A centrist Democrat after extensive poll research and discussion with lobbyists.

Paul Krugman vents via today's op-ed in The New York Times:

When I first began writing for The Times, I was naïve about many things. But my biggest misconception was this: I actually believed that influential people could be moved by evidence, that they would change their views if events completely refuted their beliefs.

And to be fair, it does happen now and then. I’ve been highly critical of Alan Greenspan over the years (since long before it was fashionable), but give the former Fed chairman credit: he has admitted that he was wrong about the ability of financial markets to police themselves.

But he’s a rare case. Just how rare was demonstrated by what happened last Friday in the House of Representatives, when — with the meltdown caused by a runaway financial system still fresh in our minds, and the mass unemployment that meltdown caused still very much in evidence — every single Republican and 27 Democrats voted against a quite modest effort to rein in Wall Street excesses.

Krugman then goes on to tell a short, rational, fact-based story of U.S. financial history and the events leading up to last year's market crash. Well worth the full read.

Bottom line? In all arenas -- health care and financial reform, national security, education, whatever -- Republican's continue to spout their trademark brand of crazy rhetoric. It's the so-called centrist Democrats that I can't stand. The Republicans will say anything to tear down the Dems and get their party back into power. Simple power play. I get it. They believe in themselves and, collectively, in their party. The centrist Dems, on the other hand, claim to stand by values in line with the Democrats yet believe in nothing but getting themselves reelected, by any means necessary. At best they're mercenaries, at worst nihilists. And while that must be exhausting for them, they're ruining the future for the rest of us.

Our foundation, the rule of law.

From 2001-2008, the Department of Justice was transformed from a respectable, reasonably-run segment of the executive that operated to prosecute violations of the law into a partisan frat house on the Monday after a weekend-long party. Drunk with power, philosophically opposed to the rule of law, or simply used as a political tool, the DOJ under W followed the fundamental belief that if you are in charge and you win, then justice has been done. Though blind, Justice could still act improperly and at odds with political goals. Better to cover her, lest other goals be compromised. Regardless of the means, the ends were all that mattered.

Of course, winning is not the same as doing justice. As part of his campaign for President, Obama, an excellent lawyer in his own right, promised major changes to the DOJ. Once elected, our new President started at the top, installing an Attorney General who understands the import of the rule of law and of justice as central to the DOJ's mission.

As one of his first major acts, AG Holder shockingly decided not to contest the appeal of Ted Stevens. Formerly the Republican Senator from Alaska, Stevens had been convicted for corruption under W.

Now you might be saying to yourself "How could this have been a partisan play by W's cronies?" or "Why would the Republicans go after one of their own?" A number of reasons...

1. Stevens had run into trouble with the press for pushing for pork projects such as the "bridge to nowhere."
2. One of the oldest Senators, he seemed behind the times and out of touch, once famously calling the Internet a "series of tubes."
3. Between 1 and 2, he was giving the party a bad name and hurting the party's image. As such, Senator Stevens had made himself expendable.
4. With Gov. Palin running for Vice President as an anti-corruption, anti-establishment candidate, it helped her story to say that she got rid of corruption in her state. Who better for her to take down than Alaska's own long-serving, powerful state Senator?
5. Ted Stevens represented a highly conservative constituancy. Even were he to be run out of town, it was likely that a different Republican would take his spot. In fact, even though he was facing these corruption charges during his campaign, Stevens was only narrowly defeated by his Democrat opponent.

So if the prosecution of Stevens was a partisan play by Republicans, then shouldn't Holder's decision to drop the case also be seen as partisan?

That argument might have some weight, had Holder not clearly stated his reasons for dropping the charges.

The federal judge presiding over the Stevens decision "said he had never seen such mishandling of a case by prosecutors. He took the extraordinary step of opening an investigation into whether the Justice Department attorneys broke the law by withholding evidence, and he encouraged Holder to increase training for new and experienced prosecutors."

In response, Holder said the following:

There are things that we have to take into account given what has happened recently, with regard to training, with regard to resources, and I expect that we'll have some announcements to make to you all in the not too distant future. . . .

I always want to ensure that the Justice Department acts in a way that is consistent with the long tradition of this great department — that we treat people fairly, that if we make mistakes we admit them and that we then take the appropriate action.

In other words, there's a new Sheriff in town.

What's more, Holder isn't stopping at spouting rhetoric to the press. A friend and federal Public Defender, passed on this quote today:

Your job as assistant US attorneys is not to convict people. Your job is not to win cases. Your job is to do justice. Your job is in every case, every decision that you make, to do the right thing. Anybody who asks you to do something other than that is to be ignored. Any policy that is at tension with that is to be questioned and brought to my attention. And I mean that.

-- Eric Holder, Attorney General of the United States

Notice that Holder wasn't talking to those who work directly for him, or to those in charge of big cases. He was talking to assistant US attorneys. He was talking to the foot soldiers of the department, the grunts, the younger attorneys who might have worked exclusively under the prior administration, the DOJ attorneys most in need of retraining.

And, with that statement, the pursuit of justice and respect for the rule of law returned to their proper places as guiding principles of the DOJ.

Politics transforms a reasoned system into a tool for control.

Nobel-laureate Paul Krugman is "perturbed by the state of debate over fiscal stimulus. ... This has not been one of the profession’s finest hours."

There are certainly legitimate arguments against spending-based fiscal stimulus. You can worry about the burden of debt; you can argue that the government will spend money so badly that the jobs created are not worth having; and I’m sure there are other arguments worth taking seriously.

What’s been disturbing, however, is the parade of first-rate economists making totally non-serious arguments against fiscal expansion.

Everyone he lists in his post is politically conservative, to which he says...

That’s their right: economists are citizens too. But it’s hard to avoid the conclusion that all of them have decided on political grounds that they don’t want a spending-based fiscal stimulus — and that these political considerations have led them to drop their usual quality-control standards when it comes to economic analysis.

Think back to the time between 9/11 and the Mission Accomplished press conference, when anyone who disagreed with President Bush was deemed, at best, a partisan opponent and, at worst, a traitor. Reasoned, honest debate was squashed as disingenuous political maneuvering.

Those were challenging, uncertain times, but the scale of that threat is dwarfed into absurdity by the systemic economic collapse continuing around us today.

When met with a crisis, we look to detached, objective experts to provide leadership and to create a path to safety. Economists who, thanks to their past, excellent work, have emerged as experts and leaders are brought front and center under the spotlight of societal need.

To revel in the spotlight and masquerade political plays as reasoned opinion is an abuse of trust and tarnishes the reputation of these experts. While the personal harm may be great, even worse is the harm to society. Krugman left the gloves on for that post, but should the posturing continue, I hope he ignores restraint and unleashes fury.

I expect that Obama and his team will have the confidence and security to cut to the truth. The real question is how will Congress respond? The last, Democratically-led Congress was weak. Hopefully now the leadership will be hitting their stride and will similarly be able to work for the public good. If, instead, politics trumps objectivity, we're all in trouble.

[Image by Warren Noronha, used under a Creative Commons license.]

The shirt Geithner should wear for his first day on the job.

Even before word came on Tuesday that Citigroup might split into pieces to shore up its finances, an unpleasant message was moving through Congress and President-elect Barack Obama’s transition team: the banks need more taxpayer money.

In all likelihood, a lot more money. . . .

On Tuesday, Mr. Bernanke publicly made the case that one of the most unpopular and most scorned programs in Washington — the $700 billion bailout program — needs to pour hundreds of billions more into the very banks and financial institutions that already received federal money and caused much of the credit crisis in the first place.

The most glaring example that the banking system needs even more help is Citigroup. Though it already has received $45 billion from the Treasury, it is in such dire straits that it is breaking itself into parts. . . .

Industry analysts estimate rising unemployment and business failures will lead to another $500 billion to $750 billion of losses in coming months. That could bring total losses from the credit crisis to $1.5 trillion to $1.8 trillion, twice as high as earlier estimates.

Citigroup is not alone. JPMorgan Chase, Bank of America, Wells Fargo and most other big banks all expect enormous losses as millions of consumers default on their mortgages, credit cards and automobile loans. Other losses are expected on loans made to commercial real estate developers, small businesses and for highly leveraged corporate buyout deals.

Most egregious of these is Bank of America, who already absored Merrill Lynch and received $25 billion from the Treasury via the TARP and then acquired Merrill Lynch. BoA is now "seeking billions more to shore up its balance sheet as it struggles with mounting losses at Merrill Lynch." As a reddit poster notes, this is equivalent to the South Park Underpants Gnomes' [brilliant] synopsis of the moronic dotcom business model:

• Step 1: Bank of America needs and gets bailout money.
• Step 2: Flush with cash, BOA buys Merrill Lynch.
• Step 3: ? ? ?
• Step 4: Bank of America needs more bailout money.

The government’s willingness to feed Bank of America a new tranche of taxpayer money comes on the heels of greater federal intervention in Citigroup. After pumping more than $45 billion in Treasury money onto its balance sheet, the government has put pressure on Citigroup to dismantle its troubled empire in an effort to stop losses and curb capital injections. . . .

[Still,] “Citi is being unwound because it’s too big and the government wants it smaller,” said Paul Miller, an analyst with Friedman Billings Ramsey. “I think Bank of America, either a year or two out, is going to be dismantled also because its returns are going to be too weak. No management has the expertise or brain power to provide the right required return for investors with institutions that are this size.”

Brace yourselves -- this recession (depression?) is just getting warmed up.

Tax plans drawn to scale.

I've gotten into a few debates recently with friends who oppose Obama's tax plan for two main reasons: (1) they feel that raising the capital gains tax will hurt the national economy by discouraging investment and removing liquidity from the market; and (2) taxes are going up for those households making over $250,000 per year. That's not much money, they argue -- a good chunk of my friends have advanced degrees (with associated debt) and live in S.F. and NYC. If they want to even dream of owning their own apartment in a decent neighborhood, making that kind of money is a necessity.

If you agree with point number two, first take a look at the chart above, which shows how the tax plans of McCain and Obama will directly impact different segments of the population.*

Clear? Good. Welcome back. Next, Daniel Gross takes apart the second argument in his Slate article "The deluded Obama critics who think $250,000 is a middle-class salary."

Barack Obama's tax plan, . . . promises to improve the nation's fiscal standing by scaling back tax cuts for people making more than $250,000. Since then, the business pundit class has been griping that people who make $250,000 a year aren't really wealthy, especially if they live in and around New York; San Francisco; or Washington, D.C. . . . On Wednesday afternoon, CNBC's unscientific online poll found that (surprise!) only 35 percent of respondents believed an income of $250,000 qualified a household for elite rich status.

I have two pieces of bad news for the over-$250,000 crowd. First, the reversal of some of the temporary Bush tax cuts is probably inevitable, given the Republican fiscal clown show of the past eight years. Second, I regret to inform you that you are indeed rich. . . . [I]ncome data can surely tell us something. And they tell us that $250,000 puts you in pretty fancy company. The Census Bureau earlier this week reported that the median household income was $50,223 in 2007—up slightly from the last year but still below the 1999 peak. So a household that earned $250,000 made five times the median. In fact, as this chart shows, only 2.245 million U.S. households, the top 1.9 percent, had income greater than $250,000 in 2007. (About 20 percent of households make more than $100,000.)

In dealing with aggregate nationwide numbers, we should of course take account of the significant differences in the cost of living from state to state. . . . But even in wealthy states, $250,000 ain't bad—it's nearly four times the median income in wealthy states like Maryland and Connecticut. And even if you look at the wealthiest metropolitan areas—Washington, D.C. ($83,200); San Francisco ($73,851); Boston ($68,142); and New York ($61,554)—$250,000 a year dwarfs the median income.

Still feel that $250,000 isn't much money? Let me know why -- I'd love to discuss.

[Update -- According to this 1997 paper put out by the Fed [pdf], 1% of the population owns 82% of the stock market.]

* Looking at tax policy alone can be misleading, especially because of the radical differences in proposed health care plans.

So mark Feb. 17, 2009, on your calendar. That's the date when over-the-air broadcast television stations stop transmitting in analog signals and turn on digital television broadcasts, called DTV. The effect, for anyone who receives over-the-air television with an analog television, will be a blank screen. . . . Make no mistake about this: it will be a train wreck.

There are several additional steps the government should take right now to ensure that those at risk of either not receiving nor understanding the message do get it. The Social Security Administration should include a simple notice of the change and the steps an over-the-air viewer must take with every Social Security check or deposit acknowledgement. Further, the U.S. Postal Service could also distribute a flyer with every mail delivery several times during the remainder of this year and then again in January 2009.

Unless the government does a much better job of ensuring that everyone gets the message, many won't. The result will be a fiasco.

Completely on target. From what I've read, that NC test had a 0.5% fail rate, which sounds great until you realize that this was under optimal conditions with extensive community outreach. Expanded out to the entire country, even this near-perfect performance leaves one million people tuning in to snow. Feb. 17, 2009 is going to be interesting. I'm expecting a run on converters at Target and Walmart, and a lot of unhappy calls to customer support.

Under current law, [Network Operators] can block certain files or Web sites for their subscribers, or slow or obstruct certain applications. And they do, albeit pretty rarely. Network providers have censored anti-Bush comments from an online Pearl Jam concert, refused to allow a text-messaging program from the pro-choice group Naral (saying it was “unsavory”), blocked access to the Internet phone service (and direct competitor) Vonage and selectively throttled online traffic that was using the BitTorrent protocol.

And what is likely to happen without government regulation? What if the operators are free to do what they want to "optimize traffic" over their network? 

[Network Operators] won’t be blocking anything per se — we’ll never know what we’re not getting — they’ll just be leapfrogging today’s technology with a new, higher-bandwidth network where they get to be the gatekeepers and toll collectors. The superlative new video on offer will be available from (surprise, surprise) them, or companies who’ve paid them for the privilege of access to their customers. If this model sounds familiar, that’s because it is. It’s how cable TV operates.

We can’t allow a system of gatekeepers to get built into the network. The Internet shouldn’t be harnessed for the profit of a few, rather than the good of the many; value should come from the quality of information, not the control of access to it.

For some parallel examples: there are only two guitar companies who make most of the guitars sold in America, but they don’t control what we play on those guitars. Whether we use a Mac or a PC doesn’t govern what we can make with our computers. The telephone company doesn’t get to decide what we discuss over our phone lines. It would be absurd to let the handful of companies who connect us to the Internet determine what we can do online. Congress needs to establish basic ground rules for an open Internet, just as common carriage laws did for the phone system.

Couldn't have said it better myself.

It's legitimately incredible that Congress wasted so much time on the moronic Roger Clemens hearings, and yet here's an issue that truly matters -- the ongoing problem of professional sports owners extorting taxpayers with the threat of relocation, with Seattle as the latest victim -- and Congress is nowhere to be seen. I just love the fact Roger Clemens' appearance at Jose Canseco's pool party takes precedence over 41 years of professional basketball in Seattle with the people who run our country. Awesome. I'm moving to Canada soon.