Do you care if it’s a man or woman patting you down at TSA, even if they're gay or trans?

And interesting conundrum that we explore over at AMERICAblog Gay.

In the end, I don't think we're even talking about gender. I think we're talking about sexual orientation. The idea is that you don't want someone feeling you up who just might be turned on by it (though it's absurd to think that some TSA agent who does hundreds of pat downs a day is getting off on it). Nonetheless, I think that's the rationale. So shouldn't it be based on sexual orientation of the patter downer, and not the apparent gender? Now, having said that, I'm more comfortable stripping down in front of a male doctor than a female one, regardless of sexual orientation (theirs or mine), and I think I might have been more disturbed had a woman touched my "junk" that day in the Amsterdam airport than had it been a man (though I'm not sure it would have mattered - and hell, I could see some men preferring a woman touching them than a man (cooties!), and that's a whole other issue). But that still might be the odd cultural bias that's bred in to me about "oppose genders together equal sex," regardless of my orientation.

Read the rest of this post...

S & P downgraded credit rating of United States

S & P, which played a key role in the economic meltdown, has lowered the credit rating of the United States::

Standard & Poor’s announced Friday night that it has downgraded the sterling U.S. credit rating for the first time.

The move came even though the Treasury Department said that it had found a math error (a $2 trillion math error) in the firm’s calculations of deficit projections, according to a person familiar with the matter.

S&P; decided to lower the AAA rating, held by the United States for 70 years, to AA+ after a bipartisan debt deal signed into law this week failed to assuage concerns about the nation’s growing spending.

Great work all around.

S & P already screwed us all over once. This time they were once again aided and abetted by the key players in DC. Read the rest of this post...

Earth may have once had two moons that collided

Until the Republicans decided that we could no longer afford two moons, and cut it back to one.  From the Guardian:

The remnants of a second moon that orbited the Earth billions of years ago may be splattered across the far side of our moon, scientists claim.

The two moons are believed to have been created at the same time and followed a similar path to the moon we're familiar with today, but after tens of millions of years of peaceful co-existence, the two appear to have crunched together in a gentle collision that left the smaller, just a third of the size, spread across the larger like a cosmic pancake.

Researchers put forward the idea after computer simulations found that a collision with a second, sibling moon in Earth's early history might solve the longstanding puzzle of why the two faces of the moon differ so dramatically.

Read the rest of this post...

Life in a liquidity trap: Bank pays negative interest rate

As saltwater Keynesians have been saying since forever (or for a while anyway), you can't have inflation in a liquidity trap, a situation where short-term rates are near or at zero:

Here’s one way to think about the liquidity trap — a situation in which conventional monetary policy loses all traction. When short-term interest rates are close to zero, open-market operations in which the central bank prints money and buys government debt don’t do anything, because you’re just swapping one more or less zero-interest rate asset for another. Alternatively, you can say that there’s no incentive to lend out any increase in the monetary base, because the interest rate you get isn’t enough to make it worth bothering.

At zero percent interest, money just sits in big stagnant pools.

How do you get to zero percent interest? One way is by trying to stimulate (with lower and lower interest rates) an unstimulatable economy — one riddled with personal debt, joblessness, and inefficient demand — one like ours. Rates go to zero, the economy still lays flat as a pancake, and nothing moves. Everyone's trapped.

Well, in 2008, when the above was written, there were lots of bright little freshwater Friedman-esque minds arguing that liquidity traps don't matter (despite the evidence of Japan) and that increasing the monetary base (i.e., "printing money") is always inflationary, even hyper-inflationary.

Welcome to the real world (h/t Krugman):

Bank of New York’s move to charge a fee on large deposits is emblematic of much broader strains that plague the U.S. economy and the global financial system.

In response to the recession and anemic recovery, the Federal Reserve has pushed interest rates to zero and purchased $2.6 trillion worth of mortgage and Treasury securities. In the process, it has flooded the financial system with cash. But banks and investors are reluctant to put that cash to work because they are worried about the economic outlook. With no other place to put it, they’re parking it in banks.

Put simply, if you have a lot of money, BNY will charge you to take your deposit. Why? Your money is useless to them. What will they do with it, invest? In what? The next big bubble isn't on the horizon yet. And interest rates, even for banks, are (ahem) at all time lows.

In essence, they're charging you a storage fee. And with Barack Obama's eager hand at the wheel, government spending is going into reverse, fast, which will almost guarantee low demand and low employment for (my best guess) five to ten years.

I've had Rubicon dreams for the last few days. On this Super Congress with its hair-trigger triggers, all we need is one bad Dem and the Republicans have a majority for anything they want to do. Do you think Pelosi and Reid will limit the damage to just one bad Dem? (Do you think Team Bipartisan will have some input on that as well?)

As I look back, it seems we've been heading up this destructive hill since Reagan (some argue since Carter). It's been work, wrecking the country, fighting progressive and populist gravity for every mile gained.

This week, they may have finally crossed the peak. Gravity now works on their side, and the awesome slide downhill now has its own pre-triggered inevitability.

God I hope that's just a very bad dream, and we all wake up.

GP Read the rest of this post...

"Mystery company" gives $1m to Romney then dissolves

UPDATE: The "mystery" has been solved:

The check-writer is Ed Conard, who was a top official at Bain, the private-equity firm Romney helped create, and who has been a strong supporter of his over the years.

____________________

From Isikoff at NBC:

A mystery company that pumped $1 million into a political committee backing Mitt Romney has been dissolved just months after it was formed, leaving few clues as to who was behind one of the biggest contributions yet of the 2012 presidential campaign.

The existence of the million-dollar donation — as gleaned from campaign and corporate records obtained by NBC News — provides a vivid example of how secret campaign cash is being funneled in ever more circuitous ways into the political system.

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Wisconsin Dems file complaint against Republican recall senator Alberta Darling, alleging multiple felonies

Great catch by Chris Bowers at Daily Kos Elections. From the party announcement (my emphasis):

MILWAUKEE-The Democratic Party of Wisconsin today filed complaints in multiple jurisdictions alleging that state Sen. Alberta Darling has committed multiple felonies as part of a collusion and obstruction conspiracy.

(See attached complaint [pdf].)

The complaints also name the corporate front group Americans For Prosperity, Wisconsin Family Action, Wisconsin Right to Life and the lobbying arm of for-profit education corporations, the so-called American Federation for Children.

Darling's campaign and political operation is alleged to have benefited directly from groups that are part of a loose "coalition" that is funneling millions of dollars into Wisconsin in defense of her and Scott Walker's agenda.

Only when forced by the threat of a lawsuit to release some emails that indicate coordination and collusion did Darling begrudgingly comply. But Darling is blocking the release of records relating to a Democratic Party of Wisconsin Open Records Request that includes groups such as Wisconsin Right to Life -- an extreme conservative organization that is under current investigation for campaign violations.

"It appears that Alberta Darling is engaged in a coverup to hide election collusion," Democratic Party of Wisconsin Chair Mike Tate said Thursday. "The last acts of her desperate campaign are not merely pathetic. They are illegal."

Note: It's not that Darling and her investors are doing it; it's that Democrats are finally taking effective action — accusing them in actual court for actual crimes.

Darling is attracting a ton of right-wing money, as we noted here. She's also ahead of her Democratic challenger, but by a narrow margin. That race is winnable.

Our appeal for your help is above (thanks!) — and if you're in-state (or in-district) please consider donating your time. The election is August 9, which my math says is soon.

GP Read the rest of this post...

So airlines still charged you for the federal tax they didn't have to pay during the shutdown

Let me reiterate.  If you flew during the FAA shutdown, the airlines charged you a federal tax, quite a hefty one in fact.  The thing is, the airlines knew that they didn't have to pay that tax as a result of the shutdown.  They were pocketing the money, but charging you for it anyway.  It's good to be king of a monopoly industry that cares nothing about its customers because the customers have zero alternatives for travel since every airline magically charges the same fare, to the penny, as every other airline for the same routes. Read the rest of this post...

The history lesson Obama ignored

By David Woolner at Salon:

Just under three quarters of a century ago, a group of conservative economic advisers close to Franklin Roosevelt informed the President that they were worried about the rapid rate of growth in the US economy. Since 1933, when FDR took over at the height of the Great Depression, the economy had been expanding steadily, at an average rate of 14 percent per year. Schooled as most of these advisors were in the tenets of economic orthodoxy (which called for cuts in spending during an economic downturn), and unsure of the effects of the Keynesian-style deficit spending that the administration had been engaged in under the terms of the early New Deal, the President was advised to cut the budget, reduce deficit spending and tighten the money supply as a means to stave off inflation. Heeding their word (and no economist himself), FDR did just that.

The results were an unmitigated disaster.

Thanks to the Administration’s decision to move away from the increasingly Keynesian policies it had been following — policies that saw the unemployment rate fall from a high of 25 percent in 1933 to 14 percent by 1937 -- FDR launched one of the sharpest economic downturns in American history-the so-called "Roosevelt Recession" of 1937-38. In just a few short months, the GDP declined by 13 percent; industrial production by 33 percent; wages by 35 percent and an estimated four million people lost their jobs. No fool, FDR quickly reversed himself and went back to Congress to seek a massive stimulus bill to put people back to work and repair the damage to the Depression-era economy. Within three months growth had returned and the economy was back on track.

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82% of public disapproves of Congress - uh, you voted for it

There is something annoying about the fact that the public got what they voted for, a Congress full of far-right nuts, and now suddenly they're not happy about that fact. If we had stronger and smarter Democrats, they'd be making this point (you voted for these nuts, how you liking them now?), repeatedly. Including the President, who has the largest megaphone, and simply refuses to use it for anything that might smack of helping Democrats and hurting Republicans. Read the rest of this post...

NY AG Schneiderman charges Bank of New York with defrauding investors

Gretchen Morgenson reports:

The New York attorney general is moving to block a proposed $8.5 billion settlement struck in June by Bank of New York Mellon and Bank of America over troubled loan pools issued by Countrywide. A lawsuit filed late Thursday accuses Bank of New York of fraud in its role as trustee overseeing the pools for investors.

In papers filed in New York State Supreme Court, lawyers for Eric T. Schneiderman, the attorney general, contended that Bank of New York misled investors about its conduct as overseer of the securities. The bank also breached its duties to investors by agreeing to the deal with Bank of America, according to the complaint, because the trustee is conflicted and “stands to receive direct financial benefits” as a result of the agreement.

Questioning the fairness of the deal, the attorney general’s lawsuit said that it could “compromise investors’ claims in exchange for a payment representing a fraction of the losses” that have been suffered by investors.

David Dayen highlights some key takeaways:

This is a major allegation. Schneiderman is saying that the game-playing with securitizations, which has been well-documented, represent violations of securities law on the part of the trustee and the originator of the loans. They knowingly sold junk to investors and violated their own agreements. And now they’re trying to whitewash it through a settlement where the bank and the trustee are colluding with one another. As Schneiderman says, “the Trustee stands to receive direct financial benefits under the Proposed Settlement.”

And here’s the real bombshell: Schneiderman alleges that Bank of New York Mellon was aware that Countrywide failed to transfer loans properly to the trust. This means they sold what amounted to non-mortgage backed securities to investors, who should then be granted the full value of these bonds back. The pooling and servicing agreements governing the loan transfers are very precise, and were violated in this case, according to the AG.

We'll see how this plays out in the courts, but it's clear that Eric Schneiderman is one of the few real cops on the beat policing Wall Street. His actions here could have serious consequences to the ongoing 50 state attorneys general negotiations being lead by Iowa AG Tom Miller, who has sought to immunize banks from the consequences of robosigning and foreclosure fraud in exchange for a small cash settlemen. While the Miller negotiations have sought to move past this lawlessness (look forward, not back!), Schneiderman's actions demonstrate the impossibility of a global settlement being anything but a disservice to homeowners, investors, and the American public. There needs to be more investigation and real accountability. Schneiderman's intervention in the Bank of New York/Bank of America settlement is a strong start.

Yves Smith at Naked Capitalism has more about what Schneiderman is doing and what the consequences of his actions should be. Read the rest of this post...

Lessons of the deficit ceiling showdown

From Jacob Weisberg at Slate:

Some lessons of the crisis have added significance beyond our shores. One is that America now regards its most solemn financial obligations as flexible commitments. The problem isn't just that some members of Congress were willing to contemplate national default. It was that some of them clearly desired default as a kind of ultimate weapon against social spending. The precedent has been set for using America's credit rating as blackmail. The issue comes up again in less than a year and a half, at which point the masochistic drama of recent weeks could be repeated with a different outcome. This is the way in which the United States resembles Greece—not in its underlying creditworthiness, but in making the matter of paying its debts a political question.

At the level of political culture, we have learned some other sobering lessons: that compromise is dead and that there's no point trying to explain complicated matters to the American people. The president has tried reasonableness and he has failed. It has been astonishing to watch Obama's sheer unwillingness to give up on his opponents after their refusal to work with him on the stimulus package, health care reform, or the extension of the Bush tax cuts last fall. A Congress dominated by mindless cannibals is now feasting on a supine president. But surely even he now realizes there's no middle ground with antagonists whose only interest is in seeing him humiliated.

I'm particularly struck by the first graph. Weisberg presents it in a way I hadn't completely though of. Namely, that America has now made clear that it will not necessarily pay its debts. We have become, in some ways, like other economically troubled countries where it is no longer a certainty that debt can be fully repaid, and where debt has become a political commodity.  All because of the Republicans.

If we had a partisan President, he would have noted such a thing, which not only would have worked to our political advantage in the talks, and in the next elections, it also may very well have stopped the GOP from undercutting America's financial credibility in the eyes of the world. As Joe and I have noted numerous times, the President's mistakes are not isolated incidents. They reverberate far beyond the current crisis, into other policy matters, and into the future where the numerous errors tend to coalesce into something bigger and increasingly worse. Read the rest of this post...

UE rate drops to 9.1%, still too few jobs created

A tweet by Ezra Klein about the latest numbers:

The fact that 85,000 jobs were expected doesn't make 117,000 good. We're below population growth. We are literally not recovering. (emphasis added)

And Boehner is now claiming that the poor unemployment numbers are proof that Washington is spending too much money, and that America is overtaxed and over-regulated.  It's time the President shot down this kind of dangerous talk from the Speaker.

“Today’s unemployment report is more proof that all of the Washington spending, taxing, and regulating is devastating our economy. While the American people are asking ‘where are the jobs?’ the Democrats running Washington are determined to punish small businesses with higher taxes and more red tape – including hundreds of new regulations last month alone – and to keep their spending binge going at all costs. Instead of more jobs, they’re creating more fear, more uncertainty, and more debt.
“To get our economy back to creating jobs, Republicans are working to expand American energy production to help lower gas prices, repeal the job-crushing health care law with all of its mandates and tax hikes, adopt a Balanced Budget Amendment to stop Washington from spending money it doesn’t have, and more. While the Senate and White House have resisted these efforts so far, I hope Democrats will take this opportunity to ‘pivot’ away from their failed ‘stimulus’ policies, and work with us to implement our Plan for America’s Job Creators and remove the government barriers that are hurting job growth.”

He doesn't mention, and the President refuses to say, that the stimulus worked - it created or saved millions of jobs. The problem is that it wasn't big enough. But for some reason the White House doesn't believe in strongly defending its record.

More here.

Hiring picked up slightly in the U.S. in July and the unemployment rate dipped to 9.1 percent, an optimistic sign after the worst day on Wall Street in nearly three years.

The Labor Department said Friday that employers added 117,000 jobs last month. That's an improvement from the past two months.

At least 125,000 jobs a month are needed to keep up with population growth. Twice as many [250,000] are generally associated with significant declines in the unemployment rate, which has risen for three straight months.

Read the rest of this post...

Ari Melber on the "Super Congress"

Visit msnbc.com for breaking news, world news, and news about the economy

Above is a rant by Ari Melber on the Super Congress that's a big piece of the deficit deal that passed earlier this week. Here's a snippet of the transcript:

I think that brings us to the last ingredient in this farce: the idea that these arbitrary cuts are magically going to result in equal pressure on both sides. ...Well many Republicans opposed default too, but in practice you know and I know this GOP congress has proven itself willing to risk great harm in pursuit of its agenda.

There are other larger issues with the Super Congress, but the notion that it will work out of a fear of mutually assured destruction is bogus. For starters, it's a central tenet of the modern Republican Party's governing philosophy that the social support network should be removed and Americans should all be own their own. As we saw with the deficit hysteria, conservatives are anxious to use this narrative as a means of destroying the Big Three social programs and many smaller ones as well. While some Democrats have sought to reduce waste and Cold War era weapons systems from the Pentagon budget, reducing the size of the defense budget isn't exactly a driving force of the Democratic Party. And since all of our many wars aren't funded out of the Pentagon budget, this Super Congress isn't affording liberals a mechanism to speed the end of the wars in Iraq, Afghanistan and Libya. Reducing defense spending is no Democratic holy grail. Dennis Kucinich and Mark Warner aren't in the same place on it. Decreasing the raw Pentagon budget just isn't a guiding star for the Democratic Party, particularly given the amount of Democrats who supported and funded the war in Iraq, the President's escalation of the war in Afghanistan, and his initiation with little Democratic objection of a war congressionally irrelevant kinetic action in Libya.

And that's just the Democratic Party's tensions on defense spending. There's a real tension in the Republican Party between war hawks and tax cutters. This is has the potential to undercut the Republican fear of the Super Congress not reaching a deal and snap cuts to defense. Since that fear, we are told, is critical to good-faith negotiation within the Super Congress, this is actually a pretty large structural problem with the mechanism for finding future spending cuts.

As Melber points out, the nut result is that there will be tremendous pressure on Democrats to block social spending cuts and some amount less pressure on Republicans to stop defense cuts, paired with rabid pursuit by conservatives of social spending cuts with some degree of understanding that defense should be cut some too coming from Democrats. This structural asymmetry seems destined to produce deeper social spending cuts that inflict more damage and more pain on working American families than will be felt by cuts to contracts with Halliburton, Raytheon, BAE Systems, and KBR. Read the rest of this post...

This is the seventh time the President has "pivoted" to jobs

From  Ben Smith:

[T]he underlying truth of the presidency is that through a mixture of choice -- health care -- and circumstance -- the Arab Spring, the Japan earthquake -- Obama has spent very little of his presidency publicly driving a conversation about jobs. By far the most serious jobs legislation he passes was the stimulus, but over-optimistic forecasts and implacable Republican opposition put the White House sharply on defense about it almost from the start.

And the story of the Administration is, in no small part, one of a constant attempt to pivot formally to jobs. Emily and I identified what seem like six really attempts at it, with the seventh starting now.

Read the rest of this post...

The Onion: "President Obama thanked Democrats as well as Democrats for their willingness to make tough, but necessary, concessions"

Et tu, Onion?

WASHINGTON—A day after signing legislation that raised the government debt ceiling and authorized steep budget cuts, President Obama thanked Democrats as well as Democrats for their willingness to make tough, but necessary, concessions during negotiations. "I'm truly grateful that both Democrats and their Democratic counterparts were able to reach this consensus, accepting an agreement that is far from perfect not just for Democrats, but also for Democrats," Obama said Wednesday[.]

...

"Lawmakers from across the political spectrum—from moderate Democrats to the more liberal members of the party to dyed-in-the-wool progressives—reached within the aisle and showed the nation that compromise requires real sacrifice from everyone."

Is it that obvious we were had? How embarrassing for us (h/t Glenn Greenwald).

(By the way, in that same vein it's entirely possible that the 2012 election will feature a choice between Herbert Hoover and Herbert Hoover.)

GP Read the rest of this post...