Last Call Of 2010

Happy New Year!

On to 2011.

You'll need a helmet.

Pour One On The Floor For Ol' Jon Swift

Battochio at Vagabond Scholar rounds up some of the best lefty blog posts of the year from the bloggers themselves in honor of the departed Jon Swift.

I'm not even in the same phylum as most of these guys, so make sure you hop over there and see the best of 2010.

Maybe Europe's In A Bit Of Trouble

A UK think tank is giving the euro a 20% chance of making it to 2021.

The Center for Economics and Business Research said Spain and Italy would have to refinance over 400 billion euros ($530 billion) of bonds in the spring, potentially sparking a fresh crisis within the 16-nation euro area.

"The euro might break up at this point, though European politicians are normally able to respond to a crisis," said CEBR Chief Executive Douglas McWilliams in a list of 10 forecasts for 2011.

Hell, it sounds like the euro might not make it to 2012.

McWilliams argued that the deeper imbalances between the euro zone's stronger and weaker economies, which have become increasingly apparent since the 2008 financial crisis, would undermine the project in the long term.

"I suspect that what will break up the euro will be the failure of most of the countries to take the tough medicine necessary to make their economies competitive over the longer term," McWilliams said:

"We give it only a one in five chance of surviving in its present form for 10 years. If the euro doesn't break up, this could be the year when it weakens substantially toward parity with the dollar," he added.

Well, if everyone decides to go through with Irish/Greek style austerity, there may not be a Europe in 2021.  Keep a really close eye on eurozone politics in 2011.  it's a preview of the crapburger we're going to have to eat in order to satisfy our lords and masters.

Well Now Here's Your Problem, Senate

If you're wondering why the United States Senate doesn't seem to work very well, check out the hoops Democrats would have to jump through in order to change filibuster rules.

Possible Procedure for the Constitutional Option

· On the first day of the 112th Congress, a member of the reform group would seek recognition from the Chair. Upon receiving recognition, s/he would say: "Mr. President, on behalf of the following Senators and myself, and in accordance with Article I, Section 5 of the Constitution, I send to the desk a resolution and I ask that the Clerk read it." This would be a resolution containing the various reforms to the Senate rules.

· After the Clerk reads the Resolution, the Senator would ask unanimous consent for its immediate consideration. If there is no objection, the Resolution is on the floor for debate.

· Most likely, there would be an objection. Senate rules require 1 legislative day's notice in writing to amend or modify a Senate rule. The Senator who offered the motion would then address the Chair and send to the desk a motion to amend a Senate rule and ask that the notice be read.

· At some point, the Senate would adjourn, rather than recess, so the reformer's Resolution would comply with the one-day notice rule. (The Senate majority leader determines whether the Senate recesses or adjourns at the end of a day.)

· Reform Senators would need to object to any attempt to transact substantive business or seek a unanimous consent request to that effect. The objective is to ensure that the reformers do not waive any rights to amend Senate rules on opening day by majority vote. Thus, "opening day" could be extended for several days or weeks.

· On the day the Senate returns after an adjournment, the Chair would lay the Resolution before the Senate during the morning hour. At the conclusion of the morning hour, the Resolution would be placed on the calendar. At that time the sponsor of the Resolution would move that the Senate proceed to its consideration. Debate on the motion that the Senate proceed to the consideration of the Resolution would follow.

· Opponents could (a) move to table the reformer's Resolution reaffirming the continuity of Senate rules; (b) move to refer the Resolution to the Committee on Rules and Administration; (c) defeat the motion to call up the Resolution; (d) reject the Resolution outright; or (e) raise a constitutional point of order against the Resolution. Assuming there is a majority in favor of reform, all of these tactics would fail.

· The constitutional challenge would likely come if a filibuster is launched against either the motion to call up the Resolution or on the Resolution itself. After a reasonable period of debate, a member of the reform group would move to cut off debate by a simple majority vote. A point of order would likely be made that the move to cut off debate is contrary to the continuous nature of Senate rules. The Chair would submit the point of order to the Senate because it raises a constitutional question. The point of order is debatable.

· As occurred three times in 1975, a majority could vote to table the point of order, thus upholding the right of a simple majority to end debate on a rules change.

· Throughout these procedural steps, there would be negotiations on the rules reforms that might be able to pass with a supermajority. This is how the filibuster rule was amended in 1959 and 1975 - the looming threat of a majority vote on cloture forced a compromise.

You get all that?  And all that mess will most likely result in Republicans deciding to come to the table on filibuster reform, and the negotiations would start all over again.

Awesome.  And people wonder why Congress is about as popular as herpes.

Look For The Union Scapegoat Label

Via Memeorandum I see that John Hindraker has declared war on public employee unions.

For the large majority of our history, public employee unions have been illegal. It is only since the 1960s and 1970s that they have been allowed. Currently, they are legal in roughly half the states. The United States has carried on a four-decade experiment in legalization, and the results are in: public employee unions are a cancer on our country.

I'd argue that Hindraker probably decided to forgo pluralizing "employee" and omitted the word "and" after it as an editorial change in that last sentence, because that's what would really float his boat.

Public employee unions flourish because government is, by its nature, a monopoly. Thus, there is no need for unionized government units to compete against non-unionized units. Moreover, public officials who negotiate with public employee unions generally lack the same incentives that private employers have to keep costs down. The result has been a fiscal disaster, with numerous states and municipalities now going over the waterfall of bankruptcy.

Correlation does not equal causation.  "Government is a monopoly" is also silly.  And since private sector unions are being broken up all across America and have been for decades now, the endpoint of Hindraker's logic is of course no unions at all and the end of collective bargaining, period.

But here's the really fun part.

Meanwhile, public employee unions have become perhaps the dominant force in our political life. They extract dues from their members which go to fund the candidacies of politicians who will pay public employees even more money. The unions' ill-gotten clout has created a vicious cycle; at the same time that government units are going broke, public employees are now far better paid than their private sector counterparts, while enjoying better benefits and ridiculous job security.

Raise your hand if you believe that unions control the country.  Let's take a look at the latest Labor Department union stats for 2009:

In 2009, the union membership rate--the percent of wage and salary workers who were members of a union--was 12.3 percent, essentially unchanged from 12.4 percent a year earlier, the U.S. Bureau of Labor Statistics reported today. The number of wage and salary workers belonging to unions declined by 771,000 to 15.3 million, largely reflecting the overall drop in employment due to the recession. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent, and there were 17.7 million union workers.

Even with the number of public employees who are unionized (7.9 million) that still brings the total to just one in eight across the entire country.  That's how far down in membership and power unions have dropped in this country.

And if you think unions are the "dominant force in our political life" one has suffered selective amnesia of how corporate America and particularly the financial, insurance, and medical industries in this country gained massive polticial power over the last decade.  The Citizens United decision in particular favored corporate interests over unions, unless you think the AFL-CIO has more money or political power than Goldman Sachs.

And if Hindraker's statement really is true, then the most important political issue to unions, card check legslation to make it easier to join and form a union, should have passed easily.  It went precisely nowhere, even in a Congress dominated by Rust Belt and New England blue state Democrats with union constituencies and a President from Illinois.  It died in the Senate early.  What dominance can unions have if they can't even get their central legislative effort passed during the short time that the Democrats had 60 seats in the Senate?  On the contrary, that would demonstrate how weak unions are.

No, what Hindraker is doing is putting the blame for state fiscal problems squarely on the backs of public employee unions instead of public officials always making the decision to cut taxes to remain popular.  The magical thinking of cutting taxes not adding to deficits is idiotic and leads to this kind of shoddy, irresponsible scapegoating of public employees.

But that's where we are going into 2011, our hated, vile public employees.

[UPDATE]  Oh yes, and addressing Hindraker's original point, maybe it wasn't a slowdown.

In the last two years, the agency's 6,300-person workforce has been slashed by 400 trash haulers and supervisors and, effective tomorrow, 100 department supervisors are to be demoted and their salaries slashed as an added cost-saving move, the Post reports. 

You cut 6% of the workforce and expect response time to be adequate in a blizzard on a holiday weekend?  How are those cost savings looking now?

A Most Disturbing Village Trend

The more I look for it, the more I find articles about "what to do about state budget shortfalls?" not including the obvious solution of raising taxes and fees at all, let alone on the wealthy.  Again and again we're told the only solution is painful cuts in vital social programs.  A prime example of this phenomenon is today's Philip Moeller article in US News & World Report covering the subject of the senior safety net.

As the United States slogs its way through a third year of recessionary conditions, the cumulative impact on government support programs for older Americans has become worrisome. Most eyes are on the federal government's massive budget deficits. Safety net programs would be affected by deficit reduction proposals that have been introduced to generally favorable receptions. Whether you call them entitlements or part of a welfare state, the big three — Social Security, Medicare, and Medicaid — must be reined in for meaningful deficit reduction to occur. The battle over these programs has already begun and will intensify when the new Republican majority takes office next year in the U.S. House of Representatives.

Here's point number one:  these programs must be "reined in" or else.  Cuts are coming.  You have to accept that, because tax increases are unfair (especially on America's precious rich people).  You're not lazy like one of them, are you?  Good.  Tighten your belt like a good Christian.  (You are a Christian, right?)

Even as the lines are drawn for the federal deficit-reduction war, the states have become a battleground for resources to fund Medicaid. The states share funding for Medicaid services with Uncle Sam, and have been increasingly hard-pressed to come up with their portion of Medicaid funding. Where Washington can, in effect, print money to pay its share of the tab, states cannot. Their budget deficits are, in many cases, getting worse instead of better.

Along with the Medicaid battle there will be countless skirmishes over continued funding for local support programs for seniors. Such efforts may receive some government funds but also depend on private philanthropy and the work of an extensive network of nonprofit agencies. After three years of flat or reduced contributions and austere operating budgets, this government-volunteer network is stressed and tired. And there is no relief in sight.

Note the clever wording here:  if you feel guilty about America's seniors taking program cuts, then you need to get off your ass and donate to charities.  If you're not willing to put your money where your mouth is, then you clearly don't care about America's seniors.  Don't you dare mention raising taxes, you horrible person.  Don't tread on me!

The concept of tax increases doesn't even enter into the article.

Tax increases don't exist, so you'd better be ready to take your medicine, America.  Your betters demand it.  And the more the Republicans cut taxes for the wealthy, the more you'll have to tighten your belt.  Or don't you work for a living like a Real American?

A Real American who used to understand what shared sacrifice truly meant, anyway.  Now it's just sacrificing for the lords of the manor.

Zandar's Ten Predictions For 2011

Let's see if I can do any better at all than 45%, shall we?  Here's my ten predictions for 2011.

1. The GOP will shut down the government at some point in 2011 over the budget.  Maybe it will involve the debt ceiling, maybe it won't, but March is going to be real interesting.
2. Unemployment will top 10% again.  I just don't see the job situation turning around, especially given the coming avalanche of local government layoffs when stimulus money runs out.
3. California, Illinois, and/or Michigan will ask for federal money to close their budget hole.  What Obama and Congress will do is anyone's guess.
4. President Obama will bust out the veto pen at least once in 2011.  Seems like a no-brainer.
5. At least one major GOP presidential candidate will embrace birtherism in order to capture a plurality of support heading into 2012.
6. If California's Prop 8, the HCRA individual mandate, or Arizona's immigration law reaches the Supreme Court in 2011, Justice Kennedy will make it a 5-4 split and side with the court's liberals. Most likely we won't see a decision on these until 2012.
7. Republicans will find a way to delay full implementation of DADT repeal until after 2011.  It may involve number 1 up there, too.  Totally wouldn't put it past the Republicans to say "re-implement the law or no budget for you."
8. Julian Assange doesn't make it to see Dec. 31, 2011.  Somehow, I think somebody's government agents are going to erase the guy.  The consequences could be interesting however.
9. Apple's iPad 2 crushes the competition.  I was dead wrong about the iPad last year...now I own one. 
10. Dow ends the year under 10,000.  I'm going to eat that prediction from last year, but 2011 is going to be ugly.

We'll see how I do at the end of next year.  Into the Future Stupidity files you go.

The Kroog Versus Voodoo Economics

Paul Krugman wonders why the Village idea of deficit austerity vanished when the Obama-McConnell tax deal came along.

How did Republican leaders reconcile their purported deep concern about budget deficits with their advocacy of large tax cuts? Was it that old voodoo economics — the belief, refuted by study after study, that tax cuts pay for themselves — making a comeback? No, it was something new and worse.

To be sure, there were renewed claims that tax cuts lead to higher revenue. But 2010 marked the emergence of a new, even more profound level of magical thinking: the belief that deficits created by tax cuts just don’t matter. For example, Senator Jon Kyl of Arizona — who had denounced President Obama for running deficits — declared that “you should never have to offset the cost of a deliberate decision to reduce tax rates on Americans.”

It’s an easy position to ridicule. After all, if you never have to offset the cost of tax cuts, why not just eliminate taxes altogether? But the joke’s on us because while this kind of magical thinking may not yet be the law of the land, it’s about to become part of the rules governing legislation in the House of Representatives.

As the Center on Budget and Policy Priorities points out, the incoming House majority plans to make changes in the “pay-as-you-go” rules — rules that are supposed to enforce responsible budgeting — that effectively implement Mr. Kyl’s principle. Spending increases will have to be offset, but revenue losses from tax cuts won’t. Oh, and revenue increases, even if they come from the elimination of tax loopholes, won’t count either: any spending increase must be offset by spending cuts elsewhere; it can’t be paid for with additional taxes.

So if taxes don’t matter, does the incoming majority have a realistic plan to cut spending? Of course not. Republicans say that they want to cut $100 billion in spending, which is itself small change in a $3.6 trillion federal budget. But they also say that defense, Medicare and Social Security — all the big-ticket items — are off the table. So they’re talking about a 20 percent cut in what’s left, which includes things like running the judicial system and operating the Centers for Disease Control and Prevention; they have offered no specifics about where the cuts will fall. 

There's an even larger plan here.  Republicans figure if they cut taxes enough, social programs that are "off the table" will have to take a hit...or be privatized or eliminated completely.   The goal of Republicans in 2011 is to take the country back to the Gilded Age of the 20's, before Social Security, before Medicare, before the New Deal.  They especially want to eliminate social programs for the poor and for minorities, but keep them for traditional Republican voters.

Pretty good plan if they can pull it off.  And that's what 2012 will be all about.

Why Wasn't Wachovia Too Big To Fail?

Our old friend Republican The Odious Patrick McHenry wants to know why North Carolina-based Wachovia bank was allowed to die when the Treasury and Fed were spewing out trillions to big banks to keep them going as he takes over the new House subcommittee dealing with TARP.

McHenry, 35, will chair the new Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs when he starts his fourth term in Congress next month. It's part of the Oversight and Government Reform Committee, which Republicans are reorganizing as they prepare to take over the House next month.

The subcommittee is still in its early stages: McHenry's appointment came less than two weeks ago, and the other members have not yet been named. McHenry said there's "a very rich environment for potential oversight hearings," including topics like troubled Freddie Mac and Fannie Mae.

Like other lawmakers, McHenry is sometimes accused of being in lockstep with the banks. Two of his biggest donors are the political action committees of Bank of America and the American Bankers Association, according to data compiled by the Center for Responsive Politics. This summer, he voted against the Dodd-Frank financial regulation overhaul, which imposed strict new rules on banks. But McHenry said he is not on the side of big banking or big government, and that he's willing to ask tough questions of either.

"If there's incompetence on the side of the regulators, I'm willing to point that out," he said. "If there's incompetence on the side of the private institutions, I'm willing to point that out."

He voted against the 2008 bill to bail out the banking industry, saying it was "inherently wrong" to send taxpayer money to Wall Street when families in North Carolina were struggling to pay bills. Instead, he backed a Republican-led alternative that essentially would have been a private-sector-funded rescue plan.

"Certainly we had to deal with the toxic assets and bad investments, the dumb decisions, by some of the significant financial institutions," he said.

He called the original bailout bill, which was passed when George W. Bush was president, a "bipartisan bad deal."

His main concern, he said, are the people caught in the middle, like the small businesses trying to get lending.

So, on one hand he did vote against TARP.  On the other hand, he voted against Wall Street regulation too.  McHenry's game is actually pretty simple:  he figures his "oversight" job means to let the banks do whatever they want to with as little government interference as possible, the standard Republican line on anything.  Government shouldn't do anything at all, as far as the banks are concerned.

Don't kid yourself, however.  He's going to try to stick as much of the financial crisis as possible on the Democrats over the last four years and let the banks walk free to play more Big Casino games.  Keep an eye on Patrick here.  The winger from my old neck of the woods is looking to hit the big time in the 112th Congress.

StupidiNews!

• In separate recalls, both Ford and Chrysler are recalling tens of thousands of trucks and SUVs with electrical problems.
• New rules take effect in 2011 that declare Skype illegal in China as the country cracks down on non-state VoIP communication.
• California's new Governor, Jerry Brown, will ask voters to approve tax hike extensions and another round of budget cuts in order to close California's huge fiscal hole.
• EU civil liberties supporters are worried about Hungary's PM Viktor Orban and his record taking over tomorrow as rotating EU President.
• The FBI has raided a Texas network hijacked by Operation: Payback users to attack business websites.

Last Call

People differ on what will be done in 2011 when states run out of stimulus cash --  the gamut runs from borrowing more tho Chapter 8 bunkruptcy -- but all the "experts" agree:  state employees will be the biggest losers.  CNBC's Nicole Lapin:

The mere idea of bankruptcy sounds unpalatable to some governors, including Mark Parkinson from Kansas. “Declaring bankruptcy is not the answer to the budget crisis facing many states,” he said, adding that “the crippling public relations message bankruptcy would send to businesses and investors and the ripple effect on local communities is too high a price to pay for any potential upsides.” 

True, at first glance, it seems nuclear. But, the potential upsides to allowing states to declare bankruptcy are far too compelling to dismiss outright. Namely, it would give bite to the barking we’ve been hearing from the states’ governors, like Parkinson, letting them play hardball with their biggest creditors — bondholders and union contracts. 

Granted, union contracts can theoretically be restructured outside of bankruptcy, but in no meaningful way. State bonds, in essence, can’t be restructured without bankruptcy. 

I’m not suggesting that bankruptcy is the only option. It’s not even a good one to see to fruition, but the mere threat might reduce the burden on Congress to push through more stimulus or a state bailout. 

“Some of the biggest benefits would occur even if no state ever actually filed for bankruptcy,” Skeel tells me. “Creditors might agree to much more meaningful concessions if the alternative is a messy bankruptcy that would require even greater concessions.” 

Yay, abrogating union contracts is an "upside".   So what more cuts will state employees be asked to suffer?  They're already losing benefits and work hours left and right.  States want to declare bankruptcy so they can throw out state employee contracts and screw them over.

What, you thought bondholders and multi-billion dollar institutional investors like hedge fund giants were going to have to eat crap sandwiches on this?  Yeah, right.

And as before, nowhere...nowhere...in this article do I see "raising taxes in order to close budget gaps" as an option.  We're being told that bankruptcy and contract abrogation of state employees is the "only option" that must be considered before "turning on the printing press".

The reality is that allowing Congress to change federal law to allow states to consider bankruptcy before raising taxes is patently ridiculous.

Greek Fire, Part 25

We're now back to interest rates on the Greek 10-year bond above where they were when Greece needed a bailout.

Greek 10-year bonds on Thursday rose to a record high of 12.553 percent, breaking the previous record set earlier this year during its bailout by the European Union and International Monetary Fund.

In thin trading the yield, or return to investors, on Greek 10-year bonds rose from Wednesday's close of 12.489 percent to hit an intra-session high of 12.553 percent. It later dropped to 12.504 percent.

The records of 12.465 percent intra-session and 12.449 percent close were set in May, when the country secured a 110-billion-euro (150-billion-dollar) EU-IMF bailout.

Investors have been spooked by Greece's high deficit and debt levels, and been demanding higher returns.

You think?   The Greek bailout has failed.  The Irish bailout is looking pretty failtastic too.

From the report: "Deposits from the Irish resident private sector were 6.7 per cent lower on a year-to-year basis in November 2010. The annual rate of change in deposits from Irish households was minus 4.5 per cent, whereas deposits from Irish NFCs fell by 14.9 per cent on an annual basis in November." What this means simply said, is that as more deposit capital is withdrawn from Irish banks, the more they will need to rely on ECB and ICB funding, the more distressed they will be perceived as, the more capital will be withdrawn and so on... But that is a 2011 story.

Boy, is it.  Greece is crashing, Ireland is next, and the rest of the PIIGS are about to be barbecued.  I've been warning about Greece and Ireland for months now, and it's looking more and more like worst case scenario time.  The Eurozone is destabilizing across the board.  Italy's latest bond auction failed today.  Portugal is planning to sell all kinds of bonds in 2011 in a buyer's market.  There's no appetite for Spain's bonds at all.

The Greek Fire is raging across Europe, folks.  And it's looking like there's no way to put it out until everything is reduced to ashes.  As Digby reminds us, that's what's in store for us if we let it happen.

By The Time I Get To Arizona, Part 13

The mastermind behind Arizona's War On The Brown kicks it into high gear as voters have rewarded GOP State Senator Russell Pearce as the President of the Arizona Senate.  Pearce, you'll remember, is the racist assclown behind Arizona's "Papers, Please" immigration law.  Now he's making good on his campaign pledge to revoke the citizenship of children born in the US to undocumented parents.

His plan is to pass such a blatantly unconstitutional law that it forces a Supreme Court ruling on the 14th Amendment.

PEARCE: Well, because we have about 18 states that have joined us in this effort, a coalition of 18 states that agree with us. Others do, too. They just don`t think they can pass it through their congress or -- I mean, their legislative bodies.

So we actually have the majority of Americans on this issue on our side, too. The polls show 62 percent to 70 percent of Americans know that birthright citizenship is unconstitutional, that the practice ought to be stopped.

What you`re doing, you are inducing -- it is against the law to enter the United States in violation of federal law. And it`s against law to remain here without permission. And yet we induce you to break the law. It is absolutely outrageous. The common sense...

Amazing.   And of course, the next step is to round up and deport all undocumented people in the country.   Hey, can you prove your parents were US citizens when you were born here?  Better hope you can in Russell Pearce's world.  He's been planning this for a while, hoping the "activist judges" of the Supreme Court will validate their hate-filled viewpoint as law.

Republicans continue to shift towards being the party of "screw you, minorities."  They are so afraid of Latinos that they are willing to try to rewrite the Constitution to get rid of them.

One Hell Of A Snow Job

Today's winger "How dare they!" poutrage is a NY Post story pinning the blame for the slow cleanup in NYC after last weekend's blizzard squarely on those Evil Unionized City Workers.

Selfish bosses from the snow-slammed outer boroughs ordered their drivers to snarl the blizzard cleanup to protest budget cuts -- a disastrous move that turned streets into a minefield for emergency-services vehicles, The Post has learned.

Miles of roads stretching from as north as Whitestone, Queens, to the south shore of Staten Island still remained treacherously unplowed last night because of the shameless job action, several sources and a city lawmaker said, which was over a raft of demotions, attrition and budget cuts.

"They sent a message to the rest of the city that these particular labor issues are more important," said City Councilman Dan Halloran (R-Queens), who was visited yesterday by a group of guilt-ridden sanitation workers who confessed the shameless plot.

Halloran said he met with three plow workers from the Sanitation Department -- and two Department of Transportation supervisors who were on loan -- at his office after he was flooded with irate calls from constituents.

The indignation is thick enough to weld to the front of a truck to use to plow the boroughs. The garbage slowdown killed people! String up the sanitation workers!

Of course a slightly less breathless look at the situation in the Big Apple this weekend reveals a lot more.

But the Bloomberg administration decided not to call a snow emergency. One city official briefed on the response to the storm said it was explicitly considered. But ultimately Mr. Doherty and Ms. Sadik-Khan decided against it, said Seth Solomonow, a spokesman for Ms. Sadik-Khan.

Mr. Solomonow said the forecast was not severe enough.

“As of about 5 p.m. on Christmas Day,” he said, “the forecast called for about a foot of accumulation, which is not uncommon and which is not a basis for a snow emergency declaration.”

Mr. Bloomberg, asked Tuesday why an emergency had not been declared, confused the issue by asserting that doing so would have put more cars on the roads, potentially creating more problems. But clearly, had he declared an emergency shortly after the Weather Service’s blizzard warning, there would have been ample time to move cars before the heavy snow began.

Mr. Hauer called the decision bewildering, and Mr. Bloomberg’s claims misleading.

“We’ve done snow emergencies in the city for decades, many decades, and people have always found a place to put their cars,” said Mr. Hauer, who has had many angry disagreements with Mr. Bloomberg over the years. “You’ve just got to give them enough time.” 

A snow emergency would have cleared the roads for emergency vehicles, but it was never declared by the Mayor's office.  Oh...and the city often hires private, non-unionized contractors to deal with snow emergencies too.

“If we had the private industry and the front-end loaders early, come in, it would have been a big help, no question about it,” Mr. Doherty said in an interview on Wednesday. “It is a problem.”

The problem, he said, rested largely with him. He said he might have taken too long to make the first calls for private help. He said he had become too consumed with deploying thousands of his own workers.

“Why did we wait so long?” he asked. “Well, maybe that is something we have to look at, no questions about it.”

There are, though, an array of questions about the system for soliciting private assistance. The city’s list of reliable, proven, untainted businesses has shrunk. Any new volunteers have to be vetted; it can take 12 hours to get them rolling.

Unlike years ago, Mr. Doherty said, the private workers just do not seem “interested in the work anymore.”

“Are we paying enough?” he said. “It may be the reason.” 

Seems to me the blame for this lies with a city administration that didn't take the threat of a blizzard seriously enough because it would have meant somewhere in America that a local government was spending money on something, clearly an illegal, unconstitutional act in the eyes of wingers.  Decisions were made pretty high up to cut corners and this was the result.

But blaming the city sanitation workers for the clogged streets is just idiotic.  Wingers expect all this stuff to magically be cleaned up, but don't think anyone should have to foot the bill...especially taxpayers.  Governance itself is the enemy, it seems.

This Year In Busted Banks

Unless there are any surprises tomorrow, 2010 will end with 157 bank failures, surpassing last year's 140. In 2011 more will be on the way.

The FDIC's list of "problem" banks - those whose weaknesses "threaten their continued financial viability"- stood at 860 as of Sept. 30, the highest since 1993. Historically, about a fifth of banks on the watch list end up failing.

Bank failures have left the FDIC insurance fund in the red, but the agency predicts that it will have more than enough money to meet the anticipated cost of failures through 2014.

As the financial crisis of recent years recedes, the FDIC has been predicting that 2010 will be the high-water mark for bank implosions.

"Going forward, the FDIC looks to see fewer failures," agency spokesman Greg Hernandez said.
Some industry observers agreed.

"I think we're over the hump of the problem but far from the end," banking consultant Bert Ely said.

Gary B. Townsend, president of Hill-Townsend Capital, said the industry is not just out of the woods, "we are far beyond the woods."

By one measure, the trouble is already abating. On average, the banks that failed this year were much smaller than those that failed last year.

The banks that failed this year had assets totaling $92.1 billion, a decrease of 45.7 percent from the $169.7 billion in assets of the banks that failed in 2009.

"These are very small institutions," Townsend said. "The total assets that they represent is insignificant compared to the financial system as a whole. It's quite manageable."

Well gosh, that's nice.  If that one-fifth rule holds true, there will be 172 bank failures in 2011.  Sure the banks are smaller, and there's a reason for that:  these are the banks below the "Too Big To Fail" line, community and regional banks.  They are getting snapped up by the megabanks, while the taxpayer foots the bill for the rest of the mess.

The forced consolidation by FDIC attrition of the industry will continue in 2011.  Fewer banks means less competition, means higher lending costs to the customer.

The community bank is on the endangered species list.

Working Over Veterans

Veterans of Iraq and Afghanistan are finding that transitioning back to the civilian workforce is pretty damned difficult when there's no jobs.

While their nonmilitary contemporaries were launching careers during the nearly 10 years the nation has been at war, troops were repeatedly deployed to desolate war zones. And on their return to civilian life, these veterans are forced to find their way in a bleak economy where the skills they learned at war have little value.

Some experts say the grim employment landscape confronting veterans challenges the veracity of one of the central recruiting promises of the nation's all-volunteer force: that serving in the military will make them more marketable in civilian life.

"That [promise] works great in peacetime," said Lawrence J. Korb, an assistant secretary of defense for manpower under President Ronald Reagan who is now a senior fellow at the Center for American Progress. "But that does not work too well in war. . . . If you are in there four years and deployed twice, what kind of skills have you learned other than counterinsurgency?"

The unemployment rate for Iraq and Afghanistan war veterans was 10 percent in November, compared with 9.1 percent for non-veterans, according to the federal Bureau of Labor Statistics. Unemployment rates for combat veterans of the wars in Iraq and Afghanistan have been higher than the overall rate since at least 2005, according to the bureau. 

And it's pretty simple, really.  Employers these days can pick and choose the most qualified candidate for the job, and that usually means somebody with recent experience, not somebody who has spent the last several years out of the job market.

But note that it's not the recession that caused this.  Iraq and Afghanistan vets have been unemployed at a higher rate since 2005, well before the bottom fell out of the job market.  Employers wonder about the mental health history of a returning vet who served three or four tours in the sandbox.

That means the job market, or lack of it, is driving a lot of vets back into active service.  The larger problem is after nine years of war, we're discovering new and heartbreaking costs everywhere.

If It's Thursday...

New jobless claims finally...finally...fall under 400k for the first time in nearly two and a half years.

Initial claims for state unemployment benefits fell 34,000 to a seasonally adjusted 388,000, the lowest reading since early July 2008, the Labor Department said Thursday. That was well below economists' expectations for 415,000.

The prior week's claims figure was revised modestly up to 422,000 from the previously reported 420,000. A Labor Department official said there was nothing unusual in the state-level data and described the report as clean.

That's good news if the trend keeps up and businesses are hiring in 2011.  Unfortunately, I see a reversal in much of the gains made in the labor market next year.   I'd very much like to be wrong about this, but I doubt I will be.

The Epic Year In Politics Win

I've got five folks in consideration for this year's EPIC WIN, Political category:

• Sen. Lisa Murkowski (R-AK) -- who came back from Tea Party primary hell served up by Joe Miller and Sarah Palin to win as a write-in.
• Rep. Nancy Pelosi (D-CA) -- who SMASHED a path through health care reform with her gavel, got smashed in return by voters, and still remained minority leader going into 2011.
• Sen. Scott Brown (R-MA) -- who succeeded Ted Kennedy and turned out to be a better Democrat than some Democrats in the Senate, going from GOP hero to goat in less than a year (and Donk goat to hero in the same time period.)
• Rep. Barney Frank (D-MA) -- who laid the smacketh down on reporters, Republicans, and critics by getting both Wall Street reform and DADT repeal through the House.
• President Barack Obama -- who rolled the dice on the lame duck, yelled Yahtzee and came away with a hell of a bag of Christmas legislation out from under the Republicans' noses.

So, of those five players in 2010, which one had the biggest EPIC WIN in Washington this year?

More Recess Success

President Obama made six recess appointments on Wednesday as Senate Republicans stalled the confirmation process in 2010.

Obama first nominated James Cole to the No. 2 Justice Department post in May. But Republican lawmakers blocked his confirmation in part because of questions about his role as an independent consultant for AIG before its near collapse and government bailout in 2008. Senate Republicans complained that confidentiality agreements prevented them from receiving answers about his work for the company.

Cole is a close friend of Attorney General Eric Holder and a partner at a private Washington law firm. His appointment is one of six Obama announced from his vacation in Hawaii, including ambassadors to Turkey and Syria.

Both Republican and Democratic presidents have made recess appointments, which circumvents the Senate's authority to confirm nominees, when they could not overcome delays in the Senate. President George W. Bush made more than 170 such appointments in his two-term presidency. President Bill Clinton made nearly 140.

Obama has made 28 recess appointments this year. The White House said Bush had made 23 at this point in his presidency.

Obama has often warned that he is willing to turn to recess appointments to overcome Republican opposition. The White House said the appointees he named Wednesday had their nominations pending for an average of five months.

Several ambassadors to former Soviet republics and Middle Eastern countries were appointed last night.  It's hard to imagine why Republicans would sit on vital ambassadorial confirmations like that, but then again Democrats did delay many of Bush's appointments as well.

It's one of the valid "both sides do it" situations out there.  You would think some sort of Senate reform on the filibuster and secret holds would be welcomed by both sides, but you'd be wrong.

StupidiNews!

• Former Israeli President Moshe Katsav has been convicted of rape and sexual harassment charges involving three different women.
• German kindergartners have run afoul of the country's strict new copyright laws involving songs.
• Kansas lawmakers plan to introduce the country's strictest anti-abortion law, banning all abortions after 20 weeks without exceptions for the mother's health.
• Winter storms in the US show the downside of airline efficiency as thousands remain stranded.
• A new Pew poll shows 2 out of 3 internet users have bought something online.

Last Call

Dennis Kucinich feels like a man with a bullseye on his forehead.  As they say, it's not paranoia if they really are out to get you.

The state of Ohio will lose two congressional seats thanks to the latest U.S. Census figures, and liberal stalwart Dennis Kucinich is worried his seat is on the chopping block.


In an e-mail to supporters Wednesday, the seven-term Democratic congressman and two-time presidential candidate says the Republican-controlled Ohio legislature is likely to eliminate his heavily Democratic Cleveland-area district.

But Kucinich says he’s not just going to stand by while that happens.

“I will not wait until a new Ohio map is produced to begin this crucial discussion of the consequences of congressional redistricting,” writes Kucinich. “I will not wait until the Ohio Legislature produces a new map to start thinking of the options. The question will not be: Who is my opponent? The question will be: Where is my district? Seriously.”

If Ohio was going to lose only one district, I figured Kucinich would actually be okay.  (First target would actually be Tim Ryan in OH-17), but with two going, Kucinich's digs will be folded into Marcia Fudge's heavily urban Cleveland district, OH-11 and you have to figure Betty Sutton and Tim Ryan will see theirs folded together too.

No doubt in my mind that Ohio will get rid of two Democrats, and phasing out Kucinich would be a big symbolic head to collect.

Turn On The Lights, Watch The Roaches Scatter, Part 54

Today's Foreclosuregate story comes from Barry Ritholtz.

In one of the more bizarre foreclosure cases, Bank of America is threatening to throw a West Hartford family out of their home even though the couple never missed a mortgage payment.

The largest bank in the United States earlier this month notified Shock Baitch and his wife Lisa (Friedman) Baitch that foreclosure action will start today – Christmas eve – unless the couple agrees to put their home up for a forced sale.

Why? Because another unit of Bank of America erroneously reported to credit agencies that the family was seeking a loan modification, ruining their credit rating and as the result putting their mortgage into default.

All this is happening even though the bank – after admitting it erred and sent a letter of apology in September – handed this case to a special unit at Bank of America that is charged with dealing with severe customer issues. It promised to notify the credit reporting agencies that the couple were not deadbeats, but were good credit risks.

This is the nightmare scenario for both the banks and for mortgage holders.  Banks foreclosing on people on Christmas Eve because the bank can't get their own paperwork straight?  Exactly how many people will that motivate to try to buy or sell a home in 2011?  Would you, knowing that foreclosure paperwork is so badly fraudulent that a bank will foreclose on somebody who was never even late on a payment?

Barry breaks down the cause of the problem quite effectively:

The obvious answer is the illegal processing of foreclosures. When lawyers, bank executives and there outside contractors are paid to violate the law, the local State Attorney General needs to prosecute these felons. Where Lawyers perjure themselves, swearing they have verified, reviewed and confirmed foreclosure files they never so much have looked at, they need to be disbarred.

Its called the rule of law, and its long past time we actually enforced it.

The legal and economic chain reaction from Foreclosuregate is the number one reason why 2011 is going to be a nightmare year for a whole lot of Americans.  It's always darkest just before it goes pitch black.  No wonder today's third quarter 2010 foreclosure numbers are so dismal.

Newly initiated foreclosures increased to 382,000 in the third quarter, a 31.2 percent jump over the previous quarter and a 3.7 percent rise from a year ago, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in their quarterly mortgage report.

The number of foreclosures in process increased to 1.2 million, a 4.5 percent increase from the second quarter and a 10.1 percent increase from a year ago, according to the regulators. 

The housing depression continues unabated. Gary Shilling now says another 20% housing price drop is in the works by 2012.  If he's right, America is in serious trouble.  You think there'd be a sense of urgency in Washington but...naah.

The Bite Was Worse, Actually

In the New York Times, Michael Shear hails Obama for thanking the Eagles for giving Michael Vick a second chance.  Vick did his time, and this was a public demonstration of forgiveness to those who have paid their debt to society.  It is not clear whether Obama knew his words would be published (though I'm sure he realized the likelihood).  The article praises Obama for speaking up on social issues, even awkward ones that may not benefit him.  I agree that this is a good thing, and Obama did it in a way that did not trivialize the seriousness of Vick's crimes, but focused on the positive.

Let me be perfectly clear when I say I am an animal lover.  I've sacrificed to feed and heal animals who have been mistreated.  My husband lovingly refers to our property as "Bambi's hideout" because I feed squirrels and birds, and make sure the bunnies have food in the winter.  I felt sick to my stomach when I watched Vick's half-assed-at-best "apology" before he was sentenced to do time.  But when he came out, he was different. Not a changed man, no complete reform or grand awakening.  But he had finally realized the seriousness of his actions, and showed a little humility and compassion in following interviews.  It's hard to tell truth from publicity, but it even appears he has gone above what was required of him to speak out about animal cruelty and make amends.  The self-serving guy who wasn't sorry, just sorry he got caught seemed changed.

Should Vick have a second chance?  Yes.  When you pay your debt, you owe no more.  I'm of the opinion that he owed more, considering the crimes he committed, but I also keep in mind that his crime was in no way relevant to his job.  If he had owned a kennel, it would be different.  Vick is where he should be, and Obama did a good thing for the social stigma of having been in jail, something that touches an astonishing number of families.  PETA will be ticked, and I can't say that I blame them for that.  In the end, this whole situation has shed light on a troubling problem, and I think the publicity from Vick's fall from grace did a lot of good for the cause.  Now Vick gets a second chance.  I hope for his sake that he makes the most of it.

By The Time I Get Out Of Arizona

Looks like Republican Gov. Jan Brewer's immigration law has cost the state hundreds of millions in federal dollars as the state's 2010 Census numbers are far below predictions, meaning less federal money for the Grand Canyon State.

Michael McDonald of George Mason University explains.

The federal government uses these population counts to distribute federal dollars to the states. According to Andrew Reamer at the Brookings Institution, in 2008 the federal government distributed $866.5 billion in funds to the states based on the census population counts. Your state gets its share of the federal pie based on the number of people that are counted by the census. If there were $866.5 billion in funds to disperse in 2010, each person would be worth $2,807 in federal money to your state.

Note that I say "people" not "citizens." This is where Arizona may have lost as much as three-quarters of a billion dollars annually in federal funding. The Arizona state government could have easily put this money to good use, as according to the New York Times, the state faced a $2.6 billion shortfall in fiscal year 2011.

I come to this conclusion by comparing what the Census Bureau expected Arizona's population to be and what it really was -- or at least who was counted. Throughout the decade, the Census Bureau demographers estimate each state's population. The most recent estimates give a sense of what the Census Bureau thought the April 1, 2010, population of Arizona would be.

So, the Census Bureau demographers projected Arizona's population to be 6,668,079 but the actual number was 6,392,017 or 276,062 fewer people than what the Census Bureau expected to find. This was the largest shortfall of any state in absolute numbers. Since Arizona is a mid-sized state, as a percentage of the population this shortfall was nearly twice that of the next nearest state, Georgia.

So why was the Census Bureau wrong? Or were they wrong? It is not unreasonable to surmise one of two things were contributing factors: Either Arizona's undocumented population did not want to stick around in the state or they did not think it was wise to fill out a government form -- even if their confidentiality is strictly guarded by the U.S. Census Bureau. If the shortfall was due to the latter, then at $2,708 a person, Arizona lost out on $775 million in federal grants per year.

Arizona's Census estimates were short by more than twice any other state?  Seems to me the state just found out the price for driving people away with an odious, draconian law.  And considering Arizona's $2.6 billion budget hole, well this is bad, bad news.

So who's going to pay the price for Arizona's immigration law?  Arizona taxpayers just lost $120 in federal dollars per person.

How's that "tough law" working out for you guys now?

Dreams Of A Moose Cut Loose

From the Well Duh department:


Washington (CNN) – As the start of the next presidential campaign nears, a new national poll suggests that President Barack Obama's tax-cut compromise with congressional Republicans did not hurt his standing among Democrats, while former Alaska Gov. Sarah Palin may be dropping in the eyes of Republicans.


To which I can only say hallelujah, there is a glimmer of hope for us, ladies and gentlemen.  Obama is miles from perfect, but he's accomplished a hell of a lot in his time in office.  Palin is a quacking, evil little troll whose popularity depends on spin doctors and controlled interviews.


And by God, some people can see the difference.

Five. Five Dollar. Five Dollar Gas Bomb.

Former Shell Oil exec John Hofmeister is warning of $5 a gallon gas before the next Presidential election.

"I'm predicting actually the worst outcome over the next two years which takes us to 2012 with higher gasoline prices," John Hofmeister said in a recent interview with Platts Energy Week television.

Tom Kloza, chief oil analyst with Oil Price Information Service, agreed that Americans would see $5 a gallon gas but told CNN that he did not believe it would happen in 2012. "That wolf is out there and it's going to be at the door...I agree with him that we'll see those numbers at some point this decade but not yet."

"The demand is still sluggish enough in some of the mature economies," he said.

Hofmeister also predicted that demand would outstrip supply before the end of the decade.

"When supplies run low and the demand is still high, many areas will start to run out, with gas stations having no supplies," World News Insight observed. "Ultimately rationing could then come into force. We could be looking at a return to the 1970's."

Scary stuff, but personally all I think $5 gas would do is lead directly to another economic crash.  It's no coincidence that $4.25 gas in July 2008 preceded the September 2008 meltdown by a matter of just months.  High gas prices took out billions from disposable income, which had a major ripple effect.  We're starting to see that same bubble build up again.  Granted, to get to $5 gas around here in the Cincy area, we'd have to see oil hit $175 a barrel or so.  Still, gas and oil prices have only gone up this winter, topping $90 a barrel on the way to $100.

We'll see where this goes.

The Future Of Israel

The Atlantic's Jeffrey Goldberg explores the endgame of the current political position of Israel towards Palestine, where a two-state solution is unacceptable.  What happens to the Palestinians absorbed by Israel's expansion into the West Bank and other areas?

Is it actually possible that one day Israelis -- Jewish Israelis -- would choose to give up democracy in order to maintain Israel's Jewish voting majority? Some people, of course, argue that Israel has ceased to be a democracy, because there is nothing temporary about the 43-year-old occupation of the West Bank. I believe it is premature to talk about the end of Israel as a democratic state -- mainly because the disposition of the West Bank is still undecided --  but I can't say that the thought hasn't crossed my mind that one day Israelis will make the conscious, active decision to preserve the state's Jewish character instead of its democratic character (I use the word "Jewish" in the demographic sense, not the moral sense, obviously).

As I wrote last week, there's very little Israel's right-wing government has done in the past year or so to suggest that it is willing to wean itself from its addiction to West Bank settlements, and the expansion of settlements bodes ill for the creation of a Palestinian state -- and the absence of Palestinian statehood means that Israel will one day soon confront this crucial question concerning its democratic nature: Will it grant West Bank Arabs the right to vote, or will it deny them the vote? If it grants them the vote, this will be the end of Israel as a Jewish state; if it denies them the vote in perpetuity, it will cease to be a democratic state.

The fact that anyone in the Village is even asking this question is something of a revelation.   It's such a basic, simple question that nobody bothers to ask it.  What democratic rights do Palestinians have in Israel?  If Israel refuses to even consider a two-state solution, then what of those rights?  Goldberg goes on to say that he believes that Israel will continue down this path, and may even declare that Palestinians are citizens of Jordan, and can vote there.

But for the life of me, I can't remember when any columnist in an American magazine actively questioned Israel's democratic future.  Commentary's Alana Goodman dismisses Goldberg's concerns about Israeli Foreign Minister Avigdor Lieberman, rumored to be Israel's next hard-line PM.

Say what you will about Lieberman but, actually, his position has always been that some Arab towns and villages that are part of Israel should be given to a Palestinian state while Jewish settlement blocs are annexed to Israel. That may not be what the Palestinians want or even what many Israelis want but the outcome Lieberman desires would be a democratic and Jewish state.

Which would be true, but again, that would involve the creation of a Palestinian state.  So far, that hasn't happened.  And I don't see it happening anytime soon, either.

StupidiNews!

• A federal judge has dismissed Joe Miller's recall lawsuit against Sen. Lisa Murkowski, clearing the way for her election certification tomorrow.
• Iraqi PM Nouri al-Maliki says he wants US troops out of Iraq by the end of 2011.
• Sarah Palin's emails as Governor of Alaska may not be released for another six months as Alaska Republicans continue to delay release requests.
• US corporations want President Obama to give them a tax holiday on nearly a trillion dollars worth offshore earnings, taxes that most corporations avoid anyway.
• Apple faces a California lawsuit saying that its iOS system collects enough data on users in order to be able to identify them.

Last Call

The one thing that Foreclosuregate has really done is rip the cover off of the secret fraud factory the banks have been running for years in the mortgage business.  Now the institutional investors that bought this toxic mess are suing to get their losses back.  It's one thing when a small company does it, but when the nation's biggest auto insurance company weighs in with a big-ass lawsuit against the nation's biggest bank over this, you know it's about to get ugly.

Allstate has sued Bank of America and 18 other defendants over losses it said it suffered on more than $700 million of mortgage debt it bought from Countrywide Financial.

In a complaint filed Monday in Manhattan federal court, Allstate, the largest publicly traded U.S. home and auto insurer, alleged that Countrywide misled it into believing the securities it bought were safe, and that the quality of residential home loans backing them was high.

"Defendants knew the loans offloaded onto Allstate were a toxic mix of loans given to borrowers that could not afford the properties, and thus were highly likely to default," the complaint said. Allstate suffered "significant losses" as a result, the complaint said. 

Among the defendants are several former Countrywide officials, including long-time Chief Executive Angelo Mozilo. 

Allstate won't be the last company to sue the banks over subprime losses either.  And these two corporate heavyweights have the money and the muscle to make this a full 15-round fight.  But it looks like the tale of the tape strongly favors Allstate.  Tyler Durden:

Allstate's sample sizes of Mortgage Loans are more than sufficient to provide statistically-significant data to demonstrate the degree of misrepresentation of the Mortgage Loan characteristics. Analyzing data for each Mortgage Loan in each Offering would have been cost-prohibitive and unnecessary. Statistical sampling is an accepted method of establishing reliable conclusions about broader data sets, and is routinely used by courts, government agencies, and private business. As the sample size increases, the reliability of its estimations of the total population increase as well. Experts in RMBS cases have found that a sample size of just 400 loans can provide statistically significant data, regardless the size of the actual loan pool, because it is unlikely that so large a sample would yield results vastly different from results fro the entire population.

In other words, Allstate used statistical analysis to show that no matter what random package of loans that Countrywide sold them, the loans themselves were all fudged.  In the most damning evidence, Countrywide claimed that 0% of the instruments they sold Allstate contained any mortgages that were underwater, i.e. not a single mortgage loan packaged for investment had a homeowner who owed more than the home was worth.

That of course was complete bull.  Every single tranche of mortgages that Allstate inspected had at least some underwater mortgages in it.

Every. Single. One. Ranging from 3.3% to 14.5%.

Let's say you are a major investor and are looking for something to sink capital into. I come to you and say "I have a chain of used car lots I would like you to invest in." You say, "Okay, let's see your inventory."

I show you all this paperwork that says these cars are popular and will sell well. I say to you "I promise that zero of these cars are defective." You go "Okay, let's invest."

And then you lose your shirt, and you find out later that I was lying about the car's prices and values, and you do some digging on your own and find out from a random audit of my car lots that 3.3% to 14.5% of the cars sold from my lot were lemons. You'd want your damn money back.

Something pretty similar happened here. Allstate is suing to get its money back and they have a pretty devastating case, according to the filing. Countrywide flat out lied.

Mmm, fraudtastic.  This one's going to get nasty, folks.

Stupidinews: Deadly Serious

Eight people were killed in a New Orleans fire.  The building was abandoned, and the people are thought to be homeless folks taking shelter from a rare blast of freezing weather.  While there has always been a large homeless population in New Orleans, this will hopefully drive more people to take advantage of shelters, where they are safer on many levels.

Five teenagers died of carbon monoxide poisoning after leaving a car running in a closed garage below the room they were using.  This is still being investigated, but it seems to be a mistake that took the worst turn possible.  They had come together to celebrate the 19th birthday of one of the people present.

Oklahoma resident Mark Sedille is facing murder charges after fatally shooting his wife in the head.  According to Sedille, they routinely used a gun in their fantasy play in the bedroom.  This time the gun was loaded, and Rebecca Sedille died when the gun discharged.  Sedille is currently held, but formal charges have not been filed because the police report has not reached the prosecutor.

Home, Home I'm Deranged Part 13

The double dip housing depression continues.  Good ol' Asariel snags the Case Shiller numbers for October.

Arriving in the howling arctic wastes that were once the eastern seaboard of the United States of America, the S&P/Case-Shiller Home Price Index is out. The 10-City Composite increased (barely) 0.2% while the 20-City Composite fell 0.8%, and home prices fell in all 20 metropolitan areas covered by the index.

Pay attention to that chart in the PDF:  home prices are officially on the decline as the 20-city composite is negative and the Case Shiller numbers are always 3 months behind.  The real extent of the damage won't be known for some time, but it's going to be fugly.  Remember, for a vast majority of the American people, what little wealth they have is represented by their homes.

That wealth is vanishing as home prices are back into plunge mode.

As bad as 2010 was, 2011 is going to be friggin' brutal.

Double G Has To Regulate Once Again

I may not always agree with Glenn Greenwald, but the dude can shut people down when he kicks in the Indignation Overthruster.  Respect.



Here he dismantles CNN's Fran Townsend (and later, Jessica Yellin) over the issue of Julian Assange and WikiLeaks.  Professor Greenwald teaches some people badly in need of some basic lessons in journalistic integrity and the role of the adversarial press.

Best line:  "Good investigative journalists – maybe CNN doesn’t do it – but good investigative journalists work their sources all the time."

Regulators, mount up.

Depends On What You Mean By "Deficit Control"

House Republicans plan to change budget reconciliation (you remember that, right?  The process that Republicans used many, many times before and brutally attacked during the health care debate as tyrannical?)
in order to use the procedure to prevent spending increases from adding to the deficit...but tax cuts that add to the deficit are 100% okay!

The Center on Budget and Policy Priorities examined the GOP's proposed new rules for the House, and here's what they found.

The new rules would stand the reconciliation process on its head, by allowing the House to use reconciliation to push through bills that greatly increase deficits as long as the deficit increases result from tax cuts, while barring the use of reconciliation in the House for legislation that reduces the deficit if that legislation contains a net increase in spending (no matter how small) that is more than offset by revenue-raising provisions.

To translate: Bush tax cuts are fine, but, say, paying for infrastructure projects by taxing carbon would be forbidden, even if the net result would be a reduction in the deficit.

This is just one key feature of the GOP's playbook: CUT/GO. Under CUT/GO, all new spending has to be paid for, but tax cuts do not. Additionally any new spending must be paid for with parallel spending cuts elsewhere in the budget -- not with tax hikes. So unemployment benefits couldn't be paid for by closing a corporate tax loophole. But a corporate tax loophole could be widened without requiring any offsets.

The practical implications for now are nil. The Democrats still control the Senate, and, even if they didn't, the Senate's rules are more arcane and harder to change. But Democrats are currently weighing a few modest changes to other Senate rules, and you could imagine Republicans in a future Congress taking steps to make tax cuts even easier to pass.

The CUT/GO era is upon us.  Republicans plan to pay for tax cuts for the wealthy -- or pretend to pay for them -- by cutting as much social spending as possible.  Anyone who voted Republicans in to be fiscally responsible really needs to have their head examined, because they are telegraphing their moves to pile on the deficit months in advance.

Epic Governing The Jersey Way Fail

Profiles in leadership time as New Jersey's GOP Gov. Chris Christie and Democratic Mayor of Newark Cory Booker demonstrate what to do in case a major blizzard hits the Garden State...and what not to do.

Following up on an item from yesterday, New Jersey Gov. Chris Christie (R) and his lieutenant governor were told Sunday about the blizzard barreling down on the Garden State. Soon after, they left town at the same time, with Lt. Gov. Kim Guadagno (R) and her family flying to Mexico, and Christie and his family going to Disney World in Florida.


It left state Senate President Stephen Sweeney (D) in charge as the acting governor, and by all appearances, he's handling everything fine -- he declared a state of emergency, dispatched road crews, coordinated with state agencies, and activated the National Guard. The response seems to have gone fairly well, and Sweeney lifted the state of emergency this morning.

But there's still the political fallout to consider. Many are questioning why the Christie administration allowed both the governor and lieutenant governor to go on vacation at the same time, despite warnings about the impending storm. Others have noted that the governor isn't bothering to rush home to deal with the situation.

So both the Governor and the Lt. Gov. were told over the weekend that the state was going to get nailed Sunday night by a major snowstorm, and both of them left town as fast as they could for sunny points south of there.  Nice.

So what did Mayor Booker of Newark do in contrast?

Perhaps even more interesting was how Cory Booker spent his day. Booker, the Democratic mayor of Newark and likely gubernatorial candidate in 2013, grabbed a shovel to help seniors and the disabled, delivered diapers to a housebound mother, helped dig out a stuck police car, and tended to a woman in labor who was waiting on an EMS team to arrive.

So the Republicans bolt town and leave the Democrats to do the responsible governing part of the Governor's job when a mess comes barreling down the pike, and they come through admirably.  Meanwhile, Gov. Christie might be back by the end of the week from Disney World and the important things:  gym, tan, laundry.

Hey, governing is freakin' hard.

EPIC FAIL.

A Whole Wide World Of Bank Bailouts

Boy, we sure are generous as Americans, taking it on the chin here at home while taxpayers helped to bail out non-US banks.  CNBC and the Financial Times:

More than half of lending under the Fed’s term auction facility – the largest of its crisis programs – went to foreign banks. Details of the varied uses to which they put it may add to political criticism of the Fed.

The Taf was set up in December 2007 to provide one-month loans to creditworthy banks as markets dried up for lending longer than overnight. In August 2008, it began offering three-month loans as well.

Rabobank of the Netherlands and Toronto-Dominion of Canada, two of the only banks in the world with triple A credit ratings, used more than $20 billion in cumulative Taf loans.

Ed Clark, TD chief executive, said that using Taf was logical even though his bank never had a liquidity problem. “That wasn’t how we made a lot of money. But you make a dollar here, you make a dollar there. What’s the spread you make on a billion dollars?” he said.

In the summer of 2008, TD was borrowing $1 billion from TAF at rates of between 2 and 2.5 percent. For that borrowing it used the lowest quality – and hence highest yielding – collateral acceptable to the Fed.

More than 80 percent of its collateral had a triple B credit rating at a time when such bonds yielded about 7 percent. TD could therefore have made a notional gross spread of about $4m a month during 2008.

So not only were the big US banks making money off this scheme, taking worthless commercial paper, giving it to the Fed at face value as collateral, and getting cheap loans back in return, but overseas and Canadian banks were taking advantage of the TAF as well.

Keep in mind this all happened in early 2008, too -- before Obama took office, this was all Hank Paulson's idea -- and ask yourselves why the same Republicans who are looking to make Americans eat billions in spending cuts are the same guys who had no problem giving away taxpayer dollars to banks in Canada and Europe.

Think about that the next time a Bush-era Republican launches into another tirade about how we must control spending.

Rand Paul's Unkindest Cut

My new Senator-elect says he's going to load down major bills with spending cut amendments, but like most Republicans he has no specifics as to what will get the axe.

Paul (Ky.) — who won his race with strong support from the Tea Party movement — said that he will "pressure" Senate Majority Leader Harry Reid (D-Nev.) to take simple majority votes on spending cut amendments in the next Congress.

"I think that every piece of major legislation that goes forward from now on needs to have attached to it spending cuts," Paul said during a podcast with conservative blogger Ben Domenech. If Congress is serious about the nation's ballooning debt and deficits, "We have to be serious and introduce spending cuts.

"That's one thing that I will do when I am there, is introduce it at every opportunity and we will have votes on it," he said. Many political observers have taken a keen interest in Paul to see if his priorities next year will clash with those of Senate GOP leader Mitch McConnell, who also happens to be Kentucky's other senator. 

Don't believe that last part for a second.   When it comes to McConnell's wishes during the 2010 campaign, Rand Paul fell in line like a good GOP footsoldier, and now that he's in the Senate that will continue.  Don't watch his mouth, watch his votes.

He talks a good game, but he's just another Republican.

Deconstruction Artists

Brian Beutler reports on the GOP stocking up on health insurance lobbyists in order to find a way to dismantle health care reform.

House Republicans are turning to old friends on K Street to lead their legislative attempts to repeal the new health care law.

Three recently hired Republican aides -- two set to work in senior positions on the powerful Energy and Commerce Committee, and one for soon-to-be Speaker John Boehner -- spent the past years lobbying on behalf of insurance companies, pharmaceutical manufacturers, and other corporate interest groups with a vested interest in weakening or repealing the law.

Two weeks ago, incoming Energy and Commerce chair Fred Upton announced he'd hired Gary Andres to be his staff director.

"For over two decades, Gary has been a leading voice in Republican policy, always seeking solutions to advance our principles to limit the size and scope of government," Upton said in a statement at the time.

Andres served as Vice Chairman of Public Policy and Research for Dutko Worldwide, where, according to congressional public disclosure forms, he lobbied for insurance giant UnitedHealth Group and for a corporate umbrella organization called the Coalition to Advance Healthcare Reform.

The coalition's website is now defunct, but you can view an archive of its homepage here and of its membership here. 

It looks like the GOP may be using these former lobbyists to take a scalpel to the health care reform measure rather than the flamethrower they promised during the campaign season, but the goal of making the law DOA before additional provisions can take effect remains the same.

That's probably not enough to satisfy Tea Party types eager to get in on the "defund and shutdown" action.  House Republicans who don't move fast enough to torch legislation passed in the first two years of Obama's term may not be back in 2013.

Still, I can see why House Republicans are doing this.  They basically want to replace the Obama legislation with their own version of it, and they're going to need surgeons, not demolition men.

StupidiNews!

• Thousands of air travelers remain stranded as the East Coast digs out of this weekend's blizzard.
• The US can't account for some $55 billion spent to rebuild Afghanistan.
• Gambling proponents in Texas are confident the state's $20 billion plus budget shortfall will convince Republicans to expand gambling in the state.
• African leaders are traveling to Ivory Coast to try to convince Laurent Gbagbo to step down or face the threat of regional force.
• As China limits rare earth exports, the Obama administration is starting to reopen closed domestic mines.

Last Call

I really do wonder why wingers believe "DADT repeal means military personnel exposed to communal showers will immediately sexually molest each other!" is somehow a winning argument.  Take Elaine Donnelly of the Concern Troll Bigot Foundation Center For Military Readiness.

Showers are "huge issue," Donnelly said. "To pretend that throwing up a few shower curtains solves the problem is tantamount, again, to saying, well women should share close quarters with men, we'll throw up a few shower curtains and that will take care of it."

"I don't know about the gyms where you go or most people go, but the gyms that I've seen have a sign inside the door, and the door says inside the women's locker room 'no boys of any age are allowed.' Now there's a reason for that," Donnelley said. "It in no way is a negative reflection on anybody, it is just a sign of respect for modesty in sexual manners."

"Knowingly, you don't expose yourself to somebody who might be sexually attracted to you. Does it happen unknowingly? Sure," Donnelly said. "It's something that again, when you introduce an element of sexuality in an environment that previously did not have that, that is problematic. There will be consequences from that, because people are normal, they're humans, they're sensitive to that."

"It's time to start talking about where we're going now. It's not just a matter of repealing a policy that should have been eliminated a long time ago, it's a matter of where are we going from here," Donnelly said.

Donnelly said her group has seen a jump in support for her organization this year in the lead up to the repeal of "Don't Ask, Don't Tell."

"We were able to raise money to do things we haven't done before. We had a full page ad in Roll Call just before the vote in September." They were far outspent by the opposition, Donnelley said. 

One wonders what military personnel have been doing in communal showers before DADT was repealed.  Clearly we'll need some sort of system of inflatable shower protective gear, like swim floats or inner tubes to protect our soliders, sailors, and airmen from showers.  Perhaps we could station armed predator drones inside the showers to pursue overly "friendly" personnel and subdue them, or use sonic crowd control technology in showers to deter violators.

Maybe the Pentagon should invest in some sort of cootie-repelling soap.  I'm sure we can create thousands of jobs in many congressional districts to manufacture that to exacting mil spec standards.

Glad to know that when we send our military into the field, what they really need to worry about is not the guys playing "hide the IED" but the guys playing "drop the soap".

The thing that kills me is people give idiots like this money of their own free will, people who think our troops are going to disintegrate at the mere thought of somebody looking at their ass in the shower.  Oy.

Justice - The Good, The Bad and The Stupid

The Good:

At a time when privacy and Constitutional rights have been hit hard, a small victory has been won.

GREELEY, Colo. – A Weld County judge has ordered the destruction of tax documents in an investigation the state Supreme Court said illegally probed suspected identity theft by illegal immigrants.

Regardless of what we may think the best way to deal with the issues of identity theft and illegal immigration, obtaining evidence illegally simply cannot lead to victory.  It is cashing in a one-time win for a loss that would haunt our judicial system forever.  Once you cross a line like this, there's no going back, and for now we are safe.

The Bad:

Dan Balsam, owner of danhatesspam.com, quit his job and went to law school, where he has spent his every waking moment since fighting spam.  He has over 40 victories in small claims court, and will never run out of targets.

Why is this bad?  Because this is the downside of what happens when you have freedom.  Some jerk just has to go mess it up, and some people have to be stupid enough to fall for promises of free money and bank account transfers.  Saddest of all, one man has dedicated his life to fighting a good fight and he's never even going to make a dent in the uncountable Viagra and breast enlargement ads.

The Stupid:

And then sometimes, while looking over the daily happenings, you stumble across something that takes you back a good 200 points on the Common Sense-o-meter:

DECEMBER 22--A 13-year-old boy was arrested Friday for using a permanent marker while in class at his Oklahoma City middle school, a violation of an obscure city ordinance.

In what must be a global WTF moment, a math teacher filed a citation against a boy who was using his marker in class.  The boy was transported to a juvenile detention center, and the marker was properly booked as evidence.