President Obama has said repeatedly he thinks Don't Ask, Don't Tell is bad policy that "hurts our national security," but he wants Congress to take the lead in rescinding the law. We can all see the logic here: It would continue a terrible Bush-era precedent (not to mention reek of hypocrisy) if Obama were to issue an executive order eliminating an act of Congress.

We all understand that logic. But I'm having trouble understanding this: Florida House Democrat Alcee Hastings introduced an amendment this week to a military appropriations bill that would cut off funds for Don't Ask, Don't Tell investigations. The next day, he says, colleagues in Congress and in the White House urged him to withdraw the amendment, which he did.

Why would the White House get in Congress' way? The Senate has already committed to hearings on DADT; the House's bill to eliminate the policy has 165 cosponsors. It's not as if quashing Hastings' amendment will slow the momentum. Or will it? Because what kind of message does this send to House members unsure about whether or not to support DADT's end?

Last night, Hastings tried to make sense of it with Rachel Maddow.

Visit msnbc.com for Breaking News, World News, and News about the Economy

H/t: ThinkProgress.

While the health care debate has been consumed by the smoke and mirrors game on Capitol Hill, one big story is being overlooked: the Obama administration’s decision not to regulate—or even attempt to regulate—the insurance industry, led by AIG, the giant outfit at the center of the national financial collapse. Instead of curbing the power of these companies, Obama is proposing another one of his half-hearted solutions. This time, it’s something called the Office of National Insurance, to be stuck in a corner of the Treasury Department. This new contraption is meant to “monitor’’ insurance—but can’t get involved in setting rules or regulating the business.

 

 

Kelefa Sanneh's profile of right-wing radio talker Michael Savage in this week's New Yorker is insightful in many respects. Most notable is its appreciation that Savage is an extremely idiosyncratic guy, and that it's his personal hang-ups that fuel his daily program, The Savage Nation, as much or even more than his political leanings. The 67-year-old Savage is, Sanneh observes, "a marvellous storyteller, a quirky thinker, and an incorrigible free-associator. He sometimes sounds less like a political commentator than like the star of a riveting and unusually vivid one-man play." All true, and it's part of why his show draws in fans and foes alike.

Yet in Sanneh's account, Savage comes off as the crotchety old uncle of the conservative radio world, an amusingly apoplectic, ultimately harmless crank. That's too bad, because as one of the few mainstream journalists to get access to Savage's inner sanctum (i.e., his seaside home in tony Tiburon, California), Sanneh had a unique opportunity to reconcile Savage's showmanship and charisma with his toxic political rhetoric, which runs the gamut from raw homophobia to annihilationist fantasies about illegal immigrants and Muslims. Instead of taking Savage at his word, Sanneh went soft on him.

This is too good. From Politico:

Rep. Pete Sessions — the chief of the Republicans’ campaign arm in the House — says on his website that earmarks have become “a symbol of a broken Washington to the American people.”

Yet in 2008, Sessions himself steered a $1.6 million earmark for dirigible research to an Illinois company whose president acknowledges having no experience in government contracting, let alone in building blimps.

What the company did have: the help of Adrian Plesha, a former Sessions aide with a criminal record who has made more than $446,000 lobbying on its behalf.

You can't make this up. Someone's balloon ought to get popped.

You can follow David Corn's postings and media appearances via Twitter.

Important news from press secretary Robert Gibbs on the Skip-Gates-controversy-ending beer-sharing planned at the White House later today:

The President will drink Bud Light.  As I understand it—I have not heard this, I've read this, so I'll just repeat what I've read, that Professor Gates said he liked Red Stripe, and I believe Sergeant Crowley mentioned to the President that he liked Blue Moon.  So we'll have the gamut covered tomorrow afternoon.  I think we're still thinking, weather permitting, the picnic table out back.  All right?

I, for one, am outraged that Barack Obama would drink a furrin-owned beer like Bud Light, which is owned by the pot-smoking frites-eating, universal health care-having, freedom-hating Dutch Belgians (Sorry. I often get my low-lying western European countries confused). Clearly the president should be drinking a true American beer like Sam Adams, which is not only owned by Americans, but also named after a great American hero. Boston Beer Company, which makes Sam Adams, is actually only the second-largest American-owned brewery. Here are the top American choices, in order of size, via Foreign Policy's Travis Daub, with commentary and notes by yours truly:

  1. Pabst Blue Ribbon (video has NSFW language). It's worth noting that Pabst doesn't brew its own beer anymore, but outsources it to a South African conglomerate:
  2. Boston Beer Company/Sam Adams
  3. Yuengling, otherwise known as "lager" in Pennsylvania and its environs. Seriously—go order a lager at a Philly bar and see what you get.
  4. Sierra Nevada, makers of a delicious pale ale.
  5. Colorado's New Belgium Brewing Co. Inc., makers of Fat Tire.
  6. High Falls Brewing Co., which is responsible for the NESCAC beer pong staple that is Genessee Cream Ale.
  7. Spoetzl Brewery, brewers of the excellent Shiner Bock.
  8. Widmer Brothers Brewing Group, which makes a Hefewiezen that is sold at the food court across the street from Mother Jones' DC bureau for $5.00 for a 32-ounce plastic cup.
  9. Redhook Ale Brewery, a favorite of hipsters everywhere, which makes the very good Red Hook ESB and Long Hammer IPA.
  10. Pyramid Breweries Inc, which has "alehouses" in Portland, Sacramento, Seattle, Walnut Creek, and, of course, Berkeley.

The President has plenty of American beers to choose from. Bud Light doesn't need more advertising. Buy American, Mr. President!

Here's what's new around the site in health, science, and environment news:

Doesn't take a genius: Texting while driving is linked to truck crashes.

Healthcare headway: Cooperation in both the House and the Senate might not mean anything definitive, but Kevin Drum thinks it's a pretty good sign.

Solar for the rest of us: The city of Berkeley issues bonds to cover the up-front costs of installing solar panels on private homes, then homeowmers pay the city back over time. Smart.

Not so bad after all: There's already a popular single-payer healthcare plan the United States. It's called Medicare. 

US Marines assigned to 1st Platoon, 2nd Battalion, 8th Marine Regiment, prepare to return fire after receiving enemy fire in Lakari Bazaar, Afghanistan, July 19. The Marines are accompanied by Afghan National Army soldiers in order to deny freedom of movement to the country's enemies. The Marine battalion is the ground combat element of Regimental Combat Team 3, 2nd Marine Expeditionary Brigade-Afghanistan. (Photo by Gunnery Sgt. James A. Burks courtesy marines.mil.)

Like most bloggers, I also use twitter. I mostly use it to send out links to interesting web content. You can follow me, of course. (David Corn, Mother Jones' DC bureau chief, is also on twitter. So is my colleague Daniel Schulman.) But for those of you who aren't too eager to hop on the tweetwagon, here's what you should have read yesterday:

Foreclosure Kabuki

Why are so few mortgage companies willing to modify loans for delinquent borrowers even though the federal government has allocated $75 billion to keep them from taking a big hit when they refinance the loans?  What's the holdup?  Peter Goodman reports:

“It frustrates me when I see the government looking to the servicer for the solution, because it will never ever happen,” said Margery Golant, a Florida lawyer who defends homeowners against foreclosure and who worked in the law department of a major mortgage company, Ocwen Financial. “I don’t think they’re motivated to do modifications at all. They keep hitting the loan all the way through for junk fees. It’s a license to do whatever they want.”

....“If they do a loan modification, they get a few shekels from the government,” said David Dickey, who led a mortgage sales team at Countrywide and Bank of America [....] By contrast, he said, the road to foreclosure is lined with fees, especially if it is prolonged. “There’s all sorts of things behind the scenes,” he said.

....As a home slides toward foreclosure, mortgage companies pay for many services required to take control of the property and resell it. They typically funnel orders for title searches, insurance policies, appraisals and legal filings to companies they own or share revenue with.

An old gag asks, What do you call a thousand lawyers at the bottom of the ocean?  Answer: A good start.  These days, I don't think "lawyer" is the right profession for that joke.

Jon Stokes has more about high frequency trading over at Ars Technica.  His piece doesn't address the allegations that HFT shops engage in front running (i.e., sneaking a look at stock prices a few milliseconds before anyone else), but focuses instead on "pure" HFT strategies.  For example:

One of the most important uses for HFT is to get the best price for very large stock orders by breaking them up into small orders of random sizes and hiding the activity from other traders, who, on sensing that a large order is in progress, might take advantage of that knowledge by making moves that would impact the stock price....Some categories of "predatory algos" closely monitor the markets in order to sniff out exactly these types of hidden large orders, so that the algo can trade against them. For instance, if a predatory algo detects that someone is trying to hide a large sell order for [Intel] by trickling it out into the market in small blocks, it might work to bid down the price of [Intel] just a bit so that it can pick up those blocks at a discount and then sell them for a profit when the share price floats back up to the market's earlier, non-manipulated valuation.

It kinda reminds me of Charlie Stross's fictional Economics 2.0 — an automated economy that runs so fast no human being can keep up with it.  In an interview at Felix Salmon's blog, Stokes adds this comment about the allegedly gigantic trading profits generated by HFT:

To justify this $20B/year “fee” you have to make the case that the market system as a whole is getting something of value to all the payers in return. So supporters will say that it’s the price of liquidity and innovation, and, besides, they’ll argue, everyone who has been participating in the markets for decades has been paying these hidden liquidity taxes (and I’d rather call them taxes than fees) to specialists and any other market maker. But when you see this tax ballooning at Internet speed — much the same way that finance has ballooned as a portion of GDP — you have to take a step back and ask, “what is the real, fundamental benefit that we’re all paying for here when we collectively direct money into this?”

This, of course, is a question we've been asking about a lot of financial innovation lately: how, exactly, does it benefit anyone other than the tiny band of Wall Street zillionaires who collect fees from it all?  And Felix adds this:

My bottom line is that HFT is a black box which very few people understand, and that one thing we’ve learned over the course of the crisis is that if there’s a financial innovation which doesn’t make a lot of sense and which is hard to understand, there’s a good chance there’s systemic risk there. Is it possible that HFT is entirely benign and just provides liquidity to the market? Yes. But that seems improbable to me.

John Hempton offers a contrary view here.  He's very skeptical of the $20 billion number that's been tossed around lately, and in any case says that trading is a whole lot cheaper today than it was in the past even if the HFT folks are skimming a cut off the top.  That's unquestionably true, but I'm not sure it's a very good defense.  If Wal-Mart overcharges every customer by a penny, it's still wrong even if you're saving money compared to the corner market.  Add in the potential systemic instabilities caused by the HFT black box, and I think the burden of proof should be on the high frequency community to convince us that what they're doing is safe and worthwhile, not the other way around.