The criminal complaint against Rod Blagojevich, Democratic governor of Illinois,  is well worth skimming. You have to read this stuff for yourself to believe it.

90. Later on November 3, 2008, ROD BLAGOJEVICH spoke with Advisor A. By this time, media reports indicated that Senate Candidate 1, an advisor to the President-elect, was interested in the Senate seat if it became vacant, and was likely to be supported by the President-elect.  During the call, ROD BLAGOJEVICH stated, “unless I get something real good for [Senate Candidate 1], s**t, I’ll just send myself, you know what I’m saying.” ROD BLAGOJEVICH later stated, “I’m going to keep this Senate option for me a real possibility, you know, and therefore I can drive a hard bargain.  You hear what I’m saying. And if I don’t get what I want and I’m not satisfied with it, then I’ll just take the Senate seat myself.”  Later, ROD BLAGOJEVICH stated that the Senate seat “is a f***ing valuable thing, you just don’t give it away for nothing.”

91. On November 4, 2008, ROD BLAGOJEVICH spoke with Deputy Governor A.  This was the same day as the United States Presidential election.  With respect to the Senate seat, Deputy Governor A suggested putting together a list of things that ROD BLAGOJEVICH would accept in exchange for the Senate seat.   ROD BLAGOJEVICH responded that the list “can’t be in writing.”  Thereafter,  ROD BLAGOJEVICH discussed whether he could obtain an ambassadorship in exchange for the Senate seat.

Jay Leno has a running joke on his show. “What do I love? Stupid criminals”–then he reads a news clipping about a robber who leaves his name and address at the scene of the crime or impales himself on a trash can while fleeing. That shrewd “can’t be in writing” belongs in the anthology. That’s right, boss. Be careful what you write down, for God’s sake.

101. On November 10, 2008, ROD BLAGOJEVICH, his wife, JOHN HARRIS, Governor General Counsel, and various Washington-D.C. based advisors, including Advisor B, discussed the open Senate seat during a conference call.  (The Washington D.C.-based advisors to ROD BLAGOJEVICH are believed to have participated on this call from Washington D.C.).  Various individuals participated at different times during the call.  The call lasted for approximately two hours, and what follows are simply summaries of various portions of the two-hour call.

a. ROD BLAGOJEVICH expressed his interest in figuring out a way to make money and build some financial security, while at the same time potentially participating in the political arena again.  ROD BLAGOJEVICH mentioned the Senate seat, the dynamics of a new Presidential administration with the strong contacts that ROD BLAGOJEVICH has in it, and asked what if anything he can do to make that work for him and his wife and his responsibilities as Governor of Illinois.  ROD BLAGOJEVICH suggested during the call that he could name himself to the open Senate seat to avoid impeachment by the State of Illinois legislature.   ROD BLAGOJEVICH agreed it was unlikely that the President-elect would name him Secretary of Health and Human Services or give him an ambassadorship because of all of the negative publicity surrounding ROD BLAGOJEVICH.

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c. ROD BLAGOJEVICH said that the consultants (Advisor B and another consultant are believed to be on the call at that time) are telling him that he has to “suck it up” for two years and do nothing and give this “motherf***er [the President-elect] his senator.  F*** him.  For nothing?  F*** him.”

Too soon to say whether it will hurt Obama. For some reason Democratic corruption does not create a universal presumption of collective guilt in the way that Republican corruption does. (In many of the pieces on this you have to tunnel down quite far to read that Blagojevich is indeed a Democrat, as though that were a point of little significance.) The story so far does not reflect badly on the president-elect. Quite the opposite. Blagojevich wanted more than mere appreciation in return for the appointment of Obama’s ally Valerie Jarrett to the Senate seat, and didn’t get it. Still, there are some loose ends.

See Jake Tapper:

And, it should be pointed out, Mr. Obama has a relationship with Mr. Blagojevich, having not only endorsed Blagojevich in 2002 and 2006, but having served as a top adviser to the Illinois governor in his first 2002 run for the state house.

In the Democratic gubernatorial primary that year, then-state sen. Obama endorsed former Illinois Attorney General Roland Burris. But after Blagojevich won, Obama came around enthusiastically. At the same time, meanwhile, Axelrod had such serious concerns about whether Blagojevich was ready for governing he refused to work for his one-time client.

According to Rep. Rahm Emanuel, D-Ill., Mr. Obama’s incoming White House chief of staff, Emanuel, then-state senator Obama, a third Blagojevich aide, and Blagojevich’s campaign co-chair, David Wilhelm, were the top strategists of Blagojevich’s 2002 gubernatorial victory.

Emanuel told the New Yorker earlier this year that he and Obama “participated in a small group that met weekly when Rod was running for governor. We basically laid out the general election, Barack and I and these two.”

Wilhelm said that Emanuel had overstated Obama’s role. “There was an advisory council that was inclusive of Rahm and Barack but not limited to them,” Wilhelm said, and he disputed the notion that Obama was “an architect or one of the principal strategists.”

(An Obama Transition Team aide emails to note that Emanuel later changed his recollection of this story to Rich Miller’s “CAPITOL FAX,” saying, “David [Wilhelm] and I have worked together on campaigns for decades. Like always, he’s right and I’m wrong.”)

Obviously, Obama and Blagojevich moved in the same world–improbable as the contrast between the two men makes that seem. Perhaps now, better late than never, we will begin to read more about that world.

Obama has said he did not talk to the governor about his vacant Senate seat. David Axelrod had to withdraw an earlier statement which said otherwise. There was presumably communication at some level between the two sides, even if it was just the exchange of demand and curt refusal. (Otherwise, Blagojevich would have had no grounds for calling the president-elect a motherfucker.) But the person receiving that demand was under an obligation to do more than just refuse. Perhaps he or she did do more than that. In due course, maybe, we will find out.

If you are interested in photography (as I am) you will have noticed that the launch of the Nikon D3x has met with a mixed response.

[youtube]http://www.youtube.com/watch?v=tnwf2RShNV0[/youtube]

“Rule one: never allow a crisis to go to waste. They are opportunities to do big things.” Rahm Emanuel, who will be chief of staff in the Obama White House, made this observation to an interviewer recently. The big things he has in mind include comprehensive healthcare reform and a greener energy policy to make the US less dependent on foreign oil.

With a lot of luck, he could be right – and how fine it would be to combine strong macroeconomic medicine and far-sighted microeconomic improvement at a stroke. Grand, but none too likely. For the next year and maybe longer, there are great risks in approaching economic policy this way.

With the economy shrinking at a frightening rate, the new administration needs to focus intently on devising an effective fiscal stimulus. This needs to be large, fast, temporary and do as much as possible to support demand. Most of the items on Barack Obama’s broad agenda for reform – including health reform and energy policy – rightly have other priorities. So the new administration needs to think hard about what will be feasible and what matters most.

The remainder of the article can be read here. Please post comments below.

In a new column for National Journal [link expires in two weeks], I argue that one of the most important gaps in the measures taken so far to revive the economy is the lack of effective action on loan foreclosures.

For months now the Treasury and the Federal Reserve Board have been trying everything they can think of to stabilize the financial system and prop up the economy. You can criticize them for many things–for the regulatory failures that let this unfolding calamity happen in the first place, maybe for the slowness of the initial response, and certainly for the failure even now to devise a coherent, intelligible plan for financial intervention. But you cannot accuse them of timidity or of idly standing by.

In a frenzy of initiatives, they have committed trillions of dollars in various kinds of public support for banks and other financial institutions. Further huge outlays, including a second fiscal stimulus, are on the way. Nobody is any longer denying the gravity of the situation; just the opposite. Yet one critical aspect of the problem has barely been addressed–the still-rising tide of home loan delinquencies and foreclosures.
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Even though the emergency has now broadened–to almost every corner of the U.S. economy and across the world–housing is still at the center. As long as house prices continue to fall, more and more families will find that they have negative equity in their homes (in other words, their outstanding mortgage debt is greater than the current value of their house). The number of delinquent loans will keep rising, and so will the number of mortgage foreclosures. It is a vicious circle, because foreclosures drive house prices lower still. While this goes on, fiscal stimulus or no, a broader economic recovery will be difficult to engineer. The value of mortgage-backed securities will keep sinking, the panic in financial markets will persist, lending will fail to revive, and households will keep trying to retrench.

The article recommends three things: an FDIC-style plan to promote modifications; a change to the bankruptcy code, permitting courts to modify mortgage loans; and temporary tax relief to stimulate the demand for housing, as suggested by Allan Meltzer.

The column had closed before I read that the Treasury is thinking about a plan to lower rates on some new mortgages, and that Ben Bernanke was expressing renewed concern about foreclosures. The Treasury’s idea, if it goes somewhere, could be helpful, though I don’t know if it would pack the punch of Meltzer’s proposal. In any event, this scheme is still not targeted directly at reducing foreclosures. I’m puzzled that this aspect of the problem continues to receive comparatively little attention.