Ah, Paging Mike Kinsley…

Chris Rovzar at New York Magazine:

Speaking to a small group at MIT, State Department spokesman P.J. Crowley said that accused WikiLeaker Bradley Manning is “in the right place” in federal custody, but the way he has been treated is “ridiculous and counterproductive and stupid.” Just now, ABC News’ Jake Tapper asked President Obama about the comments in the White House Briefing Room. “With respect to Private Manning, I have actually asked the Pentagon whether the procedures that have been taken in terms of his confinement are appropriate and are meeting basic standards,” Obama replied. “They assured me that they are. I can’t go into details about some of their concerns, but some of that has to do with Private Manning’s safety as well.” In other news, apparently Manning’s no longer sleeping naked: Now he gets to have a “suicide-proof” sleeping smock.

Hilary Clinton:

Resignation of Philip J. Crowley as Assistant Secretary of State for Public Affairs

Press Statement

Hillary Rodham Clinton
Secretary of State

Washington, DC

March 13, 2011

---

It is with regret that I have accepted the resignation of Philip J. Crowley as Assistant Secretary of State for Public Affairs. PJ has served our nation with distinction for more than three decades, in uniform and as a civilian. His service to country is motivated by a deep devotion to public policy and public diplomacy, and I wish him the very best. Principal Deputy Assistant Secretary (PDAS) Michael Hammer will serve as Acting Assistant Secretary for Public Affairs.

STATEMENT BY PHILIP J. CROWLEY

The unauthorized disclosure of classified information is a serious crime under U.S. law. My recent comments regarding the conditions of the pre-trial detention of Private First Class Bradley Manning were intended to highlight the broader, even strategic impact of discrete actions undertaken by national security agencies every day and their impact on our global standing and leadership. The exercise of power in today’s challenging times and relentless media environment must be prudent and consistent with our laws and values.

Given the impact of my remarks, for which I take full responsibility, I have submitted my resignation as Assistant Secretary for Public Affairs and Spokesman for the Department of State.

I am enormously grateful to President Obama and Secretary Clinton for the high honor of once again serving the American people. I leave with great admiration and affection for my State colleagues, who promote our national interest both on the front lines and in the quiet corners of the world. It was a privilege to help communicate their many and vital contributions to our national security. And I leave with deep respect for the journalists who report on foreign policy and global developments every day, in many cases under dangerous conditions and subject to serious threats. Their efforts help make governments more responsible, accountable and transparent.

Josh Rogin at Foreign Policy:

Crowley’s Twitter personality mirrored his real-life personality — affable, edgy, sometimes sarcastic, and occasionally a little off-message. Crowley’s energy and willingness to take measured risks by going beyond the Obama administration’s standard talking points is what endeared him to the reporters he worked with each day. It was that same openness that cost him his job, after he admitted that he believed the Marine Corps’ treatment of alleged WikiLeaks source Private Bradley Manning was “ridiculous and counterproductive and stupid.”

Crowley’s last tweet before resigning was a gem, but he deleted it. “We’ve been watching hopeful #tsunami sweep across #MiddleEast. Now seeing a tsunami of a different kind sweep across Japan,” read the March 11 tweet.

Of the remaining 400-plus tweets he sent out to his 24,000-plus followers, here are The Cable‘s top 10, in reverse chronological order:

1. March 1, 7:08 a.m.: “#Qaddafi tells #ABCNews: All my people with me, they love me. They will die to protect me. The #Libyan people tell Qaddafi: You go first!”
2. Feb. 26, 7:37 a.m.: “Despite #Qaddafi‘s hardly sober claim that the protesters are on drugs, the people of #Libya are clear-eyed in their demand for change.”
3. Feb. 22, 7:28 p.m.: “We are surprised that #Argentina has chosen not to resolve a simple dispute involving training equipment. And we still want our stuff back.”
4. Feb. 16, 7:56 a.m.: “#KimJongIl‘s son attended an #EricClapton concert in Singapore? Actually, the #DearLeader himself would benefit from getting out more often.”
5. Jan. 22, 5:40 a.m.: “The claim by the lawyer for #JulianAssange that his client could go to #Guantanamo is pure legal fantasy. Save it for the movie.”
6. Dec. 24, 12:40 p.m.: “The legal export of popcorn, chewing gum, cake sprinkles and hot sauce is not propping up the Iranian government. #Iran“
7. Oct. 28, 4:30 p.m.: “Happy birthday President #Ahmadinejad. Celebrate by sending Josh Fattal and Shane Bauer home. What a gift that would be. #Iran“
8. Aug. 27, 5:38 p.m.: “Americans should heed our #travel warning and avoid North Korea. We only have a handful of former Presidents. http://go.usa.gov/cAO #DPRK“
9. Aug. 20, 11:34 a.m.: “North #Korea has joined #Facebook, but will it allow its citizens to belong? What is Facebook without friends?”
10. May 18, 10:37 p.m.: “It doesn’t take a reading test to recognize misguided legislation. I have read the #Arizona law. Comprehensive reform is the right answer.”

Mike Konczal at Rortybomb:

This argument is the liberal argument.  This is what distinguishes liberals from conservatives in this space.   The liberal argument isn’t that we have an extensive, unaccountable security state and feel really bad about it (while the conservative argument is that we cheerlead it), it’s that this kind of state is a bad deal.  The machine Cheney et al were operating in the dark, away from any oversight gave us no useful intelligence, corrupted offices, people and practices, and left us less safe than had we not done anything.   This is the argument I find convincing.  That Obama campaigned as the constitutional law professor from Chicago who could push back on the 8-year power grab was one reason I found him so compelling as a candidate.

P.J. Crowley has a distinguished career, retiring from the Air Force as a Colonel, and it’s good to see him stand by his statement after resigning. When I combine things like this with the administration’s aggressive war on whistleblowers it makes me think this has been a complete disaster at reform in the security-surveillance state.   What can be done about this?

Three related: 1. Kudos to the people who cover this material. Glenn Greenwald, FDL, Adam Serwer, etc. I can link to an unemployment number to tell you what you already know – things are bad in the economy. That Obama has an aggressive war on whistleblowers when he campaigned to expand their protections is a tough narrative to establish, especially since everyone has wanted to believe otherwise in the liberal space.

2. Emptywheel has a post about the Brothers Daley and torture, relating Bill Daley’s comment – “he’s done” – to the sordid history of Richard Daley’s time as a prosecutor and Chicago Police Commander Jon Burge’s torture of African-American residents of Chicago during interrogations. I’ve talked with people who know the Burge situation well from Chicago, and when I ask how could it happen I always get some variety of “that’s how things were done back then.” I worry that a “that’s how things are done” is taking to the surveillance state now that Obama hasn’t broke it but instead established and, in some cases, expanded it.

3. Robert Chlala at Jadaliyya has a post – Of Predators and Radicals: King’s Hearings and the Political Economy of Criminalization – that gives a disturbing look at where all this can go. Discussing “From Super Predator to Predator Drone” Chlala argues that the current work done on Muslim so-called radicalization in America looks very similar to the African-American “youth gang” hysteria of the 1990s, an argument that lead to a massive expansion of the incarceration state along with a political ideology of making “state violence the only solution to social questions…while nurturing a broader racialized political economy of fear that entwines media, police, military, prisons, urban “entrepreneurs,” and security/crime “experts” towards the solidification of the neoliberal punitive state.” We’ve seen where this hysteria leads. Serious leadership and mechanisms for accountability when it fails is needed.

David Weigel:

It sounds even stranger when you type it out: the spokesman for the Secretary of State resigned over comments he made at a seminar of around 20 people at MIT. It sounds so strange that the Guardian muddled it a bit in one of the first stories on the matter.

Hillary Clinton‘s spokesman has launched a public attack on the Pentagon for the way it is treating military prisoner Bradley Manning, the US soldier suspected of handing the US embassy cables to WikiLeaks.

Not really; it was a non-reported, non-televised talk to a small group that happened to be blogged. He wasn’t saying he spoke for the administration, much less that he knew the facts of the case. It was a comment in confidence; that was enough to embarrass the administration and boost him out.

John Hinderaker at Powerline:

Reflexive leftism is pretty common at State, and I suppose this was a classic gaffe, i.e., Crowley said what he actually believed. Still, it is hard to understand how Crowley could have thought it would be OK to slam the Defense Department. Isn’t the State Department supposed to be all about diplomacy? Isn’t it a bit weird that they can’t come up with a spokesman who is diplomatic enough not to insult the guys on his own side?

Rick Moran:

The military says that Manning is on suicide watch which necessitates his being stripped to make sure he can’t harm himself. If Crowley thinks that’s “ridiculous” he also thinks the Defense Department are violating the law by enforcing common sense procedures to make sure we have a live suspect to stand trial and not a dead martyr.

Crowley’s position simply became untenable.

“Here I Am. Tell Me I Didn’t Do The Things That I Did.”

Sharyl Attkisson at CBS News:

Federal agent John Dodson says what he was asked to do was beyond belief.

He was intentionally letting guns go to Mexico?

“Yes ma’am,” Dodson told CBS News. “The agency was.”

An Alcohol, Tobacco and Firearms senior agent assigned to the Phoenix office in 2010, Dodson’s job is to stop gun trafficking across the border. Instead, he says he was ordered to sit by and watch it happen.

Investigators call the tactic letting guns “walk.” In this case, walking into the hands of criminals who would use them in Mexico and the United States.

Dodson’s bosses say that never happened. Now, he’s risking his job to go public.

“I’m boots on the ground in Phoenix, telling you we’ve been doing it every day since I’ve been here,” he said. “Here I am. Tell me I didn’t do the things that I did. Tell me you didn’t order me to do the things I did. Tell me it didn’t happen. Now you have a name on it. You have a face to put with it. Here I am. Someone now, tell me it didn’t happen.”

Agent Dodson and other sources say the gun walking strategy was approved all the way up to the Justice Department. The idea was to see where the guns ended up, build a big case and take down a cartel. And it was all kept secret from Mexico.

ATF named the case “Fast and Furious.”

[…]

On Dec. 14, 2010, Border Patrol Agent Brian Terry was gunned down. Dodson got the bad news from a colleague.

According to Dodson, “They said, ‘Did you hear about the border patrol agent?’ And I said, ‘Yeah.’ And they said ‘Well it was one of the Fast and Furious guns.’ There’s not really much you can say after that.”

Two assault rifles ATF had let go nearly a year before were found at Terry’s murder.

Dodson said, “I felt guilty. I mean it’s crushing. I don’t know how to explain it.”

Sen. Grassley began investigating after his office spoke to Dodson and a dozen other ATF sources — all telling the same story.

Mark Krikorian at The Corner:

When Border Patrol Agent Brian Terry was murdered by drug smugglers in Arizona last December, Tom Tancredo revealed that Terry’s BORTAC unit (the Border Patrol’s equivalent of a SWAT team) were armed with bean-bag rounds in their weapons:

Here’s the part Homeland Security Secretary Janet Napolitano and Border Patrol management are trying to hide: Border Patrol Agent Terry and the BORTAC team were under standing orders to always use (“non-lethal”) bean-bag rounds first before using live ammunition. When the smugglers heard the first rounds, they returned fire with real bullets, and Agent Terry was killed in that exchange. Real bullets outperform bean bags every time.

At the time, the government denied such “bizarre Internet-fueled rumors”:

“There was no order given to CBP law enforcement personnel – now or in the past – that dictates the use of less-than-lethal devices before using deadly force,” stated CBP’s Southwest Border Field Branch Office of Public Affairs.

Oops:

Records show agents fired beanbags in fatal border gunfight
Brady McCombs Arizona Daily Star | Posted: Thursday, March 3, 2011 12:00 am

Border Patrol agents shot beanbags at a group of suspected bandits before the men returned fire during a confrontation in a remote canyon, killing agent Brian Terry with a single gunshot, records show.

And an illegal immigrant wounded in the gunbattle who is now the only person in custody linked to the slaying contends he never fired a shot, according to FBI search warrant requests filed in the U.S. District Court in Tucson.

The documents provide the most detailed version yet of what happened in the deadly gunbattle Dec. 14 in Peck Canyon, northwest of Nogales.

The documents say the group of illegal border entrants refused commands to drop their weapons after agents confronted them at about 11:15 p.m. Two agents fired beanbags at the migrants, who responded with gunfire. Two agents returned fire, one with a long gun and one with a pistol, but Terry was mortally wounded in the gunfight.

Border Patrol officials declined to answer questions about protocol for use of force, citing the ongoing investigation.

Bryan Preston at PJ Tatler:

It seems highly unlikely that officers would choose to load beanbags instead of live rounds. That’s not the kind of thing field agents come up with. It’s a policy that’s so stupid it had to come from Washington.

And even worse than Washington’s policy stupidity: No one will be held to account for the killing of BP agent Brian Terry

The Jawa Report

Brian Doherty at Reason:

Presented as an interesting case study in the way law enforcement actually thinks–not to say that it is an essential task of U.S. law enforcement to “keep guns out of Mexico.” Our real culpability in Mexican gun violence lies, of course, in our drug prohibition, as see Jacob Sullum from earlier today.

Patterico at Patterico’s Pontifications:

How were they tracing the guns across the border? Was this murder also the result of guns that the Obama administration deliberately allowed into Mexico?

Keep a close eye on this one.

Regardless of whether that is the case, it is clear that this was a stupid idea in any event. Who knows how much violence has increased due to the new availability of thousands of assault rifles and other powerful weapons?

Jim Hoft at Gateway Pundit:

But, don’t worry.
Barack Obama says the border is as safe today as it’s ever been.

Lara Logan, Nir Rosen… Nothing Funny Here

CBS News:

On Friday, Feb. 11, the day Egyptian President Hosni Mubarak stepped down, CBS chief foreign correspondent Lara Logan was covering the jubilation in Tahrir Square for a “60 Minutes” story when she and her team and their security were surrounded by a dangerous element amidst the celebration. It was a mob of more than 200 people whipped into frenzy.

In the crush of the mob, she was separated from her crew. She was surrounded and suffered a brutal and sustained sexual assault and beating before being saved by a group of women and an estimated 20 Egyptian soldiers. She reconnected with the CBS team, returned to her hotel and returned to the United States on the first flight the next morning. She is currently home recovering.

There will be no further comment from CBS News and correspondent Logan and her family respectfully request privacy at this time.

Doug Mataconis:

Best wishes to Logan for a speedy recovery, physically and emotionally.

Allah Pundit:

Logan wasn’t the only reporter in danger while covering the protests. Katie Couric and Brian Williams ended up leaving Egypt early because of the risk and Anderson Cooper freely admitted to being scared despite sticking it out for a few more days. Couric later told Howard Kurtz about an episode where she too was surrounded and shoved by an enraged lunatic. I wonder how close she came to Logan’s fate.

In an ideal world the army would have shot the attackers on the spot, but you can imagine the chaos that would have broken out in the Square if Egyptian soldiers suddenly started firing on people. As it is, were there even arrests made? And why does CBS’s statement feel compelled to note that the mob had been “whipped into frenzy”? Crowds at all sorts of events get pretty frenzied, but good luck trying that with a judge if you use it as a pretext to join in on a mass sexual assault.

Needless to say, the way journalists cover these events is going to change dramatically. And even more needless to say, America will never see those protests the same way again.

Jim Geraghty at NRO:

The news from CBS about correspondent Lara Logan’s assault in Egypt is awful beyond words.

At a time like this, we all feel helpless. And angry. The perpetrators, anonymous men in an angry mob, may never see justice.

Perhaps we can channel that frustration and anger towards righting a wrong closer to home. To some other outrage… say… the reaction to Logan’s assault from a fellow at the NYU Center for Law and Security, Nir Rosen.

Nir Rosen deleted some of his worst comments about Logan on his Twitter feed, but… it’s the Internet. It’s never gone forever.

I’m sure Rosen will apologize at some point, and perhaps we’ll get some tut-tutting statement from NYU about the need for “civility” and “restraint” and “sensitivity.” Brows will be furrowed. Maybe they’ll hold a seminar about technology and emotional reactions to breaking news events.

But let’s just remember one thing going forward: Nir Rosen believed this was the right moment to let the world know that he “ran out of sympathy for her” and that we should “remember her role as a major war monger” and that we “have to find humor in the small things.”

Your move, NYU.

UPDATE: Nir Rosen has departed Twitter. Your reaction to this development probably depends on whether you think the offense in this circumstance is the ability to broadcast that type of reaction to the crime to the entire Internet, or whether the problem is the reaction itself.

Debbie Schlussel:

So sad, too bad, Lara. No one told her to go there. She knew the risks. And she should have known what Islam is all about. Now she knows. Or so we’d hope. But in the case of the media vis-a-vis Islam, that’s a hope that’s generally unanswered.

This never happened to her or any other mainstream media reporter when Mubarak was allowed to treat his country of savages in the only way they can be controlled.

Now that’s all gone. How fitting that Lara Logan was “liberated” by Muslims in Liberation Square while she was gushing over the other part of the “liberation.”

Hope you’re enjoying the revolution, Lara! Alhamdilllullah [praise allah].

Jeffrey Goldberg:

Nir Rosen, the far-left journalist who joked about the sexual assault on Lara Logan, has company: Debbie Schlussel, the extreme right-wing commentator. Rosen calls for the elimination of Israel, and is a pro-Hamas Hezbollah apologist; Schlussel is a racist anti-Muslim commentator. They come from radically different places on the political spectrum, and yet they share a common inhumanity.

Colby Hall at Mediaite:

Tragic news broke yesterday that CBS News’ Lara Logan was victim to a sustained a brutal sexual attack at the hands of a dangerous element amidst the celebration in Cairo’s Tahrir Square. The news brought universal condemnation and empathy from Logan’s media peers, but it also seemed to also bring the worst out in some people as well. Take for example now former NYU Fellow Nir Rosen , who took to his Twitter feed to make inappropriate jokes that he soon deleted. In the firestorm of controversy that followed, Rosen offered his resignation, which NYU readily accepted.

Hamilton Nolan at Gawker:

What can we learn?

1. Twitter is dangerous.
2. Some things aren’t funny.
3. Even if you don’t like the person they happened to.

Useful lessons for all of us.

Suzi Parker at Politics Daily:

A 2007 article in the Columbia Journalism Review exploring the threats to female foreign correspondents singles out Egypt: “The Committee to Protect Journalists, for example, cites rape threats against female reporters in Egypt who were seen as government critics.”

The CJR article states, “Female reporters are targets in lawless places where guns are common and punishment rare.” They face more sexual harassment and rape than their male counterparts. They are subjected to unwanted advances and “lewd come-ons . . . especially in places where Western women are viewed as promiscuous.”

Such risk is nothing new to Logan. A South African native, she entered Afghanistan after Sept. 11, 2001, by begging a Russian Embassy clerk in London to give her an expedited visa for travel there. She followed up that stint with one as an embedded journalist in Iraq.

Earlier this month, Logan and her crew were detained overnight by the Egyptian army and interrogated. She told Esquire’s “The Politics Blog” that during the ordeal her captors blindfolded her and kept her upright. She vomited frequently. They finally gave her intravenous fluids and released her and her crew.

Logan’s desire to venture into danger zones mirrors the brave actions of female war reporters who came before her. During World War II, many female correspondents had to write under male pseudonyms. They were banned from press briefings and had to submit stories after their male counterparts.

Dickey Chapelle was a World War II photojournalist, posted with the Marines during the Battle of Iwo Jima. She cultivated a signature look of fatigues, an Australian bush hat, dramatic Harlequin glasses and pearl earrings, but loved the grittiness of war. In 1956, the petite photographer covered the Hungarian Revolution, where she was captured and jailed for seven weeks.

In her forties, Chapelle covered the Vietnam War. In 1965, she was the first American female war correspondent killed in action. Famed war photographer Henri Huet photographed Chapelle receiving last rites. She was given a full Marine burial with six Marine honor guards.

Not much has changed in the way of training for such work. In the early days of war reporting, women wrote their own rules for covering conflict — and for surviving. Surprisingly, even in the 21^st century, many women travel to war zones with little training. The BBC is the only major news organization that offers special safety instruction for female journalists that is taught by women, according to CJR.

But training or precautions noted in the Handbook for Journalists may not have prepared Logan for the situation she faced on Friday. A mob of 200 abruptly surrounded her crew, from which she quickly became separated. Such tragedies are common during chaotic events.

And The Fire Spreads

CBS News:

Federal officials are investigating a fire that started overnight at the site of a new Islamic center in a Nashville suburb.

Ben Goodwin of the Rutherford County Sheriff’s Department confirmed to CBS Affiliate WTVF that the fire, which burned construction equipment at the future site of the Islamic Center of Murfreesboro, is being ruled as arson.

Special Agent Andy Anderson of the federal Bureau of Alcohol, Tobacco, Firearms and Explosives told CBS News that the fire destroyed one piece of construction equipment and damaged three others. Gas was poured over the equipment to start the fire, Anderson said.

The ATF, FBI and Rutherford County Sheriff’s Office are conducting a joint investigation into the fire, Anderson said.

WTVF reports firefighters were alerted by a passerby who saw flames at the site. One large earth hauler was set on fire before the suspect or suspects left the scene.

The chair of the center’s planning committee, Essim Fathy, said he drove to the site at around 5:30 a.m. Saturday morning after he was contacted by the sheriff’s department.

“Our people and community are so worried of what else can happen,” said Fathy. “They are so scared.”

The fire was smoldering by the time Fathy and the center’s imam, Ossama Bahloul, had arrived. Fathy was told that responders had smelled gasoline near the fire.

Fathy was later contacted by members of the FBI and the Department of Homeland Security, who told him the incident was under investigation and to remain calm.

Charles Johnson at Little Green Footballs

Josh Marshall at Talking Points Memo:

In recent weeks we’ve been covering the controversy over a proposed Muslim community center in Murfreesboro, Tennessee, which has been pulled into several local and statewide political campaigns. Now the ATF and FBI are investigating a suspicious fire and vandalism that occurred at the construction site Saturday morning.

Steve Benen:

“No mosque in Murfreesboro. I don’t want it. I don’t want them here,” Evy Summers told the local CBS affiliate. “Go start their own country overseas somewhere. This is a Christian country. It was based on Christianity.”

Saleh Sbenaty, a member of the center’s planning committee and a professor of engineering technology at Middle Tennessee State University, noted that Murfreesboro’s Muslim Americans have been part of the community for 30 years, largely without incident. But the proposed center has apparently driven local bigots to violence.

Jeff Neumann at Gawker:

Last month, Tennessee Lieutenant Gov. Ron Ramsey, who was running for governor but lost in the primary, had this to say about Muslims in America, and specifically the Islamic Center of Murfreesboro:

Now, you know, I’m all about freedom of religion. I value the First Amendment as much as I value the Second Amendment as much as I value the Tenth Amendment and on and on and on,” he said. “But you cross the line when they try to start bringing Sharia Law here to the state of Tennessee — to the United States. We live under our Constitution and they live under our Constitution.”

That’s right. Tennessee doesn’t need to worry about a 9.8% jobless rate, the state needs to watch out for the Muslim takeover which is just around the corner. It’s no surprise when these things happen, especially when you have men like Ron Ramsey tapping into people’s fear of The Other. Good job, asshole.

Glenn Greenwald:

The arsonists undoubtedly will be happy to tell you how much they hate Terrorism.  And how there’s a War on Christianity underway in the U.S.  The harm from these actions are not merely the physical damage they cause, but also the well-grounded fear it imposes on a minority of the American population.  If you launch a nationwide, anti-Islamic campaign in Lower Manhattan based on the toxic premise that Muslims generally are responsible for 9/11 — and spend a decade expanding American wars on one Muslim country after the next — this is the inevitable, and obviously dangerous, outcome.

John Cole:

We’re getting to the point that I just don’t want to even talk about politics any more. It is just too depressing, and even smart people I know are spouting nonsense. I had a discussion with someone I’ve known a long time about the Glenn Beck nonsense yesterday, and all that person could say was “If the Democrats want my vote, they need to distance themselves from Al Sharpton.” Because you know how much power Al Sharpton has in the Democratic party, as opposed to the lunatics in the driver’s seat of the GOP. I swear to God every white person over the age of fifty has just completely lost their shit.

I just changed the topic. FOX news and the race-baiters have us all by the balls.

How Low Will He Go? How Low Will He Go?

Dan Balz and Jon Cohen at WaPo:

Public confidence in President Obama has hit a new low, according to the latest Washington Post-ABC News poll. Four months before midterm elections that will define the second half of his term, nearly six in 10 voters say they lack faith in the president to make the right decisions for the country, and a clear majority once again disapproves of how he is dealing with the economy.

Regard for Obama is still higher than it is for members of Congress, but the gap has narrowed. About seven in 10 registered voters say they lack confidence in Democratic lawmakers and a similar proportion say so of Republican lawmakers.

Overall, more than a third of voters polled — 36 percent — say they have no confidence or only some confidence in the president, congressional Democrats and congressional Republicans. Among independents, this disillusionment is higher still. About two-thirds of all voters say they are dissatisfied with or angry about the way the federal government is working.

CBS News:

Economists have declared the economic recession over largely over, but most Americans don’t share their optimism, and they are increasingly blaming President Obama for their money woes.

Mr. Obama’s approval rating on the economy has tumbled five percentage points from last month, according to a new CBS News poll, with just 40 percent of those polled expressing full confidence in his actions.

More than half of those questioned (54 percent) said they disapproved of Mr. Obama’s handling of the economy. Last month, 45 percent approved. The drop in approval has been seen mostly among independents, just 35 percent of whom now say they approve.

Jennifer Rubin at Commentary:

In short, Obama has lost the confidence of the voters on the issues that matter most. (”Just 43 percent of all Americans now say they approve of the job Obama is doing on the economy, while 54 percent disapprove.”) They will take it out on those with a “D” next to their names in November.

DiA at The Economist:

Things look bad for the Democrats, but I’m not sure I agree with Jennifer Rubin’s oversimplified assessment that the poll “has nothing but bad, very bad, news for Obama.” Buried deep in the Post‘s report is the surprising news that Mr Obama’s overall job-approval rating stands at 50%. Granted, “those who strongly disapprove now significantly outnumber those who strongly approve”, according to the paper. But with the unemployment rate at 9.5%, I’d expect much worse. Mr Obama’s rating puts him in a similar position to Bill Clinton in 1994, and ahead of where Ronald Reagan was in 1982, when he too struggled with a severe recession. Mr Clinton’s Democrats lost both the House and the Senate, and Mr Reagan’s Republicans lost a bunch of seats in the House, but both went on to easily win re-election two years later. So, bad news for the president’s party, but not all bad for the president himself. The worse news for Mr Obama is that voters seem to be prioritising deficit reduction over further stimulus spending, which will make it hard for the president to do anything about that sticky unemployment rate.

John McCormack at The Weekly Standard:

One bright spot for President Obama in an otherwise dreary Washington Post/ABC News poll:

On the issues tested in the poll, Obama’s worst ratings come on his handling of the federal budget deficit, where 56 percent disapprove and 40 percent approve. He scores somewhat better on health-care reform (45 percent approve) and regulation of the financial industry (44 percent). His best marks come on his duties as commander in chief, with 55 percent approving.

Voters also disapproved of Obama’s job performance on the one other issue tested by the Post: 54 percent disapprove and 43 percent approve of how he’s handling the economy.

So Obama’s head was above water on just one of the five issues tested by the Post: his performance as commander in chief. Yet his overall approval rating is at 50 percent, which suggests that perhaps the president’s determination to prosecute the war in Afghanistan is propping up his overall job performance rating.

Jonathan Chait at TNR:

At the same time, the poll also shows that the public clearly favors the Democrats over the Republicans. The Post story about the poll leads with the fact that only 43% of the public has confidence in President Obama to make the right decisions for the country’s future. That’s low. But only 26% have confidence in Republicans in Congress to make the right decisions, which is far lower than Obama, and even lower than Congressional Democrats, in whom 32% have confidence. That’s not an anomaly. Asked which party will do a better job of handling the economy, 42% say the Democrats and 34% say the GOP.

So, in sum, there’s a crucial swing vote bloc that prefers the policies of the Democrats over the Republicans but plans to vote for the Republicans anyway.

Why would anybody do that? Delving into the psychology of voters is tricky. But clearly, it vindicates the sense that voters hold the governing party responsible for the state of the country, which mainly means the state of the economy. Voters in the middle are not going to compare the policies of the two parties. They’re just going to vote yay or nay on how things appear to be going. That makes more sense when you consider things from the perspective of voters who don’t follow politics very closely.

Tom Maguire:

A new WaPo/ABC News poll shows Obama is still taking on water as he continues his Titantic fail.  Two bright spots for Dems – although Dems are moving down, Republicans are not really moving up.  And the poll didn’t ask about immigration, thereby sparing Obama more mortification:

Confidence in Obama reaches new low, Washington Post-ABC News poll finds

By Dan Balz and Jon Cohen
Washington Post Staff Writer
Tuesday, July 13, 2010; A01

Public confidence in President Obama has hit a new low, according to the latest Washington Post-ABC News poll. Four months before midterm elections that will define the second half of his term, nearly six in 10 voters say they lack faith in the president to make the right decisions for the country, and a clear majority once again disapproves of how he is dealing with the economy.

As a aside, I am sort of missing the fawning coverage of Obama’s oh-so-sweet date night in Manhattan with Michelle.  I wonder if we will be seeing any more date nights like that before the election

Derek Thompson at The Atlantic:

Finally, this analysis requires a big asterisk. Democrats are almost certainly doomed to fall by the dozens in the House this November. It’s not the candidates, it’s the conditions: plus-nine percent unemployment; slow business investment; continuing weakness in the housing sector. (As the graphs below demonstrate, income growth is a particularly accurate indicator of losses.)

History will debate and determine whether the Obama/Bernanke regime wisely handled the recession. In the nearer term, the voters will make that judgment themselves, and there isn’t much evidence from July 2010 to suggest that the recovery, or the Democrats’ fortunes, are ready to pick up any time soon.

Don’t Drink The Water

Andrew Moseman at Discover:

The oil rig fire in the Gulf of Mexico is finally out, as the Deepwater Horizon sank into the sea yesterday and hope for finding 11 missing workers began to fade. The damage assessment for the oil spill, however, has just begun.

Oil from an undersea pocket that was ruptured by the rig, which was leased by the energy company BP, has begun to spread outward. The spill measures 10 miles (16 kilometers) by 10 miles, about four times the area of Manhattan, and is comprised of a “light sheen with a few patches of thicker crude,” U.S. Coast Guard Lieutenant Commander Cheri Ben-Iesau said today [BusinessWeek]. Whether or not the 700,000 gallons of diesel on board Deepwater Horizon is part of the spill remains unknown. Transocean, the company that owns the rig, admitted that it failed to “to stem the flow of hydrocarbons” before the rig sank.

Josh Garrett at HeatingOil:

On top of the heavy human cost of the incident is the threat of widespread environmental damage, which is growing by the minute as a massive oil slick spreads toward land. By Monday afternoon, the size of the oil slick was estimated at 1,800 square miles, the New York Times reported. Although no environmental effects have yet been observed, sea flora and fauna could soon be harmed by the presence of the oil in the water. Environmental damage could worsen as the oil slick moves into coastal ecosystems, which the US Coast Guard estimated would not happen for at least 36 hours, according to the Wall Street Journal. BP, the oil company that commissioned the sunken platform, is charged with stopping the leak and cleaning up the spilled oil, both of which could take months.

Cain Burdeau at Daily Caller:

Crews used robot submarines to activate valves in hopes of stopping the leaks, but they may not know until Tuesday if that strategy will work. BP also mobilized two rigs to drill a relief well if needed. Such a well could help redirect the oil, though it could also take weeks to complete, especially at that depth.

BP plans to collect leaking oil on the ocean bottom by lowering a large dome to capture the oil and then pumping it through pipes and hoses into a vessel on the surface, said Doug Suttles, chief operating officer of BP Exploration and Production.

It could take up to a month to get the equipment in place.

“That system has been deployed in shallower water, but it has never been deployed at 5,000 feet of water, so we have to be careful,” he said.

The spill, moving slowly north and spreading east and west, was about 30 miles from the Chandeleur Islands off the Louisiana coast Monday. The Coast Guard said kinks in the pipe were helping stem the flow of oil.

From the air Monday afternoon, the oil spill reached as far as the eye could see. There was little evidence of a major cleanup, with only a handful of vessels near the site of the leak.

The oil sheen was of a shiny light blue color, translucent and blending with the water, but a distinct edge between the oil slick and the sea could be seen stretching for miles.

George Crozier, oceanographer and executive director at the Dauphin Island Sea Lab in Alabama, said he was studying wind and ocean currents driving the oil.

He said Pensacola, Fla., is probably the eastern edge of the threatened area, though no one really knows what the effects will be.

“We’ve never seen anything like this magnitude,” he said. “The problems are going to be on the beaches themselves. That’s where it will be really visible.”

Aaron Viles, director for the New Orleans-based environmental group Gulf Restoration Network, said he flew over the spill Sunday and saw what was likely a sperm whale swimming near the oil sheen.

“There are going to be significant marine impacts,” he said.

Seymour Friendly at Firedoglake:

We have the information that Federal law places all the responsibility for cleanup and emergency response onto the rig’s operator. BP leased the rig from Transoceanic, hence, BP is liable.

Obviously, without massive regulation and investment, British Petroleum is not going to plan and prepare effectively for disasters like this. Such preparation is not profitable to them.

Handling a disaster like this should without doubt be a Federal obligation. BP can absorb the costs, but the Feds should fulfill the mandate for having plans and personnel ready for response, and requirements and safety guidelines that prevent and mitigate disasters as well.

As it stands, of the three initial possible responses:

1) Activate the massive cutoff valve, stopping the flow of oil, via improvised use of deep-sea ROVs,

2) Drill “intervention wells” over a period of months,

3) Place an apparatus over the well that transports the leaked oil to the surface where it can then be removed from the sea indefinitely,

That BP, which owns the decision in lieu of Federal regulations and agency authority, is going to elect for (3).

That means that oil will be going to the surface, and recovered, until the “something can be done”. In other words, this oil leak in the Gulf may go on for a very, very long time.

I’d like to see the Obama administration rectify its statement today that it has “acted swiftly to protect the environment” in light of the fact that it is not clear that there is even a Federal capacity to respond to this situation, and the best of our information is that the leak will continue indefinitely, with the Feds needing to figure out how to remove the oily water produced for months, and the wreck of the oil rig left at the bottom of the deep blue sea.

James Herron at WSJ:

However, contrary to initial Coastguard reports Friday that no oil was leaking from the sunken drilling rig, it became apparent Saturday that around 1,000 barrels a day of crude oil is gushing from ruptures in the pipeline that linked the platform to the sea bed. An oil slick 30 miles long and 20 miles wide is drifting slowly north towards the shore, although weather forecasts indicate it will not hit land for at least 72 hours.

“The oil is ours and we are responsible for the cleanup,” said a BP spokesman. [Read BP’s latest press statement here.]

BP is throwing all the resources it has available at the spill, so the cost to the company may be substantial. It has deployed 32 spill response ships and five aircraft to spray up to 100,000 gallons of chemical dispersant on the slick and skim oil from the surface of the water and deploy floating barriers to trap the oil.

In case attempts to shut down the leaking oil using a remotely operated subsea robot fail, BP is already sending in another rig to drill a second well to inject a specialized heavy fluid into the reservoir and cut the flow of oil from the sea bed–a process that could take months.

“We’ve already spent millions,” and will continue to spend whatever is necessary, said the BP spokesman.

UPDATE: John Cole

Rod Dreher

UPDATE #3: Paul Krugman

Chris Good at The Atlantic

Max Fisher at The Atlantic with a round-up

Jonah Goldberg at The Corner

UPDATE #4: John Hinderaker at Powerline

National Review

Andrew Sullivan

Mark Schmitt and Megan McArdle at Bloggingheads

UPDATE #5: Glenn Thrush and Mike Allen in Politico

Allah Pundit

Steve Benen

UPDATE #6: Pascal-Emmanuel Gorby at The American Scene here and here. And via PEG, Lexington at The Economist

UPDATE #7: Huffington Post

UPDATE #8: Daniel Gross at Slate

Not, Of Course, That There’s Anything Wrong With That

Ben Domenech at The New Ledger (and CBS):

Update: The White House has seen fit to take the effort to respond to my description of Elena Kagan’s sexuality, and Howard Kurtz asked me to comment. Here’s how I responded:

Since the position opened on the court, there have been abundant numbers of commenters and bloggers on the Left arguing openly about the potential political reactions of appointing either Sullivan or Karlan as the first openly gay members of the court. The idea of history-making appointments always has great appeal, and it’s one reason I supported Sonia Sotomayor’s nomination, a lonely position for any conservative — and when the first openly gay nominee is advanced, it will be a true statement about how far we’ve come as a society. When that does happen, it will be an issue of political discussion, whether we like it or not. It obviously has nothing to do with whether they are a good nominee or not [Note: Sens. Cornyn and Sessions are right on this].

I offer my sincere apologies to Ms. Kagan if she is offended at all by my repetition of a Harvard rumor in a speculative blog post. But if I were her, I’d feel pretty good about the fact that the White House specifically responded to this — it seems like a clue as to who the pick will be, doesn’t it?

1. Elena Kagan (49), Solicitor General of the United States. The likeliest candidate, and it was somewhat of a surprise she didn’t get picked last time. Pluses: would please much of Obama’s base, follows diversity politics of Sotomayor with first openly gay justice (so would Karlan and Sullivan). [Update: While Karlan and Sullivan are open about it, I have to correct my text here to say that Kagan is apparently still closeted — odd, because her female partner is rather well known in Harvard circles.] [Update: see my apology to Ms. Kagan at Huffington Post] Minuses: Seen as too moderate by some on the left; people like Arianna Huffington and Glenn Greenwald strongly dislike her because of her positions on executive power and anti-terror activities. Could be seen as a thumb in the eye of the civil liberties folks.

Sources numerous and equally dismissible report that President Obama has a “Top Ten” list of potential SCOTUS candidates to replace the outgoing John Paul Stevens. Since no one can honestly claim to know what the president is thinking, here’s my stab at his top ten (after conferring with a few TNL friends) as potential choices, with pluses and minuses for each. Trust me – you’ll want to stick around for the 10th.

Howard Kurtz at WaPo:

The White House ripped CBS News on Thursday for publishing an online column by a blogger who made assertions about the sexual orientation of Solicitor General Elena Kagan, widely viewed as a leading candidate for the Supreme Court.

Ben Domenech, a former Bush administration aide and Republican Senate staffer, wrote that President Obama would “please” much of his base by picking the “first openly gay justice.” An administration official, who asked not to be identified discussing personal matters, said Kagan is not a lesbian.

CBS initially refused to pull the posting, prompting Anita Dunn, a former White House communications director who is working with the administration on the high court vacancy, to say: “The fact that they’ve chosen to become enablers of people posting lies on their site tells us where the journalistic standards of CBS are in 2010.” She said the network was giving a platform to a blogger “with a history of plagiarism” who was “applying old stereotypes to single women with successful careers.”

The network deleted the posting Thursday night after Domenech said he was merely repeating a rumor. The flare-up underscores how quickly the battle over a Supreme Court nominee — or even a potential nominee — can turn searingly personal. Most major news organizations have policies against “outing” gays or reporting on the sex lives of public officials unless they are related to their public duties.

Greg Sargent:

CBS unquestionably deserved to take a hit for this. But what’s more interesting than CBS’s role is the White House’s aggressive response. People who follow the ins and outs of nomination battles closely are interpreting it as a sign that Kagan has a very good shot at being picked. As one of these people put it to me this morning, this is the most hard-hitting pushback by the White House to misinformation being spread about any nominee.

A White House official told Kurtz that Kagan is not a lesbian. That won’t matter, of course; the whisper campaign from the right is likely to continue. But the White House has now signaled that they’re prepared to go to war against it.

Ben Domenech at Huffington Post:

I erroneously believed that Ms. Kagan was openly gay not because of, as Stein describes it, a “whisper campaign” on the part of conservatives, but because it had been mentioned casually on multiple occasions by friends and colleagues — including students at Harvard, Hill staffers, and in the sphere of legal academia — who know Kagan personally. And as the reaction from Julian Sanchez and Matt Yglesias shows, I was not alone in that apparently inaccurate belief.

Look, it’s 2010 — no one should care if a nominee to any position is gay. The fact that conservative Senators John Cornyn and Jeff Sessions have recently expressed openness to confirming an openly gay nominee to the Court is a good thing. Senators should look at things that actually matter — evaluating a nominee’s decisions, approach to the law, their judgment and ability — to see whether there are actually good and relevant reasons to oppose the nomination. That’s all.

But that’s about getting the job. As a political matter, there are ramifications for nominations to the Supreme Court, and the core elements of a nominee’s biography, like his or her family life, are inescapable when the nation focuses on such a high-profile life-tenured appointment. Making history is a noteworthy thing: many in the Latino community were pleased when Sonia Sotomayor (who I supported) was nominated, and many in the LGBT community would welcome the opportunity to confirm an openly gay justice. Glenn Greenwald and others agree with me on this point, and I can’t think why anyone would disagree.

That’s why I listed it as a positive: after so much frustration with the White House from the gay community on lack of action on other policy fronts, an openly gay nominee might serve to mend that strained relationship.

As I told Howard Kurtz, and I say again here, I offer my sincere apologies to Ms. Kagan if she is offended at all by my repetition of a Harvard rumor in a speculative blog post. It still seems odd to me that the White House would single out this statement for attack, adamantly slamming closed a door that nobody was trying to open, as opposed to issuing a mild correction. As Yglesias notes, “I’d like to think we’re past the point where saying someone’s a lesbian counts as a dastardly ‘accusation,'” and it certainly was not intended as such.

But on the other hand, if I were Ms. Kagan, I’d feel pretty good about the fact that the White House specifically responded to this, and did so in such an aggressive and forceful manner — after all, it seems like quite a clue as to who the pick will be, doesn’t it?

Sam Stein at Huffington Post:

Even before the CBS post, a top conservative religious group was already insisting that a nominee’s sexuality would play a major role in his or her confirmation process. This past week, the organization Focus on the Family abruptly reversed its position from the last Supreme Court confirmation battle by declaring it would oppose a gay Supreme Court pick, no matter who the nominee is.

“We can assure you that we recognize that homosexual behavior is a sin and does not reflect God’s created intent and desire for humanity,” said Tom Minnery, the group’s senior vice president. “Further, we at Focus do affirm that character and moral rectitude should be key considerations in appointing members of the judiciary, especially in the case of the highest court in the land. Sexual behavior — be it heterosexual or homosexual — certainly lies at the heart of personal morality.”

The fact that the rumor campaign surrounding Kagan has been settled doesn’t necessarily mean that the issue is off the table, Republicans still seem poised to make gay rights a prominent feature of the confirmation process — should she be chosen as Justice John Paul Stevens’ replacement. Already conservative websites are latching on to a brief signed by Kagan and 40 Harvard Law School professors in which they argued that the military’s “Don’t Ask Don’t Tell” policy was discriminatory against gay troops.

“Let’s just say that if somebody is gay, it clearly becomes political fodder,” said Navetta, when asked if the effort could damage Kagan’s chances for the court or confirmation. “And I’m not implying one way or the other that she is or is not [gay]. I’m just saying that its no myth that people’s sexual orientation can and does become an issue in political campaigns. We’ve seen it before.”

Moe Lane:

Having reviewed the completely voluntary decision of the White House to freak out over Ben Domenech’s mention in passing of now-probable USSC nominee Elena Kagan’s rumored sexuality – and before anybody freaks out in their turn, note this passage, please:

…as the reaction from Julian Sanchez and Matt Yglesias shows, I was not alone in that apparently inaccurate belief.

…one wonders what all the fuss was about.  After all, Ben, Sanchez, Yglesias, Glenn freaking Greenwald – and for that matter, myself – are all more or less in agreement that a strong reaction to this is at least a bit odd.  In a world where Senators Cornyn & Sessions can both readily and for the record state that sexual orientation is not a barrier for a Supreme Court spot, why would the White House jump on this issue with both feet?  And why did they, by the way, do so in a manner that explicitly and authoritatively denies that Ms. Kagan is gay?

Digby:

Everything I’ve heard is that Kagan is not a lesbian. Not that there’s anything wrong with being gay, obviously, or anything shameful in being called that. But I know far too many straight, single women who are assumed to be gay simply because they aren’t married or don’t have an active dating life. It’s hurtful to them, and not because they have any prejudice against gay people but because it’s an assumption about them that isn’t true. Everyone deserves to be seen the way they really are, whether gay or straight.

Marc Ambinder, a blogger for the Atlantic, wrote Monday about what he called “a baffling whisper campaign” about Kagan “among both gay rights activists and social conservatives. . . .“So pervasive are these rumors that two senior administration officials I spoke with this weekend acknowledged hearing about them and did not know whether they were true. . . . Why is she the subject of these rumors? Who’s behind them?”

Why? Because every woman who isn’t married after a certain age is assumed to be a lesbian by some people, even if she isn’t, especially if she doesn’t look like a fashion model. And social conservatives and gay rights activists (for different reasons) have a vested interest in her being seen as gay. It’s not an insult but it is a misconception and one that isn’t entirely benign to the person who is the subject of it. If she says anything publicly to deny it, it sounds as though she has a prejudice against gay people and if she doesn’t deny it, she becomes known as something she isn’t. It’s not fair.

Ben Domenech is right wing hit man and always has been. And he’s succeeded wildly here. The rumors are now “out there” and Cokie’s Law is in effect. How a known plagiarist came to be employed by CBS is the more interesting story, actually. Especially for a man who’s known to hire hookers to powder and diaper him and then sing him to sleep. Or at least that’s the rumor. Not that there’s anything wrong with that.

UPDATE: Andrew Sullivan

Joe Conason at Salon

Allah Pundit

Amanda Terkel at Think Progress

UPDATE #2: Ben Smith at Politico

Digby

Jules Crittenden

William Saletan in Slate

UPDATE #3: Bill Scher and Matt Lewis at Bloggingheads

UPDATE #4: Scott Johnson at Powerline

UPDATE #5: Michael Kinsley at The Atlantic

Kevin Drum

Andrew Sullivan

UPDATE #6: Richard Kim and Reihan Salam at Bloggingheads

And Who Will Sandra Bullock Play In The Movie?

Michael Lewis has a new book, The Big Short. Lewis on The Daily Show here.

Paul Smalera at The Big Money:

I am angry, outraged, and bitter. What I got from Michael Lewis was more like bemused, resigned, and weary.

Bemused, in that the pre-eminent American “industry” of the last 40 years, finance, is full of people, much like Lewis, an Ivy League art history major who wanted mostly, as he admits in Liar’s Poker, to get rich. They are pedigreed, and despite little to no initial understanding of finance, they work their ways into controlling the highest levers of capitalism. And the handful of them who seem to understand the mechanisms best are not running the financial casino but instead scheming to find out how the game can be gamed. It’s the Wall Street equivalent of counting cards in blackjack.

Resigned, in that even when the system woke up to its own massive mistakes on subprime in early 2008 and momentarily seized up, the only possible course of action was for it to creak back to life and continue the march to its demise, having identified another sucker (AIG) to assume some of the massive, synthetic risk it had created. These instruments were designed to act like a video-game cheat code entered into our economy, breaking all the rules of financial physics in order to rake up the highest possible score. The system had no way to process that the higher the score became, the faster it was actually racing toward a kill screen, a glitch in the matrix. One that only the government, the god of our financial video game, er, system, would be able to fix.

And weary. Lewis again confronts the inexorable fact that pursuit of profit is the only thing that ever changes the way business gets done on the Street. This is the sole reason for advances in the scale and scope by which money can be made since his departure from Wall Street more than 20 years ago. Social benefit, advancement of public good, and/or true innovation is not enough, as Lewis repeatedly laments in the text. Any regulation that limits profiteering will always be smeared by Wall Street as a frontal attack on the ability of all America to prosper. (Public statements and evidence to the contrary notwithstanding.)

Felix Salmon:

The Big Short is not the story of the crisis, as the crisis is commonly understood. The failure of Lehman brothers and of Fannie Mae and Freddie Mac; the stock-market crash; the bail-out of Detroit; the fevered all-nighters pulled at Treasury and the New York Fed; the fears that the entire global financial system was on the brink of collapse — little if any of that is in this book.

Instead, Lewis has found a different story — one which he started mining for a spectacular cover story in the December 2007 issue of Portfolio magazine, and which has culminated in this book, over two years later. It’s the story of what used to be called the “subprime crisis” before it metastasized into something much larger and more dangerous than that. And it’s also, like all Michael Lewis tales, a human story, which takes us deep inside unique characters like Steve Eisman and Mike Burry.

On the face of it, there’s almost nothing sympathetic about these men. Their social skills are all but nonexistent; they live in a world of arcane financial analysis which might as well be a different planet for all that it has any bearing on the way that most of us live our lives; and they made their outsize profits by wagering hundreds of millions of dollars on the proposition that Americans across the country would end up being thrown out of their homes after they found themselves unable to make their mortgage payments.

What these men did was not “socially useless,” to quote the chairman of the UK’s Financial Services Authority, Lord Turner. It was worse than that: it was actively harmful, since they provided the fuel which kept the subprime mortgage furnace burning even when the country was running out of new junk mortgages to write. In most financial markets, bearish bets act as a dampener; in this one, they were a necessary part of the subprime-mortgage machine, and a Deutsche Bank mortgage trader named Greg Lippmann ended up making billions of dollars for his employer — not to mention a $50 million bonus for himself — by aggressively going out and finding fund managers to put on the short bets needed to keep the market ticking. (This is the same Lippmann who, when accused of being a “Chicken Little” responded by saying “Fuck you, I’m short your house.”)

But Lewis has a soft spot for these misfits — fund managers who stumbled into the bond market from careers making bets on stocks, who suffered ridicule and ostracism even from their own investors before their bets paid off, and who he has now chosen to immortalize in print as the few clear-eyed men in a world of deluded bankers and investors.

At the same time, Lewis aims both barrels at the ratings agencies, happily quoting someone describing the staff there as “basically like brain-dead.” He also sets up a hapless fund manager named Wing Chau as a major villain for taking the long side of the bet and making millions of dollars by doing so, despite being spectacularly wrong.

The result is a rollicking narrative: a tale of beleaguered little guys betting against monster banks and fund managers, and, in the end, winning. (Lewis barely mentions the biggest and most famous of the shorts, John Paulson and Andrew Lahde, perhaps because they were too rich and successful to begin with.)

Tyler Cowen:

In terms of policy, Lewis attaches great weight to the fact that the major investment banks became publicly-traded companies rather than partnerships.  I liked the stories and much of the inside scoop, but it didn’t have the giddy fun of Liar’s Poker or Moneyball nor did it have the analysis of some other books.

Andrew Leonard at Salon:

There are passages in “The Big Short” that get seriously wonky — where most writers would be content to simply talk in generalities about “slicing and dicing up risk” — but Lewis makes a game effort to communicate the nitty-gritty of how the structured finance con game actually worked. It can be intimidating, but if you stick with it the end result is devastating.

Lewis does not attempt to explicitly resolve some of the bigger questions as to how it was possible for Wall Street to run so far off the tracks. If you’re looking to plug “The Big Short” neatly into a political narrative you may find it wanting. By now everyone has chosen their own favorite villain — some blame the dismantling of regulatory oversight, others point at government efforts to boost lower-class home ownership. Everybody’s mad at housing speculators and people who take out loans that they can’t afford. The ratings agencies, regulators, mortgage lenders and banks all clearly failed us.

It’s quite the toxic stew. But sitting at the center of the spider’s web are the investment banks — Goldman Sachs, Morgan Stanley, Merrill Lynch, Deutsche Bank, Bear Stearns, Lehman Brothers. These banks were not creating complex derivatives tied to subprime mortgages because of government policy pushing homeownership or because individual homeowners were irresponsibly prone to lying about their income. Far from it; these banks had discovered that billions of dollars could be made transforming lousy mortgage loans into securities supposedly safe enough that they could be sold to pension funds or anyone else. So they had a huge financial incentive to encourage the creation of even more crappy loans.

And even then, there wasn’t enough raw product! The hunger for garbage that could be turned into gold was beyond anything the craziest real estate markets in California or Arizona or Florida or Nevada could provide. The smart brains at Goldman Sachs found many innovative ways to get around this obstacle, to the point of taking the collateralized debt obligations that already, uh, sliced and diced subprime bonds, and reslicing those into synthetic CDOs that were even further removed from actual humans living in real houses.

And even that wasn’t enough, so they created a superstructure of credit default insurance swaps to buy and sell, ostensibly to protect against the possibility that their synthetic CDO or subprime mortgage bond might collapse, but really, just to have another way to make another speculative bet, in a world where there actually were physical limits to how many real mortgages could be created.

It all adds up to an extraordinary demonstration of how markets can fail disastrously. The tragedy, however, is that we appear, as a society, not to have learned anything lasting from this debacle. The most depressing part of “The Big Short” is realizing that now, more than a year into a new presidential administration, we have done nothing substantive to prevent a similar mess from occurring again in the future. The investment banks are minting money again, while millions of Americans have lost their jobs and their homes.

Janet Tavakoli at Huffington Post:

I was in the Salomon Brothers’ 1985 training class that Michael Lewis lampooned in his amusing book, Liar’s Poker. Imagine my surprise to see him billed as a trader on 60 Minutes, since he was actually a junior salesman. Well-heeled male peacocks strutted the trading floor, and junior salesmen were girlie-men, mere eunuchs serving their pashas.

Michael hit the roof when I ribbed him about the mischaracterization.* Yet, in January 2007 he didn’t spare the “wimps, ninnies, and pointless skeptics” at Davos. I wasn’t at Davos (Michael wasn’t either), but he derided people who staked their reputations–as I staked mine–on the fact that the financial system was in peril. One might think he’d have a thicker skin, when turnabout was fairplay and truth was his casualty.

[…]

Michael had it wrong in more than one profound way. The markets weren’t just “mispricing risk,” those in-the-know were manipulating prices–covering up malfeasance and losses. Meanwhile, some members of the fourth estate used their pernicious pens as pawns in the cover-up.

All of the legacy investment banks enabled predatory lending, yet they now perpetrate what Elizabeth Warren calls the “myth of the immoral debtor.” Wall Street banks were the key architects of the financial meltdown. The Fed provided cheap money, but irresponsible financiers exploited it. Banks massively over-borrowed, their agents extracted billions in bonuses, and now they blame hard-working taxpayers. These predators call this “God’s work,’ while most of the media covers-up for them.

Peter Lattman at WSJ:

Deal Journal has yet to read “The Big Short,” Michael Lewis’s yarn on the financial crisis that hit stores today. We did, however, read his acknowledgments, where Lewis praises “A.K. Barnett-Hart, a Harvard undergraduate who had just  written a thesis about the market for subprime mortgage-backed CDOs that remains more interesting than any single piece of Wall Street research on the subject.”

While unsure if we can stomach yet another book on the crisis, a killer thesis on the topic? Now that piqued our curiosity. We tracked down Barnett-Hart, a 24-year-old financial analyst at a large New York investment bank. She met us for coffee last week to discuss her thesis, “The Story of the CDO Market Meltdown: An Empirical Analysis.” Handed in a year ago this week at the depths of the market collapse, the paper was awarded summa cum laude and won virtually every thesis honor, including the Harvard Hoopes Prize for outstanding scholarly work.

Last October, Barnett-Hart, already pulling all-nighters at the bank (we agreed to not name her employer), received a call from Lewis, who had heard about her thesis from a Harvard doctoral student. Lewis was blown away.

“It was a classic example of the innocent going to Wall Street and asking the right questions,” said Mr. Lewis, who in his 20s wrote “Liar’s Poker,” considered a defining book on Wall Street culture. “Her thesis shows there were ways to discover things that everyone should have wanted to know. That it took a 22-year-old Harvard student to find them out is just outrageous.”

Dodd’s The Word, Part II

Wall Street Journal prints Chris Dodd’s fact sheet on the bill:

HIGHLIGHTS OF THE NEW BILL

Consumer Protections with Authority and Independence: Creates a new independent watchdog, housed at the Federal Reserve, with the authority to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, and protect them from hidden fees, abusive terms, and deceptive practices.

Ends Too Big to Fail: Ends the possibility that taxpayers will be asked to write a check to bail out financial firms that threaten the economy by: creating a safe way to liquidate failed financial firms; imposing tough new capital and leverage requirements that make it undesirable to get too big; updating the Fed’s authority to allow system-wide support but no longer prop up individual firms; and establishing rigorous standards and supervision to protect the economy and American consumers, investors and businesses.

Advanced Warning System: Creates a council to identify and address systemic risks posed by large, complex companies, products, and activities before they threaten the stability of the economy.

Transparency & Accountability for Exotic Instruments: Eliminates loopholes that allow risky and abusive practices to go on unnoticed and unregulated – including loopholes for over-the-counter derivatives, asset-backed securities, hedge funds, mortgage brokers and payday lenders.

Federal Bank Supervision: Streamlines bank supervision to create clarity and accountability. Protects the dual banking system that supports community banks.

Executive Compensation and Corporate Governance: Provides shareholders with a say on pay and corporate affairs with a non-binding vote on executive compensation.

Protects Investors: Provides tough new rules for transparency and accountability for credit rating agencies to protect investors and businesses.

Enforces Regulations on the Books: Strengthens oversight and empowers regulators to aggressively pursue financial fraud, conflicts of interest and manipulation of the system that benefit special interests at the expense of American families and businesses.

David Corn at Mother Jones:

Elizabeth Warren, the lead advocate for the proposed Consumer Financial Protection Agency, seems to like—or, at least, not dislike—the financial reform package (finally) released on Monday by Sen. Chris Dodd, the Democratic chairman of the Senate banking committee. In the summary of the legislation, Dodd notes that his bill would create the CFPA as an independent bureau within the Federal Reserve—which could pose problems—but that it will have the power to write and enforce rules governing the sale of various financial products, including credit cards and mortgages. Yet its enforcement powers would not extend to banks with less than $10 billion in assets. In a statement, Warren notes:

Since bringing our economy to the brink of collapse, Wall Street has spent more than a year and hundreds of millions of dollars in an all-out effort to block financial reform. Despite the banks’ ferocious lobbying for business as usual, Chairman Dodd took an important step today by advancing new laws to prevent the next crisis. We’re now heading toward a series of votes in which the choice will be clear: families or banks.

That sounds like a cautious endorsement

John Carney at Forbes:

Spreading the Fed’s authority risks making this problem of market homogenization even worse. Hedge funds and insurance companies escaped the financial crisis intact, largely because they weren’t subject to the same regulators whose views on prudence so damaged the banks. Subjecting a broader range of financial firms to the Fed’s market views will create more systemic risk, leaving more firms in vulnerable if the Fed gets it wrong again.

The new powers being proposed for the Fed would allow it to order financial firms to “reduce risk.” Which is to say, the Fed’s view of risk will even more directly control the financial system. The Fed will be able to impose its views of risk on a broader range of financial firms. But that is exactly what regulators thought they were doing when they incentivized banks to buy up mortgage backed securities through sliding-scale capital requirements.

In short, the regulators’ views of prudent banking got us into this mess. Allowing the Fed to fail upward is just a recipe for another—likely worse—crisis.

Daniel Indiviglio at The Atlantic:

The next stop as I continue to go through Senate Banking Committee Chairman Christopher Dodd’s (D-CT) new financial reform proposal (.pdf) is how he intends to resolve too big to fail firms. As with most other sub-proposals I’ve discussed thus far, this one largely resembles what’s found in the House bill. The big differences have to do with the creation of a “Orderly Liquidation Authority Panel” of bankruptcy judges to bless the resolution and the size of the fund to pay for it.

Both proposals call for firms to create resolution plans. In each proposal, the Treasury Secretary, Federal Reserve Chairman, relevant regulator or the firm itself requests resolution. The firm’s failure must pose a systemic risk to the U.S. economy in order to utilize this process instead of the bankruptcy code. The Federal Reserve Board and the relevant regulator’s board or commission vote on whether or not to proceed. A two-thirds vote is required. All of this is essentially identical for both Dodd’s and the House’s versions.

Orderly Liquidation Authority Panel

Next, the House version turns the process over to the FDIC, who completes the resolution process. Dodd’s proposal, however, takes a quick detour. He wishes to establish a panel of three bankruptcy judges who must first approve. If they agree that the firm in question is, indeed, in default or in danger of default, then the FDIC takes over.

This is an interesting deviation, and I suspect that Senate Republicans may have had a hand in this provision, based on reports during the compromise process. I’m a little mixed on whether it’s a good idea or not. I don’t know that it would hurt much — the judges must decide within 24-hours, so it would still be pretty quick. But then, a lot can happen in the world of finance in a day’s time.

John Berlau at Big Government:

For more than 150 years, state law has governed the director nomination and election process for corporations and their shareholders. In states such as Delaware and Nevada, where many companies are incorporated, any shareholder can nominate a candidate for the board, but that candidate has to pay for the campaign out of his or her own pocket. Under Dodd’s bill, the federal government would force the companies and other shareholders to subsidize the campaigns of dissident shareholders and include their candidates in a company’s own proxy materials.

But as I have written in BigGovernment.com, subsidizing certain shareholders to let them run director candidates on the cheap opens the floodgates to special interest agendas that hurt the bottom line for ordinary shareholders. “Groups from unions to animal rights groups could run their own candidate for corporate directors and promote their special interest agendas at the company’s (and ultimately other shareholders) expense,” I wrote.

And leaders of 17 groups representing a broad spectrum of the center-right coalition — from my Competitive Enterprise Institute and Americans for Tax Reform to the Christian Coalition of America – recently sent a letter to members of the Senate Banking Committee pointing out that with proxy access: “Everything on the anti-market political wish list from cap-and-trade carbon restrictions, to animal rights activism, to interfering with defense contractors to advance foreign policy objectives would be possible. These initiatives, whatever their merits, belong in the political arena, not in corporate boardrooms where the focus should be on maximizing shareholder value.”

The bill also takes the unwise step of coercing companies into cookie-cutter corporate governance procedures such as separating the chairman and CEO. Some corporate governance activists have flagged this as a bad practice, but there is no empirical evidence that it harms shareholder returns. In fact, shareholders of Google and Berkshire Hathaway seem quite pleased with their CEOs – Eric Schimidt and Warren Buffett, respectively (both of whom supported Obama) –  also serving as chairmen, and would be quite angry if the government were to penalize this practice that had been so effective for these companies’ growth and profitability.

In the meantime, as I have noted in the New York Daily News, Citigroup’s having a separate chairman and CEO throughout most of the last decade did nothing to prevent that firm’s financial implosion that resulted in taxpayer bailouts. Different governance structures may work better for different firms, as an entrepreneurial startup may opt for a close-knit board and a more established company may want to separate these positions. Regardless, shareholders are perfectly capable of deciding on things like whether the chairman and CEO should be separate, and that these matters shouldn’t be dictated to them by the government

Finally, the one-size fits all corporate governance procedures would greatly reduce the competitiveness of Delaware and Nevada in attracting firms from all over the world incorporating their because of the variety of corporate structures the states allow that work both for entrepreneurs and investors.

Paul Krugman:

OK, I’m still evaluating the Dodd proposal for financial reform. But here’s my puzzle: the bill, as I understand it, calls for an independent Consumer Protection Agency, with a director directly appointed by the president, but one that is “housed” at the Fed.

What, exactly, does that mean? Physical location is presumably not the issue; I don’t know if all Fed staffers are currently in the main complex, but there have certainly been times when some departments spilled over into other locations. (Back in 1977, when I was an intern at the International Finance Section, we were located in the Watergate!)

Does it mean that the staff will all be long-term Fed employees? Then that would, to at least some degree, compromise the agency’s independence. Or is it purely a cosmetic issue? If so, who exactly is being diverted?

I’m not prejudging this — there’s a lot to look at. But I’m puzzled.

Joseph Lawler at The American Spectator:

That is, it’s written up to include loopholes to allow hedge funds to continue whatever risky or abusive practices they’ve engaged in previously. The key loophole is that there is no real common definition of a hedge fund. The only concrete distinguishing feature of a hedge fund is that it has under 100 owners. Usually a hedge fund entails some combination of a long/short strategy and leverage, but not necessarily. There is no bright line dividing what are referred to as hedge funds, private equity funds, and venture capital funds — they are legally similar firms distinguished mostly by different business models . Yet Dodd would attempt to “close loopholes” on hedge funds without affecting private equity or venture capital firms. How? From the text (pages 377-378, pdf):

Not later than 6 months after the date of enactment of this subsection, the Commission shall issue final rules to define the term ‘venture capital fund’ for purposes of this subsection….   Not later than 6 months after the date of enactment of this subsection, the Commission shall issue final rules… to define the term ‘private equity fund’ for purposes of this subsection.’

In other words, the Democrats would pass the bill, satisfying the left-wing’s resentment of Wall Street fat cats, and then give hedge fund managers six months either to lobby for very wide definitions of venture capital and private equity or to make whatever small organizational changes are necessary to get away with calling their firms venture capital or private equity instead of hedge funds.

Tim Fernholz at The American Prospect:

So what happened to the much-lauded Volcker rule, which would limit the size and scope of bank activities, in Sen. Chris Dodd’s latest financial reform bill? It’s a bit complicated, but essentially the rule is gone.Regular readers will recall that the key distinction between the Volcker rule, as proposed by the Obama administration, and similar provisions in the House bill, was that the Volcker rule was mandatory: It required regulators to ban proprietary trading, hedge and private-equity funds from commercial banks, and would offer specific limits on the size of a bank’s liabilities. The House bill, on the other hand, would simply give regulators the authority to limit a firm’s size and scope however they pleased if they determined it was necessary. While the House authorities were more powerful, they are also less likely to be implemented; the Volcker rule provides definitive, hard and fast lines.

Well, no more. The new method is that the Systemic Risk Council will have six months to study how and why to implement the size and scope rules, and then recommend how to write those rules, or even if they should be written at all. Basically, it’s regulatory discretion with a time limit: The council has six months to do the research and nine months after that to write rules that could be either totally cosmetic or, less likely in my view, actually effective.

Chris Good at The Atlantic:

In a CNN/Opinion Research Poll conducted in January (results at PollingReport.com), Wall Street reforms ranked behind the economy, unemployment, terrorism, the deficit, health care, education, Afghanistan, Iraq, and taxes–in that order–as an issue that President Obama and Congress must deal with. 64% said it was important; 36% said it wasn’t.

Polling has indicated that many Americans think the federal government helped Wall Street too much in its response to the financial crisis, and Obama has said, many times, that no one wanted to undertake the financial bailout initiated under the Bush administration and then stewarded by the Obama administration–that helping the banks was a distasteful necessity.

It would stand to reason that financial reform is the counterweight, politically, to the unpopular bailout; that if the public is angry that banks got saved, an ensuing regulatory crackdown is the political move that would placate that sense of unjustness–the price the banks must pay to the taxpayer, so to speak.

But if it isn’t high in voters’ minds right now, will it have much political effect?

UPDATE: Kevin Drum collecting reactions. His collection:

Ryan Avent at Free Exchange at The Economist

Mike Konczal at Rortybomb

UPDATE #2: Paul Krugman

UPDATE #3: Krugman in NYT

More Konczal at Ezra Klein’s place

Jonathan Chait at TNR

Someone Is In Custody, But Who They Are, We Don’t Know

MSNBC:

The U.S.-born spokesman for al-Qaida has been captured in Pakistan, government sources said Sunday. But the reports were greeted with skepticism by U.S. intelligence officials, who said Pakistanis might have confused another detainee with Adam Yahiye Gadahn.

Two Pakistani officers told The Associated Press that they had taken part in an operation that netted Gadahn. A senior Pakistani government official also confirmed the arrest. They spoke on condition of anonymity because they were not authorized to release the information.

A Pakistani intelligence source confirmed the report to NBC News, adding that Gadahn was detained in Sohrab Goth, a suburb of Karachi, and was later moved to the capital Islamabad.

CBS:

An “important Taliban militant” was arrested today in Pakistan. But that is where the confusion started.

Earlier it was reported by Pakistani media that intelligence agents had arrested Adam Gadahn, the American-born spokesman for al Qaeda, in an operation in the southern city of Karachi.

It was further reported by the Associated Press and Reuters that Gadahn had been arrested, sourcing security officials.

CBS News was told by sources in the Pakistan government that it was Gadahn, even after U.S. officials refused to confirm it was the California native for whom a $1 million reward has been posted.

Now, CBS News’ Farhan Bokhari in Islamabad writes that earlier reports the detained individual was Gadahn proved false. According to a Pakistan security official who spoke with CBS News on condition of anonymity, the arrested individual is in fact “a Taliban militant leader who is known as Abu Yahya.”

The official said evidence compiled from an interrogation of the suspect and information exchanged with U.S. officials verified the man’s identify.

Ed Morrissey:

Maybe we should have asked Radar Online?

However, don’t lose hope. Apparently, this Abu Yahya is still a big enough figure to be an important capture, if it’s not really Gadahn.  CBS also warns that it still could be Gadahn, but that we won’t know until Pakistan produces the detainee publicly.  When might that be?  I’m going to keep a close eye on Radar to find out.

Joe Gandelman at Moderate Voice:

In doing this site for the past five years we’ve generally tried to observe two fail safe rules:

1. We try not to tout an exclusive breaking news story that originates in a weblog until we see confirmation in the mainstream media, unless it is a site known for solid original reporting.
2. We add a cautionary note in claims of major deaths and arrests of Al Qaeda officials until we see that there has been confirmation from U.S. officials.

Charles Johnson at Little Green Footballs

Spencer Ackerman:

Oh Azzam the American, you fucking fool. I have such a long history with you, including tracking down your old imam — you know, the one you called a “Jew” because he, like, disapproves of murdering innocents? — and your old metalhead friends and talking about how you were into Cannibal Corpse. And now, you motherfucker, you are caught. (Facts of the arrest are still unclear, so I’m not gonna say anything about a ‘Pakistani shift’ for a variety of reasons — getting an al-Qaeda capture is something different than providing Afghan Taliban but whatever — still, no matter what: thank you Pakistan.)

[…]

Update, 7:56 p.m.: Sigh, the New York Times says initial reports were wrong and Gadahn is not actually the guy apprehended. False metal continues.

Rick Moran:

In the AP story linked above, the reporter quoted a “senior government official” that it was indeed, Gadahn. In addition to AP, Reuters, CBS, the New York Times, and the Washington Post independently confirmed that it was Gadahn.

I am going to eat a huge steak dinner, purposely not watch the Oscars (we will watch LOTR Return of the King instead) and then go to bed.

I hope they have this sorted out by morning.