Shell Games

While awaiting FL-19's special election results, I thought I'd take a look at the WaMu testimony, and got distracted by this. The court-appointed examiner of the Lehman Brothers failure has reported back to the court that the investment house's directors did not breech their fiduciary responsibilities. Of greater interest however was this little gem:

'A 2,200-page report by a court-appointed examiner says executives of Lehman Brothers manipulated the now-defunct company's balance sheet, using a "materially misleading" accounting trick to temporarily remove $50 billion of troubled assets, The New York Times and The Washington Post report.

The examiner's report says that then-Lehman CEO Richard S. Fuld Jr. was "at least grossly negligent" and that the accounting firm Ernst & Young could be accused of professional malpractice.'

It turns out that Lehman used a shell to hide it's toxic assets, trading them for cash out of a small company it owned on the side. This maneuver allowed Lehman to improve the appearance of its books. WaMu's whining to Congress notwithstanding, it seems less and less certain that any of these firms deserved the rescues they received in 2008 & 2009.

Down in Negative Territory

For the second time to date, and far more significantly than previously, President Obama's RCP average has dropped into negative territory.  Gallup, Rasmussen, Fox, and USA Today/Gallup are all negative.  The friendliest of the most recent polls to the President, The Marist (which typically has a high bias toward self-identified DNC responders) is down to it's lowest point; +3.  Today's RCP average is -1.2.  The best poll that is currently out of the average (their last poll closed 3/26) is the Washington Post poll (also significantly biased leftward) at +10.  This poll has been dropping more slowly than the others, but has also shown a significant decline over the last six months.  It will be interesting to see a snapshot in June, when the mid-cycle campaigns are in full swing.

The RCP average for Congressional Approval polling is also dismal (-56.5); Health Care is at +12 Oppose (52.4 oppose: 40.4 approve) and the Election 2010 polling is looking increasingly red.  It's going to be a long, hot summer.

Understanding and Arrogance

From Fortune:

'The Obama White House likes to say that the theories of John Maynard Keynes form the foundation for its fiscal policies. Most notably, it draws upon the legendary British economist's idea of spending big to pull out of a recession.

But one economist says the administration has gotten Keynes only half right. Allan Meltzer of Carnegie Mellon is one of the most influential monetarists of the past 50 years. He has served in the Department of the Treasury under President Kennedy and on the Council of Economic Advisors during the Reagan Administration. He also authored the book, Keynes's Monetary Theory: A Different Interpretation.

While the Obama team is laying out huge sums of money, Meltzer says it's neglecting a key part of Keynes' plan: You can't run up a debt without a way to cover it.'

The whole article is a great read, along with this one by Gerard Alexander in tomorrow's Washington Post. The opening paragraph says it all:

'Every political community includes some members who insist that their side has all the answers and that their adversaries are idiots. But American liberals, to a degree far surpassing conservatives, appear committed to the proposition that their views are correct, self-evident, and based on fact and reason, while conservative positions are not just wrong but illegitimate, ideological and unworthy of serious consideration. Indeed, all the appeals to bipartisanship notwithstanding, President Obama and other leading liberal voices have joined in a chorus of intellectual condescension.'