“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”.

Wednesday is Ladies’ Day

Follow us on Twitter @StarsHollowGzt

Katrina vanden Heuvel: The Better Bargain: Transaction Tax, not Austerity

On the eve of Occupy Wall Street’s first anniversary, Congressman Keith Ellison introduced a much-needed common sense bill: HR 6411, the Inclusive Prosperity Act. The bill taxes financial transactions to generate revenue for social needs. Amid our consensus-narrowed, deficit-obsessed political debate, it’s a call to arms, and a breath of fresh air.

As I’ve often argued, a financial transaction tax is deeply pragmatic, broadly popular and sorely needed. At a time when budget slashing is a bipartisan obsession, it offers vital revenue. As we struggle to escape the recession wrought by the 1 percent, it presents a simple solution to discourage speculation. As progressives fight too many defensive battles, the financial transaction tax presents an urgent opportunity to go on offense.

Bryce Covert: A Gaffe Is When a Republican Tells the Truth

This Sunday, I attended a panel at the Brooklyn Book Festival in which moderator Ta-Nehisi Coates started out with a question for the panelists: Does this campaign season matter? Are we learning anything about the candidates? I was in the audience, but my response would be: Yes, it matters, and we’re learning a great deal. But it’s mostly about what the Republican Party really thinks.

While this election season may appear gaffe-tastic, the most viral moments weren’t misspoken words. Rather, they reveal what’s deep in the conservative heart-opinions that many had warned existed for a long time (and had even appeared in real-life legislation) but have now been put into stark relief for the general public. This election season has been highly instructional about deep-seated beliefs on the right.

High Speed Frequency Trading (HFT) has been known to rattle traders and disrupt the stock market but has yet to be harnessed by regulators, until now.

Germany Acts to Increase Limits on High-Speed Trades

by Melissa Eddy and James Kanter

Chancellor Angela Merkel’s government approved draft legislation on Wednesday that foresees imposing additional controls on such trading. The proposed measures include requiring that all high-frequency traders be licensed, requiring clear labeling of all financial products traded by powerful algorithms without human intervention and limiting the number of orders that may be placed without a corresponding trade. Traders who violate the limits, which would be set once the law took effect, would face a fine.

“Computer-generated algorithmic transaction involves a variety of new risks,” Germany’s finance ministry said in a statement. “Germany is reacting to these risks with legislation that will create more transparency, security and a better overview.”

The legislation, which is subject to approval by both houses of Parliament, was written with an eye toward similar legislation being discussed in Brussels that could eventually apply across the European Union, which has 27 member nations, the official said.

A prime example of what happens when HFT runs amok occurred in August this year by Knight Match, a system used by high speed trades, nearly bankrupted the trading company Knight Capital that lost $440 million in 45 minutes.

Knight was saved by a hastily assembled $400 million from a consortium of investors, but it appears the damage to Knight’s reputation with customers, particularly high frequency traders, will take longer to repair. Knight says the volume numbers, which were compiled by stock market and technology research firm Tabb Group, exclude the trading glitch, which happened on August 1st. Knight was forced to shut down its systems for part of that day. The volume drop shows that traders shied away from Knight longer than just in the days following the trading glitch. A Knight spokeswoman says the company won’t comment on whether trading volumes rebounded in September until early next month.

The HFT system has caused some concern in Washington. At a Senate Banking Committee hearing trading professional expressed the the fears of investors:

It no longer is your parents’ or grandparents’ stock market. Rather, it’s become a Wild West of trading, with errant technology too often in control and setting stocks, commodities, currencies and futures up for violent moves that could make the $1 trillion flash crash of May 2010 look tame by comparison, testified David Lauer, who has designed trading technology and worked as an analyst for Allston Trading and Citadel Investment Group.

“U.S. equity markets are in dire straits,” Lauer said. “We are truly in a crisis.”

He noted that “retail investors have been fleeing the stock market in droves” and that the Chicago Booth/Kellogg School Financial Trust Index shows “investor confidence is nonexistent – with only 15 percent of the public expressing trust in the stock market.”

Rather than buying a stock and holding onto it, institutions using high-frequency trading buy and sell stocks constantly in milliseconds, or much faster than a blink of the eye. Lauer said about 50 to 70 percent of the volume of trading in the stock market now takes that form. Often trading systems send out phony trades aimed at manipulating others into buying or selling. The activity can mislead legitimate traders working for mutual funds, pension funds or individuals to buy a stock at too high a price or sell it at too low a price.

The system is also riddled with fraud:

A New York-based brokerage allowed overseas clients to run a scheme aimed at distorting stock prices by rapidly canceling orders, according to the U.S. Securities and Exchange Commission.

Clients of Hold Brothers On-Line Investment Services were “repeatedly manipulating publicly traded stocks” by placing and erasing orders in an illegal strategy designed to trick others into buying or selling, the SEC said today in a release. Hold Brothers, its owners, and the foreign firms Trade Alpha Corporate Ltd. and Demonstrate LLC agreed to settle allegations that the New York broker failed to supervise customers and pay $4 million in total SEC fines.

The SEC complaint targeted practices that abused high-speed computer trading on American equity venues. As high-frequency activity has grown in recent years, the agency’s efforts to stop fraudulent practices such as “layering” or “spoofing” have extended to the automated trading tactics.

However, the SEC has been called the “Barney Fife” of regulators when it comes to regulating HFT and their competence has been questioned:

But the agency is clearly outgunned when it comes to dealing with high-frequency trading, many experts agree. And a new lawsuit goes so far as to accuse the SEC of covering up high-speed fraud so nobody will know just how incompetent it really is, Courthouse News reports.

In the suit, a Wisconsin company called EMM Holdings accuses the SEC of not investigating a Houston high-speed trading firm called Quantlab Financial. According to EMM, Quantlab is perpetrating fraud amid all the high-speed churning and burning it does in the stock market. EMM notes that Quantlab has been flagged six times in the past eight years by the Financial Industry Regulatory Authority, the brokerage industry’s self-regulatory body, for not properly documenting its trades. EMM thinks this is evidence that Quantlab is trying to cover up some fraud, and it has asked the SEC (pdf) for any documents showing an investigation of Quantlab. The SEC has refused (pdf), on the grounds that doing so might interfere with law-enforcement activities. EMM has sued the SEC to force it to give up whatever goods it has on Quantlab.

Trouble is, it’s not entirely clear if the SEC is actually investigating Quantlab at all. EMM argues in its complaint that the only way the SEC could deny its record request is “if there is an on-going and active investigation.” And EMM accuses the SEC of letting this investigation fester, hoping the statute of limitations will run out.

“Given [the SEC’s] near complete abdication of its prosecutorial duties during the 2008 financial crisis, inaction and delay may unfortunately have become [the SEC’s] modus operandi for dealing with complex financial malfeasance,” EMM said in its complaint.

At least the Germans are willing to take the “bull by the horns” by limiting the ability of these trades to disrupt the market with rules that would slow trading, curb the volume and make it more expensive for traders to cancel large volumes of orders.  

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.

September 26 is the 269th day of the year (270th in leap years) in the Gregorian calendar. There are 96 days remaining until the end of the year.

On this day on 1957, West Side Story premieres on Broadway. East Side Story was the original title of the Shakespeare-inspired musical conceived by choreographer Jerome Robbins, written by playwright Arthur Laurents and scored by composer and lyricist Leonard Bernstein in 1949. A tale of star-crossed lovers-one Jewish, the other Catholic-on Manhattan’s Lower East Side, the show in its original form never went into production, and the idea was set aside for the next six years. It was more than just a change of setting, however, that helped the re-titled show get off the ground in the mid-1950s. It was also the addition of a young, relatively unknown lyricist named Stephen Sondheim. The book by Arthur Laurents and the incredible choreography by Jerome Robbins helped make West Side Story a work of lasting genius, but it was the strength of the songs by Stephen Sondheim and Leonard Bernstein that allowed it to make its Broadway debut on this day in 1957.

There are no videos of the original Broadway production which starred Larry Kert as Tony, Carol Lawrence as Maria, Ken Le Roy as Bernardo and Chita Rivera as Anita (Ms. Rivera reprized her role in the movie), so here is the Prologue from the Academy Award winning movie. The area that the movie was filmed no longer exists. The 17 blocks between Columbus and Amsterdam Avenues, from West 60th to West 66th Street on the Upper West Side of Manhattan where he filming took place were demolished to build Lincoln Center for the Preforming Arts.

“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”.

Follow us on Twitter @StarsHollowGzt

Dean Baker: Debt Worries: Economists Fail Arithmetic, Again

The Washington political establishment has decided that reducing the debt should be the country’s number one economic priority. The tens of millions who are unemployed, underemployed or out of the workforce altogether due to the fallout from the collapse of the housing bubble will just have to wait until things get better; limiting the growth of the debt is the order of the day in Washington. [..]

Is it possible that many of the world’s leading economists are completely missing the boat in their understanding of the way in which the debt poses a burden on the economy? While that may seem far-fetched, almost all of the world’s leading economists completely missed the housing bubbles, in the United States and elsewhere, and the dangers the housing bubbles posed to the economy. In fact, the reason that the United States and other countries are facing large deficits today is almost entirely the result of the failure of the economists who were guiding policy in the years preceding the crash. [..]

In fact, they were anxious to put Social Security money in the stock market. The Republican economists wanted to get the money into the market through private accounts, and the Democratic economists wanted to do it by investing the Social Security trust fund directly. Either way, both got their arithmetic wrong.

Robert Reich: Mitt Romney’s Biggest Problem: He’s Giving the GOP Exactly What It Wants in a Candidate

I’ve spent the past few days debating right-wingers – among them, Grover Norquist and Ann Coulter. This isn’t my idea of fun. I do it because apparently many Americans find these people persuasive, and it seems important to try to show why they’re profoundly wrong.

There are two major theories about why Romney is dropping in the polls. One is Romney is a lousy candidate, unable to connect with people or make his case.

The second is that Americans are finally beginning to see how radical the GOP has become, and are repudiating it. [..]

Romney’s failing isn’t that he’s a bad candidate. To the contrary, he’s giving this GOP exactly what it wants in a candidate. And that’s exactly the problem for Romney – as it is for every other Republican candidate – because what the GOP wants is not at all what the rest of America wants.

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.

September 25 is the 268th day of the year (269th in leap years) in the Gregorian calendar. There are 97 days remaining until the end of the year.

On this day in 1789, the Bill of Rights passes Congress.

The first Congress of the United States approves 12 amendments to the U.S. Constitution, and sends them to the states for ratification. The amendments, known as the Bill of Rights, were designed to protect the basic rights of U.S. citizens, guaranteeing the freedom of speech, press, assembly, and exercise of religion; the right to fair legal procedure and to bear arms; and that powers not delegated to the federal government were reserved for the states and the people.

The Bill of Rights is the name by which the first ten amendments to the United States Constitution are known. They were introduced by James Madison to the First United States Congress in 1789 as a series of articles, and came into effect on December 15, 1791, when they had been ratified by three-fourths of the States. An agreement to create the Bill of Rights helped to secure ratification of the Constitution itself. Thomas Jefferson was a supporter of the Bill of Rights.

The Bill of Rights prohibits Congress from making any law respecting any establishment of religion or prohibiting the free exercise thereof, guarantees free speech, free press, free assembly and association and the right to petition government for redress, forbids infringement of “…the right of the people to keep and bear Arms…”, and prohibits the federal government from depriving any person of life, liberty, or property, without due process of law. In federal criminal cases, it requires indictment by a grand jury for any capital or “infamous crime”, guarantees a speedy, public trial with an impartial jury composed of members of the state or judicial district in which the crime occurred, and prohibits double jeopardy. In addition, the Bill of Rights states that “the enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people,” and reserves all powers not specifically granted to the federal government to the people or the States. Most of these restrictions were later applied to the states by a series of decisions applying the due process clause of the Fourteenth Amendment, which was ratified in 1868, after the American Civil War.

The question of including a Bill of Rights in the body of the Constitution was discussed at the Philadelphia Convention on September 12, 1787. George Mason “wished the plan [the Constitution] had been prefaced with a Bill of Rights.” Elbridge Gerry of Massachusetts “concurred in the idea & moved for a Committee to prepare a Bill of Rights.” Mr Sherman argued against a Bill of Rights stating that the “State Declarations of Rights are not repealed by this Constitution.” Mason then stated “The Laws of the U. S. are to be paramount to State Bills of Rights.” The motion was defeated with 10-Nays, 1-Absent, and No-Yeas.

Madison proposed the Bill of Rights while ideological conflict between Federalists and anti-Federalists, dating from the 1787 Philadelphia Convention, threatened the final ratification of the new national Constitution. It largely responded to the Constitution’s influential opponents, including prominent Founding Fathers, who argued that the Constitution should not be ratified because it failed to protect the fundamental principles of human liberty. The Bill was influenced by George Mason’s 1776 Virginia Declaration of Rights, the 1689 English Bill of Rights, works of the Age of Enlightenment pertaining to natural rights, and earlier English political documents such as Magna Carta (1215).

Two other articles were proposed to the States; only the last ten articles were ratified contemporaneously. They correspond to the First through Tenth Amendments to the Constitution. The proposed first Article, dealing with the number and apportionment of U.S. Representatives, never became part of the Constitution. The second Article, limiting the power of Congress to increase the salaries of its members, was ratified two centuries later as the 27th Amendment. Though they are incorporated into Madison’s document known as the “Bill of Rights”, neither article established protection of a right. For that reason, and also because the term had been applied to the first ten amendments long before the 27th Amendment was ratified, the term “Bill of Rights” in modern U.S. usage means only the ten amendments ratified in 1791.

The Bill of Rights plays a key role in American law and government, and remains a vital symbol of the freedoms and culture of the nation. One of the first fourteen copies of the Bill of Rights is on public display at the National Archives in Washington, D.C.

The Obama administration has now taken an even lower road the Bush/Cheney regime when it comes to terrorism and terrorist organizations. US Secretary of State, Hillary Clinton is expected to inform Congress that she will be removing Mujahideen-e-Khalq (MEK) from the department’s list of Foreign Terrorist Organizations (FTO). MEK was designated a terrorist organization in 1997 during the Clinton administration and was one of the reasons for the justification of the Bush invasion of Iraq. MEK has also has been linked to the assassinations of several of Iran’s nuclear scientists.

The decision was driven by a steady flow of funds to members of Congress, lobbying firms and former officials in support of Iranian group:

The campaign to bury the MEK’s bloody history of bombings and assassinations that killed American businessmen, Iranian politicians and thousands of civilians, and to portray it as a loyal US ally against the Islamic government in Tehran has seen large sums of money directed at three principal targets: members of Congress, Washington lobby groups and influential former officials.

There is a long list of MEK supporters from both sides of the aisle: Democrats Howard Dean, Ed Rendell, Wesley Clark, Bill Richardson, and Lee Hamilton;

Republicans Rudy Giuliani, Fran Townsend, Tom Ridge, Michael Mukasey, ex-FBI director Louis Freeh, Newt Gingrich and Andrew Card. Current Republican Congress members Ted Poe, Ileana Ros-Lehtinen, the chair of the House of Representatives foreign affairs committee,; Mike Rogers, chairman of the House of Representatives intelligence committee;  Dana Rohrabacher, chairman of the foreign affairs committee’s oversight subcommittee

Lobbyist groups: DLA Piper; Akin Gump Strauss Hauer & Feld; and DiGenova & Toensing;

Government outsiders and journalists: Nobel Peace Prize recipient, Eli Wiesel; pro-Israel supporter Alan Deschowitz; The Washington Post‘s Carl Bernstein and the Chicago Tribune‘s Clarence Page. Townsend and Rendell are both cable news contributors.

Glenn Greenwald, writing at The Guardian, has five lessons to be learned about :the rot and corruption at the heart of America’s DC-based political culture”:

Lesson One: There is a separate justice system in the US for Muslim Americans.

The past decade has seen numerous “material support” prosecutions of US Muslims for the most trivial and incidental contacts with designated terror groups. It is hardly an exaggeration to say that any Muslim who gets within sneezing distance of such a group is subject to prosecution. Indeed, as I documented last week, many of them have been prosecuted even for core First Amendment activities: political advocacy deemed supportive of such groups. [..]

In sum, there are numerous American Muslims sitting in prison for years for far less substantial interactions with terror groups than this bipartisan group of former officials gave to MEK. This is what New York Times Editorial Page Editor Andrew Rosenthal meant when he wrote back in March that the 9/11 attacks have “led to what’s essentially a separate justice system for Muslims“. The converse is equally true: America’s political elites can engage in the most egregious offenses – torture, illegal eavesdropping, money-driven material support for a terror group – with complete impunity.

Lesson Two: The US government is not opposed to terrorism; it favors it.

The history of the US list of designated terrorist organizations, and its close cousin list of state sponsors of terrorism, is simple: a country or group goes on the list when they use violence to impede US interests, and they are then taken off the list when they start to use exactly the same violence to advance US interests. The terrorist list is not a list of terrorists; it’s a list of states and groups which use their power to defy US dictates rather than adhere to them.

Lesson Three: “Terrorism” remains the most meaningless, and thus the most manipulated, term in political discourse.

Terrorism, at least in its applied sense, means little other than: violence used by enemies of the US and its allies. Violence used by the US and its allies (including stateless groups) can never be terrorism, no matter how heinous and criminal.

Lesson Four: Legalized influence-peddling within both parties is what drives DC.

MEK achieved its goal by doing more than merely changing the beneficiaries of its actions from Saddam to the US and Israel. It also found a way – how it did so remains a mystery – to funnel millions of dollars into the bank accounts of key ex-officials from both parties, a bipartisan list of DC lobbyist firms, and several key journalists. In other words, it achieved its policy aims the same way most groups in DC do: by buying influence within both parties, and paying influence-peddlers who parlay their political celebrity into personal riches.

Lesson Five: there is aggression between the US and Iran, but it’s generally not from Iran.

Over the last decade, the US has had Iran almost entirely encircled, thanks in part – only in part – to large-scale ground invasions of the nations on its eastern and western borders. Some combination of Israel and the US have launched cyberwarfare at the Iranians, murdered their civilian scientists, and caused explosions on its soil. The American president and the Israeli government continuously and publicly threaten to use force against them.

Remember Osama bin Laden and how well that went.

Where is the protest from the so-called progressive left who were so opposed to the right wing Republican fetish with a war with Iran? ‘It’s OK if you’re Obama” should not be acceptable.

“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”.

Follow us on Twitter @StarsHollowGzt

Paul Krugman: The Optimism Cure

Mitt Romney is optimistic about optimism. In fact, it’s pretty much all he’s got. And that fact should make you very pessimistic about his chances of leading an economic recovery.

As many people have noticed, Mr. Romney’s five-point “economic plan” is very nearly substance-free. It vaguely suggests that he will pursue the same goals Republicans always pursue – weaker environmental protection, lower taxes on the wealthy. But it offers neither specifics nor any indication why returning to George W. Bush’s policies would cure a slump that began on Mr. Bush’s watch.

In his Boca Raton meeting with donors, however, Mr. Romney revealed his real plan, which is to rely on magic. “My own view is,” he declared, “if we win on November 6, there will be a great deal of optimism about the future of this country. We’ll see capital come back, and we’ll see – without actually doing anything – we’ll actually get a boost in the economy.”

Are you feeling reassured?

Robert Kuttner: Filling Geithner’s (Small) Shoes

Timothy Geithner has said that he’ll step down as Treasury Secretary at the end of Obama’s first term. Assuming that Mitt Romney keeps self-destructing and Obama wins a second term, who should succeed him?

Just as Obama’s choice in 2008 of an economic team led by Larry Summers and Tim Geithner told you a lot about what kind of president he’d be (and not be), Obama will signal a lot in his selection of Geithner’s replacement. [..]

This is a key appointment, folks. Should not be left to the usual suspects. Progressive community should be paying attention, big time.

Despite the Obama administration’s poor performance, it appears that President Obama is on his way to a second term. It also appears that the Senate will continue to remain in the hands of the Democrats and now there is speculation that favors the Democrats taking back the House of Representatives.

What has changed? Up with Chris Hayes host Chris Hayes and The Nation‘s Washington correspondent, John Nichols discuss the status of heavily contested U.S. House and Senate races across the country, and the polls that show a potential uptick for Democrats.

At the New York Times, Nate Silver, who writes Five Thirty Eight, gives his analysis on key Senate races and what has gone wrong for GOP Candidates:

Since we published our initial Senate forecast on Tuesday, Republicans have seen an additional decline in their standing in two major races.

Two polls of Virginia published on Wednesday gave the Democrat, the former Gov. Tim Kaine, leads of 4 and 7 percentage points over the Republican, the former Senator George Allen. [..]

The other problematic state for Republicans is Wisconsin, where their candidate, the former Gov. Tommy Thompson, had once appeared to hold the advantage.

Mr. Thompson’s Democratic opponent, Representative Tammy Baldwin, had published an internal poll earlier this week showing her pulling into the lead. [..]

Wednesday also brought bad news for Republicans in Massachusetts, where a fourth consecutive poll showed the Democrat Elizabeth Warren ahead of Senator Scott Brown; in Connecticut, where a poll gave the Democrat Chris Murphy a slight advantage over their candidate, Linda McMahon; and in Florida, where a Fox News poll gave the Democratic incumbent Bill Nelson a 14-point lead.

The Democrats’ chances of controlling the Senate have increased to 79 percent in the forecast, up from 70 percent on Tuesday.

Nate has two theories on what has effected the downturn for the GOP:

Theory No. 1: Is Romney a Downballot Drag?

Mr. Romney has not dictated much in the way of detailed programs in these areas, and some of the policy stances that he has articulated are unpopular.

Mr. Romney has also been less able to campaign effectively against an unpopular Democratic initiative, the Democrats’ health care bill, because he passed a similar bill as governor of Massachusetts.

Finally, some voters who disapprove of Mr. Obama, but who also have lukewarm feelings toward Mr. Romney, might lean toward voting Democrat for Senate in effort to ensure divided government, especially since Republicans also have control of the House.

Theory No. 2: G.O.P. Conservatism Is Hurting

An alternative hypothesis is that the shift has to do with overall perceptions of the Republican platform.

Nate’s last comment in the article was that if this trend continues with the Senate races leaning to Democrats just how vulnerable is the GOP to losing the House? Well here are a couple of articles that discuss just that possibility:

Breaking blue? Will Romney-Ryan troubles give Dems shot at House Majority?]

by Michael John Spinelli

(As) Romney-Ryan lose steam just when they’re supposed to be gaining on the White House, Republicans, including House Ohio Congressman and House Speaker John Boehner, show by actions they took last week that maintaining control of the people’s chamber may not be the slam dunk they once thought.

Reports surfaced late last week that House Republicans are throwing in $3.2 million to save their majority. Speaker John Boehner, one report said, is in “all-out panic mode,” manifested by his initiative to ask his Republican Members to put up $3.2 million from their coffers to save their shaky House majority.

If the Senate can stay in Democratic control, as many pollsters believe it can, and the House gavel leaves Boehner’s grip to be wielded by California congresswoman Nancy Pelosi again, President Obama’s second term will turn on a dime from being four years of more GOP obstruction to his every policy recommendation, to a term he can double down on, learning from the battlefield of missed first-term opportunities. [..]

Democrats are currently leading in national “generic ballot polls that ask people which party they prefer for House races (without naming candidates), Dylan Matthews at Wonkblog writes, about the fact that has led a forecasters like Princeton’s Sam Wang to conclude that, based on past elections, Democrats are favored to retake the House. Wang puts the odds of that occurring at 74 percent.

The article by Mr. Wang that is cited above is from August. This is Mr. Wang’s latest analysis of the Democrat’s change of taking back the House:

Conditions through August showed a 2% lead on the generic Congressional ballot for Democrats. As of September 20th, in the wake of the Democratic convention, the lead has widened to 4.0 +/- 2.0%. Although it has yet to be appreciated by pundits, this could well translate to a November loss of the House of Representatives by Republicans. Based on the generic Congressional ballot, the probability of a Democratic takeover is 74% with a median 16-seat majority. Whichever party is in control, the seat margin is headed for being narrower than the current Congress. Like any probability in the 20-80% range, this is a knife-edge situation. This picture may change over the coming six weeks as more information, especially district-level polls, becomes available. [..]

Predicting the House outcome is challenging. First, there is the basic problem that we have to estimate how far opinion will move between now and November. On top of that, there is uncertainty in knowing how the polling measurement – generic Congressional ballot preference – translates to a seat outcome.

Another approach would be to use district-by-district polls and ratings. An estimate like that can be seen from our data partner, Pollster.com. Their House outlook shows retained GOP control, and RealClearPolitics implies the same. However, many of those polls are weeks or months old. My estimate today suggests that in the coming weeks, we might look for district polls to move in the Democrats’ direction. This is also an opportunity for a detailed analytical approach, as taken elsewhere, to shine.

Regardless of which party controls the Executive Branch, it is the Congress that can dictate the direction of policies. We will be following these races and trends closely.

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 on 1789, The Judiciary Act of 1789 is passed by Congress and signed by President George Washington, establishing the Supreme Court of the United States as a tribunal made up of six justices who were to serve on the court until death or retirement. That day, President Washington nominated John Jay to preside as chief justice, and John Rutledge, William Cushing, John Blair, Robert Harrison, and James Wilson to be associate justices. On September 26, all six appointments were confirmed by the U.S. Senate.

The U.S. Supreme Court was established by Article 3 of the U.S. Constitution. The Constitution granted the Supreme Court ultimate jurisdiction over all laws, especially those in which their constitutionality was at issue. The high court was also designated to oversee cases concerning treaties of the United States, foreign diplomats, admiralty practice, and maritime jurisdiction. On February 1, 1790, the first session of the U.S. Supreme Court was held in New York City’s Royal Exchange Building.

Black Agenda Report‘s executive editor, Glen Ford and Michael Eric Dyson, professor of sociology at Georgetown University and radio host debated the presidency of Barack Obama on Democracy Now! with host Amy Goodman.

Transcript can be read here.