More fun with the dollar. From the Financial Times today:

The US dollar fell to a fresh low against the euro on Tuesday, breaching the $1.31 barrier for the first time.

The cataylst was a hint from the Russian central bank that it plans to step up its policy of switching its foreign exchange reserves into euros, at the expense of the dollar…

…More importantly, the Russian comments highlighted the prospect of Asian central banks with larger reserves following suit. China has an estimated 80 per cent of its $515bn of reserves in dollars, while Middle Eastern central banks were rumoured to be selling dollars and buying sterling on Tuesday.

…The greenback also fell 0.6 per cent to a fresh eight-year low of SFr1.1564 against the Swiss franc, 0.7 per cent to a nine-month low of A$0.7877 against the Australian dollar, 0.7 per cent to a four-month low of $1.8726 against sterling and 0.9 per cent to a seven-month low of Rbs28.49 against the rouble itself.

Atrios has a report that Morgan Stanley's chief economist Stephen Roach has been privately warning of an economic meltdown.

His prediction: America has no better than a 10 percent chance of avoiding economic ``armageddon.''

Press were not allowed into the meetings. But the Herald has obtained a copy of Roach's presentation. A stunned source who was at one meeting said, ``it struck me how extreme he was - much more, it seemed to me, than in public.''

Roach sees a 30 percent chance of a slump soon and a 60 percent chance that ``we'll muddle through for a while and delay the eventual armageddon.''

The long and short term results of a collapse in the dollar vary depending on who you talk to, but this much is certain, it would be a rough ride. Investors across the globe will lose money as the dollar loses value, foreign banks and other investors will be less likely to let us borrow money and essential imports like oil will jump in price.

For an administration that has no intentions of trying to wean our dependance on oil, even the slightest, which choses to fund the government through heavy borrowing, and which is paying little or no attention to the analysts and experts across the globe who are trying to warn them that their policies are driving this decline; this will be a nasty wake-up call.

The reality of the situation combined with the inexplicable refusal to re-evaluate its policies means that this administration may just drive us into the ground while claiming everything is pie in the sky.

Tom Shales has a great piece in the Washington Post about FCC Chairman Michael Powell's "indecency" crusade. An excerpt:

The madness reached its appalling apotheosis on Veterans Day: Sixty-five of ABC's 220 owned or affiliated stations declined to air the universally praised Steven Spielberg film "Saving Private Ryan," about American heroes of World War II, because the verboten F-word is spoken several times, and the FCC now fines stations sometimes astronomical amounts if even a few people file complaints over what they have heard.

This means Spielberg's acclaimed Holocaust film, "Schindler's List," cannot be shown again on a broadcast network because it, too, contains unpleasant language and, of course, graphic violence. See, it's about the Nazis, and they tended to be a little pushy. But realism is no defense, artistic excellence is no defense, even a consensus that the program in question constitutes a public service is no defense. (By contractual agreement, Spielberg's films must be shown without deletions or alterations.)

The whole article is worth reading.

Breaking open the "Investor Class" myth( via Matthew Yglesias). I think many people know this in general, but it's nice to put some numbers to the fact that the tax cuts aimed at the "investor class" will benefit the most wealthy among us. The argument is that there are more and more middle-class families with investments and that eliminating income tax on corporate dividends will benefit them and help the ranks of the invested grow.

This quick rundown by the Center on Budget and Policy Priorities breaks down who receives income from corporate dividends and how much. It's pretty easy to see who will benefit the most, and its not the middle-class investor.

It's worth some time to read through some of the Center's Reports. It doesn't take long to start seeing some light through the administration's fiscal rhetoric.

AchPundit asks a good question, one that seems to be left behind in some of the process coverage of the DeLay debacle.

DeLay and the others deserve their day in court, but trying to dismiss this as politically motivated is nothing more than ignoring his many ethical lapses in the past.

If DeLay is never indicted, then this was unnecessary, though telling act. If he is, why do Republicans want him as their Leader?

This whole debate stinks of the worst sort of corruption, that of the corrupting influence of power. This isn't about money, although it is certainly one of the tools of the trade, but its importance is its ability to wield power. Those who control the money can control the future of the local politicians trying to make it in state and local elections (the Democratic anger at the discovery that Kerry has $15 million in unspent funds in the bank and made no effort to use it to help down-ticket races is a perfect example).

DeLay is one of the most powerful politicians in memory, not for his power or his ability to write essential legislation, but for his ability to wield his power. Something he does often and with little concern for the mess he makes. His control over the party machine, his expertise in reworking house rules for his advantage and his power over the purse give him almost unchecked reign.

The evidence of this is the rather timid nature in which House Republicans who have objected to the rules change have stated their opposition. Josh Marshall has been documenting some of the ways in which House Republicans have "stood up" to DeLay. Who's talking and who's not(scroll up). Some have announced their opposition, some say they will only respond to questions from constituents, many have simply tried not to answer the phone or have been "indisposed" since before the vote.

The Republicans know this looks bad. There is almost no way they can spin this as being an attempt to avoid, "criminalizing politics," as Sen. Kay Bailey Hutchison (R-TX) has claimed. The vote was taken in secret so as to give the members denyability. Fortunately thanks to Josh Marshall and others, this is very thin cover. There have been numerous claims that the rules change is hypocrisy at its finest. It was put in place to try and shame the Democrats in the mid-90's who had such corrupt House Leaders as Rep. Dan Rostenkowski (D-Il). Now, with the potential of a DeLay indictment (no one knows if it will happen or not, but the fact that the Republicans would make such a change may indicate that something is coming down the pike) the Republicans have abandoned their own moral high ground.

Which brings us back to our original point, if he is indicted and he maintains his leadership position, what does that say about the Republicans? It makes one wonder if this obviously self-preservationist move may cause DeLay to lose support. Certainly he has enormous power, but at what point does he simply become a liability? The corrupt politician meme is hard to battle when your leadership is under indictment.

Voters often expect a certain amount of self-serving from their politicians, even accusations of corruption and illegal activities are sometimes overlooked for one reason or another. Two famous examples were Gov. Huey "The Kingfish of Louisiana" Long and Massachusetts politician James Curley who was re-elected while in jail for fraud. Recently Marion Barry, former mayor of the District of Columbia was elected to the D.C. district council even after being indicted for possession of crack cocaine. Many of these politicians were colorful characters who, although corrupt, provided something to the voters that they were unable to get otherwise. They were tolerated if not sometimes celebrated.

Yet the kind of hubris and shamelessness exhibited by DeLay and some of his former aides and associates is verging on the incredible. Two of DeLay's former aides were recently indicted for, in essence, bribery. They managed to help close some Indian casinos and then approached the tribe involved offering to try and get their casinos re-opened for the low price of $4 million bucks. That is a shakedown.

DeLay himself has received several ethics admonishments in the House for his actions in the redistricting effort in Texas, which is also the focus of the DA's investigation.

For a party that ran on a platform of moral values, a consistent pattern of corruption and hubris is not likely to fly well for long. There are numerous good Republicans serving in Congress at the moment. Moderate Republicans who are working to help their constituents, not simply establish a permanent majority, whatever the cost. These Republicans need to stand up and denounce the actions of the few among the leadership who will, if unchecked, run their party into the ground.

The Stakeholder has a good rundown on the case against Tom DeLay in Texas. It seems that there are some pretty hard-and-fast laws in Texas when it comes to corporate contributions in state elections; they can't. DeLay's problems stem from the fact that he spent a good deal of time and effort to find ways around the law. The question on everyone's mind is will DeLay be indicted personally. The PAC that he founded got into trouble for laundering money through the RNC, there were several DeLay associates indicted in those cases. DeLay himself was involved in pressuring out-of-state companies to donate to campaigns one case in which he received an admonishment from the ethics committee.

This all leads up to the recent decision to change the Republican's own leadership rules so that DeLay can continue to serve even if he is indicted.

The whole mess is even further complicated by the fact that DeLay's cronies in Texas may attempt to go after the prosecutor investigating the situation, Ron Earl, through redistricting and other structural techniques.

When these guys play, they play for keeps.

Just when I start saying good things about the National Review, Ramesh Ponnuru has to write something like this on their blog.

TAX REFORM [Ramesh Ponnuru]
I'd been hearing, even before the election, that the administration was looking at getting rid of the deduction for state and local taxes as part of its tax-reform package. I'm all for the policy: Why should low-tax states subsidize high-tax ones? Why should the federal government encourage states to have high taxes? But didn't tax reformers get their heads handed to them over this precise issue in 1985-86? Of course, there were more New York Republicans then to worry about.

The administration is also apparently looking at taxing employer-provided health insurance. Again, a good policy: that tax break has done a lot of damage to health-care markets over the years. And anyone who wants to get rid of the alternative minimum tax without swelling the deficit has to look at taxing health insurance: It's one of the few tax breaks that can generate the necessary funds. But again, there are obvious political risks here.
Posted at 11:40 AM

As to the first point of who subsidizes who, there seems to be plenty of evidence that in general the Blue States receive less money from the Federal Government than they give, while the Red States tend to receive more than they give. TaxProfBlog gives a good rundown of the Tax Foundation's report on this subject.

The report shows that of the 32 states (and the District of Columbia) that are "winners" -- receiving more in federal spending than they pay in federal taxes -- 76% are Red States that voted for George Bush in 2000. Indeed, 17 of the 20 (85%) states receiving the most federal spending per dollar of federal taxes paid are Red States. Here are the Top 10 states that feed at the federal trough (with Red States highlighted in bold):
States Receiving Most in Federal Spending Per Dollar of Federal Taxes Paid:
1. D.C. ($6.17)
2. North Dakota ($2.03)
3. New Mexico ($1.89)
4. Mississippi ($1.84)
5. Alaska ($1.82)
6. West Virginia ($1.74)
7. Montana ($1.64)
8. Alabama ($1.61)
9. South Dakota ($1.59)
10. Arkansas ($1.53)

In contrast, of the 16 states that are "losers" -- receiving less in federal spending than they pay in federal taxes -- 69% are Blue States that voted for Al Gore in 2000. Indeed, 11 of the 14 (79%) of the states receiving the least federal spending per dollar of federal taxes paid are Blue States. Here are the Top 10 states that supply feed for the federal trough (with Blue States highlighted in bold):
States Receiving Least in Federal Spending Per Dollar of Federal Taxes Paid:
1. New Jersey ($0.62)
2. Connecticut ($0.64)
3. New Hampshire ($0.68)
4. Nevada ($0.73)
5. Illinois ($0.77)
6. Minnesota ($0.77)
7. Colorado ($0.79)
8. Massachusetts ($0.79)
9. California ($0.81)
10. New York ($0.81)

As for his assertion that the employer health care tax break is screwing up the market, I can't make much of that. However, I can tell you, if that goes, so does millions of workers' health care.

Laura Rozen over at War and Piece has a copy of the Goss memo to the CIA.

The paragraph that has raised eyebrows:

I want everyone in our workforce to know - I seek to encourage and expect the best from everyone in CIA. Our country demands it, our President needs it, and this institution deserves it. I also intend to clarify beyond doubt the rules of the road. We support the Administration and its policies in our work. As Agency employees we do not identify with, support, or champion opposition to the Administration or its policies. We provide the intelligence as we see it - and let the facts alone speak to the policymaker.

Goss has asserted that the statement was taken out of context. Yet the context of the paragraph makes it pretty clear. Read the whole memo and it becomes even more clear that the intention was exactly what critics have said, no dissent will be tolerated.

While I can understand the desire to want to cut down on possible leaks and controlling media access to agents, the statement sounds like they plan on only presenting information that will support the administrations decision. Picking an outcome and then finding facts to back it up is an awful way to run an intelligence operation. It's how this whole mess in Iraq got started. It'll be quick, we'll be welcomed and we'll install our guy Chalabi who will be accepted because he's an Iraqi. That worked out well didn't it.

In fact, it was the dissenting voices in the CIA who will most likely feel the brunt of the coming changes. Those who said, correctly, that the administration's expectations for the post-war period were completely wrong and things will go sideways pretty quickly. It is this crew of "realists" rather than "supporters" that did most of the leaking. Not to harm anyone, but to exhibit that whatever is going on at the top of the chain and in the White House, we told you Iraq would devolve the way it has and you ignored us.

It's a bit of payback, but it is also a cry for help. They need help to escape the politicization that has occurred under Bush. The appointment of Goss and the signals he has given illustrate that they can only expect more of the same.

I think this statement from Rep John Dingell (D-MI) sums up the DeLay Bill situation very nicely (via Josh Marshall):

"These folks talk about values and decency, but then think it’s okay to change the rules once it appears one of their own may have broken them. This amounts to a work release program for the ethically challenged. We should all remember that a decade ago, Mr. DeLay helped to create this rule. Republicans said at the time they were the party of reform and good government. Now they’ve become the party of moribund hubris."

I especially like that "moribund hubris" line.

Marshall also has been doing a rundown of the Republicans who voted against this rule change. While they still support the party, they do deserve a pat on the back for not being complete cads.

Josh also does a good job of playing out the possible scenario that would develop if DeLay were indicted and convicted. If the Republican party is already willing to take this step, can letting a convicted criminal serve be far behind? This all depends on the possible indictment of course, but given this latest step, do they know something's coming down the pike?

Check it out over at Talking Points Memo.

Economist Brad Delong posted an excerpt from an article he and Steven Cohen are working on for the Atlantic Monthly.

Steve Cohen and I are thrashing about, trying to write a piece about corporate welfare capitalism and the future of social insurance for the Atlantic Monthly. We are treading in the footsteps of Peter Gosselin of the LA Times and Jacob Hacker:

In the opening the article hits on something I have been talking about for a while now. This fascination with the post-WWII period and the fetishization that goes along with it. This is most often found in Republican and/or aged circles. The belief that the period was a perfect period of growth, stability and exemplar of the true American values. Often this is combined with a belief that if people would just stop complaining and get a job we could return to that idillic period.

DeLong's piece highlights something that needs to be repeated in order to burst this modern mythology

This post-World-War-II period stands as a reference point in our collective memory of our economic history as one of rapid growth and shared prosperity. It lingers in our national memory, and remains an important source of confidence in the unity of our culture and the awesome power of our economy. But although it serves as a baseline for our economic expectations, our sense of "the way things ought to be," in reality the post-war era was in all likelihood an aberration, a period marked by a confluence of events never before seen in our history, and unlikely to be seen again

Its not that we shouldn't strive for the ideal that many see in that period, but that is must be seen honestly for what it was, a lucky break. What should also be acknowledged were the cultural and social upheavals underway at the time. It is often believed that the civil rights movement was a late-60's phenomenon, but it had been underway for generations and the 50's were no exception.

In 1954, the Supreme Court unanimously rules in Brown v. Board of Education that public school segregation violates the equal protection clause of the 14th Amendment and in 1955 orders that desegregation proceed "with all deliberate speed." The murder of Emmett Till in Mississippi in 1955 receives prominent coverage in the press. In December 1955, the year-long Montgomery bus boycott begins; its eventual success demonstrates the potential of nonviolent mass action and brings the Rev. Martin Luther King Jr. to national attention.

Resistance to school desegregation in Little Rock, Arkansas, in 1957 causes President Eisenhower to dispatch more than 1,000 paratroopers to enforce a federal court order as an estimated 200 reporters cover the events. Congress passes the first federal civil rights act since Reconstruction, but only after it is weakened by Southern opposition. In 1959, a television documentary on the Nation of Islam brings Malcolm X to wider public attention.

And these are just the civil rights highlights. (From The Library of America's: Reporting Civil Rights.)

In order to move forward we must learn from, not mythologize our past. DeLong and Cohen's piece seems to try and do just that by examining the role of corporate welfare and social insurance through the years. I look forward to reading it.

Yet more strange electoral math from the "liberal media" via Nick Confessore at Tapped and Josh Marshall atTalking Points Memo.

Yet again, those on the right are asserting that without a large block of its base, the Democratic party would prove no threat to Bush. So, in other words, if you have fewer members you...have fewer members? How these inane lines of thought get out are baffling to me. Even more so is the fact that this is another line that we will find repeated by the Republican pundits. Inevitably, Brooks will pick it up as more proof that the Dems need to look away from the cities and expand into the surrounding area. Despite the fact that the statement makes as much sense as saying, "without rural voters, Kerry would have crushed Bush."

Wait for it.