies can't make those payments anymore, they'll get foreclosed on too, driving values down for the rest of the country's offices, factories, hotels and strip malls. More and more companies will go under. This second crash will finish off a great many businesses already on the edge...and truly put us into a depressionary scenario. Seven states are now facing double-digit unemployment, and U-6 "real" unemployment estimates ranging from 18-21%. A great many local and state economies are already so weakened by the current situation that another wave will absolutely capsize them. The banks will take another mortal blow as they lose billions on commercial real estate, throttling any nascent recovery for the financial sector in its crib. That means more bailouts, more spending, more legislation, more pain.

And the real problem is that the local banks that have kept their noses clean on subprimes are the ones that will be rocked the hardest by the global commercial real estate collapse. They're the ones that invested in the strip malls and hotels and business parks because at the time they were safe bets. Now, they'll be cutting back on loans and dealing with foreclosures just like the big boys just when the country needs those loans the most to restart the economy. The disease will be spreading. The results will be devastating. Solid banks now will become weakened. Weakened banks now will become insolvent. Insolvent zombie banks now will become more multi-billion dollar albatrosses around our necks.

The bottom? We're going to wish that March 2009 was the bottom here very, very shortly. Alas, nothing could be further from the truth. Any chance we had at recovery is about to get hit by a tsunami of commercial real estate foreclosures, skyrocketing unemployment, and a long-term depression.

Buckle in kids. As bad as it's been, it will absolutely get worse from here.

Be prepared.

StupidiNews, Weekend Edition

• Obama's comments about not legalizing pot has generated quite a bit of fundraising for the opposite position.
• The President's plan for restructuring the automakers is expected to be revealed Monday.
• Kentucky's Democratic Governor endorses Republican Senator Jim Bunning's rival for 2010.
• Disney is quietly cutting hundreds of jobs at its Florida and California theme parks.
• With 99% of Freshman having their own computer, U of Va. is doing away with the campus computer lab.

Screw Job

State unemployment figures are out from the Labor Department for February. They are pretty grim. Seven states are now into double digit unemployment:

• Michigan, 12.0%
• South Carolina, 11.0%
• Oregon, 10.8%
• North Carolina, 10.7%
• California, 10.5%
• Rhode Island, 10.5%
• Nevada, 10.1%

DC is on the edge with 9.9% and seven more states are between 9 and 10%. Seven more states are between 8 and 9%. If the national U-3 average goes up to 10%, there's a very good chance that you'll be looking at twenty-one states plus DC in double digit unemployment.

U-6 numbers for all those states? Since these seven states range from 2% to 3.9% over the national U-3 average of 8.1%, and the U-6 is 14.8% (and you add 60% to the previous spread to reflect the current 60% increase in the difference between U-3 and U-6 over the last 12 months) that means the U-6 numbers are estimated for these states to be between 3.2% and 6.3% higher than the national 14.8% U-6 average, by this method.

That's putting the U-6 range estimation for these states being 18.0% for Nevada on the low end (14.8% + 3.2%) and a staggering 21.1% for Michigan on the high end (14.8% + 6.3%).

That's frightening. Michigan would be the only 20% plus U-6 state in my estimation right now, but SC would be close at 19.5% (14.8+ 4.7%). It will not take long at all for Michigan to hit 25% on the U-6.

Not long at all. Now, these are just back-of-the-napkin numbers, but remember, 25% U-6 is Depression era level "real" unemployment. Michigan is almost there now.

Heavy, Neck-Based Millstone Is Heavy

Ol' Mitch McConnell declares that now that Dubya is gone, the GOP is going to win!

"President Bush had become extremely unpopular, and politically he was sort of a millstone around our necks in both '06 and '08," McConnell told reporters Friday. "We now have the opportunity to be on offense, offer our own ideas and we will win some."

Yep, you're free of the Dubya millstone there, Mitchie.

Now all you have to worry about is the Michael Steele millstone and the Dick Cheney millstone and the Michele Bachmann millstone and the Jim Bunning millstone and the John Boehner millstone and the BIG FAT GIANT RUSH LIMBAUGH MOUNTAIN around your necks.

In Which Matt Taibbi Runs With It

Matt Taibbi vs. Jake DeSantis:

No contest whatsoever.

Like a lot of people, I read Wednesday's New York Times editorial by former AIG Financial Products employee Jake DeSantis, whose resignation letter basically asks us all to reconsider our anger toward the poor overworked employees of his unit.

DeSantis has a few major points. They include: 1) I had nothing to do with my boss Joe Cassano's toxic credit default swaps portfolio, and only a handful of people in our unit did; 2) I didn't even know anything about them; 3) I could have left AIG for a better job several times last year; 4) but I didn't, staying out of a sense of duty to my poor, beleaguered firm, only to find out in the end that; 5) I would be betrayed by AIG senior management, who promised we would be rewarded for staying, but then went back on their word when they folded in highly cowardly fashion in the face of an angry and stupid populist mob.

I have a few responses to those points. They are 1) Bullshit; 2) bullshit; 3) bullshit, plus of course; 4) bullshit. Lastly, there is 5) Boo-Fucking-Hoo. You dog.

I was a lot nicer, for the record...which is why I'm not getting paid the big bucks for being Rolling Stone's political reporter. DeSantis was an executive VP in a firm of 400. He knew exactly what was going on. Period. If he didn't know, he was simply an incompetent twit instead of a greedy asshole.

Like I've said, you want to absolve yourself, Jake? Treasury and your country needs your "expertise".

The Woman Is Crazy

Michele Bachmann has officially lost her mind on Sean Hannity's radio show.

"At this point the American people - it's like Thomas Jefferson said, a revolution every now and then is a good thing. We are at the point, Sean, of revolution. And by that, what I mean, an orderly revolution -- where the people of this country wake up get up and make a decision that this is not going to happen on their watch. It won't be our children and grandchildren that are in debt. It is we who are in debt, we who will be bankrupting this country, inside of ten years, if we don't get a grip. And we can't let the Democrats achieve their ends any longer."

It gets worse from there.

She is certifiably insane.

[UPDATE] And now she's gone on from Hannity the Manatee's show to...you got it...THE DOOM BUNKER.

Michele Bachmann was recently on Glenn Beck’s radio show, so that two of the right-wing’s most prominent nutters could talk, inaccurately, about currency issues:

BACHMANN: Let me tell you, there’s something that’s happening this week in Congress that could be the eventual unravelling for our freedom, and it’s this. I had asked the Treasury Secretary and Ben Bernanke, the Federal Reserve Chair, if they would categorically denounce–

BECK: I know.

BACHMANN: –taking the United States off of the dollar and putting us on an international global currency. Because as you know, Russia, China, Brazil, India, South Africa, many national have lined up now and called for an international currency, a One World currency. And they want to get off the dollar as the reserve currency.

BECK: Most people don’t understand what that means.

Here, for once, Beck is on the money.

As Iggy puts it, "Keep in mind that these aren’t just two weirdos hiding out in a cabin somewhere. Beck has a show on a major cable news network and Bachmann has a seat in congress." And yet we're talking about a member on Congress that is so far out of line and off her rocker it's breathtaking. Dennis Kucinich and Ron Paul are totally out there as far as Congressmen go but they make an awful lot of sense every once in a while, and they are both very intelligent people. Bachmann on the other hand is a complete nutjob who seems to be incapable of learning anything.

The worst part of all this is that there really is a danger should China or the EU or the UN ever really get serious about dumping the US dollar as world reserve currency, which is a completely different problem than the lunacy Bachmann is spouting.

Bonus verbatim Bachmann:

Well, Glenn, I have experienced that throughout my political career being labeled a kook.

Well damn, I wonder why that is?

In Which Zandar Answers Your Burning Questions

Aaron Task at YTT asks:

Are Bonus Restrictions Driving Top Talent Overseas?

Depends. Are we talking about the same "top talent" that crashed our entire economy into the ground? If that's true, then good riddance to bad rubbish. But he goes on:

But there actually is some truth to the we have to pay our top people outlandish salaries argument, says Mark DeCambre, Wall Street reporter for The New York Post.

Relatively strong European firms like Credit Suisse and Deutsche Bank are in a hiring mode, he says, as are smaller shops like Jefferies Group, hedge funds and boutiques like Greenhill and Moelis & Co.

In other words, there's always a market for top talent, whom DeCambre likens to a star pitcher or slugger on a baseball team. The team may have a strong bench, but isn't going very far without its top players.

So be it, you might say - but all those bailout billions will most definitely go to waste if the recipients can't compete in the global marketplace.

I'm thinking I'm not going to want to choose to do business with the company that lost tens of billions of dollars anyway, because I have every reason to believe the company's "top talent" -- the same people they are paying "outlandish salaries" to retain -- are not the people I want to give my money to. In fact, we now have empirical evidence that the "top talent" of the companies in question are greedy douchebags who drove their companies into near insolvency.

Bonus restrictions driving these idiots overseas may be the smartest thing America has done in years. They can't compete in the marketplace anyway...in which case let's nationalize the insolvent sacks of crap and break them up.

Problem solved. Hey Aaron, let's stop pretending that the Captains of Industry were innocent here.

Zandar's Thought Of The Day

Bloomberg Headline: "Obama Seeks JPMorgan, Goldman Support on Bank Plan".

Shouldn't this be reading "Insolvent Banks Fall All Over Selves To Do Exactly What Obama Tells Them"?

Isn't the fact the story is nowhere near that idea the major problem right now?

Today's Culprit In The Village Game Of Clue Is:

CNN's Ruben Navarette, in the Conservatory, with "The President is trying to do too much!" Concern Trolling.

Eventually this tack of using the "He can't chew gum and walk at the same time" meme is going to devolve into outright attacks on Obama's competence and intelligence...and from there it's not too far to the ol' Racism Express.

Let's Budgetize This Thing!

Some more details are leaking out on the GOP's completely insane budget plan, and "insanity" is a really, really good term for it.

How do Republicans propose to control future deficits? First, they would end a litany of controversial programs of doubtful value to the public:

International organizations and foreign aid recipients, including millions for reconstruction in the Hamas-controlled Gaza Strip. Labor union bosses participating in a new “green jobs” program. The National Endowment for the Arts, the Corporation for Public Broadcasting, Americorps, Title X Family Planning, and a host of spending programs that will do nothing to help our economy recover. And even community organizers, such as ACORN, performing “neighborhood stabilization.” Hundreds of programs deemed ineffective by prior Administrations...

That's the easy part. Unfortunately, these programs, no matter how unworthy, barely scratch the surface when it comes to saving money. There is a lot more money to be found in undoing a large part of what has been done this year:

Republicans propose to undo the recent reckless and wasteful Democrat spending binge included in the so-called “stimulus” and omnibus bills.

What does this mean? For one thing, as Minority Leader John Boehner (R) said in a conference call yesterday, it would replace the $410 billion omnibus bill with a spending freeze for the rest of fiscal 2009. That takes care of normal appropriations and saves about $30 billion. As for the stimulus package, it is less clear how much of the roughly $250 billion in refundable tax-credits and the $500 billion in direct spending would disappear — probably about half, along the lines of the GOP alternative that was proposed at the time.

So yeah, take away half the stimulus and the $410 in the omnibus bill. Eliminate all the programs Republicans hate. Throw in a massive tax cut for the wealthy. Freeze all other spending during a depressionary cycle.

Complete the transfer of America's remaining wealth and power to Republican interests. Leave tens of millions of Americans in abject poverty as consumer spending dries up and unemployment explodes. Remove the safety net for millions of American families. Continue to destroy the environment and enrich corporations -- the only entities that matter to Republicans. Scold the rest of America for the social sin of being poor.

This is what we avoided when we elected Obama instead of McCain. Never forget that. Republicans still want to ravage America and will do so given any chance to do so.

They must never be given the chance.

StupidiNews!

• The President's new Afghanistan/Pakistan strategy is rolled out publicly today.
• Two U.S. Senators are looking to reform the country's prison system.
• Democrats want to try to keep the parts of the Bush tax cuts for the middle class.
• Obama goes to Wall Street to talk up his bank toxic asset plan.
• Patent trolls go after the iPhone and Apple, hoping to make billions.

Last Call

The same Republican blowhards and wingnut partisans who completely ignored George W. Bush's actual fascism and dictatorial power grabs or better yet told us they were necessary sacrifices we had to make in a time of war are the same ones accusing Obama's efforts to restore oversight and rectify the economic disaster Republicans created as somehow being infinitely worse.

Republicans and their cheerleaders are incapable of ever telling the truth.

Now, having said that, the Obama administration's record of rolling back those same Bush power grabs is spotty at best, embarrasingly inadequate at some points, and at worst still completely unethical, if not qualifying as outright unjustifiable homicide.

We still have a hell of a long way to go to recover -- economically, ethically, legally, militarily, and diplomatically.

Are You Smarter Than A Fifth Grader?

'Cause Michele Bachmann sure as hell isn't.

Bachmann is jumping on a claim yesterday by Tim Geithner, who temporarily seemed to suggest yesterday that he’s open to a Chinese proposal to replace the dollar as the global currency, before walking it back. She blasted out a release demanding that Obama come clean about his intentions and say whether he agrees with Geithner:

Bachmann Demands Truth: Will Obama Administration Abandon Dollar for a Multi-National Currency?

The thing is, though, is that Geithner has already clarified that he doesn’t foresee a change in the dollar’s centrality. And Obama himself flatly declared that he’s not open to such a change at his presser the other night.

Undeterred, Bachmann has even “introduced a resolution that would bar the dollar from being replaced by any foreign currency,” as her release puts it.

It appears Bachmann may have thought that Geithner was talking about being open to a change in U.S. currency, rather than the world’s reserve currency, which is what the China proposal was about. And as Matthew Yglesias notes, foreign countries partake in decisions about the world reserve currency.

Not only does the woman herself fail the apparently rigorous intellectual qualifications to successfully operate a pair of safety scissors, most of her staff should be immediately fired for the cardinal political sin of not preventing her constituents from having their reasonable suspicions about Bachmann's qualifications to legislate anything instantly transformed into the ghastly realization that she actually is that ignorant.

So is Bachmann proposing legislation that would ban foreign countries from doing this? Can Congress really legislate the behavior of foreign countries?

No, it turns out. I checked in with Bachmann’s spokesperson, Debbee Keller, who reassures that this is only about American currency.

“She’s talking about the United States,” Keller said. “This legislation would ensure that the U.S. dollar remain the currency of the United States.” Of course, no one had been discussing any change in U.S. currency in the first place….

Nobody except the stupidest politician in Congress (which is like saying the hottest section of the sun or the wettest part of the ocean, I know).

Take comfort in the fact that you are smarter than she is. All of you.

Guess What's In The Box?

The Box contains the Secret Republican Budget Plan. Guess what's the one semi-concrete identifiable proposal in the Secret Republican Budget Plan?

Go on. Guess.

(TAXEN CUTTEN UBER ALLES!)

Under the Republican plan, the top marginal tax rate would be slashed from 35 to 25 percent, facilitating a dramatic transfer of wealth up the economic scale. Anyone making more than a $100,000 would pay the top rate; those under would pay 10 percent.

Yeah, that'll fix the deficit. The presser went like this:

"Are you going to have any further details on this today?" the first asked.

"On what?" asked Boehner.

"There's no detail in here," noted the reporter.

Answered Boehner: "This is a blueprint for where we're going. Are you asking about some other document?"

A second reporter followed up: "What about some numbers? What about the out-year deficit? What about balancing the budget? How are you going to do it?"

"We'll have the alternative budget details next week," promised Boehner. Minority Whip Eric Cantor (R-Va.) had wisely departed the room after offering his opening remarks. ("Today's Republican road-to-recovery is the latest in a series of GOP initiatives, solutions and plans," he had offered.)

A third reporter asked Boehner about the Republican goal for deficit reduction, noting President Obama aimed to cut it in half in five years. "What's your goal?"

"To do better," said Boehner.

"How? How much?"

"You'll see next week."

"Wait. Why not today? Because he asked you to present a budget."

"Now, hold on," said Boehner. "The president came to Capitol Hill and laid out his blueprint for his budget during the State of the Union. He didn't offer his details until days later."

"In general, where do you see cuts coming?" the Huffington Post asked.

"We'll wait and see next week," he said.

The new Republican Party motto: Tax Cuts And Magical Thinking.

And people wonder why nobody takes these goons seriously anymore. Honestly, if you assume the rest of their budget is a spending freeze on everything but Pentagon spending, jack up Pentagon spending by 10%, and then add in this massive tax cut for the rich, you pretty much have to assume we're looking at what, doubling that $1.3 trillion deficit Bush gave to Obama?

So of course to make up for that tax cut, the GOP budget would have to either completely wreck the dollar and triple our national debt in ten years or on the other hand basically destroy every social program in the country during a huge recession, either way decimating America's economy.

Somebody needs to remind John Boehner that he is utterly irrelevant.

[UPDATE] Iggy discovers that the real problem with the GOP "budget" is the fascist European socialist central planning policies it contains. More deficit spending than Obama, more government control over the economy than Obama: the GOP playbook of "accuse your opponent of doing something unspeakably horrible and then make sure you're doing it doubly so" hasn't changed from the Rove days.

Can't Win For Losing

Note to Obama: Just skip the internet town hall experiments in the future. The Right now thinks you're the new digital Goebbels, the Left now thinks you're the old analog Five-O, and the Village still hates you because you're going around their control of your narrative.

If everyone can find this much to bitch about over seven lousy questions, then it's not worth it. Leave the Village stupidity to the Villagers.

More Applied Lying For Dummies

And just when I think the adults are allowed to be in charge of the economy, we get stupid crap like this assuring that billions more dollars will be lost as the Son of the Ghost of Creative Accounting rears its ugly head once again.

The proposed FASB rule, according to a release from the agency, "provides a framework for measuring fair value and a definition of fair value that contemplates an orderly transaction between market participants, not a forced or distressed sale."

It goes on: "In the current economic crisis, many constituents have requested additional authoritative guidance to assist them in determining whether a market is active or inactive, and whether a transaction is distressed. Proposed FSP FAS 157-e would provide this application guidance."

In other words, if a bank asserts that the market for a certain asset is "inactive," then it need not write the value of it down to market prices. Critics such as Grayson insist this change would allow banks to continue a fiction of viability when in fact they may be insolvent.

"I think the real reason this has come up now is because a lot of the institutions are genuinely insolvent and don't want to admit it," Grayson said.

Once again we're asking for the ability to seize insolvent banks with one hand, and then denying ourselves the ability to determine the true financial status of the banks with the other.

Great. The banks of course will say that nearly all toxic assets are in inactive markets. Thus, all the assets are worth 100% of what the banks say they should be. So, now the Obama administration can say "Well, we can seize these banks, but as you can see here the banks say they are all solvent." These supposedly solvent banks will then get to participate in the Geithner Plan and get free money by selling these assets at the prices the banks want to sell them at to the American taxpayer.

Then we get stuck with billions of dollars spent on something really worth 20 cents on the dollar.

It's maddening, and yet there's nothing we can really DO about it.

Timmy Lays Down The Law

Mr. Geithner wants a whole bunch of new regs and oversight, which is the first thing he's done that I 100% agree with.

“To address this will require comprehensive reform,” Geithner said in prepared testimony for a House Financial Services Committee hearing. “Not modest repairs at the margin, but new rules of the game,”

Geithner called today for a systemic risk regulator to oversee big financial institutions and federal authority to seize them if they run into trouble.

The administration’s regulatory framework would make it mandatory for large hedge funds, private-equity firms and venture-capital funds to register with the Securities and Exchange Commission, and it would require derivatives to be traded through central clearinghouses.

The SEC would be able to refer those firms to the systemic regulator, which could order them to raise capital or curtail borrowing.

I know just the guy he should hire for the role of Systemic Risk Regulator too, and he even likes Tim's plan, he just knows Plan N will have to come afterwards.

Hopefully this is the start of the real work on the economy. All of these are badly needed oversight reforms that will have to be used to fix the problem.