Last Call

BooMan flags this gobsmacker of an article down on GOP Rep. Eric Cantor's meet with Israeli PM Benjamin Netanyahu.

What do you call it when the (soon-to-be) House Majority Leader sits down with a visiting head of state and assures him that he and his party can be counted on to side with his country against the president of the United States?

This isn't a hypothetical, by the way. It's not like I'm asking what would have happened if Joachim von Ribbentrop had sat down in Sam Rayburn's office in 1939 and received assurances that Rayburn and the Dems could be counted on to support Germany and block anything Roosevelt did to try to force concessions. Because, in a case like that (which did not happen) we know what we would call it. We know what Eric Cantor would call it.

But, there I go again, bringing up Nazis, which is in such bad taste in this case.

Last night, Netanyahu met in New York for over an hour with incoming House Majority Leader Rep. Eric Cantor (R-Va.), who is set to become the highest ranking Jewish member of Congress in history. The meeting took place at New York’s Regency Hotel, and included no other American lawmakers besides Cantor. Also attending on the Israeli side were Israeli Ambassador to the U.S. Michael Oren, and Netanyahu’s National Security Advisor Uzi Arad. Israeli sources characterized a one-on-one meeting between an Israeli prime minister and a lone American lawmaker as unusual, if not unheard of.

Cantor was understandably feeling delighted with his sense of self-importance and could not help but provide a readout of the meeting for the press. Part of that readout said:

"Eric stressed that the new Republican majority will serve as a check on the Administration and what has been, up until this point, one party rule in Washington," the readout continued. "He made clear that the Republican majority understands the special relationship between Israel and the United States, and that the security of each nation is reliant upon the other."

This isn't boilerplate. The president is trying to facilitate a peace agreement between two parties, only one of which is Israel. In that process, Israel must make concessions. Eric Cantor is promising to undermine that process. 

Two questions here for Cantor's defenders:

One, if this was Nancy Pelosi speaking directly to any foreign leader and specifically saying "We will act as a check on the Republican President of the United States in order to get the policies you want" would that be in any way acceptable? 

Two, if this was Eric Cantor making the same promise to "check the President's power" to Iranian President Ahmadinejad, Russia's Vladimir Putin, China's Wen Jiabao, or Cuba's Raul Castro, would that in any way be acceptable?

So I ask why is Cantor allowed to openly promise to the leader of a foreign country that he will undermine the foreign policy authority of the President?  How is that even remotely acceptable?

The answer is clearly that it's not.

Unless that foreign country is Israel.  Let's recall how Republicans have responded to that first theoretical question I posed as the excellent Amanda Terkel explains:

In the past, Republicans have been sharply critical of Democratic trips abroad that could be seen as undermining the official foreign policies of the U.S. president. For example, in 2007, both the Bush White House and its Republican supporters lashed out at House Speaker Nancy Pelosi (D-Cali.) for visiting Syria, saying that she was trying to circumvent President Bush (never mind that Republican lawmakers were also in Syria and Pelosi didn't criticize the Bush administration).

"It has long been the established principle of this country that the president of the United States leads our foreign policy," said former Massachusetts governor Mitt Romney. "And if you don't like the president, then you change him. But you don't have the two parties each conducting foreign policy in the way they think it ought to be conducted."

John Bolton, the former U.S. ambassador to the United Nations, added, "I would simply hope that people would understand that, under the Constitution, the president conducts foreign policy, not the speaker of the House."

In 2006, conservatives went after former vice president Al Gore for criticizing "abuses" committed by the U.S. government against Arabs post-9/11 in a speech in Saudi Arabia, with the editorial page of Investor's Business Daily saying he demonstrated "supreme disloyalty to his country."

But in fact, in 1996, Rep. Dennis Hastert (R-Ill.) also tried to signal to a foreign country that it might have better luck working with Congress instead of the president, traveling to Colombia and telling military officials there to "bypass the U.S. executive branch and communicate directly with Congress."

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So does that mean Dennis Hastert and Eric Cantor are "supremely disloyal" too?

Turn On The Lights, Watch The Roaches Scatter, Part 39

With a heads up from John Carney (who I will grant is much better when he's sticking to financial news rather than punditry) we learn that the one thing that may pass the lame duck session easily is a bill to absolve the banks of Foreclosuregate.

Specifically, the plan seems to be to have Congress pass a law to shield MERS from most or all legal liability in the robo-signing fraud part of the equation:

If courts rule against MERS, the damage could be catastrophic. Here’s how the AP tallies up the potential damage:

Assuming each mortgage it tracks had been resold, and re-recorded, just once, MERS would have saved the industry $2.4 billion in recording costs, R.K. Arnold, the firm's chief executive officer, testified in 2009. It's not unusual for a mortgage to be resold a dozen times or more.

The California suit alone could cost MERS $60 billion to $120 billion in damages and penalties from unpaid recording fees.

The liabilities are astronomical because, according to laws in California and many other states, penalties between $5,000 and $10,000 can be imposed each time a recording fee went unpaid. Because the suits are filed as false claims, the law stipulates that the penalties can then be tripled.

Perhaps even more devastatingly, some critics say that sloppiness at MERS—which has just 40 full-time employees—may have botched chain of title for many mortgages. They say that MERS lacks standing to bring foreclosure actions, and the botched chain of title may cast doubts on whether anyone has clear enough ownership of some mortgages to foreclose on a defaulting borrower. The problems with MERS system led JPMorgan Chase CEO Jamie Dimon to stop using MERS for foreclosures in 2008. 

As you can see, the banks, which collectively own MERS, could conceivably owe tens of thousands of dollars for each robo-signing screw up.  And considering there may be hundreds of thousands if not millions of these, you're getting the picture as to just how much trouble the banks are really in.  And that's just tens of billions just in fines, let alone the punitive damages.

Catastrophic situation indeed.  So what's Congress going to do about it?

Supposedly let the banks walk away without a scratch.

Now it appears that Congress may attempt to prevent any MERS meltdown from occurring. MERS is owned by all the biggest banks, and they certainly do not want it to be sunk by huge fines. Investors in mortgage-backed securities also do not want to see the value of their bonds sink because of doubts about the ownership of the underlying mortgages. 

So it looks like the stage may be set for Congress to pass a bill that would limit MERS exposure on the recording fee issue and perhaps retroactively legitimate mortgage transfers conducted through MERS private database. 

Self-styled consumer advocate Neil Garfield says the legislation is already being drafted:

After years of negative judicial decisions about the use of a straw-man on mortgages, MERS was about to lose its existence as well as its credibility. But now all of that is set to change as Wall Street money is pouring into the coffers of those who are receptive (i.e., almost everyone in Congress). The legislation is already being drafted under the interstate commerce clause to ratify MERS and everything it did retroactively. It appears that the Obama administration is ready to pardon all the securitization deviants by signing this bill into law. This information is corroborated by several people who are in sensitive positions — persons who would be the first to know such proposals. Fortunately, there are some people in Washington who have a conscience and do not want to see this happen.

Garfield is overstating things a bit. In truth, the results of the legal challenges to MERS have been mixed. But it is very plausible that the banks might want to put to rest any ongoing uncertainty about the legality of MERS. I wouldn't be at all surprised if Congress manages to pass a bill that bails MERS out of its legal issues. 

And for once, I agree with Carney.  The cash pouring into Congressional coffers in order to pass this bill in the dead of night is overwhelming.  The last time this happened the press found out about it and Obama tossed the robo-signing bill back with a pocket veto.

It may be up to Obama again, but Wall Street is betting heavily that their post-Citizens United, post-election message has been heard on the Hill:  We own you.  Will Obama resist another bill like this again, or worse, will it be attached as a rider to a stopgap spending measure that has to pass?

Imagine the chaos if Obama is forced to sign a MERS shield bill in order to prevent a government shutdown.  Will he cave or stand strong?

We're about to find out.  Remember, in the lame duck session at least is would have to be Dems introducing this bill.

Looking Into The Abyss

"One day, men will look back and say I gave birth to the twentieth century."
- Jack The Ripper

This article is an update of the Petit family murder in Connecticut. The details speak for themselves, and the crime was brutal enough to bother even seasoned cops. What sets Joshua Komisarjevsky apart from other murderers is his self-awareness. He used the words "a terrible feeling" to describe what prompted him to kill.

The recipe is one we can recognize. Komisarjevsky claims to have been sexually abused as a child, and determines this was the turning point. He broke into "hundreds" of homes by the time he was a teenager, and so follows the spiral leading to drug abuse and other red flags. He claims he sometimes broke into homes just to watch people breathe. He pulled little pranks such as moving photographs around to confuse and scare his victims. He stalked animals and perfected the art of moving without making a sound. He bathed his daughter while deciding this was the night he was going to terrorize and murder a family, his whole life an exercise building to this inevitable act.

Millions of Americans are on the brink of losing everything. According to many sources, alcoholism is on the rise, especially for women and teens. Prescription pills and marijuana use is also spiking, as we begin to seek an escape from the pressure all around. Child abuse is on the rise. Educational programs are being cut as budgets shrink. Resources for intervention and preventative measures for kids at risk are suffering. The link between economical difficulty and child abuse is theoretical but makes sense. The correlation between child abuse and drug abuse is clear. What we have here is a perfect storm for a new generation of predators. A little foresight can go a long way. Keep this in mind when we shrug and "meh" our way through yet another round of belt tightening.

The abyss is returning our gaze. It is important that we not overreact, but that we are aware of the monsters created in our midst.

And He's Rand, Rand So Far Away

Far, far away from actually telling the truth, it seems.

Some just-elected Republicans are going after federal employees, or at least their wages.

Among them is GOP Sen.-Elect Rand Paul, who wants to reduce federal wages by 10 percent. And his views happen to be in line with those of the Federal Debt Commission, which said Wednesday that the federal workforce should be cut by 10 percent and federal government salaries frozen across the board.

Paul made his case on ABC's "This Week," arguing that such drastic measures would be justified because, by his calculations, the average government employee earns a six-figure salary.

"The average federal employee makes $120,000 a year," Paul of Kentucky said. "The average private employee makes $60,000 a year. Let's get them more in line, and let's find savings. Let's hire no new federal workers."

Wow, $120,000 a year? Twice as much as what private sector employees make? GET THE PITCHFORKS AND TORC...wait a minute.

That doesn't sound right. Maybe because Rand Paul is full of crap?

But the average government employee earns nowhere near $120,000 per year.

"The median salary is $65,000," said Jennifer Dorsey of the U.S. Office of Personnel Management.

Gosh, you mean Rand is pulling numbers out of his ass? But those are gubmint numbers, and they must be lying!

Federal employees earn a median salary of $61,574, according to PayScale.com.

Hey you know who's a federal employee now?

Rand Paul.

Just saying.  Way to go with the intellectual integrity, Rand.  Also, way to go ABC fact checking him on your own network some four days later, too.

Irish Eyes Are Crying, Part 4

Oh yeah, the bailout of Ireland is on, baby.

The Irish Times reported on Friday that informal contacts were already under way between Brussels, Berlin and other capitals to assess their readiness to activate the EU's rescue fund in the event of an application from Dublin.

A spokesman for Ireland's finance ministry called the report "completely untrue.

Irish officials have insisted they have no intention of tapping the fund, stressing they are not in the same situation as Greece was back in May, when it was forced to seek a 110 billion euro ($150 billion) rescue from the EU and IMF.

Ireland is fully funded through mid-2011 and is therefore not currently at risk of a Greek-style liquidity crisis.

Dublin expects to return to the market early next year and hopes a four-year 15 billion euro austerity plan to be unveiled later this month and passage of the 2011 budget in early December will bring its borrowing costs down.

"We're not borrowing at the present time so I don't think any of what's going on at the moment is going to affect the real price of Irish borrowing," Communications Minister Eamon Ryan said on Friday. "When we do have to go out next year, I think there will be different circumstances."

But concerns remain about whether Irish borrowing costs will fall far enough by then to make debt refinancing sustainable, or whether the deeply unpopular Cowen can win passage of the budget on December 7 given his government's razor-thin majority in parliament.

Sure, that'll go great. Meanwhile, I'm expecting an Ireland bailout deal over the weekend now, because if it doesn't happen Sunday, the bond spreads will make it painfully clear that it needs to happen Monday.  And the best part is as the ECB crew assured bondholders they will not take a haircut, it means Irish taxpayers will foot the bill for this mess on top of their already gruesome austerity package.

Not to get too cute here, but the "Time of Troubles" may be back with a vengeance.

The Fall Of The House Of Gates

As Zandar posted this morning, Microsoft is not pleased about open source Kinect drivers. And while they arguably have the right to stomp this down like they have other open source attempts in the past, I think we are about to see an enormous shift in the computer industry. One that will define the future of software. I'm talking about the day of the penguin.

Ten years ago, the very mention of Linux caused people to shudder and flinch. Once upon a time, you had to have a degree and a lot of caffeine to get the most modest programs to run. But in a movement to bring software to the masses, Linux has improved enough that it works right out of the box, and the community has grown and continues to support newbies who take that first teetering step from Windows domination.

And did I mention it's free?

Gates has his fortune because he created a brilliant product, and then used his domination of a new market as a weight that crushed opposition. You must pay per computer for Microsoft products, and with Linux there is no cost. Open Office has MS Office feeling the crunch, and Dell has been installing Ubuntu Linux (the most user-friendly of the bunch) on computers for some time now. Even my husband, who isn't still quite sure how his email winds up on our computer, can use Ubuntu with ease.

The brilliance that has brought the home computer into existence has fed the greed that will ultimately drive people to the free alternative. Folks who have never heard of Linux can download Ubuntu and start clicking and working right away. Geeks like me contribute to write help files and answer questions in forums. Groups and enthusiasts are hosting events, and they're not all nerds. This is the beginning of the time when Microsoft slides and the new generation of open source software emerges.

The Kroog Versus The Catfood Commission

Like something out of epic mythology, Paul Krugman takes on the 310-million-tit beast that is Simpson-Bowles.

Still, can’t we say that for all its flaws, the Bowles-Simpson proposal is a serious effort to tackle the nation’s long-run fiscal problem? No, we can’t.

It’s true that the PowerPoint contains nice-looking charts showing deficits falling and debt levels stabilizing. But it becomes clear, once you spend a little time trying to figure out what’s going on, that the main driver of those pretty charts is the assumption that the rate of growth in health-care costs will slow dramatically. And how is this to be achieved? By “establishing a process to regularly evaluate cost growth” and taking “additional steps as needed.” What does that mean? I have no idea.

It’s no mystery what has happened on the deficit commission: as so often happens in modern Washington, a process meant to deal with real problems has been hijacked on behalf of an ideological agenda. Under the guise of facing our fiscal problems, Mr. Bowles and Mr. Simpson are trying to smuggle in the same old, same old — tax cuts for the rich and erosion of the social safety net.

Can anything be salvaged from this wreck? I doubt it. The deficit commission should be told to fold its tents and go away. 

And this is the same argument  Kevin Drum was making yesterday:  any serious attempt to lower the national deficit, let alone the national debt, must focus on containing health care costs.  Social Security is not the friggin problem.  It has always, always, always been health care costs (and to an extent, massive defense spending).  Obama's health care reform was a start, but only a start.

If you really want to "harpoon the whale" there boys, start with the Pentagon and health care.  We don't need advanced air-superiority jets to stop car bombs in Kabul, dig?  And we've got to do something about health care costs most of all.

So at this point, it's safe to say that any deficit reduction proposal that doesn't include those two items can be and should be completely ignored.

The faster the President kills the Catfood Commission, the better off the Democrats will be.

It's Steele Reigning, But For How Long?

The key battle in the GOP to see if the Tea Party has any real game-changing clout in the party (or if as I suspect, the conservative crazies have served their usefulness and will summarily be tossed into the crawlspace under the Big Tent as soon as possible) will come as RNC chair Michael Steele draws inevitable challengers heading into 2012.  First up:  former Michigan party head Saul Anuzis.

"We cannot be misled by our victories this year," Anuzis wrote in an announcement posted on his blog. "Chairman Steele's record speaks for itself. He has his way of doing things. I have mine."

Anuzis, clearly hoping to emerge as the choice of the anti-Steele forces within the 168 member Republican National Committee added that "I will NOT strive to be the voice or the face of our party" -- seeking to draw a direct contrast with high profile (and gaffe prone) current chairman.

This is the second time Anuzis is making a bid to lead his party. He ran and lost in 2009, dropping out after the fifth ballot.

In addition to Anuzis, there are at least four other people making calls to RNC members to test the waters for a bid, according to an informed source on the committee. That quartet includes: Wisconsin Republican party chairman Reince Priebus, who managed Steele's 2009 RNC campaign, veteran GOP strategist Maria Cino, Connecticut Republican party chairman Chris Healy and former Ambassador Ann Wagner.

While it's not clear whether any -- or all -- of those candidates will run, many people are looking at next week's Republican Governors Association gathering in San Diego as a time when people either need to be in or out.

There is significant concern among the anti-Steele forces that a crowded field could splinter the vote in enough pieces to allow him to be reelected. 

That last part there is what I expect to happen.  Steele will survive because there won't be enough solid support behind any single challenger to dethrone him, and he can say "Hey, since I became chair we took back the House.  What did you do for us?"

Besides, the real heavyweights (such as they are in the GOP) are running for Obama's job in 2012, not Steele's.  It's possible one of the contenders could drop out early and go gunning for Steele instead, but that's not a good move on the chessboard:  if you make a difference in 2012 there will be a Republican President who outranks you as party boss, and if you blow it, you're the next pinata.

Nobody serious is going to take the job, and I think Steele keeps it by default.

Maybe Not Fold-O-Rama But Not Much Better

Now President Obama says of course he's not caving in to Republicans on tax cuts for the wealthy.  If so, he's got a discipline problem back home.

President Barack Obama declared Friday that his "number one priority" is preserving tax cuts for the middle class, and sharply denied that comments by his senior adviser David Axelrod suggest that his administration is about to cave in to Republicans who also want to extend the Bush tax cuts for the wealthy.

"That is the wrong interpretation because I haven't had a conversation with Democratic and Republican leaders," Obama said of a Huffington Post article suggesting that in advance of negotiations with lawmakers next week, the White House has calculated that giving in on tax cuts for the rich is the only way to get the middle class cuts extended too.

"Here's the right interpretation -- I want to make sure that taxes don't go up for middle class families starting on January 1st," Obama said at a news conference at the conclusion of the G-20 Summit here. "That is my number one priority for those families and for our economy. I also believe that it would be fiscally irresponsible for us to permanently extend the high income tax cuts. I think that would be a mistake, particularly when we've got our Republican friends saying that their number 1 priority is making sure that we are dealing with our debt and our deficit."

Obama would not tip his hand on the discussions coming when Congress returns to work for a lame-duck session next week.

Oy.  Hey man, first of all that's not exactly a denial of a temporary extension of tax cuts for the wealthy, just a permanent one.  Second of all, the number one priority of your "Republican friends" is to make you a one-term President.

With all due respect Mr. President sir, these guys are not going to work with you.  And a cheesy non-denial denial like this isn't helping.

What would help?  Standing up to the GOP.

Defending The Senate

With 23 Democratic seats to defend to the Republican's 10, the Donks are going to have a brutally difficult time holding on to the Senate.  BooMan takes an initial look at the lineup:

Hawaii- If Akaka retires, we have two women in the House lined up to replace him: Mazie Hirono and freshman Colleen Hanabusa. Anyone have a preference? I'm for anyone but Ed Case.

Wyoming- Our only chance is to convince Dave Freudenthal to run.

Massachusetts- Who's the best candidate to take down Scott Brown?

North Dakota- Can Kent Conrad survive? Who will run against him?

Nevada- Do we have anyone lined up to challenge for Ensign's seat?

California- Will Feinstein retire? Who's placed well to win the nomination if she does?

Utah- Can Orrin Hatch escape the fate of his friend and colleague, Bob Bennett?

Texas- Can Kay Bailey Hutchison keep the crazies at bay and win the nomination for another term in the Senate?

Wisconsin- If Herb Kohl retires as expected, can we convince Feingold to run for his seat?

Arizona- We have to find a candidate who can beat Jon Kyl. Could Janet Napolitano pull it off?

Connecticut- This should be the end of Lieberman's career. But who will replace him?

Nebraska- It looks like we sink or swim with Ben Nelson.

Montana- Can Jon Tester win reelection in a presidential year?

Virginia- Will Jim Webb even try to win reelection in a presidential year? Is Tim Kaine the only guy on the bench?

It's slim pickings, folks. We have to be smart, and good, or we're losing the Senate. 

And he's right.  The Democrats don't have a deep bench or even somebody to run yet in a number of states.  likely retirements of Jim Webb, Herb Kohl, Dianne Feinstein and Daniel Akaka means Dems in Virginia, Wisconsin, California and Hawaii need to start thinking now about who to get going.

Our best shot to pick up a seat is literally flipping Olympia Snowe.  That's it.  Meanwhile, the Republicans could very well end up with 60 seats or something ridiculous, and even if they just get enough for a Senate majority, does anyone think they're going to keep the filibuster around, especially if they beat Obama?

Yeah, imagine that.  One party Republican rule with no filibuster and President Insert Crazy Republican Here.  That's the GOP goal in 2012.  Time to get to work.

Whoa, Check Out The Big Brain On Einstein Here

Got a chance to see Megamind this week.

It was a good time. Will Ferrell voices the title character, a super-intelligent alien who crashes to Earth as a baby and grows up to become a supervillain, while Brad Pitt is Metro Man, the Superman-style good guy who follows the same path to become a superhero instead and vows to stop him.

What keeps this from being just an ordinary superhero film is that for once, the bad guy wins in the first 15 minutes. Megamind's latest overly convoluted evil plan involving kidnapping Metro Man's reporter friend Roxanne Ritchi (voiced by Tina Fey) and using her for bait for a deadly trap actually succeeds in dispatching Metro Man for good, much to the surprise of the entire population of Metro City, Megamind's faithful minion, Minion (a hysterical, scene-devouring David Cross), a stunned Roxanne, and especially Megamind himself.

Megamind is a smart guy, but he's altogether unprepared to handle actually winning, and that's where the movie really begins. Cleverly written and often laugh out loud funny, I definitely recommend this one for superhero fans, families, and anyone who enjoys seeing a talking piranha in a robotic gorilla suit wearing a apron.

Threading The Needle

An interesting choice of words for Nancy Pelosi in voicing her...confidence?...in President Obama.

Speaker Nancy Pelosi told Democratic leaders Wednesday afternoon that President Barack Obama has to be “perfect” to win a second term, several senior Democratic aides told Roll Call.

Pelosi told leaders on a conference call that Obama will have problems running for re-election because of the loss of governorships in Ohio, Pennsylvania and other states, several aides said. The soon-to-be-ex-Speaker also said House Democrats have many opportunities to take back 25 House seats and win back the majority, aides said.

According to one aide, Pelosi also said she wasn’t sure whether the White House is prepared to deal with a Republican House. A leadership aide denied that Pelosi made such a statement.

The annoying part is I basically agree with all of that.  2012 can certainly be another flip-flop year, especially if angry Tea Party voters start openly issuing primary challenges to Republican House leaders.  But Obama is going to have to be at the top of his game to survive this, and that crack about not being able to handle a Republican House?

Not disagreeing with that so far.  A lot has to happen in the lame duck session starting Monday.

StupidiNews!

Thanks for taking over last night Bon.  Anyway, back into the fray:

• A 24-year old Japanese man committed suicide and streamed his hanging live on the internet, Japanese police were unable to stop him in time.
• A Tennessee Republican has compared immigrants to vermin, saying that "they can multiply like rats".
• Senate Republicans are headed for a showdown over earmarks next week.
• New York City is halfway towards its goal of 3,000 cameras used to check for terrorist activity.
• Microsoft says it will fight efforts to create open-source drivers for its Kinect motion-control camera system.