"His column is going to be scathing tomorrow morning"

That's what I said to my wife right after I read this headline last night:

World Leaders Agree on Timetable for Cutting Deficits

Sure enough, here's the title of Krugman's column as of this morning:

The Third Depression

Best Email Ever


I've used "Best Email Ever" way too many times for that headline to be credible. But really, this is pretty good stuff.  Here's a snipet from a post on The Big Picture (Barry Ritholtz's blog) (link):

“The old pay system (era of John Whitehead): you work at an investment bank for 30 years, have a reasonable draw and cash bonus, build up stock in the firm as most of your bonus, and when you decide to retire you request of the partners their permission to go limited. If they assent, you get to withdraw your money over five years, all the while continuing to expose the balance to the risks of the enterprise.

The new pay system post-Donald Lufkin Jenrette’s original I.P.O.: you’re a young 29-year-old punk playing with OPM (Other People’s Money), taking huge risks for which you get huge bonuses, while the outsiders shoulder the losses on your bets. You make all the money you’ll ever need in three years, stay around 15 years to pile up five times as much as you need, and then you retire with your cash hoard, buy a winery in Napa/Sonoma or a huge farm in Connecticut, living above the fray for the rest of your life.

Which system, do you think, makes people consider the downside of their actions?”

That explains a ton.  Really, it doesn't much insight into human behavior to see how badly the incentives line up here.  It wasn't just a housing crisis that brought us to the brink in 2008.

"It's just like our job"

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Jon Stewart sets them up, then knocks 'em down.

When it rains...

Really awful story on the tents provided to Haiti (link):

Hurricane season in Haiti officially began three weeks ago, bringing rain to the region nearly every day. More than 1.5 million Haitians remain in the streets. Yet this week, the United Nations completed a study, revealing that 40 percent of all emergency shelters, including tents and tarps, already need to be replaced or "improved."

It took the international community five months to distribute almost 700,000 tarps and 70,000 tents and remains one of the most complex and difficult accomplishments of the disaster response. The new study, however, shows that emergency shelter materials cannot withstand the extreme weather in Haiti. In particular, small camping-style tents have fallen apart.

(Hat Tip: Marginal Revolution)

The home crisis isn't over

Here's Ritholtz on why home prices are too high (link).

In my analysis, price stands out as being the prime mover of the next leg down. High unemployment, and a decade of flat wages aren’t helping to create any new housing demand. And the millions in homes they cannot afford will eventually add more pressure to inventory and prices.

But the bottom line is Home prices remain too high: There can be no doubt that home prices have moved way down from the 2005-06 peaks. How did I reach the conclusion that, even after a 33% decrease in prices?

By using traditional metrics. Whether we are looking at US housing stock as a percentage of GDP or Median income vs home prices or even ownership vs renting costs, prices remain elevated. Indeed, we see prices remain above historic mean.

I'd recommend reading the whole post if you're following the housing market.  He's got a great perspective and it shows in this writing.  Below are two charts he references in his post.  Good stuff!

Hey, it can't be that bad. It got a B+.

Mmm.  Burger.  Mmm.  Grilled Cheese.

Here's a sum up of the new Grilled Chess BurgerMelt from Friendly's (link):

Friendly's Grilled Cheese BurgerMelt
Grade: B+
Nutritional Info: 1500 calories, 97 grams fat, 2090 mgs sodium

While completely over the top, this sandwich is also pure genius. Yes, it's higher in calories, fat and sodium than the Double Down, but the ingredients in this sandwich are more harmonious, making it an embarrassingly pleasurable eating experience. (As one of our readers recently commented, "...at its heart, all this is is a cheeseburger on buttered toast.")

The grilled cheese "buns" were buttery, oozing with just the right amount of cheese and just the right amount of greasiness. True, the burger could have been more plump and juicy but it was the right amount of beef to balance out the two grilled cheese sandwiches. The only thing we'd do differently is skip the lettuce. Watery, shredded lettuce did not pair well with the grilled cheese.

 Hungry?  Take two of these and call me from the hospital.

Be sure to look at comment #4...



Why not pay more for less?

First, three points:

1.  Health care costs will drive the long-run federal deficit.
2.  Our current health care system is one of the lowest international performers.
3.  We spend more on health care than anybody.

For more on that second point , here's Ezra Klein (link) quoting from the most recent commonwealth fund report (link):

But even with all that spending, "the U.S. ranks last overall, as it did in the 2007, 2006, and 2004 editions of Mirror, Mirror. Most troubling, the U.S. fails to achieve better health outcomes than the other countries, and as shown in the earlier editions, the U.S. is last on dimensions of access, patient safety, coordination, efficiency, and equity. The Netherlands ranks first, followed closely by the U.K. and Australia."

The issue isn't just that we don't have universal health care. Our delivery system underperforms, too. "Even when access and equity measures are not considered, the U.S. ranks behind most of the other countries on most measures. With the inclusion of primary care physician survey data in the analysis, it is apparent that the U.S. is lagging in adoption of national policies that promote primary care, quality improvement, and information technology."

As we begin to see health care change over the next five years, it will be very important to keep an eye on these metrics.  If the US doesn't find a way to improve, more change will absolutely be necessary.

Here are some illustrative charts from Ezra's post:

Tick, Tick, Tick, Tick...

Per Charlie Cook (link), time to change the political dynamic before the mid-terms is almost out:

Two of the most common clichés in American political circles are "all politics is local" and "a few months is a lifetime in politics." Each contains a kernel of truth, but both have become all-too-handy excuses for pols seeking to explain away unpleasant realities.


In this election year, the circumstances and dynamics have not materially improved for Democrats since Labor Day. With a little more than four months to go before the November election, the chances of this contest's trajectory fundamentally changing decline with every passing week.

Great poll interpretation in the rest of the article.  If you think the GOP has already peaked this cycle, you may want to change your assessment.

Gulf Spill Pictures

Some great spill pictures at Boston.com (link).

(Hat tip: Andrew Sullivan)

Do you mind if I take a copy of that?

Perhaps breaking copyright law is a good thing.  Here's Matthew Yglesias (link) quoting from the abstract of research studying the impact of file-sharing (Felix Oberholzer-Gee of Harvard and Koleman Strumpf of the University of Kansas wrote the paper, here):

The advent of file sharing has considerably weakened effective copyright protection. Today, more than 60% of internet traffic consists of consumers sharing music, movies, books and games. Yet, despite the popularity of the new technology, file sharing has not undermined the incentives of authors to produce new works. We argue that the effect of file sharing has been muted for three reasons. (1) The cannibalization of sales that is due to file sharing is more modest than many observers assume. Empirical work suggests that in music, no more than 20% of the recent decline in sales is due to sharing. (2) File sharing increases the demand for complements to protected works, raising, for instance, the demand for concerts and concert prices. The sale of more expensive complements has added to artists’ incomes. (3) In many creative industries, monetary incentives play a reduced role in motivating authors to remain creative. Data on the supply of new works are consistent with the argument that file sharing did not discourage authors and publishers. Since the advent of file sharing, the production of music, books, and movies has increased sharply.

See, grabbing content from pirate bay is actually good for society.  I knew it.

The stimulus problem.

Here's the problem with the Federal Stimulus bill passed in 2009.


OK, it's scary to run deficits.  But, the problem in the states is what people were talking about when they said that the 2009 federal stimulus package was too small and should have done more to help the states.  So now the states, which can't run deficits, are being forced to cut spending which further exacerbates the recession.  Here's Bruce Bartlett (link), Ezra Klein (link), and Paul Krugman (link) far more eloquent than I on the issue.

Count me as one of those people worried about a double-dip recession.  And no, I don't see how cutting government spending right now, with unemployment stuck around 10%, is going to make our economy better in the long-run.  I wish I did.  And no, I don't see how the current political environment is going to be supportive of a further stimulus plan.  And no, the mid-terms should make it harder, not easier, to fix the economy.


The day the deficit didn't die.

I try to keep a little hope that any bipartisan deficit commission will actually end up being a useful exercise, rather then the policy punt it so obviously is. Well, even a little hope is probably too much. Here's Krugman (link):

Specifically, Simpson has resurrected the old nonsense about how Social Security will be bankrupt as soon as payroll tax revenues fall short of benefit payments, never mind the quarter century of surpluses that came first.


here’s what you can’t do: you can’t have it both ways. You can’t say that for the last 25 years, when Social Security ran surpluses, well, that didn’t mean anything, because it’s just part of the federal government — but when payroll taxes fall short of benefits, even though there’s lots of money in the trust fund, Social Security is broke.

So, it looks like another meaningless deficit commission. It's my belief that fear-mongering on the deficit is too useful a political weapon for the GOP to seriously engage in substantive discussions with their opposition.  So, guess what? The quickest way to end meaningful policy discussions is to start making up 'facts' that are politically expedient but easily disproved by anyone paying attention to the numbers.


UPDATE:  Great post on the deficit commission from Jonathan Bernstein (link).

Sometimes, when you put your foot in your mouth, it's best to just keep on talking.

Here's David Frum on what has to be his favorite topic (link):

This story is another example of the harm done by allowing talk radio & Fox – rather than elected officials and aspiring candidates – to define the GOP. Anybody heard any objection to the escrow fund from Mitt Romney? Has Mitch Daniels termed it a “shakedown”? Bobby Jindal seems cool with the idea, ditto Mitch McConnell. But these real leaders are crowded out by people trying to bump ratings a point or two by inciting another prime time hour’s worth of anti-Obama indignation.

And here's the video he's reacting to:

"Fool me eight times... Am I a F____g idiot?"

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That didn't take long.

Here's the GOP representative from Arlington Texas, Joe Barton (link):

"BP should bear the full financial responsibility for the accident on their lease in the Gulf of Mexico," Barton said in a written statement. "BP should fully compensate those families and businesses that have been hurt by this accident. BP and the federal government need to stop the leak, clean up the damage, and take whatever steps necessary to prevent a similar accident in the future." 

He added: “I regret the impact that my statement this morning implied that BP should not pay for the consequences of their decisions and actions in this incident."

Apologizing to BP was such a ridiculous stunt.  I'm not surprised to see Barton backing away from his statement.  As as aside, its pretty clear why he made the statement.  Here's 538 on his campaign contributors (link).

UPDATE:  The walk back is only a walk back from the words, not the intent of the statement.  Here's from Sullivan's blog (link).

Yes. They will attack anything.

So we all know that Obama got BP to agree to cut it's $10.5 billion annual dividend and set up a $20.0 billion fund to start paying out claims (link, link).  Apparently, this was a bad thing to do (Per TPM).

BP is ponying up $20 billion for Gulf Spill oil damages. And quite a few Republicans don't like it one bit.

Here is the usual list of suspects: link, link, link, link.  These guys are the leaders of party poised to win the next election.  Really.


Here's Barry Ritholtz on social security (link):

The issue of government debt seems to be coming up a lot news lately. Courtesy of the credit collapse and economic recession, Deficits are front page news. Classic balance budget advocates are reiterating their views, joined by hypocritical partisans who, after a decade of spending profligacy, unfunded tax cuts, new entitlement programs and a war of choice, have “suddenly” discovered the evils of borrowing.

Then there are the major entitlement programs: Social Security, Medicare and the Prescription Drug plan. These are, we are told, an even bigger problem then the ordinary budget deficit. As presently configured, the entitlement deficits are set to skyrocket as the boomers retire. Social Security especially is a target of persistent fear-mongering.

This is all unvarnished nonsense. Social Security is at present, financially stable; As it starts to run into increasing deficits, the political classes will be forced to respond.

To repeat a point re-iterated at length during the health care reform debate, the long run deficit is all about controlling the cost of health care (link, link, link, link, link, link, etc...).  If you care about long-run deficits, then figuring out how to contain these costs should be the focus of your attention.  All this other talk is just fear mongering.

No apologies

"I'm sorry" really isn't enough.

(Hat Tip: TPM)

What could possibly go wrong?

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I didn't know golf games were this cool

(Warning - LOTS of curse words)

Nothing to see here, move along...

Great quote (link) from Haley Barbour (GOP governor of Mississippi):

He's exactly right to call for continued drilling. Let me — let me say a couple things. In the last 50 years, the four states that allow offshore drilling on the gulf, Mississippi, Louisiana, Texas and Alabama — more than 30,000 wells have been drilled in the Gulf of Mexico.

This is the first time in that more than 30,000 we have ever had anything like this happen. About 30 percent of America's production of oil and gas coming out of the Gulf of Mexico. If you shut this down, don't kid yourself, you're not shutting it down for six months. These big oil rigs — by the way, B.P. and Transocean are not even American companies.

In six months, these oil rigs aren't going to be sitting around the gulf waiting. They're going to be in west Africa. They'll be in Indonesia. They're going to be in China. They're going to be drilling oil wells elsewhere in the world.

And the loss of production that we're going to suffer will make us even more dependent on the Middle East, on Venezuela, on people that aren't our friends.

And let me tell you one other little thing environmentalists ought to think about. Of the 10 worst oil spills in American history, seven of them were from ships. Seven of them were from ships.

So we had a big disaster.  Caused by deep sea drilling.  And we're not entirely sure why.  Oh, and the disaster isn't over yet.  Whatever.  Business should go on as usual.  I mean this has only happened badly a few times.  Most of the time when things go wrong its the ship's fault anyway.  You're getting all worked up over something that probably won't even happen.  Again.

Oh yea.  And get off my land, you hippie.

(Hat Tip: Doonesbury)

What does that mean?

This an attack.  Right?  Or maybe, it's something else.  Nice use of the peace sign...

(Hat tip: Andrew Sullivan)

Don't mess with Obama

Onion fun (link):

WASHINGTON—After serving 12 years in the position, Motley, the official White House Jester, was beheaded Tuesday after delivering a poorly received jape about the spiraling national debt before President and Mrs. Obama.


At this, Obama reportedly dropped the large turkey leg in his hand and signaled to nearby Secret Service agents, who seized Motley and dragged him, pleading, to the Executive Dungeon. The President exited the Hall in a fury, and within minutes had drafted an order of execution by beheading.

Greedy much?

Headline says it all: Nigerian spam email of the week.  Here's a teaser:

Dear Friend

I am the private solicitor for Mr Tony Hayward, the esteemed Chairman and Chief executive of British Petroleum.  My client has various personal and family related holdings of BP stock and options. Due to his faithful long standing service to BP the total value of his holdings amounts to in excess of 100m pounds sterling.  Mr Heywood is a British citizen but it has been my sorrowful duty to advise him that his personal and family wealth is at great risk of being wrongfully confiscated by US authorities acting extra-territorially under special powers authorised by the US government and with the secret consent of a supine UK political and legal establishment.  

Here's the link to more.

(Hat Tip: Felix Salmon)

Double-Dip Please...

Robert Reich on what not to tell Obama (link):

B) Tell the President you understand the political pressures for deficit reduction are growing, and Republicans are making headway fooling the public into believing that this terrible recovery is due to to excessive government deficits. So so it’s perfectly fine for the President to bend to those political pressures. Cut the budgets of most federal agencies by 5 percent, enforce “pay-go” rules that don’t allow bigger deficits, build up expectations for the report of his “deficit commission” on December, and tell the American public that we now have to move toward fiscal austerity.

If you choose B, you shouldn’t be advising the President.

Ding Ding Ding

Ezra has it right (link).  The 'lone Republican' strategy has worked very well for the GOP.

It's further evidence that the "lone Republican" strategy doesn't work. Time and again, Democrats have ended up in a room with a single Republican who seemed willing to cut a deal. It was Olympia Snowe on health care, Bob Corker on financial regulation and Lindsey Graham on climate change. In every case, the final bill looked a lot like what that Republican helped negotiate. And in every single case, the Republican realized that he or she couldn't get more support from their party and so they eventually bolted the effort.

If you think this has all been a cynical strategy, it's been brilliantly successful. On the one hand, Republicans have had a major role in shaping these bills. On the other hand, they haven't had to vote for these bills, and so they could cleanly campaign against legislation that a member of their party helped write. And as an added bonus, Democrats are stuck trying to defend a bill that their base doesn't like very much and that's thick with compromises that annoy political elites.

It has to be a cynical strategy, right?   If I was in the minority and I thought it would trip up the ruling party, I'd give it a shot.

Two Quick Pessimistic Thoughts

Lifted from this post by Kevin Drum.  My first thought:

Today probably marks the official death of climate legislation in the United States. Lindsey Graham, the only Republican even nominally favorable toward any kind of carbon pricing plan, has announced that he can't support the Kerry-Lieberman bill because it doesn't allow enough offshore drilling (!), and without Graham there's pretty much zero chance of getting any further Republican support.

Death due to not enough off-shore drilling.  That's wild.  And, my second thought:

So there you have it: the American public believes in global warming and wants the government to do something about it. However, the American public doesn't want to do anything — carbon taxes or cap-and-trade — that might actually work. But they do want to open the federal goody bag and dole out subsidies and tax breaks to everyone under the sun, presumably because these all sound like pleasant things to do and they're under the impression that they're all "free." Whether they work or not isn't really on their radar.

And it looks like that's what Congress is going to deliver. We are, in this case, getting exactly the government we deserve.

Effectively policy has to be demanded.  It's not being demanded.

Meet the new boss. It's the same as the old boss.

Ezra captures the strange irony of the political results so far this cycle (link):

Part of the narrative that's emerged is that these primaries show an anti-incumbent, anti-Washington, year. That's right, but it's mixed, incoherently, with pro-party -- which is to say, pro-Washington establishment -- results. The different bases are eliminating politicians who've been insufficiently dedicated to holding their party's line. The result will be much more significant than merely the election of three new senators. Rather, surviving senators will upgrade the threat an unhappy base poses to their reelection and trim their independence accordingly. The moderates and compromisers who are left will stop acting like moderates and compromisers. This election looks, if nothing else, like it's going to be a big step forward in bringing strong party discipline to the Senate.

Of course, The Who would see nothing strange about this (link).

A personal 900 number

Why in the world does Christopher Hitchens want this (link)?

I trust you answer the e-mail of your friends at no charge.
I haven’t got to the point yet where phone calls and e-mails are billable, but I am working on it. That would be happiness defined for me. What I’m hoping is to get a 900 number, so I can tell all my friends, “Call me back on my 900 number: 1-900-HITCH22.” I can talk for a long time. 

(Hat Tip: Marginal Revolution)

Nobody hates their politicians like California hates thier politicians

Seriously (link), here PPPs commentary:

Arnold Schwarzenegger of course is the least popular Governor in the country with a 20/64 approval rating. The battle to replace him looks like it will be between someone marginally unpopular (Jerry Brown and his 37/39 favorability ratio) and someone very unpopular (Meg Whitman and her 24/44 favorability ratio.)

In the Senate race right now an unpopular incumbent (Barbara Boxer, 37/46 approval) is still favored for reelection because her likely opponent is just as unpopular (Carly Fiorina, 22/30 favorability and that's before the Democrats start really spending money on attacking the heck out of her.)

Tough Day for Blogging

Lots of emergency analysis going on in my day job - so my blog crawl today has been severely curtailed.  On the plus side, I'm not as POed at the GOP as I usually am about this time of day.

Here is the one post that has me thinking bad thoughts (link).  It's a fun rant from Sullivan about Palin, torture, Israel, and Iran.  It red meat for those who sceptically view Israeli actions .  Enjoy!

I'd like effectively provided government services, please.

So, not this (link).

Peach County is one of more than 120 school districts across the country where students attend school just four days a week, a cost-saving tactic gaining popularity among cash-strapped districts struggling to make ends meet. The 4,000-student district started shaving a day off its weekly school calendar last year to help fill a $1 million budget shortfall.

It was that or lay off 39 teachers the week before school started, said Superintendent Susan Clark.

The article is unsure on whether or not this is bad thing.  Let me clear that up.  It is a bad thing.  I have never seen an educational study which says that less class time results in better student performance.  I have never read an economist that said educational performance is not a significant factor in our nation's future prosperity.  Every time you hear somebody complain about how much money government wastes and that we pay too much in taxes, I want you to think of four day school weeks in Peach County.

Let's put these guys back in charge....

I'm offended (link).  You should be too.  His presidency is an object lesson in how to become your enemy.

George W. Bush's casual acknowledgment Wednesday that he had Khalid Sheikh Mohammed waterboarded -- and would do it again -- has horrified some former military and intelligence officials who argue that the former president doesn't seem to understand the gravity of what he is admitting.

Waterboarding, a form of controlled drowning, is "unequivocably torture", said retired Brigadier General David R. Irvine, a former strategic intelligence officer who taught prisoner of war interrogation and military law for 18 years. 

I'm in the "Don't Gut Regulation" camp...

Ezra captures the key point on the oil spill (link).

It strains credulity to suggest that presidents will enter office and zero in on failures at tiny regulatory agencies. But their underlings should. And they appoint their underlings. So insofar as Ken Salazar fell down on the job, it's Obama's fault in a "buck stops here" sort of way.

But this is also evidence of what a bad idea it is to routinely elect people who make it a point to degrade the capacity of regulatory agencies. If your regulators are going to be effective, the commitment to their effectiveness has to be continuous, not episodic. If every other administration has to come into office and nurse a sabotaged bureaucracy back to health, they're going to miss some of the problems, and much of the damage will already have been done.

(Emphasis mine).

That's the Way You Do It

When the crazzies wake-up, the deficit solution becomes apparent.  It's called the budget deals of 1990 and 1993.  Here's a key chart from Jonathan Chiat's excellent post "Conservatives Ignore Their One Proven Success" :

(Hat Tip: Matt Yglesias)

Your 2012 Frontrunner

May I present, Sarah Palin (link):

This is a message to extreme “environmentalists” who hypocritically protest domestic energy production offshore and onshore. There is nothing “clean and green” about your efforts. Look, here’s the deal: when you lock up our land, you outsource jobs and opportunity away from America and into foreign countries that are making us beholden to them. Some of these countries don’t like America. Some of these countries don’t care for planet earth like we do – as evidenced by our stricter environmental standards.

With your nonsensical efforts to lock up safer drilling areas, all you’re doing is outsourcing energy development, which makes us more controlled by foreign countries, less safe, and less prosperous on a dirtier planet. Your hypocrisy is showing. You’re not preventing environmental hazards; you’re outsourcing them and making drilling more dangerous.

Extreme deep water drilling is not the preferred choice to meet our country’s energy needs, but your protests and lawsuits and lies about onshore and shallow water drilling have locked up safer areas. It’s catching up with you. The tragic, unprecedented deep water Gulf oil spill proves it.

That's right.  The environmentalists are to blame.  Run, Baby, Run.

Ack... I may end up buying a subscription to the NYT

I really like the free internet.  All the free news and analysis that you can read.  Links to the best sources.  All that.  Reading about the paywalls being formed has made me worried.  Will I eventually have to pay for this great stuff I've been getting for free?  I mean it hasn't happened yet.  And usually when I run into a paywall (Like the WSJ), you can do a google search on the article's headline and get a free full version being posted by somebody else (I have no idea how they aren't getting sued for stealing content).

But remember that the NYT announced that they would have a pay wall (link).  Maybe they'll back down if Murdoch's own play fails (link).  Maybe not.

But, I can get my news from other sources, right?  Well, Krugman's blog is part of the NYT.  And now, so will Nate Silver's (link).  Yikes.  If all the best web content gets put behind paywalls, big content will have forced my hand.  Again.

(Hat Tip: Andrew Sullivan)

UPDATE:  Nate has his own take on this change on his blog (link).   I'm disappointed to hear that his posts will reduce in frequency over the next 9-10 weeks during his transition.  However, it's good to hear that he'll be up and running by September, just about the time that political news junkies like myself will be going completely nuts.


(Hat Tip: Andrew Sullivan)

Crazy is as crazy does

Yesterday, I noticed this headline over at RedState.com: "Sestak Job Offer Violated Federal Law?".  Which made me remember this post over at Ezra Klein's blog by Jonathan Bernstein (link):

The incentives all run to impeachment, as far as I can tell. The leaders of such an effort would find it easy to cash in (literally, I mean) with books and appearances on the conservative lecture circuit. It's hard to believe that Rush, Beck and the rest of the gang wouldn't be tripping over each other to wear the crown of the Host Who Brought Down the socialist gangster president. And we've seen the ability, or I should say the lack thereof, of rank-and-file GOP pols to stand up to the talk show yakkers. Besides, it's not as if a new Republican majority would have a full agenda of legislative items to pass, and what they did have would face an Obama veto (and most likely death in the Senate at any rate). Against all that is the collective preference of the Republican Party not to have a reputation as a pack of loons, but that doesn't seem to be much of a constraint in practice. Of course, also against impeachment is the lack of a serious offense by the president, but I don't see that as a major impediment -- if offering a job to a potential Senate candidate is an impeachable offense (and see Jonathan Chait if you think it really is), then they'll have no trouble at all coming up with something.

I'm beginning to fear the political impact of the oil spill on the mid-term elections.  I don't want to under-emphasize the environmental/economic catastrophe by making it seem that the only impact I care about is the political one.  Especially given the horse race sensibility of my comment.  So please read this as only one aspect of my thinking.

Basically, the oil spill contributes to the growing sense of frustration on the part of the citizenry.  This leads to greater anger at incumbents.  As the GOP is out of power, this increases their likelihood of retaking the house and possibly the senate.  And because the crazies are running the GOP show, we get to the Bernstein impeachment prediction.  Which is crazy.

This sounds nuts.  And I would bet against it today.  But what else would need to happen to change my bet?  If today wasn't in June but was in late October, would my bet change?