Obama

Paul Krugman: "On the Edge"

Barack Obama, D.C., Economy, Federal Reserve, Finance, GOP, Larry Summers, Media, Paul Krugman, Politics, Republicans, Stimulus Bill, Tim Geithner
February 6, 2009
Op-Ed Columnist
THE NEW YORK TIMES
On the Edge
By PAUL KRUGMAN

A not-so-funny thing happened on the way to economic recovery. Over the last two weeks, what should have been a deadly serious debate about how to save an economy in desperate straits turned, instead, into hackneyed political theater, with Republicans spouting all the old clichés about wasteful government spending and the wonders of tax cuts.

It’s as if the dismal economic failure of the last eight years never happened — yet Democrats have, incredibly, been on the defensive. Even if a major stimulus bill does pass the Senate, there’s a real risk that important parts of the original plan, especially aid to state and local governments, will have been emasculated.

Somehow, Washington has lost any sense of what’s at stake — of the reality that we may well be falling into an economic abyss, and that if we do, it will be very hard to get out again.

It’s hard to exaggerate how much economic trouble we’re in. The crisis began with housing, but the implosion of the Bush-era housing bubble has set economic dominoes falling not just in the United States, but around the world.

Consumers, their wealth decimated and their optimism shattered by collapsing home prices and a sliding stock market, have cut back their spending and sharply increased their saving — a good thing in the long run, but a huge blow to the economy right now. Developers of commercial real estate, watching rents fall and financing costs soar, are slashing their investment plans. Businesses are canceling plans to expand capacity, since they aren’t selling enough to use the capacity they have. And exports, which were one of the U.S. economy’s few areas of strength over the past couple of years, are now plunging as the financial crisis hits our trading partners.

Meanwhile, our main line of defense against recessions — the Federal Reserve’s usual ability to support the economy by cutting interest rates — has already been overrun. The Fed has cut the rates it controls basically to zero, yet the economy is still in free fall.

It’s no wonder, then, that most economic forecasts warn that in the absence of government action we’re headed for a deep, prolonged slump. Some private analysts predict double-digit unemployment. The Congressional Budget Office is slightly more sanguine, but its director, nonetheless, recently warned that “absent a change in fiscal policy … the shortfall in the nation’s output relative to potential levels will be the largest — in duration and depth — since the Depression of the 1930s.”

Worst of all is the possibility that the economy will, as it did in the ’30s, end up stuck in a prolonged deflationary trap.

We’re already closer to outright deflation than at any point since the Great Depression. In particular, the private sector is experiencing widespread wage cuts for the first time since the 1930s, and there will be much more of that if the economy continues to weaken.

As the great American economist Irving Fisher pointed out almost 80 years ago, deflation, once started, tends to feed on itself. As dollar incomes fall in the face of a depressed economy, the burden of debt becomes harder to bear, while the expectation of further price declines discourages investment spending. These effects of deflation depress the economy further, which leads to more deflation, and so on.

And deflationary traps can go on for a long time. Japan experienced a “lost decade” of deflation and stagnation in the 1990s — and the only thing that let Japan escape from its trap was a global boom that boosted the nation’s exports. Who will rescue America from a similar trap now that the whole world is slumping at the same time?

Would the Obama economic plan, if enacted, ensure that America won’t have its own lost decade? Not necessarily: a number of economists, myself included, think the plan falls short and should be substantially bigger. But the Obama plan would certainly improve our odds. And that’s why the efforts of Republicans to make the plan smaller and less effective — to turn it into little more than another round of Bush-style tax cuts — are so destructive.

So what should Mr. Obama do? Count me among those who think that the president made a big mistake in his initial approach, that his attempts to transcend partisanship ended up empowering politicians who take their marching orders from Rush Limbaugh. What matters now, however, is what he does next.

It’s time for Mr. Obama to go on the offensive. Above all, he must not shy away from pointing out that those who stand in the way of his plan, in the name of a discredited economic philosophy, are putting the nation’s future at risk. The American economy is on the edge of catastrophe, and much of the Republican Party is trying to push it over that edge.

Numerous Myths and Falsehoods Advanced by the Media in Their Coverage of the American Recovery and Reinvestment Act

American Recovery and Reinvestment Act, Banking, Beltway Groupthink, D.C., Finance, GOP, Infrastructure, Jobs, Media, Media Matters, Politics, Propaganda, Republicans, Stimulus Bill

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Media Matters for America previously identified numerous myths and falsehoods advanced by the media in their coverage of the American Recovery and Reinvestment Act. As debate on the bill continues in Congress, other myths and falsehoods advanced by the media about the recovery package have risen to prominence. These myths and falsehoods include: the assertion that the bill will not stimulate the economy — including the false assertion that the Congressional Budget Office (CBO) said the bill will not stimulate the economy; that spending in the bill is not stimulus; that there is no reason for stimulus after an economic turnaround begins; that corporate tax rate cuts and capital gains tax rate cuts would provide substantial stimulus; and that undocumented immigrants without Social Security numbers could receive the “Making Work Pay” tax credit provided in the bill.

1. The bill will not stimulate the economy

In a February 1 article, The Associated Press reported an assertion by Senate Minority Leader Mitch McConnell (R-KY) that the recovery bill will not stimulate the economy without noting that the CBO disagrees. ABC World News anchor Charles Gibson echoed this assertion during his February 3 interview with President Obama, stating: “And as you know, there’s a lot of people in the public, a lot of members of Congress who think this is pork-stuffed and that it really doesn’t stimulate.” Additionally, on the January 28 edition of his show, nationally syndicated radio host Rush Limbaugh allowed Rep. Eric Cantor (R-VA) to falsely claim of the bill: “Even the Congressional Budget Office, controlled by the Democrats now, says it is not a stimulative bill.” Fox News host Sean Hannity repeated this claim on the February 2 broadcast of Fox News’ Hannity, asserting that the CBO “say[s] it’s not a stimulus bill.”

In fact, in analyzing the House version of the bill, H.R. 1, and the proposed Senate version, the CBO stated that it expects both measures to “have a noticeable impact on economic growth and employment in the next few years.” Additionally, in his January 27 written testimony before the House Budget Committee, CBO director Douglas Elmendorf said that H.R. 1 would “provide massive fiscal stimulus that includes a combination of government spending increases and revenue reductions.” Elmendorf further stated: “In CBO’s judgment, H.R. 1 would provide a substantial boost to economic activity over the next several years relative to what would occur without any legislation.”

2. Government spending in the bill is not stimulus

Several media figures, including CNN correspondent Carol Costello, CBS Evening News correspondent Sharyl Attkisson, and ABC World News anchor Charles Gibson, have all uncritically reported or aired the Republican claim that, in Gibson’s words, “it’s a spending bill and not a stimulus,” without noting that economists have said that government spending is stimulus. Indeed, in his January 27 testimony, Elmendorf explicitly refuted the suggestion that some of the spending provisions in the bill would not have a stimulative effect, stating: “[I]n our estimation — and I think the estimation of most economists — all of the increase in government spending and all of the reduction in tax revenue provides some stimulative effect. People are put to work, receive income, spend that on something else. That puts somebody else to work.” Additionally, Dean Baker, co-director of the Center for Economic and Policy Research, has said, “[S]pending is stimulus. Any spending will generate jobs. It is that simple.”

3. There is no reason for stimulus after a turnaround begins

Continue reading →

Obama's Campaign Manager and Elizabeth Edwards Get Book Deals

Barack Obama, David Plouffe, Elizabeth Edwards, John Edwards, The Audacity to Win: The Inside Story and Lessons of Barack Obama's Historic Victory

CBS NEWS’ HOTSHEET

hotsheet

David Plouffe, Barack Obama’s campaign manager, and Elizabeth Edwards, whose husband John ran for president last year and later admitted an extramarital affair, have both secured book deals, the Associated Press reports.

Plouffe’s seven-figure deal is for a book on the presidential election entitled “The Audacity to Win: The Inside Story and Lessons of Barack Obama’s Historic Victory.”

In a statement, publisher Viking said it would examine “the deliberations about whether to run against long odds, the epic primary battle with Hillary Clinton, the drama of the general election campaign against John McCain and the strategic roads taken — and not taken.”

It will “also detail the business lessons to be learned from the formation and the functioning of an unprecedented $1 billion start-up — use of technology, crisis management, grass roots, and personnel management.”

Edwards’ book, entitled “Resilience,” will be released in May. The publisher is not releasing details about what Edwards covers in the book, but she has plenty to work with: Her continuing fight against breast cancer, her experiences during her husband’s run for the Democratic presidential nomination, and the fallout from John Edwards’ admission of an affair with a video producer.

“She has always been a kind of candid and honest writer, and people can expect that of her in her new book,” said her publisher’s publicity director.

Edwards published a book in 2006 called “Saving Graces” in which she discussed her fight against cancer and the death of her son 10 years earlier. She has not discussed her husband’s affair in detail since it was revealed last August.

White House: Priority Is Legislation That "Doesn't Signal A Change In Our Overall Stance on Trade

AFL-CIO, Barack Obama, Bob Baugh, CAFTA, Free Trade, Larry Summers, NAFTA, Ohio, Pennsylvania, Robert Gibbs, Trade, White House, Wisconsin, WTO

By David Sirota
02/04/2009

Whether or not you are among the tiny minority of Americans who thinks our trade and globalization policies are good for our country, it is undeniable that Barack Obama campaigned on very explicit pledges to radically change those policies [1]. He not only campaigned on an implicit promise to support Buy America laws [2], but with regards to existing trade agreements and their provisions dealing with procurement, he said he does “not support trade efforts that undermine important federal, state and local policies.”

Clearly, his move to water-down the Buy America laws he campaigned on violate the spirit – if not the letter – of his campaign promises, especially because he is justifying the move by citing the trade agreement restrictions he said he opposed. But today, the White House went even further, saying that the administration’s overarching goal is actually no wholesale change of trade policy whatsoever. Check this out [3] from White House press secretary Robert Gibbs’ briefing today:

The lawmakers are reacting to a demand by the White House that the provisions satisfy U.S. obligations under the World Trade Organization. President Barack Obama “wants to ensure that any legislation that passes is consistent with trade agreements and doesn’t signal a change in our overall stance on trade,” White House Press Secretary Robert Gibbs said at a news briefing today.

As the AFL-CIO’s Bob Baugh notes – and as Public Citizen ably details [4] – Buy America laws (ie. laws that let the government target its procurement to American companies) are completely consistent with our international trade agreements. Indeed, both the “protectionist” [5] fearmongering and the “violation of trade pacts” nonsense are canards on the substance.

But that’s less important than the White House’s meta statement here. After winning free-trade-decimated swing states like Ohio, Indiana, Pennsylvania, Wisconsin on very clear promises to change America’s overall stance on trade policy, the White House has made an official declaration that one of the president’s biggest objectives in the debate over the stimulus bill is that the legislation “doesn’t signal a change in our overall stance on trade.” Yes, the administration that came in on a promise of “change” is explicitly saying it doesn’t want to even “signal a change.”

Between this, and Larry Summers’ letter [6] insisting that the Obama administration will avoid any “industrial policy” at all cost, I don’t know how much more clear the Obama administration can really make things. It is going before cameras specifically saying its objective is to prevent change on one of the most important economic issues that Obama campaigned on.


Daschle Withdraws His Nomination to Health and Human Services

Barack Obama, Charles Schumer, Edward Kennedy, HHS, John Kerry, Patrick Leahy, Robert Gibbs, Senate, South Dakota, Taxes, Tom Daschle

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(CNN) — Former Sen. Tom Daschle has withdrawn his nomination to head the Department of Health and Human Services, according to a statement Tuesday from the White House.

Daschle had been fighting to save his nomination as HHS secretary following controversy over his tax records and questions over his work in a field that some consider lobbying.

In a statement announcing his withdrawal, Daschle said it was an honor to be chosen to lead the reform of America’s health care system.

“But if 30 years of exposure to the challenges inherent in our system has taught me anything, it has taught me that this work will require a leader who can operate with the full faith of Congress and the American people, and without distraction,” he said.

“Right now, I am not that leader, and will not be a distraction. The focus of Congress should be on the urgent business of moving the president’s economic agenda forward, including affordable health care for every American.”

The Obama administration had stood by his side, and fellow Democrats lined up behind him, but Daschle’s problems, coupled with other nominees’ issues, gave critics ammunition to question President Obama’s call for a “new era of responsibility.”

The president said Tuesday he accepts Daschle’s decision “with sadness and regret.”

“Tom made a mistake, which he has openly acknowledged. He has not excused it, nor do I. But that mistake, and this decision, cannot diminish the many contributions Tom has made to this country, from his years in the military to his decades of public service. Now we must move forward, with our plan to lift this economy and put people back to work,” Obama said in a statement.

Daschle’s resignation came hours after Nancy Killefer’s withdrawal as Obama’s chief performance officer, a new post in the administration.

Officials said privately the reason for Killefer’s withdrawal was unspecified tax issues. The much-touted post was designed to scrub the federal budget.

Daschle, the former Senate majority leader, apologized Monday for failing to pay his taxes in full. He said earlier he was “deeply embarrassed” for a series of errors that included failing to report $15,000 in charitable donations, unreported car service and more than $80,000 in unreported income from consulting.

Daschle recently filed amended tax returns and paid more than $140,000 in back taxes and interest for 2005-2007.

A New York Times editorial on Tuesday called for Daschle to withdraw.

The paper’s editorial board particularly took issue with Daschle saying he identified the unpaid taxes in June but did not pay them until his nomination for the top post at the Department of Health and Human Services.

The editorial also criticized Daschle for generating a sizable income from health-related industries while working in the private sector.

“Mr. Daschle is another in a long line of politicians who move cozily between government and industry. We don’t know that his industry ties would influence his judgments on health issues, but they could potentially throw a cloud over health care reform,” the editorial said.

Shortly after news of the tax quandary broke, a number of Democratic senators released statements expressing their support for Daschle, including Sens. John Kerry of Massachusetts, Charles Schumer of New York, Patrick Leahy of Vermont and Edward Kennedy of Massachusetts. In their opinions, Daschle identified the problem and corrected it.

Daschle’s supporters said that given his record of three decades of public service, he was still the right man for the job.

“One cannot underestimate how widely admired Tom Daschle is in Washington for his integrity, for his public service. And many, many Democrats look to him as one of the favorite people. He’s got a lot of support in this White House, starting with the president,” said David Gergen, a senior political analyst for CNN.

Obama and Daschle have a longstanding relationship. Daschle endorsed Obama for the Democratic presidential nomination in February 2007 — nearly 11 months before the first contest. Daschle was also considered to be a contender for Obama’s No. 2 spot.

Daschle also has a history with members of Congress. He represented South Dakota in the House of Representatives for four terms, and he served in the Senate for three terms. He was the Senate majority leader from June 2001 to January 2003, and was the minority leader before losing his re-election bid in 2004.

Daschle’s work in his post-Senate years was also a point of contention on his path to confirmation.

After leaving the Senate, Daschle went on to serve as a special public policy adviser at the law firm Alston & Bird.

According to the firm’s Web site, Daschle advised clients on “issues related to financial services, health care, energy, telecommunications and taxes.”

His work, for which he reportedly made millions, seemed to contradict Obama’s strict rules on lobbyists working in his administration.

Promising “a new era of openness in our country,” Obama signed executive orders relating to ethics guidelines for staff members as one of his first acts in office.

“If you are a lobbyist entering my administration, you will not be able to work on matters you lobbied on, or in the agencies you lobbied during the previous two years,” the president said.

The administration had defended its choice of Daschle, pointing out that he was not technically a lobbyist.

“If you’re not registered to lobby, you can’t be a lobbyist,” said White House press secretary Robert Gibbs, according to Time.com. Time.com: When is a lobbyist not a lobbyist?

Daschle and Kellifer were not the first of Obama’s nominees to come under scrutiny.

Before Tim Geithner was confirmed as treasury secretary, he was questioned over concerns involving his personal taxes and the immigration status of a former housekeeper.

New Mexico Gov. Bill Richardson also withdrew his nomination to be commerce secretary, citing the distraction of a federal investigation into ties to a company that has done business with his state.

Given Obama’s pledge for “unprecedented transparency, rigorous oversight and clear accountability,” some said the controversy surrounding Obama’s appointments are calling into question the president’s vetting process.

“Mr. President, your picks to help run the federal government don’t have to be perfect, but is it too much to ask that they pay like everyone else, to keep that same government functioning? And more importantly, that they don’t wait until everyone, including you, is watching?” CNN’s Campbell Brown wrote in a commentary. Read the commentary

Asked if the president is embarrassed by the slew of appointment problems, Gibbs was quick to negate that idea.

“No, I don’t think that — that we believe there’s any problem in the vetting,” Gibbs said Monday.


Hillary Kicking Arse and Taking Names at State Department

Afghanistan, Democratic, Hillary Clinton, Iran, Jacob Lew, Laura D'Andrea Tyson, Middle East, Pakistan, State Department

Clinton moves to widen role of State Department

hillary_vmedmobile_logo

By Mark Landler and Helene Cooper
Tuesday, December 23, 2008

WASHINGTON: Even before taking office, Hillary Rodham Clinton is seeking to build a more powerful State Department, with a bigger budget, high-profile special envoys to trouble spots and an expanded role in dealing with global economic issues at a time of crisis.

Clinton is recruiting Jacob Lew, the budget director under President Bill Clinton, as one of two deputies, according to people close to the Obama transition team. Lew’s focus, they said, would be on increasing the share of financing that goes to the diplomatic corps.

He and James Steinberg, a deputy national security adviser in the Clinton administration, are to be Hillary Clinton’s chief lieutenants.

Nominations of deputy secretaries, like Clinton’s, would be subject to confirmation by the Senate.

The incoming administration is also likely to name several envoys, officials said, reviving a practice of the Clinton administration, when Richard Holbrooke, Dennis Ross and other diplomats played a central role in mediating disputes in the Balkans and the Middle East.

As Clinton puts together her senior team, officials said, she is also trying to carve out a bigger role for the State Department in economic affairs, where the Treasury has dominated during the Bush years. She has sought advice from Laura D’Andrea Tyson, an economist who headed Bill Clinton’s Council of Economic Advisers.

The steps seem intended to strengthen the role of diplomacy after a long stretch, particularly under Secretary of State Colin Powell, in which the Pentagon, the vice president’s office and even the intelligence agencies held considerable sway over U.S. foreign policy.

Given Hillary Clinton’s prominence, expanding the department’s portfolio could bring on conflict with other powerful cabinet members.

Clinton and President-elect Barack Obama have not settled on specific envoys or missions, although Ross’s name has been mentioned as a possible Middle East envoy, as have those of Holbrooke and Martin Indyk, a former U.S. ambassador to Israel.

The Bush administration has made relatively little use of special envoys. Secretary of State Condoleezza Rice has personally handled most peacemaking initiatives, which has meant a punishing schedule of Middle East missions, often with meager results.

“There’s no question that there is a reinvention of the wheel here,” said Aaron David Miller, a public policy analyst at the Woodrow Wilson International Center for Scholars. “But it’s geared not so much as a reaction to Bush as to a fairly astute analysis of what’s going to work in foreign policy.”

With so many problems, including Pakistan, Iran and Afghanistan, Miller said it made sense for the White House to farm out some of the diplomatic heavy lifting.

In addition to the Middle East, one Democratic foreign policy adviser said, Holbrooke might be considered for an appointment as special envoy to Afghanistan and Pakistan, and possibly Iran. The adviser said the decision had not been made.

A transition official dismissed as “speculation” reports in Indian newspapers that Obama was considering appointing Bill Clinton as a special envoy to deal with Kashmir issues.

But another transition official confirmed that Obama’s foreign policy advisers were discussing the possibility of appointing a special envoy to India. Steinberg, who is the dean of the Lyndon B. Johnson School of Public Affairs at the University of Texas, would probably coordinate the work of any special envoys, the official said.

The recruitment of Lew – for a position that was not filled in the Bush administration – suggests that Hillary Clinton is determined to win a larger share of financial resources for the department. Lew, a well-connected figure who was once an aide to the House speaker Thomas O’Neill, now works for Citigroup in a unit that oversees hedge funds.

“If we’re going to re-establish diplomacy as the critical tool in America’s arsenal,” a senior transition official said, “you need someone who can work both the budget and management side. He has very strong relations on the Hill; he knows the inner workings of how to manage a big enterprise.”

The official, who spoke on condition of anonymity because the discussions were private, said Clinton was being supported in her push for more resources by Defense Secretary Robert Gates and by Obama’s incoming national security adviser, General James Jones Jr.

For years, some Pentagon officials have complained that jobs like the economic reconstruction in Afghanistan and Iraq have been added to the military’s burden when they could have been handled by a robust foreign service.

“The Pentagon would like to turn functionality over to civilian resources, but the resources are not there,” the official said. “We’re looking to have a State Department that has what it needs.”

Clinton’s push for a more vigorous economic team, one of her advisers said, stems from her conviction that the State Department needs to play a part in the recovery from the global financial crisis.

Economic issues also underpin some of the most important diplomatic relationships, notably with China.

In recent years, the Treasury Department, led by Henry Paulson Jr., has dominated policy toward China. Paulson leads a “strategic economic dialogue” with China that involves several agencies. It is not yet clear who will pick up that role in the Obama administration, although Vice President-elect Joseph Biden Jr. is frequently mentioned as a possibility.

Israel Threatens 'Disproportionate' Response to Rockets

Gaza, Hamas, Israel, Palestinian

janda

Sunday, February 1, 2009

JERUSALEM: Gaza militants launched two rockets into southern Israel early Sunday, drawing a threat of “disproportionate” military retaliation from Israel’s prime minister and further straining a cease-fire that ended Israel’s devastating Gaza offensive two weeks ago.

There were no casualties from the rockets, though one projectile landed near a kindergarten in a community near Gaza, said a police spokesman, Micky Rosenfeld.

The recent Israeli offensive was aimed at halting years of rocket attacks, and the military declared a cease-fire on Jan. 18 after declaring its goals had been achieved.

But on Sunday the rockets, which followed sporadic rocket fire and the killing of an Israeli soldier in a border bombing attack last week, illustrated the difficulties of achieving a complete end to the attacks. Despite years of efforts, Israel’s high-tech military still has not found a solution to stopping the projectiles.

Speaking to his cabinet on Sunday, Israel’s outgoing prime minister, Ehud Olmert, said Israel would respond “when and where we choose.”

The government’s position, Olmert said, is that “if there is shooting at residents of the south, there will be an Israeli response that will be harsh and disproportionate by its nature to the shooting at residents of Israel and at our forces.”

Hamas has not taken responsibility for any of the new attacks, which have been claimed by smaller militant groups. But Israel says it holds Hamas, which has ruled Gaza since seizing power in June 2007, responsible for all attacks emanating from Gaza.

The rocket strikes come just over a week before Israel holds a parliamentary election. Tzipi Livni, the foreign minister and one of the leaders behind the operation, has replaced Olmert as head of the centrist Kadima party and is the only serious challenger to the front-runner, the hard-line Likud leader, Benjamin Netanyahu, according to recent opinion polls.

Netanyahu has been campaigning on a platform that calls for a tough stance against Hamas, and he stands to benefit if Israelis conclude that the offensive failed to achieve its goal of making residents of southern Israel safer.

Since ending the offensive, Israel has conducted retaliatory strikes and pounded tunnels Hamas uses to smuggle in weapons from Egypt. Israeli forces have also shot and killed three men whom Palestinians identified as farmers along the Gaza-Israel border.

One of Israel’s main concerns is that Hamas could continue smuggling weapons into Gaza through tunnels under the Egypt border. Israel is pushing Egypt to do more to crack down on the flow of weapons, and internationally backed anti-smuggling efforts are at the center of attempts to win a lasting cease-fire in Gaza.

Gaza is still struggling to recover from the punishing three-week offensive, which left swaths of the territory damaged and nearly 1,300 people dead, more than half of them civilians, according to Gaza officials. Thirteen Israelis were killed, including three civilians.

Hamas officials in Cairo were set to meet with Egyptian mediators on Sunday. The Palestinian president, Mahmoud Abbas, will meet Egyptian officials in Cairo on Monday. The official Palestinian news agency, Wafa, said that a visit by Abbas to the Czech Republic planned for Monday would have to be rescheduled.

Is There a White House Baby on the Way?

Barack Obama, Michelle Obama, Perez, Romors, White House

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CBS NEWS

Celebrity blogger Perez Hilton has rarely let facts get in the way of gossip. Still, his latest and apparently baseless speculation about Michelle Obama has generated international baby buzz.

On Wednesday, an item appeared on PerezHilton.com (filed under Baby Blabber – Conspiracy Corner) with the headline: “White House Baby???”

“We’re hearing talk in D.C. that Michelle Obama is pregnant,” the post read.

Despite Hilton’s blunt disclaimer (“this is completely unconfirmed”), the rumor has picked up steam. A Google search for the words “Michelle Obama” and “pregnant” churns out 826,000 results. Meanwhile, Gawker has begun scrutinizing recent photos of the First Lady for signs of pregnancy.

The speculation has also spread overseas. News outlets from England to Australia pounced on the news.

So did the gambling world. In the wake of the rumor, Ireland’s biggest bookmaker Paddy Power slashed the odds on Michelle Obama giving birth this year from 10-1 to 2-1. You can also wager on the sex of the baby and even if the birth will produce multiple babies (it’s 20-1 that Michelle Obama will have twins and 10,000-1 that she will have octuplets).

Paddy Power’s Ken Robertson tells CBSNews.com that at this very moment, there are 166 bets on “Yes, there will be a new first baby” (for a total stake of 2412 Euros) and 222 bets on “No, there will not be a new first baby” (for a total stake of €3996).

Of course, the baby bets also include what the Obamas would name their third child, after Sasha and Malia. Barack Jr. is the favorite at 3-1; Michelle is 10-1; and the 250-1 long shots include Paris, Perez and Jesus.

Roberston says so far the most widely backed name for the new baby is Barack Jr., which has 98 bets for a total stake of €784.

If the dubious rumor does prove to be true, the baby would be only the second born in the White House. That sole distinction now belongs to the daughter of President Grover Cleveland, who was born in 1893. Her name? Esther.

Rezco Sentencing Indefinately Postponed

Barack Obama, Chicago, Corruption, Tony Rezco
December 16, 2008


BY NATASHA KORECKI
Federal Courts Reporter
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A federal judge has indefinitely postponed the Jan. 6 sentencing for Tony Rezko, the prominent political fund-raiser and former adviser to Gov. Blagojevich.

The move this morning came after Rezko lawyers asked U.S. District Judge Amy St. Eve last week to throw out the sentencing date.

Rezko’s request comes as he restarts talks with federal prosecutors. Those talks hit a stumbling block as Rezko asked to be let out of solitary confinement at the downtown federal lockup. He asked for a rushed sentencing in January.

But last week’s revelation that the government has recordings in the governor’s case, appeared to change Rezko’s mind about cooperating.

Rezko’s lawyers did not ask for a new sentencing date at this morning’s hearing

Holder Forgets To Tell Judiciary Committee About Blago Work

Barack Obama, Eric Holder, Patrick Fitzgerald, Rahm Emmanuel, Rod Blagojevich
December 17, 2008

BY CHRIS FUSCO/Staff Reporter
CHICAGO SUN TIMES

Holder omitted Blagojevich link from questionnaire/Announced as a ‘special investigator to the Illinois Gaming Board’ in 2004

Before Eric Holder was President-elect Barack Obama’s choice to be attorney general, he was Gov. Blagojevich’s pick to sort out a mess involving Illinois’ long-dormant casino license.rat-blago

Blagojevich and Holder appeared together at a March 24, 2004, news conference to announce Holder’s role as “special investigator to the Illinois Gaming Board” — a post that was to pay Holder and his Washington, D.C. law firm up to $300,000.

Holder, however, omitted that event from his 47-page response to a Senate Judiciary Committee questionnaire made public this week — an oversight he plans to correct after a Chicago Sun-Times inquiry, Obama’s transition team indicated late Tuesday.

“Eric Holder has given hundreds of press interviews,” Obama transition spokeswoman Stephanie Cutter said in a statement. “He did his best to report them all to the committee, but as he noted in the questionnaire itself, some were undoubtedly missed in the effort to reconstruct a list of them.”

Holder signed the questionnaire on Sunday — five days after Blagojevich’s arrest for allegedly putting Obama’s U.S. Senate seat up for sale. The Judiciary Committee asked him to provide lists and “copies of transcripts or tape recordings of all speeches or talks delivered by you” and “all interviews you have given to newspapers, magazines or other publications.”

The March 2004 Chicago news conference where Holder and Blagojevich spoke was widely covered because of a controversial 4-1 Gaming Board vote earlier that month to allow a casino to be built in Rosemont. That vote defied the recommendation of the board’s staff, which had raised concerns about alleged organized-crime links to the Rosemont casino’s developer.

Besides that, the Gaming Board’s staff had been concerned that the governor had named his close friend and fund-raiser, Christopher G. Kelly, as a “special government agent” to be involved in official state negotiations about the casino. Kelly, the Sun-Times later learned, was a business partner of Tony Rezko, another Blagojevich fund-raiser who had held an option to lease a hotel site next to the proposed casino site in Rosemont.

Rezko, also a former Obama fund-raiser, and Kelly both have denied any wrongdoing related to the casino, though both have been charged in separate, unrelated criminal cases since 2004.

The Sun-Times disclosed Rezko’s interest in the Rosemont hotel site about three weeks before the news conference announcing Holder would be involved in the casino case. Holder was not aware of the story when he opted to get involved, a source said.

In an interview Tuesday, the Gaming Board’s chief investigator in 2004 said the timing of Blagojevich’s appointment of Holder raised the staff’s suspicions.

“The concern was Holder had a bias to do whatever Blagojevich wanted, which was to give the casino to Rosemont,” said Jim Wagner, who was a top Chicago FBI agent before he joined the Gaming Board, from which he retired in December 2005. “We all believed the only reason Holder was coming in was to fashion an investigation that would manipulate the casino into Rosemont.”

Wagner also said the matter should be explored by the Senate Judiciary Committee. “It ought be brought up and vetted totally as to what motivated him to leave it off” the questionnaire, Wagner said.

At the 2004 press conference, Holder stressed he would be independent.

“The governor’s made quite clear to me that he has no preconceived notions as to how this should turn out, that we should follow the facts, let them lead us to wherever they take us and then report to him and to the people of the state with regard to our findings,” he said.

Despite the concerns of the Gaming Board’s staff, Holder ended up a non-factor in the casino matter. The board — this time listening to its staff’s concerns — refused to hire him, and Blagojevich on May 18, 2004, said he was scrapping Holder’s probe.

“Holder and his firm did some preliminary work in anticipation of the engagement, but did not undertake the investigation itself before it was canceled,” said Cutter, the Obama transition team spokeswoman. “Holder and his firm received no compensation from the state for this preparatory work.

“The 2004 press conference,” she said, “was not memorable because Holder’s legal work for the State of Illinois never materialized.”

The state gaming license once slated to be located in Rosemont has been in limbo since Holder’s brief involvement in it. A process to award the license to one of three bidders is expected to wrap up soon. Rosemont — whose officials long have denied organized crime somehow taints their suburb — again is a finalist to become home to a casino, along with Waukegan and Des Plaines.

A former Deputy Attorney General, Holder has faced criticism about his role in President Bill Clinton’s controversial pardon of fugitive Marc Rich. His confirmation hearing is to begin Jan. 15.