The day after Obama declared victory (sort of) in Iraq, the Administration announced a whole package of sanctions against the Pakistani Taliban, Tehrik-e Taliban. The sanctions:

• Designate TTP as a Foreign Terrorist Organization
• Designate TTP as a Special Designated Global Terrorist Organization
• Designate TTP’s two leaders, Hakimullah Mehsud and Wali Ur Rehman, as Special Designated Global Terrorists
• Offer of $5 million reward leading to Mehsud or Rehman’s arrest
• Charge Mehsud in connection with the Khost killings

Forgive me if I dismiss what are real measures against a genuinely dangerous organization. But I can’t help but suspect this lays the ground work to ensure we have a war against terror to fight (and with it, expanded executive powers) beyond July 2011.

Charging a formerly dead guy

Perhaps my favorite comment on the criminal charges came from reporter James Gordon Meek:

DOJ charges Pak #Taliban emir Hakimullah Mehsud in absentia for killing 7 CIA officers in #Afghanistan 12/09. Anybody tell CIA’s drone unit?

Presumably, Meek is referring to claims a US drone strike killed Mehsud in January, a claim the CIA once judged to have a 90% likelihood of being correct. There’s not much point in arresting Mehsud if he’s been dead nine months.

But the mention of CIA’s drone campaign in Pakistan raises a bunch more problems with DOJ’s charges. For starters, Mehsud’s wife–a civilian–was reportedly killed in that January drone strike too. Both the uncertainty the CIA has about its purportedly scalpel-like use of drones and the civilian deaths they’ve caused illustrate the problem with drones in the first place. Civilians–CIA officers–are using them in circumstances with significant collateral damage. It would be generous to call the use of drones in such situations an act of war; some legal experts have said the CIA officers targeting the drones are as much illegal combatants as al Qaeda fighters themselves.

The affidavit describing the evidence to charge Mehsud doesn’t say it, but underlying his alleged crime is the potential US crime of having civilians target non-combatants in situations that cannot be described as imminently defensive.

Charging someone for revenge on CIA’s illegal killing

Which leads us to the crimes for which they’re charging Mehsud: conspiracy to murder and conspiracy to use a WMD (bombs) against a US national while outside of the United States. Basically, DOJ is charging Mehsud with conspiring with Humam Khalil Mulal al-Balawi, the Jordanian doctor who committed the suicide bombing at Khost that killed 7 CIA officers and contractors.

Now, there’s not much doubt that Mehsud did conspire with al-Balawi. I just doubt whether it could be fairly called a crime. The affidavit describes two videos in which Mehsud stands side by side with al-Bawali. In one, both al-Balawi and Mehsud describe the upcoming attack as revenge for killings in the drone program–most importantly, of Mehsud’s brother Baitullah Mehsud from a CIA drone strike in August 2009.

Al-Balawi then continues alone: “This itishhadi [martyrdom-seeking attack] will be the first of the revenge against the Americans.” After additional declarations of revenge by al-Balawi, MEHSUD resumes speaking in Pashtu, explaining the motive for the upcoming suicide attack by al-Balawi, that is the death of the former emir of the TTP, Baitullah Meshud [sic] which MESHUD [sic] attributes to the Americans.

Remember, too, that al-Balawi was a double agent. The Americans believed he was helping them target people, people just like Mehsud. That means al-Balawi (and presumably through him, Mehsud) knew he was specifically targeting those behind the earlier killings in Pakistan when he killed them.

So al-Balawi successfully killed people who were either civilians, in which case their own strikes at Baitullah Mehsud and others may be illegal, or people who were acting as soldiers, in which case the attack on their base was presumably legal under the law of war. And for helping al-Balawi, DOJ is now charging Mehsud with conspiracy.

The affidavit, of course, neglects to mention any of these details. Here’s how they describe the US presence in Afghanistan:

In an effort to stabilize Afghanistan, the United States has maintained a presence in Afghanistan since the removal of the Taliban at several facilities throughout the country, including bases located along the Afghanistan-Pakistan border.

It’s a convenient description, given as how it might vaguely justify the drone strikes in Pakistan. Yet it doesn’t mention the actual legal purpose for US presence in Afghanistan authorized by the AUMF, which is to get the people who hit us on 9/11. That obviously can’t include the TTP, since even this affidavit said they formed in 2007 in what could fairly be read as a response to US actions in Pakistan tied to the Afghan war.

TTP’s primary purpose is to force withdrawal of Pakistani troops from the FATA of Pakistan–which is located along the Pakistan-Afghanistan border–unite against NATO forces in Afghanistan, and establish Sharia–or Islamic law–in the tribal territories.

It’s not a crime to advocate for sharia. TTP’s other two described goals–to force the withdrawal of Pakistani troops placed there at US behest, and to “unite” against NATO forces “in Afghanistan” which (the affidavit doesn’t say) support drone strikes in Pakistan are responses to US actions. Granted the TTP are dangerous creeps. But even this affidavit is largely describing them as an entity reacting in defensive fashion to US actions.

As to the killing of Baitullah Mehsud? The affidavit simply says he died, without any explanation of the drones that illegally (if their suggestion that al-Balawi targeted civilians is true) or legally (if they concede that al-Balawi struck a military target) struck in Pakistan.

The Tehrik-e-Taliban Pakistan (TTP) is a Taliban-inspired alliance of Pakistan-based Sunni tribal militants formed in or about late 2007 by Baitullah Mehsud, who was killed in August 2009.

[snip]

… the motive for the upcoming suicide attack by al-Balawi, that is the death of the former emir of the TTP, Baitullah Meshud [sic] which MESHUD [sic] attributes to the Americans.

Of course, they have to depict Baitullah Mehsud as just dying, with no further discussion. Because if they included such a discussion, then either the al-Balawi attack would not be a crime, or the CIA civilians killed in it were acting illegally when they committed the act that brought Mehsud to retaliate. (Note, too, that when State Department Counterterrorism Coordinator Daniel Benjamin was asked yesterday about ties between TTP and ISI, he claimed to know nothing.)

But no matter. We now officially have a new, named target, one to match Anwar al-Awlaki in Yemen, and one who (unlike Osama bin Laden, Ayman al-Zawahiri, or Mullah Omar) we might stand a chance of getting. Now the American people have a villain to root against.

Why impose these sanctions now

Which may be why the Administration has taken these steps, up to and including the dubious charges against Mehsud.

To a large degree, this is a reaction to Faisal Shahzad’s attempt to bomb Times Square in May. Yet curiously, the charges are not related to that strike, even though if the TTP was genuinely involved, it would be more clearly terrorism than the Khost strike. Though  a YouTube initially had the TTP claiming credit for the strike, shortly after Shahzad’s arrest, the TTP said it did not train him. Video later surfaced showing Shahzad and Mehsud together. And Shahzad himself said he had been trained by the TTP before his strike. The affidavit against Mehsud says that TTP has claimed responsibility for the attack, but makes no charges relating to it.

(Note, the government’s claims about TTP also repeatedly mention the Benazir Bhutto assassination, though they very carefully couch that claim in terms of what Pakistani authorities have claimed about TTP, not what TTP has claimed or the US has evidence to support.)

It may be tied to General Petraeus’ assumption of the command in Pakistan–though he has pushed for the listing of the Haqqani network more strongly than the TTP.

Ultimately, though, I suspect this is an effort to establish ties between the al Qaeda–those covered in the AUMF in Afghanistan–and the Pakistani Taliban not legally included in the AUMF before the justification for remaining in Afghanistan to fight the dozen al Qaeda members still in the country begins to look utterly ridiculous.

The TTP is very much part of the most dangerous terrorist threat the United States faces. The TTP and al-Qaida have a symbiotic relationship. TTP draws ideological guidance from al-Qaida while al-Qaida relies on the TTP for safe haven in the Pashtun areas along the Afghan-Pakistani border.This mutual cooperation gives TTP access to both al-Qaida’s global terrorist network and the operational experience of its members. Given the proximity of the two groups and the nature of their relationship, TTP is a force multiplier for al-Qaida.

While the terrorist designations undeniably gives law enforcement agencies the ability to prosecute anyone knowingly working with the TTP going forward (thus making it easier to try any Americans seeking out ties with them), it also seems to point to a lot of the problems with our hybrid legal-military strategy.

In honor of Steve Rattner’s revelation that Rahm Emanuel wandered around during the auto bailout saying “fuck the UAW,” I’ve renamed the “Cadillac tax” the “Fuck the UAW” tax.

Which is appropriate timing given that the Kaiser Family Foundation is out with a study today they should have done during the health care debate, showing that employers have been shifting health care costs onto employees.

The premiums that employees pay for employer-sponsored family coverage rose an average of 13.7 percent this year, while the amount that employers contribute fell by 0.9 percent, the survey found.

For family coverage, workers are paying an average of $3,997, up $482 from last year, while employers are paying an average of $9,773, down $87, according to the survey by the Kaiser Family Foundation and the Health Research & Educational Trust.

The best part of the WaPo coverage, though, are the quotes from KFF President Drew Altman playing dumb.

“Many employers looked into their recession survival kit and seem to have concluded that one way to make it through the recession and hang on to as many employees as possible was to pass on their health premium increases to their employees this year,” Kaiser Family Foundation President Drew Altman said by e-mail.

How much, if at all, the federal health-care overhaul enacted in March will restrain cost increases over the long run remains to be seen. While experts debate its likely impact, the legislation is “the only thing we have coming on line as a country to control costs other than what now seems like the primary default strategy in the private sector – shifting costs to people,” Altman said.

You see, the trend of employers shifting costs onto employees was readily apparent last year, when Jonathan Gruber and the Administration and health care reform boosters were using MagicMath to claim that not only would the “Fuck the UAW” tax save money, but that workers would end up with higher wages.

In fact, this behavior has been going on for decades, and it is precisely what the Fuck the UAW tax is designed to incent: boosters—some funded by the KFF–routinely argued that if employers passed more costs onto employees, they would become more sensitive to cost, and use less care (the entire debate sidestepped the question of whether incenting less care was useful, particularly for those with chronic conditions), thereby lowering health care costs overall. And this hocus pocus logic is–aside from laudable changes to Medicare delivery–the biggest cost “savings” in the health care reform bill. But the KFF poll appears to undercut the assumptions that went into the bill (notably, that employees would benefit from this scam).

And KFF President Drew Altman has the audacity to say that the health insurance reform bill is “the only thing we have coming on line as a country to control costs other than what now seems like the primary default strategy in the private sector – shifting costs to people,” without admitting that one of the biggest cost control strategies in the health insurance reform bill is to shift costs to people!

Ah well. An Administration whose Chief of Staff wanders around saying “Fuck the UAW” probably doesn’t consider union members real people anyway.

Following closely on the reporting that Wall Street has resigned itself to having Elizabeth Warren recess appointed to head the Consumer Finance Protection Board, the WaPo reports that she has backed out of teaching a Harvard class at the last minute.

“I’m writing to let you know that Professor Jerry Frug will be teaching your Contracts class this term instead of Professor Elizabeth Warren,” law school dean Martha Minow wrote to students on Tuesday, according to an e-mail obtained by The Washington Post. “Professor Warren regrets that she will not be able to teach you this fall and we regret the last minute change.”

Of course, Dawn Johnsen canceled over a year of law school classes before she got hung out to dry by the Administration. So while this is an intriguing development, don’t count any consumer protection chickens yet.

In 30 days, changes to Part II (Rules) and IV (Punitive Articles) of the Courts Martial Manual will go into effect. Only, we don’t know what those changes are because the annex that describes them appears to be classified.

All we get is this Executive Order noting the change–and explaining that nothing in yesterday’s order affects acts or legal actions that took place before the EO goes into effect in 30 days.

(a) Nothing in these amendments shall be construed to make punishable any act done or omitted prior to the effective date of this order that was not punishable when done or omitted.

(b) Nothing in these amendments shall be construed to invalidate any nonjudicial punishment proceedings, restraint, investigation, referral of charges, trial in which arraignment occurred, or other action begun prior to the effective date of this order, and any such nonjudicial punishment, restraint, investigation, referral of charges, trial, or other action may proceed in the same manner and with the same effect as if these amendments had not been prescribed.

I’m particularly interested in this because of two recent high profile events: the Nidal Hasan attack–the report on which DOD just released–and Bradley Manning’s arrest. Both might precipitate some changes in the handling of courts martial, charges, and the handing of charges.

But it’s not clear how.

Yesterday, the SEC told ratings agencies they mean business. They will prosecute agencies for fraud.

In the future.

It did so in a report of investigation into explicit fraud on the part of Moody’s in which the SEC declined to prosecute for jurisdictional reasons.

At issue is a programming error that caused Moody’s to give credit ratings up to four notches higher to some complex debt products than the products deserved. Moody’s discovered the coding error in January 2007. But then ratings committee members in Europe decided not to downgrade the credit ratings for those products because doing so–admitting the coding error–might make Moody’s look bad.

In this particular case we seem to face an important reputation risk issue. To be fully honest this latter issue is so important that I would feel inclined at this stage to minimize ratings impact and accept unstressed parameters that are within possible ranges rather than even allow for the possibility of a hint that the model has a bug.

The Financial Times learned of and reported Moody’s decision in May 2008 after which, in July 2008, Moody’s ‘fessed up to the problem.

Internal Moody’s documents seen by the FT show that some senior staff within the credit agency knew early in 2007 that products rated the previous year had received top-notch triple A ratings and that, after a computer coding error was corrected, their ratings should have been up to four notches lower.

But in the interim period, as part of a registration application to be a recognized ratings agency, Moody’s made the following representations to the SEC:

Accordingly, Exhibit 2 to the MIS application provided the procedures and methodologies used by MIS to determine credit ratings and, among other things, stated therein that the “Relevant Credit Rating Process Policies” included the MIS “Core Principles for the Conduct of Rating Committees.” The actions of the rating committee that evaluated the affected credit ratings for the CPDO notes did not comply with these Core Principles. Most notably, the Core Principles stated that “Moody’s will not forbear or refrain from taking a rating action based on the potential effect (economic, political or otherwise) of the action on Moody’s, an issuer, an investor, or any other market participant.” The Core Principles also stated that “[i]n arriving at a Credit Rating, the [rating committee] will only consider analytical factors relevant to the rating opinion.” Because the committee allowed concerns regarding the potential reputational impact on Moody’s to influence decisions not to downgrade the affected CPDOs, the process did not comply with the procedures listed in the MIS application. [my emphasis]

In other words, Moody’s promised to the SEC that it did not do what it had done in 2007, choose not to downgrade the credit rating of an entity because doing so would hurt Moody’s.

Financial Times first reported of SEC’s investigation into Moody’s in May 2010–almost two years after Moody’s admitted they had been gaming their ratings. But yesterday, SEC basically said they weren’t going to prosecute Moody’s for making false representations to the SEC because–given that the financial products being rated and the decisions not to downgrade their ratings all took place in Europe–it wasn’t sure it had jurisdiction to prosecute.

Mind you, the Financial Reform bill has made it explicitly clear that the SEC can prosecute ratings agencies for stuff they do overseas.

The Commission notes that, in recently enacted legislation, Congress has provided expressly that federal district courts have jurisdiction over Commission enforcement actions alleging violations of the antifraud provisions of the Securities Act of 1933 or the Exchange Act involving “conduct within the United States that constitutes significant steps in furtherance of the violation, even if the securities transaction occurs outside the United States and involves only foreign investors” or “conduct occurring outside the United States that has a foreseeable substantial effect within the United States.”

So the punchline of this report–showing that Moody’s clearly was cooking the books but concluding that because the books were cooked in Europe, SEC isn’t sure it can do anything–is a stern warning to ratings agencies going forward:

This report serves to caution NRSROs that, where appropriate, the Commission will utilize recent legislative provisions granting jurisdiction for enforcement actions alleging otherwise extraterritorial fraudulent misconduct that involves significant steps or foreseeable effects within the United States. The Commission also cautions NRSROs that they should implement sufficient and requisite internal controls over policies, procedures, and methodologies used to determine credit ratings.

Charlie Savage noted an interesting part of yesterday’s DC Circuit ruling upholding the detention of Ghaleb Nassar al-Bihani: it explicitly disagreed with earlier assertions made by Janice Rogers Brown and Brett Kavanaugh that international law could not bind presidential authority.

On Tuesday, all nine judges on United States Court of Appeals for the District of Columbia Circuit rejected a request by Mr. Bihani to rehear his case. But seven of the nine judges issued an unusual one-paragraph note saying that they viewed Judge Brown’s and Judge Kavanaugh’s discussion of international law as irrelevant to deciding Mr. Bihani’s fate.

Stephen I. Vladeck, an American University law professor who filed a friend-of-the-court brief asking the court to rehear the case, said the note amounted to a nullification of the more sweeping parts of the January ruling without the court bothering to rehear it. The paragraph, he said, tells the world that the section of the January ruling about international law should be treated like what lawyers call “dicta” — editorializing about issues that are not necessary to decide the matter at hand, which has little controlling authority for other cases.

“They’ve basically removed the single biggest complaint people had with that opinion,” Mr. Vladeck said. “They said, ‘We don’t think we need to rehear the whole case just to limit the opinion — we can just say it, and going forward this is how we understand it.’ That matters a lot.”

Click through to read about Rogers Brown and Kavanaugh’s whiny response.

So the lesson here? The Court upholds the government’s claim it needs to hold Osama bin Laden’s cooks like Bihani in custody to keep us all safe. But it does so on the logic that holding cooks is accepted under the rules of war.

Jake Tapper hammered Robert “a recovery that got our economy moving again” Gibbs yesterday on whether the Administration is not doing more for the economy because of political paralysis. After four attempts to avoid answering the question or focus exclusively on blaming Republicans, Gibbs finally suggested there wasn’t all that much the Administration can do to stimulate the economy.

Q Is the reason the President is not pushing for a bolder move on the economy because he doesn’t believe there is one, or because he doesn’t think he could get it through Congress?

MR. GIBBS: Well, Jake, I think you will hear the President — you heard him today after meeting with his economic team, and you will hear him over the course of the next several weeks outlining a series of ideas, some of which are stuck in Congress and some of which we continue to work through the economic team, that will be targeted measures to continue to spur our recovery and to create an environment in which the private sector is hiring.

Q But these are smaller-bore type proposals. These aren’t $787 billion stimulus packages.

MR. GIBBS: No, they’re not. But let’s understand — when you mention small bore — some of you probably saw this article today — “Small businesses sit in holding pattern.” “Small businesses have put hiring, supply buying, and real estate expansion on hold as they wait out the vote on a small business aid bill that is stalled in the Senate earlier this summer.” Right?

As the President said in the Rose Garden, 60 percent of our job losses have come from small business. Small businesses are waiting for the Senate to act on a bill that would cut their taxes and provide them greater loans and investment opportunities with which to expand.

The Republican Party talks a lot about their support for and their helping of small business, and I think the question that the President put toward them today is, if that’s what you support, why are you standing in the way of something that small businesses acknowledge would help with their hiring, with their purchasing, and with their expansion?

Q Okay, but the question I asked was, do you think — does the President think that there should be a bolder move taken beyond a $30 billion small business lending initiative —

MR. GIBBS: Well, again, I think —

Q — and there aren’t the votes for it, or he just didn’t think there is such a thing?

MR. GIBBS: I think, Jake, I think the President mentioned several ideas today that he believes are important to continue that recovery that we will pursue. I think these will be areas and initiatives that are targeted towards spurring recovery and creating an environment for hiring, not some —

Q But does that mean he believes that that is the right approach, or he believes that it’s the only politically possible approach?

MR. GIBBS: Well, look, I don’t think there’s any — I think there’s no doubt that there are — there’s only so much that can be done.

Q Not having to do with politics?

MR. GIBBS: Not having to do with politics. [my emphasis]

At which point Gibbs promptly pivoted and adopted the most thread-bare of DC excuses: whocouldanode.

Q In retrospect, was the stimulus too small?

MR. GIBBS: Look, we always — I think it makes sense to step back just for a second. If you look at — and I don’t think anybody had — and I think we’d be the first to admit that nobody had, in January of 2009, a sufficient grasp at the sheer depth of what we were facing. I think that’s, quite frankly, true for virtually every economist that made predictions. You had — the chart that I generally show, adding the job losses for the last three recessions up doesn’t get you to the job loss that we’ve seen in this recession alone.

It took us a long time to get to this point. We got here not simply because of one thing but because of many things. We’ve seen the housing market collapse. We saw what happened to credit markets. We saw what happened to the stability of our financial system. All of that accumulated after many years into one big pothole that — the size of which any stimulus was unlikely to fill.

I think that for all of the political back-and-forth on the Recovery Act, there should no longer be any doubt — despite some Capitol Hill nonbelievers — that what the Recovery Act did was prevent us from sliding even into a deeper recession, with greater economic contraction, with greater job loss, than we have experienced because of it. [my emphasis]

Calculated Risk didn’t even have to look outside of the Administration–at least as it existed when people were making predictions about the recovery act–to find an economist who had enough of a grasp on what was happening.

How about Christina Romer (the chair of the Council of Economic Advisers)? From Ryan Lizza at the New Yorker:

At the December [2008] meeting, it was Romer’s job to explain just how bad the economy was likely to get. “David Axelrod said we have to have a ‘holy-shit moment,’ ” she began. “Well, Mr. President, this is your ‘holy-shit moment.’ It’s worse than we thought.” She gave a short tutorial about what happens to an economy during a depression, what happened during previous severe recessions, and what could happen if the Administration didn’t act. She showed PowerPoint slides emphasizing that the situation would require a bold government response.

…

The most important question facing Obama that day was how large the stimulus should be. Since the election, as the economy continued to worsen, the consensus among economists kept rising. … Romer had run simulations of the effects of stimulus packages of varying sizes: six hundred billion dollars, eight hundred billion dollars, and $1.2 trillion. The best estimate for the output gap was some two trillion dollars over 2009 and 2010. Because of the multiplier effect, filling that gap didn’t require two trillion dollars of government spending, but Romer’s analysis, deeply informed by her work on the Depression, suggested that the package should probably be more than $1.2 trillion.

So Romer thought the right size was probably about double what was actually enacted (excluding the Alternative Minimum Tax relief).

And then there are the prominent Nobel prize winning economists in the Democratic party who predicted the stimulus was too small.

So basically, the Administration’s strategy for limiting the political damage of the dismal economy (to say nothing of doing something to fix it) is simply to blame Republicans, because actually admitting that the Administration fucked up–much less doing something like firing Tim Geithner and starting fresh–is just not palatable.

A pity for all those struggling Americans who have to pay for the Administration’s arrogance, huh?

From a joint press release:

The American Civil Liberties Union and the Center for Constitutional Rights (CCR) today filed a lawsuit challenging the government’s asserted authority to carry out “targeted killings” of U.S. citizens located far from any armed conflict zone.

The authority contemplated by the Obama administration is far broader than what the Constitution and international law allow, the groups charge. Outside of armed conflict, both the Constitution and international law prohibit targeted killing except as a last resort to protect against concrete, specific and imminent threats of death or serious physical injury. An extrajudicial killing policy under which names are added to CIA and military “kill lists” through a secret executive process and stay there for months at a time is plainly not limited to imminent threats.

“The United States cannot simply execute people, including its own citizens, anywhere in the world based on its own say-so,” said Vince Warren, Executive Director of CCR. “The law prohibits the government from killing without trial or conviction other than in the face of an imminent threat that leaves no time for deliberation or due process. That the government adds people to kill lists after a bureaucratic process and leaves them on the lists for months at a time flies in the face of the Constitution and international law.”

The groups charge that targeting individuals for execution who are suspected of terrorism but have not been convicted or even charged – without oversight, judicial process or disclosed standards for placement on kill lists – also poses the risk that the government will erroneously target the wrong people. In recent years, the U.S. government has detained many men as terrorists, only for courts or the government itself to discover later that the evidence was wrong or unreliable.

According to today’s legal complaint, the government has not disclosed the standards it uses for authorizing the premeditated and deliberate killing of U.S. citizens located far from any battlefield. The groups argue that the American people are entitled to know the standards being used for these life and death decisions.

“A program that authorizes killing U.S. citizens, without judicial oversight, due process or disclosed standards is unconstitutional, unlawful and un-American,” said Anthony D. Romero, Executive Director of the ACLU. “We don’t sentence people to prison on the basis of secret criteria, and we certainly shouldn’t sentence them to death that way. It is not enough for the executive branch to say ‘trust us’ – we have seen that backfire in the past and we should learn from those mistakes.”

CCR and the ACLU were retained by Nasser Al-Aulaqi to bring a lawsuit in connection with the government’s decision to authorize the targeted killing of his son, U.S. citizen Anwar Al-Aulaqi, whom the CIA and Defense Department have targeted for death. The complaint asks a court to rule that using lethal force far from any battlefield and without judicial process is illegal in all but the narrowest circumstances and to prohibit the government from carrying out targeted killings except in compliance with these standards. It also asks the court to order the government to disclose the standards it uses to place U.S. citizens on government kill lists. [my emphasis]

For the backup documentation, go here or here.

Great news! My house goes on the market today — at the same price the house next door sold as a foreclosure a few years ago.

Okay — it’s mostly good news insofar as I don’t have to drive back to Ann Arbor every weekend and instead can start enjoying the beauty of west Michigan.

But being in the housing market at its bleakest moment does mean I’m following news closely. Like this story, suggesting the Administration may bring back the housing tax credit.

The Obama administration has not decided whether it should resurrect a popular tax credit for first-time homebuyers, Housing and Urban Development Secretary Shaun Donovan said on Sunday.”It’s too early to say whether the tax credit will be revived,” Donovan said in an interview on CNN’s “State of the Union” program. He said the administration would “do everything we can” to stabilize the shaky U.S. housing market.

Now, policy wonks of all political persuasions have agreed since last year that it was always a stupid policy (and note, this is from  before it was extended to more buyers).

“It’s terrible policy,” says Mark Calabria of the libertarian Cato Institute.

“It’s awful policy,” says Andrew Jakabovics, associate director for housing and economics at the liberal Center for American Progress. “It’s incredibly expensive. It’s not well targeted.”

Home sales have risen dramatically in the past year, but most economists don’t attribute the increase to the tax credit. August single-family-home sales in Southern Nevada, for instance, hit 3,229, up more than 25 percent from a year earlier.

But economists attribute most of the rising sales to the plunge in prices, not the tax credit. The median sale price of single-family homes was off more than 35 percent from a year earlier.

“A heck of a lot of people would have bought the house anyway,” says Ted Gayer, an economist at the Brookings Institution.

According to an estimate by the National Association of Realtors, of the 2 million new homebuyers since the credit was instituted, 350,000 say they would not have bought a house without the tax break.

“We paid $8,000 to at least 1.5 million people to do something they were going to do anyway,” Jakabovics says.

The tax break, due to expire at the end of November, is on track to cost $15 billion, twice what Congress had planned. In other words, it will cost $43,000 for every new homebuyer who would not have bought a house without the tax break.

Unlike Cash for Clunkers, there was no societal benefit tied to the credit (however ineffective C4C was at saving gas). Moreover, the benefit was small enough — given the cost of a house — that it wasn’t helping all that many marginal buyers get into a new home.

More importantly, as Calculated Risk notes (and has been noting, for over a year), the credit doesn’t affect the underlying problem in the housing market: too few households and therefore too much supply.

The problem in housing is there is too much supply (at the current price). Incentivizing people to buy existing homes just shuffles households around — it does NOT reduce the overall supply unless the buyer is moving out of their parent’s basement. I doubt that happened very often. Note: It is important to remember that rental units are part of the overall supply, so moving people from a rental unit to homeownership doesn’t help.

And if the tax credit leads to more new home sales — that ADDS to the excess supply. And that makes the situation WORSE.

It would be far better for housing and the economy to announce “There will be no further housing tax credits.”

But, a tax credit is a Republican policy championed by former realtor Johnny Isakson (R-GA) which means it has the plus — in DC terms — of being hopey-changey bipartisan and of being celebrated as a tax cut for market behavior in DC’s twisted sense of morality. And so, we consider re-upping the tax credit.

And while HUD Secretary Shaun Donovan says the Administration would “do anything we can” to prop up the housing market, they seem to be ignoring the underlying causes of the problem. Joe Nocera has a great piece talking about how all players in the housing market right now have reason to be really cautious. But for most, the issue still comes back to oversupply and therefore prices that will fall for some time.

The second reason is that, Mr. Yun notwithstanding, most people simply do not believe that housing prices are even close to hitting bottom. “In the Bay Area, a house that was worth $300,000 a decade ago became a million-dollar home,” said Greg Fielding, a real estate broker and blogger. “Now it is listed at $800,000.” That price, he suggested, was still unrealistically high. The seller, meanwhile, doesn’t want to face the fact that his or her home is too richly priced, and won’t sell at a more realistic price — which may well be below his or her mortgage debt.

There is also an immense amount of inventory that has yet to hit the market but will, sooner or later. People in the real estate business have taken to calling this “the shadow inventory.” It consists of homes for which the owners have stopped paying the mortgage but the banks haven’t foreclosed on yet, foreclosed properties that have not yet been put up for sale, homes with modified mortgages that the owners still can’t afford and will soon default on and so on.

Mr. Barnes describes the shadow inventory as akin to “ranks of Napoleonic infantry, rows deep, hidden in the fog.” This inventory, estimated by Rick Sharga of RealtyTrac to be between three million and four million homes, is almost certain to drag down home prices for the foreseeable future. “The disinterest of buyers, in an interest-rate environment that may be the lowest ever, is striking,” Mr. Barnes said. But, he added, it makes perfect sense. Since 2007, housing prices have been in a deflationary spiral, and nobody can say when it will end. “It doesn’t matter if interest rates go down to 2 percent,” Mr. Barnes said — buyers won’t reappear in big numbers until they can see the light at the end of the tunnel.

The Administration has not yet, however, considered the most obvious “do everything we can” to affect this bleak scenario: stop the shrinkage in the number of households. If, rather than declaring victory over giving the banks more power to unwind foreclosures over time (thus creating the Napoleonic army of shadow inventory Barnes refers to), the Administration had done what was needed to actually keep people in homes, this downward spiral would be slowed, at least.

The downward spiral in housing is not going to be arrested until we’re able to keep the people who want to stay in their houses in them. But thus far I see no sign of a policy solution that will do that.

Add this to the list of things I might laugh about if it weren’t so damned sad and awful. The Administration has now realized trying a Canadian accused of murder for killing someone in an active battlefield as a teenager exposes the Gitmo show trials as a kangaroo court. But they don’t know whether they have the authority to intervene to stop it.

Administration officials would speak only anonymously about deliberations on whether to try to abort the trial. But their view about the need to improve the system’s perceived credibility — so allies will cooperate by providing evidence or extraditing defendants — was echoed by Kenneth L. Wainstein, assistant attorney general for national security in the Bush administration.

“It is important for the government to be able to proceed through a trial, to do so in a transparent way, and have the world see that this is a fair process with strong safeguards and full due process,” he said. “The sooner that happens, the better.”

[snip]

Administration officials have discussed whether senior civilian leaders at the Pentagon or elsewhere could get involved, helping to revive plea negotiations or even directing Admiral MacDonald to make a more attractive offer. (Admiral MacDonald did not respond to an interview request.)

A similar high-level intervention would clearly be allowed in the regular court system, where the attorney general supervises prosecutions. But tribunal rules insulate commission officials.

A provision in the Military Commissions Act prohibits “unlawful command influence,” defined as attempting “to coerce, or, by any unauthorized means, influence” the judgment or actions of prosecutors or the convening authority. Officials are debating what that means.

But it seems there are at least two things complicating this picture (I’ll think of more after I drink more coffee).

First, in discussions of Khadr’s potential plea deal, no one seems to admit that the plea deals themselves discredit the military commissions. The press reacted little more favorably to Ibrahim al Qosi’s pretend 14 year sentence that everyone knew was actually two years than they have to the rulings in the Khadr case admitting rape threat tainted evidence. The kabuki quality of the plea deal was one of the reasons Khadr cited for firing his lawyers and rejecting the plea deal they were offering him (they were offering him 30 pretend years and 5 real ones). So a sweeter plea deal, without fixing the whole double secret sentence business, won’t do all that much to restore the credibility of the military commissions.

Also, it seems like the Administration has one other option (and I hope the Canucks will expand on this in comments). After all, our government has transferred every other western detainee back to his home country. There have been discussions with Canada about doing the same. Why not make Omar Khadr Stephen Harper’s problem? Nothing in the military commissions would preclude the Administration from engaging in foreign policy, would it?

Of course, that would require the courage to stand up to the screeching fear-mongers who would attack the Obama Administration for making the same kind of deals that the Bush Administration made.

But international credibility doesn’t come for free. If the Administration is serious about winning international credibility for our kangaroo court, it is going to have to be willing to make the case for credibility itself. And right now, it still seems to be hoping for some gimmick to get out of its Khadr problem.