The Dow

Matt Yglesias is annoyed at the undue attention paid to the Dow Jones Industrial Average:

Not only is it obviously stupid for political commentators to be assessing the quality of economic policy by tracking the ups-and-downs of the stock market but the fact that the commentators who want to do this keep wanting to specifically use the Dow Jones Industrial Average just highlights their ignorance....Why not use the S&P 500? Or the Wilshire 5000?

To be clear, that wouldn’t make this idea any less dumb on the merits. But if we’re going to have stock-based punditry then it could at least be informed stock-based punditry. Back in the real world, the key issues are the trajectory of employment and income.

Clearly, the answer is that nobody makes or loses money based on betting on the unemployment rate.  And we don't have exciting video of traders going nuts on exchange floors when hourly wage numbers are announced.  And anyway, all that stuff is only available on a monthly basis.  You can hardly run a 24/7 cable show based on that, can you?

In CNBC's defense, it's worth noting that they're just giving the people what they want.  Lots and lots of fairly ordinary people have money invested in the stock market, but virtually nobody has a bunch of money invested in derivatives based on, say, the TED spread, even though right now it might be more important than the DJIA.  What's more, it's sort of interesting just how good a proxy for the economy the Dow Jones is.  Take a look at a historical chart and you'll see that its ups and downs correlate pretty well to the overall state of the economy.  If you're looking for a sexy, fast-moving, gut-wrenching indicator of the economy's animal spirits, you can do a lot worse than the DJIA.

And why the DJIA instead of the S&P 500?  It's the power of the first mover.  The S&P didn't get started until 1923, and even then was published only once a week.  Boring!  By the time they finally got around to doing things daily, the DJIA was the king of quotes, and it's stayed that way ever since.  And since the two indexes follow each other so closely anyway, I guess there's never been any really compelling reason to switch loyalties.  Plus it helps when the guys who own the average also happen to own the country's biggest financial newspaper.  That kind of synergy is hard to beat.

Want to know what Mardi Gras looked like during WWII? Watch this 1941 home video:

From the Prelinger Archives, via BoingBoing.

Happy Fat Tuesday!
Last year, liberals in DC were furious with the US Supreme Court for striking down the city's strict gun-control law. In DC v Heller, the high court found that individuals have the right to bear arms, and not just within the 2nd Amendment's famous "well-armedregulated militia." Since then, gun-rights groups have used that decision to challenge gun-control statutes all across the country. Strangely enough, the National Rifle Association is getting some help in at least one of those case from liberal Yale law profs and other activists normally on the other side of such fights. Why?

Legal Times' Tony Mauro explains that the liberal lawyers see progressive benefits to the cases. Doug Kendall, founder of the Constitutional Accountability Center, tells Mauro that if successful, the lawsuits "would have a "lift-all-boats" effect, strengthening free speech, and possibly even abortion and gay rights, at the same time that it bolsters the right to bear arms." Of course, gun control groups aren't so happy about the new-found alliance. The legal director of the Brady Center to End Gun Violence tells Mauro, "It's unfortunate that they would choose to participate in a gun case to grind that particular ax." Still, given that most people think gun control laws don't work, maybe trading useless gun control measures for stronger legal protections for the rights of women, minorities and gays is actually a pretty inspired idea.

I've long worried that the Republicans have a hidden ace card, and I think we're seeing its first playing.

Here's what worries me. The Republican Party, newly enamored with fiscal responsibility, can make a plausible-sounding argument that after the stimulus bill, the Wall Street bailout, the auto industry bailout, and the homeowner bailout, the federal government simply does not have money left to spend. The American people are tightening their belts -- it's time for the government to do the same. Here's Congressman Tom Price, head of the very conservative Republican Study Committee, essentially making that argument while calling for a freeze in government spending.

"Put simply, government spending is out of control," said Chairman Price. "The American people are making tough economic choices, but this Congress is failing to make tough choices as well. As we sink further into debt, Democrats in Congress continue to endorse the causes of the problem rather than embracing a solution. With federal deficits possibly approaching three trillion dollars, a freeze on new government spending is the least we can do. Washington likes to talk about fiscal restraint, but the American people demand more than lip service. It's time to make responsible policy a reality rather than a talking point."

Quick note: I haven't heard or seen that three trillion dollar figure anywhere else. President Obama's fiscal responsibility summit yesterday was meant to suggest to the American people that Democrats can be the party of thrift, that a public worried that the government may spend beyond its means need not turn to fundamentalists like Price. I think we'll see more of this back and forth as Obama tries to move his budget through Congress in the coming weeks.

Update: Looks like the Republican leadership in the House is already making this a major issue.

A Virginia state Senate committee voted Monday to kill a bill that would have allowed state police chaplains to recite prayers in the name of Jesus and other deities at official events.

The decision ended a dispute that erupted last September, when Virginia's police superintendent issued an order requiring chaplains to offer nondenominational prayers in public. Six chaplains resigned, and a handful of Virginia pols took up the issue, alleging the request was an attack on Christianity. At the time, House Majority Leader H. Morgan Griffith painted the chaplains as victims, saying the state was requiring the men to "disregard their own faith while serving," which infringed upon "their First Amendment rights," leaving them "little choice but to resign."

The situation is stark, but not in the way Griffith sees it: The very law that allows the chaplains the right to identify as Christians also bans the government from sponsoring any particular religion. The chaplains are sworn government personnel who appear in uniform and are paid when they deliver invocations and benedictions at public events. In that capacity, they are representatives of the state, not of Christianity, Judaism, or Islam. As one chaplain put it, "When I don my police uniform, I am no longer representing my congregation as a Jewish clergy. Instead, I am representing the government, and therefore the public is my congregation."

Here's a real political diss. Speaking to The Washington Times, Republican Utah Governor Jon Huntsman, who has said he's happy to accept the stimulus funds for his state, had some choice words for his fellow GOPers on Capitol Hill:

The Republican governor of Utah on Monday said his party is blighted by leaders in Congress whose lack of new ideas renders them so "inconsequential" that he doesn't even bother to talk to them.

"I don't even know the congressional leadership," Gov. Jon Huntsman Jr. told editors and reporters at The Washington Times, shrugging off questions about top congressional Republicans, including House Minority Leader John A. Boehner of Ohio and Senate Minority Leader Mitch McConnell of Kentucky. "I have not met them. I don't listen or read whatever it is they say because it is inconsequential - completely."

Just a week or so ago, Congressional Republicans were crowing that their lockstep opposition to President Obama's stimulus bill had brought them back from irrelevance and marginalization. Perhaps. But it has also sparked a civil war within the party between practical, give-me-the-money governors (such as Charlie Crist and Arnold Schwarzenegger) and ideological conservatives who are talking about eschewing some of the stimulus funds (notably, Bobby Jindal, Mark Sanford and Haley Barbour) and a clash between those pragmatic governors and the GOP's leaders on Capitol Hill. Good work, everyone. Obama's stimulus has become a wedge issue within the Republican Party.

On Monday night, I discussed this on MSNBC's The Rachel Maddow Show:

Carbon Fail

This is a huge disappointment.  The Orbiting Carbon Observatory, which was designed to fill in missing gaps in our understanding of greenhouse gas levels in the atmosphere, failed to reach orbit:

Three minutes [after liftoff], during the burning of the third stage, the payload fairing — a clamshell nose cone that protects the satellite as it rises through the atmosphere — failed to separate as commanded.

....“The fairing has considerable weight relative to the portion of the vehicle that’s flying,” said John Brunschwyler, manager of the Taurus rocket program for Orbital Sciences of Virginia, which built both the rocket and the satellite.

“So when it separates off, you get a jump in acceleration,” said Mr. Brunschwyler. “We did not have that jump in acceleration. As a direct result of carrying that extra weight, we could not make orbit.”  The satellite fell back to Earth, landing in the ocean just short of Antarctica.

More here from Jonathan Hiskes at Gristmill about what the OCO was supposed to do.

That Bush-Cheney legacy is going to be a mean one for years. And there's likely to de a drip-drip-drip disclosure of all the damage done. For instance, on Tuesday there was news that the Bush administration screwed nursing homes residents. Bloomberg reports:

The Bush administration shut off a source of information last fall about abuse and neglect in long- term care facilities that people suing nursing homes consider crucial to their cases.

The change that affects the $144 billion nursing-home industry occurred with no public notice or attention, perhaps because of the array of last-minute rules that President George W. Bush’s appointees rushed out before leaving Washington last month.

“This is pretty stunning,” said Mark Kosieradzki, a plaintiff attorney in Plymouth, Minnesota. “Nobody was told. It was just done.”

The rule designates state inspectors and Medicare and Medicaid contractors as federal employees, a group usually shielded from providing evidence for either side in private litigation.

The restrictions affect about 16,000 nursing facilities in the U.S. and 3 million residents. The practical effect is to force litigants to go to greater lengths, including seeking court orders, to get inspection reports or depositions for cases they are pursuing or defending.

Wonder who asked for this rule change? Could it have been...the nursing home industry? This was truly a harsh move, making it harder for abused nursing home residents to gather information on the institutions in which they live. Big hat tip to Bloomberg for a fine piece of investigative reporting that uncovered a telling example of the Bush administration's compassionate conservatism.

Even the relatively healthy banks are starting to bulk up in anticipation of Timothy Geithner's stress tests:

J.P. Morgan Chase & Co. cut its quarterly dividend by 87% to a nickel a share, a surprise move aimed at beefing up the bank's capital cushion as the economy deteriorates and putting it in a position to potentially repay funds received from the government more quickly.

....[CEO James] Dimon said the decision, which came as the government is preparing to test whether banks' portfolios can hold up under a severe economic stress, was voluntary and doesn't reflect any unexpected problems in the bank's results. In fact, he said the bank remains profitable more or less in line with Wall Street's expectations.

....The reduction in the dividend will let J.P. Morgan hang on to an extra $5 billion a year — enough, Mr. Dimon said, to help the bank weather a scenario in which the recession drags on for two years, unemployment tops 10% and home prices ultimately drop 40% from their peak.

JP Morgan has been widely viewed as the strongest of the big money center banks, so the fact that even they're feeling nervous about their ability to pass Geithner's test doesn't bode well for the rest of them.  It's a smart thing to do, but it's still a little unnerving that they feel like they have to do it.

The problem with food festivals is that it is always little unclear if the judges are there because they are interested in truly rendering an objective decision or because they're just, well, hungry.  

This becomes particularly obvious if the food in question is a grilled cheese sandwich. Um yeah I'm a "judge," feed me lunch.