Two economics professors say that the toxic assets are correctly valued by the market.

Business Insider reports "The government's official view that toxic assets are incorrectly priced due to illiquidity "fire sales" is wrong, a new study by Harvard and Princeton finance professors suggests." Harvard's Joshua Coval and Erik Stafford and Princeton's Jakub Jurek conclude "that the low prices of toxic assets actually reflect the fundamentals, rather than being driven by an illiquidity discount."

This suggests that many of the financial institutions may be insolvent rather than illiquid as the government has been indicating. This means that "the government cannot save the banks by improving liquidity or changing mark to market rules because the problem isn't illiquidity or accounting. The problem is that highly leveraged financial firms own assets that are worth far less than they thought they would be, and the firms are insolvent as a result."

Attorney General lacks confidence in his opinion that the bill giving voting representation to DC is constitutional.

John McGinnis talks about Attorney General Eric Holder's "End Run Around the Rule of Law." The article concerns the constitutionality of giving a voting Representative to the District of Columbia. McGinnis sets the issue out very clearly:

It is the long standing practice of the Department of Justice to provide
constitutional analysis of any bill that may be presented to the President so
that the President can fulfill his constitutional duty of signing only bills
that are constitutional. As a result, the Office of Legal Counsel had previous
occasion to conclude that this giving voting representation to the District is
unconstitutional. According to uncontradicted news reports, the Obama
administration’s OLC affirmed the same conclusion.

If the Attorney General believed that this opinion was wrong, he could overrule it. Attorneys General previously have themselves rendered legal opinions. An opinion would provide a measure of accountability because General Holder would have to sign his name to a legal document that purported to show how to get around the Constitution’s clear requirement. Indeed, the Obama administration has argued that increasing the transparency of the legal process within the executive branch will increase respect for the rule of law. What better testament to that transparency than to allow us to compare the reasoning of the Attorney General with that of his own
legal counsel?

Instead, the Attorney General asked the office of Solicitor General at a time when there was no confirmed Solicitor General whether that office would be willing to defend the statute, if passed. The Solicitor General’s office has a long history of defending legislation if there is any credible basis for doing so. But it never opines on the constitutionality of pending legislation, because the question for the President in signing a bill is not whether the legislation might be defended by some argument in Court but whether the legislation is constitutional, not whether some Court might uphold it, but whether the President should give it his own unique constitutional
imprimatur.

If Holder truly believes the statute to be constitutional, he should set out his legal analysis for the world to see. Instead, he hid behind an opinion of the Solicitor General's office that didn't even respond to the correct question. Holder asked the Solicitor's office if it would defend the legislation. The real question is the constitutionality of the statute, not whether there is a colorable argument for constitutionality, the usual standard for defending legislation.

This suggests that Holder lacks confidence in his own position.

A politicized Justice Department.

Edward Whelan says, "Look Who's Politicizing Justice Now" in the Washington Post. Whelan writes

In the course of its usual task of reviewing pending legislation to
identify constitutional problems, OLC determined that the D.C. voting rights
bill, which would give the District of Columbia a voting member in the House of
Representatives, is unconstitutional. The acting head of OLC, David Barron -- a
liberal Harvard law professor appointed by Holder -- signed an opinion setting
forth OLC's conclusion. That conclusion is no surprise, as it has been the
Department of Justice's consistent position, under presidents of both parties,
at least as far back as Attorney General Robert F. Kennedy in 1963 and as
recently as two years ago.

The OLC followed consistent prior findings of the Justice Department that the proposal to give the District of Columbia a voting member in the House is unconstitutional.

The Attorney General overruled that decision. The Attorney General certainly has that authority the Office of Legal Counsel only acts pursuant to delegation of authority from the Attorney General. However, Whelan contends that there is a right way and a wrong way for the Attorney General to overrule the OLC.

Attorney General Eric Holder took the wrong course. "The right way would have been for Holder to conduct a full and careful formal review of the legal question. If that review yielded the conclusion that Holder's position was in fact the best reading of the law -- an extremely unlikely conclusion, in my judgment -- then Holder would sign a written opinion to that effect."

Instead, Holder simply asked the Deputy Solicitor General if his office could defend the statute in court. Since the test of such defense is simply whether a colorable argument exists that can be made without embarrassment, he got the response he wanted. Of course, the Solicitor's office could defend the statute in court.

That was not the proper question to provide a basis for overturning the considered judgment of the OLC that the statute was unconstitutional.

What or who started the Great Depression?

Greg Mankiw provides the conclusion from a paper by ULCA economist Lee Ohanian title "What - or Who - Started the Great Depression?" It has some interesting ideas that challenge conventional wisdom about the depression.

Everyone knows that the depression resulted from Herbert Hoover's do nothing approach. Ohanian concludes that:

... the Depression is the consequence of government programs and policies,
including those of Hoover, that increased labor’s ability to raise wages above
their competitive levels. The Depression would have been much less severe in the
absence of Hoover’s program. Similarly, given Hoover’s program, the Depression
would have been much less severe if monetary policy had responded to keep the
price level from falling, which raised real wages.

He contends that the "defining characteristic of the Great Depression is a substantial and chronic excess supply of labor, with employment well below normal, and real wages in key industrial sectors well above normal."

Economic theory would suggest that in a condition of excess labor supply, real wages would fall below normal rather than rising above normal. He concludes that the higher than expected wages resulted from "President Hoover’s program that offered industrial firms protection from unions in return for paying high wages."

Mankiw suggests that this should make everyone think of the macroeconomic effects of card check now before Congress. It was certainly my reaction as I read Ohanian's conclusion. In our present economic situation, increased unionization through card check seems to be the last thing this country needs.

FBI scientists' reports support Blackwater guards' position that they were ambushed by insurgents.

Matt Appuzo with AP reports, "No forensic match for ammo in Blackwater shooting." The AP report continues

FBI scientists were unable to match bullets from a deadly 2007 Baghdad
shooting to guns carried by Blackwater Worldwide security guards, according to
laboratory reports that leave open the possibility that insurgents also fired in
the crowded intersection.

Five Blackwater guards face manslaughter and weapons charges for their role in the shooting, which left 17 Iraqis dead and inflamed anti-U.S. sentiment abroad. Prosecutors say the contractors launched an unprovoked attack on civilians with machine guns and grenade launchers. The guards maintain their convoy was ambushed by insurgents.

The FBI lab reports, obtained by The Associated Press from someone not involved in the criminal case, allow for both possibilities.

It appears that the evidence supports the Blackwater guards' story and refutes the prosecution's case. This raises two questions. Why is the prosecution continuing? Why did this information not come out during the campaign?

Attorney General Holder overrules Justice Department lawyers' opinion that DC voting rights bill is unconstitutional.

The Washington Post reports

Justice Department lawyers concluded in an unpublished opinion earlier this year
that the historic D.C. voting rights bill pending in Congress is
unconstitutional, according to sources briefed on the issue. But Attorney
General Eric H. Holder Jr., who supports the measure, ordered up a second
opinion from other lawyers in his department and determined that the legislation
would pass muster.

One can easily imagine the outcry if a Republican Attorney General had taken such an action against the advice of a Justice Department lawyers.

The story describes conflict within the departments in Justice:

In deciding that the measure is unconstitutional, lawyers in the department's Office of Legal Counsel matched a conclusion reached by their Bush administration counterparts nearly two years ago, when a lawyer there testified
that a similar bill would not withstand legal attack.

Holder rejected the advice and sought the opinion of the solicitor general's office, where lawyers told him that they could defend the legislation if it were challenged after its enactment.

Democratic and Republican Justice Department veterans said it is unusual, though not unprecedented, for the solicitor general, who backs the administration's position before the Supreme Court, to be asked to weigh in before a case makes its way into a courtroom. Typically, legal scholars said, the solicitor general is asked whether the office can plausibly defend a law in court, rather than to opine directly on the legality of a piece of legislation. The office was asked for the opinion several weeks ago, before the Senate confirmed Elena Kagan as the new solicitor general.

The Office of Legal Counsel found the proposal to be unconstitutional, just it had under President Bush. Holder then asked the Solicitor General's Office for an opinion. They opined that they could defend the position in court.

These are radically different questions. A lawyer may recommend that a proposal is unconstitutional and should not be enacted but can be defended in court if it is enacted. The first represents their advice as a lawyer as to whether the action should be taken. That latter only requires that a good faith argument of constitutionality exists. The lawyer may readily agree that the court should rule against the position advocated, but still think that a good faith argument for the position exists.

If the Post accurately describes the Solicitor General's Office's opinion - "that they could defend the legislation if it were challenged after its enactment," General Holder should not have overruled the opinion of the Office of Legal Counsel. Doing so constitutes a gross politicization of the office of Attorney General.

The Post article includes this comment: "M. Edward Whelan III, who was a deputy at OLC during the Bush administration, said when informed of the matter that Holder's decision to override the office's conclusions amounted to a 'blatant abuse' of the office's purpose."

Clearly, the Attorney General has the authority to take the action he took. If the OLC indicates that the proposal is constitutional, he has some plausible argument to support his decision. If, however, it only says that an argument exists to offer to the courts, as indicated by the Post, he has no real support for his position, except his own unsupported opinion that is contradicted by his own lawyers.

Where does Senator Stevens go to get back his reputation?

Justice Dept. Seeks to Void Stevens' Conviction. This is absolutely disgusting. We have been told for many months that Senator Ted Stevens took bribes and was a criminal deserving of time in prison. As a result, he lost his Senate seat and was convicted of taking bribes.

Now we find out that he was convicted because of prosecutorial misconduct. This raises serious doubts as to the entire narrative. Of course, now the election is over. Senator Stevens is disgraced. How does the former senator win back his reputation?