The House of Representatives officially rejected the bipartisan agreement that passed the Senate with 89 votes for a two-month extension of the payroll tax cut, extended unemployment benefits and a doctor’s fix to prevent a 27% reduction in Medicare reimbursement rates. They did so under a complicated scheme whereby members did not vote on the Senate deal itself, but on whether to move to a conference committee on the package, with the rejection of the Senate deal implicit in the exchange. The final roll call was 229-193, with seven Republicans switching sides and voting with Democrats to reject the conference committee. All Democrats present voted against the bill. [..]

The seven Republican no votes: Charlie Bass (NH), Jeff Flake (AZ), Chris Gibson (NY), Jaime Herrera Beutler (WA), Tim Johnson (IL), Walter Jones (NC), Frank Wolf (VA).

Senate Majority Leader Harry Reid won’t play:

“My House colleagues should be clear on what their vote means today. If Republicans vote down the bipartisan compromise negotiated by Republican and Democratic leaders, and passed by 89 senators including 39 Republicans, their intransigence will mean that in ten days, 160 million middle class Americans will see a tax increase, over two million Americans will begin losing their unemployment benefits, and millions of senior citizens on Medicare could find it harder to receive treatment from physicians. “Senator McConnell and I negotiated a compromise at Speaker Boehner’s request. I will not re-open negotiations until the House follows through and passes this agreement that was negotiated by Republican leaders, and supported by 90 percent of the Senate. “This is a question of whether the House of Representatives will be able to fulfill the basic legislative function of passing an overwhelmingly bipartisan agreement, in order to protect the economic security of millions of middle-class Americans. Democratic and Republican leaders negotiated a compromise and Speaker Boehner should not walk away from it, putting middle-class families at risk of a thousand-dollar tax hike just because a few angry Tea Partiers raised their voices to the Speaker. “I have always sought a year-long extension. I have been trying to forge one for weeks, and I am happy to continue negotiating one once we have made sure middle-class families will not wake up to a tax increase on January 1st. So before we re-open negotiations on a year-long extension, the House of Representatives must protect middle-class families by passing the overwhelmingly bipartisan compromise that Republicans negotiated, and was approved by ninety percent of the Senate.”

A couple of point where I disagree with Barney Frank is that we are doing better than Europe and that the economy is doing better. Maybe for the 1% it is but the middle class is shriveling. The important part of this bill was an extension of the UI which is about expire.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

New York Times Editorial: The Middle-Class Agenda

Earlier this month, President Obama delivered his first unabashed 2012 campaign speech. Unlike his opponents, Mr. Obama acknowledged the ravages of income equality, the hollowing out of the American middle class. There is no hyperbole in the urgency he conveyed about “a make-or-break moment for the middle class, and for all those who are fighting to get into the middle class.”

The challenge for Mr. Obama is to translate the plight of the middle class into an agenda for broad prosperity. Congress’s inability to cleanly extend even emergency measures though 2012 – including the temporary payroll tax cut and federal unemployment benefits – underscores the difficulty. The alternative is continued decline.

Recent government data show that 100 million Americans, or about one in three, are living in poverty or very close to it. Of 13.3 million unemployed Americans now searching for work, 5.7 million have been looking for more than six months, while millions more have given up altogether. Even a job is no guarantee of middle-class security. The real median income of working-age households has declined, from $61,600 in 2000 to $55,300 in 2010 – the result of abysmally slow job growth even before the onset of the recession.

Joe Nocera: An Inconvenient Truth

There is so much about Fannie Mae and Freddie Mac that we should be angry about.

In their heyday, these strange hybrids – part corporation, part government agency – were the biggest bullies in Washington, quick to bludgeon critics who dared suggest that their dual missions of maximizing profits while making homeownership affordable for low- and moderate-income Americans were incompatible. They steamrolled their regulator and pushed back at any suggestion that their capital was inadequate.

For years, they essentially wrote most of the legislation that affected them, which they larded with loopholes. In the mid-2000s, they had giant accounting scandals. Eventually, their quest for profits led them to make a belated, disastrous foray into subprime mortgages, which ended with their collapse, and which has cost taxpayers about $150 billion. Tragically, Fannie and Freddie could have led a housing recovery – if they hadn’t become crippled wards of the state instead.

As atrios says- LEAVE THE RICH ASSHOLES ALOOOOOOONE!

Bankers Seek to Debunk Attack on Top 1%

By Max Abelson, Bloomberg News

Dec 20, 2011 12:01 AM ET

The top 1 percent of taxpayers in the U.S. made at least $343,927 in 2009, the last year data is available, according to the Internal Revenue Service. While average household income increased 62 percent from 1979 through 2007, the top 1 percent’s more than tripled, an October Congressional Budget Office report showed. As a result, the U.S. had greater income inequality in 2007 than China or Iran, according to the Central Intelligence Agency’s World Factbook.

…

“Rich businesspeople like me don’t create jobs,” Nick Hanauer, co-founder of aQuantive Inc., an online advertising company he sold to Microsoft Corp. for about $6 billion, wrote in a Dec. 1 Bloomberg View article. “Let’s tax the rich like we once did and use that money to spur growth.”

Two out of three Americans support raising taxes on households with incomes of at least $250,000, according to a Bloomberg-Washington Post national poll conducted in October.

…

“It’s simply a fact that pretty much all the private- sector jobs in America are created by the decisions of ‘the 1 percent’ to hire and invest,” Rosenkranz, 69, said in an e- mail. “Since their confidence in the future more than any other factor will drive those decisions, it makes little sense to undermine their confidence by vilifying them.”

…

Cooperman, 68, said in an interview that he can’t walk through the dining room of St. Andrews Country Club in Boca Raton, Florida, without being thanked for speaking up. At least four people expressed their gratitude on Dec. 5 while he was eating an egg-white omelet, he said.

And here I thought jobs were created by “Small Businesses.”

Update: lambert @ Corrente.  Krugman.  Felix Salmon.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

December 20 is the 354th day of the year (355th in leap years) in the Gregorian calendar. There are 11 days remaining until the end of the year.

On this day in 1803, the French hand over New Orleans and Lower Louisiana to the United States.

In April 1803, the United States purchased from France the 828,000 square miles that had formerly been French Louisiana. The area was divided into two territories: the northern half was Louisiana Territory, the largely unsettled (though home to many Indians) frontier section that was later explored by Lewis and Clark; and the southern Orleans Territory, which was populated by Europeans.

Unlike the sprawling and largely unexplored northern territory (which eventually encompassed a dozen large states), Orleans Territory was a small, densely populated region that was like a little slice of France in the New World. With borders that roughly corresponded to the modern state of Louisiana, Orleans Territory was home to about 50,000 people, a primarily French population that had been living under the direction of a Spanish administration.

The Louisiana Purchase (French: Vente de la Louisiane “Sale of Louisiana”) was the acquisition by the United States of America of 828,800 square miles (2,147,000 km2) of France’s claim to the territory of Louisiana in 1803. The U.S. paid 60 million francs ($11,250,000) plus cancellation of debts worth 18 million francs ($3,750,000), for a total sum of 15 million dollars for the Louisiana territory ($219 million in today’s currency).

The Louisiana Purchase encompassed all or part of 14 current U.S. states and two Canadian provinces. The land purchased contained all of present-day Arkansas, Missouri, Iowa, Oklahoma, Kansas, Nebraska, parts of Minnesota that were west of the Mississippi River, most of North Dakota, nearly all of South Dakota, northeastern New Mexico, the portions of Montana, Wyoming, and Colorado east of the Continental Divide, and Louisiana west of the Mississippi River, including the city of New Orleans. (The Oklahoma Panhandle and southwestern portions of Kansas and Louisiana were still claimed by Spain at the time of the Purchase.) In addition, the Purchase contained small portions of land that would eventually become part of the Canadian provinces of Alberta and Saskatchewan. The purchase, which doubled the size of the United States, comprises around 23% of current U.S. territory. The population of European immigrants was estimated to be 92,345 as of the 1810 census.

The purchase was a vital moment in the presidency of Thomas Jefferson. At the time, it faced domestic opposition as being possibly unconstitutional. Although he felt that the U.S. Constitution did not contain any provisions for acquiring territory, Jefferson decided to purchase Louisiana because he felt uneasy about France and Spain having the power to block American trade access to the port of New Orleans.

Napoleon Bonaparte, upon completion of the agreement, stated, “This accession of territory affirms forever the power of the United States, and I have given England a maritime rival who sooner or later will humble her pride.”

New York State attorney General Eric Schneiderman and Steve Linick, the inspector general supervising Fannie and Freddie and the Federal Housing Finance Agency (FHFA) have joined forces giving the NY AG access to documents and depositions taken by the FHFA Office of Inspector General as part of its investigation into mortgage and securities fraud perpetrated against Fannie and Freddie. As Yves Smith at naked capitalism points out this is a “well deserved slap in the case to the Department of Justice”:

I’m not certain of the precise scope of powers of the FHFA inspector general. But typically, federal inspector generals have limited scope of action. They can only subpoena documents and cannot subpoena witnesses. And, of course, they are not prosecutors and cannot launch cases. The theory of IGs is that if they uncover something unsavory, they’ll hand it off to the Department of Justice. But as a former IG has pointed out, the DoJ does not take case leads from the IGs unless they are fully fleshed out, and that is well nigh impossible to do in the absence of speaking to witnesses.

The Department of Justice has AWOL on the mortgage and banking beat, no doubt to avoid ruffling powerful possible Obama donors. Inspectors general are in theory independent, and on top of that, the FHFA is an independent agency and is not running the Administration playbook (I’ve been told by people involved in bank regulation that Geithner has tried pressuring FHFA acting chief DeMarco to no avail).

So what does the FHFA inspector general do, certain that Eric Holder will ignore any misdeeds he finds? Turn to another prosecutor who can bring cases that can bring cases that are national in scope.

According to Shahien Nasiripour writing for the Financial Times this alliance could “make it easier for authorities to bring fraud charges against Wall Street companies”.:

Investigators will be able to share documents and findings, and pool resources, according to people familiar with the co-operation agreement. It was signed in recent weeks by Eric Schneiderman, New York attorney-general, and Steve Linick, the inspector general supervising Fannie and Freddie as well as the Federal Housing Finance Agency , the regulator responsible for the two taxpayer-owned home loan financiers.

The collaboration escalates Mr Schneiderman’s probe of about a dozen banks and mortgage insurers as part of a broad investigation into whether banks properly bundled hundreds of billions of dollars worth of home loans into now-soured securities sold to investors.

The New York attorney-general is armed with the state’s Martin Act, considered one of the most powerful prosecutorial tools in the country. The law allows Mr Schneiderman to investigate anyone doing business in New York and to bring cases without having to show that the accused intended to commit fraud. State prosecutors need only prove that a fraud was committed, which state courts have defined as “all deceitful practices contrary to the plain rules of common honesty”.

The law allows Mr Schneiderman to pursue civil and criminal probes, and to seek felony criminal convictions. The Martin Act confers broader powers than federal securities laws used by agencies like the US Securities and Exchange Commission, which must show intent when bringing fraud cases. Previous New York prosecutors such as Eliot Spitzer have wielded the law to extract billions of dollars from Wall Street firms for alleged wrongdoing.

In conjunction with with lawsuits from Delaware’s Beau Biden, Massachusetts’ Martha Coakley and Nevada’s Catherine Cortez Masto, this is really great news. As David Dayen at FDL says “this is an end run around the justice department”:

Recall that Linick has recently come out with some explosive reports, including a report that the GSEs know about foreclosure fraud back in 2003. So that’s a wealth of knowledge from which to draw, and the IG can compel some more of it, though as said above they are somewhat limited. If Schneiderman sought these documents and depositions by himself, federal regulators could have overruled him. Now he can just use Linick as a conduit.

The FHFA, over which Linick monitors, sued 17 banks for securities fraud earlier this year. So you’re almost seeing a consolidation of lawsuits and actions between Schneiderman and a rogue independent housing agency. It’s really nice to see.

Another step in getting justice for homeowners.

Who knew? Presidential candidate for the GOP nomination, Newt Gingrich is like the family’s crazy uncle that gets let out for family gatherings and then gets sent back to is room. His recent emergence as the “favorite” for the nomination has met with some harsh criticism and not just from the left. Many of the right wing punditry are not happy with Newt Gingrich’s surge in the polls for the nomination. During Newt’s interview on Face The Nation with Bob Schieffer, he said he would have “activist judges” (translation: judges who disagree with Newt) hauled before Congress to answer for their decisions, if necessary arresting them:

   SCHIEFFER: One of the things you say is that if you don’t like what a court has done, that Congress should subpoena the judge and bring him before Congress and hold a Congressional hearing… how would you enforce that? Would you send the Capitol Police down to arrest him?

   GINGRICH: Sure. If you had to. Or you’d instruct the Justice Department to send a U.S. Marshal.

I have no idea how Schieffer didn’t react with disbelieving “what?” much like Barbara Walters’ response when Herman Cain said he would want to be Secretary of Defense.

Obviously Newt is off the rails and a couple of former Republican Attorney Generals with some questionable constitutional decisions under their belts think so, too. Former attorney generals Alberto Gonzalez and Michael Mukasey, also a former judge, weighed in on Newt’s judicial lunacy to defy the Supreme Court and, if necessary according to Newt, eliminate the courts that disagree with him all together. In appearances on Fox News they called Newt’s ideas “ridiculous,” “irresponsible,” “outrageous,” and “dangerous”:

   KELLY: He wants to see the Ninth Circuit Court of Appeals entirely abolished, your thoughts on that?

   MUKASEY: Ridiculous. . . . to say that you’re going to undo and entire court simply because you don’t like some of their decisions, when there are thousands of cases before that court, is totally irresponsible. It’s outrageous because it essentially does away with the notion that when courts decide cases the proper way to have them reviewed is to go to a higher court. It’s dangerous because, even from the standpoint of the people who put it forward, you have no guarantee that you’ll have a permanent majority. . . . It would end with having a Democratic majority that then decides to abolish the Fourth Circuit and the Eleventh Circuit. And you go on and on and on. And I guess they could then reconstitute another court. It would reduce the entire judicial system to a spectacle.

Former Attorney General Alberto Gonzales had a similar reaction:

   GONZALES: The notion or the specter of bringing judges before the Congress, like a schoolchild being brought before the principal is, to me, a little bit troubling . . . . I cannot support and I would not support efforts that appear to be intimidation or retaliation against judges.

Keep in mind that these two men, supported some if the most unconstitutionally egregious of George W. Bush’s policies, including torture.

But poor Newt, he’s even slipping in the polls. According to Public Policy Polling, Rep. Ron Paul has now taken the lead in Iowa:

Newt Gingrich’s campaign is rapidly imploding, and Ron Paul has now taken the lead in Iowa.  He’s at 23% to 20% for Mitt Romney, 14% for Gingrich, 10% each for Rick Santorum, Michele Bachmann, and Rick Perry, 4% for Jon Huntsman, and 2% for Gary Johnson.

Gingrich has now seen a big drop in his Iowa standing two weeks in a row.  His share of the vote has gone from 27% to 22% to 14%.  And there’s been a large drop in his personal favorability numbers as well from +31 (62/31) to +12 (52/40) to now -1 (46/47). Negative ads over the last few weeks have really chipped away at Gingrich’s image as being a strong conservative, now only 36% of voters believe that he has ‘strong principles,’ while 43% think he does not.

Paul’s ascendancy is a sign that perhaps campaigns do matter at least a little, in a year where there has been a lot of discussion about whether they still do in Iowa.  22% of voters think he’s run the best campaign in the state compared to only 8% for Gingrich and 5% for Romney. The only other candidate to hit double digits on that question is Bachmann at 19%. Paul also leads Romney 26-5 (with Gingrich at 13%) with the 22% of voters who say it’s ‘very important’ that a candidate spends a lot of time in Iowa.  Finally Paul leads Romney 29-19 among the 26% of likely voters who have seen one of the candidates in person.

Iowa is no predictor of who will get the nomination and the caucuses are an undemocratic form of voting with no absentee ballots and very low voter turn out but Iowa is a predictor for early primary states. However, the recent harsh criticism from right wing politicians and pundits may keep Newt out of the Oval Office. Poor crazy Newt. Back to your room.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

New York Times Editorial: A Fraction of a Tax Cut

If you looked quickly at what the Senate did on Saturday, it seemed as if it agreed to President Obama’s proposal for short-term middle-class relief by extending the payroll tax cut and unemployment insurance. In fact, that’s not quite what happened.

The two programs were approved in a severely diminished form. Because Republicans rejected a millionaire’s tax surcharge to pay for the extension, negotiators could not reach agreement on a full year’s offset, and instead settled for a measly two more months.

In exchange for those eight short weeks of stimulus, Republicans won a provision that forces the president to make a decision on the Keystone XL oil pipeline from Canada in the next 60 days, instead of waiting until after the election. In a sense, the provision liberates Mr. Obama to do the right thing and immediately reject the pipeline, an environmentally treacherous proposal that would create few jobs. The State Department will not have enough information to approve the pipeline in such a short period.

Paul Krugman: Will China Break?

Consider the following picture: Recent growth has relied on a huge construction boom fueled by surging real estate prices, and exhibiting all the classic signs of a bubble. There was rapid growth in credit – with much of that growth taking place not through traditional banking but rather through unregulated “shadow banking” neither subject to government supervision nor backed by government guarantees. Now the bubble is bursting – and there are real reasons to fear financial and economic crisis.

Am I describing Japan at the end of the 1980s? Or am I describing America in 2007? I could be. But right now I’m talking about China, which is emerging as another danger spot in a world economy that really, really doesn’t need this right now.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

On this day in 1776, Thomas Paine publishes The American Crisis.

These are the times that try men’s souls; the summer soldier and the sunshine patriot will, in this crisis, shrink from the service of his country; but he that stands it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph.

When these phrases appeared in the pages of the Pennsylvania Journal for the first time, General George Washington’s troops were encamped at McKonkey’s Ferry on the Delaware River opposite Trenton, New Jersey. In August, they had suffered humiliating defeats and lost New York City to British troops. Between September and December, 11,000 American volunteers gave up the fight and returned to their families. General Washington could foresee the destiny of a rebellion without an army if the rest of his men returned home when their service contracts expired on December 31. He knew that without an upswing in morale and a significant victory, the American Revolution would come to a swift and humiliating end.

Thomas Paine was similarly astute. His Common Sense was the clarion call that began the revolution. As Washington’s troops retreated from New York through New Jersey, Paine again rose to the challenge of literary warfare. With American Crisis, he delivered the words that would salvage the revolution.

The American Crisis was a series of pamphlets published from 1776 to 1783 during the American Revolution by eighteenth century Enlightenment philosopher and author Thomas Paine. Thirteen numbered pamphlets were published between 1776-1777 with three additional pamphlets released between 1777-1783. The writings were contemporaneous with the early parts of the American Revolution, during the times that colonists needed inspiring.

They were written in a language the common man could manage and are indicative of Paine’s liberal philosophies. Paine signed them with one of his many pseudonyms “Common Sense”. The writings bolstered the morale of the American colonists, appealed to the English people’s consideration of the war with America, clarified the issues at stake in the war and denounced the advocates of a negotiated peace.

“Duck House”:

I sit on the floor of the Duck House with thirty others, brainstorming for the January action. Neither men nor women dominate the group. We are young, and surprisingly old. Counter-culture and conservatively clad. We question whether it is nobler to seek permits or just show up unannounced. We speak of banners, flyers and street theater-anything to educate the public about our goal.

Even when I still lived in Arizona, I had heard of this place. Democracy Unlimited Humboldt County (DUHC) or “Duck” was on the forefront of the war against corporate power. In 1998, they helped pass a ballot initiative establishing the Democracy and Corporations standing committee in Arcata’s city council here in California.

The Committee’s primary functions are: to research and present to the Council options for controlling the growth of “pattern restaurants” in the community; to cooperate with other communities working on socially responsible investing and procurement policies; to make recommendations to the Council, and/or with the Council’s approval, provide educational opportunities to promote “fair trade”; to inform citizens of corporations with negative social and environmental impact; and to provide advice on ways to foster sustained locally-owned businesses, publicly or locally owned services and worker-owned cooperatives and collectives.–City of Arcata

The committee was hailed by Howard Zinn, Noam Chomsky, and Jim Hightower. Ralph Nader commented, “I look forward to Arcata being a luminous star in the rising crescendo of democracy in our country.”

Embolden by this success, they passed Measure T in 2004. It forbid nonlocal corporations from contributing to local political campaigns. Two corporations immediately challenged the initiative as unconstitutional. Before the case could be decided by the courts, Humboldt’s Board of Supervisors succumbed to corporate pressure and declared this popularly elected law nullified.

DUHC learned from this experience. They won’t be going it alone, this time. They are but one small seed of democracy, but they are amassing with others to change the political landscape in America. They have joined Move to Amend in a miliary campaign, and this time their aim is not a city ordinance in some far off town on the edge of America, but changing the highest law in the land.