Krugman: Enough with the Deficit Panic.

“What’s the greatest threat to our still-fragile economic recovery? Dangers abound, of course. But what I currently find most ominous is the spread of a destructive idea: the view that now, less than a year into a weak recovery from the worst slump since World War II, is the time for policy makers to stop helping the jobless and start inflicting pain.” The NYT’s Paul Krugman weighs in on the deficit hysteria afflicting Washington right now. Honestly, this is Keynes 101, people — you don’t dial back government spending at a moment of incipient recovery, or else you end up with things like the 1937 Roosevelt Recession.

FWIW, the deficit witchhunt may be rolling in DC, but the bond markets aren’t listening. “On Friday, they were willing to hand over their cash to the Treasury for 10 years for 3.3 percent interest, a level so low it implies they consider the United States among the safest investments in the world.“

Spitting on a Gift Horse.

“They’re not accustomed to being engaged in politics this way,” says a private-equity investor. ‘Their skin isn’t toughened. They actually take [the attacks by Obama] personally. This is a profession with a lot of smart people, but who aren’t necessarily terribly introspective. They think they actually deserve to make all this money. So any attack on their livelihood is, ahem, unpleasant.’“

In the wake of the Senate’s 59-39 passage of financial reform last week (not to mention increasing evidence of rampant and pervasive fraud at Goldman, Morgan, and elsewhere), New York‘s John Heilemann surveys the bruised egos of Wall Street’s would-be robber barons. (In very related news, Paul Krugman and the WP note that Wall Street is now betting heavily on the GOP again.)

Keep in mind: Wall Street is angry with the administration despite the fact that “Geithner’s team spent much of its time during the debate over the Senate bill helping…kill off or modify amendments being offered by more-progressive Democrats.” [Change we can believe in!] Heilemann writes: “Whatever the effects of the bill, among them will be neither an end to the too-big-too-fail doctrine nor any curb on what the sharpest Wall Streeters see as the central threat to the system’s stability: excessive financial leverage. Geithner, Summers, and Obama had little interest in tackling those matters, not because they are indentured servants to Wall Street but because at heart they are all technocrats who believe the system doesn’t need to be rebooted or downsized, merely better supervised.“

Still, on the bright side and despite the ambivalence (or open opposition) from folks in high places, this bill did get significantly stronger on the Senate floor, and in some ways is now stronger than the House version passed last year. Let’s hope this welcome progressive trend continues in conference.

FinReg: Where Things Stand.

“Last week, Congress decided it would not confront Too Big To Fail, the single gravest threat to our collective financial security. But there are still several key Wall Street reforms worth fighting for–reforms that must be enacted before the next crisis hits, with or without a big bank break-up. And fortunately, key Senators have authored amendments dealing with each one.” In HuffPo, Zach Carter delineates the most worthwhile progressive amendments to financial reform still up for debate in the Senate. A good encapsulation of the state of play.

Thune Unleashes a Corker.

“‘I think he’s a guy who’s willing to get down into the weeds,’ said South Dakota Sen. John Thune, who is No. 4 in GOP leadership. ‘Because he immerses himself in that and understands it so well — the positions he adopts may not always be the ones that everyone else in our conference comes to.’“

Hmmm, that explains a lot. In trying to explain why Sen. Bob Corker has been bucking the GOP line on financial reform of late, Sen. John Thune gaffe-tastically concedes that it’s because Corker actually tries to figure out what he’s talking about. “When Sen. Richard Shelby of Alabama started working on a draft outline of a GOP alternative to the Democrats’ bill, Corker said he didn’t plan on spending ‘any time’ on it. ‘At the end of the day — look it’s a messaging piece, isn’t it?’ Corker smiled.“

HCR: Where’s My Stuff?

Since I was talking to old friends on Facebook yesterday and realized once again that few folks outside of DC have a good sense of what’s actually in the recently passed health care bill, here’s a handy interactive graphic that delivers the what-for for the first year. There’s also a handy embed code there for wider distribution (but sorry, the death panel protocols are still classified. You’ll learn them when they come for you.)

Here’s to our Health.

“As our colleague John Lewis has said, ‘We may not have chosen the time, but the time has chosen us.’ We have been given this opportunity, an opportunity right up there with Social Security and Medicare: health care for all Americans. I urge my colleagues in joining together in passing health insurance reform — making history, making progress, and restoring the American dream.”

So, as you may have heard, the House passed the health care bill 219-212 late last night. It was a long and busy weekend, and a long and busy week is ahead, formulating the death panels and whatnot. Still, we’ve been talking about this bill since I got here last July, so it feels quite good to finally get this done. Now, let’s make it better. (Pic via here.)

Update: Here’s what goes into effect right away, and here’s what it means for you.

The Wages of Citizens United: The $$$.

“The Chamber spent much of its money in 2009 on campaigns that worked — it scared the Senate away from considering a version of the Waxman-Markey cap-and-trade legislation, and an argument can be made that its cutting ads on health care (with money taken from some insurance companies) helped to undercut support for the legislation.” You think? In a shape-of-things-to-come moment even before Citizens United goes into effect, the Chamber of Commerce outspent both political parties in 2009.

“According to The Center for Responsive Politics, the U.S. Chamber of Commerce and its national subsidiaries spent $144.5 million in 2009, far more than the RNC and more than double the expenditures by the DNC.” But corporate spending isn’t a problem or anything.

Brownian Motion.

So, slow news evening, eh?

Well, first off, thanks, Massachusetts! To my many friends from the Bay State, I say this: Speaking as a son of South Carolina, I never, ever want to get the “you-hicks-are-keeping-us-back” routine from y’all again, thanks much.

So, yes, Scott Brown defeated Martha Coakley for Ted Kennedy’s Senate seat. And thus, in a truly bitter irony, a man who spent his life trying to achieve health care reform for all Americans has now been replaced by a guy sworn to kill the health care bill and armed with the 41st vote(?) that could potentially make it happen. (Yes, Virginia, it’s true. In our system, 41 > 59.) Well, in Brown’s defense, he has a nice truck.

Why did this happen? Well, everybody has a theory. Here’s mine, which boils down to two reasons.

1. Martha Coakley. I didn’t watch enough of the MA race to determine if she was a lousy candidate through-and-through, although I have my suspicions. Nonetheless, Ms. Coakley was undeniably a gaffe-prone standard-bearer. From calling Curt Schilling a Yankee to misspelling the name of the state in a political ad to, weirdly, insulting the very idea of glad-handing in public, Coakley was an out-and-out gaffe machine. Couple that with a lackadaisical campaign and the inexplicable decision to take an extended vacation in the heat of the race, and you have a recipe for disaster. There’s a reason we’ve been telling the story of the Tortoise and the Hare for a couple thousand years now.

2. Change. In fending off Rahm Emanuel’s charge that she’s at fault for this fiasco, pollster Celinda Lake aptly summed up the main problem here: ““If Scott Brown wins tonight he’ll win because he became the change-oriented candidate. Voters are still voting for the change they voted for in 2008, but they want to see it.” Put another way: All across the country, the current occupants of the White House tapped into a deep and strongly-felt yearning for a transformative presidency in 2008…and then spent pretty much the entirety of their first-year in office playing the same old tired in-the-Beltway reindeer games that made people ill in the first place. This is not change voters believed in, and it has made voters angry, or depressed, or both.

Equally demoralizing is the neverending spectacle of a stalled-out health care bill. If I’d hazard a guess, most voters aren’t really delving into the ins and outs of this all-consuming debate, particularly by Month Eight or whatever it is. But they can see just from casually following along that the Democrats are really struggling to get this done, that the White House has been letting the bill get bogged down and eviscerated in the Senate — first in August, and again in November/December — and that, from the Big Pharma deal to the disappearing public option to all of the Lieberman/Stupak/Nelson/Snowe shenanigans on display, the usual Washington rules are in full effect right now. Once again, this is not change people can believe in. With each passing month that the bill has languished, we Dems have looked weaker and weaker. And if you continually force voters to choose between venal and incompetent, they’ll tend to gravitate toward the former.

Now, the good news: 1. First, and this cannot be stressed enough, we have an 18-seat majority in the Senate. It’s 59-41 people…most presidents can only dream of having that kind of majority, Dubya included. So there’s really no good reason — none, zip, zero — that we shouldn’t see more progressive accomplishments from this administration in the year to come. It just takes an act of will. I don’t remember the Republicans getting all kerfuffled about operating with 51 votes. Nor did Hubert Humphrey and the Johnson Senate have any problem with blithely ignoring the Senate parliamentarian when it got in the way of legislation.

2. It’s January of 2010, i.e. almost a full year before the “real” election day. In other words, this Brown victory is really just a shot across the bow. And if the administration course-corrects now, we may even end up gaining a year in time — and several seats we might well have lost — had this lazy centrist drift continued on until next November.

Of course, that’s only good news if the administration and the Democratic Party draw the right lessons from yesterday’s defeat. Suffice to say, this afternoon, it does not look good: Enabled, as usual, by the Serious People™ who comprise the broken-down wreck we once called beltway journalism, all the usual suspects are currently blaming Coakley’s loss on “the Left,” or more specifically the hippie-liberal cast of Obama’s administration thus far. Uh, say what now?

It’s hard to answer this ridiculous charge any better than did the estimable Glenn Greenwald this afternoon: “‘In what universe must someone be living to believe that the Democratic Party is controlled by ‘the Left,’ let alone ‘the furthest left elements” of the Party? As Ezra Klein says, the Left ‘ha[s] gotten exactly nothing they wanted in recent months’….The very idea that an administration run by Barack Obama and Rahm Emanuel and staffed with centrists, Wall Street mavens, and former Bush officials — and a Congress beholden to Blue Dogs and Lieberdems — has been captive ‘to the Left’ is so patently false that everyone should be too embarrassed to utter it.“

Truer words and all that. If we want to stop seeing these sorts of Brownian upsets in the future, the answer is emphatically not to curl up within the usual GOP-lite protective camouflage and hope the flak dies down. People see through that malarkey immediately. (As Harry Truman is rumored to have said, “In an election between a Republican and a Republican, the Republican wins every time.“) No, the answer is to move forward from this point with the courage of our convictions, and to start delivering to American families the real and fundamental change they were promised a year ago. It’s just that simple, folks.

The Trouble With Harry.

“Mr. Ford spoke about his childhood in Memphis, describing a grandmother who used the extension cords from living room lamps to discipline him and his brother. ‘I am always amazed when I meet parents who say they can’t get their kids to go to church, ’cause I didn’t know kids had options like that…Later, he returned to the subject: ‘We as a nation need to be disciplined. If there were ever a day in which an electric cord ought to be used on all of us to remind us of what’s good, what’s bad, what’s right and what’s wrong, it’s on the King holiday.'”

Speaking of exactly the direction Dems don’t need to go after yesterday’s’ Massachusetts thumping, consider Harold Ford, who (with some not-insubstantial Wall Street prodding) has up and decided he wants to be the Senator from New York, and who, among his many, many other faults, cannot seem to wrap his mind around either the basic fundamentals of capitalism or Dr. King’s doctrine of non-violence.

As I said on Twitter the other day, Harold Ford may not represent *everything* that’s wrong with the Dems, because we’ve got lots of problems right now. But he’s darn close.

Advise and Dissent.

“When the U.S. Senate was created, the most populous state, Virginia, had 10 times as many people as the least populous, Delaware…Now the most populous state, California, has 69 times as many people as the least populous, Wyoming, yet they have the same two votes in the Senate. A similarly inflexible business organization would still have a major Whale Oil Division; a military unit would be mainly fusiliers and cavalry. No one would propose such a system in a constitution written today, but without a revolution, it’s unchangeable.

Similarly, since it takes 60 votes in the Senate to break a filibuster on controversial legislation, 41 votes is in effect a blocking minority. States that together hold about 12 percent of the U.S. population can provide that many Senate votes. This converts the Senate from the ‘saucer’ George Washington called it, in which scalding ideas from the more temperamental House might ‘cool,’ into a deep freeze and a dead weight.“

In a worthwhile cover story for The Atlantic on the long history of American declension and jeremiads, James Fallows — recently returned from China — make his case for the biggest problem facing our nation right now.”That is the American tragedy of the early 21st century: a vital and self-renewing culture that attracts the world’s talent, and a governing system that increasingly looks like a joke. One thing I’ve never heard in my time overseas is ‘I wish we had a Senate like yours.’”