Epic Speak Your Mind Win

Every now and then we're reminded what's really important this holiday season, and how a simple act of making something a great many of us take for granted into a helpful reality can change a person's world forever.

Victor Pauca will have plenty of presents to unwrap on Christmas, but the 5-year-old Winston-Salem boy has already received the best gift he'll get this year: the ability to communicate.

Victor has a rare genetic disorder that delays development of a number of skills, including speech. To help him and others with disabilities, his father, Paul, and some of his students at Wake Forest University in Winston-Salem have created an application for the iPhone and iPad that turns their touch screens into communications tools.

The VerbalVictor app allows parents and caregivers to take pictures and record phrases to go with them. These become "buttons" on the screen that Victor touches when he wants to communicate. A picture of the backyard, for example, can be accompanied by a recording of a sentence like "I want to go outside and play." When Victor touches it, his parents or teachers know what he wants to do.

"The user records the voice, so it's something the child's familiar with. It's not robotic," Paul Pauca said.

The app, which should be for sale for $10 in Apple Inc.'s iTunes store by early next week, is one of dozens of new software products designed to make life easier for people with a range of disabilities.

Yes, Victor, there's an app for that indeed.  Best part?

"It opens up his mind to us, because he can show us what he's thinking," said Victor's mother, Theresa.

Not to mention the tons of other people all over the world software like this can help.

This one's for you, Pop.  Figured you'd like it.  You and Mom have a good Christmas, as do the rest of you, whatever holiday you celebrate (or don't!)

Oh, and EPIC WIN for the Pauca family.

It's Getting Hot In Here

One of the big, big showdowns coming in 2011 is the EPA versus the House GOP.  The Environmental Protection Agency says if Congress won't take action on greenhouse gases, then the EPA will.  yesterday it announced plans to deal with power plant carbon emissions, and immediately both House Republicans and energy companies are saying "over our dead bodies."

The EPA announcement, which came as part of a settlement of two 2008 lawsuits, will propose new standards for power plants in July 2011 and for refineries in December 2011, followed by final standards in May 2012 and November 2012, respectively.

During a telephone briefing for reporters, Gina McCarthy, the EPA's assistant administrator for air and radiation, said she could not spell out how significantly the new rules will reduce the nation's contribution to global warming.

"You will see measurable reductions," she said. "It's way too early in the game right now to talk about what the standards will look like."

Power plants account for 35 percent of the nation's greenhouse gas emissions while oil refineries account for 3 percent; combined with an earlier EPA rule targeting cars and light trucks, the agency is poised to regulate sectors accounting for more than 55 percent of the nation's total greenhouse gas emissions.

According to an analysis by the World Resources Institute, the new rules could deliver about one-third of the carbon cuts the United States has pledged to make by 2020. "By focusing on the largest polluters, EPA can take a big bite out of U.S. emissions," said WRI senior fellow Franz Litz.

The EPA's McCarthy said the agency would require that existing and new utilities and refineries use only "what technologies are available." It would not set an overall limit on greenhouse gases such as one that was included in the cap-and-trade bill passed by the House in 2009 but that died in the Senate.

"This is not about a cap-and-trade program," she said. "It is not in any way trying to get into the area where Congress will be establishing law at some point in the future, we hope."

But Charles T. Drevna, president of the National Petrochemical and Refiners Association, said in an interview that the proposal was unrealistic and that his industry will urge lawmakers to block the EPA's move.

"There is no best available technology. The only thing you can do is cut production," Drevna said. "I see bipartisan concern as to where EPA and the administration are attempting to take climate regulation - how they're going to get there and what it's going to do to the economy."

Rep. Darrell Issa (R-Calif.), who is in line to chair the House Oversight and Government Reform Committee next year, seemed to agree. "The fact is there are serious questions about EPA's decision to move forward with these job-killing regulations that will usurp power from states - violating the principles of federalism that are the backbone of the Clean Air Act," his spokesman Kurt Bardella said in an e-mailed statement.

The move from the Republicans is to simply refuse to appropriate any operating funds the EPA or to get rid of the agency completely rather than to see carbon emissions reduced.  Surely the GOP will make one of the two methods part of its government shutdown hostage plan should the agency go through with the process.

A lot of other pieces are going to be on the table when the Republicans play the shutdown card in March (and yes, I fully expect House Republicans will shut down the government in March unless they get 100% of what they want, no word on whether or not that will include Obama's immediate resignation.)  But count on this being a big part of the whole mess next spring.

Another Big Effin' Deal

Vice President Joe Biden believes that national gay marriage is something of an "inevitability".

Vice President Joseph Biden said in a television interview Friday that “there’s an inevitability for a national consensus on gay marriage.”

The vice president, who backs civil unions but not same-sex marriage, weighed in on the issue two days after President Obama acknowledged his position was “evolving.”

“I think the country's evolving,” Biden said in the interview with ABC News. His comments were not the first time he has suggested the country would eventually accept and support gay marriage. Asked in a 2007 appearance on NBC’s “Meet the Press” if gay marriage was inevitable, Biden replied that “it probably is.”

He's right.  Of course the real issue is how long that will take, but it's refreshing to hear that both the President and Vice President believe that DOMA needs to go.

Unfortunately doing something about DOMA from a legislative standpoint is not going to happen while Republicans are in control of anything.  Executive and judicial options still remain, however, particularly the judicial one as California's Prop 8 case winds through the courts on the way to SCOTUS.

Personally I'm convinced there's a fair chunk of conservative Republicans who desperately want a Roe v. Wade style SCOTUS decision permitting same-sex marriage in America to rail against -- and fundraise against -- for the next 30 plus years.  Look how effective and lucrative opposing Roe has been for the wingers over the years.  Hell, I think they'd be secretly delighted.

Turn On The Lights, Watch The Roaches Scatter, Part 53

Republicans are doing their dead level best to punish American's homeowners for Foreclosuregate  There can't possibly be any way the banks could be wrong about who to foreclose on to these guys, and as a number of states now are completely controlled by Republicans, look for those GOP-controlled states to do what Virginia did over the last two years.

Since the meltdown in the housing market began more than three years ago, Maryland and the District have changed their foreclosure laws to give borrowers greater protection. Virginia has moved in the opposite direction.

Last year, the state legislature overwhelmingly passed a law making it easier for lenders to defend themselves when accused of giving homeowners too little warning of impending foreclosures.

The process moves so quickly in Virginia - one of the fastest states in the nation - that homeowners can receive less than two weeks' notice that their house is about to be sold on the courthouse steps.

That confronts homeowners with an almost impossible deadline. To get a court to stop the sale in that narrow window, they must gather evidence, file a lawsuit and potentially post a bond with the court that could total thousands of dollars. Instead of trying to find a lawyer and prepare a suit, many borrowers run out the clock trying to deal with their lender.

At a time when lenders have been cutting corners and using phony documents to seize huge numbers of houses, the hurdles can be insurmountable, according to lawyers, consumer advocates and borrowers who have tried to save their homes.

"There's no question that people are losing their homes when they should not be," said James W. "Jay" Speer, executive director of the Virginia Poverty Law Center, which is part of a legal-aid network.

In many states, homeowners facing foreclosure automatically get a day in court, a chance to tell a judge why they should keep their homes. The judicial process provides at least a modest check on error and abuse.

But in Virginia and 28 other states, as well as the District, according to the RealtyTrac foreclosure information service, borrowers have no such luck. They face "nonjudicial" foreclosure processes, meaning lenders can foreclose without going through the courts. 

Wham, bam, out on your ass.   Remember, the entire MERS system of computerized foreclosure documentation must be considered suspect here.  The burden of proving the banks are owed must fall on the banks.  But in states like Virginia, the burden falls on the homeowner to prove why they shouldn't be thrown out, even with the increasing instances of banks not having anywhere near the required legal paperwork...and in some cases the paperwork they do have is robo-signer fraud.

For many states, there's no judicial recourse.  And Virginia Republicans went out of their way to create legislation specifically to allow banks to foreclose faster, despite the very real concerns about the accuracy of MERS.

Banks are getting away with stealing people's homes.  And increasingly they are getting away with it.  Republicans in Virginia are just the beginning.  Merry Christmas, indeed.

Crude Awakening

Here's your Chart of the Day on gasoline prices Labor Day through the end of the year:



Gas prices traditionally fall 20 cents a gallon or so after Labor Day. This year, they are up 30 cents a gallon or more. We should be looking at gas prices around $2.50 a gallon right now, but instead we're at $3 plus and rising sharply as crude oil has crossed $91 a barrel heading up.

If this is the start of Yet Another Commodity Speculation Bubble, we'll be back in the same mess we were in 2007 when crude hit $147 a barrel, and gas prices topped $4 a gallon (I remember paying $4.25 a gallon in July 2007.)

The difference this time around is that now we have nearly 10% unemployment as opposed to the 5% we had in 2007, which means whatever recovery we do have will get smothered in oil and set on fire.

Yet another indication that the vaunted "just around the corner" recovery of 2011 is simply not going to materialize.

Stone Cold Obama

Greg Sargent catches the two interesting parts of today's otherwise boring and obligatory "President lost the midterms, must shake up White House" article in the WaPo this morning:

Despite all his time studying the Clinton administration, Mr. Obama told his aides that he had no intention of following the precise path of Mr. Clinton, who after the Democratic midterm election defeats of 1994 ordered a clearing of the decks inside the White House, installed competing teams of advisers and employed a centrist policy of triangulation. In fact, several advisers confirmed, the word "triangulation" has been banned by Mr. Obama because he does not believe it accurately describes his approach.

Well, it may not be what Obama will call it, but I doubt the Village will play ball. They'll call it triangulation all day.  Greg continues:

Triangulation just isn't Obama's style, and his scolding of liberals seems to be rooted in genuine frustration with them for disagreeing with him about what's politically possible, given today's realities. To whatever degree Obama is using his disagreement with the left for positioning purposes, it's more about temperament than ideology: He's casting himself as the voice of sanity trying to talk sense into uncompromising partisans on both sides. This just isn't Clintonian triangulation in any sense.

The problem is there's folks on the left who don't understand the words "politically possible".  Their response to this will probably fall along these lines:



The other point Greg caught was this:

The President, preparing to deal with a strengthened GOP, is studying how to maximize the powers of the executive branch. Keep an eye on that one.

Yeah. The problem with that is that Bush tried to do the same thing four years ago.  It hasn't been good for the country so far.  Both Republicans and Democrats are going to be hypocrites on that one.

The Business End Of Means To An End

If you thought sanctions against terrorists states like Iran actually applied to US business titans, allow me to disabuse you of the notion.

Despite sanctions and trade embargoes, over the past decade the United States government has allowed American companies to do billions of dollars in business with Iran and other countries blacklisted as state sponsors of terrorism, an examination by The New York Times has found.

At the behest of a host of companies — from Kraft Food and Pepsi to some of the nation’s largest banks — a little-known office of the Treasury Department has granted nearly 10,000 licenses for deals involving countries that have been cast into economic purgatory, beyond the reach of American business.

Most of the licenses were approved under a decade-old law mandating that agricultural and medical humanitarian aid be exempted from sanctions. But the law, pushed by the farm lobby and other industry groups, was written so broadly that allowable humanitarian aid has included cigarettes, Wrigley’s gum, Louisiana hot sauce, weight-loss remedies, body-building supplements and sports rehabilitation equipment sold to the institute that trains Iran’s Olympic athletes.

Hundreds of other licenses were approved because they passed a litmus test: They were deemed to serve American foreign policy goals. And many clearly do, among them deals to provide famine relief in North Korea or to improve Internet connections — and nurture democracy — in Iran. But the examination also found cases in which the foreign-policy benefits were considerably less clear. 

The article goes on to document a number of confusing deals through this massive humanitarian aid loophole, quite literally one large enough to sail a container ship full of goods through.   A few companies have come clean or backed out, but for the most part at the same time we were slapping sanctions on places like Iran, we were selling them cigs, internet, and soda...and still are.

Given the state of the economy right now, I can see why the Obama administration would want to look the other way on some of the licenses they supplied for exemptions for exports.  Those do equal jobs back here in the states.  But this exemption law has been in place since 2000, and that's a whole lot of moral ambiguity to push during and including the entire Bush administration's duration and the good years we had.  Apparently they didn't mention any of this.

Yet another place where we play both sides of the game.  Funny how that works.

Method To The Madness

Brian Beutler takes a crack at explaining why Republicans gave in on so much during the lame duck session.

One X-factor in the Dems' run of lame duck wins was the GOP. They didn't exactly make it easy for Dems to do stuff...but they could've made it harder. Much harder. They ceded back hours of time; they handed Dems the food-safety bill after Dems basically botched it; they wrote this high-dudgeon letter vowing to block all Dem initiatives until taxes and spending were resolved, but then basically didn't.

I think there were a few reasons for this. Part of it was that they knew Dems had more time on their hands than most people realized, and were willing to eat into it. Another was that, with the election over, there was little value added to blocking everything, particularly for moderate Republicans.

But Republicans must at some level have understood that some of these things weren't going away. DADT would've stayed on the agenda. 9/11 responders would have stayed on the agenda. DREAM will stay on the agenda. And I'm guessing they made the simple calculation that it would be easier and wiser to give Dems these victories now, rather than fight it out with them publicly next after the GOP takes over the House with a caucus that's divided over these things.

Now the issues are off the table, and that creates more space for them to set the agenda.

It's an interesting theory, but one that has more than a few holes in it.   Lisa Murkowski is a big part of the reason why things went so badly for the GOP.  Nobody could have expected her to basically vote for everything Obama wanted to see pass.  She was an extra vote that nullified Mark Kirk's automatic no, and then Mark Kirk turned around with the President a couple of times.

The real issue was that retiring Republican senators -- and those forced out by Tea Party primaries like Robert Bennett -- told the Republican caucus to go to hell in one final spate of pique.  It wasn't "Republicans were trying to get issues off the table", it was the last of the moderate Senate Republicans telling the Tea Party to go intercourse themselves with a rusty chainsaw.

What goes around, comes around.  That's what happened.  Obama used these departing senators to get things done.

Oh, and Republicans wanted to just go home already.  So yeah, they folded.  They figure they have a much larger and nastier hand to play come January, and they're right.  Besides, the Village was beginning to actually call the Republicans out on stopping Obama's agenda just to spite him, especially on the START treaty (and eventually the 9/11 first responders legislation too.)  Those were lose-lose battles for the GOP and DADT repeal was going that direction too.

They did cut their losses, but Republicans broke ranks for the first real time with nothing to lose anymore.  Obama won the lame duck big time.

All the more reason to expect Republicans will overplay their hand to exact their pounds of flesh come January.

Rich Man, Poor Man, Beggar Man, Thief

The wealth gap in 2009 between the top 1% and the average American household rose to record levels thanks to the housing bubble exploding in the face of America's shrinking middle class.

The richest 1% of U.S. households had a net worth 225 times greater than that of the average American household in 2009, according to analysis conducted by the Economic Policy Institute, a liberal think tank. That's up from the previous record of 190 times greater, which was set in 2004.

The widening gap came even as wealthy households' average net worth tumbled 27% -- to about $14 million -- between 2007 to 2009. That's the first time that they suffered a decline since the three-year period of 1992 to 1995. 

Meanwhile, the average family's net worth plunged 41% -- to just $62,200 -- from 2007 to 2009, according to EPI's calculations.

"The typical person lost more because a bigger percentage of their wealth in 2007 had been the value of their home," said Heidi Shierholz, an economist with EPI.

The rich took a significant wealth hit during the financial crisis absolutely, but the average American household lost 40% of its value in the same time period.  And now in 2010 the wealthiest Americans have recovered nicely while the typical American family went nowhere.  I'd bet any economist that the 225 time multiplier went up in 2010, the only question in my mind is by how much.

And in 2011 remember that home prices will continue to decline for many Americans, making this problem even worse.

We've got a long way to go just to get back to the inequality of 2004.

StupidiNews!

• California gets a break from torrential winter rains, but only until later this weekend.
• Congressional Democrats have included a measure to prevent the President from closing Gitmo in the spending package he has signed.
• Ahead of WikiLeaks' promised reveal of information that could cause Bank of America executives to "resign", the company is buying up domain names critical of top execs.
• Aggressive deals and holiday discounts have boosted holiday online sales by 15% over last year.
• The FCC plans to approve the merge between Comcast and NBC Universal...with some strings attached.

Last Call

Rahmbo lives!

Rahm Emanuel is a Chicago resident and therefore can run for mayor, the Chicago Board of Election Commissioners ruled Thursday.

The unanimous ruling in favor of the former White House chief of staff comes after board hearing officer Joe Morris ruled early Thursday morning that Emanuel’s name should remain on the ballot even though he moved to Washington D.C. in 2009 to work for President Obama. After a hearing later in the morning, the board affirmed Morris’ decision that Emanuel didn’t lose his residency status and therefore can continue his campaign.

Board Commissioner Richard Cowen said the ruling was based on the fact that Emanuel never abandoned his residence in Ravenswood, which he established long before he and his family moved and rented out his home. Cowen said that although state law requires candidates to live in the state for a year prior to the Feb. 22 election, he said case law states that candidates only need to be physically present in the city to establish residency in the first place — not to continue it. Emanuel clearly intended to return to Chicago all along, Cowen said.

There's a reason why folks want him off the ballot:  he's going to win easily in February.  The downside is I expect Republican Sen. Mark Kirk to start giving Hizzoner Rahmbo a damn hard time, along with every other Republicans yelling "Chicago Way politics!" like it means something.

Ignore them.

Have Yourself A Merry Little Moosemas

And a Murkowski New Year.  Obama needs to be sending one ex-Republican Senator in particular some flowers.

Lisa Murkowski isn’t gunning down caribou on national TV like that other famous Alaskan, but the Republican lawmaker is going rogue in the Senate just weeks after staging the most stunning back-from-the-dead political win of the 2010 cycle.

Murkowski is already showing a fierce independent streak, becoming the only Republican to cast votes on all four items on President Barack Obama’s wish list: a repeal of “don’t ask, don’t tell,” a tax-cut compromise, the START deal and cloture for the DREAM Act.

The lame-duck votes capped a strange political odyssey for the Alaska Republican — one that started Aug. 31 when she conceded the GOP primary to tea-party-backed Joe Miller, continued when she resigned her leadership job in September and ended when she waged Alaska’s first successful statewide write-in bid to retain her seat.

Now, she heads back to the Senate with a fresh six-year term without owing much to either her home state party establishment or her Washington leadership. 

How important was Murkowski's backing of Obama's initiatives in the lame duck session?  Her 4 for 4 voting record puts her ahead of some 18 Democratic senators who broke ranks with the President at least once on those four issues.   She was the only returning Republican senator to vote for the DREAM Act.  The rest of the Republicans who did are all retiring or were defeated in primaries.

So yeah, Lisa Murkowski is the new Lady from Maine.

And none of this would have been possible without a generous contribution by one Sarah Palin, who backed Joe Miller's primary efforts to sink Murkowski.  How's that hopey changey thing workin' out for ya, sweetheart?

Perhaps Obama should send her some caribou sausage and a thank you note too.

Meanwhile, Palin's ignoring all the "I helped Obama's legacy" stuff and wants to have her ghost writer slap Iran some more to make herself feel better.

But we also need to encourage a positive vision for Iran. Iran is not condemned to live under the totalitarian inheritance of the Ayatollah Khomeini forever. There is an alternative — an Iran where human rights are respected, where women are not subjugated, where terrorist groups are not supported and neighbors are not threatened. A peaceful, democratic Iran should be everyone's goal. There are many hopeful signs inside Iran that reveal the Iranian people's desire for this peaceful, democratic future. We must encourage their voices...

By bombing the crap out of them!  Just like Iraq, where the grateful populace will greet their liberators with flowers and not an 8-year civil war between Sunni and Shiite.

Moosetastic.

Zandar's Thought Of The Day

The 111th Senate did set at least one new record:  63 filibusters broken by 60-vote cloture motions, two more than the 110th.

If you're wondering why Dems are all of a sudden smitten with the idea of reforming Senate rules, check out this chart, passed along by a Democratic source.

Over the last two years, Dems broke more filibusters than any Senate in recorded history. In fact the only other Senate that comes close was the last Senate, right after the GOP lost its controlling majority on the Hill.

In fact Republicans have filibustered over 275 times in the last 4 years, and of the 275 cloture motions, 213 got a vote and 124 of those cloture votes passed.  That's more than twice as much in the prior four years.

Nancy Pelosi got legislation through the House.  The silly 60-vote cloture rule killed hundreds of laws in the Senate.  Yeah, maybe it's time for filibuster reform.

In Which Zandar Answers Your Burning Questions

CNBC headline:

Just How Freaked Out Should You Be About A ‘Muni Meltdown’?

Well gosh, do you live in a city, county, or state in the United States? Do those governments provide public services that you use, such as road maintenance, police, fire protection, schools, public safety, sanitation and water?

Then yes, you might want to pay attention right about now.

And For His Next Trick...

Julian Assange is going to master the mysterious art of disappearing from Earth.  The best part of the trick is he's not going to be the one performing the magic act.

WikiLeaks will release top secret American files concerning Israel in the next six months, its founder Julian Assange disclosed yesterday.

In an excusive interview with Al Jazeera, Assange said only a meagre number of files related to Israel had been published so far, because the newspapers in the West that were given exclusive rights to publish the secret documents were reluctant to publish many sensitive information about Israel.

“There are 3,700 files related to Israel and the source of 2,700 files is Israel. In the next six months we intend to publish more files depending on our sources,” said Assange in the nearly one-hour interview telecast live from the UK.

Asked if Israel had tried to contact him though mediators, Assange said, “No, no contacts with Israel but I am sure Mossad is following our activities closely like Australia, Sweden and the CIA.

“The Guardian, El-Pais and Le Monde have published only two percent of the files related to Israel due to the sensitive relations between Germany, France and Israel. Even New York Times could not publish more due to the sensitivities related to the Jewish community in the US,” he added.

And you thought screwing with Bank of America was a bad idea?  Now he wants to air Israel's dirty laundry?  Well, if you thought the calls to assassinate Assange were loud before, you've not seen anything yet.  You have to hand it to the guy, if he's trying to become a martyr in the digital age, he's well on his way to ending up in a pine box.  Already he's being blamed for the end of corporate e-mail.

Balls of polycarbonate steel, that one.  Odds on him and WikiLeaks seeing 2012 just got a whole hell of a lot shorter, however.  Personally?  Yeah, I wouldn't want to be pissing on the Mossad right now, if they feel it would be better for Israel to zap the guy, they will end him.

That's A Roman Holiday, Indeed

Two embassies in Rome were attacked by bombs this morning, the Swiss and Chilean embassies were targeted and a third suspicious package was dealt with at the Ukrainian embassy.

The first explosion, a package bomb at the Swiss Embassy, seriously wounded the person who opened it, police said.

A second bomb exploded at the Chilean Embassy shortly afterwards, wounding one person, who was taken to a hospital, according to police.

And a "suspicious package" was found at the Ukrainian Embassy in the Italian capital, police said, but it turned out not to be dangerous.

Police were fanning out to check all embassies and consulates in Rome, they said. Many countries have two diplomatic missions in the city -- one to the Italian state and a separate one to the Vatican.

Bomb threats were phoned to City Hall and to another government office in Rome, the mayor's office said. No bombs have been found in either location.

There has been no claim of responsibility for the attacks.

The bombings come a day after police blanketed Rome in heavy security due to student demonstrations. 

Not sure who's behind this, but whoever it is, you're not helping.

Also, who bombs the Swiss Embassy?  Seriously?  That's just mean.  More on this as it comes in.

Classic Big Casino Games

And I'm not talking baccarat here.  Via John Cole comes this story of bankers winning a 1000 to 1 bet they couldn't lose and the 300 million Americans who lost it as a result (emphasis mine):

Two years before the financial crisis hit, Merrill Lynch confronted a serious problem. No one, not even the bank's own traders, wanted to buy the supposedly safe portions of the mortgage-backed securities Merrill was creating.

Bank executives came up with a fix that had short-term benefits and long-term consequences. They formed a new group within Merrill, which took on the bank's money-losing securities. But how to get the group to accept deals that were otherwise unprofitable? They paid them. The division creating the securities passed portions of their bonuses to the new group, according to two former Merrill executives with detailed knowledge of the arrangement.

Moral hazard for the win, folks.  Merrill turned their mortgage cole slaw factory into snake oil salesmen, paying them huge bonuses to buy stuff their own traders wouldn't touch.  The traders racked up millions.  The company went under and was bought out by Bank of America.

Within Merrill Lynch, some traders called it a "million for a billion" -- meaning a million dollars in bonus money for every billion taken on in Merrill mortgage securities. Others referred to it as "the subsidy." One former executive called it bribery. The group was being compensated for how much it took, not whether it made money.

The group, created in 2006, accepted tens of billions of dollars of Merrill's Triple A-rated mortgage-backed assets, with disastrous results. The value of the securities fell to pennies on the dollar and helped to sink the iconic firm. Merrill was sold to Bank of America, which was in turn bailed out by taxpayers.

What became of the bankers who created this arrangement and the traders who took the now-toxic assets? They walked away with millions. Some still hold senior positions at prominent financial firms.

And they're busy setting up the same Big Casino games again, because they know they can play all they want to and that the government will bail them out ten times out of ten.  Same games, different firm, same results.  These guys get the cash, we get the bill.  And the Wall Street reform passed will only address a tiny fraction of this mess.

The next crash crisis is coming.  My guess is that it'll be sooner rather than later, and this time it will be blamed on the taxpayer for daring to have Social Security when everyone knows our economy has to go towards paying off the moral hazard tables at the Big Casino.  Hell, as it is Republicans are going to de-fund the Consumer Financial Protection Agency, so that small fraction will go to zero.

And the next time the banks go busted, we'll get the check and told we have to take the cuts.  Felix Salmon sums it up:

Merrill’s antics are the reductio ad absurdum of bonus culture, and show why it’s so silly for investment banks to pay multi-million-dollar bonuses and reckon that they’re protecting their long-term franchise at the same time. Not everybody was as egregious as this. But the differences between Merrill and other investment banks were only of degree, not of kind.

And a degree of being caught, too.

If It's Thursday...

New jobless claims flat, down 3k to 420k, but the big chunk of data is durable goods for November, revised downward from 3.3% in October to -3.1%.  Ouch.

Continuing claims down to 4.064 million.  Not a good sign, still deflationary especially in conjunction with home prices still falling.

More Thursday numbers from Asariel over at the Great Redoubt.

Wrapping Up The 111

The 111th Congress has been gaveled to a close, and looking back on the last two years, Obama and the Democrats did score some massive legislative wins.  The President remarked on the last two years yesterday.

“We are not doomed to endless gridlock,” Mr. Obama said.

Speaking to reporters before leaving for a 10-day vacation in Hawaii, Mr. Obama hailed the flurry of accomplishments, including Wednesday’s approval of a new nuclear treaty with Russia.

He called the treaty “the most significant arms control agreement in more than two decades” and the top national security priority of the first half of his presidency.

“With this treaty our inspectors will also be back on the ground with Russian nuclear bases,” Mr. Obama said. He called the 71-26 vote a “powerful signal to the world.”

But Mr. Obama rejected an opportunity to gloat about the successes of the past several weeks by declaring himself the “comeback kid,” telling a reporter that the results are “not a victory for me. It’s a victory for the American people.”


In fact, the president appeared to go out of his way to suggest that Americans would see from him more of the kinds of compromises that led him to cut a deal with Republicans on the extension of tax cuts for the middle class and the wealthy.

“A lot of folks in this time predicted that after the midterm elections, Washington would be headed for more partisanship and more gridlock,” Mr. Obama said. Instead, he said, Washington politicians decided that it was time to find common ground.

“That’s a message that I will take to heart in the new year, and I hope my Democratic and Republican friends will do the same,” he said.

So, hope you appreciated the good times.  I assure you come January, the same people who said Obama didn't do enough will be happy for his veto pen.

Pension Tension

Since state and local governments refuse to raise taxes, their local pension funds are drying up and even vanishing.  All we seem to hear is that local government retirees have to accept cuts, but one city in Alabama simply stopped paying pension checks two years ago when it got into trouble despite that being against state law.  And Pritchard, Alabama is the future of millions of government employees.

Since then, Nettie Banks, 68, a retired Prichard police and fire dispatcher, has filed for bankruptcy. Alfred Arnold, a 66-year-old retired fire captain, has gone back to work as a shopping mall security guard to try to keep his house. Eddie Ragland, 59, a retired police captain, accepted help from colleagues, bake sales and collection jars after he was shot by a robber, leaving him badly wounded and unable to get to his new job as a police officer at the regional airport.

Far worse was the retired fire marshal who died in June. Like many of the others, he was too young to collect Social Security. “When they found him, he had no electricity and no running water in his house,” said David Anders, 58, a retired district fire chief. “He was a proud enough man that he wouldn’t accept help.”

The situation in Prichard is extremely unusual — the city has sought bankruptcy protection twice — but it proves that the unthinkable can, in fact, sometimes happen. And it stands as a warning to cities like Philadelphia and states like Illinois, whose pension funds are under great strain: if nothing changes, the money eventually does run out, and when that happens, misery and turmoil follow.

It is not just the pensioners who suffer when a pension fund runs dry. If a city tried to follow the law and pay its pensioners with money from its annual operating budget, it would probably have to adopt large tax increases, or make huge service cuts, to come up with the money.

Current city workers could find themselves paying into a pension plan that will not be there for their own retirements. In Prichard, some older workers have delayed retiring, since they cannot afford to give up their paychecks if no pension checks will follow.

So the declining, little-known city of Prichard is now attracting the attention of bankruptcy lawyers, labor leaders, municipal credit analysts and local officials from across the country. They want to see if the situation in Prichard, like the continuing bankruptcy of Vallejo, Calif., ultimately creates a legal precedent on whether distressed cities can legally cut or reduce their pensions, and if so, how.

“Prichard is the future,” said Michael Aguirre, the former San Diego city attorney, who has called for San Diego to declare bankruptcy and restructure its own outsize pension obligations. “We’re all on the same conveyor belt. Prichard is just a little further down the road.” 

In other words, cities are trying to figure out from a legal standpoint if they can just slash or eliminate completely pension checks to retirees.  And before you say "Yeah, screw those guys" remember, these workers paid into pension funds for decades, on top of Social Security taxes.  It would be like your employer of 30+ years saying "Sorry, we don't have the money to pay your 401(k).  You're on your own.  It's politically unpopular for us to pay it out to you in retirement and we're not going to raise 401(k) payments on our current workers to fund your bill.  Go work at Wal-Mart."

Not exactly a situation you or a loved one would want to be in, yes?  And yet over the next few years, local, county and state workers are going to find out the hard way the pensions they were promised and paid into for years aren't going to be paid back, and may not be paid back at all.

Think about that when you say "Better them than raise my taxes one dime."

Social Security is next.

[UPDATE]  Ken at Down With Tyranny also sees the writing on the wall for public employee pensions.

The colleague who passed along this NYT story commented: "Prichard, Alabama is going to be used as a model for voiding contractual commitments made to retired public workers. Once again, contracts for working Americans are worth shit, unlike contracts for Wall Street executives who broke the economy."

Ain't that the truth.