Not Over Until The Norm Coleman Sings

Just in case you were wondering how the Minnesota Senate race was going after three months, it's still up in the air, Al Franken leads by 225 votes, and Norm Coleman just won a court battle that will prolong this even further as now another 4,800 ballots must be considered.

Nearly 4,800 rejected absentee ballots may be reconsidered in the U.S. Senate recount trial, after the presiding three-judge panel issued a ruling today defining boundaries for the proceeding.

The court granted Democrat Al Franken’s request to limit the universe of ballots that Republican Norm Coleman can seek to have counted, rejecting Coleman’s attempt to have about 11,000 rejected absentee ballots reconsidered. But Franken had asked the judges to limit the review to only the 650 ballots cited by Coleman when he filed his lawsuit last month challenging the recount.

With Franken holding a 225-vote lead after the recount results were certified, the 4,800 ballots that may be reconsidered would appear to be enough to put the ultimate outcome in doubt.

The court order indicates that any of the ballots that complied with state law should be counted, along with those where errors occurred through no fault of the voter.

But the order limits Coleman to presenting evidence on those ballots specifically disclosed to the Franken legal team by Jan. 22.

Coleman lawyer Fritz Knaak said he believes that the number is about 4,800, and Franken spokeswoman Jess McIntosh said that was also her understanding.

Franken could widen his lead, or Coleman could gain, it could go either way at this point. We're not quite back to square one on the recount of the recount, but eventually somebody's going to rule that the recount has to stop, and then it will go in front of the US Supreme Court.

There may not be a second senator from Minnesota for another three months, if not longer.

The Gregg Gambit, Part 5

Bonnie Newman is Judd Gregg's replacement officially as the New Hampshire senator moves on to Commerce. Once again, what's Obama getting for the trouble?

[UPDATE] Rhodes scholar and Oxford grad Dr. Rae-Rae has no clue either.

And if Rae-Rae's coming up with Large Yellow Question Mark Over Head, then I certainly have no idea what Obama's getting with Gregg.

About now would be a great time for a leak as to what the deal is, cause right now it's looking like Obama has completely caved to the Sensible Village Centrists in order to score cool points with people who pretty much hate everything about him.

America doesn't have time for this drama shit. Pick real people to fill your cabinet and have them work on fixing the friggin' country, Barry. We're barreling down the highway to Hooverville and you're making nice with the people who want to dump every single crooked thing they did to create the situation on your shoulders when the engine blows. It's called a co-dependent relationship. Google it, Barry.

Now.

I Think We're Turning Japanese

Roubini's latest column is another must read, but the bottom line is this: (emphasis mine)

Thus, even if the US were to do everything right and fast enough (on the monetary, fiscal, bank cleanup and household debt reduction) we would still have a severe two year U-shaped recession until early 2010 with a weak recovery of growth (1% or so that feels like a recession even if you are technically out of it) in 2010-2011. But if the US does not do it right this severe U-shaped US and global recession may turn into a nasty multi-year L-shaped near depression like the one experienced by Japan. We don’t have to go back to the Great Depression (when output fell over 20% and unemployment peaked over 25%); even a stag-deflation and Near-Depression like the Japanese one would be most severe for the US and the global economy. And while six months ago I was putting the odds of this L-shaped near-depression at 10% or so such odds have now risen to one third. So time is of the essence and the clock is working against US and global policy makers. The time to stop dithering is well past; and the time to implement a program of forceful, coherent, credible, globally-coordinated monetary, fiscal, financial clean-up and debt-resolution is now. The US and global economy are truly risking a near-depression if the policy reaction is not bold, aggressive, sustainable and credible.

The clock is ticking. It's looking less and less like Obama is going to be able to actually do anything about the coming depression other than try to soften the blow. The GOP certainly won't let him spend the kind of money he needs to spend, and of course he'll only get the blame when the current plan in Congress fails to do anything more than slow us down a bit during the 20,000 foot freefall we're in.

Folks, Roubini has been dead, solid right for the last several years. If he says there's a one in three chance of a "near-depression" on the way (and he's been hedging his bets on the downside) I would pay attention to the man. A global economic catastrophe is in the works, and we're rapidly approaching the systemic failure point of the US economy.

Remember, even if Obama manages to stave off a depressionary scenario behind door number one, the other two doors contain a multi-year recession that will still be the worst in generations.

Going Through Withdrawal Pains

Another day, another Obama administration member with tax problems. The difference is without the friends on Capitol Hill that Tim Geither has, Nancy Killeifer has been forced to withdraw from her appointment.

Nancy Killefer withdrew her candidacy to be the first chief performance officer for the federal government on Tuesday, saying she didn't want her bungling of payroll taxes on her household help to become a distraction for the Obama administration.

Killefer was the second major nominee to withdraw and the third to have tax problems complicate nominations after President Barack Obama announced he had chosen them.

In a brief letter to Obama, the 55-year-old executive with consulting giant McKinsey & Co. wrote that she had "come to realize in the current environment that my personal tax issue of D.C. unemployment tax could be used to create exactly the kind of distraction and delay" that must be avoided in responding to urgent economic problems.

She offered no further details of her tax difficulties.

On the other hand, with Daschle too having his critics asking him to do the same thing and withdraw, today he did just that. Matt Cooper at TPM DC asks the post-Daschle questions.

After Daschle, a few big questions:

1. How many more officials are going to run into the tax buzzsaw. Just spoke to someone who is applying for a senior job in the administration. "If you haven't been preparing for public service your whole life, you're really kind of screwed," said the person. That may be a bit much, but it does raise the question of what tax indiscretion/error is now enough to derail your career in the Obama administration.

2. What's Plan B for HHS and the health care campaign? Remember Daschle was not only supposed to run the largest cabinet agency but also to quarterback health care reform. Will the jobs now be bifurcated?

3. What're the recriminations for Leo Hindery, the New York financier for whom Daschle worked? Did he do anything untoward or was this all Daschle's failure to keep his accounting straight?

4. How badly is Obama tarnished by this both in terms of his competence--two cabinet nominees choke before they reach their confirmation hearings--and his promise of reform.

5. It's No Fun Being Majority Leader. Look what's happened to the last majority leaders in the Senate. Bob Dole quit the post and his senate seat in 1996 and lost badly. Trent Lott got ushered out of office thanks to TPM and others who noted his praise of Strom Thurmond's 1948 presidential campaign. Bill Frist was a flameout. Now Daschle's career in public service seems at an end. Makes you not want to run for the leadership.

Somebody should point that last one out to Harry Reid. Is Obamacare now dead before it gets a chance to even get started?

As I said before, it's something of an unfair double standard compared to the nepotism, cronyism, and outright impropriety of Bush's cabinet picks. But Obama has to be held to a higher standard, fair or not, and this includes the members of his administration. Geithner really should take the hint and pack it in himself, for that matter.

At least Daschle fell on his sword, already putting himself above anyone Bush ever appointed that was crooked...and that was pretty much everyone.

The Gregg Gambit, Part 4

Yes, the Judd Gregg story is still driving me nuts. All indications are that Gregg will be named as Commerce Secretary today, which means Gov. Lynch will name a Republican to replace him. The thing that bothers me the most is that Obama needs a fiscal conservative Republican in his cabinet more than he needs 60 Dems in the Senate right now, which makes less and less sense to me the more I think about it.

Yes, the logical assumption is that there's some sort of major deal here, and there's several theories behind what that deal (or deals) may be. But the bottom line is this: the Obama administration has done a lousy, lousy job selling the stimulus package to the American people and instead has chosen to sell it to the GOP. The Republicans know two things, that a majority of Americans increasingly hate any idea of a stimulus package whatsoever, and that if they filibuster it and block it, the GOP can honestly claim they are doing America's will as the brave resistance.

What is Obama getting from Gregg that he specifically needs Gregg for? It's not 60 votes in the Senate. It's not a strong progressive voice in Commerce. If he blows the stimulus package and the GOP blocks it (and the GOP has to block it, they have no choice now as they have repeatedly portrayed the bill as "something they can't vote for") it's not going to really matter what Gregg does in Commerce, Obama's administration looks like a bunch of losers and the Village will forever push the notion that the GOP saved America from the Liberal Menace Of Nancy And Harry.

Who knows? Is Obama a genius, or is he getting completely owned by the Republicans on this? Obama cut some sort of deal? Great. Why is Obama cutting deals with the GOP in the first place? Why is Obama acting like he lost when supposedly "I won?" What's with the contrite act?

Obama's playing by the rules, by a code of honor. The GOP is playing to destroy the Democratic Party and establish a permanent rulership of what's left of the country. Who's the bigger fool here?

This Michael Steele Guy Can't Be That Bad, Right?

Newly elected RNC chair Michael Steele, less than a week into the position as the "leader of the Republican Party" gives us this golden quote:

"Not in the history of mankind has the government ever created a job."

Apparently somebody hasn't looked at the signature on his paycheck yet from the Republican National Committee, or the US Constitution, or the US military, the state National Guard, the friggin DMV, Zandardad (who spent a good 25 years working for one of those government things), the millions of state and federal employees working government jobs for the government, or the fact that Michael Steele himself was the Lieutenant Governor of Maryland...which I'm thinking qualifies as a government-created job.

For a brief millisecond I was convinced that maybe the election of an African-American like Michael Steele as RNC chair meant a more tolerant, open, and evolving Republican Party. The country does need a loyal and effective opposition no matter who is in charge, and that means at least two strong parties (and I'd personally argue we need a lot more than two.)

But rather than striving to be just thought of as a fool, Steele instead opened his mouth and confirmed it in the grand Bushian sense. He's nothing more than an empty suit, a hack that the GOP uses to feel good about itself when the racists in the party come out to scare the locals.

It's funny. If Steele was a Democrat, we'd immediately have wingnuts saying "Why does the Democratic Party hate our troops?"

StupidiNews!

• Nearly one in three homes sold last year were bank repos or short sales of "underwater" mortgages.
• A broke California has suspended $3.5 billion in payments to state citizens as a January 31 budget deadline expires.
• Obama turns to his grassroots supporters to get out the word on the stimulus package.
• New Hampshire Republican Sen. Judd Gregg has accepted the position of Commerce Secretary.
• Is the gaming industry's old E3 Expo finally back in 2009?

Speak, Rover! Speak!

TPM Muckraker has a Murray Waas story on Karl Rove's apparent cooperation with both probes he's been subpoenaed on.

Karl Rove will cooperate with a federal criminal inquiry underway into the firings of nine U.S. attorneys and has already spoken to investigators in a separate, internal DOJ investigation into the prosecution of former Alabama Gov. Don Siegelman, his attorney said in an interview.

Rove previously refused to cooperate with an earlier Justice Department inquiry into the firings. The Justice Department's Inspector General and its Office of Professional Responsibility (OPR) said in a report released last September detailing their earlier probe of the firings of the U.S. attorneys that their investigation was severely "hindered" by the refusal by Rove and other senior Bush administration officials to cooperate with the probe.

Rove's attorney, Robert Luskin, said that Rove, however, will cooperate with a federal criminal probe of the firings being led by Nora Dannehy, the Acting U.S. Attorney for Connecticut who was selected by former Attorney General Michael Mukasey to lead the investigation. Dannehy has recently empaneled a federal grand jury to hear evidence in the matter.

So Rover's going to spill the beans on Attorney-gate and the Don Siegelman snowjob? What's the catch, then?

Or maybe there isn't one. Maybe Eric Holder will get his chance to do his job after all. We'll see.

Holder Is In

Eric Holder has been confirmed by the Senate as Attorney General.

The U.S. Senate confirmed Eric Holder as attorney general Monday, voting 75-21 to place him in charge of the Department of Justice.

Holder, 58, is a former federal prosecutor and served as deputy attorney general during the Clinton administration. His confirmation makes him the first African-American confirmed to the post, though he held the job on an acting basis in early 2001.

Monday's vote leaves him set to take over a Justice Department battered by a series of controversies during the Bush administration, from questions about how it laid legal groundwork for harsh interrogations of suspected terrorists to the sackings of top federal prosecutors in several cities.

Still up in the air: Holder actually doing his job and prosecuting Bush officials. I wonder how quickly that will fade from the headlines? Will he even have time? After all he has so much work ahead of him just to get the Justice Department up and running again.

A Man, A Plan, Martinez

Retiring Florida Republican Sen. Mel Martinez is shopping his own version of the stimulus plan that's -- surprise! -- made up primarily of tax cuts.

The proposal includes $430 billion in tax cuts, $114 billion for infrastructure projects, $138 billion for extending unemployment insurance, food stamps and other provisions to help those in need and $31 billion to address the housing crisis.

The draft Martinez put together is a broader approach than what some GOP leaders have suggested.

And of course, the Martinez plan will be acceptably bipartisan to the rest of the GOP and the Blue Dog Dems if it just had a bit less spending and a lot more tax cuts, as it magically becomes the new leftward boundary of the stimulus argument, meaning the bill that passes Congress will be far, far more to the GOP's liking...

...and just like that Obama has to sign the Son Of Bush Tax Cuts later this month. Obama has to know he's getting rolled. How is he going to fight back?

The Gregg Gambit, Part 3

Expanding on this morning's post, BooMan hypothesizes that there's something of a "gentleman's agreement" among Obama, Gregg, and Lynch.

If Governor John Lynch appoints a Republican to replace Gregg, there could still be some benefits. A Republican that committed not to seek election in 2010 would leave Gregg's seat open, and therefore much more vulnerable to Democratic takeover. Additionally, other concessions could be part of any deal, including a commitment to allow an up or down vote on the Employee Free Choice Act or other key legislation that is likely to be contentious in the 111th Congress. It's hard to tell what kind of deals might be going on behind the scenes.

Whatever this deal is, it's the crucial info that is missing from why Obama is doing this. Chris Cilliza believes the deal may in fact be having Gregg as a crucial voice on entitlement reform.

Finally, at the practical level, putting Gregg at Commerce would give Obama someone known and trusted in the Senate whom he could task with selling the need for entitlement reform -- a high priority for the new president that will be a centerpiece of the upcoming fiscal responsibility summit in February. Gregg, who has served in the Senate since 1992, is a past chairman of the Budget Committee -- a perch from which he emerged as a strong advocate for just the sort of entitlement reform Obama is now advocating.

Which means Obama is looking past 2010 to a Senate that he expects to have his 60+ votes on for tackling Social Security and Medicare, and Gregg as his bipartisan point man. Both BooMan and Cilliza make a lot of sense here if Gregg is playing ball...and again, that's a big if.

Cilliza also notes that Gov. Lynch is not the favorite Granite State Dem to be mentioned taking Gregg's seat, but Rep. Paul Hodes is. This keeps getting more and more interesting. Perhaps Lynch will name Hodes directly, but I doubt it. Almost everyone I've read agrees that Lynch is picking a Republican: Bonnie Newman, former NH State Speaker of the House Doug Scamman, or former 13-term NH State Rep. Elizabeth Hager.

We'll see how it shakes out.

The Banks Project

Here in Cincy, the city's buzzing with the possible fate of the area's largest bank, Fifth Third. Insurance company Cincinnati Financial has just unloaded its entire stake in 5/3 stock, and the stock price is hovering around the $2 mark.

Things aren't looking good. Everyone here remembers National City Bank rolled in the dirt for nearly a year before PNC Bank picked it up. People are wondering if 5/3 is next.

Zandar's Thought Of The Day

Have the Republicans gotten the memo that they lost in November and are the minority party in Washington right now, or have the Democrats just completely missed the memo that they won and control Congress and the White House by the largest margin in decades?

In Which Zandar Answers Your Burning Questions

The Great And Mighty Kroog asks:

Now, something must be done to shore up the financial system. The chaos after Lehman Brothers failed showed that letting major financial institutions collapse can be very bad for the economy’s health. And a number of major institutions are dangerously close to the edge.

So banks need more capital. In normal times, banks raise capital by selling stock to private investors, who receive a share in the bank’s ownership in return. You might think, then, that if banks currently can’t or won’t raise enough capital from private investors, the government should do what a private investor would: provide capital in return for partial ownership.

But bank stocks are worth so little these days — Citigroup and Bank of America have a combined market value of only $52 billion — that the ownership wouldn’t be partial: pumping in enough taxpayer money to make the banks sound would, in effect, turn them into publicly owned enterprises.

My response to this prospect is: so? If taxpayers are footing the bill for rescuing the banks, why shouldn’t they get ownership, at least until private buyers can be found?

Well, as the Kroog points out, that's exactly what we're going to get: ownership of the securitized debts and none of the actual assets (stockholders and banksters get to keep those.)

So why is the Obama administration so loathe to call nationalization of the financial industry what it is? After all, they're not going to have a choice: America's banks are across the board insolvent. The sooner Obama nationalizes them, the less financial damage the country takes.

But of course, the more political damage he endures. Obama's guys aren't going to want to be responsible for the end of capitalism in America, of course...but it's too late. We're already throwing trillions at the banks. They're already de facto nationalized.

Why not complete the process as soon as possible?

The Gregg Gambit, Part 2

More evidence this morning that if Republican Judd Gregg is appointed as Commerce Secretary, his replacement to the Senate by Democrat John Lynch will in fact be a Republican.

U.S. Sen. Judd Gregg won't take the job of commerce secretary in the Obama administration if his appointment would tip the Senate balance of power in favor of Democrats, the chamber's Republican leader said Sunday.

"He's indicated to me that he would not accept this appointment if he believed it would lead to a change in the current makeup of the Senate," Minority Leader Mitch McConnell, R-Kentucky, told reporters.

An administration official told CNN on Saturday that Gregg, a third-term Republican known for being fiscally conservative, is the leading candidate to head the Commerce Department. Gregg, of New Hampshire, said in a written statement Friday that he was among those being considered for the post, and White House spokesman Robert Gibbs said no final decision has been made.

If Gregg moves to the Cabinet, New Hampshire's Democratic governor would appoint a replacement. That could give Democrats the 60-seat majority needed to overcome Republican attempts to use filibusters to block legislation.

But McConnell told CBS' "Face the Nation" on Sunday that "whoever is appointed to replace him would caucus with Senate Republicans," indicating his belief that a Republican would be named.

"I think it would have no impact on the balance of power in the Senate," he said.

Is this completely wishful thinking on the part of the GOP, or have they outsmarted Obama and cut a deal with Gov. Lynch? Ol' Mitch here seems confident that Gregg's replacement will caucus with the Republicans, so why do it?

Aren't there qualified Democrats who could fill the position? Why not get one and take yet another opportunity away from a Democratic governor to do something embarrassing and/or stupid in appointing somebody? Haven't the Dems learned after Blago and Paterson that these things can go horribly wrong?

Finally, if Lynch really is going to appoint either a Republican or an Independent who will caucus with the GOP, why the hell is Obama bothering to do this in the first place? Is Judd Gregg that dangerous to Obama's agenda in the Senate that he has to bring him on board as a Cabinet member?

What's going on here?

[UPDATE] Researching this, the word around Lynch is that he plans to name University of New Hampshire president J. Bonnie Newman as Gregg's replacement.

Newman served as assistant secretary of Commerce for economic development in the Reagan administration. She was in charge of administrative operations for the George H.W. Bush White House.

She was chief of staff to Gregg when he was a congressman in the 1980s, and she was one of the first Republicans to publicly endorse Lynch in his 2004 challenge of then-Republican Governor Craig Benson, and co-chaired Republicans for Lynch.

This keeps getting stranger and makes less and less sense from Obama's political perspective the more I think about it. Newman is certainly a Republican. If Lynch is going to be running for Gregg's seat in 2010, he'd have a much easier time running in blue New Hampshire against the conservative Gregg than the moderate Newman, unless the deal is Newman is not going to run in 2010, making her a placeholder.

But if Newman's not running in 2010 and you need a placeholder, why not find a placeholder from your own party? Even Blago managed to get that right. Lynch certainly owes Newman a favor, but this seems to be a hell of a way to repay it.

What makes even less sense is appointing Gregg in the first place. Obama had no problems finding Clinton-era folks to fill his Cabinet. Surely there's got to be somebody from Commerce during the Clinton years who he can appoint. Why Judd Gregg? If Obama's that good of friends with the guy, Gregg's repaying that friendship badly by voting against much of the early legislation Obama has signed into law. If Lynch is going to appoint a Republican, Obama doesn't gain anything from it. Heck, he's actually putting Lynch in a hell of a bind, assuring Lynch has to find somebody who is qualified but doesn't want the job so he can run for it in 2010.

Finally, Gregg doesn't seem like the right person for the progressive Obama administration. Why would he take the job anyway? If Gregg's re-election is that much in doubt, why is Obama doing him such a huge favor by giving him a Cabinet job? Obama certainly doesn't gain a reliable vote in the Senate as a result. Newman would be under tremendous pressure to vote party line against Obama at every turn. Lynch would run and probably win in 2010 anyway. If Gregg was the most qualified person for the position, why didn't you take him in the first place rather than Bill Richardson?

None of this makes any sense at all. There's still some crucial information missing here.