brainiac conspiracy

The Obama Good Neighbor Policy

This is going to end well.

The US administration is speeding up deployment of defenses against potential Iranian missile attacks in the Gulf to heed off any possible retaliation, The New York Times reported Saturday.

The move involves placing specialized ships off the Iranian coast and anti-missile systems in at least four Arab countries -- Qatar, the United Arab Emirates, Bahrain and Kuwait -- the Times said, citing administration and military officials.

Oman has also been approached, although no Patriot missiles have been deployed there yet, US officials told the newspaper, adding that the willingness of other Arab states to accept the US defenses reflects growing unease in the region over Iran's ambitions and capabilities.

"Our first goal is to deter the Iranians," a senior administration official told the newspaper. "A second is to reassure the Arab states, so they don't feel they have to go nuclear themselves. But there is certainly an element of calming the Israelis as well."

Of course, as the article also states, the missile emplacements could also deter Israel from launching a preemptive strike against Iranian nuclear facilities, but for some reason, I have a hard time envisioning any scenario where the US acts unilaterally to prevent any Israeli military incursion within the region.

I guess my bigger question is, why oh why are we still trying to throw our weight around in places like the Middle East? How does this flexing of American muscle "deter" a country like Iran from proceeding with its nuclearization regime in any discernible way? If I were a member of the council of mullahs, or whatever the hell they're called, I'd be counseling going full speed ahead with it. Wouldn't you? And how in the world does this help resolve the Israel-Palestine issue? Of course, it doesn't. And just for good measure, we've just installed some awesome new targets, all across the Gulf, for Qaeda types to go after.

Our government is still fighting the Cold War. The enemies have changed, but our mentality hasn't.

Even more awesomely, we continue to make sure every Middle East country that isn't Iran has plenty of capability to blow shit up:

The efforts build on commitments by the George W. Bush administration to sell warplanes and anti-missile systems to friendly Arab states to counter Iran's growing conventional arsenal. The United Arab Emirates and Saudi Arabia are leading a region-wide military buildup that has resulted in more than $25 billion in U.S. arms purchases in the past two years alone . . .

"It's a tough neighborhood, and we have to make sure we are protected," said a senior government official in a U.S.-allied Arab state. The official, who also spoke on the condition that his name and country not be revealed, called Iran the "No. 1 threat in the region."

But it's not our fucking neighborhood. When will we ever learn?

Six hundred and fifty-plus billion we shell out for this shit each year, accompanied by spending freezes and deficit reduction at home. Heckuva job, Barry, us dirty fucking hippies who helped get you elected couldn't be happier campers.

---Vitelius

A Man Among Boys

Note to Reid and Pelosi: Most Congressional Republicans, our plucky President reminds us today, are Genuinely Stupid People.

Now stop wasting time trying to reason with these idiots, and get us a real healthcare-reform bill.

---Vitelius

Forget the Filibuster. Just Get. Shit. Done.

I can’t say I’m terribly shocked to learn that most Americans don’t know much of anything about the Senate filibuster rule. After all, the majority of our people don’t believe in Darwin’s theory of natural selection or that human activity contributes to the current climate change crisis. Heck, less than half of all Republicans believe that President Obama in a natural-born US citizen, so it doesn’t surprise me a bit that most Americans aren’t exactly up to snuff on an arcane parliamentary trick that was ginned up in the earliest days of the Republic. Jed at DKos suggests that Democrats need to do a better job of informing the electorate:

One aspect of the explanation for this is that people don't follow politics too closely. But there's another piece of the puzzle: Democrats have failed to make the abuse of the filibuster an issue.

With President Obama's criticism of Senate Republicans during the State of the Union, there's signs of that changing -- but to get the message out there, Democrats need to hammer on it over and over and over again. The abuse of the filibuster is an outrage, and it should be denounced as such.

As the Pew poll illustrates, Democrats cannot afford to be quiet about this.

Steve Benen at the Monthly has a slightly more direct prescription: Scream bloody murder:

Put simply, I'd like Democratic leaders to think about what Republicans would do if the situations were completely reversed. Then they should do that.

With all due respect, I don't see what either of these approaches would constructively accomplish. Expending a lot of time and political capital to denounce a legislative maneuver that most Americans frankly don’t care about is only going to be seen as a case of vintage Washington scapegoating (you know that’s how the GOP Noise Machine will spin it), and staging the liberal equivalent of GOP hissy fits will reduce the discussion over the filibuster to the level of "Democrats as Crybabies." Besides, who's going to provide an objective account of these maneuvers? as Steve himself notes today, there's simply no comparison between the Right and Left in this country when it comes to manipulating mainstream media reportage and spin. So either way, prolonged harangues and arguments over the filibuster end with Democrats losing the image war---and with it, most likely, the policy discussion.

Seems to me that if Democrats really want to do what Republicans would if the current circumstances were reversed, they should do exactly what Republicans always do when confronted with factual inconveniences---pretend the problem simply doesn't exist, then proceed with enacting their agenda.

So let's save the educational program for high-school civics teachers, and our outrage for war crimes and torture, and instead start using the levers of power that are already at our disposal. Americans may not be the most politically-savvy people on the planet, and while most of them won't grasp the finer policy details of "budget reconciliation," they will understand and respect the basic concept of “majority rules” contained within it. It’s easy to comprehend, it fits on a bumper sticker, and it appeals to people's basic sense of fairness. Republicans on the Hill may bitch and moan to Fox News about Democrats ramming legislation down the American people's throats, but they will do this anyway, no matter how many courtesies the Democratic Senate extends to them. The best remedy to Republican filibuster threats, in short, is not to complain about them, or try to educate the masses, or stage a series of angry-liberal Latte Parties, but to simply take the filibuster option off the table. Senate Democrats have the power to do so this very instant, if only they have the will to do it.

Update: She, as always, cuts to the chase.

Results are what matters, not process.

---Vitelius

The First SOTU

I don't have much to add to the discussion that hasn't been posted elsewhere in Left Blogistan over the past 24 hours, though I'd simply say I was heartened to see Obama ditch the usual soaring big-picture rhetoric for a grittier, plain-talking approach that he used fairly effectively to channel some middle-class anger without pandering to cheap populism. I especially relished his excoriation of the Supreme Court for their totally awesome decision last week permitting Bin Laden Associates to buy the Congressional candidates of their choice in the future, in the name of strict constructionism.

Of course, the wingnuts are aghast today that Obama would be so uncouth as to insult the good names of Sam Alito and Tony Scalia, but as far as I'm concerned, those Federalist Society creeps should consider themselves lucky in retrospect that our current President is, at heart, a gentleman.

How do I know this? Because if he weren't, the following passage of last night's speech would have included this little addendum:

At the beginning of the last decade, the year 2000, America had a budget surplus of over $200 billion. By the time I took office, we had a one-year deficit of over $1 trillion and projected deficits of $8 trillion over the next decade. Most of this was the result of not paying for two wars, two tax cuts, and an expensive prescription drug program. On top of that, the effects of the recession put a $3 trillion hole in our budget. All this was before I walked in the door. Just stating the facts.

And all of this -- all of this -- was only made possible by the action -- unprecedented in our history -- of five judicial activists who, ignoring 200 years of legal precedent and Constitutional constraints, took it upon themselves to inject themselves in the lawful conduct of a state election, and installed their preferred candidate for president in the Oval Office not with findings of established law, but by simple and unilateral decree. Three of them are here with us tonight.

Those amoral bastards should be reminded of the ramifications of Bush v. Gore every waking day of their lives. It is the Dred Scott of the 21st century, and they should be hounded all the way to their graves for it. If they don't like taking the heat, tough shit. The republic has paid dearly for their cheap little stunt every day since they handed down their decision, and will be for years if not decades to come.

--Vitelius

I Know You Are, But What Am I?

Exhibit A in the argument for comprehensive tort reform:

Orly Taitz, the dentist and lawyer whose birther lawsuits we've been following, filed a new suit in D.C. District Court Wednesday: Dr. Orly Taitz v. Barack Hussein Obama.

The suit, like Taitz's others, claims President Obama is not a U.S. citizen and demands his birth certificate.

It also alleges that Attorney General Eric Holder has ignored her allegations and calls to the Justice Department -- a "game of hide and seek," she says, that's "infantile at best and treasonous at worst."

The next time you hear some right-wing gasbag trying to inflame the Tea Party brigade with sermons inveighing against "frivolous lawsuits" and rapacious "trial lawyers", throw this crazy person back in their faces before instructing them to shut the hell up.

---Vitelius

The Awesomeness of Federal Safety Regulations

I wonder how long it will be before we can take the full measure of how thoroughly our government regulatory agencies were controlled and influenced over the last decade by the same corporations they were supposed to be keeping an eye on:

As early as 2004, authorities investigated reports of unintended acceleration in Toyota's best-selling model, the Camry.

But the National Highway Traffic Safety Administration looked at incidents lasting only 1 second or less.

That limit came after a former official who went to work for Toyota shortly before the investigation began was involved in discussions with former colleagues at the safety agency, according to documents in a lawsuit filed by the estate of Guadalupe Alberto of Flint, who died in 2008 when she lost control of her 2005 Camry.

In March 2004, NHTSA began to examine complaints of sudden surges from owners of 2002 and 2003 Camrys, Solaras and Lexus ES300s, according to a deposition of Christopher Santucci, the Toyota employee who had worked for NHTSA. Toyota and NHTSA did not respond to questions about the 2004 investigation, but a NHTSA report said examination of 139 complaints found no defects.

While the issues in the 2004 investigation have not been tied to current recalls, the case raises questions of whether Toyota, which this week halted sales of eight models over acceleration concerns, can put the issue to rest without repairing older models.

How awesome is that?

The sad irony is, the big loser now is Toyota itself, which will likely have to recall millions more cars going back several model years in addition to the millions of cars they've already had to recall. They could have fixed the problem years ago at comparatively minimal cost, but chose to work the refs instead. Now they're probably looking at an international fiasco that will probably cost them billions of dollars in retrofits, lost sales and liability suits. The fact that a traditionally conservative and farsighted corporation such as Toyota lost its way in the past decade speaks volumes to the kind of collective insanity that defined the workings of much of corporate America in the 'Naughts, and should serve as a cautionary tale to companies more concerned with short-term growth than long-term viability. As for NHTSA, well, which government agencies didn't blatantly serve corporate interests in the Bush years? Were there any at all?

---Vitelius

At Last, Something to Really Believe In

Could someone at the White House actually be reading this blog?

Nah, I didn't think so, either.

But either way, this is welcome news. Via Meteor Blades:

In a follow-up to President Obama’s heavy-on-the-economy State of the Union address tonight, he and Vice President Joe Biden will be off to Tampa, Fla., Thursday to announce what advocates expect will be a $2.5-$2.6 billion grant for the country’s first 150+ mph passenger train. Smaller grants totaling $8 billion for 13 high-speed rail corridors in other states will also be announced. Other awards for improving existing rail lines will also receive money. All told, 31 states will receive grants. The money is part of the $787 American Recovery and Reinvestment Act passed a year ago.

Now, as MB notes, two and a half billion is barely start-up scratch for this particular project. and while the money's not exactly being spent where I'd like (those doggone pesky political considerations, one supposes), it's still a positive step in the right direction. Guess I'll have to save any further Obama-as-heartbreaker spleen-venting until the SOTU address wraps up tonight.

---Vitelius

Someone Forgot to Tell These PeopleThat America is a Center-Right Nation

Think either of these subjects will make their way into tonight's State of the Union?

Oregon voters have passed measures to raise income taxes on the wealthy and on businesses. The measures were approved 54% to 46%. It means that taxes will go up for individuals with taxable income of more than $125,000 and households with more than $250,000. If the measures had failed, the Legislature would have faced a huge shortfall in the two-year state budget. It was the first time time since the 1930s that Oregon voters have approved a statewide income tax increase.

What does it mean for the future of the commonweal? Outsourced to Kevin Drum:

I await the immediate immolation of Oregon's economy. That's what happened to America after Clinton raised taxes on the rich, after all.

---Vitelius

Pimpin' Ain't Easy

Bwahahahahahahahhaaa!!!!

A conservative activist who posed as a pimp to target the community-organizing group ACORN and the son of a federal prosecutor were among four people arrested by the FBI and accused of trying to interfere with phones at Sen. Mary Landrieu's office.

Activist James O'Keefe, 25, was already in Landrieu's New Orleans office Monday when Robert Flanagan and Joseph Basel, both 24, showed up claiming to be telephone repairmen, U.S. Attorney Jim Letten's office said Tuesday. Letten says O'Keefe recorded the two with his cell phone.

Flanagan, the son of acting U.S. Attorney Bill Flanagan in Shreveport, and Basel asked for access to a phone at the reception desk. Then they asked for access to a phone closet so they could work on the phone system. The men were directed to another office in the building, where they again said they were telephone repairmen.

They were arrested later by the U.S. Marshal's Service. Details of the arrest were not available. A fourth man, Stan Dai, 24, was also arrested, but Letten's office said only that he assisted the others in planning, coordinating and preparing the operation.

Federal officials did not say why the men wanted to interfere with Landrieu's phones or whether they were successful. Landrieu, a moderate Democrat, declined comment Tuesday. She has been in the news recently because she negotiated an increase in Medicaid funds for her state before announcing her support for Senate health care legislation.

To the rescue: America's Concern Trolls:

Vaughn: [It's a] very weird story that probably needs a lot of context and a lot of looking into, which is what we’re going to do here. I just wanted to get it on the record with it right now.

Shep Smith: So, they’re saying basically, they’re in there — It sounds as if what they’re saying is, they’re looking for some ACORN hanky panky and they try to tap into Mary Landrieu’s telephone to get it.

Vaughn: That could be one way of looking at it, yes.

Yes, and another way of looking at it might be that these malicious little pricks wanted to dig up some dirt on Mary Landrieu since she's up for reelection in November, so they decided to try tapping her phone, Plumbers-style. Hey, why not? Obeying the law is only for Democrats, y'know. Either way, let's hope federal investigators have read All The President's Men and opt to follow the money trail. Find out who's been paying these creeps, and you'll likely find the motive for this sleazy burlesque---and most likely, for those bullshit ACORN videos as well.

Update: It gets more interesting. Maybe a little, maybe a lot.

According to the Phillips Foundation's Web site, Dai was the editor-in-chief of the GW Patriot, an alternative conservative student newspaper, when he attended The George Washington University in 2006. According to information Dai posted in September 2007 on the university's online alumni directory, he lived in Naperville, Ill., helped run a "Defense Deparment regional defense counterterrorism/irregular warfare program" and then became assistant director of the Intelligence Community Center of Academic Excellence at Trinity Washington University, which prepares undergraduates for careers in intelligence.

Keep digging, guys. This story might have some legs after all.

---Vitelius

Obama: Too Smart For America

Apparently, the last decade was so traumatic, collective amnesia is not only the province of wingnuts anymore:

"He is still a very eloquent, articulate speaker," Sorensen says. "He is clearly well informed on all matters of public policy, sometimes, frankly, a little too well informed. And as a result, some of the speeches are too complicated for typical citizens and very clear to university faculties and big newspaper editorial boards."

Authors, editors and speechwriters interviewed by The Associated Press agree that Obama is indeed a gifted and effective speechmaker, able to set a new tone with the Middle East in his Cairo speech or to turn public opinion, at least temporarily, in favor of changing the health care system after his address to Congress.

But even admirers have a hard time remembering what he actually says.

Ted Widmer, who edited an anthology of political speeches for the Library of America, praised Obama for his "masterful" style, but could not cite a specific line the president said. Similar observations were made by Jeff Shesol, David Frum and Harry C. McPherson, who wrote speeches for presidents Bill Clinton, George W. Bush and Lyndon Johnson, respectively.

"The speech he made in Cairo — I remember the intelligence, the breadth and the reasonableness," McPherson says. "But I can't tell you, and this is one of the shortcomings of the kind of speech he makes — I can't quote anything, or cite anything, off the top of my head."

Maybe if Obama starts peppering his speeches with witty bon mots like “Axis of Evil” or “death panels,” or even the delicately nuanced "You lie!", the wise wordsmiths of Washington would sit up and take notice. Twenty years of right-wing talk radio and bumper-sticker sloganeering have certainly taken a toll on our nation’s collective attention span, to be sure, but what this piece really reveals to me is the historically cynical nature of most Washington speechwriters, and their refusal to craft arguments for the electorate that assume that we can be reasoned with as mature and responsible adults who are capable of linear thought. And we wonder why one of our major political parties, and no small percentage of the citizenry, have become hostage to a form of ideological infantilism that's been decades in the making.

---Vitelius

Torpor We Can Believe In

Finally, a rare moment of sanity in an otherwise deranged fortnight:

The Senate Tuesday rejected a plan backed by President Barack Obama to create a bipartisan task force to tackle the federal deficit this year despite glaring new figures showing the enormity of the red-ink threat.

The special deficit panel would have attempted to produce a plan combining tax cuts and spending curbs that would have been voted on after the midterm elections. The measure went down because anti-tax Republicans joined with Democrats who were wary of being railroaded into cutting Social Security and Medicare.

The Senate vote to kill the deficit task force came just hours after the nonpartisan Congressional Budget Office predicted a $1.35 trillion deficit for this year as the economy continues to slowly recover from the recession.

"Yet another indication that Congress is more concerned with the next election than the next generation," said Sen. Judd Gregg, R-N.H., a sponsor of the plan.

Actually, I think it’s more of reflection of the fact that most of these bloviators realize in their heart of hearts that all the posturing and preening that’s taken place over deficit reduction in the last few days is largely bullshit that was meant to feed a news cycle, not an entire session of Congress, and now that everyone's had the chance to thump their chest over it, it's time to get back to the hard business of governing. Somebody should cue the White House next.

---Vitelius

The Inmates Are Already Running The Jailhouse

At first, I thought this was a joke, but apparently, I was wrong:

Governor Arnold Schwarzenegger suggested California could ease its crowded prison system by sending thousands of undocumented inmates to specially built jails in Mexico.

Speaking to reporters at the Sacramento Press Club, Schwarzenegger said California could ease its strained finances by a billion dollars if 20,000 illegal immigrants currently held in the state were housed across the border.

"I think that we can do so much better in the prison system alone if we can go and take, inmates for instance, the 20,000 inmates that are illegal immigrants that are here and get them to Mexico," Schwarzenegger said.

"Think about it -- if California gives Mexico the money. Not 'Hey, you take care of them, these are your citizens'. No. Not at all.

"We pay them to build the prison down in Mexico. And then we have those undocumented immigrants down there in prison. It would half [sic] the costs to build the prison and run the prison. We could save a billion dollars right there that could go into higher education."

With what money, for God's sake? A new issuance of prison bonds? With 12 percent unemployment in our state, any legislative initiative that funds a new jobs program for foreign nationals is bound to be a big winner with the voters, yep, uh huh.

Okay, when all else fails, fall back on generic GOP boilerplate: Privatization!

Schwarzenegger said he believed the financial burden of California's prisons could be eased if the private sector moved into the industry.

"I think that there is no reason why we should have just state employees and public prisons," Schwarzenegger said. "Why shouldn't we have private prisons and private prisons competing with public prisons?

"I don't want to go and get rid of public prisons, not at all. It's not an attack on their labor union even though they may take it as such."

Of course not. It's not like any Republican elected officials would ever entertain the notion of weakening organized labor. But while we're at it, maybe we should consider privatizing the state's police departments and the Highway Patrol as well, and get about the business of instituting the kind of warlord government our state so richly deserves.

Back in the '60s and '70s, there was a bikini-wearing nightclub singer named Eileen Anderson who became a local cause celebre by running for mayor of Los Angeles every four years. Her proposal for reducing air pollution in the city was to drill some holes in the San Bernardino mountains, install a series of enormous electric fans, flip a switch, and whooosh! Blow the smog out of the basin. She was a model of sanity compared to the idiot who occupies the governor's mansion in Sacramento today.

---Vitelius

Not With a Bang But a Freeze-Out

Report: Obama to call for three-year non-defense spending freeze.

(H/t Brad DeLong.)

---Vitelius

Geithner. Must. Go.

As in, right. Fucking. Now.

U.S. securities regulators originally treated the New York Federal Reserve's bid to keep secret many of the details of the American International Group bailout like a request to protect matters of national security, according to emails obtained by Reuters.

The request to keep the details secret were made by the New York Federal Reserve -- a regulator that helped orchestrate the bailout -- and by the giant insurer itself, according to the emails.

The emails from early last year reveal that officials at the New York Fed were only comfortable with AIG submitting a critical bailout-related document to the U.S. Securities and Exchange Commission after getting assurances from the regulatory agency that "special security procedures" would be used to handle the document.

The SEC, according to an email sent by a New York Fed lawyer on January 13, 2009, agreed to limit the number of SEC employees who would review the document to just two and keep the document locked in a safe while the SEC considered AIG's confidentiality request.

The SEC had also agreed that if it determined the document should not be made public, it would be stored "in a special area where national security related files are kept," the lawyer wrote.

Okay, okay, don't can Geithner right away. Maybe just waterboard him instead and ask him where all the financial WMDs are buried. Then dump his ass.

Snark aside, this AIG e-mail story is the political equivalent of a suicide bomb. The Obama administration ignores it at its own one-term peril. (H/t Ritholtz.)

Update: If this is true, say hello to Great Depression v2.0. And Republican majorities in Congress for the next 10 years.

---Vitelius

Incrementalism We Can Believe In

This will solve everything.

Declaring America's middle class is "under assault," President Barack Obama unveiled plans Monday to help hurting families pay their bills, save for retirement and care for their kids and aging parents. His comments previewed Wednesday's State of the Union Address.

He's right, of course. Middle-class Americans have been under assault for decades. It's the "Trojan horse" of Friedmanite free-market economic theory which has been dissected in great detail by others far more knowledgeable than I. So of course, our President plans to announce his intention to reverse the ravages of 30 years of Reaganite class war by proposing massive tax increases on the wealthiest Americans, hiking the corporate income and capital-gains taxes, cutting defense spending to reflect the end of the Cold War, embarking on massive new public-works projects, and reinstituting the regulatory regime at agencies such as the SEC that once took a skeptic's view of debt-fueled mergers, acquisitions, and trading in exotic, high-risk instruments?

Alas, not quite.

• Nearly doubling the tax credit that families making under $85,000 can receive for child care costs, with some help for families earning up to $115,000, too.

Jesus. Another short-term fix, just like the first-time homebuyer's tax credit, which worked so awesomely for, oh, a month or so. And I gotta tell you, those of us whose kids are full grown, or who never had children at all---and believe it or not, we're a majority of the population now---are really getting a little ticked off at seeing ourselves being repeatedly discriminated against in favor of the breeders.

I've got a better idea: instead of another one-shot stimulus dump, how about setting aside an equivalent amount of federal money for grants-in-aid to states and municipalities to make up shortfalls in their education and health care budgets?

• Capping the size of periodic federal college loan repayments at 10 percent of borrowers' discretionary income to make payments more affordable.

Fine, I suppose. How about capping credit-card interest rates at 12 percent while you're at it? Too ambitious for you?

• Increasing by $1.6 billion the money pumped into a federal fund to help working parents pay for child care, covering an estimated 235,000 additional children.

Fair enough. But where are the freaking jobs?

• Requiring employers who don't offer 401(k) retirement plans to offer direct-deposit IRAs for their employees, with exemptions for the smallest firms.

No. No. No. No. No. You really want the same greedy fucks who blew a $13 trillion hole in the global economy to have access to even more worker money? Not to mention handing the Republicans another cudgel that they can wield against you and your evil socialist government mandates that threaten our liberties also too.

Here's another idea: how about passing a law allowing employees who have seen their 401(k)s hemorrhaging money for the past year and a half to withdraw their funds in whole or in part, penalty-free, at any time they wish? If you wanted to encourage investment firms and hedge funds to manage other people's money more prudently, I can't think of a better way to make the point.

• Spending more than $100 million to help people care for their elderly parents and get support for themselves as well.

This is such a laughably small amount of money---a little more than four dollars for every American who provides some form of financial assistance to their parents---it is hard to fathom why any time was spent in formulating, let alone advancing, this initiative.

If this is the most ambitious and far-reaching recovery agenda that we can expect from the Obama administration in the coming year, we are in for some genuine shit-ugly times ahead. The denizens of the Dow will be pleased, to be sure, but the rest of us will see little or nothing at all in terms of real income, jobs creation or federal aid. At least those of us with aging parents can treat Mom and Pop to a couple of Happy Meals with the senior-aid money we'll receive. It pains me to say this, but: President Palin, it's time to start measuring your inaugural gown.

---Vitelius

Weeds Sprout Green Shoots, Too

This recession ain't over by a longshot.

California employers cut more workers in December, capping a dismal year in which the state lost more than half a million jobs.

Payrolls shrank by 38,800, marking the worst month for job losses since September. The unemployment rate remained flat at 12.4%, but only because more than 100,000 workers left the labor force and are no longer counted. Many of them have given up looking for work or have moved out of state.

Economists expect the state's labor market to remain weak this year largely because the bellwether housing sector continues to struggle. Over the last two years, California has lost more than 1 million jobs.

How bad was it?

The construction sector has been pummeled particularly hard. California has shed more than 300,000 construction jobs -- nearly one-third of the industry's labor force -- since the sector peaked at 948,500 jobs in February 2006, according to state figures.

Last year the state lost 116,100 construction jobs, the most in the nation.

"Construction jobs are a visible indicator of how well the economy is doing," Watkins said. "We have no idea when they're going to see relief."

The state probably set a record in 2009 for the fewest homes produced in a single year, the California Building Industry Assn. said last month. Although the data are not yet final, the association forecast that 35,600 homes would be built in 2009, the lowest number since it began keeping track in 1954.

There are some glimmers of hope. Median home prices in California have been rising while inventories are shrinking, trends that could entice home builders to resume construction.

Still, a forecast released this week by the Associated General Contractors of America predicted there would be no recovery in the industry nationally or in California this year.

No kidding, Sherlock.

Sales of previously occupied homes took the largest monthly drop in more than 40 years last month, sinking more dramatically than expected after lawmakers gave buyers additional time to use a tax credit.

The report reflects a sharp drop in demand after buyers stopped scrambling to qualify for a tax credit of up to $8,000 for first-time homeowners. It had been due to expire on Nov. 30. But Congress extended the deadline until April 30 and expanded it with a new $6,500 credit for existing homeowners who move.

"It's 'exit stage left' for first-time homebuyers," wrote Guy LeBas, an analyst with Janney Montgomery Scott.

December's sales fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million, from an unchanged pace of 6.54 million in November, the National Association of Realtors said Monday. Sales had been expected to fall by about 10 percent, according to economists surveyed by Thomson Reuters.

God forbid that we should've passed cramdown legislation and substantial financial reform instead of another awesome tax credit that merely provided a temporary stimulus for overleveraged consumers to start consuming again. Call it "Cash for [Fore]Closures." I mean, how much longer can the government keep throwing money at this hopelessly bubblicious economy, anyway?

Not much longer, it would appear.

The Federal Housing Administration’s mortgage insurance reserves fell to the lowest level in history and the government said more steps are needed to shore up the agency that guarantees one of every five single-family loans.

The net capital ratio, or reserves after accounting for projected losses, fell to 0.53 percent in the year ended in September, from 3 percent in fiscal 2008 and 6.4 percent in 2007, according to an annual review sent today. While FHA said the fund “has good prospects,” it is changing its risk models to account for the possibility of the ratio falling below zero.

“Additional actions” will be needed to shore up the agency, Housing and Urban Development Secretary Shaun Donovan said at a news conference in Washington today. The insurance fund tripled in size last year and has taken on more risk as private industry sources for lenders to finance and insure home loans dried up and mortgage default rates rose to record highs.

I fail to see how this situation resolves itself in any successful way in the foreseeable future. Get ready for impeachment hearings to start in January 2011.

---Vitelius

Laws of Unintended Awesomeness

The Lee Greenwood Roberts Court, striking another blow for liberty:

I'm losing sleep over the millions — or billions — of dollars that could flood into our elections from ARAMCO, the Saudi Oil corporation's U.S. unit; or from the maker of "New Order" fashions, the Chinese People's Liberation Army. Or from Bin Laden Construction corporation. Or Bin Laden Destruction Corporation.

Right now, corporations can give loads of loot through PACs. While this money stinks (Barack Obama took none of it), anyone can go through a PAC's federal disclosure filing and see the name of every individual who put money into it. And every contributor must be a citizen of the USA.

But under today's Supreme Court ruling that corporations can support candidates without limit, there is nothing that stops, say, a Delaware-incorporated handmaiden of the Burmese junta from picking a Congressman or two with a cache of loot masked by a corporate alias.

Candidate Barack Obama was one sharp speaker, but he would not have been heard, and certainly would not have won, without the astonishing outpouring of donations from two million Americans. It was an unprecedented uprising-by-PayPal, overwhelming the old fat-cat sources of funding.

Well, kiss that small-donor revolution goodbye. Under the Court's new rules, progressive list serves won't stand a chance against the resources of new "citizens" such as CNOOC, the China National Offshore Oil Corporation. Maybe UBS (United Bank of Switzerland), which faces U.S. criminal prosecution and a billion-dollar fine for fraud, might be tempted to invest in a few Senate seats. As would XYZ Corporation, whose owners remain hidden by "street names."

Excellent. Once our Chinese landlords decide to foreclose on us and bring their even-shittier-than-America's healthcare system along with them, maybe we can finally convince a few of our elected representatives to give us a Medicare buy-in after all. I'm just sayin'. (H/t Doug J.)

Update: Contra my quasi-informed rants, Greenwald has a pretty persuasive contrarian take today that's well worth the read, even if you think like I do that the hidden agenda of the Roberts Court involves manipulating the Constitution to make New Deal liberal governance a near-impossibility going forward.

---Vitelius

Time to Put High-Speed on the Fast Track

Here's a novel idea for dealing with unemployment: Federal public works programs!

Congress would be wise to model a new job stimulus package after a proven program: the Works Progress Administration (WPA), the 1935 Roosevelt Depression brainchild that employed an estimated 10-million Americans building 850 airports, 110,000 libraries, schools, and hospitals, 500 water treatment plants, 78,000 bridges, and 8,000 parks. The WPA also employed writers and artists, many of whom painted murals in post offices, like the San Pedro post office on Beacon Street, where inside the Art Deco building of marble and chrome we find a WPA mural depicting the history of the harbor.

Obama’s first recovery plan, the American Reinvestment & Recovery Act, funded “shovel-ready” jobs: storm drain clean-up; energy retrofits; highway repairs.

President Obama’s second recovery plan must invest in future industries with large pay-offs in terms of career-path learning and earning opportunities in the Green economy. Put laid-off Boeing missile defense workers back on the job building electric buses for the future. Put college professors back to work in Green Energy Departments at universities across the country. Put steelworkers back to work strengthening our bridges in earthquake-prone California. Put everyone with a hard hat back to work building solar panel parts now outsourced to China.

Amen to that, and what better place and time for our President to issue this kind of challenge to the country and the Congress than a State of the Union address? Like, maybe the one that's scheduled next week?

For what it's worth, I can think of one excellent place to kick-start a massive public works project. In our current economic climate, the benefits are self-explanatory:

The statewide high-speed train project will require us to draw upon and expand California’s skilled workforce, creating nearly 160,000 construction-related jobs to plan, design and build the system. An additional 450,000 permanent jobs are expected to be created by 2035 as a result of the economic growth the train system will bring to California.

And as a special added bonus:

The high-speed train system would lower the number of intercity automobile passengers on highways by up to 70 million annually. What’s more, it will cost less than half the cost of expanding freeways and airports to meet future intercity travel demand and would eliminate the need to construct 3000 lane miles of highways, 91 airport gates and five additional airport runways.

But wait, there's more!

The system is projected to save 12.7 million barrels of oil per year by 2030, even with future improvements in auto fuel efficiency.

Electrically-powered high-speed trains reduce pollutant and greenhouse gas emissions and reliance on fossil fuels. The total predicted emissions savings of the California high-speed train system is up to 12 billion pounds of CO2 per year by 2030 and would grow with higher ridership.

So, it's good for jobs, good for the environment, and good for infrastructure. So why should it take 25 years to build this damn thing?

Because as things stand now, the high-speed rail project is being primarily financed by 20-year transportation bonds, which (irony of ironies) are being issued by a state whose bond rating has been inelegantly but justly reduced to junk status. So if investors aren't wowed by our credit rating and don't snap up our bonds, then there's a shortfall of financing for the project, and besides, it'll cost the taxpayers more to borrow the money to float the bonds for those brave souls who'll trust us as long-term bondholders. (Bond issuances are a crazy way to fund these kinds of projects anyway, especially since you're talking about incurring some $45 billion in future debt for a state that's already $26 billion in the hole and which is furloughing workers, laying off teachers, raising tuitions, and shutting libraries and parks to pay down the deficit.)

So instead of limiting stimulus money to those so-called "shovel ready" projects, why not use the upcoming State of the Union to announce the inauguration of an Interstate Railway System? Along with a proposal for a down payment of $15 to $20 billion of seed money to get the ball rolling in California, accompanied by a challenge to the nation to finish the project within ten years' time? If we could send a man 250,000 miles to the moon within eight years, we sure as hell oughta be able to build a 350-mile bullet train line from LA to the East Bay within the same time frame.

Money? Washington deficit scolds notwithstanding, it's readily available---even if we don't end either of our stupid and costly Asian wars. To cite only one example, all we need to is solve this looming little problem, and there's plenty of money to go around for California's HSR program, and likely several others. The only thing that's truly missing is the vision to will this project, and others like it, into being. There's certainly no shortage of labor. Heck, even Third-World hellholes emerging nations are managing to pull it off, and here's how they're doing it:

Plenty more speedy lines are coming in China under an ambitious build-out initiated in 2006 by China's Ministry of Railways, and accelerated with government stimulus funds. A two-trillion-yuan ($293 billion) plan envisions 16,000 kilometers of dedicated high-speed rail lines connecting all of China's major cities by 2020. The first East-West segment--a link from Xi'an to Zhengzhou--could begin operating as early as this month, and work is underway to extend the Beijing-Tianjin line southward to Shanghai by 2012. WuGuang, meanwhile, is expected to expand northward to Beijing and South to Hong Kong by 2013. "Over the next five years there'll be more high-speed rail added in China than the rest of the world combined," says Keith Dierkx, director of IBM's Beijing-based Global Rail Innovation Center.

Americans have always loved things that go fast, and no small number of us have a longstanding love affair with train travel. We also simply have to be the fastest, baddest and bestest at everything we do---at least, we used to be that way---so I would think that this kind of project would be a relatively easy sell to taxpayers, as public-works programs go, on any number of levels.

Either way, it seems to me that now would be an excellent time to start holding Obama's feet to the fire on using the power of his prestige, and of his rhetoric, to lobby for this kind of stimulus. Hey, he did signal his support for this project in the early days of his administration, didn't he?

Meanwhile, if you want to help send a progressive Democrat to Congress who'll work to make programs like this a reality, click here. (H/t Digby.)

---Vitelius

Gouging We Can Believe In

From the Department of Good Intentions, more Bad Outcomes:

Struggling homeowners are increasingly falling behind on their mortgage payments. Not enough of them are getting help from lenders, mortgage companies or the Obama administration's foreclosure initiative. Worse, the backlog to get into a foreclosure-prevention program and to get permanent relief is growing.

For the few homeowners that are helped, the relief comes with a cost: unpaid balances typically rise.

More troubling, more than 70 percent of modifications result in an increase in the principal amount owed," according to the report by the State Foreclosure Prevention Working Group, a collection of 12 state attorneys general and three state banking supervisors (underlined in the original). This occurs because modification programs typically allow for mortgage companies to tack on delinquent amounts and any fees incurred by servicing to the mortgage principal. The Obama administration's signature effort, the Home Affordable Modification Program, allows for this, too.

Wouldn't it have been a lot less complicated and time-consuming to have simply nationalized the banks, written down most of these delinquent loans, charged the banks for the write-downs, and driven people like these into abject poverty? It certainly would've been more fun.

---Vitelius

Credit Where Due

Looks like it's one step back, one step forward today:

Declaring that huge banks had nearly brought down the economy by taking “huge, reckless risks in pursuit of profits,” President Obama on Thursday proposed legislation to limit the scope and size of large financial institutions.

The changes would prohibit bank holding companies from owning, investing, or sponsoring hedge fund or private equity funds and from engaging in proprietary trading — what Mr. Obama called the Volcker Rule, in recognition of the former Federal Reserve chairman, Paul A. Volcker, who has championed the restriction.

In addition, Mr. Obama will seek to limit consolidation in the financial sector, by placing curbs on the growth of the market share of liabilities at the biggest firms. An existing cap, put in place in 1994, put a limit of 10 percent on the share of insured deposits that can be held by any one bank. That cap would be expanded, officials said, to include liabilities other than deposits.

If it's true, as has been speculated recently, that Obama is starting to take Paul Volcker's counsel to heart, that's welcome news indeed, and he'd be well advised to hammer hard on the theme of financial reform in next week's State of the Union. It would have been nice if it hadn't taken him a whole year to come around to admitting, in essence, that our current too-big-to-fail banking system is overrun with corrupting conflicts of interest and in need of a near-total breakup. If he'd confronted this problem in the earliest days of his administration, I have little doubt that the gesture would have gone a long way towards preempting a lot of the middle-class populist rage that emerged over the summer of '09, and hence rendered irrelevant the astroturf Teabag brigades who scavenged it so ruthlessly for votes, money and TV ratings.

Or, put another way: If Obama had proposed these reforms a year ago, Martha Coakley would likely be the newest member of the U.S. Senate today. But better late than never, I guess.

Or is it too late already? Some people are close to thinking so.

---Vitelius