Year: 2009

Obama Decides to Try to Kowtow to Republicans

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Well, it now appears that Barack Obama is looking at about $300 billion of the stimulus package being taxcuts.

Why? Because he wants to get more than 80 votes in the Senate.

This is delusional, and it is wrong. The Republicans don’t care about making government work for the people, and if it doesn’t work, he will get the blame anyway.

Anything worth passing will not get Republican votes. Obama need only remember that Social Security passed without a single Republican vote….Not one.

I agree with Josh Marshall when he says, “Can someone help me come up with an argument for why the Obama stimulus plan isn’t turning out to be a painful joke?“

The Shrill One, Paul Krugman, makes the best point on his blog:

Look, Republicans are not going to come on board. Make 40% of the package tax cuts, they’ll demand 100%. Then they’ll start the thing about how you can’t cut taxes on people who don’t pay taxes (with only income taxes counting, of course) and demand that the plan focus on the affluent. Then they’ll demand cuts in corporate taxes. And Mitch McConnell is already saying that state and local governments should get loans, not aid — which would undermine that part of the plan, too.

He follows up with another good point in his column, that Republicans are already, “setting up roadblocks to stimulus legislation while posing as the champions of careful Congressional deliberation,” and then he follows up with the point that action needs to be taken quickly, and Republicans have no interest in taking action at all.

They believe that action in and of itself is evil.

Hilzoy notes, tax cuts give among the smallest GDP bang for the buck:

Not Enough Bullets: Weekend at Bernie’s

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Madoff, that is.

The prosecution wants his bail revoked. It appears that he has been transferring a significant amount of valuables to 3rd parties.

It appears that he has mailed in excess of $1million in items to friends and relatives:

The decision by Bernard Madoff and his wife to ship jewelry and others valuables to family and friends may land him behind bars sooner rather than later.

Assistant U.S. Attorney Marc Litt of the Southern District of New York told a magistrate judge Monday that Madoff and his wife Ruth mailed in excess of $1 million in valuables late last month despite a court order in a related civil case requiring the accused mastermind of a multi-billion dollar Ponzi scheme not to dissipate assets.

Most of the material has since been returned and handed over to federal authorities, but Litt said the transfer amounted to changed conditions that warrant Madoff detention as he awaits trial or a guilty plea on one of the largest frauds in history.

Defense attorney Ira Sorkin of Dickstein Shapiro said the mailing of the valuables, which included watches, a pair of cuff links and even a $200 pair of mittens, had nothing to do with allowing Madoff to remain free on bail.

$200 mittens?

Well, that was Fast

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Silvio Berlusconi dis something that George W. Bush could only dream of, he partially privatized the Italian social security system.

Well, the “beneficiaries”, of the policy, the roughly 1.2 million people who made the switch to privately managed accounts, are now screaming like defrauded Italians, (which they are) because their accounts have gone south with the markets, and the management fees have taken most of what is left, and now they want their bailout.

How many times does this have to happen until people realize that taking a safety net, and making it a revenue stream for a broker is a bad thing?

Obama Staffing Update

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Leon Panetta: C.I.A. Director.

What is interesting here is two things, he does not have previous intel experience, being Clintons Chief of staff for a time, and that he has Panetta op/ed forcefully stated his opposition to warrantless surveillance and torture.

Clearly, as a former CoS, he will know how to run a bureaucracy, and how to get the President’s attention, which should be helpful, though I still find it an odd pick.

We also have some more appointments at the Department of Justice

  • David Ogden for Deputy Attorney General;
  • Elena Kagan, Solicitor General;
  • Tom Perrelli, Associate Attorney General;
  • Dawn Johnsen, Assistant Attorney General for the Office of Legal Counsel.

No knowledge of them, though Glenn Greenwald is generally happy over the above appointments, and positively ecstatic over Dawn Johnsen.

Greenwald also reveals that Sen. Dianne Feinstein* and Sen. Jay Rockefeller are upset because they Panetta is not an “intelligence professional”, and because they feel that they were not consulted sufficiently.

*Full disclosure, my great grandfather, Harry Goldman, and her grandfather, Sam Goldman were brothers.

Maliki to Bush: Drop Dead

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Nouri al-Maliki is now saying that he will not allow Iraq to be used as a base to threaten their neighbors:

Prime Minister Nuri al-Maliki told Iran’s Arabic news channel on Friday that Iraq “will not let Iraq be a launching ground to threaten any country,” Al-Alam said on its website.

Just in case you are wondering, why yes, we have spent hundreds of billions of dollars and thousands of lives to put Iran’s bitch in control of Iraq.

The Stupidest Thing Written …….. On December 19, 2008

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It might be a the stupidest thing ever written on other days, but the internet is a vast place, so the the suggestion that increasing broadband internet access will lead to fascism may not be the stupidest thing ever written, but it is the stupidest thing that I’ve read in a long time.

It appears that Andrew Keen (who else, seriously, just wiki him) is alarmed at the fact that part of Barack Obama’s stimulus package will be directed toward expanding broadband access across the United States, and it might be, “Inadvertently laying the foundations for a return to fascism, the political catastrophe of the 1930’s.“

You see, the according to Mr. Keen:

The 1930s fascists were expert at using all the most technologically sophisticated communications technologies—the cinema, radio, newspapers, advertising—to spew their destructive, hate-filled message. What they excelled at was removing the the traditional middlemen like religion, media, and politics, and using these modern technologies of mass communications to speak with reassuring familiarity to the disorientated masses.

There are a couple of problems here:

  • They did not control these media until after they came to power.
  • The middlemen dominated the cinema, radio, newspapers, and advertising, then, as they do now, it was that they supported the fascists, because they thought that they might prevent the Bolsheviks from coming to power.

If you read the rest, I’m sure that you can find more.

Canary in a Coal Mine?

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When I started predicting a financial meltdown 5 years ago, I didn’t know a CDO, CDS, or MBS from a hole in the wall.

Truth be told, I’m only barely past that now.

What I was predicting was a real-estate crash followed by a recession, followed by a loss of status as a reserve currency, which would drive the dollar down and interest rates up.

So, I was really only right on one thing, the real estate crash, at least for now, which I figure is pretty good for someone with one economics course under his belt.

That being said, the recommendation by Akio Mikuni, president of the Japanese credit ratings agency Mikuni & Co., that Japan should unwind its holding in US Treasuries could be seen as a first step for the rest of the sequence:

The dollar may lose as much as 40 percent of its value to 50 yen or 60 yen from the current spot rate of 90.40 today in Tokyo unless Japan takes “drastic measures” to help bail out the U.S. economy, Mikuni said. Treasury yields, which are near record lows, may fall further without debt relief, making it difficult for the U.S. to borrow elsewhere, Mikuni said.

Interestingly enough, Mikuni is not suggesting flight from the US market, but rather that, “Japan should also invest in U.S. roads and bridges to support personal spending and secure demand for its goods as a global recession crimps trade.”

He’s talking about a Marshall Plan for America.

I’m wondering if this is just one (rather influential) guy spouting off, or the first few steps in a rush to the exits.

Election Update

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Minnesota first earlier, so now, let’s lead with Illinois.ABC News: Burris Credential Rejected by Senate Parliamentarian, which is no surprise.

Somehow, I think that Reid will get run over, like he always does.

In the meantime, the Minnesota Canvassing Board has certified Franken the winner, by 225 votes.

Note that state law precludes the issue of an election certificate can be issued for at least a week, and the Coleman camp says that it intends to mount a challenge in the courts.

That being said, the Minnesota Supreme Court has just rejected a challenge by Coleman, which claims that 654 ballots were improperly excluded.

I’m not surprised. They already ruled on this, and Coleman would need to pick up 225 votes, or 34.4% of the total, which would mean that he would need to outpoll Franken by over 2:1, which is simply not in the realm of reality.

The Senate Democrats want to seat Franken, at least provisionally, but Cornyn and the rest of the ‘Phants are promising a filibuster.

Finally, here is a little bonus feature for my reader(s), the future Senator for Minnesota, in tights, doing Mick Jagger : (H/T Josh Marshall)

Economics Update

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Just so you know, the whole auto industry is in a tailspin.

All the auto manufacturers are seeing sales fall by more than 30%, with Chrysler falling by a whopping 53%, year-over-year.

My guess as to Chrysler is that the American public realizes on some unconscious level that Cerberus is a pump and dump operation that cannot be trusted.

In real estate, construction spending was down by 0.6% from October to November, which was better than the consensus estimate of 1.4%, which to my mind is a serious WTF number. 1.4% a month is Sta-Puft Marshmallow man time.

In central-bank land, we have reports that the Federal Reserve and the ECB are working together to avoid deflation, which indicates that central bankers on the both sides of the pond are scared.

The ECB’s only charter is to control inflation, but now they are trying to figure out how to get inflation back into their economies.

No surprise that we are still seeing a flight to safety that is driving the dollar up against both the Euro and Yen.

In energy, oil is up again, largely on concerns about the Middle East, and retail gasoline was up 1.4¢/gal, the 6th straight day in a row, which seems to indicate that gas prices will be rising in the near future.

Finally, here is a pretty picture:

It’s a measure of the ISM Manufacturing index (I mentioned this last week). The graph is courtesy of The Bonddad Blog, and he accurately describes this as “cliff diving”.

Time to Dump Reid?

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Truth be told, I’ve had thoughts about dumping the Democratic Party Congressional leadership regularly, every waking minute in the case of Steny Hoyer, but I’m beginning to think that Reid may do a passable job of maintaining order in the Democratic caucus, he is is simply hopeless when dealing with opponents of that caucus.

In l’affaire Joe (Lieberman), he collapsed like a bunch of brussel sprouts too overcooked for consumption at a British boarding school, and now he is mishandling the seating of both the Burris (Blagojevich) and Al Franken.

First, we now have his “stand on principle,” followed by statements yesterday that negotiation was possible.

Then we have the reports that he’s having the Senate Parliamentarian reject Burris’s credentials for lack of a Secretary of State signature, which might be inspired, except for the fact, as Majikthise notes, the governor has a stack of papers pre-signed by the SoS for convenience, and may have used one, and that the Illinois Secretary of State has explicitly said that his signature is not required.

Follow this up with a generous dose of credible reports that Reid lobbied Blagojevich against appointing a black man to replace Obama. (Yes, I know, he didn’t, lobby against a black person as Senator, just all the possible black politicians in the state who might have the stature to do this. It’s a distinction without a difference.)

Finally, we have his tactics backfiring against Al Franken, with the Republicans promising a filibuster against seating the Senator-Elect from Minnesota using his arguments.

Also note that any delay in seating either of them makes it more difficult to break a filibuster: 98 Senators means 59 votes (all the Dems + Lieberman + 2 Republicans), 99 Senators means 60 votes, (all the Dems + Lieberman + 2 Republicans), and 100 Senators means 60 votes ((all the Dems + Lieberman + only 1 Republican) to get cloture.

Seriously, I’m beginning to think that he’s moonlighting as Senate Majority Leader, and that his day job is as the coach of the Washington Generals.

Election Update

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Not sure where to start, Minnesota, or Illinois….coin flip….Minnesota.

Well, after counting the absentee ballots that both campaigns agreed to, Al Franken’s lead over Norm Coleman has grown to 225. He added 176 votes while counting 933 ballots, which means that Franken polled 18.9% better on absentee ballots.

It appears that Obama’s push on early and absentee balloting paid off here.

Seriusly though, it’s game over, and Harry Reid and Chuck Schumer have both called for Coleman to concede.

The vote is expected to be certified some time today, at which point Coleman is expected to mount a challenge in the courts, but the burden of proof will then be on him.

In the mean time, Harry Reid is sounding a bit more conciliatory towards Roland Burris, saying that, “there’s always room to negotiate.”

I’m not sure what is going on here, except that Harry Reid has gotten played by Rod Blagojevich something fierce.

Obama Getting Rolled by Pentagon and NASA?

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It now appears that people in the Pentagon and in NASA are feedinb Obama and his transition team scare stories about a Chinese manned program to the moon:

President-elect Barack Obama will probably tear down long-standing barriers between the U.S.’s civilian and military space programs to speed up a mission to the moon amid the prospect of a new space race with China.

The argument is that the Chinese will be able to put a man back on the moon before the US’s goal of 2020.

It should be noted that planting a flag on the moon means nothing.

That China is making strides in space development is true, and the military implications are a legitimate concern, and the idea of replacing NASA’s Ares vehicles with existing vehicles, which means military launchers because NASA has meticulously destroyed the opposition on their end, is a good thing.

But this whole “race to the moon” thing is 6 pounds of sh%$ in a 5 pound bag.

If Obama and his team believe this, I have some ballots in Florida for them to count.

I Always Had a Soft Spot for This Aircraft

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It appears that they are going to be sending the canard equipped F-15 testbed to the boneyard. (Paid subscription required)

Originally called the short-take-off/maneuver-technology demonstration (SMTD) about 20 years ago, the aircraft was originally equipped with F-18 tail derived canards, square thrust vectoring nozzles, and a redesigned landing gear intended for rough field operations.

It demonstrated impressive improvements in STOL peformance and agility.

NASA is currently using it to research its quiet boom supersonic aircraft technology, as they felt the need to test a canard equipped airframe as one of the configurations.

When they are done, it’s going to the boneyard.

My Mouth Writing Checks…..

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So, I was at an Society for Creative Anachronism (SCA) event.

The SCA is a medieval living history group, and the event was Day of Dance II & Bardic Bachanal.

It was potluck with dancing and bardic (music and story telling).

At the end of the evening, someone publicly thanked the musicians, and we all applauded, and then I shouted out, “Play Freebird.”

And damned if they did not start to play “Freebird”, on a guitar, a mandolin, a tenor recorder, and a bowed psalter…The lyrics were a filk, rather than the original, but the tune was there.

My life is complete now.

Another Innovation Setback from the Financial Crisis

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It looks like Toyota may be making changes to its just in time inventory system as a result of the credit crunch.

They are worried that bankruptcies and liquidations of suppliers may leave them with no parts to make cars with.

The Japanese company may work with more partsmakers and increase inventories to mitigate the effects of a collapse among its U.S. suppliers, at least half of whom also work for Detroit automakers, Goss said. U.S. vehicle sales at a 26-year low have forced GM and Chrysler to seek government aid and left as many as a third of North American component-makers at risk of bankruptcy, according to consulting company Grant Thornton LLP.

(emphasis mine)

Basically, they are going to put up some warehouses and get a few weeks to a few months of parts to handle potential disruptions. This amounts to an abandonment of just-in-time, at least in the short term.

On the bright side, the increase in inventory will provide a small boost to the economy.

When Upper Management Should Be Fired

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Here we have a story where Macy’s, Gannett and the New York Times are facing problems servicing their debt.

Why do they have the debt? Because they borrowed money for stock buybacks so as to bump the price of their shares. (The New York times also blew the money on a shiny new headquarters)

They borrowed money for a stock buyback?

I can understand diverting profits to do so, it is an activity similar to paying dividends, but borrowing money to buy back stock?

Seriously, everyone in senior management who touched this decision needs to be fired.

Gaza Update

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I guess that the lede here is the deaths of Nizar Rayyan, who appears to be the most senior member of Hamas’ military wing, and Azkariah al-Jamal, leader of their rocket forces.

While al-Jamal was hit in his car, Rayyan was hit at his home, where he was staying with his 4(!) wives and 10 children, who were also killed in the strike.*

I can’t say that I’ll shed a tear over Rayaan or al-Jamal, though the deaths of family members is unfortunate.

Israel is still resisting calls for a truce, and there are increasing indications that Israel is preparing for a ground assault (also here)

In the world of the more surreal aspects of the war, there is a PR campaign between Israel and Hamas being conducted on YouTube, and in the reports of Israeli cell phone warnings to civilians in advance of strikes, we have another report confirming this activity, along with reports that Hamas is sending text message threats.

Again, let me state that I really want to hear the War Nerd’s perspective on all this, because his lack of moral dimension on his commentary provides more military insight.

*Reports are that he refused to go to ground, a stupidity that should be restricted to military leaders, and that he refused to allow his family to go elsewhere, which is wrong, and cowardly, on many levels.

Russia Increasing Test Launches of New SLBM

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Because of the most recent test failure of the Bulava SLBM, Russia will be increasing the number of test launches for the missile in 2009.

They had indented to do 3-4 test launches this year, but now they are committing to at least 5 launches.

They have been 5 for 10 on test launches, which is actually better than SLBM tests during the Soviet days, and this indicates a move back to more extensive testing, which I approve.

In reviewing US missile tests, it appears that there is a panic whenever their is a failure, because the test programs here are now based on the idea that everything will be caught in analysis, and that tests should progress without failures.

This does not work, and results in delays and cost escalation.