Month: March 2010


Barack Obama has finally realized that playing nice with the ‘Phants, and has made 15 recess appointments in response to Republicans filibustering his nominees.

Most notably are Craig Becker and Mark Pearce for the National Labor Relations Board, and and Jacqueline Berrien and Chai Feldblum in the Equal Employment Opportunity Commission, basically because these are people who won’t reflexively rule for the rich pig fat cats.

Personally, I would have gone further.

If the Republicans don’t want Becker or Pearce on the NRLB, the response should be to appoint Teamsters President James P. Hoffa, AFL-CIO President Richard Trumka, and SEIU President Andy Stern.

If the Republicans don’t like that, they can allow an up or down vote on the nominees.

Full White House statement after break

The White House

Office of the Press Secretary

For Immediate Release
March 27, 2010

President Obama Announces Recess Appointments to Key Administration Positions

Fifteen Appointees Have Waited an Average of 214 Days for Senate Confirmation

WASHINGTON –After facing months of Republican obstruction to administration nominees, President Obama announced his intent to recess appoint fifteen nominees to fill critical administration posts that have been left vacant, including key positions on the economic team and on boards that have been left with vacancies for months.

“The United States Senate has the responsibility to approve or disapprove of my nominees. But if, in the interest of scoring political points, Republicans in the Senate refuse to exercise that responsibility, I must act in the interest of the American people and exercise my authority to fill these positions on an interim basis,” said President Barack Obama. “Most of the men and women whose appointments I am announcing today were approved by Senate committees months ago, yet still await a vote of the Senate. At a time of economic emergency, two top appointees to the Department of Treasury have been held up for nearly six months. I simply cannot allow partisan politics to stand in the way of the basic functioning of government.”

Following their appointment, these nominees will remain in the Senate for confirmation.

Obama Administration appointees have faced an unprecedented level of obstruction in the Senate.

  • President Obama currently has a total of 217 nominees pending before the Senate. These nominees have been pending for an average of 101 days, including 34 nominees pending for more than 6 months.
  • The 15 nominees President Obama intends to recess appoint have been pending for an average of 214 days or 7 months for a total of 3204 days or almost 9 years.
  • President Bush had made 15 recess appointments by this point in his presidency, but he was not facing the same level of obstruction. At this time in 2002, President Bush had only 5 nominees pending on the floor. By contrast, President Obama has 77 nominees currently pending on the floor, 58 of whom have been waiting for over two weeks and 44 of those have been waiting more than a month.

The President announced his intention to recess appoint the following nominees:

Jeffrey Goldstein: Nominee for Under Secretary for Domestic Finance, Department of the Treasury
Jeffrey Goldstein is currently a Counselor to the Secretary of the Treasury. Mr Goldstein was a Managing Director of Hellman & Friedman LLC, a private equity investment firm with offices in San Francisco, New York and London. Mr. Goldstein served at the World Bank from 1999 to 2004, where he served as Managing Director and Chief Financial Officer. He oversaw the Bank’s work with its client countries in strengthening financial and capital market systems. Mr. Goldstein was the Bank’s point person on the International Development Association (IDA). He also helped lead the Bank’s relationship with the G-8 countries. As Chief Financial Officer, he was responsible for the Bank’s financial operations and budget. He was the Bank’s representative on the Financial Stability Forum and on the International Monetary Fund’s Capital Markets Consultative Group and Chairman of the Pension Finance Committee. Prior to joining the World Bank, Mr. Goldstein was Co-Chairman of BT Wolfensohn and a member of the Bankers Trust Company Management Committee. He held senior management positions and worked with BT Wolfensohn and its predecessor, James D. Wolfensohn Incorporated, for more than 15 years. Early in his career, Mr. Goldstein taught economics at Princeton University and worked at the Brookings Institution and the U. S. Department of the Treasury. Mr. Goldstein received his Ph.D., M.Phil., and M.A. in economics from Yale University. He received his B.A. with honors in economics from Vassar College (Phi Beta Kappa) and attended the London School of Economics. He is on the Board of Trustees of Vassar College and was Chairman of the Vassar College Investments Committee.

Michael F. Mundaca: Nominee for Assistant Secretary for Tax Policy, Department of the Treasury
Michael F. Mundaca currently is Senior Advisor for Policy within the Treasury Department’s Office of Tax Policy and the Acting Assistant Secretary for Tax Policy. Mr. Mundaca served in the Treasury Department during the Clinton Administration and returned to the Treasury Department in 2007, as the Deputy Assistant Secretary for International Tax Affairs. Before that appointment, he was a partner for five years in the International Tax Services group of Ernst & Young’s National Tax Department, in Washington, D.C. His practice focused on cross-border planning and structuring, including especially tax treaty issues, and on international legislative and regulatory monitoring and consulting. Before joining Ernst & Young, Mr. Mundaca served for over five years in Treasury’s Office of the International Tax Counsel, leaving as the Deputy International Tax Counsel. He was also Treasury’s Senior Advisor on Electronic Commerce. Prior to that first stint in Treasury, he was an associate at Sullivan & Cromwell, a law firm in New York. Mr. Mundaca has been an adjunct professor at the Georgetown University Law Center, teaching a seminar on tax treaties. Mr. Mundaca received a B.A. in philosophy and in physics from Columbia University, in 1986, and an philosophy from the University of Chicago, in 1988. He received a J.D. from the University of California, Berkeley, School of Law (Boalt Hall), in 1992, where he was Senior Executive Editor of The California Law Review and a member of the Order of the Coif. He also has an LL.M., in taxation (international tax specialization), from the University of Miami.

Eric L. Hirschhorn: Nominee for Under Secretary of Commerce for Export Administration and head of the Bureau of Industry and Security, Department of Commerce
Eric Hirschhorn, a partner in the Washington, D.C. office of Winston & Strawn LLP, long has been active in the areas of international law, litigation, and professional responsibility. As Deputy Assistant Secretary for Export Administration at the U.S. Department of Commerce (1980-81), Mr. Hirschhorn oversaw U.S. export controls for items having commercial as well as military applications, antiboycott compliance, restraints on imports for national security reasons, and the Department’s participation in the Committee on Foreign Investment in the United States (CFIUS). Earlier, while a member of President Jimmy Carter’s reorganization project staff (1977-80), he worked on reorganizing the government’s international trade, public diplomacy, and foreign assistance mechanisms. Before working in the Executive branch, Mr. Hirschhorn held several congressional staff positions, was in private law practice in New York City, and was a legal services lawyer. Mr. Hirschhorn has represented clients on a wide range of commercial and regulatory matters since returning to private law practice in 1981. He is Executive Secretary of the Industry Coalition on Technology Transfer (ICOTT), a group whose industry participants are affected by U.S. export control and embargo rules. He is the author of The Export Control and Embargo Handbook, Second Edition, published in 2004, and numerous articles on export controls, embargoes and related topics. He chairs the D.C. Bar Rules of Professional Conduct Review Committee and is a member (and former chair) of the D.C. Bar Legal Ethics Committee. He also is a member of the New York City Bar Association and the Thurgood Marshall American Inn of Court. Mr. Hirschhorn received his B.A. degree from the University of Chicago and a J.D. degree from Columbia University, where he was a Harlan Fiske Stone Scholar.

Michael Punke: Nominee for Deputy Trade Representative – Geneva, Office of the United States Trade Representative
Michael Punke has worked in the field of international trade law and policy for two decades. From 1995 to 1996, Punke served as Senior Policy Advisor at the Office of the United States Trade Representative. There, he advised the USTR on issues ranging from agricultural trade to intellectual property protection. From 1993 to 1995, Punke served at the White House as Director for International Economic Affairs with a joint appointment to the National Security Council and the National Economic Council. His responsibilities included assisting in the management of the interagency process. From 1991 to 1992, Punke was International Trade Counsel to Senator Max Baucus, then Chairman of the Finance Committee’s International Trade Subcommittee. Punke has also worked on international trade issues from the private sector, including as a partner at the Washington, D.C., office of Mayer, Brown, Rowe, & Maw. From 2003 to 2009, Punke advised clients on trade issues through out of Missoula, Montana. Since January 2010, Punke has served as a Consultant to the U.S. Trade Representative. He also has worked as an adjunct professor at the University of Montana and as a writer, authoring a novel, two books of nonfiction, and two screenplays. Punke is a graduate of George Washington University and Cornell Law School, where he was elected Editor-in-Chief of the Cornell International Law Journal.

Francisco “Frank” J. Sánchez: Nominee for Under Secretary for International Trade, Department of Commerce
Francisco J. Sánchez currently serves as a Senior Advisor to Commerce Secretary Gary Locke on international trade issues. He served as a Policy Advisor on Latin America to the Obama For America campaign. He was also the Chairman of the campaign’s National Hispanic Leadership Council. In 1999, Sanchez became a Special Assistant to President Clinton, working in the Office of the Special Envoy for the Americas. While at the White House, Sanchez worked with the National Security Council, the State Department and the U.S. Trade Representative. Clinton later appointed Sánchez as U.S. Assistant Secretary of Transportation where he developed aviation policy and oversaw international negotiations. Prior to his work in the federal government, Sánchez practiced corporate and administrative law with the firm of Steel, Hector and Davis in Miami, Florida. Before practicing law, he served in the administration of former Florida Governor (and later U.S. Senator) Bob Graham, as the first director of the state’s Caribbean Basin Initiative Program. For the last 15 years, Sanchez has worked with several consulting companies on projects involving complex transactions, labor-management negotiations, litigation settlement, negotiation strategy, alliance management, facilitation and training, most recently as a partner with CM Partners. Among his public-sector engagements, Sánchez headed a team in Medellín, Colombia as part of a “Teaching Tolerance” program. He also advised the president of Ecuador in negotiations to settle the 56-year-old border dispute with Peru. He is a contributing author to Negociación 2000, a collection of essays on negotiation published by McGraw-Hill. A Florida native, Mr. Sánchez attended the University of Florida, received his undergraduate and law degrees from Florida State University and holds a master’s degree in public administration from the Kennedy School of Government at Harvard University.

Islam A. Siddiqui: Nominee for Chief Agricultural Negotiator, Office of the U.S. Trade Representative
Islam A. Siddiqui is currently Vice President for Science and Regulatory Affairs at CropLife America, where he is responsible for regulatory and international trade issues related to crop protection chemicals. Previously, Dr. Siddiqui also served as CropLife America’s Vice President for agricultural biotechnology and trade. From 1997 to 2001, Dr. Siddiqui served in various capacities in the Clinton Administration at U.S. Department of Agriculture as Under Secretary for Marketing and Regulatory Programs, Senior Trade Advisor to Secretary Dan Glickman and Deputy Under Secretary for Marketing and Regulatory Programs. As a result, he worked closely with the USTR and represented USDA in bilateral, regional and multi-lateral agricultural trade negotiations. Since 2004, Dr. Siddiqui has also served on the U.S. Department of Commerce’s Industry Trade Advisory Committee on Chemicals, Pharmaceuticals, and Health/Science Products & Services, which advises the U.S. Secretary of Commerce and USTR on international trade issues related to these sectors. Between 2001 and 2003, Dr. Siddiqui was appointed as Senior Associate at the Center for Strategic and International Studies (CSIS), where he focused on agricultural biotechnology and food security issues. Before joining USDA, Dr. Siddiqui spent 28 years with the California Department of Food and Agriculture. He received a B.S. degree in plant protection from Uttar Pradesh Agricultural University in Pantnagar, India, as well as M.S. and Ph.D. degrees in plant pathology, both from the University of Illinois at Champaign-Urbana.

Alan D. Bersin: Nominee for Commissioner, U.S. Customs and Border Protection, Department of Homeland Security
Alan Bersin was appointed by Homeland Security Secretary Napolitano in April, 2009 as Assistant Secretary for International Affairs and Special Representative for Border Affairs in the Department of Homeland Security (DHS). In that capacity, he serves as the Secretary’s lead representative on Border Affairs and Mexico, for developing DHS strategy regarding security, immigration, narcotics, and trade matters affecting Mexico and for coordinating the Secretary’s security initiatives on the nation’s borders. Prior to his current service, Bersin served as Chairman of the San Diego County Regional Airport Authority. Previously, Mr. Bersin served as California’s Secretary of Education between July 2005 and December 2006 in the Administration of Governor Arnold Schwarzenegger. Between 1998 and 2005, he served as Superintendent of Public Education in San Diego and from 2000 to 2003 served as a member and then Chairman of the California Commission on Teacher Credentialing. Prior to becoming the leader of the nation’s eighth largest urban school district, he was appointed by President Bill Clinton as the United States Attorney for the Southern District of California and confirmed in that capacity by the U.S. Senate. Mr. Bersin served as U.S. Attorney for nearly five years and as the Attorney General’s Southwest Border Representative responsible for coordinating federal law enforcement on the border from South Texas to Southern California. Mr. Bersin previously was a senior partner in the Los Angeles law firm of Munger, Tolles & Olson. Mr. Bersin received his A.B. in Government from Harvard University (magna cum laude) and attended Balliol College at Oxford University as a Rhodes Scholar. In 1974, he received his J.D. degree from the Yale Law School.:

Jill Long Thompson: Nominee for Member, Farm Credit Administration Board
Jill Long Thompson is a former Member of the United States House of Representatives and the former Under Secretary for Rural Development at the United States Department of Agriculture. She also served as Chief Executive Officer and Senior Fellow at The National Center for Food and Agricultural Policy, a not-for-profit, non-advocacy research and policy organization. She is the first and only woman to be nominated by a major party to run for Governor in Indiana, as well as the first and only Hoosier woman to be nominated by a major party to run for the United States Senate. Long Thompson joined the faculty at Valparaiso University in 1981 and in 1983 was elected to the City Council. In 1989 Long Thompson was elected to represent Northeast Indiana in Congress. She went on to serve three terms in the House, where she was a member of the Agriculture Committee and the Committee on Veterans’ Affairs. She introduced one of the nation’s first pieces of legislation banning Members of Congress from accepting gifts and expanding the disclosure requirements for lobbying activities. After leaving Congress, Long Thompson was appointed by President Bill Clinton to serve as the Under Secretary for Rural Development at the United States Department of Agriculture. In her five years at USDA, she oversaw a $10 billion annual budget and 7,000 employees while managing a number of programs that provide services to the underserved areas of rural America. Long Thompson earned a B.S. in Business Administration from Valparaiso University and an M.B.A. and Ph.D. in Business from the Kelley School at Indiana University.

Rafael Borras: Nominee for Under Secretary for Management , Department of Homeland Security
Rafael Borras currently serves as a Vice President, Construction Services, for the Mid-Atlantic Region with URS Corporation, a global engineering services firm. Prior to joining the URS, Mr. Borras served as the Regional Administrator for the Mid-Atlantic Region of the U.S. General Services Administration. Prior to serving in this position, he served as Deputy Assistant Secretary for Administration in the U.S. Department of Commerce. Mr. Borras also served as Deputy City Manager in the City of Hartford, Connecticut, where he was responsible for the departments of finance, police, fire, code enforcement, information technology, purchasing, budget, and human relations. Mr. Borras began his public sector career with Metropolitan Dade County Government, serving in the Office of the County Administrator as an administrative officer.

Craig Becker: Nominee for Board Member, National Labor Relations Board
Craig Becker currently serves as Associate General Counsel to both the Service Employees International Union and the American Federation of Labor & Congress of Industrial Organizations. He graduated summa cum laude from Yale College in 1978 and received his J.D. in 1981 from Yale Law School where he was an Editor of the Yale Law Journal. After law school he clerked for the Honorable Donald P. Lay, Chief Judge of the United States Court of Appeals for the Eighth Circuit. For the past 27 years, he has practiced and taught labor law. He was a Professor of Law at the UCLA School of Law between 1989 and 1994 and has also taught at the University of Chicago and Georgetown Law Schools. He has published numerous articles on labor and employment law in scholarly journals, including the Harvard Law Review and Chicago Law Review, and has argued labor and employment cases in virtually every federal court of appeals and before the United States Supreme Court.

Mark Pearce: Nominee for Board Member, National Labor Relations Board
Mark Gaston Pearce has been a labor lawyer for his entire career. He is one of the founding partners of the Buffalo, New York law firm of Creighton, Pearce, Johnsen & Giroux where he practices union side labor and employment law before state and federal courts and agencies including the N.Y.S. Public Employment Relations Board, Equal Employment Opportunity Commission, the U.S. Department of Labor, and the National Labor Relations Board. Pearce in 2008 was appointed by the NYS Governor to serve as a Board Member on the New York State Industrial Board of Appeals, an independent quasi-judicial agency responsible for review of certain rulings and compliance orders of the NYS Department of Labor in matters including wage and hour law. Pearce has taught several courses in the labor studies program at Cornell University’s School of Industrial Labor Relations Extension. He is a Fellow in the College of Labor and Employment Lawyers. Prior to 2002, Pearce practiced union side labor law and employment law at Lipsitz, Green, Fahringer, Roll, Salisbury & Cambria LLP. From 1979 to 1994, he was an attorney and District Trial Specialist for the NLRB in Buffalo, NY. Pearce received his J.D. from State University of New York, and his B.A. from Cornell University.

Jacqueline A. Berrien, Nominee for Chair of the Equal Employment Opportunity Commission
Ms. Berrien has served as Associate Director-Counsel of the NAACP Legal Defense and Educational Fund (LDF) since September 2004. In that position, she assists with the direction and implementation of LDF’s national legal advocacy and scholarship programs. Ms. Berrien served from 2001 to 2004 as a Program Officer in the Ford Foundation’s Peace and Social Justice Program, where she administered more than $13 million of grants to promote greater political participation by underrepresented groups and remove barriers to civic engagement. Prior to joining the Ford Foundation, Ms. Berrien was an Assistant Counsel with LDF and directed the Fund’s voting rights and political participation work. For eight years before that, Ms. Berrien was a staff attorney with the Lawyers’ Committee for Civil Rights and the American Civil Liberties Union. Berrien has also taught in trial advocacy programs at Fordham and Harvard law schools and served on the adjunct faculty of New York Law School. She began her legal career clerking for the Honorable U.W. Clemon, the first African-American appointed to the U.S. District Court in Birmingham, Alabama. Ms. Berrien is a graduate of Harvard Law School, where she served as a General Editor of the Harvard Civil Rights-Civil Liberties Law Review. She received her Bachelor of Arts degree with High Honors in Government from Oberlin College and also completed a major in English.

Chai R. Feldblum: Nominee for Commissioner, Equal Employment Opportunity Commission
Chai Feldblum is a Professor of Law at the Georgetown University Law Center where she has taught since 1991. She also founded the Law Center’s Federal Legislation and Administrative Clinic, a program designed to train students to become legislative lawyers. Feldblum previously served as Legislative Counsel to the AIDS Project of the American Civil Liberties Union. In this role, she developed legislation, analyzed policy on various AIDS-related issues, and played a leading role in the drafting of the Americans with Disabilities Act of 1990 and, later as a law professor, in the passage of the ADA Amendments Act of 2008. She has also worked on advancing lesbian, gay, bisexual and transgender rights and has been a leading expert on the Employment Nondiscrimination Act. As Co-Director of Workplace Flexibility 2010, Feldblum has worked to advance flexible workplaces in a manner that works for employees and employers. Feldblum clerked for Judge Frank Coffin and for Supreme Court Justice Harry A. Blackmun. She received her J.D. from Harvard Law School and B.A. from Barnard College.

Victoria A. Lipnic: Nominee for Commissioner, Equal Employment Opportunity Commission
Victoria A. Lipnic is of counsel in the Washington, D.C. office of Seyfarth Shaw LLP. Ms. Lipnic was the U.S. Assistant Secretary of Labor for Employment Standards from 2002 until 2009. In addition to her work with the Department of Labor, Ms. Lipnic’s experience in Washington, D.C. includes service as Workforce Policy Counsel to the Republican members of the Education and Labor Committee in the U.S. House of Representatives. Before her work for Congress, Ms. Lipnic acted as in-house counsel for labor and employment matters to the U.S. Postal Service for six years. She also served as a special assistant for business liaison to the U.S. Secretary of Commerce, the Honorable Malcolm Baldrige. She earned a Bachelor of Arts degree in Political Science and History from Allegheny College and a Juris Doctor degree from George Mason University School of Law.

P. David Lopez: Nominee for General Counsel, Equal Employment Opportunity Commission
David Lopez has served at the Equal Employment Opportunity Commission (EEOC) for 13 years in the field and at headquarters. He began at the EEOC in 1994 as a Special Assistant to Commissioner Casellas. Currently, Mr. Lopez is a Supervisory Trial Attorney with the EEOC’s Phoenix District Office. During his tenure, Mr. Lopez has successfully tried several cases on behalf of the EEOC in a wide variety of legal bases. Before joining the Commission, Mr. Lopez served at the Civil Rights Division, Employment Litigation Section, at the U.S. Department of Justice in Washington, D.C. from 1991 to 1994. From 1988 to 1991, he was an Associate with Spiegel and McDiarmid. Mr. Lopez received a Juris Doctor degree from Harvard Law School in 1988 and a Bachelor of Science in Political Science from Arizona State University in 1985, magna cum laude.

Just Bloody Marvelous

It appears Orrin Hatch, who voted against the healthcare bill, and is claiming that the healthcare bill is unconstitutional, still managed to insert ¼ billion in funding for abstinence only education.


These programs don’t work, and in fact the only effect appears to be encourage higher risk behavior, like anal sex, but the Republicans have gotta pay off a constituency, and for some reason, the Dems have let them.

F%$# that.

Not a Good Week for the JSF

Click for full size

The Problem: As development times of microprocessors and cars have remained steady or fallen, fighter development times have exploded.

The GAO has released its report on the JSF, and the nickel tour, as described by Bill Sweetman, is rather brutal:

The good news for the JSF program in the March 20 Government Accountability Office report – combined with the other numbers released in March – is that the program is no longer at risk of failure.

The bad news is that it has already failed.

(emphasis mine)

It’s true.

The $50 million (2002 dollars) affordable aircraft is now a $106+ million ($127+ million for the B & C versions, 2010 dollars) aircraft, and there are still significant technical hurdles to its success:

  • There is no money to pay for the alternate engine (F136).
  • The current engine, the F135 has deep and real cost and performance issues.
    • The term for these first two items is “Catch 22”: You cannot afford a alternate engine, and not having an alternate engine means that you lack a lever to force the contractor to address issues with cost and reliability.
  • Cost reduction efforts have under performed.
  • There are indications that there is significant price elasticity of demand for foreign customers, which means that they will purchase fewer, or cancel contracts, as costs increase, which will further increase unit cost. (See the Danes, below)
  • Direct operating costs are slightly more than the F-15, and significantly more than the F-16 which it is tasked to replace.

DARPA has looked at this, and concluded that the system engineering techniques used in aerospace are largely responsible for the program, because they take the top level requirements and “stovepipe” them down the chain, where they remain isolated until they eventually come together in something that resembles a multi-car pileup

In any case, one of the consequences of the cost and schedule slippage has been that the Danish government has decided to delay any decision on purchasing the F-35.

I see this as a prelude to cancellation: If they aren’t ready to buy the $106 million dollar aircraft now, they won’t be willing to buy the $126 million dollar aircraft in 4 years. (link to Google translation of the report)

Basically, once you commit to a purchase, it’s very tough to pull out, even when the cost escalates, but if you defer the decision, and the cost escalates, it’s a no brainer to stay out of the program.

The program appears to be in a death spiral, where increasing unit costs reduce purchases, which increases unit costs, etc., or to quote The Boss, “It’s a death trap, it’s a suicide rap.”

Well, Both of You are Going to Get More of My Bloggy Goodness

The client firm, which is doing a maintenance manual for a Post Office mail sorter, did not get a bridge contract for the next stage of the contract, so they let the contractors go today, so as soon as the Passover Yom Tovim* are over, I back to calling around for a job.


Sometimes life sucks.

*Some Jewish holidays, like Purim and Hanukah, come from somewhere other than Torah, and so there are few, if any restrictions on what you are supposed to do, while others, like Rosh Hashanah and Yom Kippur, are mentioned in Torah, and so activities are restricted by Jewish law, much in the same way that they are for Shabbat, where “work” (long story) is forbidden. (It’s marginally more lenient). Days 1, 2, 7, and 8 of Passover are Yom Tovim outside of Israel (longer story), and so, out of respect for my wife, and her mother, who will be visiting, I won’t be online those days.

Mixed Ruling on Campaign Finance

This is a consequence of the Citizens United case, and the ruling was that independent advocacy groups can raise donations of any size, striking the $5000 limits but the disclosure requirements stand, and, in a separate ruling, the contribution limit remains for party organizations

The Republican National Committee is promising an appeal of the latter ruling.

It is not an unalloyed bad day for campaign finance reform, but on a scale of 1-10, I’d give it a 3-4.

Another Whack at the Foreclosure Epidemic

And once again, it’s a swing and a miss, because once again, it’s an attempt to use the carrot on banks, a rather generous payout for principal reductions, along with giving banks an incentive to shovel their most toxic mortgages to the FHA, as opposed to a stick, in the hope that house prices somehow recover.

They won’t ever that is what “post bubble” means.

But once again, Larry Summers* and His Evil Minionsbailing out the banks, not the homeowners. The goal is to keep the toxic nature of the mortgages off of the banks’ books.

Little things, like banning prepayment penalties, which lock people into bad mortgages, and allowing mortgages to be modified in bankruptcy (cram down), would give lenders the incentive to deal fairly.

But that’s not gonna happen.

*But remember, the Cossacks work for the Czar.

Joe Lieberman with Better Hair*

OK, so Blanche Lincoln is polling horribly against her Republican opponents, who basically have the name recognition of Cranston Snord, she is in favor of the banks, and the health insurance companies, and now she is running robocalls accusing her Democratic primary Bill Halter opponent of taking union money:

The Senators phone survey first asks how the constitutient feels about Lt. Gov. Halter. The survey then goes on to ask the constitutient if they are aware that the Lt. Governor has accepted money from unions.

Note that the distinguished lady from Arkansas has taken well over $½ million in labor PAC money in her career, despite the fact that she has been the Senator from Walmart, and now that labor unions are supporting her opponent, they are, of course portrayed as the font of all evil.

Seriously, I understand the desire to support a loyal Democrat who might be a conservative, but given her record on labor issues, healthcare, etc., she’s a disloyal Democrat.

Note that Mr. Halter is on my Act Blue Page, I support Bill Halter for Senate.

Barack Obama, on the other hand, supports Blanche Lincoln: he has formally endorsed her.

*Originally, I was going to say, “With t**s,” but I decided that that is insufficiently sensitive new age guy.
Who, you ask, is Cranston Snord? And that is, of course, my point.

Economics Update

Well, they just revised down the 4th quarter GDP numbers down again, to a 5.6% annual rate, the earlier estimate had been 5.9%.

On the brighter side, incomes rose faster than GDP, which gives a boost to the idea that some sort of recovery is going on.

Meanwhile, in high fiance, Ambac’s dance of death continues, with the International Swaps and Derivatives Association, Inc. (ISDA) ruling that the regulator action yesterday constitutes a trigger for bankruptcy CDS contracts.

Meanwhile, the apparrent resolution of the Greek crisis has pushed the US dollar down on reduced demand for safe havens, and oil prices fell marginally.


Well, it looks like the issue with a possible default by Greece has been resolved, for a while at least, by a joint action of the EU and the IMF.

I think that this puts to rest the idea that Greece will leave the Euro, for a while at least, but the real problem is that the Germans have structured the Euro with the goal of furthering their mercantilist export driven goals, much as the Chinese have with the Yuan, and the solution here is not to kick the Greeks out of the Euros, but to kick the Germans out of the Euro.

Simply put, the German desire for new export markets has made them push aggressively for countries to join the monetary union before it is prudent, and to encourage them to do so by providing economic aid and by overvaluing the sovereign currency.

Unfortunately, this creates asymmetries that are creating the problems that we have now, and it will be a tough thing to avoid something like the downfall of European Exchange Rate Mechanism that occurred when George Soros, “Broke the Bank of England.”

The problem is that, absent the labor mobility that exists in the United States, where one need neither a work permit nor to learn a new language, these asymmetries will persist.

This has been further reinforced by the efforts of Europhiles to jump-start the mechanisms of European integration through direct and indirect subsidies to entice new members to join prematurely.

Damn ………… I gotta make this a longer form, and submit it to Marketplace as a guest editorial.

Economics Update

It’s jobless Thursday, and initial jobless claims fell by 14K to 442,000, though it should be noted that a change to seasonal adjustments accounted for 11K of that 14 K.

The less noisy 4 week moving average fell by 11K to 453,750, and continuing claims fell by 54K to 4.65 million, the lowest number in 1¼ years.

All in all, good news, but we are still not at a number where we would see real job growth.

In the intersection of real estate and finance, we have 13.6% of US mortgages being delinquent in the 4th quarter of 2009, up by 0.9% from the 3rd quarter.

In a blast from the past, we have a development in the slow motion immolation of the monoliner insurers with the largest of the bond insurers, Ambac, had the Wisconsin Office of the Commissioner of Insurance take control of roughly $35 billion of insurance contracts on residential mortgages.

They have direct the troubled insurance company to segregate these contracts into separate accounts.

You arrogant ass. You’ve killed us!

Just so you know, it appears that the financial weapon of mass destruction, the Credit Default Swap is rearing its ugly head once again, as the segregation of accounts may constitute a “default” under the terms of the credit default swap contracts on these assets.

Seriously, this sh%$ is going to destroy us if we don’t get a handle on it. (Cue captain Tupolev)

Finally, in currency the Euro has rebounded slightly off its low on reports of an imminent solution for the Greek crisis, though these concerns were still enough to push oil prices down.

Reconciliation Sidecar Is Approved

The House of Representatives just approved the minor changes to reconciliation side car.

Note that, once again, the public option got left on the sidelines.

The Senate said that they had more than 50 votes for it, and the House is supposed to have more than 217 for it, and with the tweak, it could have been put in, but it wasn’t.

Maybe it had something to do with the fact that Barack Obama agreed to kill the public option very early in this process:

For months I’ve been reporting in The Huffington Post that President Obama made a backroom deal last summer with the for-profit hospital lobby that he would make sure there would be no national public option in the final health reform legislation. (See here, here and here). I’ve been increasingly frustrated that except for an initial story last August in the New York Times, no major media outlet has picked up this important story and investigated further.

John Walker at FDL notes the shifting reasons for killing the public option, and draws what I think is the accurate explanation:

It is foolish to believe that a President, Senate Majority Leader, and Speaker of the House with historically large majorities couldn’t get a public option–which roughly 65% of the country supported–if they really wanted one. Clearly, if they all really wanted to include a public option, they could have done it using reconciliation. To accept their many different excuses of powerlessness requires one to completely suspend reality.

Occam’s razor teaches us the simplest explanation is usually the correct one. Here, the simplest explanation is that, months ago, Obama promised to kill the public option as part of a secret deal with the for-profit hospital lobby, and that for months he lied to the American people about supporting the public option while working behind the scenes to stop it.

So, when exactly does that changing the way Washington works thing start again?

(emphasis mine)


David Frum Fired By the AEI

He has been fired as a fellow at the American Enterprise Institute.

It probably has something to do with his recent comments about the Republican party’s missteps.

Fellow pariah right winger Bruce Bartlett actually invoked Stalin in his comments on the affair, though he wimped out and only used the “S” word in his URL. “groupthink-right-would-make-stalin-proud.”

Bartlett notes that the AEI “experts” on healthcare had been muzzled:

Since, he [Frum] is no longer affiliated with AEI, I feel free to say publicly something he told me in private a few months ago. He asked if I had noticed any comments by AEI “scholars” on the subject of health care reform. I said no and he said that was because they had been ordered not to speak to the media because they agreed with too much of what Obama was trying to do.

It is noteworthy that Rupert Murdoch’s Wall Street Journal calls it a resignation, which even the Washington Post did not try to foist off on their readers.

Here is Mr. Frum’s letter of resignation:

Dear Arthur [Brooks, AEI President],

This will memorialize our conversation at lunch today. Effective immediately, my position as a resident fellow at the American Enterprise Institute is terminated. I appreciate the consideration that delays my emptying of my office until after my return from travel next week. Premises will be vacated no later than April 9.

I have had many fruitful years at the American Enterprise Institute, and I do regret this abrupt and unexpected conclusion of our relationship.

Very truly yours,

David Frum

And the WSJ says that he “quit”.

Least Shocking News of the Day

According to polls, the American public thinks that Wall Street and the big banks are evil and they want them flayed and staked to anthills:

Most people interviewed in the Bloomberg National Poll say they don’t like Wall Street, banks or insurance companies and favor letting the government punish bankers who helped cause the worst financial crisis since the Great Depression.

OK, so maybe I exaggerate a bit, but it has the ring of truthiness, and they did not ask about flaying or anthills in the poll.

Even less shocking is the response of the banks to the news of these attitudes, a brand new PR campaign:

One of Wall Street’s main lobbying groups is starting an image-improvement campaign aimed at showing the financial industry as trustworthy and a positive force after more than a year of being chastised in Washington.

You know, if you stopped making your goal f%$#ing the ordinary American, people might like you more.