Odds And Evens

Back on Friday I mused when Bush's pardons were coming. We've made it through the weekend without any major ones.

Politico takes a crack at handicapping the odds of who gets off, and who faces the music. You have to give them some credit, they called Bush commuting the sentences of former Border Patrol agents Ramos and Compean at 3 to 1.

Best odds are for Scooter Libby (1 to 2) , the worst appear to be for Duke Cunningham (50 to 1).

No mention of Nameless One, Keystone Kondi, or Rover/Harriet Miers in the list however. We'll see if he's saving any more for the last minute.

Dear America:

"The largest, most wasteful project in American history by default has to be whatever the most powerful Democrat in the country at the time is trying to do. At this juncture, this means anything Obama wants to accomplish over the next four years is automatically the most egregious example of government pork ever conceived."

--John Hindraker, Power Line

Bonus verbatim stupidity: "We appear to be returning, in short, to an era more like the one in which the modern conservative movement was born. If there was ever a time when America needed an effective conservative opposition, that time is now."

I'm assuming that "effective conservative opposition" was hanging out in the same place it has been for the last seven years, leading the fiscal fight against the trillions and trillions spent on Iraq, Afghanistan, bailing out banks and AIG and giving tax cuts for the wealthy.

It should be easy to find them, just follow the screams.

In And Out

Well, if anyone was still under any illusions about what the basis of the timing of Israel's attack on Gaza was, Israel is promising to be out of Gaza "by the time Barack Obama is sworn in as President."

The official, who declined to be named, said that the withdrawal could be complete before U.S. President-elect Barack Obama takes his oath of office in Washington at noon ET Tuesday -- 7 p.m. in Israel -- though commanders have not been given that deadline.

The Israel Defense Forces said Sunday that it had begun withdrawing some troops from Gaza, and Israeli government spokesman Mark Regev said Sunday that troops would be out in a matter of days, not weeks.

Well gosh, that's nice to know. I'm sure the Palestinians will appreciate it. In fact, it's good to see the Israelis so motivated in general to show mercy and all that. Even the Saudis are getting in on the act.

Saudi Arabia will donate $1 billion for reconstruction in Gaza following Israel's deadly attacks on the coastal strip, its king said on Monday.

"I announce on behalf of your brothers in Saudi Arabia that the kingdom will offer $1 billion as a contribution under the programme proposed by this summit for the reconstruction of Gaza," King Abdullah told an Arab economic summit in Kuwait.

So, it appears with the new boss in town, everyone's eager to make a good first impression on the man.

You know, before they go back to killing each other.

More Turd Polishing For Dummies

Ahh, where would we be without the Village constantly trying to rewrite Bush's failed legacy? Today's contestant: The Independent's Bruce Anderson (trying to meet or exceed the goal of complete temporal reversal set last week by Andrew Roberts.)

But it all comes back to the Iraq War, which was a tragedy, for a reason worthy of a great tragedian. It was fought in a spirit of excessive idealism. After 11 September, the US Administration asked itself one repeated and agonised question. Why do these people hate us? The Bush team came up with their answer: because they live in failed states, which offer their young no hope in this world and thus leave them open to the temptations of fanaticism and a better deal in another world.

Baghdad was one of the foremost cities in the Muslim world. Iraq was a rich country with a large educated middle class. Yet it had become a police state and many of its ablest people had fled into exile. Moreover, Saddam had been trying to acquire weapons of mass destruction. We could not be certain that his quest had failed. So should we wait until the certainty of a mushroom cloud? It seemed that all the routes to progress in the Middle East and safety in the West led to Iraq.

There was one problem. Largely because of the malign influence of that fraud and tautology, international law, we have grown squeamish about regime change. As a result, the overwhelming desirability of regime change in Iraq had to be downplayed, and there was a further difficulty: the most unfortunate un-meeting of minds in recent public policy. After 2001, in both Washington and London, there was a split between those who knew Iraq, who were generally hostile to the War, and those who wanted war but usually knew nothing about Iraq. George Bush had little confidence in his Secretary of State, Colin Powell. Unable to sack Mr Powell, he made up for it by not listening to the State Department. Tony Blair never took much notice of his foreign secretaries.

The size of the list of people who deserve the blame for Bush's failed legacy is impressive, but the one thing all these articles have in common is that Bush himself isn't on that list, but the reality-based community is.

That's to be expected after all...it's historical parallel universe fiction at its finest, the kind that makes Harry Turtledove novels look positively orthodox.

The Kroog Versus The Zombie Banks

Zombie banks are out there, Paul Krugman explains. There's tons of banks that are only solvent right now because of the future promise of bailout billions. What's the anatomy of the undead?

To explain the issue, let me describe the position of a hypothetical bank that I’ll call Gothamgroup, or Gotham for short.

On paper, Gotham has $2 trillion in assets and $1.9 trillion in liabilities, so that it has a net worth of $100 billion. But a substantial fraction of its assets — say, $400 billion worth — are mortgage-backed securities and other toxic waste. If the bank tried to sell these assets, it would get no more than $200 billion.

So Gotham is a zombie bank: it’s still operating, but the reality is that it has already gone bust. Its stock isn’t totally worthless — it still has a market capitalization of $20 billion — but that value is entirely based on the hope that shareholders will be rescued by a government bailout.

Why would the government bail Gotham out? Because it plays a central role in the financial system. When Lehman was allowed to fail, financial markets froze, and for a few weeks the world economy teetered on the edge of collapse. Since we don’t want a repeat performance, Gotham has to be kept functioning. But how can that be done?

Well, the government could simply give Gotham a couple of hundred billion dollars, enough to make it solvent again. But this would, of course, be a huge gift to Gotham’s current shareholders — and it would also encourage excessive risk-taking in the future. Still, the possibility of such a gift is what’s now supporting Gotham’s stock price.

And the reality is much worse. "Gothamgroup Bank" up there is in terrible shape. Part of the assets it's claiming are debt owed to it by other banks facing the same zombie bank situation, so the assets it really has are far less, meaning the bank is even more insolvent than Krugman alludes to.

This in turn makes stockholders all the more confident Obama will have no choice but to to throw trillions more at the banks to keep them afloat. He has no choice. If he doesn't, the results will be more Lehman Bros.-style collapses that will threaten to become a cascade of multiple bank failures that will bring down the entire system.

That's the issue facing Citigroup and Bank of America right now. It's also the issue facing virtually every other large financial institution across the country, and a host of smaller ones. Japan went through the same problem two decades ago and for most of the 90's they were cleaning up zombie banks.

The ones in America are much, much larger. $350 billion might not be enough to clean up even a few of these banks, much less the system. But that's what Obama apparently wants to do, form a huge megabank to buy this toxic waste debt and then put the taxpayer on the hook for it, rather than bank shareholders. And it will take far more than the second half of TARP to fix this problem.

Once again, the banks are getting the best deal possible, while taxpayers are getting the worst. On the other hand, the alternative is complete financial collapse of the US economy. And frankly...the collapse may STILL happen even if Obama spends trillions to bail out the banks.

Talk about worst-case scenario.

StupidiNews, MLK, Jr. Day Edition

• Obama says that the "dream will live on" this MLK, Jr. Day.
• Across the pond, a second major bank bailout in the UK is turning into a nightmare.
  
• At Gitmo, it's still business as usual as the bad dream continues.
  
• California's Inland Empire is second only to Detroit in unemployment, causing many sleppless nights.
  
• It's the Steelers versus the Cardinals as two teams chase their own dreams of glory.
  

And Lo, The Village Idiots Spake...

If it's Sunday, it must be time for a backhanded hit piece on Obama from Politico, and this week they don't disappoint.

With Barack Obama's approval ratings in the 70s and his visage plastered on every shop window and Metro card in Washington, it's hard to remember that 58 million Americans voted for the other guy.

Even President Bush — who presumably counts himself among that group — said last week that Obama's inauguration is "a moment of hope and pride."

That's not exactly how Michelle Malkin describes it.

"Jan. 20 has turned into a schlock inauguration, (where) every last moocher has come to cash in on Obama," says the conservative blogger and pundit. "There are some of us who want to bang our heads against the wall."

While most Republicans now in office are saying all the right things about Tuesday's proceedings — roll tape on "peaceful transfer of power" and "historic moment for the country" sound bites — some conservatives can't quite get themselves in the "We Are One" mood.

Not even for a day.

On his radio show last week, Rush Limbaugh railed against "people on our side of the aisle who have caved and who say, 'Well, I hope he succeeds. We have to give him a chance.'"

"Why?" Limbaugh demanded. "They didn't give Bush a chance in 2000. Before he was inaugurated, the search-and-destroy mission had begun. I'm not talking about search-and-destroy, but I've been listening to Barack Obama for a year and a half. I know what his politics are. I know what his plans are, as he has stated them. I don't want them to succeed."

Let's get things straight. The Village has one job now: to make George W. Bush's presidency look better than Barack Obama's.

Honestly, why is El Rushbo and Malkinvania hating Obama news enough for a Sunday Politico column? The millions of people out there this week braving the cold to get a glimpse of Obama at this historic juncture are just not representative of America, apparently. Malkinvania and El Rushbo are, however.

The country being truly grateful for getting rid of Bush just doesn't compute to these guys. Obama has to be taken down. Your "liberal media" is going after Obama hardcore now, and he's still not even President yet.

The Bush Legacy

Matt Yglesias sums up the last eight years (emphasis me.)

Thinking back to George W. Bush’s farewell address it’s striking that the best thing the man can say about his record in office is that only once during his term in office were 3,000 people killed by foreign terrorists. And it’s really striking that other people in the conservative movement seem to take this “accomplishment” very seriously.

There's a reason why conservatism is dead right now. It's on the slab and the Republicans along with it are not going to be able to stop Obama. Why? BooMan explains (again, emphasis me).

It's mostly raw numbers. The Democrats have the votes to do almost anything they want. But there two other factors that are new and poorly understood. The first is Obama himself. The Democrats haven't seen a president like this with this much congressional support since LBJ, and we all remember the Great Society was the result. The most important factor though is that the Republicans have suffered a total collapse on all fronts. They have lost elections, partisan support, the ability to raise money, the ability to redraw districts in their favor, their credibility on the budget, taxes, national security, and family values...in essence, they no longer have a coherent ideology to rally around.

The Republicans also lack a national leader. They don't even have a Barry Goldwater. Therefore, Republican politicians are rudderless and will increasingly find the safest course is to look out for themselves and their own interests. And the only way for a Republican to be relevant in this Congress, and to make tangible achievements that they can bring back to the voters in their states or districts, is to work with the Democrats on their committees as they draft new laws. They will have to work with the Democrats on energy, financial regulation, agriculture, transportation spending, non-proliferation, and education, and then they will have to vote for that legislation.

This is especially true in the Senate, where the Republicans are more inclined to work in this way and, in any case, they still have some relevance. But the idea that Minority Leader McConnell will be able to filibuster Democratic legislation is absurd. He will never kill off bills that his members have had a say in crafting. And this is why Obama's refusal to make hard ideological stands and demands is not a signal that he is going to move to the center. He's not moving to the center, he's co-opting the center and making it part of his coalition. If you don't believe, just watch. Obama is going to be the most powerful president since LBJ, and he will leave a similar legacy of progressive legislation.

That's a nice thought. We'll see if it holds true. There's a reason why Bush's approval rating is 22%. He's the worst President of anything, ever. The man that follows will hopefully be one of the best.

He has to be. If he's not, America is in serious trouble.

Sue For Peace

Hamas and Israel have agreed to a temporary cease-fire in Gaza. Of course the meaning of "cease-fire" is "Israel still occupies all of Gaza and will resume attacking at any time."

Palestinian militants agreed Sunday to a one-week cease-fire against Israel, Hamas spokesman Ayman Taha said.

The Hamas announcement came hours after Israeli Prime Minister Ehud Olmert announced a unilateral cease-fire in the country's assault on Hamas in Gaza.

"We in the Palestinian resistance movements announce a cease-fire in the Gaza Strip," Moussa Abu Marzouk, a senior Hamas official in Syria, said on Syrian TV. "And we demand that Israeli forces withdraw in one week and that they open all the border crossings to permit the entry of humanitarian aid and basic goods for our people in Gaza."

The agreement covers all Palestinian armed factions, not only Hamas, said CNN Jerusalem correspondent Paula Hancocks.

Israel has no intention of withdrawing from Gaza, of course. The inevitable result is another round of hostilities by both sides after a week or so.

Village Stupidity

Via BooMan, today's front page story in the Washington Post explores the newest D.C. party scene accessory: Black people.

Except for the first time, the face of ultimate power is African American. With a black first family in the White House and a diverse group of appointees and Cabinet nominees, the all-white dinner party feels all wrong. Certain hosts are suddenly grappling with a new reality: They need some black friends. Overnight, black politicians, lawyers and journalists are hot properties, receiving engraved invitations from people they never got invitations from before.

Blacks have gone from barely being on the list to being in charge of the list.

"Everyone knows that his campaign was about inclusion," Jarrett said. "We would expect that spirit of inclusion to also reflect on Washington's social scene."

A swift shift is underway in this exclusive set of those who deal with the highest level of federal government. That's a signal of wholesale change, said A. Scott Bolden, managing partner of law firm Reed Smith's Washington office and a longtime politico in a city where professionals work side by side by day, but socialize separately at night.

"You see those 'What's In and Out' columns every year?" he asked with a laugh. "With Obama and the first family in town, arguably being black is 'in.' "

This? This right here is why I despise the Village. Washington, D.C. is one of the most heavily African-American cities in the country, and only now with a black President is somebody noticing after 230 years something might be wrong with an all-white dinner party in a mostly-black city.

Jesus wept. "Well, up until now the D.C. cocktail circuit was a bunch of racists. Now it's okay!"

StupidiNews, Weekend Edition

• Obama takes a whistle stop train tour of the Northeast on the way to Washington.
• Several Bush appointees in the DoJ refuse to leave their posts, citing too many corrupt Dems to prosecute.
• The incoming administration has plans to turn Gitmo detainees over to the federal civilian court system.
• Another wave of layoffs from AMD to Clear Channel is raising doubt about any quick recovery.
• A new version of the Conficker computer virus is ripping through the net.

Totally Unplugged

Several news outlets reporting Circuit City is liquidating all assets: 35,000 more jobs lost as the company goes under.

It will not be the last major retailer to fold over the next several months.

[UPDATE] The deal for a buyer fell through. No takers on its assets, today was the deadline for a buyer and that deadline will pass without one, according to the story. Practical upshot, end of the company and 35k jobs down the drain.

[UPDATE 2] Although this was expected, the psychological impact of this is devastating. Bear Stearns didn't have a real impact on your Dad or brother or girlfriend. But everyone's shopped at Circuit City before. Anyone can go to the mall and see the big holes in the storefronts. Anyone can see Main Street is in serious trouble. And everyone is wondering "is my company next?"

There's going to be a lot more retail liquidations over the next few months, and the resulting empty storefronts and commercial real estate crash are going to really test the boundaries of a working depression.

I honestly don't see anything at this point that's going to prevent a 20-25% real unemployment rate by next year. A lot of people are going to be out of work and will not be able to get jobs, period.

Pardon Our Dust

So when does Bush drop his bombshell pardons? He has roughly 100 hours left before he's not President anymore. BooMan is betting late today in grand Bush Administration Friday Night News Dump style, since Monday is a bank holiday for MLK, others say Monday would make sense as Obama's inauguration would act as a perfect news dump.

After Eric Holder's statements yesterday at his hearing and the GOP offering no more than token resistance, the incoming AG is making a lot of Bushies nervous as a nitro delivery guy in a trampoline factory.

President-elect Barack Obama's nominee for attorney general said unequivocally Thursday that waterboarding is torture, and he vowed to initiate an extensive and immediate "damage assessment" to fix fundamental problems within the Justice Department that he said were caused by the Bush administration.

Eric Holder told the Senate Judiciary Committee during a marathon hearing that the incoming Obama administration is making major course corrections on the interrogations of terror suspects and many other issues that will represent a significant break from the current policies and programs.

Early on he was asked whether waterboarding, a technique that makes a prisoner believe he is in danger of drowning, constitutes torture and is illegal.

"If you look at the history of the use of that technique, " Holder replied, "we prosecuted our own soldiers for using it in Vietnam. ... Waterboarding is torture."

And while I absolutely applaud Holder's statements, I'm more convinced than ever that the pressure on Bush to issue blanket pardons some time in the next couple of days is going to be immense. He will be convinced there's enough risk of investigation and prosecution by Holder that he has to do it now. Bush really, really wants America to like him and to remember him fondly, but the fact that an overwhelming majority of Americans are glad as hell to see him go only means he has much less to lose if he does it.

I'd put it at 80% he does it. It would be higher, except it's a tacit admission of a mistake, which Bush has always been loathe to do. Still...a last-second pardon like this would explain why Holder's getting a free pass.

We'll know very soon.

Cutting The TARP Free

The Senate vote to release the second half of the TARP fund went along party lines, with Democrats securing a 52-42 vote in favor of supplying Obama with $350 billion.

Obama praised lawmakers for their quick response to the crisis and thanked senators for helping him score an important victory in the first test of his administration's ability to forge consensus. The Senate voted 52 to 42 to defeat a resolution that would have blocked the second installment of the $700 billion financial rescue program, guaranteeing that the money will flow to the Treasury soon after Obama takes office Tuesday.

The House may vote on a similar measure next week, but its defeat in the Senate makes that effort largely symbolic.

Obama acknowledged that it "wasn't an easy vote" for many senators "because of the frustration so many of us share" over how the Bush administration managed the first half of the rescue fund, known as the Troubled Asset Relief Program, or TARP.

"Restoring the economy requires that we maintain the flow of credit to families and businesses," Obama said in a statement. "So I'm gratified that a majority of the U.S. Senate, both Democrats and Republicans, voted today to give me the authority to implement the rest of the financial rescue plan in a new and responsible way."

With news of a $825 billion financial stimulus package in the House ready to go, Obama may be able to sign a number of bills and executive orders into law within the first few weeks of his term and hit the ground running.

But will it be enough? I have strong doubts. The best Obama will be able to do is soften the blow for some Americans over the next 18-24 months. He may indeed choose to start with the effective nationalization of Citigroup and Bank of America and other large financials. With the TARP money freed up now, Treasury can move on this option and can move quickly. The fact is Citigroup is on its last legs, and is planning to split the company into a good bank and a bad holding company: a prime target for nationalization. BoA has snapped up another $20 billion from TARP 2 already. More banks will follow.

And six weeks from now when the TARP funds are gone and banks are still in trouble...then what?

StupidiNews!

• All passengers aboard Flight 1549 safe and accounted for after yesterday's dramatic landing in the Hudson River.
• Plumes of methane gas found on Mars may indicate possible biological activity deep underground.
• Bank of America has scored another $20 billion in bailout cash.
• President Bush's farewell address to the nation stressed his legacy.
• 2008 US sales of the Nintendo Wii dominated the gaming market with over 10 million sold.