Here's hoping that the storm doesn't carry the chemical dispersant over the mainland:

PENSACOLA, Fla. — Retired Coast Guard Adm. Thad Allen late Thursday ordered BP to begin evacuating the Deepwater Horizon oil spill site after the National Hurricane Center predicted that sustained winds of more than 55 miles per hour would reach the area perhaps as early as Saturday.

"Due to the risk that Tropical Storm Bonnie poses to the safety of the nearly 2,000 people responding to the BP oil spill at the well site, many of the vessels and rigs will be preparing to move out of harm's way beginning tonight," Allen said. "This includes the rig drilling the relief well that will ultimately kill the well, as well as other vessels needed for containment. Some of the vessels may be able to remain on site, but we will err on the side of safety."

Allen said he had directed BP to leave the well sealed during the evacuation and said that monitoring of the well, which has not leaked oil into the Gulf of Mexico for more than a week, would continue until the last possible moment. He said BP has been told to move ships guiding remotely operated vehicles providing a video feed from the capped well last and to return them to the area first.

"While these actions may delay the effort to kill the well for several days, the safety of the individuals at the well site is our highest concern," he said.

Federal and state oil cleanup workers had begun the process of battening down across the Gulf of Mexico for a weekend tropical storm, pulling out booms and calling vessels back to port from anti-contamination efforts in the Deepwater Horizon disaster.

The Mighty Wind of Woodward

From March/April 2005: “I use confidential sources more than most anyone,” Woodward concedes, “but it has to be worth the risk involved. I don’t think outing Plame was worth the risk.” We should expect to be hearing the identity of Woodward's "source" that he didn't offer confidentiality to any day now, wouldn't you think?

More on Ashcroft:

Antonin Scalia Is an Enemy of the State!

So says John Ashcroft. Jeffrey Dubner reports

GET YOUR ROBES OUT OF OUR PRISONS! I just watched John Ashcroft's address to the Federalist Society. It's a gripping speech, and quite frightening. He devotes the greatest portion of it to challenging the Supreme Court's decisions in Rasul v. Bush, Hamdi v. Rumsfeld, and the other "enemy combatant" cases. A taste:

...intrusive judicial oversight and second-guessing of presidential determinations in these critical areas of treaties can put at risk the very security of our nation at a time of war.

It's very much in the vein of "the ability to set aside the laws is inherent in the president." There's no transcript available just yet, and I expect there'll be analyses and critiques up by more qualified legal folks than I by the time we get back from the weekend. But I wonder how confined this constitutional theory is to Ashcroft, and whether it will in any way leave office with him. I highly doubt it.

UPDATE: Tonight's keynote speaker is, of course, Federalist Society member and Associate Justice Antonin Scalia. He's as like as not to agree with Ashcroft on this, although it's hard to be sure.

I do think that this is, in part, fallout from Bush v. Gore. Everybody knows that Scalia and company don't believe the equal protection rationale they set forward for their decision. And if what the Supremes are doing is expressing their political preferences rather than setting forth judicial principles--well, why should their will get to override Bush's and Ashcroft's? Just because Scalia, Rehnquist, and company ruled in favor of Bush in 2000 doesn't mean that Bush and company respect them for it.

And of course every time Galbraith says this, wingnut heads explode. Ezra Klein interviews economist Jamie Galbraith:

EK: You think the danger posed by the long-term deficit is overstated by most economists and economic commentators.

JG: No, I think the danger is zero. It's not overstated. It's completely misstated.

EK: Why?

JG: What is the nature of the danger? The only possible answer is that this larger deficit would cause a rise in the interest rate. Well, if the markets thought that was a serious risk, the rate on 20-year treasury bonds wouldn't be 4 percent and change now. If the markets thought that the interest rate would be forced up by funding difficulties 10 year from now, it would show up in the 20-year rate. That rate has actually been coming down in the wake of the European crisis.

So there are two possibilities here. One is the theory is wrong. The other is that the market isn't rational. And if the market isn't rational, there's no point in designing policy to accommodate the markets because you can't accommodate an irrational entity.

EK: Then why are the bulk of your colleagues so worried about this?

JG: Let's push a bit deeper on the CBO forecasts. They publish a baseline set of projections. One of those projections holds the economy will return to a normal high-employment level with low inflation over the next 10 years. If true, that would be wonderful news. Go down a few lines and they also have the short-term interest rate going up to 5 percent. It's that short-term interest rate combined with that low inflation rate that allows them to generate, quite mechanically, these enormous future deficit forecasts. And those forecasts are driven partially by the assumption that health-care costs will rise forever at a faster rate than everything else and by interest payments on the debt will hit 20 or 25 percent of GDP.

At this point, the whole thing is completely incoherent. You cannot write checks to 20 percent to anybody without that money entering the economy and increasing employment and inflation. And if it does that, then debt-to-GDP has to be lower, because inflation figures into how much debt we have. These numbers need to come together in a coherent story, and the CBO's forecast does not give us a coherent story. So everything that is said that is based on the CBO's baseline is, strictly speaking, nonsense.

EK: But couldn't there be a space between the CBO being totally correct and the debt not being a problem? It seems certain, for instance, that health-care costs will continue to rise faster than other sectors of the economy.

JG: No, it's not reasonable. Share of health-care cost would rise as part of total GDP and the inflation would rise to be nearer to what the rate of health-care inflation is. And if health care does get that expensive, and we're paying 30 percent of GDP while everyone else is paying 12 percent, we could buy Paris and all the doctors and just move our elderly there.

EK: But putting inflation aside, the gap between spending and revenues won't have other ill effects?

JG: Is there any terrible consequence because we haven't prefunded the defense budget? No. There's only one budget and one borrowing authority and all that matters is what that authority pays. Say I'm the federal government and I wish to pay you, Ezra Klein, a billion dollars to build an aircraft carrier. I put money in your bank account for that. Did the Federal Reserve look into that? Did the IRS sign off on it? Government does not need money to spend just as a bowling alley does not run out of points.

What people worry about is that the federal government won't be able to buy bonds. But there can never be a problem for the federal government selling bonds. It goes the other way. The government's spending creates the bank's demand for bonds, because they want a higher return on the money that the government is putting into the economy. My father said this process is so simple that the mind recoils from it.

EK: What are the policy implications of this view?

JG: It says that we should be focusing on real problems and not fake ones. We have serious problems. Unemployment is at 10 percent. if we got busy and worked out things for the unemployed to do, we'd be much better off. And we can certainly afford it. We have an impending energy crisis and a climate crisis. We could spend a generation fixing those problems in a way that would rebuild our country, too. On the tax side, what you want to do is reverse the burden on working people. Since the beginning of the crisis, I've supported a payroll tax holiday so everyone gets an increase in their after-tax earnings so they can pay down their mortgages, which would be a good thing. You also want to encourage rich people to recycle their money, which is why I support the estate tax, which has accounted for an enormous number of our great universities and nonprofits and philanthropic organizations. That's one difference between us and Europe.

Jason Leopold has the story over at Truthout. Another day, another story of a huge corporate behemoth running amok and roughshod over the most basic safety regulations and protocols.

In 2008, an employee of BP hired to oversee and maintain required document databases relating to regulatory safety requirements raised concerns about a related BP Gulf project, Atlantis.

The whistleblower, whose name has been withheld at the person's request because the whistleblower still works in the oil industry and fears retaliation, first raised concerns about safety issues related to BP Atlantis, the world's largest and deepest semi-submersible oil and natural gas platform, located about 200 miles south of New Orleans, in November 2008. Atlantis, which began production in October 2007, has the capacity to produce about 8.4 million gallons of oil and 180 million cubic feet of natural gas per day.

It was then that the whistleblower, who was hired to oversee the company's databases housing documents related to its Atlantis project, discovered that the drilling platform had been operating without a majority of the engineer-approved documents it needed to run safely, leaving the platform vulnerable to a catastrophic disaster that would far surpass the massive oil spill that began last week following a deadly explosion on a BP-operated drilling rig.

The specifics are pretty chilling. Regulations require extensive preparation and analysis of potential hazards with signoffs by qualified engineers at each step. Part of the analysis is a detailed drawing of the project's piping and process flows. BP's were incomplete, which prompted a member of the BP team to alert BP officials to the risk that they could be assumed to be complete, leading to a complete failure of the system. According to the Truthout article, 85 percent of the drawings did not receive engineer approval.

Eighty-five percent. Stunning. And there's more.

Even worse, 95 percent of Atlantis' subsea welding records did not receive final approval, calling into question the integrity of thousands of crucial welds on subsea components that, if they were to rupture, could result in an oil spill 30 times worse than the one that occurred after the explosion on Deepwater Horizon last week.

The rest of the story is at Truthout. Go read it. It's chilling all on its own, but when read in the larger context of the Massey Energy Upper Big Branch disaster, Goldman Sachs revelations, Wall Street meltdowns and SEC shenanigans, the abject failure of conservative "small government, no regulation" philosophy is truly on parade for everyone to see.

Late-night editorial comment:

The Masseys, Halliburtons, BPs, and Wall Streeters do it because they expect to do it and get away with it. They do it because for 30 years we've listened to the drumbeat of a cadence: Profits over all. As the cadence quickened, the media joined the parade, morphing from objective observer to drum major. The beat grew louder. With each decibel increase, their arrogance and power grew stronger. In 30 years, the John Birch society has transformed from pariah to mainstream. How far will we let them go before we get out in the streets and "take our country back"?

Continue reading »

So it looks like Goldman Sach's strategy is going to be "deny, deny, deny." "We didn't mean it like that," "You're misinterpreting," and "We wouldn't dream of it."

And yet, here we stand, in the smoking rubble of the American dream. And there they are, laughing it up in Park Avenue penthouses. Time for some karma, baby!

Goldman Sachs sought to protect itself from a collapsing housing market by selling mortgage investments that it knew were likely to fail and taking other steps that helped spread risk throughout the financial system, according to the findings of a Senate investigation released Monday.

The investigation by the Senate Permanent Subcommittee on Investigations suggests that Goldman's actions may also have helped fuel the financial crisis by creating risky investments and then ensuring that other parties were exposed when they lost value.

Excerpts of hundreds of internal Goldman documents released by the committee show that Goldman created and sold complex investments backed by risky home loans. Then, Goldman also bet against those investments by buying a type of insurance that would pay out if the underlying home loans went bad.

"Goldman Sachs was slicing, dicing, and selling toxic mortgage-related securities on Wall Street like many other investment banks, but its executives continue to downplay the firm's role in the financial engineering that blew up the financial markets and cost millions of Americans their jobs, homes, and livelihoods," said Sen. Carl Levin (D-Mich.), chairman of the subcommittee.

"Goldman Sachs made billions of dollars from betting against the housing market, and it placed those bets in some cases at the same time it was selling mortgage related securities to its clients," Levin said. "They have a lot to answer for."

The findings of the Senate probe come as Goldman Sachs chief executive Lloyd Blankfein and several other current and former Goldman officials come to Washington to testify before the subcommittee on Tuesday. The panel is using Goldman as a case study of how investment banks fueled the financial crisis.

In prepared testimony released by Goldman, Blankfein says that the firm must do "a better job of striking the balance between what an informed client believes is important to his or her investing goals and what the public believes is overly complex and risky."

He also said "we didn't have a massive short against the housing market and we certainly did not bet against our clients. Rather, we believe that we managed our risk as our shareholders and our regulators would expect."

But internal e-mails show that Goldman did expect to make big profits off the decline in housing.

Charles Duelfer's arms teams say all U.N.-sealed structures at the Muthanna site were broken into. If the so-called Bunker 2 was breached and looted, it would be the second recent case of restricted weapons at risk of falling into militants' hands.

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Earlier this week, George Stephanopoulos had an interview with Timothy Geithner:

GEITHNER: You know, I think it's very important banks work very hard to start to rebuild trust and confidence of the American people in their institutions in the financial system. They did a huge amount of damage to the country, lost a huge amount of trust and confidence. They need to work very hard to restore that. One of the ways to do that...

STEPHANOPOULOS: Do you think they get that?

GEITHNER: I don't think they get it. I think some banks do; I don't think all banks get it yet.

STEPHANOPOULOS: What do they need to do to show that they get it?

GEITHNER: I think they need to make sure they're doing everything they can to help people who can afford to stay in their homes stay in their homes, help make sure they are lending in communities that need access to credit, they're working very hard to make sure that viable businesses that face some increased demand for orders now for their products now can get the credit they need.

They need to show some restraint and care in how they pay their people, and they need to be supportive of the kind of reforms we need to create a more stable system in the future.

STEPHANOPOULOS: That's all encouragement. Where's the stick?

GEITHNER: The stick is through what Congress is going to have to legitimate through reforms. You know, we're not going to run a strategy to protect the country from future financial crises that rests on the hope that banks in the future behave more wisely and more nobly. We're going to run a strategy that requires reforms that are going to -- going to restrain risk-taking, provide better protections for consumers.

Really, Tim? Because I don't hear anything like reform happening in Congress. In fact, voters might somehow get the wrong idea (or the right idea) about your banking bailout after stories like this:

Dec. 21 (Bloomberg) -- In the first six months of 2010, about 6,000 employees of Goldman Sachs Group Inc. will take a break from their spreadsheets and move across the southern tip of Manhattan to a new 43-story, steel-and-glass skyscraper.

The building was a bargain -- and not just because the final cost is expected to be $200 million less than the $2.3 billion price the company had estimated when construction began in November 2005. Goldman Sachs also benefited from the government’s determination to avoid losing jobs in lower Manhattan after the Sept. 11, 2001, terrorist attacks.

Building a new headquarters cater-cornered to where the World Trade Center once stood qualified the firm to sell $1 billion of tax-free Liberty Bonds and get about $49 million of job-grant funds, tax exemptions and energy discounts. Henry Paulson, then Goldman Sachs’s chief executive officer, threatened to abandon the project after delays in addressing his concerns about safety. To keep the plan on track, state and city officials raised the bond ceiling to $1.65 billion and added $66 million in benefits. The interest expense on the financing is about $175 million less over 30 years than if the company had issued corporate debt at the time, according to data compiled by Bloomberg.

“It was absolutely imperative that Goldman Sachs keep its world headquarters downtown,” says John Cahill, who took part in the negotiations as chief of staff to then-Governor George Pataki and now works at New York law firm Chadbourne & Parke LLP. “They had the financial resources to move anywhere.”

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