China slows down purchase of US debt

In this economic climate, who really wants to buy more US debt? More importantly, how is the US going to deal with addressing this ongoing debt problem? Borrowing and living off credit is not going to last forever.

China has bought more than $1 trillion of American debt, but as the global downturn has intensified, Beijing is starting to keep more of its money at home, a move that could have painful effects for American borrowers.

The declining Chinese appetite for United States debt, apparent in a series of hints from Chinese policy makers over the last two weeks, with official statistics due for release in the next few days, comes at an inconvenient time.

On Tuesday, President-elect Barack Obama predicted the possibility of trillion-dollar deficits “for years to come,” even after an $800 billion stimulus package. Normally, China would be the most avid taker of the debt required to pay for those deficits, mainly short-term Treasuries, which are government i.o.u.’s.

In the last five years, China has spent as much as one-seventh of its entire economic output buying foreign debt, mostly American. In September, it surpassed Japan as the largest overseas holder of Treasuries.

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Red states dominate teen pregnancy statistics

Ignoring sex education does not appear to be working very well. Bible studies and pretending as though sex doesn't happen with teens is not a policy. Wouldn't it be nice to see this Congress put an end to the silly abstinence programs that cost so much and deliver consistently bad results? Oh wait, we need to be fair to them too despite the facts.

Mississippi now has the nation's highest teen pregnancy rate, displacing Texas and New Mexico for that lamentable title, according to a new federal report released Wednesday.

Mississippi's rate was more than 60 percent higher than the national average in 2006, the U.S. Centers for Disease Control and Prevention said. The teen pregnancy rate in Texas and New Mexico was more than 50 percent higher.

The three states have large proportions of black and Hispanic teenagers — groups that traditionally have higher birth rates, experts noted.

The lowest teen birth rates continue to be in New England, where three states have teen birth rates at just half the national average.

New England? Not bad for godless communists. Surely the higher level of education had nothing to do with the results. Read the rest of this post...

Key panel votes to impeach Blagojevich

Good thing everyone caved today and seated his crony.

A key panel unanimously recommended impeachment for Gov. Rod Blagojevich on Thursday, setting up a vote that could make him the first governor to face such fate in Illinois' sordid political history. Blagojevich should lose his job for abusing power, mismanaging government and committing possible criminal acts, including federal allegations he tried to sell off a U.S. Senate seat, the special committee concluded.

The governor's office issued a statement calling the panel's proceedings flawed and biased.
The full House could vote as early as Friday morning. A vote for impeachment would trigger a Senate trial to decide whether the second-term Democrat should be removed from office.

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Inauguration may be security nightmare

As CNN explains, a lot of us living in DC aren't even sure we'll be able to make it to any inaugural events. It's a small town, which makes traffic a nightmare, but it's a big enough town to make walking to events impossible (it's also not very safe walking across town in the wee hours of the morning). Read the rest of this post...

Nobel economist Stiglitz, key Senate Democrats, criticize Obama stimulus plan as wrong-headed, not enough

From Bloomberg:

Nobel laureate Joseph Stiglitz said Obama’s plan is “not enough” because it puts too much into tax cuts rather than higher spending.

“Clearly more is going to be needed,” Stiglitz, a professor at Columbia University in New York who advised Obama during the campaign, told reporters at a conference in Paris today. “With a lot of the money going to tax cuts, they won’t have the effect some would hope.”

Congressional Skeptics

A top congressional Democrat also questioned the potential impact of the tax reductions Obama outlined, which would return $500 to individuals and $1,000 to families through changes in withholding.

“I’m very skeptical that’s going to make much difference,” Senate Budget Committee Chairman Kent Conrad of North Dakota told reporters in Washington. “For the average family, it’s going to add $20 a week -- I mean how much lift is that going to give?"

More Democrats are criticizing the plan:

Sen John Kerry, D-Mass., said, "I'd rather spend the money on the infrastructure, on direct investment, on energy conversion, on other kinds of things that much more directly, much more rapidly and much more certainly create a real job."

....

Sen. Ron Wyden, D-Ore., said he doubted that a modest tax cut would change consumers' spending habits.
"In tough times people don't respond all that well to marginal changes, such as a small amount of money added per paycheck," Wyden said.

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Obama tells Dean he's not welcome at event introducing new DNC chair

There is a real problem when Joe Lieberman is treated better than Howard Dean.

Sam at Huffington Post reports:

Barack Obama is set to host a press conference with incoming Democratic National Committee Chair Tim Kaine on Thursday in what will ostensibly mark the beginning of a new era for the party and the committee.

Noticeably absent from the affair will be the individual who symbolized the old regime.

Former Gov. Howard Dean is not on the list of attendees for the event, a noticeable nonattendance for someone largely credited with revitalizing the Democratic Party ranks and contributing - whether politically or through his 50-State Strategy - to major electoral gains.

In fact, AP reports that Obama's people told Dean he wasn't welcome:

But Democrats with knowledge of the situation, who spoke on the condition of anonymity to avoid angering the Obama team, say Dean won't attend the event at the request of Obama advisers.

This is part of a growing theme of poorly managed relations by the Obama people - or worse, outright vendettas with good Democrats who deserve better. I really worry that Obama is starting to create a good deal of bad blood on the Democratic side of the aisle, and unnecessarily. And as I always try to explain, it doesn't matter if some of you think its petty that people are feeling slighted. The fact remains that important, powerful people are feeling slighted - are being slighted - and the list is growing. And that does not bode well for the future of Obama's agenda in this town. At some point you need more than the minority party on your side to achieve victory. Read the rest of this post...

Roland Burris, WTF?

So now, a week after Obama, Reid and Durbin said there was no way they'd let Blagojevich appoint Obama's successor, Obama calls Reid and tells him to appoint the guy Blago picked, and Reid and Durbin capitulate. While some are saying that this episode shows what a tough guy Obama really is - successfully telling Harry Reid how to run the Senate - I'm not sure anyone came away from this one smelling like a rose.

Obama, Reid and Durbin laid a line down in the sand, the Illinois governor gayly stepped across it, and ORD blinked (and while Obama blinked to Blago and Burris, Reid and Durbin earn extra points for blinking to Obama as well). The congressional Democrats have a long history of capitulating to Bush and the Republicans, after initially talking tough. But for Obama, this is new, and starting to suggest yet another trend (the first trend being an ongoing fixation with dissing major Democrats and democratic consituencies). Earlier this week Obama gave nearly half the stimulus plan away to the Republicans in order to woo their votes, even if in so doing he gutted his own plan, and more importantly, watered down the impact the stimulus bill could have in saving our economy. And now we have Roland Burris - a bit player, to be sure - but one about whom Obama was quick to take a harsh public stand, only to subsequently cave.

The Republicans are watching and learning, to the tune of $300bn already. And that, I fear, is only the beginning. Read the rest of this post...

Live online discussion with SEIU's Andy Stern about his "Change that Works" campaign

At around 4:15 PM Eastern today, SEIU is doing a live discussion with Andy Stern about their "Change that Works" campaign.

In short, it's their campaign to pass Employee Free Choice (which is going to be an enormous fight), Health Care, and an Economic Recovery Package.

It will be $10 million dollars -- 1,000 members in the field -- full time campaigns in 35 states for the campaign. You can find more information on the campaign here, and you can join in the live chat and ask Andy a question here. Read the rest of this post...

Rick Warren sidekick demanded that all gays be arrested, published names of gays in Uganda

Max Blumenthal has conducted an in-depth investigation of Rick Warren's supposed AIDS in Africa work. It's absolutely horrifying.

[An] investigation into Warren's involvement in Africa reveals a web of alliances with right-wing clergymen who have sidelined science-based approaches to combating AIDS in favor of abstinence-only education. More disturbingly, Warren's allies have rolled back key elements of one of the continent's most successful initiative, the so-called ABC program in Uganda. Stephen Lewis, the United Nations special envoy for HIV/AIDS in Africa, told the New York Times their activism is "resulting in great damage and undoubtedly will cause significant numbers of infections which should never have occurred."

Warren's man in Uganda is a charismatic pastor named Martin Ssempa. The head of the Makerere Community Church, a rapidly growing congregation, Ssempa enjoys close ties to his country's first lady, Janet Museveni, and is a favorite of the Bush White House. In the capitol of Kampala, Ssempa is known for his boisterous crusading. Ssempa's stunts have included burning condoms in the name of Jesus and arranging the publication of names of homosexuals in cooperative local newspapers while lobbying for criminal penalties to imprison them.

Dr. Helen Epstein, a public health consultant who wrote the book, The Invisible Cure: Why We're Losing the Fight Against AIDS in Africa, met Ssempa in 2005. Epstein told me the preacher seemed gripped by paranoia, warning her of a secret witches coven that met under Lake Victoria.

"Ssempa also spoke to me for a very long time about his fear of homosexual men and women," Epstein said. "He seemed very personally terrified by their presence."

When Warren unveiled his global AIDS initiative at a 2005 conference at his Saddleback Church, he cast Ssempa as his indispensable sidekick, assigning him to lead a breakout session on abstinence-only education as well as a seminar on AIDS prevention. Later, Ssempa delivered a keynote address, a speech so stirring it "had the audience on the edge of its seats," according to Warren's public relations agency. A year later, Ssempa returned to Saddleback Church to lead another seminar on AIDS. By this time, his bond with the Warrens had grown almost familial. "You are my brother, Martin, and I love you," Rick Warren's wife, Kay, said to Ssempa from the stage. Her voice trembled with emotion as she spoke, and tears ran down her cheeks....

In August 2007, Ssempa led hundreds of his followers through the streets of Kampala to demand that the government mete out harsh punishments against gays. "Arrest all homos," read placards. And: "A man cannot marry a man." Ssempa continued his crusade online, publishing the names of Ugandan gay rights activists on a Web site he created, along with photos and home addresses. "Homosexual promoters," he called them, suggesting they intended to seduce Uganda's children into their lifestyle. Soon afterward, two of President Museveni's top officials demanded the arrest of the gay activists named by Ssempa. Terrified, the activists immediately into hiding...

when Uganda's Anglican bishops threatened to bolt from the Church of England because of its tolerant stance towards homosexuals, Warren parachuted into Kampala to confer international legitimacy on their protest.

"The Church of England is wrong, and I support the Church of Uganda on the boycott," Warren proclaimed in March 2008. Declaring homosexuality an unnatural way of life, Warren flatly stated, "We shall not tolerate this aspect [homosexuality in the church] at all."

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Is Obama's SEC choice underwhelming?

Most of the reviews out there suggest that Obama's choice to run the SEC, Mary Schapiro, is intelligent and capable. Some have suggested that she is somewhat tainted by the failings of the National Association Of Securities Dealers, which she chaired during the Wall Street crisis - though she has more recently been an outspoken critic of the Wall Street mentality.

The big question now is whether she would be aggressive enough to handle the current crisis since her tough talk came a bit late. Does the Obama team need yet another safe choice and insider or do these times call for tougher action? Wall Street excess has brought the world economy to its knees and ruined quite a few jobs and retirement plans. I would agree with the Post's Steven Pearlstein, and think that sure, she's an improvement, but we need more than someone who is simply better than a Bush appointee. After the lax oversight of recent years I wouldn't mind seeing someone more hard-nosed and confrontational, to get Wall Street working for everyone again.

All that is necessary, of course, but clearly this time we need to do more. We need an SEC chairman who is willing to move beyond narrow enforcement actions and no-fault consent decrees to stage a series of regulatory show trials that will expose in graphic detail how people think and behave at all levels of Wall Street firms. We need a chairman who will use the commission's broad powers to fine and debar from the industry big-name directors, top executives, ratings agency officials and other gatekeepers whose nonfeasance resulted in significant losses for investors, customers and taxpayers. We need a chairman who will make effective use of the bully pulpit to expose other well-known industry practices that put the interests of Wall Street ahead of those of its customers. And we need an SEC chairman willing to protect the powers and independence of the SEC against the almost-certain encroachment of the Treasury and the Federal Reserve, whose records on investor protection are virtually unblemished by success.

Mary Schapiro is a wonderful person and a fine public servant who would certainly be a big improvement over the SEC's current, ineffectual chairman. However, given the depth of the current crisis and the virulence of Wall Street's culture, she is not the change we need.

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"Obama's $300 Billion Tax Cut: Lots of Buck, Not Much Bang"

Krugman points out an analysis of the proposed $300 bn tax cut that suggests it's a lot of nothing. I think Obama is right - we need this stimulus, fast, and it had better be massive. But devoting nearly 40% of the stimulus to non-stimulus tax-pork, in an effort to woo Republican votes, seems at odds with the notion that this is an emergency.

It is becoming increasingly difficult to justify devoting 40% of the stimulus plan to non-stimulus spending. Either we have a national emergency or we don't. It's time we cut the talk of "but Obama promised he'd cut taxes." Yes, he did. He also promised he'd lift the ban on gays in military and work to repeal DOMA, and I don't see those included in this package. The stimulus package is not the place for extraneous campaign promises that have nothing to with the immediate economic emergency facing our nation. There will be plenty of time for Obama to cut taxes and keep every other campaign promise after he addresses the current economic crisis. But watering down the stimulus package by nearly half, simply because "he promised," borders on suicidal. And if we're doing it to woo Republican votes, then prepare the stimulus package we need, and sell it to the American people.

Reportedly, the tax cuts were increased to $300bn in order to woo enough Republicans to pass the bill with 80 or more votes in the Senate. The thing is, to the people who are in danger of losing their jobs and their homes and their retirement and their health care it doesn't really matter if the package passes by 80 votes or simply 51. Sweetening the deal by watering down the bill does nothing to advance our economic security. Read the rest of this post...

Missouri Senator Kit Bond is retiring

Another blow to the GOP:

Sen. Kit Bond, a senior Republican from Missouri who sits on several powerful Senate committees, announced Thursday that he will not run for reelection in 2010, giving Democrats a shot to pick up a seat in a state that has emerged as a major battleground.

The announcement is a blow to Senate Republicans, who now will have at least four of their incumbents seeking retirement at the end of the session, a sign that 2010 could be another tough cycle for the weakened GOP minority.

In addition to Bond, Sens. Mel Martinez of Florida, Sam Brownback of Kansas and Kay Bailey Hutchison of Texas are also retiring from the Senate in 2010.

This could be a Democratic pick up in 2010. Missouri Secretary of State Robin Carnahan would be a formidable candidate. Very formidable. She's very smart and very savvy.

This is one of my favorite campaign ads, from Robin's first campaign in 2004. It was a big hit:

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Obama addresses the economy: "A bad situation could become dramatically worse."

Obama is delivering a major address on the economy today. It is, of course, about the economy and the need for immediate action. The transition team e-mailed excerpts of the speech:

I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible. If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. We could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future. And our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world.

In short, a bad situation could become dramatically worse....

...There is no doubt that the cost of this plan will be considerable. It will certainly add to the budget deficit in the short-term. But equally certain are the consequences of doing too little or nothing at all, for that will lead to an even greater deficit of jobs, incomes, and confidence in our economy.

Yesterday, the Congressional Budget Office announced that we're facing a $1.2 trillion budget deficit. That number is causing all kinds of consternation, as it should. The GOP is using it to raise questions the size of the stimulus, via The Hill:

Republicans, whom Obama has courted by promising $300 billion in tax cuts as part of the package, continued to sound skeptical about the size of the stimulus.

“This morning’s announcement by the Congressional Budget Office that the deficit now stands at nearly $1.2 trillion is a stunning and sobering reminder that Congress must strengthen its efforts to be good stewards of the taxpayers’ money,” Senate Minority Leader Mitch McConnell (R-Ky.) said in a statement. “Though we agree that Congress must carefully pursue ways to strengthen our economy, this report should cause us to make certain that any dollar spent to stimulate the economy will in fact achieve that outcome and produce jobs and opportunity.”

You have to love how all the Republicans are now so worried about the huge decifit, which their president and their policies caused. But, Congressman David Obey, who doesn't mince words, (D-WI) put it bluntly:

“The deficit will be larger if we sit on our butts and do nothing than if we act,” Rep. David Obey (D-Wis.), the chairman of the House Appropriations Committee, said after a hearing by the all-Democratic Steering and Policy Committee on the stimulus.

Obama and Obey are on the same page that a bad situation could get even worse -- even worse than what Bush and the GOP have already inflicted on us.

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Chris Matthews not running for PA Senate

How will democracy survive such a blow?

MSNBC political commentator Chris Matthews has told his colleagues he won't be leaving television to run for a U.S. Senate seat from Pennsylvania.

MSNBC spokesman Jeremy Gaines says Matthews told the staff of his "Hardball" show Wednesday that he's not going to run for the seat against Republican Sen. Arlen Specter in 2010.

There's been speculation that Matthews would challenge Specter, and there have been published reports that Matthews has privately discussed the possibility.

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Thursday Morning Open Thread

Good morning.

The sun is out again -- finally. It seems like it's been dark and gray for days and days. Actually, in some ways, it feels like it's been dark and gray for eight years. But, that's going to change.

D.C. is really gearing up for the inauguration. Today's Washington Post tells us that the bridges and highways into and out of the city will be shut down for the day. If you're attending, plan to do a lot of walking. The Metro can't really accommodate the expected crowds and a number of stations will be closed. I'd suggest comfortable shoes, very comfortable shoes. And, consider a little trick I learned from running marathons: Vaseline. Put vaseline on your toes or any other part of your foot that might chafe or get blisters. Vaseline or "BodyGlide," which is a great anti-chafing product. The inauguration is going to be truly historic -- and truly complicated logistically.

Okay, on to the news... Read the rest of this post...

Friday jobs numbers might be ugly

Forecasts vary from a consensus of 475,000 losses in December up to 750,000 and possibly even 1,000,000. The losses from January through end of November have been just shy of 1,000,000 so the upward trend is going in a dangerous direction. To break even with incoming workers the US economy needs to generate 150,000 jobs per month.

New Year optimism is likely to be shaken by shocking numbers in the monthly employment report, with a loss of one million jobs coming "sooner than you might think," ING Bank analyst Rob Carnell wrote in a research note.

"At the risk of sounding like 'Dr. Evil', there is a very real possibility of seeing monthly payrolls falling by a million in the next few months," Carnell wrote.

Payroll losses could reach seven figures as soon as January or February, he added.

The latest nonfarm payrolls report is due out on Friday and analysts surveyed by Briefing.com forecast that 475,000 jobs were shed in December, slightly fewer than November's 533,000.

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AIG backs off of $3 million executive handouts

Rightly so. When your company is dead and being propped up by taxpayer money, any extra cash to anyone is wrong.

Seven senior executives of American International Group, the insurer that is getting $152 billion of U.S. taxpayers' money, will not get $3 million in deferred compensation that they were expecting to be paid by April.

In a filing with the U.S. Securities and Exchange Commission, AIG said it would pay about $273.5 million to more than 4,000 current, non-senior employees who took part in the retirement plans that allowed funds to be set aside and drawn upon in later years.

AIG in November said it planned to accelerate payment of these funds in a bid to limit departures after the company posted $42.5 billion in losses over the past four quarters, putting it on the verge of collapse.

The federal government stepped in for a second time and restructured its bailout of AIG raising the package to $152 billion with easier terms.

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