DEFLATION….Economists have been warning about the possibility of deflation for the past several months, and it looks like we might finally be getting it:

The Consumer Price Index, a key measure of how much Americans spend on groceries, clothing, entertainment and other goods and services, fell by 1 percent in October….Energy prices led the decline, falling 8.6 percent in October as the price of gasoline continued its steady slide from highs of more than $4 a gallon.

….In Wednesday’s report, even excluding volatile food and energy prices, prices dropped 0.1 percent in October. It was the first such decline in more than two decades and raises the specter of deflation as the economy contracts and demand for goods and services across the board plunges.

“This month it’s more than slowing, it’s outright contraction,” [James] O’Sullivan said. “And yes, if you extrapolate that, it’s deflation.”

It’s only 0.1% and it’s only for one month — so far. But that’s the biggest drop since 1982, and the drop in the primary CPI number is the biggest since 1947, yet another indication that our current recession is on track to be the worst we’ve suffered since World War II. More stimulus, please.

NEW SITE UPDATE….I think I’ve mentioned before that we’re working on a major redesign of the site (hooray!). We’re still a few weeks away from rolling it out, but we’re looking for beta testers willing to test drive the new site before the final unveiling. If you’d like to help out, go here and enter your email address. We’ll notify you a week or so before the rollout date and provide a URL to poke around on the test site and give us your feedback. All help is much appreciated, since it will help us work out the bugs before we go live. Thanks!

ERIC HOLDER….I’ve been scanning a bunch of stuff about Eric Holder, Obama’s apparent pick for attorney general, and the conventional wisdom appears to be pretty simple:

1. He’s basically a decent guy: sound views, hard worker, smart, honest, and generally well thought of.

2. Conservatives are going to try their damnedest to work everyone into a lather over his rather modest involvement in the Marc Rich pardon eight years ago.

From what I can tell, though, conservatives would be smarter to lay off. Holder really does appear to be honest, well briefed, straight shooting, and temperamentally moderate. They’re going to get a liberal AG whether they like it or not, and they could do a lot worse than Holder if they somehow manage to torpedo his nomination.

PIZZA ON DEMAND….Via Hit & Run, my cat’s pizza company, in partnership with TiVo, engages in some hyperbole:

“This is the first time in history that the ‘on-demand’ generation will be able to fully experience couch commerce by ordering pizza directly through their television set. You’ll see a television ad for Domino’s and you’ll click ‘I want it’ through your remote. In about 30 minutes, your pizza will show up at your door.”

Oh please. I worked for a video-on-demand company back in 2002, and even then “pizza on demand” was a cliche. It turns out that just about the first thing every shiny new broadband offering offers is….pizza delivery via your TV. I think the first time was 1994. It never went anywhere, though, because it turned out that ordering pizza by phone isn’t really much of a hassle.

But hey — everything old is new again. Maybe this is finally PoD’s time. After dozens of tries, it’s bound to catch on sometime.

HOUSING BUST UPDATE….The latest from ground zero of the housing bubble:

For the first time in the current housing downturn, the majority of Southern California homes sold in October — 51% — had been foreclosed, a real estate information service reported today. The median sales price for homes fell to $300,000, a level not seen since 2003 and a 41% drop from the peak price set in the spring and summer of 2007.

A 41% drop in 18 months. Jeebus.

ADVICE FOR PINCH….George Packer says the New York Times should fire Bill Kristol when his one-year probationary period is up in December:

In his year on the Op-Ed page, not one memorable sentence, not one provocative thought, not one valuable piece of information appeared under his name…..Kristol’s performance on the Op-Ed page during the most interesting election in a generation is a historical symptom, not merely a personal failure. He wrote badly because his world view had become problematic at best, untenable at worst, and he had spent too many years turning out Party propaganda to summon the intellectual resources that a difficult situation required. Now the Times owes it to its readers to find someone better.

After a couple of months I stopped reading Kristol’s columns. It wasn’t because I disagreed with him, it was because he was boring. Whatever the meme of the week was in the few days prior to his Monday appearance, you could be almost sure that’s what he’d write about. Not only were his subjects often stale by then, but he almost never offered anything more than the tritest conservative conventional wisdom on the subject at hand. Snooze city.

So: who should take his place? Since this is a liberal site, and the Times is looking for a conservative columnist, the answer is probably going to be whoever infuriates you the most reliably. (Kristol didn’t. He just put me to sleep.) Consider this an open thread.

HOLY JOE UPDATE….I see that Senate Democrats have voted to allow Joe Lieberman to keep his committee chairmanship. I guess they really showed him, didn’t they? No Democrat will ever dare to support a Republican candidate for president, speak at the Republican national convention in prime time, and bad mouth the Democratic Party’s candidate ever again.

CLINTONITES….Just a quick comment on a common meme: Why is Barack Obama surrounding himself with so many Clinton retreads? That’s not change we can believe in!

Sure, sure, but look: anybody who’s been active in liberal governance for more than eight years is likely to be a Clintonite. It was the only game in town during the 90s. And anybody who’s been active less than eight years probably doesn’t have the experience to get a top level position. So there’s really no way around this. There are some fresh faces around for Obama to tap, but for the most part, when you’re staffing highly visible and responsible positions, you want someone who has at least some experience to fall back on. And since Bill Clinton is the only Democrat to hold the presidency in the past 28 years, that means someone who served in the Clinton administration.

I suppose this doesn’t bother me as much as it does some people since I never expected Obama to be a huge left-wing break from Democratic tradition in the first place. He’s a little farther to the left than Clinton, but not a lot, and it’s only natural that he’d find a fair number of Clintonites who hold views similar to his own. What’s more, as his campaign showed, he’s obviously a guy who values experience and deep knowledge. He’ll do fine, Clintonites or not.

QUOTE OF THE DAY….From maritime energy security specialist Candyce Kelshall, responding to the unprecedented seizure of an oil tanker 450 miles off the coast of Somalia:

“If it was an LNG tanker seized, we’re looking at something potentially catastrophic. An LNG tanker going up is like 50 Hiroshimas.”

I just thought I’d start off the morning with a cheery thought. You may now go about your business.

FROM KURDISTAN TO K-STREET….Over on our home page today, Laura Rozen tells the story of Shlomi Michaels: former Israeli counterterrorism commando, owner of a coffee/chocolate shop franchise, lobbyist and contractor for Iraqi Kurds, and, it turns out, friend of intelligence service chiefs from Moscow to Tokyo to Washington DC. It is definitely not set in the foreign affairs world that we normally see on TV:

This is a story of the other world, the one whose real power players never show up in the CNN headline crawl. It’s the story of a man with a habit of popping up, Zelig-like, at the nexus of foreign policy and the kinds of businesses that thrive in times of war — security contracting, infrastructure development and postwar reconstruction, influence and intelligence brokering.

It’s also the story of how this entrepreneur and middleman, in the shadowy environment created by the 9/11 attacks and Washington’s advance on Iraq, seized the opportunity to propel himself from small-time businessman into global player. The trajectory of Shlomi Michaels is testament not only to one man’s driven intensity, but also to the opportunities the war on terror has presented to those with the information, connections, and ambition to seize them.

The eternal search for WMD programs in Iraq makes an appearance too. The whole story is here.