Since the story broke a few days ago, I've been extremely interested in the arrest of Bernard Madoff, former Nasdaq chief, whose investment business has been revealed as a massive scam with loses of as much as $50 billion. Since I'm in the news business a lurid story with gargantuan bad acts and fabulously wealthy people claiming they're on the way to the poor house is irresistible at some level. But that's not the root of my interest.
What we're hearing is that this was a classic, if vast, Ponzi scheme. So in the annals of the great financial sector collapse of 2008, unlike the various Wall Street firms and high flyers who were ruined because of the Real Estate Bubble, illiquid mortgage-backed derivatives and generalized speculative euphoria, Madoff's operation was just a scam, an old-fashioned fraud, that a lot of big players got suckered into.
But put me down as suspicious -- suspicious that the difference between Madoff's and the other investment implosions we've seen over recent months will turn out to be so clearly one of kind rather than degree.
Did Madoff start his operation as a consciously fraudulent enterprise? Or was he another operator who was massively over-leveraged, made a bunch of bad calls (you don't have to make many if your leverage is high enough), lost virtually everything but then was able to keep operating and taking in money and claiming high returns because he had such insanely tight control over his books? In other words, did he start legit, get into trouble and then evolve, for lack of a better word, into a Ponzi scheme?
To be crystal clear, I'm not claiming any specific knowledge of the Madoff case that's not in all news accounts. This is more of a hunch, based on what I can put together about his career. But it's also because a lot of the firms on Wall Street were so massively leveraged, probably a good deal more than they're letting on even now, and had so much obvious crap on their books that they were claiming had real value, that Ponzi Scheme would probably be a decent description of what they were up to as well.
Elizabeth Warren is the Chair of the Congressional Oversight Panel appointed to oversee and scrutinize the TARP program and that $700+ billion of public bailout money. Long time TPMers know Elizabeth has run the Warren Reports blog at TPMCafe since 2005. The panel has now set up its own website at cop.senate.gov. And Warren has taped what I assume will be the first of many video updates on the panel's work.
A good story from the LA Times about those Southern state senators and the bailout flameout. Notwithstanding the effect on the national economy, let alone a lot of people's jobs, it was all about striking a blow at unions and laying the ground work for the card check battle. A telling statement of the current diseased state of the Republican party.
Remember, the deadline for Golden Dukes nominations is this Wednesday. After Wednesday your chance to win a 2008 Golden Dukes T-Shirt will slip away forever. Don't miss the deadline. Click here for instructions on how to nominate your favorite crook, liar or disgraced politician today.
Morgan Johnson, UAW President in Shreveport on junior Senator David Vitter (R-LA), who's become a point man on killing the automaker bailout (from the Times-Picayune) ...
"I don't know what Sen. Vitter has against GM or the United Auto Workers or the entire domestic auto industry; whatever it is, whatever he thinks we've done, it's time for him to forgive us, just like Sen. Vitter has asked the citizens of Louisiana to forgive him, " said Johnson, president of Local 2166. Otherwise, Johnson said of Vitter, it would appear, "He'd rather pay a prostitute than pay auto workers."
Some money that probably would have come in handy for good old out-going Rep. Chris Shays (R-CT). From the Connecticut Post ...
A federal grand jury investigating the disappearance of up to $300,000 from U.S. Rep. Christopher Shays' re-election campaign has subpoenaed the veteran congressman's former campaign manager, Michael Sohn, of Fairfield, the Connecticut Post has learned.
Sources with knowledge of the probe said the investigation is centering on Sohn's control of campaign funds used to pay vendors and campaign staff.
The campaign scandal has prompted several state Republicans, none of whom wanted to be identified by name, to believe that Sohn may have used Shays' re-election funds to gamble.
On a strictly political calculus, in part because of the highly dysfunctional state of the GOP, those Southern Republican senators simply have no interest at all in being even remotely constructive on the auto bailout.
The publisher of the Detroit Free Press, the country's 20th largest paper by weekday circulation, is expected to announce next week that it will cease home delivery of the print edition of the newspaper on most days of the week, according to a person familiar with the company's thinking.
The publisher hasn't made a final decision, said this person, but the leading scenario set to be unveiled Tuesday would call for the Free Press and its partner paper, the Detroit News, to end home delivery on all but the most lucrative days--Thursday, Friday and Sunday. On the other days, the publisher would sell single copies of an abbreviated print edition at newsstands and direct readers to the papers' expanded digital editions
Not surprisingly, with this morning's news, we're getting more than a few emails arguing that the Democrats, in their new position of strength, should weaken or entirely do away with the filibuster -- i.e., invoking the nuclear option that Republicans repeatedly threatened through the earlier part of the decade. Despite the extremity of the moment, though, I just can't agree with that. It is just bad practice -- especially in the face of the last eight years -- for numerical majorities not only to use the power of their numbers in straight up votes but to change the rules of the game itself. Notwithstanding the fact that filibuster has been increasingly abused, it was wrong in 2005 and it would be wrong now.
What I do think makes sense is for the majority to actually require the minority to filibuster -- as in talk and talk and talk. We've arrived at a point in which it's become standard, even in the most contentious of cases, for the minority to be allowed merely to signal the intention to filibuster rather than doing the actual thing itself. Filibustering is a tool of obstruction. It's a critical right of the minority in the senate. But it is, by definition, obstruction. So it makes sense to put the obstructionists to their task, make them do it publicly. I don't know why the Democrats are not doing that in this case.
Finally, this issue now goes well beyond the fate of the American automakers. Senate Republicans are following this course for three key reasons -- first is payback against a major industrial union; second is payback against states like Michigan and Ohio who have been moving away from the GOP; third is the desire to advantage Japanese auto manufacturers who disproportionately do business in their southern states.
What even the White House can see at this point is that having one or more of these companies go under right now will rapidly accelerate the economic crisis, and in unpredictable ways.
I think it is really important to point out that the Republicans had many alternatives to avail themselves and that they chose the worst possible one.
1) Cooperate with White House and Democratic negotiators earlier in the process
2) Negotiate in good faith with Reid following the failure of the original bill
3) Pass the original bill
4) Vote for cloture on the original bill and then vote against it.
Option (4) would have been the grown up and responsible thing to do--the bill had, probably, majority support and the consequences of not bailing out the auto industry are dire. Allowing a vote is not synonymous with acquiescing or voting in favor of the bill.
I think the fact that option (4) doesn't seem to have even been considered is indicative of the abuse of the filibuster in recent years. The filibuster is meant to be a tool to express extreme outrage, not as a device to force the threshold to passing a bill to 60 votes.
At this point, the filibuster rules have lost their relevance and should be abandoned (despite the fact that it will tie Democrat's hands in future Senate sessions when Republicans are in control.
Worth noting that the geniuses at Reuters manage to explain what happened last night in the senate without mentioning that the plan failed in the face of a filibuster by senate Republicans.
A quick update from a knowledgeable source who works in that big building with the dome ...
I don't think it'll be hard to explain why Senate Republicans had the final say: that's what the Constitution and Senate rules require. How else would we have passed anything?
I do think it'll be hard for Senate Republicans to explain themselves.
They were invited, repeatedly, to participate in more than a week of negotiations with a Republican White House. They declined.
They were asked to provide an alternative bill. They refused.
Finally, one of their members - Senator Corker of Tennessee - participated in a day-long negotiation with Senate Democrats, the UAW, and bondholders. Everyone made major concessions. Democrats gave up efficiency and emissions standards. UAW accepted major benefit cuts and agreed to reduce workers' wages. Bondholders signed off on a serious haircut. But when Senator Corker took the deal back to the Republican Conference, they argued for two hours and ultimately rejected it.
Why? Because they wanted the federal government to forcibly reduce the wages of American workers within the next 12 months.
Heard this morning that President Bush may still use TARP money to rescue the automakers. He reportedly doesn't want to end up as the next Hoover.
The automaker bailout is now, apparently, officially and really dead. Dems were willing to agree to Republican demands that Big 3 employees move to wage parity with Japanese automakers operating in the US. But they wouldn't agree to reach parity by 2009, as Republicans demanded.
Late Update: The AP has a different take on it-- suggesting it wasn't the Democrats who wouldn't agree to the immediate move to wage parity but rather the UAW. Perhaps it's simply a difference in emphasis since I would assume the Dems and the UAW leaders were operating in close consultation in the negotiations.
Comment: In the future I think it will be difficult to explain why this happened, perhaps even more challenging to explain why this key national decision was left in the hands of lame duck senate Republicans.
Kwame Raoul, who succeeded President-elect Obama in his state senate seat, is now coming forward to say that he too got the shake-down from Gov. Blagojevich as he sought appoint to the two remaining years of Obama's federal senate term. Raoul says he withdrew his name from further consideration because he was spooked by the governor's ask. But the more interesting part of the article describing Raoul's story in the Times is his suggestion that it was an open secret that Blagojevich was looking for a pay-off of some sort ...
The state senator, Kwame Raoul, who represents the South Side of Chicago, offered few details of his interaction with the governor's office but said he received a call about a month ago confirming that he was under consideration. Soon afterward, however, Mr. Raoul said he ran head-on into another message: that the governor was looking for a candidate who offered something of tangible value to him.
"It was open knowledge among people in and around Springfield," Mr. Raoul said. "Legislators and lobbyists alike openly talked about the fact that the governor would want to appoint somebody who would benefit him. I can firmly say that I've had these conversations, that I've spoken with both legislators and lobbyists who felt that that would be the consideration in his appointment."
Mr. Raoul would not specifically say what the content of the conversations were, or whom they were with, except that the initial inquiry from the governor's office was made by Victor Roberson, deputy director for intergovernmental affairs. Interest in his candidacy died on both sides, Mr. Raoul said, adding, "Obviously, the perception was that I didn't have anything to give other than my service."
There's a little wiggle room there. There's horse trading and then there's little for some sort of personal pay off. And Raoul's comments are ambiguous as to what was common knowledge. But this does suggest that you not have needed to be the FBI agents listening to the wiretaps to know what was up.
Late Update: TPM Reader JP says that Raoul's words are far more ambiguous than I suggest. Many governors in a position to appoint someone to the senate would want to appoint someone who would 'benefit' them. As in, strengthen them politically, be a way to reward friends, have someone loyal in Washington, etc. If we're looking at the words themselves, I'd agree. But I think we need to look at the context in which Raoul knew he was saying these things. I think he must have been aware he was suggesting more than that, even not quite the boffo level of corruption revealed on the tapes.
"The manufacturers had to assign the job to the engineers, instead of to the lobbyists."
Those are the words of Steven Chu, Nobel Prize-winning physicist and Obama's nominee to serve as Energy Secretary, quoted by Elizabeth Kolbert in a post on the New Yorker's blog.
The message is to Detroit. But anecdote comes from California's role in setting energy efficiency standards for refrigerators in the 1970s, something the manufacturers said couldn't be done. But when they were forced to do it, they did it -- in spades. Since all this happened, to quote Kolbert, "the size of the average American refrigerator has increased by more than ten per cent, while the price, in inflation-adjusted dollars, has been cut in half. Meanwhile, energy use has dropped by two-thirds."
As Chu says, the key was they took the issue out of the hands of the lobbyists and into the hands of the engineers.
I'm always struck by the way our political culture puts regulations and mandates down as somehow inimical to free enterprise, innovation and ingenuity when in fact, in most cases, quite the opposite is the case. Resistance to efficiency standards like these is almost always born of a lack of confidence in the abilities of our engineers and technology. And the kind of innovations these sorts of regulations require is almost always a boon to economic growth.
If the issue is dictating the inner workings of manufacturing processes, that's one thing. But if it is saying such and such benchmarks must be met by such and such year, that's usually a prod to innovation.
An unnamed White House official, quoted in today's Times, describing Bush administration efforts to get home foreclosure relief: "It's become clear that if you stick your head up, it'll get cut off. We're done in two months. The next administration can try to find a way out of that maze."
The big day has arrived. In today's episode of TPMtv, we're announcing the categories and deadlines for this year's 2nd Annual Golden Duke awards, our prestigious annual awards given out for achievements in corruption, betrayals of the public trust and shameful behavior in general. Check out the categories, get in your nominations and you too could win a prized Golden Dukes T-shirt ...
Dana Perino just said we may need to "rethink" our North Korea policy after the recent hiccups in the nuclear negotiations. Presumably that means going back to the catastrophically unsuccessful Cheney/Bolton strategy of the early Bush years.
Look, if you want, the New Orleans bloggers can put together a comprehensive file for you. But you need to know it will be thick.
In the many categories that people argue for (cash involved, historical entrenchment, recent scandal, profile, fed/state/local), each of your wannabe states points out that the category they happen to be strongest in really matters the most. And that's why they're wannabes...they need special consideration.
Louisiana will let any state in the union pick the turf and the time. You want state level corruption? Local? Bring it. Historical tradition? Game on. Recent scandal? Easy money. You name the category, any category, and we'll have a big dog in that fight. And that is why Louisiana is the all time champ.
If you're a right-wing family values politician who's been caught giving substantial stimulus to the escort industry in at least two jurisdictions, don't lecture me about the Automaker bailout.
Everyone remembers the excitement and hoopla surrounding last year's First Annual Golden Duke Awards, given out for excellence in corrupt acts, betrayals of the public trust and generalized shameful behavior. (See last year's winners here.) We'll be explaining more of the details tomorrow. But if you want to get a jump on everyone else and get your nominations in now, here are the details ...
Today we're announcing the categories in which we'll award prizes.
They are ...
Sleaziest Campaign Ad
Best Election Season Fib
Outstanding Achievement in Corruption-based Chutzpah
Best Scandal -- Sex and Generalized Carnality
Best Scandal -- Local Venue
Best Scandal -- General Interest
The deadline for nominations is December 17th. And we'll be handing out exciting prizes both for the winners and also to the readers whose nominations we choose as finalists.
So here's how it works. If you want to nominate some evil-doer for one of our awards, send us a nomination identifying the person you're nominating and a description/argument of no more than 250 words explaining their achievements, bad acts or generally scandalous behavior that you believe entitles them to the award. All awards are to individual mucksters and evil-doers -- parties, concepts, groups, etc. are not eligible.
On December 19th we'll announce the nominees, which then then go to our panel of distinguished judges. The awards will be announced on the last day of the year, December 31st, new year's even.
Now Arizona wants its day in the sun, courtesy of TPM Reader JB ...
I'm disappointed you're leaving out Arizona in your catalogue of corrupt states. Like NV, we too have a rich history of mob ties; Joe Bonanno lived for years in Tucson, and in Phoenix several years ago the mob killed Don Bolles, a reporter for the Arizona Republic, when he got too close. We have a congressman (Rick Renzi) currently under indictment; we led the nation by having two members of the Keating Five (McCain and DeConcini); in the past 20 years we lost two governors to corruption (Evan Mecham was impeached; Fife Symington resigned after indictment); and many members of the AZ Legislature resigned during a sting operation in the '90s.
Our governor was recently cleared of an FBI investigation, but he is in the
middle of a messy divorce with his wife, and he faces a lawsuit for shoving
a woman in a parking garage. Our Lt. Governor Brian Krolicki was indicted
last week. Fully six former members of the Clark County Commission, the most
powerful board in the state (it encompasses the Las Vegas Strip) have been
indicted or are in jail. The LA Times did a series on our awful judges in
2006. We had a state senator who was also (at the same time) head of the
mining association. We have a state senator who's head of anti-union contractors group.
There's been a lot of news to talk about over the last thirty-six hours. But the largest volume of emails has come in in response to yesterday's note from TPM Reader WO's suggesting a contest for most corrupt state. WO took it as a given that the top three contenders were Alaska, Illinois and Louisiana.
Au contraire, say partisans of perhaps a dozen other states -- New Jersey, Rhode Island, Massachusetts, and New York being top claimants.
I know there are a lot of hurt feelings out there. A lot of people feel slighted on behalf of their states. But while a number of these states have impressive histories of corruption, as I told a few emailers, a lot of it really comes down to a case of 'what have you done for me lately?'
Let's run through the issue. As a former proud resident of Rhode Island, there's no doubt that the Ocean State has an extremely impressive history of corruption, with an impressive level of mafia infiltration as a bonus. But TPM Reader JR concedes that those days may be in the past ...
I grew up in RI and now live in MA. I think RI would have won this hands-down 20 yrs ago, but while Lincoln Almond was a completely shitty governor, as US Atty he did a pretty good job of breaking the back of the Patriarca mob family that drove a lot of southern New England's corruption for decades.
It's still a huge part of RI's self-identity, though... if they ever named a state movie (in the sense of a state bird or state flower), it would surely be "The Godfather".
Admittedly, in my day we had Buddy Cianci for the Mayor of Providence. He was on his second life at that point, having done a stint in prison after he'd been Mayor the first time. I never did the kind of deep forensic look at what that was all about as I do these days as a reporter (I was a graduate student back then.) But all the stories seemed to come back to kidnapping the guy who slept with his wife, bonking him on the head with a log and doing some sort of low level torture. That's was all in the past in the early and mid-1990s. Alas, a few years after I left Buddy made a return visit to the slammer. At the end of the day though, it was more a faint echo of the real glory days of Rhode Island corruption than a genuine reprise.
New Jersey? Hard to deny the Garden State some serious props (I used to live there too). Readers have mentioned Torricelli and McGreevey, etc. And if the issue is sheer saturation of machine politics and graft, it's a real contender. But perhaps this is the issue: how do you compete with Edwin Edwards a few years ago and William Jefferson with various international shenanigans, $90,000 of frozen cash hidden in his freezer. The list just goes on and on. Or Alaska, two of the three members of the congressional delegation under criminal investigation -- now one of them convicted. And the third member standing out as the clean senator because all she got was a discount vacation house from a fundraiser and political fixer. Or Illinois. Well, two straight governors indicted and then you go from there.
Sure, there's plenty of crooks in New York and New Jersey and Rhode Island. And Massachusetts has its moment. But I'm just not sure any of them can put the kind of serious and recent per capita muck on the table as these three other worthy states. Certainly not when it comes to governors and federal officeholders.
Again, I invite your response if you think I haven't given these states their due.
Late Update: More sour grapes, now from TPM Reader TC ...
I cannot believe that my home, the Garden State, is not in contention as the most corrupt state. Not with its rich tradition of seeing the mayors of its largest city sent to prison. (Three in a row! My favorite is probably Hugh Addonzio, who presided over the '67 riots and ended in prison for, in the federal prosecutor's words, 'delivering the city into the hands of organized crime.")
Not with the legendary Hudson County machine, founded by Frank "King Hanky-Panky" Hauge, who ran Jersey City from a suite in the Plaza Hotel during the depths of the Great Depression.
Not after Senator Harrison "Pete" Williams, the only US Senator to do time for dipping his beak during the Abscam affair, or after Senator Bob "the Torch" Torricelli, who left office in disgrace after news broke of his pecuniary friendship with a certain Mr. Chang -- a Chinese-American 'businessman' who did most of his business in North Korea.
Sure, auctioning off a Senate seat is pretty heady stuff. So what does the mob-riddled state that invented 'pay-to-play' got to do to compete? Have its Governor resign in disgrace when it's revealed he had his secret gay lover on the public payroll to the tune of six figures?...
Been there. Done that.
He didn't even mention Sharpe James, not by name at least.
Is New York fighting to get respect as part of the top three corrupt states. Former state Supreme Court Justice Thomas J. Spargo has just been indicted for bribery and extortion.
Late Update: I should have this more clear. In our state a Supreme Court Justice is not someone who sits on the highest court in the state. The Supreme Court has several circuits and is actually a trial court. New York will have to shoot higher to make serious gains on Alaska, Illinois and Louisiana.
Simply put, Blagojevich is that deadly combination of ignorance and arrogance. One or the other is survivable, but the two, combined, are not.
I know from speaking with many of my friends who have worked with him over the years (including on his campaigns) that he is as dumb as a box of rocks. (The campaign folks would never let him talk to the press, unscripted, ala Palin.) He also thought he was God's gift to the planet.
In recent years, his circle of advisers has shrunk to a miniscule three or four who make Bush's "yes men" crew look like a debate society. As a friend in state government told me recently, "Everyday Blagojevich gets up and says 'What can we do today?'" The point being, there is (and has been) no rhyme or reason for his governance. Fundamentally, the guy is an idiot, as the taped conversations prove. He is simply a jackass.
Everything I've heard is completely consistent with PN's report, though that does beg the question of how this goof got elected and reelected in the first place.
(ed.note: Please no emails telling me this is the incorrect use of the phrase 'beg the question', though I know you're right. I've decided that this misuse is too widespread, too serviceable and too lacking in an alternative not to simply persist in using it.)
Late Update: Despite my forewarning, I'm being deluged by emails from purists telling me it would be so easy simply to use "raise" instead of "beg." I guess I'll have to give it more thought.
Actual Substance Update: The answer seems to be that he faced two extraordinarily weak Republican candidates -- though weak for different reasons. So it was really winning the primary in 2002 and that was because of a divided field and because he was a consummate fundraiser -- surprise, surprise.
TPM Reader KP is not satisfied with Obama's response to the Blago scandal ...
Sounding like President Bush is no way to begin your administration.
Obama should canvass his entire Chicago staff, find out who talked to the governor or his assistant, take that information to Fitzgerald and ask Fitz how much of this information he can share publicly. Then, he should answer all reporters' questions. If something is asked that Fitz doesn't want discussed, Obama can say that.
Then turn the entire matter over to his communications team for any future questions. Then move on to the task of governing.
You'd think after all these scandals, the PR template would be clear.
I guess not.
I don't think I'm ready to be that critical yet. I'm sure they spent a lot of time yesterday trying to make sense of what had happened. And I'm heartened by the fact that there seems to be ample evidence in the criminal complaint suggesting the hostility Blagojevich had for Obama because his people wouldn't play ball. Indeed, the prosecutors say that it was the ethics bill Obama was instrumental in getting passed that prompted Blagojevich's spree. Still, the response seemed a bit weak to me too.
Last night I mentioned today's New York Times article that suggests a fairly perverse reading of Obama's decision last year to lobby for an Illinois state law to tighten up ethics rules to crackdown on pay-for-play deals. The Times suggests this is evidence of Obama's inability to escape the taint of Chicago politics whereas it seems more reasonably to put him more clearly on the side of reform.
That point aside though, there's an interesting kernel contained in the Timespiece that I'm curious about. The piece suggests that after Obama lobbied and the senate overrode Blagojevich's veto, the passage of the bill spurred "the governor to press state contractors for campaign contributions before the law's restrictions could take effect on Jan. 1, prosecutors say."
So it was the deadline created by the state ethics bill that Obama helped push through that was the spur for the "spree" of corruption that led Fitzgerald's prosecutors to get the wiretaps that uncovered the alleged attempted senate seat sale.
Now, a few questions. David Kurtz and I were chatting about this. And it seems at least a bit of a strain to believe that a change in ethics rules could prompt such a wholesale, hog-wild leap into criminality. On the other hand, one could speculate that he wanted to rake in as many iffy contributions as possible before the new year and just went overboard. And this is what the prosecutors' statement claims. And, frankly, the whole story makes Blagojevich sound a bit unhinged in addition to a lot crooked. So I'm not sure rationality is the best standard through which to understand any of this.
ABC is reporting that Jesse Jackson, Jr. is 'senate candidate #5'. Wiretaps suggest that Blagojevich believed that emissaries of Jackson had offered up to a million dollars to appoint him to serve in the senate.
It's important to note that this is unnamed 'emissaries' who Blagojevich told others had made offers to him. So there's a lot of wiggle room for misunderstandings, lying (mainly Blagojevich) and people freelancing, doing or saying things Jackson knew nothing about.
But there's no getting around the fact that this puts Jackson right in the middle of this mess, whether or not it turns out to be because of anything of his own doing.
This passage from ABC's article says a lot ...
Jackson Jr. said this morning he was contacted yesterday by federal prosecutors in Chicago who he said "asked me to come in and share with them my insights and thoughts about the selection process."
Jackson Jr. said "I don't know" when asked if he was Candidate #5, but said he was told "I am not a target of this investigation."
Jackson Jr. said he agreed to talk with federal investigators "as quickly as possible" after he consults with a lawyer.
I think Blagojevich's best defense is probably going to be an insanity defense based on the evidence of his idea that he was setting himself up to run for president by appointing himself to serve out Obama's senate term.
I think you guys should do a Most Corrupt State smackdown. Maybe get CREW, POGO, ProPublica, and whoever else wants to help to cooperate. I think it's pretty clear that the only three serious contenders are Illinois, Louisiana, and Alaska. My money would be on the young upstart, Alaska, over the grizzled corruption veterans of Illinois and Louisiana, but who knows. Statistics should play a part in the contest, but style points are important, too. Cash in the freezer is pretty impressive, as is trying to shake down the President-Elect.
Late Update: Outrage from TPM Reader JP: "Who could leave Rhode Island off the list of most corrupt states!! This is defamatory!! Ocean Staters will NOT be insulted in this way!! Don't make me go ALL CAPS on this thing!!! A very dark day for TPM...." I don't know. I'm a former Rhode Islander. I used to live about a half dozen blocks from the official Gov's mansion on Benefit Street when Buddy Cianci was mayor. But I'm not sure the Ocean State can really stand up to these three state's recent record. I'd need to see more evidence.
Carrell looks a bit like Blago, with a thinner face, so they can just skip the audition for that part. For Zell, Ben Kingsley. Think about it. Or maybe Alan Arkin. Although Alan Arkin is so freakin' funny I find it hard not to laugh whenever I see his face.
If you look down on page 8 of the Blagojevich indictment complaint, it seems he wasn't happy with Obama since he wasn't willing to play ball.
In a conversation with Harris on November 11, the charges state, Blagojevich said he knew that the President-elect wanted Senate Candidate 1 for the open seat but "they're not willing to give me anything except appreciation. [Expletive] them."
"Harris" is John Harris, Blagojevich's chief of staff, who was also arrested this morning.
We're trying to confirm the identity of "Senate Candidate 1". It appears to be Obama advisor Valerie Jarrett.
A few of you have written in to ask whether this is a case of Siegelman redux -- that is, something akin to the case of former Gov. Don Siegelman of Alabama, a Democratic governor sandbagged by Republican partisans in the US Attorney's office.
Short answer: Don't bet on it.
Needless to say, I haven't had any real chance to evaluate the specific charges themselves. But I would be extremely cautious about jumping to such conclusions. Patrick Fitzgerald, the US Attorney in Chicago, put the previous Illinois governor away too. That was RepublicanGeorge Ryan. Fitzgerald was also the special prosecutor who investigated the Plame Leak case.
I remember a few years ago I was having lunch with a prominent Democratic consultant who told me that Fitzgerald was "naive" about how politics worked -- relative to his work in Chicago. I just listened and waited to move on to another subject. What is true is that Fitzgerald takes a pretty stringent view of political corruption. But that's not such a bad thing.
In any case, if he's stringent, I think Fitzgerald's record as US Attorney in Chicago and as special prosecutor in the Plame case has earned him more than enough credibility as a hard ass irrespective of people's party designation to assume that this case has nothing to do with Blagojevich being a Democrat unless and until there's very persuasive evidence to the contrary.
Everything I know about Fitzgerald tells me he's exactly what you want in a US Attorney. The real thing.
Even setting aside the primordial level of corruption of trying to sell the senate seat of the President-elect of the United States, I never fail to be amazed at the brazenness and stupidity of some political crooks. I mean, I think everyone involved in politics or interested in political corruption in the country had to know that Blagojevich's phones were tapped and probably his offices were bugged, and that Pat Fitzgerald had him under the craziest level of scrutiny. And he tries to sell the senate seat with that hanging over his head? That's simply amazing. I guess you could say he's just a traditionalist, trying to keep up heritage of Chicago machine politics. But with some of these characters, it must just be pathological.
Late Update: TPM Reader PW has another theory ...
Don't underestimate one key factor here with Blago: sheer stupidity.
My sister works in the legislative and advocacy circles in Illinois and she's said for a long time that Blago is simply not a bright guy. People in Chicago have repeatedly saud that he's like George W. Bush but not as bright.
Kind of explains how he could believe that he could set himself up for a Presidential run in 2016 by appointing himself to this seat even while everyone in the world could see that it was just a matter of time before he was indicted. And like you say, how could he not assume that he was under serious investigation?
Stupidity explains it all.
Question: if he goes to prison could he share a cell with former GOP Gov. Ryan, jsut to show Americans that Democrats and Republicans can live together in peace?
I would be surprised if any of your readers who chastised you for second-guessing the business decisions of some of the newspaper companies that are now hanging on for dear life are in the newspaper business -- at least on the editorial side of it.
I got into the newspaper business as a reporter in 1985, which now is known as the year when newspaper circulation in the United States peaked. It quickly became evident to me that the profit margins that companies like Gannett and Thomson, which has since exited the newspaper business, were unsustainable at any papers other than small ones. Unfortunately, it didn't become evident to many other people. Gannett moved into owning larger newspapers and gutted them to achieve the 20-percent-plus margins it was getting from its smaller papers, and other newspaper owners followed suit. When circulations stated declining, paper owners cut more costs to maintain their margins. That made their papers worse, driving away more readers, they responded by cutting more costs, and the race to the bottom was on.
Throughout all this, I kept thinking that some newspaper owners eventually would realize that the problem was the high margins they were demanding of their properties and would accept lower ones from them. If they did, they did so too late. In the last round of newspaper purchases, the buyers not only expected unreasonable margins of the papers they were buying, they took out loans based on their expectations. You're seeing the result. The question now is what major U.S. city will become the first to not have a large daily newspaper. My bet's on Miami.
Longtime admirer and reader here, finally moved to comment on the fiasco that is the company I work for. You are right on the money, this filing goes directly to insanely bad business decisions, not the secular decline in newspapers. The amazing thing that is happening right now is that all of the company's assets are in the black. All of them. Every television station and newspaper is making money. Now lets not kid ourselves -- many are in a fast downhill spiral, revenues are declining, etc. But what has killed this company is the insane amount of debt Zell has placed upon it.
That debt was not incurred to invest in the company's product, or even physical plant. It was incurred solely to buy out Tribune Corp's shareholders at an inflated share price and let Zell have his toy. It was the epitome of the bubble. And now it's caught up with Zell. He'll be fine. The employees are the ones who will suffer, as always. Basically, Zell has destroyed several great newspapers as part of an unwitting wealth transfer to various large Tribune shareholders.
If you choose to post anything from this, I ask that you keep my identity out of it -- not a good time for the plebians here to be saying bad things about the emperor.
I'm not sure I'd put it with quite the same edge. But I think Jane Hamsher's right about this. Appointing Caroline Kennedy to serve out Hillary's senate term is just a bad idea. This isn't to say anything bad about her. I don't have anything bad to say about. I think very highly of her. But that's not reason enough to appoint her to serve in the senate.
A few readers have chastised me for second-guessing the business decisions of some of newspaper companies that are now in the worst shape. I take the point, in as much as that the current, acute crisis has a lot of do with debt servicing, which has been massively impacted by the extent of the economic crisis and which is a area of financial machinations which I don't pretend to know a great deal about. But I cannot help thinking that the situation the Tribune finds itself in has a lot to do with some really questionable decisions by Samuel Zell. NYT's Deal Book blog puts together some pretty choice quotes from Zell over the last year which makes for rich reading in the light of today's events. Still seems to me like Zell massively indebted a company that already had some pretty serious existing problems. This wasn't ten years ago, but about a year ago, when there were already real signs of a serious economic slowdown that would seriously impact the parts of the economy newspapers depend on for advertising. Of course, this was in addition to the major difficulties facing newspapers in general, because of the Internet. Sure, few people realized a year ago that we'd find ourselves in the midst of a historic financial crisis. But it seems like he did a lot to make his boat unseaworthy before he hit what he's now calling this perfect financial storm.
How bad have things gotten for Republicans in Nevada? Pretty soon, they won't have a home in Las Vegas.
Over the weekend, volunteers helped pack up the Nevada Republican Party's Southern Nevada offices for what was billed as a "move."
In fact, the GOP's possessions were headed for storage as its headquarters temporarily relocate to Northern Nevada, according to the party's executive director, Zac Moyle.
Moyle said he's planning to live at his parents' house in Reno and work out of the party's Carson City office until the legislative session ends in mid-2009.
TPM Reader JM -- a recent escapee from the industry -- comments ...
The most depressing thing I've heard in a while was Wall Street Journal reporter Shira Ovide on Chicago public radio this morning describing Tribune Co.'s predicament. She pointed out that the Chicago Tribune itself actually has pretty good cash flow (relatively speaking) and some cash reserves. In other words, this is a company that should still be leading the industry - if it weren't for its massive, crippling debt.
That debt comes from two of the worst decisions in recent corporate history. The first was Tribune's purchase of Times Mirror in 2000 for the vastly inflated price of $8 billion, which made the company double down on old media without gaining any strategic benefit. The second bad decision piggy-backed on the first. Swooning from the fallout of the Times Mirror deal (including a very foreseeable $1 billion tax penalty), they paid another $8 billion to put a man who actively hates newspapers in charge of one of the nation's biggest newspaper operations. What could possibly go wrong?
Just a thought experiment: What if the penalties for a CEO's business failure were as extravagant as the rewards for success are? What if the executives who did this to Tribune Co. had known that the cost of failure would be the loss of all their assets, that they would be forced to start over with a $7/hour job? I have to think they would have been a little more responsible.
There's at least something loosely parallel with McClatchy's need to get rid of the Miami Herald. They're loaded with debt from the purchase of Knight-Ridder.
I talked to a reporter today who's writing about the turnover on the Sunday shows, particularly David Gregory getting the nod to take over for the late Tim Russert as the host of Meet the Press and John King taking over the CNN show. One thing that struck me though is how skewed people's thinking seems to have gotten about relative age. David Gregory is seen as very young for the job, like a kid. But he's 38. That's not really *that* young. I was asked for comment, I think, because I'm one of the young people too, etc. But I'm about to turn 40. King, the reporter told me, is 44.
Some interesting perspective. Walter Cronkite was pushed into retirement when he was, I believe, 64. Wolf Blitzer is 60.
To a degree, this is simply a matter of people living longer and society becoming less rigid about forcing people out when they reach an arbitrary age, which is all to the good. But aside from all the other kinds of diversity that are important on the Sunday shows, some breadth of age diversity is needed as well.
(ed.note: I know I'm going to hear from a lot of people saying, 'Believe me, kid, 38 is really young. And as a 39 year old, you believe me, I like hearing that. So, I know in relative terms it's young. But in terms of the range of ages of people who are a real part of the public dialog on news and politics I think this skew is worth considering.)
The NYT is planning to borrow almost a quarter of a billion dollars by taking out a mortgage against its new New York City headquarters. On the one hand this has to do with the specific story of the New York Times. But as I've been reading these various stories over the weekend, with the possible bankruptcy of Tribune and McClatchy's apparent decision to put the Miami Herald on the block, I've been struck by how many of these companies took on massive loads of debt quite recently for reasons that strike me as at least questionable, given the paper to digital transition that was on the horizon.
I want to be clear that the structural and technological challenges the newspaper industry faces are vast, ones that would be tremendously challenging to the best business and publishing minds. But it's hard not to see some really poor decision-making over the last decade that made the present squeeze much, much tighter.
A very disquieting -- maybe just even more disquieting -- article from the Journal on the India-Pakistan conflict. Tensions spiked when India's foreign ministry called Pakistani President Zardari with a "bellicose" message at the height of the Mumbai seige. But now the two countries are arguing back and forth over whether it was actually a crank call from a prankster -- a lack of clear lines of communication which could lead to some rather unpleasant misunderstandings.
No, that doesn't inspire a lot of confidence.
Then there's this.
A top [Pakistani] security official has said the military would be willing to fight India alongside Pakistani Taliban leader Baitullah Mehsud, the man accused of assassinating former Prime Minister Benazir Bhutto. Mr. Mehsud has denied involvement in the murder. The Taliban, too, said it would suspend its fight against Pakistani soldiers to join them a conflict with India.
Obama on those factory workers occupying their factory in Chicago, demanding their benefits and pay. "When it comes to the situation here in Chicago with the workers who are asking for their benefits and payments they have earned, I think they are absolutely right. What's happening to them is reflective of what's happening across this economy."
As we noted last night, Republican John Fleming apparently came from behind to defeat Paul Carmouche in which is a very Republican district, Louisiana's 4th. But the margin was only 356 votes out of more than 90k cast. And Carmouche is not conceding.
Follow up shows there's a pretty good reason why. The current totals do not include provisional ballots (which often heavily favor Democrats) or absentee ballots (which in the past often favored Republicans but now can cut either way). They'll both be counted on Tuesday.
Carmouche is also signaling he'll likely ask for a recount.
Who knows? But with some non-trivial number of votes left to be counted, a 356 margin can't be set in stone.
According to the New Haven Independent, Bronx Borough President Adolfo Carrion, Jr. told a gathering in New Haven Friday night that he's been told by the Obama transition that he will soon be tapped for a cabinet secretaryship.
story with gargantuan bad acts and fabulously wealthy people claiming they're on the way to the poor house is irresistible at some level. But that's not the root of my interest. 
for excellence in corrupt acts, betrayals of the public trust and generalized shameful behavior. (See last year's winners 
