Rep. Edolphus Towns (D-N.Y.), chairman of the House oversight committee, has some deep thinking to do. By week's end, he tells The Hill, he'll render a verdict on whether his committee will launch a full-scale investigation into failed subprime lender Countrywide Financial. It's an investigation the committee's minority staff, under Darrell Issa, has been pursuing for more than a year, with a particular focus on the company's "Friends of Angelo" VIP loan program. But in order to take his probe to the next level, Issa needs the backing of the full committee to subpoena records from Bank of America, which took over Countrywide following its epic collapse. And Issa has been pressing hard for Towns' cooperation. Towns, meanwhile, has been dragging his heels on this. Why? One potential reason is because this investigation could shed unflattering light on the favorable financing some congressional lawmakers received through Mozilo's VIP program.

These alleged sweetheart deals, first reported last summer, have bubbled back up in the news recently. On Monday, the AP reported that a former Countrywide employee has provided some damaging information to Republican oversight investigators and members of the Senate Ethics Committee relating to VIP loans granted to Senators Kent Conrad (D-N.D.) and Chris Dodd (D-Conn.). According to the AP, Robert Feinberg, who worked in the company's VIP loan section, has said that Conrad and Dodd were made fully aware that they were receiving favorable treatment, a claim both lawmakers strongly deny. This scrutiny comes at a particularly inconvenient time for Dodd, who's already in serious jeopardy of losing his senate seat in the upcoming election.

This puts Towns in a tight spot. If he goes forward with an investigation, he risks tainting fellow Democrats, as well as other lawmakers who may have received Friends of Angelo financing. If he doesn't, he leaves himself open to charges that he is playing politics, forsaking his oversight role to provide cover for congressional colleagues. Issa surely isn't going to let this go quietly.

So what's it going to be Rep. Towns?

Quote of the Day

From Dan Drezner, who's currently teaching a summer course along the banks of the Rhine in lovely Basel:

If you think the bank bailouts are unpopular in the United States, try the Swiss reaction to the Swiss federal government's bailout of UBS.  It's to the Voldermortian point where they asked me not to say "UBS" because it's so embarrassing.  We have compromised — I can now say "UBS," but must then spit three times over my right shoulder to ward off evil spirits.

Basel, of course, is the home of the famous Basel Capital Accords, which did approximately nothing to stop our late financial meltdown.  In fact, Basel II probably made things worse.  So Swiss students have every right to be embarrassed, even if they were only renting their city out to the world's central bankers, so to speak.

OTOH, Basel is also the birthplace of Roger Federer.  So they've got something to cheer for too.

Today we get good news from the House:

House leaders, the White House and four Blue Dogs on the Energy and Commerce Committee reached a deal Wednesday on a health care overhaul....Rep. Mike Ross (D-Ark.), head of the Blue Dog health care task force, said the deal would cut more than $100 billion from the Democratic health bill, increase exemptions for small businesses and prevent the public insurance option from basing reimbursements on Medicare rates.

And we get good news from the Senate:

The chairman of the Senate Finance Committee, Max Baucus, Democrat of Montana, who is leading efforts to develop a compromise health care bill announced Wednesday that negotiators had pared the price-tag to under $900 billion over 10 years and that lawmakers had agreed on ways to cover the cost....Late Tuesday, Mr. Baucus had hinted that his group had mostly finished their work on how to pay for the bill. “The costs, I think, are pretty well nailed down,” he said.

Perhaps Tyler Cowen is right: a lot of the day-to-day chatter along the way to healthcare reform "is simply noise."  We won't know that for sure until we have actual bills, an actual conference report, and an actual vote, but hey — it's an odd-numbered day and I'll take whatever good news I can get.  And agreement of any kind, even without knowing the details yet, is forward progress.  That's good news.

It seems as if the partisan squabbling over health care reform is ratcheting up. On Wednesday, the Democratic Party and the Republican Party each accused the other side of lying about what's in the health care reform package under construction in Congress. It began with a conference call for reporters held by the RNC, in which Republican Rep. Patrick McHenry claimed President Barack Obama has been prevaricating about his plan. Within moments, the DNC zapped out a retort.

Here's how the DNC chronicled this spat:

On an RNC conference call today, Congressman Patrick McHenry accused the President of lying about the details of his health insurance reform plan. The only person lying on that call, however, was Rep. McHenry, and you don't have to take our word for it. Multiple independent fact checkers have debunked the claims McHenry and his fellow Republicans continue to make about health insurance reform. With the cost of premiums soaring for so many families and small businesses, it's disgusting that Republicans are willing to lie and use the same old Washington scare tactics to try to "kill" health insurance reform on behalf of their insurance company friends.

The DNC explained further:

Business cards are so old-school.

The new way to exhange information? The poken, an electronic portal for personal deets. Basically, it works like this:

1. Upload your profile—including twitter, facebook, and other social network accounts—to the poken.

2. Touch your poken to someone else's.

3. Upload that person's information to your computer, and they can do the same.

I got the gadget at a recent social media gathering, and it's pretty nifty—even if it must reach critical mass to prove useful.

Yet another reason not to fake bake: Today the World Health Organization elevated tanning beds' UV radiation from the "probable carcinogen" category to "carcinogenic to humans," its highest-risk designation. And if you're a young adult, it gets worse: A review of current studies found that artificial tanning before age 30 increases your melanoma risk by 75 percent.

This is pretty damning news for salons, but the industry seems to be rolling with the punches. The Toronto Star reports:

Steven Gilroy, executive director of the Joint Canadian Tanning Association, which represents 1,200 tanning salons across Canada, dismissed the international agency's report.

"When you dive into the research ... there is no increased risk," he said. The tanning industry has recently promoted the moderate use of artificial tanning as a way to boost vitamin D levels, which tanning proponents say may be associated with lower risk of some forms of cancer.

Yeah, except the WHO did dive into the research, and it found...a definitively increased risk. As for the Vitamin D argument, as I report here, we ain't buyin' it: Most people can get all the D they need from a supplement, with none of the cancer risk.

The Economist's Democracy in America blog has a fascinating post on the shift that seems to be happening in the thinking of the moderate, lefty blogosphere from process-oriented gradualism towards what you might describe as a kind of revolutionary cynicism. In a different era, if you were less kind, you might even describe Ezra Klein's and Matt Yglesias's recent claims—that our political system is irrevocably broken, that we won't do anything about health care costs or global warming—as "shrill." DiA compares Klein and Yglesias to Rolling Stone's Matt Taibbi, which is another way of saying the same thing. The (anonymous) DiA blogger points to this post by Klein as evidence of a near-total loss of faith in the system:

The country, and the system, will continue to whistle while our wages get eaten up and our government tumbles further into debt and our interest rates rise and other priorities get squeezed out and a serious and painful fiscal reckoning inches ever closer.

Meanwhile, as DiA notes, Yglesias has been calling for the abolition of the US Senate. That's not moderate wonkery. It's radicalism. (That doesn't mean Yglesias is wrong.) DiA thinks "there's something going on with these guys," and it could lead to "the kind of thing you saw happen to those clean-cut moderate liberal kids who wrote the Port Huron Statement."

So I say to the Juicebox Mafia et. al.: Why not? Sure, no one appointed you or elected you. But that didn't stop the kids at Port Huron (or in Sharon, Connecticut, for the matter). You're in leadership positions whether you like it or not. I'm serious. Set up a wiki and get to work. I'm sure the wider lefty blogosphere would be happy to help. Get some sort of statement together, and let DiA and others know for sure exactly how radical (or not) this generation of young liberals really is.

Blowing Bubbles

How do we pop financial bubbles before they get out of hand?  Alex Tabarrok surveys the literature and comes away pessimistic that it can be done:

Bubbles occur even as uncertainty about the fundamental value diminishes.  We also know that once a bubble starts it's difficult to stop.  Circuit breakers and brokerage fees (transaction taxes), for example, don't do much to stop bubbles....Investor education doesn't help (for example telling participants about previous bubbles doesn't help). Even increasing interest rates doesn't do much to stop a bubble already in progress and may increase volatility on net.

So what's the answer?  Once a bubble gets going, maybe there isn't one.  However, some lab experiments suggest that having lots of cash sloshing around is instrumental in getting bubbles going in the first place:

[These] experiments are consistent with the Fed having a significant role in bubble inflation (a theory I have not pushed).  In other words, rather than identifying and popping bubbles already on the rise, not blowing bubbles in the first place may be easier and more productive.

That would be a start, anyway.  More research, please.

Financing Solar

My homeowners association would go ballistic if I tried to install solar panels on my roof, but if you live in a less benighted area it's an attractive option.  The problem is that the upfront cost is too high for some people, and if you take out a conventional loan you run the risk having to keep making payments even if you sell your house.  One option is an outfit like SolarCity, which leases the installation for a set monthly cost.  If you sell the house, the lease goes with it, so your risk is minimal.  Brad Plumer passes along news of another alternative:

Two years ago, however, the city of Berkeley figured out an easy financing trick to get around this problem — the city itself just issues a bond to pay for the upfront costs of installing the panels, and the homeowner then repays the government over the course of 20 years via a small line item on the property-tax bill. (This way, if the home is sold, the costs of the panels get passed on to the new owner getting the benefits.)

It's a small policy tweak, but quite sensible. No mandates, no regulations, just offering homeowners an extra option if they choose. So it's not surprising to hear that, as Kate Galbraith reports today, the idea's been proliferating like crazy: This year alone, eight states have followed California's lead by giving their municipalities permission for this sort of financing, including Colorado, New Mexico, Ohio, Oklahoma, Texas, Vermont, Virginia, Wisconsin. (Apparently, a lot of cities need permission from the states before they can mess with property-tax bills.)

Another benefit of this is that cities can generally borrow at lower rates than private homeowners, so the economics of the panels work out better.  It makes a lot of sense, especially in sunny areas like California and the southwest.

UPDATE:

Getting Out of Iraq

Things are going so swimmingly in Iraq that we might speed up our exit plans:

Defense Secretary Robert M. Gates said Wednesday that the relatively low levels of violence in Iraq and improved cooperation of late between U.S. and Iraqi forces have raised the possibility that commanders might be able to "modestly accelerate" the reduction of U.S. forces this year.

....Gates said if trends throughout Iraq remain generally positive, the United States could withdraw three combat brigades, each consisting of about 5,000 soldiers, from Iraq this year. The existing plans call for two brigades to be withdrawn.

The expedited schedule might also have something to do with the tensions Ernesto Londoño reported a few days ago following the American response to an insurgent attack in Baghdad:

When the shooting subsided, another confrontation began. A senior Iraqi army commander who arrived at the scene concluded that the Americans had fired indiscriminately at civilians and ordered his men to take the U.S. soldiers into custody. The U.S. military said the soldiers had acted in self-defense and had sought to avoid civilian casualties; U.S. commanders at the scene persuaded the Iraqis to back down.

....Word of the incident quickly spread among U.S. soldiers in Baghdad. Several said it heightened concerns that the split-second decisions they make now have the potential to draw a sharp rebuke from Iraq's increasingly assertive security forces. And reaction from Iraqi military officials seemed to confirm those fears.

These things might be entirely unrelated.  Gates himself implicitly dismissed the incident by saying, "There clearly will be the occasional hiccup by someone who doesn't get the word."  Still, if violence is generally under control and Iraqi commanders are starting to harass American troops, that might make quick withdrawal into a more welcome option than it would be otherwise.  Just a thought.