Consumer confidence hits all time low

As soon as there's some good news, maybe then Americans will start to cheer up. With housing numbers falling again and Q4 numbers coming soon enough, confidence could easily hit another new low.

A key measure of consumer confidence fell to an all-time low in December amid a dismal job market and uncertain outlook for the new year.

The Conference Board, a New York-based business research group, said Tuesday that its Consumer Confidence Index fell to 38 in December from the downwardly revised 44.7 in November.

Economists were expecting the index to increase to 45.5, according to a Briefing.com consensus survey of economists.

"The further erosion of the Consumer Confidence Index reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008," said Lynn Franco, director of the Conference Board Consumer Research Center, in a statement.

The gloomy news came at the end of a full year of recession. The credit crunch has strained the financial system as central banks struggle to raise capital.

At the same time, housing prices have plunged and S&P; 500 has plummeted more than 40%. The dollar has been weak against major currencies. This year's holiday retail season is predicted to have been the worst in decades.

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Vicki Iseman is suing the NY Times for alleging she had an affair with McCain. NY Times says "We fully stand behind the article."

Well, this is an interesting development. Vicki Iseman is suing the Times. The Times is standing by its story about Iseman and McCain. The discovery process, with its sworn depositions and interrogatories, should be a fun:

Washington lobbyist Vicki Iseman is suing The New York Times for implicating her in a romantic affair with 2008 Republican presidential candidate Sen. John McCain (Ariz.).

In a 36-page complaint filed in the U.S. District Court in Richmond, Va., on Tuesday, Iseman’s lawyers say the newspaper defamed her and is asking for $27 million in damages. The complaint names The New York Times Co.; Bill Keller, the newspaper’s executive editor; Dean Baquet, the Washington bureau chief; and the four reporters who worked on the article that suggested the romantic affair.

The Times said Tuesday that the Feb. 21 article is accurate.

“We fully stand behind the article. We continue to believe it to be true and accurate, and that we will prevail,” said Abbe Ruttenberg Serphos, director of public relations for The Times, in a statement. “As we said at the time, it was an important piece that raised questions about a presidential contender and the perception that he had been engaged in conflicts of interest.”

My favorite part of the fallout when the NY Times story first ran was Cindy McCain's performance at the press conference. She maintained quite forcefully that she knew her husband was a stand up guy:

"More importantly, my children and I not only trust my husband, but know that he would never do anything to not only disappoint our family, but disappoint the people of America. He's a man of great character."

The first Mrs. McCain probably thought the same thing before she found out John was cheating with Cindy.

Like I said, the depositions and interrogatories should be interesting.

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Governor Patterson interviewed openly gay Assemblyman Danny O'Donnell about New York's Senate seat

Okay, now this would be an historic first.

Danny O'Donnell is an openly gay Assemblyman in New York. He led the effort to pass same-sex marriage in the Assembly last year. He's also a good friend of AMERICAblog. Yesterday, Danny sat down with Governor Paterson, at the Governor's invitation, to discuss the New York Senate seat, which is being vacated by Hillary Clinton. The NY Times has the scoop:

Enter the latest contender to sit down face to face with the governor: Assemblyman Daniel J. O’Donnell, a Democrat who represents the Upper West Side. Mr. O’Donnell met with Mr. Paterson for about 45 minutes on Monday afternoon in the governor’s Midtown office for what Mr. O’Donnell said was his formal interview for the Senate seat.

To say Mr. O’Donnell, known for his active support of gay rights issues, including same-sex marriage, was overly optimistic about his chances would be a stretch. He put his odds of getting the seat at about one in 10, or “about the same as the population of gay people in the world.” But Mr. O’Donnell did offer that he believes the governor has yet to settle on a final choice.

“I didn’t get the impression that a decision was coming anytime soon,” Mr. O’Donnell said. “I have the sense that he was really weighing what people were saying. I can tell when people are listening to me and actually listening, and listening to me just because they’re supposed to listen. He seemed to be very intent on focusing on and absorbing what I think my strengths might be.”

With that assessment came a dose of realism from Mr. O’Donnell, who added: “I’m sure I’m not unique. I’m sure he does that with all the people he talks to.”

After I read this article, I talked to Danny and he confirmed the report. This didn't sound perfunctory at all. It's within the realm of possibility.

Danny is a New Yorker through and through. He grew up on Long Island. His partner, John, is from upstate (they've been together since their college days at Catholic University here in D.C.). Danny is also a lawyer and has a long record that shows his commitment to social justice and progressive values.

Think of the symbolism. If Governor Patterson wants to make a powerful statement, Danny would be an amazing choice. Rick Warren might not like it, but Danny would be one hell of a Senator.

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50 Herbert Hoovers? Try 300 million.

Krugman wrote a column the other day about how state governments are cutting back spending, at at a time that we need them to keep spending, and even increase spending.

It’s true that the economy is currently shrinking. But that’s the result of a slump in private spending. It makes no sense to add to the problem by cutting public spending, too.

It's the same problem we see with private spending, spending by you and me. It makes sense that you're cutting back your spending, just in case the economy REALLY goes south. But the thing that just might send the economy REALLY south is all of us collectively cutting back our spending. Thus, the precaution leads to the very problem. Ironically, Bush's then-ridiculous advice last year to "spend money" was spot on. But how can you spend when you're afraid that your employer won't spend, but will instead cut back themselves and fire you? It's all one big prisoner's dilemma (or, tragedy of the commons).

[A] dilemma in which multiple individuals acting independently in their own self-interest can ultimately destroy a shared resource even where it is clear that it is not in anyone's long term interest for this to happen.

In other words, it makes sense for YOU personally to stop spending and save your money, but if we all do it, we're screwed. If we all spend, perhaps we're not screwed (and that's part of the problem - there is no guarantee that spending wildly will save any of incomes). Read the rest of this post...

MoveOn has had it with Politico

A few of you had written to me about an article in Politico claiming that MoveOn had abandoned gay rights and basically sided with Obama over the Rick Warren affair. MoveOn says that's a flat out lie. Here's a statement they just released:

We've had disagreements with Politico's reporting in the past. But even we were surprised by the shoddy reporting in Andie Coller's recent article, "Will MoveOn Live Up To It's Name?" which raises new questions about the Politico's rumored bias to the right.

Though we went over it with her, Coller omitted the historical context of our organization advocacy. MoveOn members have consistently prioritized universal health care, building a green economy/stopping climate change, and ending the war in Iraq since 2005--long before President-elect Obama was even a widely known player on the national political stage. The new priority that has emerged--economic recovery and job creation--is an obvious reflection of the dire situation so many American's face due to eight years of mismanagement on Wall Street.

To claim, as Coller does, that these priorities represent "leaving some of [MoveOn's] high-minded ideals behind" is nothing short of journalistic malfeasance. That our members recognize that the battle field has changed after this historic election shows strategic smarts, not retreat.

As for her claim that our silence on Rick Warren's inaugural invocation represents some sort of compromise, Coller misses the point. There are few Americans who would suggest that the statements of an inaugural speaker are one of the top four issues facing the country – egregious though they may be. Our members contributed over $350,000 to defeat Proposition 8 last month and are deeply committed to fighting for the civil rights of all Americans. Rather than focus on contrived division, Coller and Politico would serve their readers, and the truth, much better if they would do some homework before writing their articles.

MoveOn is right. If you asked me what are the top issues facing the nation this year, I'd say the economy and the war, followed by health care. I wouldn't call Rick Warren one of the top issues facing America. That doesn't mean I'm giving Obama a pass, or that the Rick Warren fiasco doesn't matter. Read the rest of this post...

Blago reportedly picks Obama's Senate replacement -- with updates

ANOTHER UPDATE @ 7:00 PM: Via email, the Obama Transition Team sent out a statement from the President-elect. He's not on board with Blago's move either:

"Roland Burris is a good man and a fine public servant, but the Senate Democrats made it clear weeks ago that they cannot accept an appointment made by governor who is accused of selling this very Senate seat. I agree with their decision, and it is extremely disappointing that Governor Blagojevich has chosen to ignore it. I believe the best resolution would be for the Governor to resign his office and allow a lawful and appropriate process of succession to take place. While Governor Blagojevich is entitled to his day in court, the people of Illinois are entitled to a functioning government and major decisions free of taint and controversy," said President-elect Obama.

UPDATE: Reid says Burris is "unacceptable," and the Senate will not seat him as a Senator. Now if we can only get Reid and the Democrats to be so unified when the target of our ire isn't a Democrat.

What a creep. No one - no one - wants this hood to remain in office. Blago's been told his pick won't be seated. But he sends one anyway. And Roland Burris, his choice, has to be the biggest idiot (or worse) in American politics to accept a nomination from a crook. Read the rest of this post...

For those still looking for New Year's Eve events, here's the list

It looks like there are plenty of options instead of the ball drop in Times Square to choose from these days. Who wouldn't want to see a walleye drop or edible bologna mark the new year?

Find watching the ball dropping in Times Square a bit dull? Then try taking part in some of the other drops going on around the United States on New Year's Eve with crabs, pirates and cheeses all set to fall.

Website TripAdvisor has come up with a list of America's top 10 quirkiest New Year's Eve drops on advice of its editors and travelers. This list is not endorsed by Reuters.

"While New York City's famous ball drop in Times Square is a spectacular sight, there are other uniquely wonderful ways Americans can ring in the New Year," said TripAdvisor spokeswoman Michele Perry. "While they range from clever to wacky, it's clear that New Year's Eve is about celebrating traditions and enjoying the company of a crowd."

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GOP officials divided over whether "negro" is a slur

And that is why the Republican party is in so much trouble. Their anger and their intolerance has been so internalized that they're actually having a debate as to whether "negro" is an appropriate term for an African-American, let alone for the incoming president of the United States. Read the rest of this post...

Another $500 a person handout?

I thought we tried this last year, and it didn't work.

The incoming administration is considering tax cuts of $1,000 for couples and $500 for individuals that will be delivered by reducing the tax withheld from paychecks. That plan has been estimated to cost about $140 billion over 2009-2010.

The lump-sum rebates issued earlier this year were used by many people to pay down debt, rather than spending the money and boosting the economy as the administration had hoped.

"People need money in their pockets to spend," Axelrod said. "That'll get our economy going again."

The first handout didn't do much because it was too much money in one fell swoop, leading people to use it to pay off debts, rather than buying goods and services, which is what we want them to do in order to help the economy (reportedly, only a third of the earlier $300/person handout was actually spent). This time, the money will be spread out throughout the year in the form of a reduction in your withholding taxes (actually this would be a permanent tax cut). So I did the math. Say you get a paycheck every two weeks, so over a twelve month period that makes 26 paychecks. If you spread the $500 per person tax cut over 26 paychecks, that puts $19 more in your pocket per paycheck.

I'm not an economist, but I've studied economics, and have worked at the World Bank with the big brainy (and arrogant) economists, and something here doesn't quite add up. People didn't spend $300 on goods and services, but they're going to find $19 a sufficient incentive to increase their spending on goods and services beyond what it already is? What's more likely to happen is that someone who earns $750 a paycheck now, who will then earn $769 under the new handout, isn't going to notice the difference, and thus won't adjust their spending habits. And if they do notice the increase, why assume that this time they're going to spend that $19 windfall on goods and services, rather than sock it away in the bank, or, as they did last time we handed out free money, simply use it to pay off their mounting debt?

The approach taken for this new handout seems counter-intuitive. If you want people to spend the money, i.e., spend more than they would normally (rather than just use this money to buy what they already would have, and sock away the rest), I'd think you'd need to give them a sizable lump sum in order to make them feel "rich" enough to splurge on something extra, even though the tough times would warrant prudence. The worst thing you could do, if your goal is to increase consumer demand and consumption, is to give the consumer the extra money in such a way as to effectively hide it. But that seems to be exactly what this plan would do.

This plan is costing $140 billion dollars. That's money we could be spending on roads, health care, and lots of other things that do actually benefit our citizens and the economy. It's money we could be using to make the real stimulus plan even larger, as many economists are asking. But giving people $19 each and thinking that they're going to see this as a windfall that will magically increase their spending in any appreciable way? I don't get it.

And finally, there's the argument that Obama should move ahead with the handout because it was a campaign promise. That's nice, but we're trying to avoid the meltdown of the entire US economy here. No tax cut should be considered that doesn't demonstrably impact consumer demand and thus spending. But since we are moving right along with those campaign promises - promises that for some inexplicable reason simply must be implemented Obama's first month in office - I assume then that we'll be lifting the ban on gays in the military some time in February? Read the rest of this post...

Tuesday Morning Open Thread

Well, Joe is back in DC (I think), but I'm giving him one more morning off. Just working on some of the Christmas photos, and this is one I shot out my parents' picture window, which was right next to the Christmas tree, the night of the nasty fog. Obviously, that's the tree reflecting in the picture. I really enjoy taking photos like this. Photos that look doctored, but really aren't. Basically, photos that show things that you might not notice, but are actually there if you open your mind, and your eye, to what's around you. Read the rest of this post...

Retailers facing hard times

As the previously bottomless pit of credit disappears, it's to be expected, though still not very welcome news. Shopping our way to prosperity is not much of a long term solution nor is it even possible as consumers wonder whether they will have their pay reduced or even a job.

The fallout from the horrific holiday season for retailers has begun, with the operator of an online toy seller filing for bankruptcy protection and more stores are expected to do the same — meaning more empty storefronts and fewer brands on store shelves.

A rash of store closings, which some experts predict will be the most in 35 years, is likely to come across areas from electronics to apparel, shrinking the industry and leading to fewer niche players and suppliers.

The most dramatic pullback in consumer spending in decades could transform the retail landscape, as thousands of stores and whole malls close down. And analysts expect prolonged woes in the industry as the dramatic changes in shopping behavior could linger for another two or three years amid worries about the deteriorating economy and rising layoffs.

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Another failed harvest coming in Zimbabwe

How much worse can things get in the former breadbasket of southern Africa? Incompetence and starvation are not black versus white issues, but right versus wrong. The sooner the neighboring countries wake up to the problems caused by Robert Mugabe, the sooner everyone can move on and start rebuilding the country that has been destroyed by Mugabe.

The road west from Harare leads through some of the most fertile land in southern Africa. The December rains are watering the plains and anything planted now should bear a bountiful harvest.

But nothing is being planted. There are no tractors making their way through what should be a sea of winter wheat seedlings.

These fields that once fed an entire region of Africa no longer feed even the country itself.

Through no act of God, Zimbabwe's new year harvest has already failed. The commercial farmers are gone and in their place wasted children scavenge by the roadside for kernels of corn that fall from passing trucks and can be picked out from the asphalt.

The United Nations has found that more than two-thirds of Zimbabweans are living on one meal, or less, per day.

The starvation that has been stalking the country for much of this decade now claims victims every day; the prospect of an unprecedented famine looms next year.

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Worst economic predictions of 2008

Or at least Business Week's list, that's pretty good. Jim Cramer's "Bear Stearns" is pretty good (didn't he also tout Lehman or something equally bad?) as is the Madoff quote. I might add McCain's "the fundamentals of the economy" line as well as the countless GOP schmucks who pitched the "AIG will provide fantastic returns for tax payers" who have all suddenly gone quiet. They probably could have added CNBC and the Wall Street-friendly media regular stories about the market bottom and encouraging buyers to jump in and ride the next wave. (Even today CNBC has one.) Read the full list here.

During the oil bubble, I also thought oil would be sitting around $150 by the end of the year and I also thought the Dow could easily be sitting closer to 7000, so I'm very glad to have been wrong on those two points. I wished that I was wrong about the failing banks and bad economy and admit I thought it would have taken longer to collapse. The speed of this unraveling has been amazing, in a very bad way. Read the rest of this post...

Free beer and resume help

For now, you will have to head to St. Louis unless someone else rolls out another brew and resume help center. Read the rest of this post...