Can't Get Around It
Today's Times has a lengthy piece on what got Citigroup into trouble. In general, the plot line is not surprising -- broad problems of corporate culture, lax internal oversight of potentially risky practices, a big, risky and ultimately disastrous move into mortgage-backed securities. There's a lot of criticism of Chuck Prince who inherited the CEO job from Sandy Weill in 2003.
But through all of it, woven into the tale, is the name Robert Rubin.
Rubin, of course, was President Clinton's second Treasury Secretary (1995-99) and his key economics advisor (perhaps even Secretary-in-waiting) as head of the National Economic Council during Clinton's first term. During the 1990s and into this decade Rubin was credited as the key architect of Clinton's economic turnaround and economic expansion.
The Times article notes that in the 1990s, Rubin played a key role helping "loosen Depression-era banking regulations that made the creation of Citigroup possible by allowing banks to expand far beyond their traditional role as lenders and permitting them to profit from a variety of financial activities." That part we know. And it's fair to note that there was a broad, though very ill-judged and ill-fated, consensus in favor of these reforms at the time.
After leaving Treasury, Rubin signed on as a director and senior advisor at Citigroup, an entity he had helped to make possible by advocating the aforementioned deregulation. Rubin was also, along with Alan Greenspan, a staunch opponent of regulating derivatives.
The Times article notes, with less specificity than I'd like, that Citi's very size, not just its corporate culture, led it into such risky waters. But this passage in particular jumped out at me ...
For some time after Sanford I. Weill, an architect of the merger that created Citigroup a decade ago, took control of Citigroup, he toned down the bank's bond trading. But in late 2002, Mr. Prince, who had been Mr. Weill's longtime legal counsel, was put in charge of Citigroup's corporate and investment bank.According to a former Citigroup executive, Mr. Prince started putting pressure on Mr. Maheras and others to increase earnings in the bank's trading operations, particularly in the creation of collateralized debt obligations, or C.D.O.'s -- securities that packaged mortgages and other forms of debt into bundles for resale to investors.
...
"Chuck Prince going down to the corporate investment bank in late 2002 was the start of that process," a former Citigroup executive said of the bank's big C.D.O. push. "Chuck was totally new to the job. He didn't know a C.D.O. from a grocery list, so he looked for someone for advice and support. That person was Rubin. And Rubin had always been an advocate of being more aggressive in the capital markets arena. He would say, 'You have to take more risk if you want to earn more.' "
As you probably know, Rubin has become a key economics advisor to President-elect Obama and is advising the transition, though he seems neither in line for nor interested in a formal appointment. But Rubin's hand does seem present at so many turns in Citigroup's undoing that I see no way of getting around asking what sort of advice he's giving.
Before going any further, I know this post has some of the feel of a gotcha. Some of the best or most successful reformers have been those who knew what needed fixing because they played a big part in creating the mess in the first place. And I've always thought there was something small-minded and immature about trying to strike this or that person from the realm of reasonable debate because they were "wrong" about, say, Iraq, whether the supposed error was in 1991 or 2003. But it's a record that's hard to ignore in present circumstances. And I'm curious whether anyone can point me to any recent (and in this context I'd say the last six months or so) statements or interviews with Rubin that shed light on his current thoughts on what led us to this point.
--Josh Marshall
Build, Build, Build
Robert Reich outlines Obama's economic recovery plan in waiting.
--Josh Marshall
Election Central Saturday Roundup
Barack Obama uses his Presidential YouTube Address to call for a massive public-works program to create new jobs and update the country's infrastructure. That and other political news in today's Election Central Saturday Roundup.
--Eric Kleefeld
Over There
Tom Hayden on the US-Iraq Status of Forces Agreement and the fate of Iraq's detainees.
--Josh Marshall
Another Mystery
Have you ever seen this guy before?
His name is Mike Duncan.
He's the head of the Republican party, chairman of the RNC.
--Josh Marshall
The Abiding Mystery Pt. 4
From TPM Reader JB, a former GOP Hill staffer who's moved on to greener pastures ...
How many Congressional Republicans had political identities distinct from that of President Bush, while Bush was still popular among Republican voters?The answer to this question -- awfully damned few -- is a big reason why the Republican setbacks in the 2006 election cycle were followed by more setbacks in 2008. For years, GOP Congressmen and Senators did what the White House told them to do and said what the White House told them to say; even Republican legislators who had been in Congress long before George Bush was elected President tied themselves tightly to him, avoiding public disagreement on any of the salient issues, particularly Bush's tax cuts, Iraq and terrorism policy and initiatives sponsored by the Vice President.
Obviously 9/11 and the spike in public support for Bush afterward was a big part of this. But the nationalization of American politics, and the vastly greater ability campaign professionals now have to target likely supporters in everything from Congressional redistricting to Election Day turnout activities also contributed -- because most Republican legislators were elected in districts that would support Republicans unless something unusual happened, something that made being a Republican an electoral liability.
Bush took care of the rest himself. When his great popularity among Republicans turned into modest popularity only among Republicans, the GOP legislators who had identified themselves with him and his White House/campaign organization had no where to go. A final factor in 2008 was the fact that many Republican legislators still had safe seats, even while the GOP brand nationally was in free fall. These legislators were hearing from their constituents what they had since 2001 -- support the President -- and they did.
Well, what happened, happened for the Republican Party, and the question Republicans now have to ask themselves is what they are for now that they cannot any longer just be for Bush. It's a question that could take years to answer if Barack Obama turns out to be a bad President. If he turns out to be an effective President, it could take a generation or more.
--Josh Marshall
Not Change We Can Believe In
Can we make it a condition that Richardson can only become Commerce Secretary if he agrees to grow back his beard?
--Josh Marshall
Drip, Drip, Drip
A few Friday afternoon leaks big enough to make a splash:
Hillary will accept Secretary of State offer.
Timothy Geithner will be Obama's pick for Treasury Secretary.
Bill Richardson is a serious contender for Commerce Secretary.
With all the usual off-the-record and thinly sourced caveats, of course.
--David Kurtz
Tighter and Tighter
The Franken camp claims the Coleman lead is now down to double digits.
--David Kurtz
The Abiding Mystery Pt. 3
One anonymous reader questions the question ...
I think it's a mistake to pin most of the blame for GOP decline on the intransigence of the Congressional Republicans. Yes, they failed to distance themselves from an unpopular President, but there was always a limit to the distance they might have achieved. What were they supposed to do, campaign on their opposition to the President's policies? When has a congressional party ever established real separation, in the public mind, from a sitting President?On the eve of the 2006 elections, the NYTimes put Bush's job approval at just 34%. The conventional wisdom was that this represented an ebb tide for the GOP, and that the next election would put a fresh face on the party and allow it to recapture ground. So Republicans stuck to their guns, figuring it couldn't get any worse. As a tactical decision, it was hardly crazy. But three things happened. Things got worse. Defying precedent and probability, Bush's approval numbers sank even further: this time around, to 22%. Then, the Democrats nominated the most compelling candidate to run for executive office in more than a generation. And that candidate decided to keep the campaign focused squarely on the legacy of the Bush administration.
If there's a connection between these two disasters, it can be found in the unwillingness of the GOP to acknowledge when theory diverges from practice. Its foreign policy failed, but it wouldn't acknowledge that. Then its economic policy failed, and it wouldn't acknowledge that, either. Voters have little patience for politicians who seem blind to their own mistakes.
True. There's only so far a congressional party can realistically go in separating itself from its own incumbent president. But I'm not sure that's precisely the issue. And this does focus my attention on how much of this was about Iraq -- both as an issue in itself and as a proxy. As the reader notes, it was "the unwillingness of the GOP to acknowledge when theory diverges from practice. Its foreign policy failed, but it wouldn't acknowledge that. Then its economic policy failed, and it wouldn't acknowledge that, either." In other words, it wouldn't have taken attacking the president himself, just not so clearly taking his dictation on critical issues. I would also note that the reason President Bush's popularity managed to fall from 34% to the unbelievably low level of 22% was closely tied to his and his party's unwillingness to take any cognizance of the results of the 2006 election. Not everyone will shift their support from positions they deeply believe in, just because they're unpopular. And usually that's a good thing -- at least as a matter of personal character. But parties as a whole will usually be more attentive to their demonstrable political interests, even if they can't see when practice departs from theory.
--Josh Marshall
The Abiding Mystery Pt. 2
TPM Reader DS (and a number of others) makes a good point ...
You missed one thing about the 2006 elections, something I think was more important than corruption (although not unconnected):Katrina.
Katrina confirmed everyone's worst fears about the Bush administration and incompetence - many were worried already because the Iraq well wasn't going so well, but they gave him the benefit of the doubt until Katrina. At that point everything people (even many who voted for Bush and GOP) suspected was not only true, but worse than imagined.
Suddenly the curtain fell away and everyone could see what a catastrophe we'd been led into and that the GOP cheerled these incompetents all along the way.
Katrina was the moment - look at the polls - the floor fell out from Bush and the GOP at that exact moment.
This is very true. Though, as DS suggests, I think Katrina was more a catalyst. Unfortunately, by the 2006 election, Katrina as an issue in itself had largely moved off the public radar in all but the places directly affected. But it was a profound catalyzing event. It really settled the public mind on the keys issues of hyper-politicization, cronyism and incompetence which had been which had been minority beliefs prior to Fall 2005 and became majority viewpoints afterwards. It also served as a confirmation and metaphor for the unfolding disaster in Iraq. So this is a critical part of the story. But I still think it was Bush and Iraq -- opinions on both of which had been decisively affected by Katrina -- that drove the 2006 wave.
--Josh Marshall
Yours, Mine, and Ours
When you get Hillary, you usually get Bill, too, but what about the rest of the foreign policy team she would bring with her to State -- and how well would they mesh with Obama's team?
--David Kurtz
The Abiding Mystery
Back to back wave elections for one party, like 2006 and 2008, are extremely uncommon in American history. So what are the roots of the 2008 election? Clearly, the trends operated on many levels, some of which will be more apparent to historians in the future than they are to us today. But even now, even over the last eighteen months, there's one cause that remains a mystery to me and for which I've seen no really adequate explanation.
I'd put it something like this.
After the 2006 election, it was very clear that the public had turned strongly against President Bush and the Iraq War. The turn of the public mood wasn't limited to those two issues. There was the general backdrop of discontent with corruption in the executive branch and Congress, and other issues too. But those were the two big, resonating issues.
For a brief interlude after the election, it looked like the congressional GOP might move into some sort of quasi-opposition to the president, at least distance themselves significantly from him. If you remember, there was a brief period of equivocation on Iraq. And then, nothing. Within a month or so, it was clear that elected Republicans were doubling down on President Bush, the Iraq War and pretty much everything else. And that decision was reflected in the presidential nominating campaign as well.
But it's really the congressional GOP that is what I'm most interested in. I remember through 2007 thinking, What am I missing here? How is this not going to lead to another slaughter in 2008? And of course that is exactly what happened. The only thing surprising in retrospect is how aggressively the Republicans seemed to court the disaster.
Let me open it up for discussion. What happened?
--Josh Marshall
The Profits Of Failure
Book Clubbin' on Bart Gellman's Angler: Was Dick Cheney's overstretch made possible by excessive political success or did he profit from failure?
We've been arguing it out all week at Cafe. And next week, we'll keep digging into the twisted remains of the last eight years with a special discussion of Charles Homans' upcoming story in the Washington Monthly: "The Last Secrets of the Bush Administration: How to Find Out What We Still Don't Know."
You know where to find us.
--Lila Shapiro
Good News on Mukasey
The initial reports of Attorney General Mukasey's collapse last night sounded very grim. But his friends and family must now be breathing a deep sigh of relief. According to a Justice Department statement just moments ago, doctors at George Washington University Hospital gave him various stress and cardiac tests overnight. And they all came up normal. So they appear to have ruled out a stroke or cardiac event. And they expect he'll be released from the hospital later today.
--Josh Marshall
Tanking
If there's anything the last decade and one half has taught us it is too look very skeptically at purportedly generational political trends. But the latest Gallup poll data is still very telling about the immediate political moment. While the Republican party had a real image problem leading up to the November election, improbably, it's gotten dramatically worse since the election. In October, the GOP's favorable/unfavorable was 40%/53%. Now it's fav. 34% / unfav. 61%. So almost twice as many people have an unfavorable view of the GOP as a favorable one.
Things can change quickly, especially in such unpredictable, unstable times. But major political parties don't get much more unpopular than that.
--Josh Marshall
Election Central Morning Roundup
More transition leaks and drips this morning in the TPM Election Central Morning Roundup.
--David Kurtz
Franken!
Slowly but surely, the Minnesota recount is whittling away at Norm Coleman's lead. With 46% of the ballots now recounted, Coleman's initial certified lead of 215 has fallen to 136. There's no real reason why the rate of change should remain at the same pace through the remaining 54% of the ballots. But the rate over the first couple days has them on track for something pretty close to a tie.
Remember too that there a few hundred disputed ballots that will be reviewed in December. So, there's reason for some cautious optimism if you're a Franken supporter. But this is still in 'who knows' territory.
--Josh Marshall
Mukasey Conscious, Alert, with "Strong" Vital Signs
The DOJ has now released a statement describing Attorney General Mukasey as "conscious, conversant and alert. His vital statistics are strong and he is in good spirits." The AG is currently at George Washington University Hospital and will remain there overnight for observation.
--Josh Marshall
Eyewitness Report on Mukasey (Updated)
I've been in contact with an attendee at tonight's Federalist Society meeting where Attorney General Mukasey spoke for roughly twenty minutes before collapsing
According to this trusted eyewitness, events transpired roughly as follows.
Attorney General Mukasey was roughly twenty minutes into a speech defending the administration's torture policies and particularly arguing against prosecutions of people who made decisions in the aftermath of 9/11 (essentially arguing against what he believed amounted to the criminalization of policy differences).
Some seven or eight minutes prior to the incident a heckler start shouting, calling Mukasey a "tyrant." But the AG seemed unfazed by this; and members of the audience shouted the heckler down.
The eyewitness tells me that Mukasey seemed particularly in earnest about the argument he was making. And when he first began to falter it appeared he was merely choking up. Soon, what at first appeared to be choking up blended into slurred words. Twenty to thirty seconds later he collapsed, his fall broken by a nearby FBI agent.
The room fell silent. After a moment there were shouts from the table where Mukasey's wife was sitting, calling to turn down the stage lights. A woman in an evening gown, presumably a doctor, ran up to the stage and the FBI agents hovering over Mukasey allowed her to attend to him.
The eyewitness told me that Mukasey collapsed at approximinately 10:06 and was taken off on a stretcher at approximately 10:33.
The one additional detail is that this eyewitness says that the medical personnel attending to Mukasey were talking to him for at least part of that period, at one point asking him "can you wiggle your toes." In other words, it appears that Mukasey did regain consciousness to at least some degree before being taken to the hospital.
As emergency personnel were attending to Mukasey, a group of Republican luminaries, including former Attorney General Ashcroft and his wife, created a cordon between Mukasey and the audience to create some degree of privacy.
After Mukasey was taken away the audience was led in a prayer for Mukasey by former Congressman David McIntosh (R-IN).
--Josh Marshall
Mukasey Collapses During Speech
As you can see in our feature to the right, Attorney General Michael Mukasey collapsed this evening while giving a speech to Federalist Society in Washington, DC. The only further word we've been able to find is from Mike Allen at The Politico, who says that as of 10:30 PM, "medical officials were still working on him on the stage."
Late Update: From the AP, "Associate Attorney General Kevin O'Connor says Mukasey began shaking during a speech to the Federalist Society and collapsed. He did not immediately regain consciousness."
Late Update Two: We're still following this closely, now just minutes after 11 PM. As best we can tell no news service has any new substantive information about the AG's health, other than the initial news that he began slurring his speech and then shaking and then collapsed. There seems to be no solid information about whether he regained consciousness.
--Josh Marshall
It's Simple
Dean Baker explains how to prevent another Great Depression: Massive government spending.
--Josh Marshall
More on HRC as SOS
On CNN this afternoon Wolf Blitzer quoted some critical stuff I wrote yesterday about making Hillary Clinton the Secretary of State. So I wanted to add some context. It's not just that I have doubts about the job Clinton might do as Secretary of State, which I do, it's also that I want her to stay in the senate. I think it's the perfect job for her. Hell, she's my senator. I've voted for her. Her voice, ability to politick, her smarts, just who she is as Hillary Clinton are really needed there, especially as Ted Kennedy's health may limit his ability to push big legislation in the way he has for decades. It's not one or the other; it's both. She's needed in the senate.
I would note that of the readers who write in and explain why this is such a great idea, quite a few of them have an explanation that boils down to thinking that Obama needs to coopt Hillary, get her working for him on the inside so he doesn't have to worry about her trying to undermine his presidency on the outside. That's a much more cynical view of her motives than I've ever had.
--Josh Marshall
Waiting Game
The Clinton camp believes it has turned over all the information about Bill's post-Presidency activities that the Obama transition team has asked for, and Hillary is awaiting the offer, a source tells TPM Election Central.
--David Kurtz
Only Surprised If You Don't Read TPM ...
Just out from CNN ...
CNN has learned that President-elect Barack Obama is getting foreign policy advice from an unlikely source: Republican Brent Scowcroft, who was national security adviser in the first Bush administration.Two sources familiar with the conversations confirm to CNN that Obama reached out to Scowcroft for phone chats even before he ran for president, and the back-and-forth has continued in recent days as the president-elect assembles his Cabinet.
Scowcroft is very close to current Defense Secretary Robert Gates, who is rumored to be in the running to stay in the Cabinet for at least an interim period at the start of the new Obama administration.
Referring back to our post of a week ago.
--Josh Marshall
Bond, Kit Bond ...
Former Bond staffer Trevor L. Blackann bites the dust in the Abramoff scandal.
--Josh Marshall
Question of the Day
And it's not just a rhetorical point. It's a question worth considering in very real terms. How much would things be different if Barack Obama had been sworn in on November 5th? The question, to some degree, gets at the very different policy perspectives of Bush and Obama. But at least as much, it points to how much things might be different right now if we had an actual president in office -- one who had some legitimacy, some level of public approval and, most importantly, knew he'd be able to see his policies through years rather than weeks into the future.
It's no one's fault, per se. It's written into our constitutional structure. But though our real and fundamental problems are profound, I think we're paying mightily for having no captain at the helm at one of the most perilous points in our recent national history.
--Josh Marshall
Vote Early and Often!
From the AP ...
More Floridians voted for John McCain than Barack Obama on Election Day, but the Democrat sealed his victory in the state by winning more early and absentee votes.An Associated Press study of 94 percent of the state's total shows that the Republican beat Obama by almost 5 percentage points on Nov. 4, but Obama trumped McCain by 11 percentage points in early and absentee balloting. Overall, Obama beat McCain 51.4 percent to 48.6 percent in Florida, becoming only the third Democrat in 11 presidential elections to carry the state.
--Josh Marshall
Survey Time!
Just a reminder, BlogAds is doing its fifth annual reader survey and we could really use your help. The more we know about you, the easier it is to sell ads and keep paying the bills.
--Andrew Golis
Taxpayers Get Golden Shower
We're focusing today on Mack "MackDaddy" Whittle, longtime CEO of South Financial Group, who pushed 
up his retirement last month so he could cash out with a $18 million Golden Parachute just before sending his bank hat in hand to the Feds to get $347 million in choice Grade A Prime bailout money.
You don't have to know too much about complex derivatives or even simple accounting to know that all dollars are fungible. So the more money out to Whittle is more money needed from the taxpayer to keep South Financial Group on its feet.
But we also know Whittle isn't the only one who's pulled something like this. And we want to put together a list of everyone who has. It doesn't have to be precisely like this. Gazillion dollar corporate retreats while you've turned your company over to the Treasury Department's corporate ICU will do fine as well.
So let us know all the examples you can think of.
Late Update: Surprise, surprise -- turns out Whittle was a part of McCain's South Carolina finance team. And now a shareholder is suing him to cough up some of the loot.
--Josh Marshall
TPMtv: Senator Stevens' Farewell
Indicted, convicted and now defeated, Sen. Ted Stevens (R-AK) made his farewell in the Senate today. We bring you the latest in today's episode of TPMtv ...
Full-size video at TPMtv.com.
--Josh Marshall
Yar!!!
I don't want to draw over-broad interpretations. But historically, the rising incidence of piracy has frequently, if not always, been a sign of the receding reach of whatever great power has taken on responsibility for policing the sea lanes. The decline of the Hellenistic monarchies in the Mediterranean before the rise of Rome. Caribbean piracy during Spain's long slide into decrepitude and before England decided she lost more than she gained from it. There are many examples. I note too that the Russians just announced that they're sending a few more warships to try to get things under control off the coast of East Africa.
--Josh Marshall
Holy Crap
Rep. Henry Waxman (D) has ousted John Dingell (D) as Chair of the Energy and Commerce Committee.
That's a hugely big deal on any number of levels -- not least of which is the two men's very different positions on energy policy. We'll have more soon.
Late Update: Here's the reaction from a Republican Hill staffer friend of mine -- very sane good guy, but, you know, still a Republican ...
Dude:The day Henry got into this race, this result was ordained.
The differences between the 2 are, as you mentioned, HUGE.
But, honestly, the real story here is Nancy Pelosi whacked John Dingell. She put a hit on him, and it was executed.
The rest of the story takes a back seat to that FACT.
For the moment, I'm still going with 'Holy Crap'.
Late Josh POV Update: My own take is that this is fundamentally Waxman's doing, not Nancy Pelosi's -- though certainly Pelosi could have come out in favor of the incumbent chair (and the principle of seniority) and quite clearly did not. This seems more like their interests being aligned. And off the insidery personalities front, this is a really, really big deal in policy terms. Note too that Phil Schiliro, Waxman's longtime top guy in the House, is now Obama's chief Hill lobbyist. This is more grease on the skids of real change on the energy and environment front.
Later Update: TPM Reader SW does not like it ...
Democrats in Congress have no sense of justice. Joe Lieberman who was rejected by CT Democrats and then rejected the party by undermining Obama during the campaign retains his committee. Congressman Dingell who helped deliver votes for Obama in blue-collar Michigan and has been a pillar of strength in the party for many, many decades gets the boot. What is wrong with this picture?
At the end of the day, I think you simply cannot make the decision on these grounds. But there's no denying or ignoring the very different outcomes.
--Josh Marshall
Election Central Morning Roundup
Arizona Gov. Janet Napolitano is reportedly Obama's pick for Homeland Security secretary. That and the day's other transition news in the TPM Election Central Morning Roundup.
--David Kurtz
Need a Catchphrase
In our new economic era, I think we need a new catchphrase for CEOs like Mack Whittle of the South Financial Group, who pushed up his retirement ahead of schedule so he could bag his mega-Golden parachute a few weeks before he sent his company hat in hand to the government for bailout funds.
Total bailout for Whittle's company: $347 million. Total parachute for Whittle: $18 million.
Seriously, what's the catchphrase? Because I think we're going to see a lot of this.
Late Update: The unfortunate truth is that the tried and true 'golden parachute' is an even better name for what these new guys are doing than what we've usually known as a golden parachute. But since that's already taken, we must look elsewhere. The best entry I've seen so far is TPM Reader RB's 'bail jumping.' Or, as I might shift the words around, 'jumping bail.'
Latter Update: Perhaps just TPM Reader LP's simple 'Golden Bailout'?
Late High Altitude Update: A slew of readers mention some play or another on the name D.B. Cooper, which is extremely clever and really captures what the game is, though I fear may be too obscure for the younger set.
--Josh Marshall
Parody Lapping Reality
Last night I was mulling a 'deep thought' post suggesting that GM should just reorganize as a bank holding company and get TARP funds that way. Looks like I snarked too soon.
--Josh Marshall
Not Reassuring ...
From Reuters ...
Citigroup Inc faced a crisis of confidence on Wednesday as investors questioned the survival prospects of the U.S. banking giant, and its shares tumbled 23 percent to a 13-year low.The second-largest U.S. bank by assets has been reeling on concerns that mounting losses from credit cards, mortgages and toxic debt could overwhelm its efforts to slash costs and add deposits. Last month, Wells Fargo & Co dealt a blow by derailing Citigroup's bid to buy Wachovia Corp.
Citigroup shares closed down $1.96 at $6.40 on the New York Stock Exchange and have fallen 33 percent this week as some investors concluded that Chief Executive Vikram Pandit's plan to shed 52,000 jobs and cut expenses by one-fifth won't restore the bank to health.
"People are looking at their business model and wondering how on earth they're going to be able to survive," said William Larkin, a fixed-income manager at Cabot Money management in Salem, Massachusetts.
--Josh Marshall
Latest out of Minnesota
Today was the first day recounting in Minnesota. And Al Franken made up some decent ground against Norm Coleman. The day started with Coleman ahead by 215 votes. And after recounting 18% of the precincts, Franken had picked up 41 votes, bringing the deficit to 174. As you can see, that's about the pace Franken has to keep up if he's going to catch up with Coleman. But of course there's no reason to think that the 'pace' tomorrow will be better or worse than today. So there's still really no telling what's happening.
Another point to keep in mind is that these shifts are in ballots that neither side disputed. In other words, these were changes based on based on ballots where the voter intent was clear enough that neither campaign questioned it. There's a whole other pile of ballots that one or the other campaign challenged. And those won't get looked at until mid-December.
According to the Star-Tribune, Coleman's people challenged 146 today and Franken's 123.
--Josh Marshall
Ted Stevens Concedes
The old rascal finally admits defeat in Alaska's protracted election process.
--David Kurtz
Holder Is No Gonzo
A quick look at what Eric Holder's public statements on the issues swirling around the Bush Justice Department suggest about his potential tenure as attorney general.
--David Kurtz
The Streak Ends
Missouri officially goes for McCain.
And our map is finally completed.
--David Kurtz
The Mandate
Former Sen. Tom Daschle's possible nomination as secretary of HHS is another sign to advocates of heath care reform that Obama means business and will put health care front and center early next year.
--David Kurtz
TPMtv: Just Start Bailing
Bailout duo Henry Paulson and Ben Bernanke took to the Hill again yesterday to talk TARP, while the CEOs of the Big Three car companies tried to get in on the action. In today's episode of TPMtv, we bring you the highlights, the lowlights and Ron Paul's quest for gold...
Full-size video at TPMtv.com.
--Rachel Slajda
A TPM Bailout?
No, don't fret, we're not reorganizing as a bank holding company to access TARP funds. And relative to a lot of other companies our finances are holding up well. But we are considering funding our own micro-bailout ... well, maybe nano-bailout, of one small sliver of the financial services industry.
What am I talking about? We're considering hiring a business and finance reporter-blogger. As you'd probably figure, we're not looking to gin up a TPM version of Squawk Box or have some slicked-back-haired right-winger ranting about zeroing out the capital gains tax or yelling about how undervalued the financial sector stocks are. And business and finance news wasn't something I'd really imagined TPM getting into. But we're already making plans to shift a lot of our TPMmuckraker.com resources to muckraking the financial collapse, the resultant bailout and all the shenanigans and self-dealing and new lobbying gambits. One of the things I most prize about TPM is that we've been able to stay nimble and light enough to be able to focus our resources on where the story is. And there's no getting around the fact that this is now where the story is.
We're not going to try to tell you which stocks to buy and, at least in our news coverage, what policies the government should be following. We'll focus on our area of core competence: muckraking ... finding where the wrong-doing is, the betrayals of public trust, particularly where business and finance intersect with government -- as they are now with a mounting frequency. Hopefully we'll also be pulling together the broader narrative that can be strewn about in a hundred different places and difficult to put together in clear view.
Now, I said above that we're considering hiring someone. And I put it that way because when we formally advertise a job listing we're not bluffing. We only list for a job when we're sure we're going to be hiring someone. In this case, we'll still in the planning stages. (I have to think through the finances and how it fits in with the rest of what we're setting out to do editorially this year.) But if this is an opportunity that interests you we'd like to hear from you. We're looking for someone in all likelihood with one of two professional backgrounds. Either someone with experience in business/financial journalism or (and here's where the bailout idea comes in) someone cast off by the rapidly downsizing financial services industry (who knows how things work) and always wanted to get into journalism and finds this a particularly auspicious moment. If you're interested, drop us a line at talk (at) talkingpointsmemo.com, with a letter and resume and the subject line "finance blogger".
--Josh Marshall
Better in the Senate
It seems that Clinton at the State Department is close to a done deal. But I think we should consider that during her time on the national stage Sen. Clinton has been at the helm in two big undertakings -- had two big executive leadership tasks. One was health care in 1994 and the other was her presidential bid in 2007-08. Each was something of a trainwreck from an executive-level management perspective. And the State Department is a notoriously intractable bureaucracy. I still need some help understanding this decision.
--Josh Marshall
Daschle on Health Care Reform
Reports in the last hour name former Senate Majority Leader Tom Daschle as Obama's pick to be the new secretary of the Department of Health and Human Services.
Here's an interview Steve Clemons did with Daschle earlier this year on the subject of health care reform:
--David Kurtz
Burrowing In
In response to the stories this week about Bush political appointees burrowing in to career positions in the federal government, we've gotten some reader emails that suggest people aren't entirely clear on how this works -- or what the point of it is.
The suggestion that Obama can merely fire these people once he takes office misses the point entirely. The whole reason for burrowing in is to take advantage of the protection of the federal civil service system which is intended to prevent career personnel from being subject to retaliation and removal by the party in power. That's a good thing.
And, yes, these political appointees-turned-career civil servants will be supervised by the new political appointees that Obama names. So they won't be able to run amok completely unchecked, but don't underestimate the ability of well-placed bureaucrats to slow down or even undermine new initiatives.
Late Update: TPM Reader SG raises a separate but related point, which I agree is a factor:
From my point of view, most of the "Burrowing" you are seeing is not about people trying to continue the Bush Jr. Administration's policies into the Obama Administration. It mostly the fact that these political appointees are facing one of the toughest job markets in the past three decades, and on top of that face zero prospects in getting a job lobbying their former agency because the new political appointees really don't care what they (or their potential clients) think about any issue. I think this is much more of a kitchen table issue for a select group of people who hitched their wagon to the Bush Administration, and now find out that the horses have been shot and they are in Death Valley. There are no jobs in DC for them outside the government. So much for drowning it in the bathtub.
--David Kurtz
Final Acts
Even some Bush political appointees at EPA are crying foul over the administration's 11th-hour push to allow major polluters to build near national parks and wilderness areas.
--David Kurtz
Lost in Foggy Bottom
At the NY Observer, John Koblin has a fun rundown of the press hyperventilation over Obama's possible but not quite yet offer of State and Hillary's possible but not quite yet acceptance.
--David Kurtz
Hagiography Alert
From today's Page 1 canonization of Henry Paulson by the Washington Post:
As he pored over the books of mortgage giants Fannie Mae and Freddie Mac, he discovered that they were about to collapse and that the financial markets would experience what he called "a meltdown to end all meltdowns."The federal government would have to seize the firms. But the law said their management would have to agree, and his own staff had reservations about whether Paulson had the legal authority to force them to surrender.
"Trust me," came Paulson's curt answer. "I'll get it done." ...
As financial firms tumble and traditional oversight agencies prove impotent, Paulson has filled the void with his 6-foot-1 frame, summoning the rest of Washington and Wall Street to get in line. ...
"[I]f you take charge, people will follow," Paulson said in an interview. "Someone has to pull it all together."
In the next installment, our green eyeshade-wearing superhero gets tangled up in his own cape when he is suddenly forced to reverse course and abandon his initial bailout plan. And don't miss the stunning conclusion! In a gripping cliffhanger, the runaway locomotive of financial crisis hurtles toward certain destruction while our superhero is busy polishing his reputation in interviews with the local press.
--David Kurtz
Election Central Morning Roundup
John McCain will reportedly run for re-election in 2010. That and the day's other political news in the TPM Election Central Morning Roundup.
--David Kurtz
It Looks Like It's Over for Uncle Ted
The AP calls the Alaska Senate race for Mark Begich.
--David Kurtz
Texas Justice
An odd report out of South Texas where a Willacy County grand jury has apparently indicted Vice President Dick Cheney and former Attorney General Alberto Gonzales. But this doesn't look like the comeuppance so many have hoped for. I can't piece together from the news reports what the precise allegations are but they don't seem to implicate Cheney or Gonzales directly in any wrongdoing. In fact a little googling shows the district attorney down there has been embroiled in one controversy after another, including getting arrested himself at one point, though he was later cleared. So this one may be entertaining but not for the reasons the headlines might suggest.
Late Update: Will Bunch has some background on the federal detention center in Willacy County that is ostensibly at the heart of this indictment.
--David Kurtz
For Whom the Bell Tolls
Alaska has resumed its vote counting in the Senate race, and Ted Stevens (R-AK) is now trailing by more than 2,000 votes. It's a large enough margin -- at this point -- that an automatic recount would not be triggered.
More soon.
--David Kurtz
Eagleburger: "I Don't Want to Beat Everybody to Death, But ..."
You wouldn't expect a Republican former secretary of state to embrace the leading Democratic contenders for the job, but in an appearance on MSNBC this afternoon Lawrence Eagleburger went off, reserving faint praise only for Hillary Clinton:
--David Kurtz
Things Were Said, Feelings Were Hurt
Video of Senate Dems public love fest/reconciliation:
--David Kurtz
Meet the New Boss
Howard Dean tells TPM Election Central that Senate Dems were just following Obama's lead on handling Joe Lieberman. "He called the shots, and that's fine," Dean says.
--David Kurtz
Question of the Day
How many companies are taking public bailout money and simultaneously lobbying the government to cut the strings that the money came with?
--Josh Marshall
TPMtv: Secretary of Speculation
Nobody knows for sure yet if Hillary Clinton will be the next secretary of state. But of course that hasn't stopped the world of television pundits from weighing in on the possibilities ...
Full-size video at TPMtv.com.
--Ben Craw
Forced Group Hug
Democratic senators come together and make up with a mildly repentant Joe Lieberman.
He keeps his homeland security committee chairmanship, but relinquishes a subcommittee chairmanship and a seat on the separate Environment and Public Works Committee. And the Dem caucus passes resolution "rejecting" Joe's remarks about Barack Obama during the campaign.
--David Kurtz
What a Difference an Adult Makes
Obama makes a surprise speech via video this morning to the Governors Global Climate Summit in Los Angeles.
--David Kurtz
All for One and One for All
Contrary to her reputation in some quarters, Hillary is seen by some within Obamaland as a consummate team player.
--David Kurtz
Election Central Morning Roundup
Joe Lieberman's fate to be decided today, by a very forgiving Democratic caucus. That and the day's other news in the TPM Election Central Morning Roundup.
--David Kurtz
Revanchist Sector Hit Hard
Focus on the Family eliminating 202 jobs, biggest layoff ever.
--Josh Marshall
Eh ...
About that Guardian story reporting that Hillary's going to accept Obama's State Department offer ... Regular readers know I put next to no stock in what the British papers report about American politics. And in this case, I'll believe it when I see it with some real sourcing and from another news outlet.
Mind you, that doesn't mean I don't think it'll eventually happen. The latest chatter I've heard is that it's well on the way to being a done deal (though the rationale still escapes me). I'm just not buying this as confirmation.
--Josh Marshall
We Bring Good Things to Life
TPM Reader GB sends this along about GE ...
Through its GE Capital subsidiary gets about from 30-50% of its revenue from the finance business. So bailing it out makes as much sense as bailing out AIG or the investment banks.And in terms of assets, it's leveraged also - about 80% of GE's total assets are controlled by GE Capital. So it's better to think of it as a bank with an industrial base, rather than an industrial company that does financing.
As the WSJ article I linked to makes clear, this is definitely the case. But I don't think GE's huge stake in its finance arm is actually what makes it eligible for the federal guarantee. It's the two banks proper that it owns that does that. And that still strikes me as a backwards way to make policy.
On a more general note though, GE's heavy reliance for profits on its finance arm seems troubling to me for a different reason. It gives me the sense that the profitable parts of our real economy -- as opposed to the inflated finance economy -- were only profitable -- or mainly profitable -- because they've wedged their way into the paper economy.
--Josh Marshall
Slap
The Senate's Democratic leadership appears to have come around to recommending that Lieberman keep his prized chairmanship.
Kos also has some thoughts on the proposed 'punishment'.
--Josh Marshall
2Gs
We're all talking about whether GM will get a lifeline from the Feds. But I hadn't heard that GE has already gotten one, albeit not of the same sort GM is looking for. Last week the federal government, or more specifically the FDIC's Temporary Liquidity Guarantee Program agreed to guarantee "as much as $139 billion in long- and short-term debt through next June."
How'd they manage that? Because the company "owns a federal savings bank and a Utah industrial bank whose deposits are insured by the FDIC."
Late Update: Let me say a bit more about this. I don't know GE's finances or their precise interconnections with the rest of the real economy. But given their role in all sorts of manufacturing, at least in the abstract, I can see the logic of backing their ability to sell debt. It may make a lot of sense. But we should do it because it makes a lot of sense. Not because they happen to own some bank in Utah. The financial press is filled with stories of all sorts of companies that are buying banks for no other purpose than to get a back door into the bailout funds. For a bunch of hardcore market types, I'd like to see a little more of an eye for perverse incentives. Rather than saving the banks, it looks like we're sucking a big chunk of the economy into the banking sector. Again, drift ...
--Josh Marshall
Cheney! Duck!
Absolutely do not miss our TPMCafe Book Club this week. We're discussing Barton Gellman's Angler, The Cheney Vice Presidency. Joining the discussion are Paul Mirengoff, practicing lawyer and co-founder of conservative blog Power Line; Spencer Ackerman, senior reporter at the Washington Independent and former TPM reporter and blogger; Jacob Heilbrunn, senior editor at the National Interest and author most recently of They Knew They were Right: The Rise of Neocons; David Greenberg, writer and associate professor of Journalism & Media Studies at Rutgers University, "History Lesson" columnist for Slate; and Steve Clemons, political blogger and Director of the American Strategy Program and the New America Foundation.
Here's Gellman's post kicking off the discussion. And here's Heilbrunn's first response.
--Josh Marshall
No Credit
Apropos of the post below about thinking bold, this is from Time.com ...
After years of setbacks and shake-ups, the first Tesla Roadsters were delivered to customers this year. Reviews have been ecstatic, but Tesla Motors has been hit hard by the financial crisis. Plans to develop an affordable electric sedan have been put on hold, and Tesla is laying off employees. But even if the Roadster turns out to be a one-hit wonder, it's been a hell of an (electric) ride.
Is the credit crisis really drying up investment money for the companies making the big innovations in electric cars? Undoubtedly it is to some degree. But I'd want to see more details.
Late Update: From TPM Reader ES ...
I've been following the Tesla story closely for a couple of years now. There's a lot to it -- a soap opera's worth -- but it is definitely true that the credit crunch has been a problem for them in terms of financing.To follow this story, and green car initiatives in general (including the Chevy Volt, which is BIG), autobloggreen.com is must read. It is by far the best online source for information in this area. To read just about Tesla, see: http://www.autobloggreen.com/tag/tesla/
Later Update: "Almost all of Tesla's $105 million in startup capital has come from wealthy California idealists and venture investors," Business Week reported last year. Here's the article.
Yet Another Late Update: TPM Reader GL reminds us that whatever GM's other problems, and they're legion, they are the ones behind the Chevy Volt. Jonathan Rauch wrote about the Volt earlier this year in The Atlantic.
Yeah, That Too Update: From TPM Reader MB ...
I too have been intrigued by and rooting for Tesla the past few years. But I think the 1st order of business is replacing the electric grid or you're putting the car(t) before the horse.If we get mass adoption of Teslas, Volts and Priuses, we're then using household current to recharge which is generally the equivalent of burning massive amounts of coal in most parts of the country. Ideally you'd want a huge wind/solar buildout and efficient battery manufacturing/recycling in place before the cars arrive en masse.
Not to say we can't develop them simultaneously but we're talking massive scale infrastructure requirements.
And a better investment than the Wall Street black hole we're currently dumping it into.
This is clearly a big issue, a big part of the equation. But I think that mass adoption of electric cars is a problem we'll deal with when we get there. Not to be flippant about it. But there's clearly a lot to do. And I don't see why not to move on all fronts simultaneously.
--Josh Marshall
Lunch Time Reading
Calvin Trillin, on what is now purported to be the best barbecue joint in all of Texas.
--David Kurtz
More Bold
As we know, crisis can mean opportunity. And sometimes crisis leaves so much broken that it's the once in a generation or a century opportunity to build stuff from the ground up rather than tinkering on the margins and making incremental change.
Over the weekend I was discussing the question of whether or not we should be bailing out the auto industry. One issue that has come up over the weekend is that we may be wrong to assume that bankruptcy just means conventional Chapter 11 reorganization (which in the abstract at least could be a good thing) rather than liquidation. In the current economic climate and with the credit markets still out of whack, bankruptcy might actually lead directly to liquidation. That probably means at least a million jobs eliminated at in one fell swoop -- something I don't think we can allow in the current situation.
One other point behind the effects on individual families' lives and the macro-effects on the economy, I think there are real national security implications to losing the domestic auto industry because you lose a substantial amount of your heavy manufacturing base. Maybe I've just got my head stuck in the 20th century on this front; but I don't think so.
A friend points me to this website: it's Tesla Motors. They have a car that is 100% electric, goes 244 miles per charge and goes from 0 - 60 in 3.9 seconds. Now, I know electric car market is very complicated on both the technology and business fronts. A lot of TPM Readers know a lot about it; and I know very little. I'm sure this Tesla car costs a gazillion dollars. And maybe Tesla's crap. And some other manufacturer is the one that's on the right track. (I'm sure I'll hear from a lot of you soon on this. And that's great; I want to know.) But that's not the point. Some people are really far ahead working out the technology. And I'm curious to hear who that is.
But the point is that we've got the hood up and maybe the engine out on the national economy. That's a bad situation on a lot of fronts. But it's also the opportunity to really change things. Not just fix things on the margins but make the big changes. As long as we're talking about sums of money in the tens and hundreds of billions of dollars, let's not restrict ourselves to considering whether we throw Detroit a lifeline that keeps them in motion and employing their workers through the current recession. Maybe we need to invest 50 billion dollars in having a mass market fully electric car in five years. I don't see anybody who doesn't agree that whatever the costs of letting GM go under, that it's management who drove this company into the ditch with a lot of terrible decisions and unwillingness to change. So maybe we take GM into some sort of managed restructuring, push out management, clean out the equity holders, and use the 'company' as the vehicle for leapfrogging the US into the 21st century, non-hydrocarbon auto industry.
As you can see, there are a lot of details I don't have a handle on. And I'm going to be trying to come up to speed. But one thing I'm confident about is that the real danger we face is being too timid, not too bold. We're going to spend a ton of money -- whether it's to bailout the auto industry, keep the Great Lakes states on life support for ten years or putting in place some top to bottom program to get us to where we actually need to be. The money, for those who have eyes to see it, are essentially sunk costs at this point. The danger is that we spend all the money and come out the other end still with a big region of the country tied to a dying industry, no true progress on the energy/climate crisis front and a lot more debt.
--Josh Marshall
TPMtv: Sunday Show Roundup: Bailout Blues
FDR said that the only thing we have to fear is fear itself, and there certainly was plenty of fear to go around on the Sunday morning talk shows ...
Full-size video at TPMtv.com.
--Ben Craw
Drift
Am I the only one worried that by the time Obama is sworn in on January 20th, the Paulson Treasury will have run through almost a trillion dollars to little or no effect?
--Josh Marshall
Election Central Morning Roundup
John McCain heads to Chicago for a sit-down with the President-elect. That and the day's other transition news in the TPM Election Central Morning Roundup.
--David Kurtz
Hunkering Down For a Fight
The military-GOP complex won't go quietly into the night:
The uniformed services are trying to lock in the next administration by creating a political cost for holding the line on defense spending. Conservative groups are hoping to ramp up defense spending as a tool to limit options for a Democratic Congress and president to pass new, and potentially costly, social programs, including health care reform.They also like the idea of creating an unrealistically high baseline of expectations for defense spending that will allow them to claim President Obama has cut defense spending. ...
There are so many things wrong with this emerging process that it is hard to address the issue concisely. Promoting overspending on defense in order to forestall popular social spending is undemocratic - it creates a false tension between national security and other public policy goals.
The informal alliance between the services and conservative think tanks threatens to further politicize the military. The abuse of national security arguments to win political arguments is both morally suspect and threatens the security of the nation by delinking strategic assessment from public policy.
Ultimately, the most dangerous aspect of this development is the threat posed to civil-military relations. We went through a similar process eight years ago, and the results were painful and unsatisfactory.
--David Kurtz
HRC as SOS
I can't be the only one who's thought of this.
In late December of last year The New York Times wrote a lengthy article about the various donors to the Clinton Foundation, and the conflicts of interest (real or apparent) they might create for Sen. Clinton should she become president. At the time Bill Clinton said that if Hillary were elected he would disclose the identities and contribution totals of all the Foundation's contributors going forward, though not the ones that predated her presidency.
The Foundation's contributors include not only a number of heads of state but also a lot of high-flying businessmen who play the game so high in the stratosphere that what we normally consider foreign policy questions routinely play into their business interests.
Now, Secretary of State is not president. But in the foreign policy realm, it is as close as you get. So how does this all play out if she's nominated to serve as Secretary of State? Does the same going-forward disclosure policy apply?
Late Update: I'm not sure when today this article went up. But it turns out the Times has a piece up on their site about precisely this question.
Latter Update: TPM Reader PD reminds us of this follow-up to the December 2007 Times article. Also by Becker and Van Natta.
--Josh Marshall
Okay, Maybe ...
I've been saying that 60 votes is extremely unlikely given how hard it will be for the Democrats to prevail in the Georgia senate run-off. But Kos had Research 2000 poll this race last week. And while it's definitely an uphill struggle, the odds may not be quite as long as I'd figured. The numbers they got were Chambliss 49%, Martin 46%.
At the end of the day, that's still an incumbent under 50%, albeit barely. The other wildcard is turnout, which will almost certainly be dramatically lower than on November 4th. A lot of factors would suggest that diminished turnout in this race hurts the Democrats. But it also makes the ground game a more critical factor.
Kos has more.
--Josh Marshall
An Important Tell
From CQ ...
Among the small number of White House staff announcements made so far by President-elect Barack Obama , most of the top spots have gone to recent Capitol Hill veterans....
While Capitol Hill experience is not the primary reason for the appointments, the hires reflect Obama's sensitivity to the importance of Congress in governance, according to a senior transition official who spoke on the condition of anonymity.
He is intent on enacting an agenda by finding common ground with Democrats and Republicans, according to the official.
Turning to Capitol Hill for talent is a "very smart move that will only enhance prospects for significant legislative victories," said Jim Manley, a senior aide to Senate Majority Leader Harry Reid , D-Nev.
The article goes on to suggest that Hill people who had already made the move to K Street may face a real hurdle in getting appointments.
--Josh Marshall
Election Central Sunday Roundup
Barack Obama has officially resigned from the Senate. That and other political news in today's Election Central Sunday Roundup.
--Eric Kleefeld
How Did I Miss This?
A Rasmussen poll from a week ago had 64% of Republicans nationwide saying that Sarah Palin was their top choice for the 2012 nomination.
In other news, Mike Wooten, the state trooper and former brother-in-law who Palin abused power over and lied about, is getting reassigned again because of continuing threats to his safety tied to Palin's nonsense.
--Josh Marshall
Greg Craig
Mike Allen says that "Democratic officials" confirm to him that Greg Craig has been chosen for White House counsel.
I'm a little surprised he's not slotted for some foreign policy related position.
--Josh Marshall
