Weekend At Bernie’s Jail Cell

Diana Henriques at NYT:

Bernard L. Madoff said he never thought the collapse of his Ponzi scheme would cause the sort of destruction that has befallen his family.

In his first interview for publication since his arrest in December 2008, Mr. Madoff — looking noticeably thinner and rumpled in khaki prison garb — maintained that family members knew nothing about his crimes.

But during a private two-hour interview in a visitor room here on Tuesday, and in earlier e-mail exchanges, he asserted that unidentified banks and hedge funds were somehow “complicit” in his elaborate fraud, an about-face from earlier claims that he was the only person involved.

Mr. Madoff, who is serving a 150-year sentence, seemed frail and a bit agitated compared with the stoic calm he maintained before his incarceration in 2009, perhaps burdened by sadness over the suicide of his son Mark in December.

Besides that loss, his family also has faced stacks of lawsuits, the potential forfeiture of most of their assets, and relentless public suspicion and enmity that cut Mr. Madoff and his wife Ruth off from their children.

In many ways, however, Mr. Madoff seemed unchanged. He spoke with great intensity and fluency about his dealings with various banks and hedge funds, pointing to their “willful blindness” and their failure to examine discrepancies between his regulatory filings and other information available to them.

“They had to know,” Mr. Madoff said. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.’ ”

Matt Schneider at Mediaite:

Bernie Madoff, the con artist who pleaded guilty two years ago to a series of financial crimes, gave his first jailhouse interview to The New York Times and was angry with a lot of his critics. Most notably, he attacked the news media for their “disgraceful” coverage of his son’s suicide.Appearing “noticeably slimmer,” “frail” and “agitated,” Madoff disclosed that banks and hedge funds were complicit all along and “had to know” about his schemes. He again claimed that his family was unaware of his crimes until the very end. In reporting on the interview, ABC’s Brian Ross quotes a prosecutor who concludes “Madoff is incapable of telling the truth still to this day.”

Uri Friedman at The Atlantic:

Madoff’s statements are particularly relevant at a time when Irving Picard, the trustee for Madoff’s victims, has accused JPMorgan Chase of harboring serious concerns about Madoff’s investment business but not notifying authorities or halting business with him. Yet, as Henriques notes, federal prosecutors have yet to accuse the major banks and hedge funds that dealt with Madoff “of knowingly investing in his Ponzi scheme.”

Madoff Has Helped Trustee

Madoff claimed he’s met with his victims’ trustee, Irving Picard, and provided him with information about the banks and hedge funds he did business with, though he says he hasn’t shared this information with federal prosecutors working on criminal cases.

Family Crisis Unforeseen

Madoff said he didn’t foresee the extent of the suffering his fraud would inflict on his family. His relations are confronting a barrage of lawsuits and his son, Mark, committed suicide in December. Madoff called some of the press coverage of Mark’s death “disgraceful” and stated that he didn’t attend Mark’s funeral because of prison regulations and because he didn’t want to turn the funeral into a “media circus.”

Mets Owner ‘Knew Nothing’

Picard alleges that New York Mets Owner Fred Wilpon and his brother-in-law, Saul Katz, knew or should have known from their financial dealings with Madoff that he was defrauding investors, but Madoff vehemently denies this: “They knew nothing. They knew nothing,” he asserted.

Andrew Leonard at Salon:

Should we trust him? After all, if there is one thing we know about Bernie Madoff, it is that he is one hell of a liar. But as evidence emerges that bank executives were exchanging e-mails wondering about Madoff’s amazing investment record, the possibility that the banks were purposefully looking the other way is not inconceivable.

The question is: What to do about it?

How about: Make sure government regulatory agencies entrusted with oversight over financial markets are adequately funded and staffed for the job?

Wouldn’t you know it — Obama wants to boost the budget for the Securities and Exchange Commission and the Commodity Futures Trading Commission, the two key government agencies watching over Wall Street

Jacob Heilbrunn at The National Interest:

As Frank Rich recently observed, Madoff was a “second-tier player.” But he could lead to bigger fry. The Wilpons, who own the New York Mets, are already in big financial trouble for their extensive dealings with Madoff–Donald Trump is angling to buy a majority stake in the team. Then there are the hedge funds and banks that were linked to, or in cahoots with, Madoff.

At this point Madoff has little to lose. President Obama shows little appetite for curbing the excesses that led to the last financial crash. Madoff cannot achieve redemption. His historical role as the biggest Ponizi schemer (so far) in history is set. He became the type-cast bad guy. For awhile Madoff took all the credit, if that’s the right phrase, for the malversation he oversaw. That’s changed. Now he seems to be interested in ensuring that his collaborators, witting or unwitting, also take the fall (though he is notably exempting his own family members from any knowledge of his transgressions).

Madoff’s own crediblity is shot. But if the information that he’s apparently providing to Picard pans out, then he may get his own measure of revenge for the humiliations he has suffered, and is suffering.  Balzac said that behind every great fortune is a crime. Madoff now seems intent on demonstrating the truth of that axiom. One thing seems clear: Madoff is not going to go down quietly. The aftershocks from his exposure may well continue to roil the financial world.

Joe Weisenthal at Business Insider

The End Of Mubarak And The End Of Fannie and Freddie?

Uri Friedman at The Atlantic:

On Friday, the Obama administration laid the foundation for what is sure to be a fierce debate about the role government should play in supporting homeownership in the United States in the wake of the housing bubble and financial crisis.

The Treasury Department and the Department of Housing and Urban Development issued a report to Congress outlining how government can gradually scale back its involvement in the mortgage market and transfer housing finance to the private sector. The report proposes abolishing the government-backed mortgage providers Fannie Mae and Freddie Mac within ten years and suggests three possible systems to take their place.

Daniel Indiviglio at The Atlantic:

With that said, however, the government’s presence in the housing market will not disappear entirely. In fact, it would certainly remain intact for the affordable housing initiatives through the Federal Housing Authority and other targeted programs, as it had in the past. The big change would be how mortgage funding would be provided for the vast majority of mortgages in the U.S., which have heavily relied on Fannie and Freddie for decades. The Treasury wants the private market to step in and take on most of that funding responsibility and relieve taxpayers of some or almost all of the mortgage market’s risk.

Before getting into the three alternative policy possibilities that it offers, the plan explains how the mortgage market would be weaned off of Fannie and Freddie over a period of time. One change would be to gradually increase the guarantee fees that the GSEs charge, so that private guarantors would be able to better compete. Another change would be to require Fannie and Freddie to obtain more private capital to cover subsequent credit losses. The Treasury also intends to reduce the size of mortgages that qualify for Fannie and Freddie guarantees. Finally, the administration intends to wind down Fannie’s and Freddie’s mortgage portfolios, by at least 10% per year.

The Treasury also provides some guidance on mortgage underwriting and measures to crack down on predatory lending. Perhaps the most surprising assertion was that loans that obtain government backing going forward — excluding those in designated programs specifically targeting lower-income borrowers — should eventually be required to “have at least a ten percent down payment.” The Treasury also stressed the importance of ensuring borrowers have the ability to pay the mortgages they obtain.

Mark Calabria at Cato:

While the report does say a lot of the right things — such as protecting the taxpayer — it is awfully short on any real details.  And in many areas, the report makes clear that the Obama administration intends to keep the taxpayer on the hook for future losses arising from Fannie and Freddie.  For instance, after assuring us that the GSEs will have sufficient capital to meet their obligations, including debt, the report tells us that such capital will not come from investors, but from the taxpayer.  One has to wonder whether this report was written for the benefit of the Chinese Central Bank (one of the largest GSE debtholders) or for the benefit of the U.S. taxpayer.

Equally vague is the discussion of “winding down” Fannie and Freddie.  While that sounds great, how is this to be accomplished? And how long will it take?  Again it seems that this “wind-down” will be financed by the taxpayer.  It is suggested that the GSE guarantee fees will increase.  Again, by how much and when?

Paragraph 2 of Section 1074 of the Dodd-Frank act, which required this study, also requires an “analysis” of various options and impacts.  In all due respect to HUD and Treasury and their efforts, there is nothing in this report that remotely resembles an “analysis” — just vague generalities.

I appreciate the administration’s stated desire to move us closer to a private market solution, but we’ve heard these empty promises before.  Remember that financial reform was going to end “too big to fail” and bailouts?  Health care reform was going to “bend the cost curve”?  It is past the time of fluff.   We need actual details and an actual plan.

Ezra Klein:

Beyond the basically insane structure of Fannie Mae and Freddie Mac — private institutions with lobbyists, profit motives, and the protection of an unarticulated but widely acknowledged government guarantee to cover their big losses — the administration’s diagnosis of what went wrong in the housing market speaks much more to issues dealt with in the financial-regulation law than issues included in their three options for reform of the government’s system of housing finance and insurance.

The story they tell begins in the consumer market, where inadequate protections and incompetent regulatory oversight allowed the brisk trade in bad mortgages to people who couldn’t afford them to take off. It then moves to the opaque and underregulated finance system, where the banks were packaging products they didn’t understand into securitized bonds and selling them off so quickly that they stopped worrying about how risky they were, and where regulators didn’t see what was going on and thus didn’t demand the banks hold enough capital to protect themselves from the inevitable reckoning.

Fannie Mae and Freddie Mac were part of this story, of course. But they were late to the party. They only got into the riskier stuff in 2006, while the rest of the financial industry had been playing in the mud since 2001. Reforming them can help mitigate a housing crisis in the future. But given this chain of events, it can’t prevent it.

The root causes will be fixed — or not — in Dodd-Frank. It’s up to the Consumer Financial Protection Bureau to strengthen the weak consumer protections that allowed these mortgages to be sold in the first place. Regulators will have new powers to force financial players — particularly the megafirms whose failure threatened the whole system — to hold more capital as a buffer against bad times. Banks won’t be able sell off all their risk because the law says they have hold five percent of the risk of any product they originate — though as Bethany McLean notes, that’s not true when the product consists of “qualifying residential mortgages,” and it’s up to the regulators implementing Dodd-Frank to define what a qualifying residential mortgage is.

That’s not to say reforming the way the government structures its presence in the housing market doesn’t matter. It does. But the government isn’t looking to dramatically change the role they play in the housing market. They’re just looking to get away from poorly designed institutions like Fannie and Freddie. The real action — the work that could prevent another crisis — is still in Dodd-Frank, where many of the questions central to how the housing markets works going forward haven’t been answered, and where many of the rules that might stop it from blowing up again have yet to be written.

Arnold Kling:

Incidentally, the more I think about it, the more outraged I am by the sketchiness of their proposal. It takes up only a few paragraphs, and those are quite vague. It is the sort of thing that, if somebody tossed it out at a meeting or in a blog post, you would say, “Might be interesting, but I am not quite sure how you would do it. Do you have a background paper on it somewhere?” In the form that it is presented in the report, I think that it is irresponsible to even call it a proposal. Shame on Treasury for putting something so half-baked at the center of their report.

This puts me in the strange position of defending Freddie and Fannie. My first choice would be for government not to hand out any goodies. But if you are going to have the government hand out goodies, the ability of regulators to control the costs and mitigate the risks will be much greater if we revert to Freddie and Fannie than if we try something new. Under any arrangement, the hard part will be what I call “staying off the booze,” meaning keeping the government from guaranteeing riskier mortgages (second mortgages, cash-out refis, loans on investment properties, loans with low down payments, etc.) when house prices start rising again.

Monica Potts at Tapped:

It’s far to ask whether we’ve been over-promoting homeownership, and, as Alyssa Katzdoes in the latest issue of the Prospect, what we maybe should do instead. Alyssa will have more detail on what happens after Fannie and Freddie on TAP Monday, but for the meantime, I’d like to point out what a symbolic victory this is for conservatives. Whether Fannie and Freddie should have been preserved probably wasn’t considered lightly, but conservatives have been vilifying the agencies as the cause of the crisis since the beginning. They weren’t, they were simply the last to ride a wave that started on Wall Street. That doesn’t mean the weird private/public limbo in which they did business wasn’t also a bad thing, but it does mean that conservatives will point to their demise as proof they were right.

Joseph Lawler at The American Spectator

Stop! Panel Time!

Uri Friedman at The Atlantic:

Explaining something as tangled, technical, and multi-dimensional as the 2008 financial crisis is fraught with difficulty. Some have tried comparing toxic assets to supermodels, while others have given musical theater a shot.

This morning we have another answer–in the form of a 576-page book–from the congressionally appointed panel charged with investigating the roots of the meltdown. Were it not for corporate incompetence, inadequate government regulation, and excessive risk-taking by Wall Street banks in the housing market, the commission concludes, the country could have avoided financial calamity.

Keith Hennessey:

At long last, here is the dissent filed by Vice Chairman Bill Thomas, Dr. Doug Holtz-Eakin, and me to the Financial Crisis Inquiry Commission Report.  (I know, you’ve been holding your breath waiting for this.)  This dissent will be transmitted to the President and the Congress later today (Thursday, January 27th) along with the majority’s document and Peter Wallison’s separate dissent.

Our dissent is 27 pages long as a PDF.  The majority’s document is 20 times longer.  Their endnotes are 98 pages.  I am not making this up.  The full report will be available on FCIC.gov tomorrow around 10 AM EST.  Peter Wallison’s dissent is available now.

Since I know that 27 pages is too long for the overwhelming majority of readers on the web, I’ll try to suck you in by telling you that our core argument is in the first seven pages.  The last twenty flesh out in more detail each of our “ten essential causes of the crisis.”  You could stop after seven pages (I hope you won’t) and have our basic argument.

If you have followed any of the press coverage of the FCIC over the past six weeks, you may think you know what we’re going to say.  This dissent, however, makes a fundamentally different argument than the four-man document I signed onto in December.  For me this document supersedes that December document, which I looked on as a temporary placeholder.

Mark Thoma on the dissent:

Bill Thomas, Keith Hennessey, and Douglas Holtz-Eakin have a dissenting statement in response to the final report of the Financial Crisis Inquiry Commission:

What Caused the Financial Crisis, by Bill Thomas, Keith Hennessey, and Douglas Holtz-Eakin, Commentary, WSJ: Today, six members of the Financial Crisis Inquiry Commission … are releasing their final report. Although the three of us served on the commission, we were unable to support the majority’s conclusions and have issued a dissenting statement. …

We recognize that … other … narratives have popular appeal:… Had the government not supported housing subsidies (the first narrative) or had policy makers implemented more restrictive financial regulations (the second) there would have been no calamity.

Both of these views are incomplete and misleading. … We believe the crisis was the product of 10 factors. Only when taken together can they offer a sufficient explanation of what happened:

Starting in the late 1990s, there was a broad credit bubble in the U.S. and Europe and a sustained housing bubble in the U.S. (factors 1 and 2). Excess liquidity, combined with rising house prices and an ineffectively regulated primary mortgage market, led to an increase in nontraditional mortgages (factor 3) that were in some cases deceptive, in many cases confusing, and often beyond borrowers’ ability to pay.

However, the credit bubble, housing bubble, and the explosion of nontraditional mortgage products are not by themselves responsible for the crisis. Our country has experienced larger bubbles—the dot-com bubble of the 1990s, for example—that were not nearly as devastating… Losses from the housing downturn were concentrated in highly leveraged financial institutions. Which raises the essential question: Why were these firms so exposed? Failures in credit-rating and securitization transformed bad mortgages into toxic financial assets (factor 4). Securitizers lowered the credit quality of the mortgages they securitized, credit-rating agencies erroneously rated these securities as safe investments, and buyers failed to look behind the ratings and do their own due diligence. Managers of many large and midsize financial institutions amassed enormous concentrations of highly correlated housing risk (factor 5), and they amplified this risk by holding too little capital relative to the risks and funded these exposures with short-term debt (factor 6). They assumed such funds would always be available. Both turned out to be bad bets.

These risks within highly leveraged, short-funded financial firms with concentrated exposure to a collapsing asset class led to a cascade of firm failures. … We call this the risk of contagion (factor 7). In other cases, the problem was a common shock (factor 8). A number of firms had made similar bad bets on housing…

A rapid succession of 10 firm failures, mergers and restructurings in September 2008 caused a financial shock and panic (factor 9). Confidence and trust in the financial system evaporated, as the health of almost every large and midsize financial institution in the U.S. and Europe was questioned. The financial shock and panic caused a severe contraction in the real economy (factor 10). …

[I]t is dangerous to conclude that the crisis would have been avoided if only we had regulated everything a lot more, had fewer housing subsidies, and had more responsible bankers. Simple narratives like these ignore the global nature of this crisis, and promote a simplistic explanation of a complex problem. Though tempting politically, they will ultimately lead to mistaken policies.

I don’t think the conclusion that better regulation would not have stopped the crisis follows from the factors they list.

By their own admission, the reason that factors 1 and 2 led to factor 3 was “an ineffectively regulated primary mortgage market.” So right away better regulation could have stopped the chain of events the led to the crisis.

Factor 3 was “nontraditional mortgages that were in some cases deceptive, in many cases confusing, and often beyond borrowers’ ability to pay.” Sure seems like regulation might help to prevent deception and confusion (through, among other things, a financial protection agency). One thing is clear in any case. The market didn’t prevent these things on its own.

On to factor 4: Securitizers lowering credit standards, a failure of credit agencies, and buyers failing to do their own due diligence. Once again, regulation can help where the private market failed. The ratings agencies exist because they help to solve an asymmetric information problem. The typical purchaser of financial assets does not have the resources needed to assess the risk of complex financial assets (which is why saying that they should have performed their own due diligence misses the mark). Instead, they rely upon ratings agencies to do the assessment for them. Unfortunately, the ratings agencies didn’t do their jobs — perhaps due to bad incentives arising from to how they were paid — and this is where regulation has a role to play.

Factor 5 is the accumulation of correlated risk — again something a regulator can stop once the accumulation or risk is evident. This seems like an easy one — when regulators see this type of risk building up, they should do something about it. The question, however, is how to give regulators better tools for assessing these risks. Backing off on regulation, as implied above, won’t help with this.

M.V. at Newsbook at The Economist:

IT IS not the most promising script for a whodunit. Ten experts are brought together to solve a mystery, but they can’t get along and ultimately reach three different conclusions. That, sadly, is the story of America’s Financial Crisis Inquiry Commission, whose book-length report was released on January 27th.

When the six Democratic and four Republican appointees began their work, there was hope that they could clarify the causes of the financial crisis in the same way as the authors of the 9/11 commission’s report had shed light on the terrorist attacks of September 2001.

It was, though, evident well before they had finished 19 days of public hearings and over 700 interviews that ideological spats would get in the way. By November Republican members were moaning that the Democrats were more interested in crafting a document  that would bolster their party’s attacks on the new Republican majority in the House of Representatives than in revealing the truth. When a majority of the panel voted to push the report’s release beyond the December 15th deadline, the four Republicans produced their own preliminary report. Then they began to fracture too.

The result is an unfortunate loss of credibility and, confusingly, three competing narratives. The main report, endorsed by the Democrats only, points to a broad swathe of failures but pins much of the blame on the financial industry, be it greed and sloppy risk management at banks, the predations of mortgage brokers, the spinelessness of ratings agencies or the explosive growth of securitisation and credit-default swaps.

The report takes swipes at politicians, too, for overseeing a long period of deregulation that allowed Wall Street to run riot; and at regulators for not using the powers they had to curb risk-taking and for blithely assuming that markets could police themselves. It points to the Federal Reserve’s “pivotal failure” to rein in reckless mortgage lending, and to the Securities and Exchange Commission’s lax supervision of investment banks. It also fingers an over-reliance on short-term debt. These, however, are hardly novel conclusions.

Rick Moran:

You may recall the Democrats telling us that the FinReg bill would make it impossible for banks to be “too big to fail” ever again. Nobody believed it then and this inquiry apparently proves it a lie.

Despite a slowly improving economy, it could all fall apart again with another shock to the system. If that happens, the taxpayers will be left holding the bag.

Richard Eskow at Huffington Post:

his report has had a long and sometimes challenging history. But to paraphrase an old gospel song, it “may not be here when you want it, but it’s right on time.”Useful Utopians

Over three decades, our government was captured by a libertarian-inspired economic philosophy that had previously been considered radical and impractical — correctly so, as it turns out. That philosophy’s most prominent spokesman, former Ayn Rand acolyte Alan Greenspan, was celebrated as a “maestro,” until the house of cards he came to symbolize finally collapsed.

The prevailing economic myth, of an impossibly wise and genuinely free market, was as useful as it was Utopian. It provided ideological cover for the deregulation that both parties embraced. Government leaders were compromised by the lure of huge campaign contributions, and by a revolving door that ensured future wealth for cooperative politicians and regulators from both parties. The result enriched Wall Street and the Washington elite and left the rest of the country wounded.

The deregulation of the 90s allowed banks to take risks they couldn’t possibly survive. But they had been rescued in previous crises, and the cozy relationship between government and bankers assured them they’d be bailed out again. Freed from the consequences of their own actions, they gambled… and we lost.

Money for Nothing

The most surprising thing about the FCIC hearings for me personally was the lack of competence shown by so many top bankers. The Wall Street executives I worked for were smart, demanding, and driven, but bankers like Citi’s Robert Rubin and Chuck Prince… not so much. Their FCIC testimony displayed a shaky grasp of their business and a lack of concern about the risks facing their own organizations. Many of them seemed to lack even the most basic level of intellectual curiosity. A big bank is a fascinating, complex entity, but one executive after another seemed to shrug off the details of their own banks’ operations with bored indifference.

Sure, their testimony may have been especially vague because of their understandable desire to avoid self-incrimination. But even allowing for that, the low level of managerial skill they displayed was disconcerting. Today’s generation of financial executives may be enjoying the greatest disparity between income and executive performance since indolent princes inherited vast kingdoms through the divine right of kings.

Yet despite this embarrassing record, these executives want to be pampered and flattered by Washington again — and they’re getting their wish. The president and his party took some steps toward genuine financial reform with last year’s bill, but a great deal of work is still needed and their recent appointments aren’t encouraging. Meanwhile, the Washington consensus is pressuring the administration to assuage the “hurt feelings” of CEOs with some success, despite record profits that should provide more than adequate compensation for any injuries to their pride.

Unfinished Business

The president only mentioned financial reform in passing, in his comments about regulations:

When we find rules that put an unnecessary burden on businesses, we will fix them. But I will not hesitate to create or enforce commonsense safeguards to protect the American people. That’s … why last year we put in place consumer protections against hidden fees and penalties by credit card companies, and new rules to prevent another financial crisis…

Last year’s bill was a start, but more reform is urgently needed — to break up “too big to fail” banks, end runaway speculation, protect consumers, and end the incestuous relationship between banks and government. Prosecutions are needed, too. They’re the only way to ensure that bankers can’t violate laws with impunity, knowing that even if they’re caught their shareholders will pay the fines.

Barry Ritholtz at The Big Picture:

It appears we got hit with another 10-12 inches of snow overnight. Schools are cancelled, and my trains are not running into the city yet.

I need to go blow the snow off the driveway, then figure out what I am gong to do today. I was hoping to read the FCIC report, but it does not look like I will get to the store today.

And speaking of Snow Jobs, the dissenters in the FCIC continue their embarrassing foolishness.

The NYT devotes two paragraphs to Peter Wallison — they mention he was “chief lawyer for the Treasury Department and then the White House during the Reagan administration” and that he is “now at the conservative American Enterprise Institute.”

But nowhere do they mention that he was co-director of the AEI’s Financial Deregulation Project.  This is a serious omission by a major publication.

The New York Times should be much better than this . .

2.5 Is The Number, Baby!

Jon Ward at The Daily Caller:

A number of the House GOP’s leading conservative members on Thursday will announce legislation that would cut $2.5 trillion over 10 years, which will be by far the most ambitious and far-reaching proposal by the new majority to cut federal government spending.

Rep. Jim Jordan of Ohio, the chairman of the Republican Study Committee, will unveil the bill in a speech at the Heritage Foundation on Thursday morning.

Jordan’s bill, which will have a companion bill introduced in the Senate by Sen. Jim DeMint, South Carolina Republican, would impose deep and broad cuts across the federal government. It includes both budget-wide cuts on non-defense discretionary spending back to 2006 levels and proposes the elimination or drastic reduction of more than 50 government programs.

Uri Friedman at The Atlantic with a round-up

Tina Korbe at Heritage:

Jordan, who serves as chairman of the Republican Study Committee, said the SRA would immediately return spending to 2008 levels and eventually cut non-defense discretionary spending to 2006 levels, as well as implement a hard freeze through 2021.

“I have never seen the American people more ready for the tough-love measures needed to put our country back on a sustainable path,” Jordan said. “The question today is: Will the political class rise to the standard the American people have set the last year and a half? … I think the answer is yes.”

Jordan authored a Washington Examiner op-ed with Sen. Jim DeMint (R-SC) and Rep. Scott Garrett (R-NJ) detailing the proposal, which also eliminates unused stimulus money and severs the government’s ties to Fannie Mae and Freddie Mac.

It’s one of several priorities for the RSC this year. Jordan reminded the Heritage audience that the RSC exists to ensure that Republicans act like Republicans.

Following shortly after the spending proposal, the RSC plans to unveil a Welfare Reform Act — something Jordan said he feels especially strongly about, as he ran for office in large part to strengthen the institution he considers the country’s bedrock: the family.

Jim DeMint, Jim Jordan, and Scott Garrett at The Washington Examiner:

Known as the Spending Reduction Act, this bill makes major strides toward resolving the debt crisis by cutting $2.5 trillion of spending between now and 2021. Here’s how it works:

In the short term, the Spending Reduction Act makes $125 billion of immediate rescissions, which target money already approved by Congress, by cutting current spending back to 2008 levels and repealing the remaining funds from Obama’s failed “stimulus” package.

The largest step toward spending reduction begins with the start of the next fiscal year on Oct. 1. On that day, the bill further cuts non-defense discretionary spending to 2006 levels and implements a hard freeze through 2021.

This alone will save taxpayers $2.3 trillion. A portion of these savings come from reducing the size and cost of the civilian federal work force. Attrition will trim the work force by 15 percent, while salaries will go without automatic pay increases for the next five years.

Our plan’s overall reduction specifically targets more than 100 separate budget items and spending reforms, ranging from the elimination of duplicative education programs (saving $1.3 billion annually) to a 50 percent reduction of the federal travel budget (saving $7.5 billion annually).

These specific savings, when combined with additional reforms like ending Fannie Mae and Freddie Mac’s taxpayer bailout, total approximately $376 billion over the next decade.

America’s debt problem wasn’t created overnight, and implementing a complete solution will take both time and perseverance. With a healthy dose of courage from elected leaders, however, we can get America moving on the right track again.

Over the long term, balancing the budget will require lasting private sector job creation and robust reforms to entitlement programs that still operate on outdated demographic assumptions.

After passing the Spending Reduction Act, Congress must work to tear down barriers to job creation and make our safety-net programs sustainable for the 21st century. Only when all Americans have ample opportunity to earn success and build prosperity on their own will we enjoy lasting fiscal and economic stability.

David Weigel:

The proposal does what Republicans have been talking about for two years — “repeal” of remaining stimulus funds (now $45 billion), privatizing Fannie and Freddie ($30 billion), repealing Medicaid’ FMAP increase ($16.1 billion), and what they estimate at $330 billion in discretionary spending cuts. Highlights of these projected annual savings:

– Cutting the federal workforce by 15 percent through attrition, and do this by allowing only one new federal worker for every two who quit.
– Killing the “fund for Obamacare administrative costs” for $900 million
– Ending Amtrak subsidies for $1.565 billion
– Ending intercity and high speed rail grants for $2.5 billion
– Repealing Davis-Bacon for $1 billion
– Cutting annual general assistance to the District of Columbia by $210 million, and cutting the subsidy for DC’s transit authority by $150 million.

Reforms that go after their own perks:
– Cutting the Federal Travel Budget in half, for $7.5 billion
– Cutting the Federal Vehicle Budget by 1/5, for $600 million
– Halve funding for congressional printing – $47 million annual savings
– Ending the death gratuity for members of Congress

And cuts that get revenge for Juan Williams: $445 million from the Corporation for Public Broadcasting, $167.5 million from the NEA, and $167.5 million from the NEH.

“Everything on this list pales in importance to saving the country,” said Rep. John Campbell (R-Ca.). “We are much closer to the Greece-Ireland-Spain precipice than any of us would like to believe.”

Philip Klein at The American Spectator:

I’m still awaiting a more detailed breakdown of the proposal, which the RSC tells me won’t be released until later today or tomorrow, but in a press release and an op-ed by Sen. Jim DeMint, and Reps. Jim Jordan and Scott Garrett, they claim the proposal would save $2.5 trillion over 10 years. It’s not clear how they get to that number, but I would imagine it’s largely a result of the spending freeze, which would lower discretionary spending relative to projections. The problem with relying on spending freezes is that you still have to figure out down the road where the actual savings are coming from, especially as time goes by and inflation makes it more challenging to meet those annual spending targets. And as we know, we won’t get the long-term debt under control without a serious effort to reform entitlements. That said, at first blush, I don’t see anything in the above list that would not be worthwhile to cut.

As the authors acknowledge, “On its own, passing the Spending Reduction Act will not get us over the finish line — but we will get a $2.5 trillion head start.”

Nick Gillespie at Reason:

If you want to get serious about cutting spending, you can’t be talking about going back to 2008 levels, a favorite GOP ploy since it focuses attention on the Obama years. Yet as readers of this site well know, the ramp up started with George W. Bush and the GOP Congress.

Doug Mataconis:

The fact that the plan doesn’t even touch to two biggest items on the budget is troublesome, and it’s worth noting that $2.5 trillion over ten years amounts to no more than 6.5% of the total amount of anticipated Federal spending over that period. Nothing to sneeze at, but hardly the solution to our problems. Nonethless, it’s a good start. Let’s see them put this in legislative action, get it passed, and dare the Senate not to be fiscally responsible.

Shall I Compare Thee To A Snake, A Gorilla, A Jungle, Bananas, Sex…

Uri Friedman at The Atlantic with a round-up.

Paul Kedrosky:

Over the weekend I tried to buy a new dishwasher. Being the fine net-friendly fellow that I am, I  began Google-ing for information. And Google-ing. and Google-ing. As I tweeted frustratedly at the tend of the failed exercise, “To a first approximation, the entire web is spam when it comes to appliance reviews”.

This is, of course, merely a personal example of the drive-by damage done by keyword-driven content — material created to be consumed like info-krill by Google’s algorithms. Find some popular keywords that lead to traffic and transactions, wrap some anodyne and regularly-changing content around the keywords so Google doesn’t kick you out of search results, and watch the dollars roll in as Google steers you life-support systems connected to wallets, i.e, idiot humans.

Google has become a snake that too readily consumes its own keyword tail. Identify some words that show up in profitable searches — from appliances, to mesothelioma suits, to kayak lessons — churn out content cheaply and regularly, and you’re done. On the web, no-one knows you’re a content-grinder.

Charles Arthur at The Guardian:

The reason why this has happened is obvious: Google is the 900-pound gorilla of search, with around 90% of the market (excluding China and Russia), and there’s an entire industry which has grown up specifically around tickling the gorilla to make it happy and enrich the ticklers. I’ve not come across anyone who describes their job as “Bing results optimisation”, nor who puts that at the top of their business CV. Well, I’m sure there are people inside Microsoft whose job title is exactly that. But not outside it.

There are two lines of thought on what happens next.

1) Google comes back from the Christmas break newly determined to fix those damned scraping sites that don’t originate content, because it says in its own webmaster guidelines that “Google will take action against domains that try to rank more highly by just showing scraped or other auto-generated pages that don’t add any value to users.”

The only value those scrapers add, in fact, is to Google, because they display tons of AdSense ads. (Well, you can make a fair bet that they aren’t Bing’s equivalent.)

Wait – the scrapers that dominate the first search page, the place from which 89% of clicks come (for only 11% of clicks come from the last 990 results out of the first thousand, or at least did in 2006, a number that has probably only shifted down since then) all benefit Google financially, even while it sees market share improvements? That’s not quite the disincentive one might have hoped for that would make Google act.

2) People start not using Google, because its search is damn well broken and becoming more broken for stuff you care about by the day. This could happen. The question is whether it would be visible enough – that is, whether enough people would do it – that it would show up on Google’s radar and be made a priority.

Over at Hacker News, the suggestions in the comments echo the idea that Google’s search really isn’t cutting the mustard any more (“vertical search” is the new watchword). Which means that really, Google does need to implement method (1) above. It might not notice if a few geeks abandon it – but once the idea really gets hold (as it will through the links they offer and comments they drop) that Google’s search is broken, then the rout begins.

I haven’t been able to get a comment from Google on this, though I’m sure it would run something along the lines of “Google makes every effort to make its search results the best and takes seriously the issues raised here.”

Update: Google responded to this article: “Google works hard to preserve the quality of our index and we’re continuing to make improvements to this. Sites that abuse our quality guidelines or prove to be spam are removed from our index as fast as possible”. (For clarification, I didn’t initially contact Google as it was a public holiday when I wrote the original article. Matt Cutts did not respond to Twitter contact as he is on holiday, Google says.)

It would be crazy not to. The question is whether it really can make a difference.

Vivek Wadhwa at Tech Crunch:

This semester, my students at the School of Information at UC-Berkeley researched the VC system from the perspective of company founders. We prepared a detailed survey; randomly selected 500 companies from a venture database; and set out to contact the founders. Thanks to Reid Hoffman, we were able to get premium access to LinkedIn—which was very helpful and provided a wealth of information.  But some of the founders didn’t have LinkedIn accounts, and others didn’t respond to our LinkedIn “inmails”. So I instructed my students to use Google searches to research each founder’s work history, by year, and to track him or her down in that way.

But it turns out that you can’t easily do such searches in Google any more. Google has become a jungle: a tropical paradise for spammers and marketers. Almost every search takes you to websites that want you to click on links that make them money, or to sponsored sites that make Google money. There’s no way to do a meaningful chronological search.

We ended up using instead a web-search tool called Blekko. It’s a new technology and is far from perfect; but it is innovative and fills the vacuum of competition with Google (and Bing).

Blekko was founded in 2007 by Rich Skrenta, Tom Annau, Mike Markson, and a bunch of former Google and Yahoo engineers. Previously, Skrenta had built Topix and what has become Netscape’s Open Directory Project. For Blekko, his team has created a new distributed computing platform to crawl the web and create search indices. Blekko is backed by notable angels, including Ron Conway, Marc Andreessen, Jeff Clavier, and Mike Maples. It has received a total of $24 million in venture funding, including $14M from U.S. Venture Partners and CMEA capital.

In addition to providing regular search capabilities like Google’s, Blekko allows you to define what it calls “slashtags” and filter the information you retrieve according to your own criteria. Slashtags are mostly human-curated sets of websites built around a specific topic, such as health, finance, sports, tech, and colleges.  So if you are looking for information about swine flu, you can add “/health” to your query and search only the top 70 or so relevant health sites rather than tens of thousands spam sites.  Blekko crowdsources the editorial judgment for what should and should not be in a slashtag, as Wikipedia does.  One Blekko user created a slashtag for 2100 college websites.  So anyone can do a targeted search for all the schools offering courses in molecular biology, for example. Most searches are like this—they can be restricted to a few thousand relevant sites. The results become much more relevant and trustworthy when you can filter out all the garbage.

The feature that I’ve found most useful is the ability to order search results.  If you are doing searches by date, as my students were, Blekko allows you to add the slashtag “/date” to the end of your query and retrieve information in a chronological fashion. Google does provide an option to search within a date range, but these are the dates when website was indexed rather than created; which means the results are practically useless. Blekko makes an effort to index the page by the date on which it was actually created (by analyzing other information embedded in its HTML).  So if I want to search for articles that mention my name, I can do a regular search; sort the results chronologically; limit them to tech blog sites or to any blog sites for a particular year; and perhaps find any references related to the subject of economics. Try doing any of this in Google or Bing

Anil Dash:

Noticing a pattern here?

Paul Kedrosky, Dishwashers, and How Google Eats Its Own Tail:

Google has become a snake that too readily consumes its own keyword tail. Identify some words that show up in profitable searches — from appliances, to mesothelioma suits, to kayak lessons — churn out content cheaply and regularly, and you’re done. On the web, no-one knows you’re a content-grinder.

The result, however, is awful. Pages and pages of Google results that are just, for practical purposes, advertisements in the loose guise of articles, original or re-purposed. It hearkens back to the dark days of 1999, before Google arrived, when search had become largely useless, with results completely overwhelmed by spam and info-clutter.

Alan Patrick, On the increasing uselessness of Google:

The lead up to the Christmas and New Year holidays required researching a number of consumer goods to buy, which of course meant using Google to search for them and ratings reviews thereof. But this year it really hit home just how badly Google’s systems have been spammed, as typically anything on Page 1 of the search results was some form of SEO spam – most typically a site that doesn’t actually sell you anything, just points to other sites (often doing the same thing) while slipping you some Ads (no doubt sold as “relevant”).

…

Google is like a monoculture, and thus parasites have a major impact once they have adapted to it – especially if Google has “lost the war”. If search was more heterogenous, spamsites would find it more costly to scam every site. That is a very interesting argument against the level of Google market dominance.

And finally, Jeff Atwood, Trouble in the House of Google:

Throughout my investigation I had nagging doubts that we were seeing serious cracks in the algorithmic search foundations of the house that Google built. But I was afraid to write an article about it for fear I’d be claimed an incompetent kook. I wasn’t comfortable sharing that opinion widely, because we might be doing something obviously wrong. Which we tend to do frequently and often. Gravity can’t be wrong. We’re just clumsy … right?

I can’t help noticing that we’re not the only site to have serious problems with Google search results in the last few months. In fact, the drum beat of deteriorating Google search quality has been practically deafening of late.

From there, Jeff links to several more examples, including the ones I mentioned above. As Alan alludes to in his post, the threat here is that Google has become a monoculture, a threat I’ve written about many times.

Felix Salmon:

It turns out that the banana we all know and love — the Cavendish — is actually the second type of banana grown in enormous quantities and exported across Europe and North America. The first was the Gros Michel, which was wiped out by Tropical Race One; you might be saddened to hear that “to those who knew the Gros Michel the flavor of the Cavendish was lamentably bland.” Indeed, Chiquita was so sure that Americans would never switch to the Cavendish that they stuck with the Gros Michel for far too long, and lost dominance of the industry to Dole.

In both cases, the fact that the same species of banana is grown and eaten everywhere constitutes a serious tail risk, even if today’s desperate attempts to genetically modify a disease-resistant Cavendish bear fruit:

A new Cavendish banana still didn’t seem like a panacea. The cultivar may dominate the world’s banana export market, but, it turns out, eighty-seven per cent of bananas are eaten locally. In Africa and Asia, villagers grow such hetergeneous mixes in their back yards that no one disease can imperil them. Tropical Race Four, scientists now theorize, has existed in the soil for thousands of years. Banana companies needed only to enter Asia, as they did twenty years ago, and plant uniform fields of Cavendish in order to unleash the blight. A disease-resistant Cavendish would still mean a commercial monoculture, and who’s to say that one day Tropical Race Five won’t show up?

This is exactly what I was talking about a year ago, in my post about Dan Barber, world hunger, and locavorism, when I talked about how monocultures are naturally prone to disastrous outbreaks of disease, and how a much more heterogeneous system of eating a variety of locally-grown foods is much more robust and equally capable of feeding the planet.

[…]

The problems with monoculture aren’t purely agricultural, either. Anil Dash has a post up today about the decline of Google search quality, and diagnosing the problem as being that “Google has become a monoculture”; Alan Patrick quotes a commenter at Hacker News as saying that if search were more heterogeneous, spamsites would find it more costly to scam every site.

I’m not completely convinced that seeing large numbers of SEO sites atop search results for consumer goods is entirely a function of the fact that Google is a monoculture. My guess is that in fact what we’re seeing is simply the result of enormous numbers of SEO sites, all using slightly different methods of trying to game the Google algorithm. Even if only a small percentage of those SEO sites succeed, and even if they only succeed briefly, the result is still a first page of Google results dominated by SEO spam — a lose-lose proposition for everybody, but one which wouldn’t be solved by having heterogeneous algorithms: they would all simply have different SEO sites atop their various search-result pages.

But maybe if Google wasn’t a monoculture, there wouldn’t be quite as many SEO sites all trying to hit the jackpot of, however briefly, landing atop the Google search results. In general, monoculture is a bad and brittle thing — and that goes for search as much as it goes for bananas.

Brad DeLong

Paul Krugman:

Brad DeLong takes us to two articles on trouble with Google: basically, scammers and spammers are doing their best to game the search engine, and in the process making it less useful to the rest of us. And people are turning to other search engines that are less affected, precisely because they’re less pervasive and the scammers and spammers haven’t adapted to them.

This makes me think of sex.

If you follow evolutionary theory, you know that one big question is why sexual reproduction evolved — and why it persists, given the substantial costs involved. Why doesn’t nature just engage in cloning?

And the most persuasive answer, as I understand it, is defense against parasites. If each generation of an organism looks exactly like the last, parasites can steadily evolve to bypass the organism’s defenses — which is why yes, we’ll have no bananas once the fungus spreads to cloned plantations around the world. But scrambling the genes each generation makes the parasites’ job harder.

So the trouble with Google is that it’s a huge target, to which human parasites — scammers and spammers — are adapting.

I’m not quite sure what search-engine sex would involve. But Google apparently needs some.

Matthew Elshaw:

And that’s not all, there are a large number of other posts which share the same thoughts on Google’s declining search quality.

While the major problems with Google’s search quality appear to be the rise of content farms and review sites, some posts also mention a number of other grey hat SEO tactics like link buying and doorway domains that are still working for some sites.

With the number of posts on this topic, I don’t think it will be long before a Google representative steps in to clear the air. In the mean time, what do you think about Google’s search results? Have you seen a decline in quality in recent months?

Strawberry Alarm Clock

Uri Friedman at The Atlantic with the round-up.

John C. Dvorak at PC Magazine:

There was a big brouhaha over the weekend as the Apple iPhone alarm clock failed to work on both News Years day and January 2nd. Then the problem self-corrected on the third for some reason nobody bothered to explain.

I first found out about it on the 2nd when my podcasting partner, Adam Curry, was moaning about how the alarms didn’t work on his iPhone, and he didn’t get up on time to prep for the show we do on Sunday morning. I thought it was peculiar. Peculiar that people use the iPhone as an alarm clock!

Apparently, a lot of people use the iPhone as an alarm clock, adding more dubious usefulness to the device. I know that over the years, the mobile phone has essentially replaced the wrist watch. When people want to know the time they pull out their mobile phone and look at it. This has the added advantage of giving you the opportunity to check for important messages.

After all, we will die on the spot and be humiliated by the throngs of passersby if we are not up to the second with our messaging obligations. It’s gotten so bad that the evil phones are now at our bedsides to wake us up. Then when this questionable function fails, the world goes into a tizzy.

Ron Hogan at Popular Fidelity:

Weirdly enough, the glitch only affected one-time alarm settings, not recurring alarms.  Recurring alarms worked just fine.  Apple says that “customers can set recurring alarms for those dates and all alarms will work properly beginning January 3.”  Too little, too late.

Even worse, the glitch affected the newest version of the iPhone, the iPhone 4G, and the most recent versions of iPhone software.  If you updated your iPhone and needed to get up this weekend for something, then you probably overslept.  Then again, if you have to get up for something, I recommend multiple alarm clocks, not just technological ones.

Charlie Sorrel and Brian X. Chen at Wired:

Apple spokesperson Natalie Harrison told Macworld that the the bug had been officially recognized, and would fix itself on Jan. 3.

“We’re aware of an issue related to non-repeating alarms set for Jan. 1 or 2,” Harrison said. “Customers can set recurring alarms for those dates and all alarms will work properly beginning Jan. 3.”

However, some iPhone customers in Asia and Europe said they were still experiencing alarm malfunctions as of Jan. 3, according to Reuters. Also, some U.S. customers said on Twitter this morning that their alarms weren’t working.

“This is why I missed the gym this morning,” tweeted Rik Nemanick, a Saint Louis resident.

Apple claims the alarm issue has only affected non-repeating alarms — meaning if your alarm is set to go off at the same time “every Monday,” for example, it should have worked today. However, for those who set a one-time alarm for this morning, some may have experienced the malfunction.

If you’re paranoid about sleeping in late, the quick fix for the issue is to set recurring alarms. To set repeating alarms, launch the Clock app, hit the + sign to create an alarm, then tap Repeat and choose the day(s) you want this alarm to go off regularly.

The alarm code in iOS seems to be pretty buggy. This latest problem follows a bug that caused alarms to sound an hour late when both Europe and the United States flipped over from daylight saving time at the end of the summer.

An unreliable alarm clock is a frivolous bug, but it’s particularly embarrassing for Apple, a company that prides itself for fine details of its products. Here’s hoping that Apple issues a complete rewrite of its clock app whenever it releases the next iPad or iPhone.

Ben Popken at The Consumerist:

On Jan 1 and 2 of 2011, tons of people overslept, not due to hangovers, but because of an iPhone glitch that made their alarms go off. For most people this was just an inconvenience, but for one couple it was disastrous. They missed a fertility treatment deadline.

Jodi writes:

“

My husband and I set the alarms on both of our iPhones to go off at 6:45am on January 1. We had a very important deadline to make that morning in regards to our scheduled fertility treatment. But we missed it. The alarms didn’t go off. Apparently (according to Google) they don’t work on January 1 or 2 of 2011. Wish we would’ve known this ahead of time. Thousands of dollars and a month of injections wasted. And no one to turn to for recourse.Jodi

Sent from my iPhone

”

My heart goes out to you and your husband, Jodi. That is devastating. I only hope that you have the resources and fortitude to be able to pick up the pieces and try again.You might say that they should have set multiple, non-iPhone alarms, but hindsight is 20/20 and that doesn’t remove the pain of their loss.

Nicholas Jackson at The Atlantic:

Unwilling to wait for another day and hope that your alarm wakes you tomorrow morning as it once used to? There’s a quick fix. Download one of hundreds of free applications from the Apple Store and use that instead. Maybe you’ll even find that you like it better than the built-in alarm.

A couple of our favorites: Nightstand Central Free is ad-supported and only gives you a few options for the sound of your alarm, but it includes a weather report and works even when you leave the phone locked and in sleeping mode. iClock Free is another ad-supported application that includes a weather report next to the time display. Once you set an alarm using this application, it will go off on your iPhone or iPod even when you don’t have the application open. In addition, you can set the app so that a puzzle must be solved before the alarm will stop ringing; a smart bonus that will help to rouse even the deepest of sleepers

 

Asking, Telling, Continuing

Uri Friedman at The Atlantic with the round-up

Greg Sargent:

Earlier this afternoon, just before Harry Reid went onto the Senate floor and gave a speech calling for a vote on repeal of don’t ask don’t tell — which has now failed — he turned to a Senate aide and shrugged his shoulders.

“I have to go to the floor, but I’m not going to like giving this speech,” he said, according to the aide.

Reid then went to the floor and called for an immediate vote on the defense authorization bill containing repeal, in the full knowledge that it was likely to go down. As Reid knew, he had not agreed to Susan Collins’s demand for four days of debate time, giving several Republicans who support repeal an excuse to vote No, dooming the bill to fall short of 60 votes needed for passage, 57-40.

I have now spoken to a senior Senate aide and put together what happened and why Reid did this.

Reid concluded that even if Collins was sincere in her promise to vote for repeal if given the four days of debate, there was no way to prevent the proceedings from taking longer, the aide says. Reid decided that the cloture vote, the 30 hours of required post-cloture debate, and procedural tricks mounted by conservative Senators who adamantly oppose repeal would have dragged the process on far longer.

“It would have been much more than four days,” the aide says. “Her suggestions were flat out unworkable given how the Senate really operates. You can talk about four days until the cows come home. That has very little meaning for Coburn and DeMint and others who have become very skilled at grinding this place to a halt.”

After spending several hours thinking it over today and consulting with other members of the Dem caucus, Reid decided to push forward with the vote today, the aide says.

The aide rejected the claim that Reid should have extended the session another week in order to accomodate GOP procedural demands, as Joe Lieberman and others had asked, arguing that extended debate would actually have dragged the session into January, what with other things on the Senate to-do list.

“Why do we need to extend the session?” the aide asked. “Republicans have blocked this bill since February. We’ve made offer after offer to try to reach agreement on this. Going through those procedural motions along with the START treaty and tax cuts would have taken us until January 5th.”

Andrew Sullivan’s round-up

Jonathan Bernstein:

Yes, Republicans could have dragged things out until January…but so what, if ultimately it gets done before the clock runs out?  And what exactly is the downside if they try and just can’t quite finish?

Meanwhile, Mark Udall just went to the Senate floor and said he’d like to see either another bite at this, or an attempt to bring back DADT as a standalone bill.  Reid’s office apparently believes that, too, could be blocked, but I’m not really sure why they believe that, if there are really 60 votes for it and, say, ten calendar days remain after the rest of their business gets done.

More Bernstein

Bradford Palmer at TNR:

Two Republicans in particular, Scott Brown of Massachusetts and Lisa Murkowski of Alaska, had earlier said they were committed to DADT repeal. But both ended up voting against it, claiming they wanted to see the tax-cut bill resolved first and more time to debate. Principled! Meanwhile, West Virginia’s newest Democrat, Joe Manchin, also voted no, but here’s what one Democratic aide toldHuffington Post‘s Sam Stein: “I would say that if he was somehow the 60th vote, I do not think he would have voted the way he did.” In other words, there actually were 60 senators who wanted to end discrimination against gays in the military, it just didn’t work out that way because…

So is that it for Don’t Ask, Don’t Tell? It looks that way. Collins, Reid, and Joe Lieberman are planning to sponsor stand-alone repeal legislation that’s separate the defense spending bill, but as one Senate aide told the Post, the odds of success are slim because, once again, “such a move would be ripe for all sorts of procedural shenanigans.” What’s that? But repealing DADT would be the right thing to do, morally speaking? As if that had anything to do with anything.

Ezra Klein:

The bill repealing Don’t Ask Don’t Tell didn’t fail: The Senate did. The bill got 57 votes, not 49. As Dylan Matthews pointed out, a procedural failsafe that’s theoretically meant to protect the rights of minorities was just used to restrict the rights of minorities — which is how it’s always been, of course.

The various players are excitedly blaming one another. Anonymous aides to Harry Reid are arguing that Susan Collins’s demands would’ve meant so much conservative obstruction that there wouldn’t have been time for a vote. Collins was just on the television saying that if Reid had only given her more time, the bill would’ve passed.

I don’t care who’s right. And nor should anyone else. The diffusion of responsibility that comes from deciding law through complex parliamentary gamesmanship rather than simple majority-rules votes is the problem. What happened today is that a majority of the Senate voted for a bill that the majority of Americans support. The bill did not pass. Neither Harry Reid nor Susan Collins are ultimately responsible for that. The rules of the Senate are.

Dan Savage:

Well, gee. There’s still time—in theory—for the Senate to act. But fuck ’em: here’s hoping we get a ruling from a judge that stops all expulsions under DADT. That’s what Defense Secretary Gates warned the Senate about during his testimony; if they didn’t pass the DADT repeal, a judge was likely to step in and order an immediate end to DADT. (Hey, did you know that the bill being debated didn’t actually end DADT?)

And that will, of course, be good for the Republicans. They’ll get to scream and yell about judicial tyranny, liberal judges, and legislating from the bench—all because they successfully blocked all efforts to, you know, legislate from the legislature.

Allah Pundit:

Even more hope for Lieberman’s bill:

On Manchin, aide says: “I would say that if he was somehow the 60th vote, I do not think he would have voted the way he did”

If that’s true, then Reid doesn’t need Brown and Murky. He needs only one, and then the pressure of being the deciding vote will flip Manchin to yes too.