Secret Federal Reserve Loan Gave Banks $13 Billion

By Bob Ivry, Bradley Keoun and Phil Kuntz -The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.
The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.
Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.
A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

‘Change Their Votes’

“When you see the dollars the banks got, it’s hard to make the case these were successful institutions,” says Sherrod Brown, a Democratic Senator from Ohio who in 2010 introduced an unsuccessful bill to limit bank size. “This is an issue that can unite the Tea Party and Occupy Wall Street. There are lawmakers in both parties who would change their votes now.”
The size of the bailout came to light after Bloomberg LP, the parent of Bloomberg News, won a court case against the Fed and a group of the biggest U.S. banks called Clearing House Association LLC to force lending details into the open.
The Fed, headed by Chairman Ben S. Bernanke, argued that revealing borrower details would create a stigma -- investors and counterparties would shun firms that used the central bank as lender of last resort -- and that needy institutions would be reluctant to borrow in the next crisis. Clearing House Association fought Bloomberg’s lawsuit up to the U.S. Supreme Court, which declined to hear the banks’ appeal in March 2011.
$7.77 Trillion
The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.
“TARP at least had some strings attached,” says Brad Miller, a North Carolina Democrat on the House Financial Services Committee, referring to the program’s executive-pay ceiling. “With the Fed programs, there was nothing.”
Bankers didn’t disclose the extent of their borrowing. On Nov. 26, 2008, then-Bank of America (BAC) Corp. Chief Executive Officer Kenneth D. Lewis wrote to shareholders that he headed “one of the strongest and most stable major banks in the world.” He didn’t say that his Charlotte, North Carolina-based firm owed the central bank $86 billion that day.

‘Motivate Others’

JPMorgan Chase & Co. CEO Jamie Dimon told shareholders in a March 26, 2010, letter that his bank used the Fed’s Term Auction Facility “at the request of the Federal Reserve to help motivate others to use the system.” He didn’t say that the New York-based bank’s total TAF borrowings were almost twice its cash holdings or that its peak borrowing of $48 billion on Feb. 26, 2009, came more than a year after the program’s creation.
Howard Opinsky, a spokesman for JPMorgan (JPM), declined to comment about Dimon’s statement or the company’s Fed borrowings. Jerry Dubrowski, a spokesman for Bank of America, also declined to comment.
The Fed has been lending money to banks through its so- called discount window since just after its founding in 1913. Starting in August 2007, when confidence in banks began to wane, it created a variety of ways to bolster the financial system with cash or easily traded securities. By the end of 2008, the central bank had established or expanded 11 lending facilities catering to banks, securities firms and corporations that couldn’t get short-term loans from their usual sources.

‘Core Function’

“Supporting financial-market stability in times of extreme market stress is a core function of central banks,” says William B. English, director of the Fed’s Division of Monetary Affairs. “Our lending programs served to prevent a collapse of the financial system and to keep credit flowing to American families and businesses.”
The Fed has said that all loans were backed by appropriate collateral. That the central bank didn’t lose money should “lead to praise of the Fed, that they took this extraordinary step and they got it right,” says Phillip Swagel, a former assistant Treasury secretary under Henry M. Paulson and now a professor of international economic policy at the University of Maryland.
The Fed initially released lending data in aggregate form only. Information on which banks borrowed, when, how much and at what interest rate was kept from public view.
The secrecy extended even to members of President George W. Bush’s administration who managed TARP. Top aides to Paulson weren’t privy to Fed lending details during the creation of the program that provided crisis funding to more than 700 banks, say two former senior Treasury officials who requested anonymity because they weren’t authorized to speak.

Big Six

The Treasury Department relied on the recommendations of the Fed to decide which banks were healthy enough to get TARP money and how much, the former officials say. The six biggest U.S. banks, which received $160 billion of TARP funds, borrowed as much as $460 billion from the Fed, measured by peak daily debt calculated by Bloomberg using data obtained from the central bank. Paulson didn’t respond to a request for comment.
The six -- JPMorgan, Bank of America, Citigroup Inc. (C), Wells Fargo & Co. (WFC), Goldman Sachs Group Inc. (GS) and Morgan Stanley -- accounted for 63 percent of the average daily debt to the Fed by all publicly traded U.S. banks, money managers and investment- services firms, the data show. By comparison, they had about half of the industry’s assets before the bailout, which lasted from August 2007 through April 2010. The daily debt figure excludes cash that banks passed along to money-market funds.

Bank Supervision

While the emergency response prevented financial collapse, the Fed shouldn’t have allowed conditions to get to that point, says Joshua Rosner, a banking analyst with Graham Fisher & Co. in New York who predicted problems from lax mortgage underwriting as far back as 2001. The Fed, the primary supervisor for large financial companies, should have been more vigilant as the housing bubble formed, and the scale of its lending shows the “supervision of the banks prior to the crisis was far worse than we had imagined,” Rosner says.
Bernanke in an April 2009 speech said that the Fed provided emergency loans only to “sound institutions,” even though its internal assessments described at least one of the biggest borrowers, Citigroup, as “marginal.”
On Jan. 14, 2009, six days before the company’s central bank loans peaked, the New York Fed gave CEO Vikram Pandit a report declaring Citigroup’s financial strength to be “superficial,” bolstered largely by its $45 billion of Treasury funds. The document was released in early 2011 by the Financial Crisis Inquiry Commission, a panel empowered by Congress to probe the causes of the crisis.

‘Need Transparency’

Andrea Priest, a spokeswoman for the New York Fed, declined to comment, as did Jon Diat, a spokesman for Citigroup.
“I believe that the Fed should have independence in conducting highly technical monetary policy, but when they are putting taxpayer resources at risk, we need transparency and accountability,” says Alabama Senator Richard Shelby, the top Republican on the Senate Banking Committee.
Judd Gregg, a former New Hampshire senator who was a lead Republican negotiator on TARP, and Barney Frank, a Massachusetts Democrat who chaired the House Financial Services Committee, both say they were kept in the dark.
“We didn’t know the specifics,” says Gregg, who’s now an adviser to Goldman Sachs.
“We were aware emergency efforts were going on,” Frank says. “We didn’t know the specifics.”

Disclose Lending

Frank co-sponsored the Dodd-Frank Wall Street Reform and Consumer Protection Act, billed as a fix for financial-industry excesses. Congress debated that legislation in 2010 without a full understanding of how deeply the banks had depended on the Fed for survival.
It would have been “totally appropriate” to disclose the lending data by mid-2009, says David Jones, a former economist at the Federal Reserve Bank of New York who has written four books about the central bank.
“The Fed is the second-most-important appointed body in the U.S., next to the Supreme Court, and we’re dealing with a democracy,” Jones says. “Our representatives in Congress deserve to have this kind of information so they can oversee the Fed.”
The Dodd-Frank law required the Fed to release details of some emergency-lending programs in December 2010. It also mandated disclosure of discount-window borrowers after a two- year lag.

Protecting TARP

TARP and the Fed lending programs went “hand in hand,” says Sherrill Shaffer, a banking professor at the University of Wyoming in Laramie and a former chief economist at the New York Fed. While the TARP money helped insulate the central bank from losses, the Fed’s willingness to supply seemingly unlimited financing to the banks assured they wouldn’t collapse, protecting the Treasury’s TARP investments, he says.
“Even though the Treasury was in the headlines, the Fed was really behind the scenes engineering it,” Shaffer says.
Congress, at the urging of Bernanke and Paulson, created TARP in October 2008 after the bankruptcy of Lehman Brothers Holdings Inc. made it difficult for financial institutions to get loans. Bank of America and New York-based Citigroup each received $45 billion from TARP. At the time, both were tapping the Fed. Citigroup hit its peak borrowing of $99.5 billion in January 2009, while Bank of America topped out in February 2009 at $91.4 billion.

No Clue

Lawmakers knew none of this.
They had no clue that one bank, New York-based Morgan Stanley (MS), took $107 billion in Fed loans in September 2008, enough to pay off one-tenth of the country’s delinquent mortgages. The firm’s peak borrowing occurred the same day Congress rejected the proposed TARP bill, triggering the biggest point drop ever in the Dow Jones Industrial Average. (INDU) The bill later passed, and Morgan Stanley got $10 billion of TARP funds, though Paulson said only “healthy institutions” were eligible.
Mark Lake, a spokesman for Morgan Stanley, declined to comment, as did spokesmen for Citigroup and Goldman Sachs.
Had lawmakers known, it “could have changed the whole approach to reform legislation,” says Ted Kaufman, a former Democratic Senator from Delaware who, with Brown, introduced the bill to limit bank size.

Moral Hazard

Kaufman says some banks are so big that their failure could trigger a chain reaction in the financial system. The cost of borrowing for so-called too-big-to-fail banks is lower than that of smaller firms because lenders believe the government won’t let them go under. The perceived safety net creates what economists call moral hazard -- the belief that bankers will take greater risks because they’ll enjoy any profits while shifting losses to taxpayers.
If Congress had been aware of the extent of the Fed rescue, Kaufman says, he would have been able to line up more support for breaking up the biggest banks.
Byron L. Dorgan, a former Democratic senator from North Dakota, says the knowledge might have helped pass legislation to reinstate the Glass-Steagall Act, which for most of the last century separated customer deposits from the riskier practices of investment banking.
“Had people known about the hundreds of billions in loans to the biggest financial institutions, they would have demanded Congress take much more courageous actions to stop the practices that caused this near financial collapse,” says Dorgan, who retired in January.

Getting Bigger

Instead, the Fed and its secret financing helped America’s biggest financial firms get bigger and go on to pay employees as much as they did at the height of the housing bubble.
Total assets held by the six biggest U.S. banks increased 39 percent to $9.5 trillion on Sept. 30, 2011, from $6.8 trillion on the same day in 2006, according to Fed data.
For so few banks to hold so many assets is “un-American,” says Richard W. Fisher, president of the Federal Reserve Bank of Dallas. “All of these gargantuan institutions are too big to regulate. I’m in favor of breaking them up and slimming them down.”
Employees at the six biggest banks made twice the average for all U.S. workers in 2010, based on Bureau of Labor Statistics hourly compensation cost data. The banks spent $146.3 billion on compensation in 2010, or an average of $126,342 per worker, according to data compiled by Bloomberg. That’s up almost 20 percent from five years earlier compared with less than 15 percent for the average worker. Average pay at the banks in 2010 was about the same as in 2007, before the bailouts.

‘Wanted to Pretend’

“The pay levels came back so fast at some of these firms that it appeared they really wanted to pretend they hadn’t been bailed out,” says Anil Kashyap, a former Fed economist who’s now a professor of economics at the University of Chicago Booth School of Business. “They shouldn’t be surprised that a lot of people find some of the stuff that happened totally outrageous.”
Bank of America took over Merrill Lynch & Co. at the urging of then-Treasury Secretary Paulson after buying the biggest U.S. home lender, Countrywide Financial Corp. When the Merrill Lynch purchase was announced on Sept. 15, 2008, Bank of America had $14.4 billion in emergency Fed loans and Merrill Lynch had $8.1 billion. By the end of the month, Bank of America’s loans had reached $25 billion and Merrill Lynch’s had exceeded $60 billion, helping both firms keep the deal on track.

Prevent Collapse

Wells Fargo bought Wachovia Corp., the fourth-largest U.S. bank by deposits before the 2008 acquisition. Because depositors were pulling their money from Wachovia, the Fed channeled $50 billion in secret loans to the Charlotte, North Carolina-based bank through two emergency-financing programs to prevent collapse before Wells Fargo could complete the purchase.
“These programs proved to be very successful at providing financial markets the additional liquidity and confidence they needed at a time of unprecedented uncertainty,” says Ancel Martinez, a spokesman for Wells Fargo.
JPMorgan absorbed the country’s largest savings and loan, Seattle-based Washington Mutual Inc., and investment bank Bear Stearns Cos. The New York Fed, then headed by Timothy F. Geithner, who’s now Treasury secretary, helped JPMorgan complete the Bear Stearns deal by providing $29 billion of financing, which was disclosed at the time. The Fed also supplied Bear Stearns with $30 billion of secret loans to keep the company from failing before the acquisition closed, central bank data show. The loans were made through a program set up to provide emergency funding to brokerage firms.

‘Regulatory Discretion’

“Some might claim that the Fed was picking winners and losers, but what the Fed was doing was exercising its professional regulatory discretion,” says John Dearie, a former speechwriter at the New York Fed who’s now executive vice president for policy at the Financial Services Forum, a Washington-based group consisting of the CEOs of 20 of the world’s biggest financial firms. “The Fed clearly felt it had what it needed within the requirements of the law to continue to lend to Bear and Wachovia.”
The bill introduced by Brown and Kaufman in April 2010 would have mandated shrinking the six largest firms.
“When a few banks have advantages, the little guys get squeezed,” Brown says. “That, to me, is not what capitalism should be.”
Kaufman says he’s passionate about curbing too-big-to-fail banks because he fears another crisis.
‘Can We Survive?’
“The amount of pain that people, through no fault of their own, had to endure -- and the prospect of putting them through it again -- is appalling,” Kaufman says. “The public has no more appetite for bailouts. What would happen tomorrow if one of these big banks got in trouble? Can we survive that?”
Lobbying expenditures by the six banks that would have been affected by the legislation rose to $29.4 million in 2010 compared with $22.1 million in 2006, the last full year before credit markets seized up -- a gain of 33 percent, according to OpenSecrets.org, a research group that tracks money in U.S. politics. Lobbying by the American Bankers Association, a trade organization, increased at about the same rate, OpenSecrets.org reported.
Lobbyists argued the virtues of bigger banks. They’re more stable, better able to serve large companies and more competitive internationally, and breaking them up would cost jobs and cause “long-term damage to the U.S. economy,” according to a Nov. 13, 2009, letter to members of Congress from the FSF.
The group’s website cites Nobel Prize-winning economist Oliver E. Williamson, a professor emeritus at the University of California, Berkeley, for demonstrating the greater efficiency of large companies.

‘Serious Burden’

In an interview, Williamson says that the organization took his research out of context and that efficiency is only one factor in deciding whether to preserve too-big-to-fail banks.
“The banks that were too big got even bigger, and the problems that we had to begin with are magnified in the process,” Williamson says. “The big banks have incentives to take risks they wouldn’t take if they didn’t have government support. It’s a serious burden on the rest of the economy.”
Dearie says his group didn’t mean to imply that Williamson endorsed big banks.
Top officials in President Barack Obama’s administration sided with the FSF in arguing against legislative curbs on the size of banks.

Geithner, Kaufman

On May 4, 2010, Geithner visited Kaufman in his Capitol Hill office. As president of the New York Fed in 2007 and 2008, Geithner helped design and run the central bank’s lending programs. The New York Fed supervised four of the six biggest U.S. banks and, during the credit crunch, put together a daily confidential report on Wall Street’s financial condition. Geithner was copied on these reports, based on a sampling of e- mails released by the Financial Crisis Inquiry Commission.
At the meeting with Kaufman, Geithner argued that the issue of limiting bank size was too complex for Congress and that people who know the markets should handle these decisions, Kaufman says. According to Kaufman, Geithner said he preferred that bank supervisors from around the world, meeting in Basel, Switzerland, make rules increasing the amount of money banks need to hold in reserve. Passing laws in the U.S. would undercut his efforts in Basel, Geithner said, according to Kaufman.
Anthony Coley, a spokesman for Geithner, declined to comment.

‘Punishing Success’

Lobbyists for the big banks made the winning case that forcing them to break up was “punishing success,” Brown says. Now that they can see how much the banks were borrowing from the Fed, senators might think differently, he says.
The Fed supported curbing too-big-to-fail banks, including giving regulators the power to close large financial firms and implementing tougher supervision for big banks, says Fed General Counsel Scott G. Alvarez. The Fed didn’t take a position on whether large banks should be dismantled before they get into trouble.
Dodd-Frank does provide a mechanism for regulators to break up the biggest banks. It established the Financial Stability Oversight Council that could order teetering banks to shut down in an orderly way. The council is headed by Geithner.
“Dodd-Frank does not solve the problem of too big to fail,” says Shelby, the Alabama Republican. “Moral hazard and taxpayer exposure still very much exist.”

Below Market

Dean Baker, co-director of the Center for Economic and Policy Research in Washington, says banks “were either in bad shape or taking advantage of the Fed giving them a good deal. The former contradicts their public statements. The latter -- getting loans at below-market rates during a financial crisis -- is quite a gift.”
The Fed says it typically makes emergency loans more expensive than those available in the marketplace to discourage banks from abusing the privilege. During the crisis, Fed loans were among the cheapest around, with funding available for as low as 0.01 percent in December 2008, according to data from the central bank and money-market rates tracked by Bloomberg.
The Fed funds also benefited firms by allowing them to avoid selling assets to pay investors and depositors who pulled their money. So the assets stayed on the banks’ books, earning interest.
Banks report the difference between what they earn on loans and investments and their borrowing expenses. The figure, known as net interest margin, provides a clue to how much profit the firms turned on their Fed loans, the costs of which were included in those expenses. To calculate how much banks stood to make, Bloomberg multiplied their tax-adjusted net interest margins by their average Fed debt during reporting periods in which they took emergency loans.

Added Income

The 190 firms for which data were available would have produced income of $13 billion, assuming all of the bailout funds were invested at the margins reported, the data show.
The six biggest U.S. banks’ share of the estimated subsidy was $4.8 billion, or 23 percent of their combined net income during the time they were borrowing from the Fed. Citigroup would have taken in the most, with $1.8 billion.
“The net interest margin is an effective way of getting at the benefits that these large banks received from the Fed,” says Gerald A. Hanweck, a former Fed economist who’s now a finance professor at George Mason University in Fairfax, Virginia.
While the method isn’t perfect, it’s impossible to state the banks’ exact profits or savings from their Fed loans because the numbers aren’t disclosed and there isn’t enough publicly available data to figure it out.
Opinsky, the JPMorgan spokesman, says he doesn’t think the calculation is fair because “in all likelihood, such funds were likely invested in very short-term investments,” which typically bring lower returns.

Standing Access

Even without tapping the Fed, the banks get a subsidy by having standing access to the central bank’s money, says Viral Acharya, a New York University economics professor who has worked as an academic adviser to the New York Fed.
“Banks don’t give lines of credit to corporations for free,” he says. “Why should all these government guarantees and liquidity facilities be for free?”
In the September 2008 meeting at which Paulson and Bernanke briefed lawmakers on the need for TARP, Bernanke said that if nothing was done, “unemployment would rise -- to 8 or 9 percent from the prevailing 6.1 percent,” Paulson wrote in “On the Brink” (Business Plus, 2010).

Occupy Wall Street

The U.S. jobless rate hasn’t dipped below 8.8 percent since March 2009, 3.6 million homes have been foreclosed since August 2007, according to data provider RealtyTrac Inc., and police have clashed with Occupy Wall Street protesters, who say government policies favor the wealthiest citizens, in New York, Boston, Seattle and Oakland, California.
The Tea Party, which supports a more limited role for government, has its roots in anger over the Wall Street bailouts, says Neil M. Barofsky, former TARP special inspector general and a Bloomberg Television contributing editor.
“The lack of transparency is not just frustrating; it really blocked accountability,” Barofsky says. “When people don’t know the details, they fill in the blanks. They believe in conspiracies.”
In the end, Geithner had his way. The Brown-Kaufman proposal to limit the size of banks was defeated, 60 to 31. Bank supervisors meeting in Switzerland did mandate minimum reserves that institutions will have to hold, with higher levels for the world’s largest banks, including the six biggest in the U.S. Those rules can be changed by individual countries.
They take full effect in 2019.
Meanwhile, Kaufman says, “we’re absolutely, totally, 100 percent not prepared for another financial crisis.”

Democract Barney Frank Won't Seek Re-Election In 2012

By Glen Johnson, Noah Bierman and Donovan Slack, Globe Staff - US Representative Barney Frank, the state’s highest-profile congressman and one of the nation’s leading liberal voices after being among its first openly gay elected officials, planned to announce today that he will not reelection next year.

Barney Frank

A top adviser told the Globe that the new district in which Frank would have had to run next year was a major factor in his decision. While it retained his Newton stronghold, it was revised to encompass more conservative towns like Walpole while losing New Bedford, a blue-collar city where the Democrat had invested a lot of time and become a leading figure in the region’s fisheries debate.
Frank’s campaign manager last year said his withering 2010 re-election effort spurred the congressman to think seriously about retirement, even saying a few days after the election that it would be his last one.
Frank wanted to announce that this would be his final term immediately afterward, but decided against it, said Kevin Sowyrda, the campaign manager.
“We looked him right in the face and said, ‘You can’t resign,” Sowyrda said. “In fairness to Barney, he was emotional about it. He said, ‘I know I’ve got to stay.’”
“I believe that Barney felt an obligation to come through for the (supporters) people that came through for him,” said Sowyrda.
But retirement has been on his mind ever since.
The congressman scheduled a 1 p.m. press conference at Newton City Hall “to formally announce and answer questions about his decision not to run for re-election in 2012,” according to a statement.
“After that election, he began the process of contemplating a different future with different challenges,” Sowyrda said.
John Walsh, chairman of the Massachusetts Democratic Party, said in a statement: “In a state that has sent many great leaders to Washington, Barney Frank will take his place in history as a shining son of Massachusetts.”
Former party head Philip W. Johnston told the Globe: “He was brilliant, funny, acerbic, strategic, and unashamedly liberal. And they’re in short supply these days.”
Frank, 71, was raised in New Jersey but schooled at Harvard University and Harvard Law School, endowing him with a street-fighter’s mouth and an academic’s wit.
He was elected to the Massachusetts House of Representatives in 1972 and the US House eight years later.
In 1987, he became the first member of the chamber to voluntarily acknowledge he was gay. Two years later, he was involved in a scandal in which a live-in boyfriend operated a gay prostitute service from his home. The House ended up reprimanding Frank for the incident.
More recently, he has been one of President Obama’s most important allies but also a target of Republicans. They accuse him of helping create the country’s housing collapse by pushing the government and banks into approving loans to unqualified buyers.
Frank faced a stern reelection challenge last year from Republican Sean Bielat, prevailing 53 percent to 43 percent but only after a blistering campaign.
He also shifted from chairman of the House Financial Services Committee to its top-ranking minority member when Republican regained control of the House of Representatives in last year’s midterm elections.
Frank, who co-authored the law overhauling financial regulation and spearheaded its passage as chair of the Financial Services Committee last year, acknowledged himself in February that he had contemplated retirement after last year’s race.
But he said after GOP lawmakers took over the House and began targeting the financial overhaul he authored, he decided he needed to try to keep his job.
“Some very important programs are at risk,’’ he said then.
The announcement comes a week after Governor Deval Patrick signed a law creating the new state congressional districts. Another Democrat in the delegation, US Representative John Olver, announced in October that he would not seek reelection next year amid the specter of being forced into a showdown with US Representative Richard E. Neal of Springfield.
Frank has depended on his hometown of Newton, as well as Brookline and the Democratic strongholds of Fall River and New Bedford to keep his seat the last three decades. But he lost New Bedford and picked up additional conservative voting towns west and south of Boston and in Bristol and Norfolk counties.
Sowyrda said Frank wanted to hold off on a decision until the redistricting process was finalized.
“When Barney saw the district changed, his exact words to me were ‘They didn’t do me any favors,’” said Sowyrda, who has remained an unofficial adviser.
“The redistricting plan was the straw that broke the camel’s back,” added Sowyrda. “I think if they left the district with New Bedford in it, you would see him running again.
“The texture of the district had changed.”
Sowyrda predicted Frank’s next chapter will include the classroom.
“This guy has talked to me about teaching for years,” he said.

NATO Attack Kills 20 Pakistani Soldiers

Islamabad (CNN) -- NATO helicopters opened fire on a Pakistani checkpoint, killing 20 soldiers, two senior Pakistani military officials said Saturday.
The officials said 12 soldiers were wounded in the attack late Friday in the Mohmand Agency area, one of seven districts of the volatile region bordering Afghanistan. The death toll could rise as many of the injuries are critical, they said.
The officials did not want to be named because they are not allowed to talk to the media.
In a statement, Pakistani Prime Minister Yousuf Raza Gilani said he "strongly condemned the NATO/ISAF attack on the Pakistani post."
The matter is being taken up by the Foreign Ministry "in the strongest possible terms" with NATO and the United States, he said.
NATO has said it is aware of "an incident," but has not released any details.
"We are still gathering information," said Jason Wagner, a spokesman for the NATO-led military mission.
Gen. Aminullah Amarkhil, commander of Afghanistan's eastern border police, said an operation was going on in the area bordering Mohmand Agency on Friday night.
"Last night, there was an operation there inside Afghanistan," he said. "Pakistani and Afghan Taliban have got a broad presence there as there are forests and difficult terrain. That's why there was an operation."
He said the military activity was in Afghanistan's Kunar province, but added he was unaware of NATO firing on Pakistani forces on the other side of the border. His latest information suggested 10 insurgents had been killed in the Afghanistan operation, he said.
Meanwhile, Pakistan has halted the flow of NATO supplies in Khyber Agency bordering Afghanistan in response to the attack, said Jamil Khan, a senior government official in the area.
About 50 containers and trucks carrying supplies for NATO were stopped at the town of Jamrud in Khyber Agency on Saturday morning, Khan said.
They were ordered to turn back toward Peshawar, the provincial capital of northwestern province Khyber Pakhtunkhwa, he said.
A second route from Pakistan into Afghanistan, the Chaman border crossing in Balochistan province, is still open to NATO supply trucks.
Roughly 40% of nonlethal NATO supplies and fuel go through Pakistan, with hundreds of supply trucks using the two routes into Afghanistan.
About 130,000 troops are deployed in Afghanistan with the NATO-led International Security Assistance Force, 90,000 of them American, according to NATO figures.
If confirmed as a NATO attack, Friday's incident could be the deadliest for Pakistani soldiers involving NATO since a U.S. airstrike in June 2008, which Pakistan said killed 11 of its forces who were cooperating with the U.S.-led war in Afghanistan.
That airstrike, also in Mohmand Agency, prompted the government in Islamabad to summon the U.S. ambassador and lodge an official protest.
NATO commander in Afghanistan, Marine Gen. John R. Allen, met with the Pakistani Chief of Army Staff Gen. Ashfaq Parvez Kayani on Thursday, the Pakistani military said.
"The visiting dignitary remained with him for some time and discussed measures concerning coordination, communication and procedures between Pakistan army, ISAF and Afghan army, aimed at enhancing border control on both sides," a Pakistani military statement said.
Pakistani officials who spoke with CNN expressed anger about Friday's attack.

Gingrich-Romney "Fight For The Nomination"

Jonah Golberg - Whether the matchup between Newt Gingrich and Mitt Romney is the final bout on the GOP primary card is impossible to know. The whole season has been more like professional wrestling than boxing, with weird characters sporting implausible hair appearing out of nowhere to talk smack and explain why they are the greatest in the world. (I'm looking at you in particular, Mr. Trump.)
Still, let's assume for the moment that it's a Gingrich-Romney contest.
It's quite a matchup. Romney has been brutalized for having too little personality, Gingrich for having way, way too much. Romney looks like the picture that comes with the frame. Gingrich looks like he should be ensconced in royal velvet as he gestures at you with a half-eaten turkey leg in one hand and a sloshing goblet of wine in the other. Romney seems terrified of fully committing to any idea. Gingrich speaks as if he just text-messaged with God.
Gingrich would have everyone believe he is the winner of the anti-Romney mantle not merely by default but by hard-won effort and a well-deserved reputation for conservative steadfastness. Many in the media, meanwhile, think that since Gingrich is taking the slot once held by Palin, Bachmann, Cain and Perry, he is a conservative of similar stripe. And many liberals think that since they hate him so much, he must be really right-wing. (They made the same mistake with Richard Nixon and George W. Bush, both of whom were far less ideologically conservative than their press clippings indicated.)
The reality is more complicated. For starters, it's not altogether clear that Gingrich is that far to the right of Romney.
Gingrich's record -- political and rhetorical -- is so vast and diverse, there's plenty of evidence to build almost any narrative you want. He's said some of the most bombastic right-wing things of any mainstream Republican in our lifetimes, but he's also reached across the aisle more frequently than far-more-liberal Republicans would ever dare.
As House speaker, he cut a deal with President Clinton on the budget. He infamously joined forces with Nancy Pelosi on climate change, with the NAACP on prison reform and with Al Sharpton on education. He was one of the few movement conservatives to vocally back George W. Bush's expansion of Medicare, and he continues to support ethanol subsidies with a straight face. And, of course, last April he tore into Paul Ryan's budget proposal as "right-wing social engineering," immolating himself in the process.
Gingrich has since retracted and modified his stance on the Ryan plan. And he's called his pairing with Pelosi one of the stupidest things he's ever done.
Still, those who dismiss Gingrich as hopelessly unelectable in the general election should at least keep in mind that Gingrich's apostasies will make it harder to tar him as a cookie-cutter "right-wing extremist."
The crucial question for most Republicans will be: Who would govern more conservatively? The candidate who answers that question to the satisfaction of the GOP base will likely be the nominee. But that question begs another: What will Congress look like?
If the Republicans take back the Senate and hold the House, you could make the case that Romney is the better man for the job. Given his unpopularity with the base of his own party, he would be on a much shorter leash and be expected to fly Ryan's flag over the West Wing while making Republican proposals seem more reasonable to the public. He very well might be the technocrat in chief, implementing reforms not necessarily of his own choosing.
Gingrich, meanwhile, is much more of a wild card. It's no secret he sees himself as a world historical figure, the last of the great statesmen. And part of that self-conception is his idea that statesmen cut grand bargains with the opposition when history calls for it. That's not necessarily a bad thing, if you know for sure when history calls for it. If the GOP controlled Congress, conservatives would be on constant "Nixon to China" watch with a President Gingrich.
Given the craziness of the season, I've been humbled enough to say I have no idea how this will play out. But I will admit, I'm looking forward to the next steel cage match.

Democractic Pollsters: Obama Should Not Run For A Second Term

Rabble Rouser Reverend Amy - Now THERE is a headline I can get behind, from the National Journal. Yes, a variety of sources are reporting today that Democratic pollsters are a bit concerned about Obama’s re-election campaign, and what would happen should he get (NOOOO!) a second term. I gotta tell you, this is a welcome headline indeed.
And just who are these Democratic pollsters, one might ask? Well, Patrick Caddell, for one, and Douglas Schoen for another. Now, I admit right up front that I am a bit partial to Patrick Caddell. Not only is he from a city in SC, close to the NC border, but he tells it like it is whether it is beneficial to his party or not, a rare find in today’s political exceedingly partisan world. Schoen is no slouch in that department, either, and I respect him as well.
And now to their headline-grabbing claim:

[snip] “He should abandon his candidacy for re-election in favor of a clear alternative, one capable not only of saving the Democratic Party, but more important, of governing effectively and in a way that preserves the most important of the president’s accomplishments. He should step aside for the one candidate who would become, by acclamation, the nominee of the Democratic Party: Secretary of State Hillary Clinton,”Caddell and Schoen wrote.
[...]
“One year ago in these pages, we warned that if President Obama continued down his overly partisan road, the nation would be ‘guaranteed two years of political gridlock at a time when we can ill afford it.’ The result has been exactly as we predicted: stalemate in Washington, fights over the debt ceiling, an inability to tackle the debt and deficit, and paralysis exacerbating market turmoil and economic decline,” they write.
Caddell and Schoen say they write as “patriots and Democrats” who are concerned for their country, and they do not expect to play a direct role in any possible Clinton campaign. (Click here to read the rest.)

Holy moley – see what I mean? Telling it like it is. I happen to think they are 100% correct in their conclusion. Obama is the most partisan president I have ever seen, and his use of the Super Committee as a campaign talking point makes the case. As I have stated previously, this is NOT the time to play party politics. This is the time to work to save the nation, and we all have to work together toward that end. Yet, Obama refuses to accept any recommendations of the very committee he put together (Simpson Bowles), and the Democrats refuse to hear plans based on those recommendations because they come from – the horror – a Republican (Toomey). Sheer insanity.
One interesting twist to this drumbeat for Obama to step down from a re-election campaign is who the pollsters mentioned above think should take his place: Hillary Rodham Clinton. From their piece in the Wall Street Journal:

[snip] He should abandon his candidacy for re-election in favor of a clear alternative, one capable not only of saving the Democratic Party, but more important, of governing effectively and in a way that preserves the most important of the president’s accomplishments. He should step aside for the one candidate who would become, by acclamation, the nominee of the Democratic Party: Secretary of State Hillary Clinton.
Never before has there been such an obvious potential successor—one who has been a loyal and effective member of the president’s administration, who has the stature to take on the office, and who is the only leader capable of uniting the country around a bipartisan economic and foreign policy.[snip] (Click here to read the rest.)

Interesting, no? But in the same breath as why she should be the nominee, is why many of us would have problems with this successor: Clinton is a loyal member of the Obama Administration. Uh, yeah…
Now, most of us also know that Clinton should have been, and would have been, the 2008 Nominee had the DNC and Obama Campaign not engaged in a tremendous amount of well-documented shenanigans, some illegal, and others unethical and immoral. Not only did the DNC violate the law in 13 states (see jbjd’s excellent report on this), but their machinations 5/31/08 to steal lawfully cast votes from Clinton to give to Obama was the last straw for many dyed in the wool, yellow dog Democrats, like myself.
But that was then, and this is now. Though I have to say, I do like the idea of not having to hear Obama continue his Us/Them attacks for another freakin’ year. I would be MORE than happy for him to just throw in the towel now. And he can take Michelle “I Pay $15,000 A Day For Makeup” Obama with him. Oh, wait – SHE doesn’t pay it. WE pay it. And that is a helluva lotta coin for MAKEUP. IMHO, that is.
So, yeah – I agree with Caddell and Schoen that it’s time for them to take their leave from DC. How about you?

Even Obama's Followers Are Following Away

David Limbaugh - President Obama's cheerleaders are starting to peel away along with his approval ratings, and it's a fascinating sight to behold. They offer different reasons, but they all boil down to one obvious thing -- Obama is first and foremost about Obama -- and one less obvious: He has been a failed president.
Democratic pollsters Pat Caddell and Doug Schoen, admittedly more centrist than most of their Democratic counterparts, penned an op-ed in The Wall Street Journal urging Obama "to abandon his candidacy for re-election." The authors conclude that the only way Obama could possibly win in 2012 would be "to wage the most negative campaign in history," because he has no successful record to run on. If he would happen to win in that way, he wouldn't be able to govern, they say, so he should step aside and allow Hillary Clinton to run.
Their main beef with Obama seems to be his extreme partisanship, which is a particularly damning indictment coming from fellow Democrats. Should he resign, they argue, he would be in a better position to work with Republicans toward "a more constructive dialogue about our nation's future" instead of obsessing over whether he or George W. Bush is more to blame for our problems.
I don't agree that Obama would be any easier to work with if he were to withdraw from the race, but it is significant that two credible Democrats, both still loyal to their party, concede that Obama is hyper-partisan and hopelessly mired in the quicksand of scapegoating his predecessor.
Even more interesting was the viral video of Chris Matthews explaining to fellow MSNBC host Alex Witt why his Obama-thrill is gone. This represents quite a fall from Matthews' previous perch of Obama hero worship.
Matthews clearly believes that Obama peaked about the time his campaign ended and his term in office began, because "the day he was inaugurated, with the Mall filled with people, African-Americans and everyone else, he sent us all home and said, 'Thank you. Now watch how smart I am.' That's the worst kind of a notion of the presidency."
Matthews is also upset that Obama is running a "virtual presidency," through endless impersonal emails, rather than building and exploiting the interpersonal relationships that are vital for effective governance. On that score, he laments: "I hear stories (from members of Congress) that you will not believe. Not a single phone call since the last election."

The "Palinization" Of Newt Gingrich Is Next On The Calendar

Allahpundit - With Newt Gingrich continuing to surge in the polls, plenty of stories are bubbling to the surface, including things from the distant past. And let’s face it… Newt has been knocking around US politics for an awfully long time, with tales of many of his exploits being told and retold until they pass into legend. Of course, you know what they say about legends.

[countable] an old story about famous people and events in the past. Legends are not usually true

One of the more nasty ones is the persistent tale of how Newt went to see his wife as she lay dying of cancer in her hospital bed and presented her with divorce papers. Ouch. That’s a pretty unpleasant story to float about anyone, and apparently it’s so temptingly salacious that it keeps getting hinted at in the media and I’ve seen it cropping up again on Twitter as recently as last night. Unfortunately for the gossip minded, nearly every aspect of the story is false and has been roundly debunked by what should be considered a pretty reliable source – his own daughter who was in the hospital room at the time. (Hat tip to OTB.)

So, to correct the record, here is what happened: My mother, Jackie Battley Gingrich, is very much alive, and often spends time with my family. I am lucky to have such a “Miracle Mom,” as I titled her in a column this week.
As for my parents’ divorce, I can remember when they told me.
It was the spring of 1980.
I was 13 years old, and we were about to leave Fairfax, Va., and drive to Carrollton, Ga., for the summer. My parents told my sister and me that they were getting a divorce as our family of four sat around the kitchen table of our ranch home.
Soon afterward, my mom, sister and I got into our light-blue Chevrolet Impala and drove back to Carrollton.
Later that summer, Mom went to Emory University Hospital in Atlanta for surgery to remove a tumor. While she was there, Dad took my sister and me to see her.
It is this visit that has turned into the infamous hospital visit about which many untruths have been told. I won’t repeat them. You can look them up online if you are interested in untruths. But here’s what happened:
My mother and father were already in the process of getting a divorce, which she requested.
Dad took my sister and me to the hospital to see our mother.
She had undergone surgery the day before to remove a tumor.
The tumor was benign.
As with many divorces, it was hard and painful for all involved, but life continued.

Yes, Newt is on his third marriage and some conservatives will raise questions about his marital track record, as they are entitled to do. But repeating this old chestnut is hurtful and slanderous. (For the record, I actually believed this story myself for quite a while and I know I made reference to it, so I’d like to apologize once again as well.)
There will be more than enough real material for critics to debate coming from Gingrich’s decades of public (and private) life, but we should focus on what is accurate and verifiable. So if you see anyone repeating this myth, do everyone a favor and point them to his daughter’s account of the story.

Newt Gingrich: MSNBC Headquarters For Pres. Obama Re-Election

RealClearPolitics. com - "I understand there are places like MSNBC that are essentially the Obama re-election team. But, you know, that's fine. This is a free society. You can also say that Fox tends to be nicer to [Republicans] than to Obama," presidential candidate Newt Gingrich said at a campaign event in Jacksonville, Florida today.

Gingrich praised the mainstream media for vetting candidates, noting, though, they only do it for Republican or conservative candidates.

Gingrich says he is confident that after the media vets him that the American people will be satisfied.

"In the next three weeks, I predict to you we will have all sorts of questions about me. And it's fine. You can not ask the people of the United States to loan you the most powerful governmental job in the world, particularly in a campaign that's promising very dramatic change, and not have them vet you carefully and thoroughly," Gingrich said.

NH Journal Poll: New Gingrich In Virtual Dead Heat Mitt Romney

Ed Morrissey - Yes, I think it’s safe to say that the Newt Gingrich bubble has gotten serious.  A new poll from Magellan Strategies in New Hampshire — Mitt Romney’s long-held redoubt — shows Gingrich now in a virtual dead heat with the presumed Republican frontrunner.  As NH Journal reports, the internals look even better for Gingrich than the top-line numbers:

The latest NH Journal poll of likely Republican primary voters conducted by Magellan Strategies shows Romney and Gingrich in a statistical dead heat for the January 10th primary. If the election were held today, Romney would earn 29% of the vote and Gingrich would earn 27%. Texas Congressman Ron Paul continues to show resolve by earning 16%. Herman Cain gets 10%. No other candidate is in double digits.
This is the first time any of NH Journal’s polls have shown anyone candidate even close to Romney. It also shows tremendous movement for Gingrich since NH Journal’s October survey, in which Gingrich was in third place, but at only 10% versus Romney’s 41%. …
A close look at the data shows Gingrich is actually leading Romney among certain important subgroups of the electorate. Among self-identified conservative voters, Gingrich beats Romney 34%-27%. Among self-identified tea party voters, he leads Romney 38%-21%.
However, Romney has a wide lead over Gingrich among Undeclared voters, who give the former Massachusetts Governor 29% over Paul’s 19% and Gingrich’s 18%. There is also a significant gender gap for both Romney and Gingrich. Romney beats Gingrich 33%-22% among women while Gingrich defeats Romney 32%-24% among men.

If this is not an outlier (Magellan is a fairly reliable pollster), then this is a blockbuster result.  Romney doesn’t need to win Iowa to garner the nomination; a strong second-place finish there could propel him quickly to the ticket — but only if he wins New Hampshire.  A loss in this state would be a body blow, especially if Gingrich wins Iowa ahead of New Hampshire and then takes aim at South Carolina and Florida.  Even a win in Michigan and Nevada might not slow down Gingrich, and Romney could be looking at a second consecutive CPAC concession in his presidential-campaign career if he loses either or both of those.
There are, however, a couple of big caveats.  No one has really tested Gingrich in this campaign, mainly because no one has needed to go on the attack against someone who hasn’t been a front-runner.  Romney will have no choice now but to open fire on the man who has praised him in the debates, and probably with much more gusto than he did against Rick Perry, who was never a threat to Romney in New Hampshire.
Another point to keep in mind is that Gingrich himself has only begun to perform as a front-runner, and he comes to this polling result with a huge disadvantage in organization.  Last night, Gingrich welcomed back the staff who walked out on him in June, which might accelerate the organizational build-up he needs to really compete in Iowa and New Hampshire:

For Newt Gingrich, the latest twist on “what goes around, comes around” has an unusual personal dimension. On top of his surge in polls and fund-raising, Mr. Gingrich has rehired two of the Iowa staff members who quit during a mass exodus from his campaign in June. …
Thanks to his solid performances in national debates, he has gradually gained supporters and donors, emerging at the top of some recent polls and flush with enough money to hire a new staff.
Last week he opened offices in New Hampshire and South Carolina. And on Thursday the campaign announced it had rehired Craig Schoenfeld, who had been state director in Iowa before the departures, and Katie Koberg, who had been deputy director. The hirings were first reported by The Des Moines Register.

Still, the polling results offer a bad omen for Romney, who had been quietly building a narrative of inevitability for his nomination.  If he becomes vulnerable in the one state he had thought was locked into his camp, then the state might be open to nearly any one of the candidates who can manage to boost their polling.  If Gingrich can build his organization quickly and manage to withstand the scrutiny of being the front-runner, he could push Romney out of the nomination by early January … but those are mighty big ifs, too.

Iowa State Poll: Cain 24%, Paul 20%, Romney 16%

CEDAR RAPIDS — With fewer than 50 days until Iowa’s first-in-the-nation precinct caucuses, the Republican presidential race appears to be up for grabs based on the results of an Iowa State University/Gazette/KCRG poll of likely caucusgoers.

“That’s more the story than who’s ahead,” said Jim McCormick, chairman of the ISU Political Science Department, who coordinated the poll.

“The number of people who are firmly committed to a candidate is really only 16.5 percent,” McCormick said. “A majority of them, 52-plus, are undecided and 30 percent are sort of leaning toward one candidate.”

Herman Cain leads the field with the support of 24.5 percent of 1,256 registered Iowa voters polled. Texas Rep. Ron Paul follows with 20.4 percent and former Massachusetts Gov. Mitt Romney is third at 16.3 percent.

“Can’t decide” polled 8.1 percent — more than Texas Gov. Rick Perry (7.9 percent), Minnesota Rep. Michele Bachman (7.6 percent), former House Speaker Newt Gingrich (4.8 percent) and former Pennsylvania Sen. Rick Santorum (4.7 percent). Former Utah Gov. Jon Huntsman, who has not campaigned in Iowa, received no support. “Other” polled 5.8 percent. The margin of error is plus or minus 5 percent.

“My takeaway from these results is that voters are still really unsure of whom they will support,” said Dave Peterson, interim director of the Harkin Institute of Public Policy at ISU and associate professor of political science, who also assisted with the poll. “Over half of the people are still trying to decide, and another third are merely leaning toward a candidate. When asked, people will express a preference for one candidate  but that they will also admit that this is a weak attitude.”

The poll was compiled through phone interviews Nov. 1-13 and surveyed 979 registered Republicans and 277 registered independents. Of those polled, 377 (30 percent) stated that they definitely or probably would attend the Republican caucus Jan. 3.

Two other important takeaways from the poll, McCormick said, are Cain’s popularity among likely GOP caucus-goers — including women — despite recent allegations of sexual harassment and an apparent decline in the impact of traditional retail politics.

News of the sexual harassment claims was breaking as the poll was being conducted.

“The maintenance of his support seems quite remarkable,” McCormick said.

The fact Cain and Romney are top-tier candidate despite infrequent visits suggests to McCormick “that retail politics — typically a hallmark of Iowa — is not the way the caucuses are going to be decided this year.”

Cain has visited 25 times but just twice since his fifth-place finish in the August Republican straw poll. Romney has visited a half dozen times.

“Contrast that with Santorum, who visited all 99 counties, and Bachmann, who repeatedly talks about being born in Iowa and has spent a lot of time here, and they’re down in the single-digit percentages,” McCormick said.

Romney has a lot of “holdover” support, according to University of Iowa political scientist Tim Hagle, and Cain’s number may not reflect the number of visits to Iowa so much as it’s his turn at the top of the leaderboard. The GOP campaign has been marked by “surge and fade” of Bachmann, then Perry, Cain and now Gingrich, he said.

While he doesn’t disagree with McCormick’s analysis, Hagle cautions that because the race is so volatile that all polls have to be taken with a grain of salt.

The timing of the polling may not have fully captured the reaction to the allegations against Cain or his trouble answering a question about President Obama’s handling of Libya as well as Gingrich’s apparent surge of support in recent days, Hagle said.

The results suggest the tea party is likely to have a strong effect on the caucuses. More than a quarter of likely caucus-goers identify themselves as part of the tea party movement. Nearly a third of them support Cain; 14 percent back Paul. Paul, Cain and Romney run neck-and-neck among non-tea party poll respondents.

Other key findings of the poll are:

• “Can’t Decide” (21.5 percent) was the most frequent second choice. Cain, Perry, Romney and Paul all had more than 10 percent support as respondents’  second choice.

• Most of the candidates have a small gender gap among supporters. Cain does much better among women than men as do Perry and Gingrich. Paul and Bachmann do better with men than with women.

• Cain has strong support across all income levels, particularly among those earning $100,000 a year or more. Among the least well off, Paul leads at around 41 percent. The wealthiest voters have the highest level of “undecideds.”

• There are sizable differences in the level of candidate support based on religious beliefs. Cain leads among three categories — Catholics, born-again Protestants and mainstream Protestants. Among those with no religious preference, Paul captured nearly 59 percent.

• Romney wins support across all educational levels. It rises with education level. Cain and Paul’s support is highest among those with either some college or a college degree.

Newt Gingrich Made $1.6-1.8 Million Consulting For Freddie Mac And Fannie Mae

Ed Morrissey - Is a big consulting payday, or several of them, a big deal in a Republican presidential race?  It depends on the client, and it depends on the work.  Bloomberg reported overnight that Newt Gingrich scored big over the course of eight years in a series of consulting contracts for Freddie Mac, earning perhaps as much as $1.8 million:

Newt Gingrich made between $1.6 million and $1.8 million in consulting fees from two contracts with mortgage company Freddie Mac, according to two people familiar with the arrangement.
The total amount is significantly larger than the $300,000 payment from Freddie Mac that Gingrich was asked about during a Republican presidential debate on Nov. 9 sponsored by CNBC, and more than was disclosed in the middle of congressional investigations into the housing industry collapse.
Gingrich’s business relationship with Freddie Mac spanned a period of eight years. When asked at the debate what he did to earn a $300,000 payment in 2006, the former speaker said he “offered them advice on precisely what they didn’t do,” and warned the company that its lending practices were “insane.” Former Freddie Mac executives who worked with Gingrich dispute that account.

The Bloomberg account makes it clear that Gingrich never lobbied for Freddie Mac, but the subject of his consultations remains in dispute.  Gingrich has stated that he tried to advise Freddie Mac executives to reform their lending practices and advised them on historical problems with loose lending.  According to Bloomberg’s sources, in the first few years he provided written support for their initiatives, which they used to argue for support from Congress in the early years of the bubble.
What about later?  Bloomberg’s report contains this curious passage about his 2006 contract, which lasted until 2008, just as the bubble popped:

Former Freddie Mac officials familiar with his work in 2006 say Gingrich was asked to build bridges to Capitol Hill Republicans and develop an argument on behalf of the company’s public-private structure that would resonate with conservatives seeking to dismantle it.
He was expected to provide written material that could be circulated among free-market conservatives in Congress and in outside organizations, said two former company executives familiar with Gingrich’s role at the firm. He didn’t produce a white paper or any other document the firm could use on its behalf, they said.

That’s certainly intriguing.  Gingrich could probably write that kind of white paper in his sleep, if he were so inclined.  Instead, at least according to Bloomberg’s sources among former Freddie Mac officials, Gingrich didn’t give them anything they could have used to garner more support on Capitol Hill for their bubble-creating policies.  What was Gingrich telling them from 2006-8?  Gingrich says he’s bound by a confidentiality agreement — standard for consultants with access to highly proprietary information — and I’m betting Freddie Mac won’t be releasing him from those NDAs any time soon.
Perhaps what happened after Gingrich’s contract expired might give some indication as to what was being said internally:

Since his retainer with Freddie Mac ended in 2008, Gingrich has become a critic of the government-sponsored enterprises, which were pushed into insolvency by subprime mortgages.
The two companies, Freddie Mac and Fannie Mae, “are so thoroughly politicized and preside over such irresponsible lending policies that they need to be replaced with smaller, private companies operating without government guarantees, whose leaders focus on making a profit, not manipulating politicians,” Gingrich wrote in his 2011 book, “To Save America.”

It’s possible that Gingrich supported Congressional pressure on Fannie and Freddie to expand home ownership in 1999-2002 during his first round with Freddie, and then changed his mind during his second consultation period.  That would mean that both Gingrich and Bloomberg’s sources are telling the truth, but just in the context of different time frames.  That would certainly explain why Gingrich didn’t provide them any supporting white papers despite being on a two-year retainer from 2006-8.
Even so, the fact that Gingrich had such a lengthy consulting relationship with such a toxic organization might be enough to turn off Republican voters.  The nexus of power and big business is one of the themes of the Tea Party’s efforts at reform, and the ability of the powerful to move into consulting relationships with big-money players like Freddie Mac is one of the symptoms of the problem.  If anyone could defend their connections to Freddie, it’s Gingrich, and we’ll see if any defense is possible.

PPP Poll: Occupy Wall Street Protesters Support Fading 33/45% Below Tea Party

The Occupy Wall Street movement is not wearing well with voters across the country. Only 33% now say that they are supportive of its goals, compared to 45% who say they oppose them. That represents an 11 point shift in the wrong direction for the movement's support compared to a month ago when 35% of voters said they supported it and 36% were opposed. Most notably independents have gone from supporting Occupy Wall Street's goals 39/34, to opposing them 34/42.
Voters don't care for the Tea Party either, with 42% saying they support its goals to 45% opposed.  But asked whether they have a higher opinion of the Tea Party or Occupy Wall Street movement the Tea Party wins out 43-37, representing a flip from last month when Occupy Wall Street won out 40-37 on that question. Again the movement with independents is notable- from preferring Occupy Wall Street 43-34, to siding with the Tea Party 44-40.
I don't think the bad poll numbers for Occupy Wall Street reflect Americans being unconcerned with wealth inequality.  Polling we did in some key swing states earlier this year found overwhelming support for raising taxes on people who make over $150,000 a year. In late September we found that 73% of voters supported the 'Buffett rule' with only 16% opposed.  And in October we found that Senators resistant to raising taxes on those who make more than a million dollars a year could pay a price at the polls. I don't think any of that has changed- what the downturn in Occupy Wall Street's image suggests is that voters are seeing the movement as more about the 'Occupy' than the 'Wall Street.'  The controversy over the protests is starting to drown out the actual message.

Voters continue to be very unhappy with the new majority in the House.  Only 37% of voters think the Republicans have been an upgrade from when the Democrats were in charge, to 41% who believe they've been worse. Among independent voters, whose overwhelming support fueled the new GOP majorities, 26% think the Republicans have been an improvement to 37% who believe they've made things worse. That unhappiness extends to John Boehner's personal poll numbers as well- just 30% of voters approve of the job he's doing to 46% who disapprove.  That -16 spread is a whole lot worse than the -6 we find for Obama's approval, but you don't see the Speaker being described as unpopular whenever you read about him the way you do the President.
As unpopular as the House Republicans are we find a tie in the generic Congressional ballot with 45% of voters favoring a Democratic candidate and 45% going for a Republican.  That's because Congressional Democrats, with a 28/63 approval spread, are almost as unpopular as their GOP counterparts.  They've succeeded in poisoning public opinion about the new Republican majority, but they haven't necessarily done anything to make voters see them as a palatable alternative.  That will be the challenge for House Democrats in the next year.

Occupy Wall Street Protesters Day Of Action "We Will Shut Down Wall Street"

NEW YORK (CBSNewYork) – The loss of their camp at Zuccotti Park doesn’t seem to be slowing down the Occupy Wall Street movement as protesters are calling for “a national day of direct action” on Thursday.
Photos: Police Raid Zuccotti Park
According to their website, protesters are planning three major actions Thursday starting with a “shut down” of Wall Street.
LISTEN: WCBS 880′s Peter Haskell reports


It all starts with a rally in Liberty Square starting at 7 a.m. to “put an end to Wall Street’s reign of terror.”

Occupy Wall Street day of action poster (credit: occupywallst.org)

Then, protesters will fan out to all five boroughs of the city in what’s being called Occupy the Subway.
They plan on gathering at 16 subways stations around New York City to take their message to the trains.
Finally, they say tens of thousands of protesters will end the day in Foley Square followed by a march to the Brooklyn Bridge to mark the two month anniversary of the Occupy Wall Street movement.
Their website says similar days of action are also planned at Occupy sites around the country and around the world.
After Tuesday’s raid of Zuccotti Park that cleared it of tents, sleeping bags and tarps, protesters marched to Foley and Duarte Square where they distributed a poster about Thursday’s day of action.
“The ideas that we have put into public discussion around this country and around the world set into sharp relief who gets what, who has a safety net, who gets thrown under the bus,” said spokesman Bill Dobbs.
City leaders who were against the raid at Zuccotti are also set to participate.
While the official movement is planning its day of action, other individuals seem to be making plans of their own.
In a video posted on YouTube after protesters were evicted from Zuccotti Park, a demonstrator in the crowd says “On the 17th, we’re going to burn New York City to the ground.”
Warning: Graphic Language – Watch the video below:

Later in the video, he then goes on to say “No more talking. They’ve got guns, we’ve got bottles. They’ve got bricks, we’ve got rocks…in a few days you’re going to see what a Molotov cocktail can do to Macy’s.”
The official movement is calling for only non-violent action during its marches and rallies on Thursday.

Breaking News: Obama Administration Pressured Solyndra to Delay Layoffs Until The Mid-Term Elections

Ed Morrissey - The Washington Post broke this story earlier this morning.  Does anyone want to argue that Solyndra isn’t a scandal now?

The Obama administration urged officers of the struggling solar company Solyndra to postpone announcing planned layoffs until after the November 2010 midterm elections, newly released e-mails show. …
Solyndra’s chief executive warned the Energy Department on Oct. 25, 2010, that he intended to announce worker layoffs Oct. 28. He said he was spurred by numerous calls from reporters and potential investors about rumors the firm was in financial trouble and was planning to lay off workers and close one of its two plants.
But in an Oct. 30, 2010, e-mail, advisers to Solyndra’s primary investor, Argonaut Equity, explain that the Energy Department had strongly urged the company to put off the layoff announcement until Nov. 3. The midterm elections were held Nov. 2, and led to Republicans taking control of the U.S. House of Representatives.
“DOE continues to be cooperative and have indicated that they will fund the November draw on our loan (app. $40 million) but have not committed to December yet,” a Solyndra investor adviser wrote Oct. 30. “They did push very hard for us to hold our announcement of the consolidation to employees and vendors to Nov. 3rd – oddly they didn’t give a reason for that date.”

Yeah — that’s odd, isn’t it?  The DoE requested that a publicly-traded corporation withhold important financial information from investors until the day after a national election.  But that’s just a coincidence … right?  Riiiiiiiiiiiiight.
This means that the DoE knew that Solyndra had begun to fail, and that the cash they provided as part of Barack Obama’s job stimulus wouldn’t actually create jobs.  In fact, it wasn’t even going to save jobs.  And yet the DoE not only succeeded in pressuring Solyndra into hiding that fact from the public and their investors, this sequence makes it look as though the Obama administration used the $40 million in loans as a bribe to keep Solyndra from making its layoff announcement in a timely manner.
Guess where this thread leads?  Right to the White House:

On Oct. 25, 2010, Solyndra chief executive Brian Harrison e-mailed the energy department’s loan staff to explain that Solyndra “has received some press inquiries about rumors of problems (one of them with quite accurate information) and we have received in bound calls from potential investors. Both of these data points indicate the story is starting to leak outside Solyndra.”
Harrison went on to state that he would “like to go forward with the internal communication [to employees regarding layoffs] on Thursday, October 28.”
Harrison’s e-mail was forwarded to program director, Jonathan Silver, who then alerted White House climate change czar Carol Browner and Vice President Biden’s point person on stimulus, Ron Klain. Browner asked for more information about the announcement, and Chu’s chief of staff explained he had left a voicemail message on her cellphone.

So who ordered Solyndra to keep quiet?  Was it the “climate-change czar”? Was it the Vice President?  Or did it go higher than that?  It’s time to start getting all of these people under oath in Congress and start preparing a criminal investigation.

NYPD Finally Kicks Occupy Wall Street Out Of Zuccotti Park

By FRANK ROSARIO, ERIN CALABRESE, LARRY CELONA and PHIL HELSEL

The NYPD arrested 70 protesters as they moved in on Zuccotti Park early this morning and cleared out the thousands of Occupy Wall Street protesters who had taken over the space for nearly two months.

Mayor Bloomberg, who called the decision to boot the protesters "mine and mine alone," said protesters would be allowed back into the Lower Manhattan park but not with their tents and sleeping bags.

But the city's victory is headed to court: This morning the National Lawyers Guild announced it had recieved a restraining order against the city ordering the mobs be allowed back in along with their tents and sleeping bags.

William Miller

MIDNIGHT MADNESS: One protester mouths off at a cop early this morning after police handed out this flier telling them they had to pack up their sleeping gear.

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A hearing is set for 11:30 a.m.

Bloomberg said this morning that the nearly two-month-old shantytown in the city's bustling downtown had become a haven for criminals and a safety hazard.

"Unfortunately, the park was becoming a place where people came not to protest, but rather to break laws, and in some cases, to harm others," Bloomberg said.

More than 1,000 cops marched on the lower Manhattan encampment shortly before 1 a.m. and handed out fliers ordering demonstrators to get out and remove their personal property.

The cops were followed by Sanitation workers, one of whom was overheard saying, “We’re gonna disinfect the hell out of this place.”

The fliers read, “The city has determined that the continued occupation of Zuccotti Park poses an increasing health and fire safety hazard to those camped in the park, the city’s first responders, and to the surrounding community.

“You are required to immediately remove all property, including tents, sleeping bags and tarps.”

That touched off a chaotic scene within the park, as many of the protesters were roused from their slumber and began shouting to others, “Wake up!”

The chaos was continuing this morning, as cops and protesters battled on Pine Street and Broadway at 5 a.m., with police pushing crowds out of the street and on to the sidewalk. Cops charged into the mob after a protester threw an object into a group of police.

At least one police officer was injured; he was seen being taken out of Zuccotti Park on a stretcher, his eyes closed and with several lacerations on his face.

Cops cut U-shaped bike locks off the necks of the last holdouts, who chained themselves together in the center of Zuccotti, witnesses said.

Several hundred ousted protesters marched north up Centre Street after the cleanup, clashing with police who in at least one case were seen using batons on a group crossing the street in a crosswalk and with the green light. A large crowd of protesters went north and are at Foley Square.

Police arrested at least 70 people in the early morning chaos, physically dragging many from the squalid encampment.

“What do you mean I’m done? What law did I break?” screamed a man as he was arrested and marched out of the park.

“I’m an anarchist, I’m not leaving this park,” said Asa Lowe, who was binding the hands of Amina Malika, 17, and Mesiah Hameed, 16, to a tree in the center of the park.

“I don’t give a f--k what they do,” said Hameed.

The anti-greed demonstrators were told they could return to Zuccotti Park in “several hours” after it was “cleared and restored for its intended use.”

William Miller

MIDNIGHT MADNESS: One protester mouths off at a cop early this morning after police handed out this flier telling them they had to pack up their sleeping gear.

see more videos

But they were warned they would no longer be allowed to camp out or bring sleeping gear.

By 5:30 a.m., the newly-scrubbed Zuccotti was a far cry from the filthy mass of tents and blankets that had fouled the park for two months. All the tents have been cleared and a heavy smell of disinfectant lingered in the air. By 7 a.m. all the streets surrounding the park were open to the public.

One area resident was thrilled to finally have his neighborhood back.

“I’m ecstatic. I’m so happy to finally be able to use the open spaces of the Financial District again,” said the man, who asked that his name not be published.

As cops continued to remove demonstrators who wouldn’t go willingly, leaders of the movement were heard yelling, “Mike check! Disobey your orders!”

“I’m not leaving just ’cause the police say so,” vowed Ben Swenson, 25, from Brooklyn.

“I have so many belongings here. It’s about social rights and equality. I’m not moving!”

Tyrone Greenfield, 23, said, “I got here and I don’t know what’s going to happen.

“I’m willing to get arrested, as many of us are. If they think this will accomplish anything, I disagree.”.

An NYPD supervisor was overheard telling his officers, “Nice and easy, no one gets hurt. Nice and easy.”

When cops first arrived, some of the protesters began chanting, “The whole world is watching!” and sang Bob Marley songs.

A sound cannon was set up on the back of a truck on Liberty Street as police massed at three points to begin their march towards the center of the park — where the kitchen area was located.

As cops closed in, a “frozen zone” was created and all members of the press were also kicked out.

Some protesters complained of heavy-handed tactics and said they were clubbed as cops moved into the park. Husband and wife protest pair Matt and Liz Baldwin initially tried to resist, but voluntarily left the park in the face of what they said was police brutality.

"They were beating people; I saw police beating people," Matt Baldwin said. "My wife's pregnant. I had to get her out of there."

Two large groups of evicted demonstrators marched to City Hall and to the famous bull statue near Wall Street.

The protesters’ ouster came less than a day after the movement announced plans for a series of disruptive protests outside the Stock Exchange and throughout the subway system.

Hours before today’s massive operation began, Mayor Bloomberg, Police Commissioner Ray Kelly, Fire Commissioner Sal Cassano and other officials secretly convened at City Hall to OK the move, sources said.

AP

Occupy Wall Street protesters clash with police at Zuccotti Park after being ordered to leave.

The mayor defended the crackdown in a statement released today, saying that the city couldn't wait until someone was killed at the increasingly crime-ridden shantytown, and that the decision to move in was his.

"Unfortunately, the park was becoming a place where people came not to protest, but rather to break laws, and in some cases, to harm others," Bloomberg said, adding that he respects the group's right to protest.

“Protestors have had two months to occupy the park with tents and sleeping bags. Now they will have to occupy the space with the power of their arguments.

Andrew Kelly

A girl screams as police barge into a gathered crowd on the corner of Broadway and Pine.

The NYPD force ranged from rookies to high-ranking officers assigned to borough task forces and precincts around the city. They began reporting at around 11 p.m. for formation under the FDR Drive between the Manhattan and Brooklyn bridges, sources said.

“They were told it was a mobilization drill, but to bring their hats and bats,” said one source, referring to protective head gear and batons.

Donning riot attire, the cops were accompanied by Emergency Service Unit trucks, as well as prisoner transport vans and city buses in the likely event that protestors did not go peacefully, the sources added.

Another group of cops comprising the NYPD Critical Response Vehicles will report this morning to the Jacob Javits Center.

The total number of Occupy Wall Street protesters busted since the protest began Sept 17 was 1,108, before last night, according to the NYPD.