Republican Louisiana Sen. David Vitter made a trip to DC's Chinatown on Thursday to nibble on kung pao chicken and rally the conservative troops. Addressing the DC lawyers chapter of the conservative legal group, the Federalist Society, Vitter got right down to red meat. After quoting comments from President Obama suggesting that he'd like his judicial nominees to be able to empathize with the downtrodden, Vitter declared that demanding empathy in a judge was something you'd expect in a "dictatorship." How empathy equates with repressive rule, Vitter didn't really explain, except to say that it had little to do with ensuring checks and balances on an imperial government. (Vitter also claimed--and it was hard to tell if he was joking or not--that he routinely walks from the Senate to the House of Representatives to use the apparently more populist House water fountains, instead of imbibing the stuff the Senate is drinking these days.)

But Vitter didn't really come to Tony Cheng's to discuss judges or the Constitution. His talk, entitled "Defending Conservative Principles in the Senate," was mostly a complaint about the economic stimulus bill that his Senate colleagues were poised to pass without his vote or the votes of most Republicans. According to Vitter, his party was having a come-to-Jesus moment over the stimulus package, which had provided the minority party an opportunity to rediscover its mantra of smaller government and lower taxes.
Hmm, are the folks at Nacional Records sure they didn't mix up their publicity photos? From what I see here, the members of RH+ look like three slabs of rough-and-tumble, smokin'-hot Chilean beef, complete with elaborate facial hair and tough-guy shades. But the single "Curb" from the Santiago combo's debut album Quintana Roo has the delicate, dream-pop style of Scandinavians Royksopp, lead by the high, clear vocals of what sounds like an innocent young lady. Did she not show up for the photo shoot, or is one of these hunks actually a castrato? Okay, okay, joking aside, there's actually a propulsive solidity to this track, and while I'm not sure if there are any strains of traditional Chilean sounds here, "Curb" does remind me of classic Brazilian psychedelia, with its hypnotic combination of silky vocals and buzzy melodies. Listen to it by pressing the "play" button on the thingy below or grab an mp3 over at the RCRD LBL site.
[Update: Okay, their label Nacional assures me that in fact, RH+ is a five piece with a female singer and one other guy, and that RCRD LBL just cut them out of the publicity shot for some reason. Well, it made for a funny post, at least...]

The title of last night's LOST episode should have been a giveaway: "This Place is Death." But I'm hoping to Hurley the island-bound Losties are not in limbo, or in purgatory, or just plain old dead because the show's creators promised they wouldn't be.

That sinking feeling aside, some really interesting information is helping progressing the series toward a (hopefully) satisfying conclusion. We now know the smoke monster used to guard a temple inscribed with Egyptian hieroglyphs, the same glyphs seen when Desmond's hatch computer was allowed to time out. The Egyptian symbols, together with Charlotte's Tunisian Dharma Initiative research, and the slave ship the Black Rock, gives this season a bit of an African flavor, but it's hard to tell what the link is between Africa and the island.

Three human rights groups released more than a thousand pages of Department of Defense and CIA documents Thursday that outline how closely the two agencies worked in rendering terrorism suspects to black sites, keeping detainees' identities secret, and tempering bad publicity for inmate treatment at Guántanamo Bay.

Most of the documents—obtained after Amnesty International, the Center for Constitutional Rights, and the Center for Human Rights and Global Justice sued under the Freedom of Information Act—simply contain news articles, but the Center for Constitutional Rights scoured the files and found three significant disclosures from the DoD.

Andrew Cuomo, New York's Attorney General, is most displeased. Cuomo is investigating why Merrill Lynch handed out $3.6 billion in bonuses before releasing its horrendous results for the fourth quarter of 2008, in which it lost $15.31 billion. After doling out the bonuses, Merrill Lynch was subsequently bought by Bank of America (with $20 billion of taxpayer help), and Bank of America was later the beneficiary of a $25 billion government bailout. The bonuses were also very unequally distributed—while 39,000 employees received some bonus money, 700 employees were made millionaires by the bonus pool, and the top 149 bonus recipients alone received $858 million. The New York AG's office wants to know why Merrill Lynch saw fit to reward so few of its employees so extravagantly for such massive failure. But Cuomo's not stopping at a state-level investigation—he's also calling in the feds. In a letter to Rep. Barney Frank (D-Mass.), the chair of the House Financial Services Committee, Cuomo dishes the dirt on his ongoing investigation of Merrill:

On October 29, 2008, we asked Merrill Lynch to detail, among other things, their plans for executive bonuses for 2008, including the size of the bonus pool and the criteria they planned to use in determining what, if any, bonuses were appropriate for their top executives... Merrill did not provide my Office with any details as to the bonus pool, claiming that such details had not been determined.
Rather, in a surprising fit of corporate irresponsibility, it appears that, instead of disclosing their bonus plans in a transparent way as requested by my Office, Merrill Lynch secretly moved up the planned date to allocate bonuses and then richly rewarded their failed executives. Merrill Lynch had never before awarded bonuses at such an early date and this timetable allowed Merrill to dole out huge bonuses ahead of their awful fourth quarter earnings announcement and before the planned takeover of Merrill by Bank of America. [emphasis added]

The sheer Rod-Blagojevich-esque audacity of Merrill's move is impressive. Merrill knew it was being watched by Cuomo, who had asked them to behave reasonably and transparently with their bonuses. One would think that knowledge would inspire some sort of caution. But no—instead, Merrill just went ahead and did what it wanted to anyway, likely figuring that politicians wouldn't have the stomach to take back bonuses that had already been handed out. (Better to beg forgiveness than to ask permission.) That may be the case, but one of Cuomo's accusations seems to make government punishment a bit more likely. "One disturbing question that must be answered," Cuomo writes, "is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding." Sure, politicians are reluctant make people give up already-awarded bonuses. But if the bonuses essentially came from taxpayer money, public outrage might force Congress (or Cuomo) to make Merrill's employees give the money back.

RSS Feed

RSS FEED....Just a quick note: we know our RSS feed is having some teething problems.  We're working on it.  Some of you are reporting that you're only getting headlines, others (like me) aren't getting any feed at all.  Once we've figured what's going on, full feeds will be restored.

There are other problems we're working on too.  Hopefully they'll all be taken care of in the next day or two.  In the meantime, feel free to leave comments to describe any bugs you're seeing.  Please let us know what OS and browser you're using since that will help us track things down.  Your help and patience is greatly appreciated.

Stress Test

STRESS TEST....Matt Yglesias comments on today's Nick Kristof column on the economic meltdown:

As he says “the larger conundrum is that a bailout is both: A) urgent and essential; and B) unfair and unpopular.” Thus far, officials have attempted to resolve that conundrum with timidity, but ultimately that results in measures that fail on both counts. What’s needed is more boldness — really decisive action to clean up the financial sector combined with measures that are tough enough on CEOs and shareholders to give the effort political legitimacy.
OK, but here's the problem: you also have to do this in a way that's at least nominally fair.  And the process has to be fairly transparent.  If you ask Vikram Pandit right now if Citigroup is solvent, he'll tell you it is — and he'll then haul out a detailed PowerPoint presentation to prove it.  Citigroup's internal numbers suggest that they're well capitalized and in no need of being taken over.

Now, those numbers are almost certainly hooey.  Certainly investors don't believe them, and to register their disbelief they've driven Citigroup stock down to almost nothing.  Nonetheless, the numbers are there, and the government can't be in the business of taking over banks that swear on a stack of Bibles that they're perfectly healthy.  This, I assume, is the point of Tim Geithner's stress test.  In the same way that the Swedes set up a transparent process to evaluate their banking sector in the early 90s and ended up nationalizing two banks but not the others, Geithner needs to set up a process that does the same here.  If the process is seen as fair, there will be way less political blowback when some of the big banks are taken over and others aren't.

This, anyway, is the optimistic point of view: that Geithner and Obama, far from being unwilling to nationalize insolvent banks, are merely setting up the political and financial process to make it tolerable in the near future.  The pessimistic view is that they're just screwing around and don't really have any plan at all.  For the moment, then, I plan to take the optimistic point of view just for the sake of my own mental health.  Your mileage may vary, of course.

The Economy Up North

THE ECONOMY UP NORTH....The economy in Canada is doing pretty well.  Fareed Zakaria explains why:

So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1—compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada's more risk-averse business culture, but it is also a product of old-fashioned rules on banking.
Canada has also been shielded from the worst aspects of this crisis because its housing prices have not fluctuated as wildly as those in the United States. Home prices are down 25 percent in the United States, but only half as much in Canada. Why? Well, the Canadian tax code does not provide the massive incentive for overconsumption that the U.S. code does: interest on your mortgage isn't deductible up north.
So there you have it.  Keep your housing bubble to merely huge but not gargantuan size, and keep the gearing in your banking sector to merely huge but not gargantuan levels, and you'll do OK.  Boring, isn't it?
I was encouraged to see this, kind of:
...the Federal Election Commission has closed the books on 17 more campaign finance investigations... Among those fined were Sen. Mel Martinez and former House Minority Leader Richard A. Gephardt.
Martinez, R-Fla., was fined $99,000 for exceeding contribution limits in his 2004 campaign by some $313,000, and for not properly filing required forms.
Gephardt, D-Mo., was fined $42,000 for accepting $211,000 in donations beyond the limit in his 2004 presidential bid and for spending $163,000 more on the Iowa caucuses than allowed.

These fines are hefty, and I'm happy to see the FEC extract them. But this highlights a major shortcoming in the way the FEC does business -- fining politicians five years after they violate elections law does not provide them with a serious disincentive for doing it again. If you're a special interest group and you desperately want to see a proposition defeated or a candidate booted from office, you are far more likely to circumvent the law in order to do so if you know you can tie the FEC up in legal knots for years and only pay a fine way down the road.

And let's say you do get hit with a serious fine five years on. Half a decade's worth of beneficial policy that you got by cheating the electoral system is almost certainly worth a couple hundred thousand bucks, right? For more on how/why the FEC doesn't work like it should, see here and here.

Good News

GOOD NEWS....Some modestly good news today:
U.S. retail sales jumped 1% in January, reversing a six-month declining trend and defying economists' expectations by posting the biggest increase in 14 months.
What else?  For my local readers, a solar firm has signed yet another deal to provide Southern California with 1,300 megawatts of solar electricity.  The first plant should be operational in four years.

And the California legislature has supposedly reached a deal to "balance" the state budget.  It includes $15 billion in spending cuts, $15 billion in tax increases, and $12 billion in smoke and mirrors — which isn't a bad ratio considering how prevalent accounting tricks usually are.  Now all we have to do is round up two or three non-insane Republicans to vote for it.  Stay tuned.