Neil Irwin says the American economy is now firing on all cylinders:

Total retail sales rose 0.7 percent in November, as holiday shopping began, and that came despite a sharp tumble in gasoline prices that reduced the dollar value of sales at gas stations by 0.8 percent. Analysts had expected a rise of only 0.4 percent.

….The November retail sales number could well be a fluke. But only 11 days into December, here is a partial list of readings on the economy that have handily beat already-strong analyst forecasts: Institute for Supply Management’s survey of manufacturing firms; its survey of nonmanufacturing firms; motor vehicle sales; construction spending; job growth; wage growth; and now retail sales. The only major piece of data that has been disappointing was a negative report this week on factory orders, a volatile series of data.

I’m not quite as excited by the wage growth number as Irwin, but it’s true that recent economic news has been distinctively more positive than in the past. As usual, my biggest worry is whether weakness in Europe and China is going to derail things, and it’s too early to tell just how serious a concern that is. For now, though, things are finally looking up. Huzzah.

From Rick Perry, asked if he’s smart enough to occupy the Oval Office:

Running for the presidency’s not an IQ test.

Boy howdy, we’ve proven that quite a few times, haven’t we? In any case, I’m genuinely interested in Perry’s candidacy. Back in 2012, when he first got into the race and was being lauded as practically unbeatable, I wrote a post listing the top ten reasons that Perry was weaker than everyone thought. For reference, here’s the nickel version of the list:

1. Everyone looks good before they get into the race.
2. He’s too Texan.
3. He’s too mean.
4. He’s too dumb.
5. He’s too smarmy.
6. He’s too overtly religious.
7. Policywise, he’s too radical, even for Republicans.
8. Despite conventional wisdom, about half of the GOP rank-and-file aren’t tea party sympathizers.
9. Perry’s campaign is going to be heavily based on the “Texas miracle.”
10. Republicans want to beat Obama. They really, really want to beat Obama. Romney is still their best chance.

Obviously #1 is no longer a factor. Perry has run before, and expectations this time around are suitably modest. And #10 doesn’t apply this year. Of the remaining eight, I’d say he’s rather noticeably working to soften #2, #3, #4, #6 (maybe), and #7. And this in turn also means he’s trying to reach out beyond his tea party base (#8). In other words, he seems to be keenly aware of the weaknesses that got my attention in 2012 and is explicitly trying to overcome them.

Does this mean he can win this time around? Not at all, and for various reasons I’d still bet against him. But despite the fact that his star has waned compared to 2012, I’d say his chances are actually better this time around. After all, he’s still a very savvy politician—and although I don’t know how high his IQ is, it’s high enough. If he’s got the self-discipline to stick to his reinvented self and not make any dumb mistakes, he could be formidable in the Republican primaries next year.

Our new $1 trillion spending bill¹ contains a provision that allows donors to give ten times more money to political parties than in the past. This may or may not be a good thing. Jonathan Bernstein, for example, tells us that some experts on campaign finance consider formal party organizations (as opposed to independent Super PACs) to be “a force for pragmatism and against extremism.” So more money flowing in that direction might be a net benefit.

Fair enough. But check out the third paragraph of the Washington Post’s writeup:

Neither party’s leaders in Congress would claim responsibility for inserting the new provision, which was tucked into the final pages of the more than 1,600-page spending bill on Tuesday evening.

The bare minimum we should expect in an alleged democracy is to know where our laws come from and who sponsored them. Instead, our two major parties, which are normally at each others’ throats like rabid dogs, regularly connive to produce the legislative version of a virgin birth whenever the subject is something that benefits politicians themselves. This happens again and again, and it’s ridiculous. If Mitch McConnell is truly dedicated to a transparent Senate, how about putting a stop to this nonsense when he takes over next year?

¹In case you’ve been vacationing on Mars, this bill is affectionately known as the Cromnibus, a mashup of CR (continuing resolution) and omnibus. That’s because it’s an omnibus spending bill that funds lots of agencies in one swoop, but for one particular agency it’s merely a short-term continuing resolution. That one agency is Homeland Security, and they get only a CR for now because Republicans consider this a kind of revenge against President Obama for his recent executive order on immigration. Welcome to kindergarten.

One of the biggest problems with modern medical research is the way that clinical studies are publicly reported by pharmaceutical companies. Basically, if a study shows a positive result, they publish it. If it shows a null or negative result, they often just file it away and no one ever hears about it.

Here’s what this means. If, say, a pharmaceutical company publishes two clinical studies showing that its new drug works better than any previous drug, no one has any idea what this means. Did they do two studies, and they were both positive? Or did they do ten studies, and two were positive compared to eight that were negative? If it’s the latter, then the new drug is probably not so great. But you have no way to know. No one knows.

This is not merely a bug in the system. It’s pretty much flat out corruption and scientific malpractice. Nor is it purely an academic concern. A few years ago, Irving Kirsch of Hull University used the Freedom of Information Act to demand full trial data about antidepressants from the FDA. This gave him access to all the relevant clinical studies, not just the ones that pharmaceutical companies had chosen to make public. And when his team examined them all, it turned out that the average effectiveness of several popular antidepressants was close to zero. For patients with moderate depression, the drugs were essentially no better than a placebo.

So I was delighted to learn this weekend about one doctor’s campaign to change this. And even more delighted to learn from Vox’s Julia Belluz that Deborah Zarin’s efforts are finally bearing fruit:

For over a decade, Dr. Zarin, a Harvard-trained MD, […] has earned a reputation as a crusader for open data, quietly presiding over the world’s largest database of clinical trials, ClinicalTrials.gov. Established in 2000, and operated by the NIH, it now holds information from more than 180,000 studies in humans in over 180 countries.

The idea underlying ClinicalTrials.gov’s creation was a public record about which trials are going on as soon as they are started. That should, in theory, make it more difficult for researchers to hide trials that didn’t produce the results they wanted. The database also makes it easier for patients to know about studies being done, should they require access to an experimental drug, for example.

But there was still a problem: ClinicalTrials.gov, up until now, hasn’t required researchers to report the outcomes of their trials — only the fact they’re happening. Under a new plan, proposed by Health and Human Services last month, researchers who run clinical trials would be made to not only register them on the database within three weeks of signing up the first study participant, but also report a summary of results — no matter the outcome. This will vastly expand the trove of data on the site.

It turns out there are some exceptions in the new rules, so there are still some studies that won’t be reported. But this is nonetheless a huge step forward and should go a long way toward improving the quality of pharmaceutical research. It’s the kind of regulatory change that doesn’t get as much attention as it deserves, and for fans of functional government, it’s also an example of the kind of bipartisan cooperation that’s become rarer and rarer these days. The new rules were authorized by the Food and Drug Administration Amendments Act of 2007, which was passed nearly unanimously in both the House and Senate and signed into law by George Bush. It was then implemented by the Obama administration.

And it’s good news for all of us. Don’t you wish we could do more stuff like this?

I know I shouldn’t spend my time responding to stuff like this. I know it. But I just can’t stand it. Here is torture advocate Andrew McCarthy writing at National Review:

Here is a thought experiment I have been using for many years as we’ve debated this topic….If you take everyone in America who is serving a minor jail sentence of say, 6 to 18 months, and you [ask] them whether they’d rather serve the rest of their time or be waterboarded….how many would choose waterboarding? I am guessing, conservatively, that over 95 percent would choose waterboarding.

….So ignore the blather about how enhanced interrogation is “not who we are.”

Give him credit: there’s no legalistic blather here. Just straight up advocacy of torturing enemy combatants. Full stop.

But here’s a thought experiment for McCarthy. Suppose any other country in the world did what we did. Waterboarding. Sleep deprivation. Physical abuse. Stress positions. Rectal feeding. Nudity. Extreme heat and cold. All for months or years in an effort to turn prisoners into broken husks. Let’s say that it was Putin’s Russia or Khamenei’s Iran, and the victims were American captives. What would you call it then? Enhanced interrogation?

I doubt it. You’d call it torture, and you’d loudly insist that it was barbaric and an act of war. And you’d be right. Or am I missing something?

Steve Benen points me to the last paragraph of today’s Washington Post story about our shiny new $1 trillion spending package:

At domestic agencies, the EPA’s budget would be cut by $60 million, and the IRS would lose $345.6 million. The nation’s tax agency also would be banned from targeting organizations seeking tax-exempt status based on their ideological beliefs.

Isn’t that great? Republicans loathe the EPA as an engine of economic destruction that’s dedicated to destroying the coal industry, shredding the Fifth Amendment, and regulating American corporations into bankruptcy. But even at that, they only lost $60 million. The IRS, by contrast, lost six times as much.

I’m sure the public justification is punishment for the IRS’s supposed targeting of conservative tea party organizations. But in fact, this is business as usual. After being decimated for years following the Roth hearing witch hunts of the 90s, the IRS managed to slowly but steadily rebuild its enforcement staff during the aughts. Things had gotten bad enough that even George Bush was on board. Then Republicans took over Congress after the 2010 elections, and enforcement was once again targeted for cuts. In every year since then, the IRS budget has declined, enforcement staff has been cut, and audit coverage has gone down.

Why? It’s simple: If the IRS budget gets cut, it means fewer audits of corporations and rich people. Any other questions?

Terrance Emerson/Thinkstock

Yesterday the Federal Housing Finance Agency issued new underwriting guidelines that allow some home buyers to take out mortgages with down payments as small as 3 percent. Dean Baker brings down the hammer:

The NYT misled readers about the relative risk from low down payment loans in an article on the decision by the government to allow Fannie Mae and Freddie Mac to purchase loans with just 3 percent down payments. The piece cited several commentators saying that the risk of defaults would not increase substantially by lowering down payment requirements.

A study by the Center for Responsible Lending found that the default rate for loans with down payments of between 3 to 10 percent was nearly 9 percent [correction: 6.8 percent]. This is more than 80 percent [45 percent] higher than the default rate it found for mortgages with down payments of 10 percent or more.

….It is dubious housing policy to encourage moderate income people to take out mortgages on which they are likely to default….I think it’s great to help low and moderate income people get good housing. But this policy is about helping banks get their bad mortgages insured by taxpayers.

This decision by the FHFA is almost criminally myopic. After all, the go-go years that produced a towering housing bubble and then ended in an epic global financial meltdown are less than a decade in the past. Have we really forgotten so soon the primary lesson of these years?

For the record, here it is: If there was a single primary culprit in the collapse of the global economy, it was excessive leverage. It was embedded in exotic financial instruments. It was encouraged by weak banking regulations. It was exploited by traders and executives who all knew they could make a quick buck as long as the music kept playing. In the end, though, it turned Wall Street into a house of cards that didn’t have the strength to withstand meaningful losses. When those losses finally, inevitably, materialized, the financial system collapsed.

But it’s not just bank leverage that’s a problem. Wall Street’s most dangerous debt all originated with consumers, who had been relentlessly encouraged to take on ever more debt and ever more leverage for nearly a decade—mostly in the form of risky mortgages that were almost designed for failure thanks to down payment requirements that got steadily weaker as the housing bubble steadily inflated. If you make a 20 percent down payment, your leverage is 4:1. That’s fine. If things go south, your house can lose a lot of value and you’re still OK. (And so is your bank.) With a 10 percent down payment, your leverage is 9:1. That’s more dangerous. But a 3 percent down payment? Now we’re talking about leverage of 32:1. That’s crazytown territory. Even a moderate setback can wipe you out completely. Put enough loans like that together and then lash them into leverage-soaked financial derivatives that no one truly understands, and a moderate setback can wipe out the entire financial system.

The FHFA’s justification, of course, is that this 3 percent deal is only being offered to people with strong credit histories. But that’s always how it starts, isn’t it? The question is, where does it end?

Nowhere good. The single biggest lesson of the 2008 meltdown is that a strong financial system is built on a foundation of limited leverage. Limited leverage for everyone. Anything else is a foundation of sand. How can we have forgotten that so soon?

Via the Washington Post, here are the top 10 key findings of the Senate torture report:

In plain English: The torture was far more brutal than we thought, and the CIA lied about that. It didn’t work, and they lied about that too. It produced so much bad intel that it most likely impaired our national security, and of course they lied about that as well. They lied to Congress, they lied to the president, and they lied to the media. Despite this, they are still defending their actions.

The rest of the report is just 600 pages of supporting evidence. But the core narrative that describes a barbarous, calculated, and sustained corruption of both our national values and our most fundamental moral principles is simple. We tortured prisoners, and then we lied about it. That’s it.

From Jose Rodriguez, the head of the CIA’s Counterterrorism Center in 2002, after field agents began questioning both the utility and legality of extended waterboarding sessions:

Strongly urge that any speculative language as to the legality of given activities or, more precisely, judgment calls as to their legality vis-à-vis operational guidelines for this activity agreed upon and vetted at the most senior levels of the agency, be refrained from in written traffic (email or cable traffic). Such language is not helpful.

This is, I suppose, not just the banality of evil, but its prolixity as well. Rodriguez, of course, is the guy who would eventually destroy videotapes of CIA torture sessions on the pretense of “protecting” the people who worked for him.

There’s more at the link from the New York Times, which got an advance copy of the Senate torture report and is now releasing it. Along with everyone else in the world, I’ll be posting bits and pieces that stand out as I read them. As much as I have the stomach for, anyway.

Brian Beutler writes today about the recent Republican practice of gumming up the Senate by deluging every bill with a tidal wave of awkward, superfluous, or just plain dumb amendments designed to force Democrats to cast politically embarrassing votes (“Is Senator Catnip really opposed to free flag pins for all vets?”):

To deny Democrats even symbolic victories, Senate Republicans have flooded each legislative debate with amendments—some pertinent, some absurd—that Democrats didn’t want to vote on, or that threatened the legislative coalition behind the underlying bill. When Reid has stepped in to protect his members from these votes, McConnell has used it as a pretext to filibuster.

….With McConnell coming into control of the Senate, the dynamic will now flip….Thus his promise to open up the Senate….”The notion that protecting all of your members from votes is a good idea politically, I think, has been pretty much disproved by the recent election,” he said.

….I hope McConnell sticks to his guns on this one, because he’s completely correct about it. And if there’s a reason to think he will, it’s that it’s entirely consistent with his other, profound insights about the basic nature of legislative politics in America….McConnell wouldn’t choose a more genteel legislative strategy if it weren’t in his interest. But if he can prove that taking hard votes like this doesn’t actually make much of a difference politically, then he can prove that the amendments themselves are worthless, or at least not to be feared, and perhaps make Congress a less ridiculous place in the long run.

Ahem. Mitch McConnell is notable for many things, but a commitment to principled process improvements in the Senate is rather notably not one of them. As Beutler says, demanding the right to offer a few hundred amendments to every bill is merely a pretext for filibustering, not the real reason. McConnell does it to annoy Harry Reid, not because he has a lifelong dedication to an open Senate.

In any case, the issue is a little more complicated. How many amendments can each side offer? Who gets to offer them? What order are they voted on? Is there a time limit on debate? How do you resolve competing amendments on the same subject? The only way to make this work is to have a cast-iron set of rules governing all this stuff. Without that, it will implode the first time someone breaks whatever gentleman’s agreement McConnell strikes with Reid. And I don’t think McConnell has the power or the votes to enact a cast-iron rule on amendments.

So….I’d put this in the general category of generic blather that switches sides whenever the parties trade majorities. For the past few years, McConnell has been for filibusters and against limitations on amendments. Starting in January, some alleged Democratic perfidy will quickly give him cover to switch his position, and Harry Reid will switch his too. Life will then go on exactly as before. You heard it here first.