Watch it:

Here are a few quotes from the full transcript:

“Despite the efforts to mislead and create doubt, the jury is not out on whether climate change is happening and being caused by manmade carbon pollution; the verdict is, in fact, in.”

“The 25th doctor says: It is a good thing you came to me, because all this diet and exercise would have been a complete waste. You are doing fine. Those other doctors are in the pockets of the fresh fruit and vegetable people. He says: Enjoy life, eat whatever you want, keep smoking, and watch a lot of TV. That is my advice. Then you learn the doctor was paid a salary by the makers of Twinkies, which, don’t get me wrong, are a delicious snack food and should be eaten in moderation.”

“Climategate should properly be known as climategate-gate because it was the scandal that was phony.”

“We are playing with very dangerous effects when we ignore climate change at the behest of a tiny minority of scientists and their polluter industry funders behind them.”

“If we can pull away from the lies and the phony science and the polluter-paid nonsense that has so far distracted us from doing our duty as a nation, we can get into the race that is going on in this world for the energy future.”

“Fifty years ago we were in a global space race. Today we are in a global clean energy race.”

“Climate change is real, and failure to address it is bad for our standing in the global economy, bad for the Federal budget, and bad for our national security. We can do better than that for our children and our grandchildren and posterity.”

(HT WWF’s Nick Sundt)

FRANKEN: I just believe you misstated the history of marriage. Marriage has not existed as a union between one man and one woman for thousands of years in every culture. In many cultures, men have been able to marry many women and young girls. For centuries, women have been treated as chattel in marriage. Further, if the religious purpose for marriage is procreation, why would we sanction marriage between an 89 year-old widower and an 80 year-old widow? I just think we need to be accurate when we talk about the history of marriage, the history of man and woman, the history of our institutions.

Watch it:

The act, which has 31 co-sponsors, now moves to the Senate, where it has yet to be scheduled for a vote.

The committee passed the education bill in a bipartisan vote of 15-7. Sen. Bob Casey (D-PA), the sponsor of a similar Safe Schools Improvement Act, also offered his measure as an amendment but withdrew it before the final vote. Neither act has attracted the 60 co-sponsors necessary to withstand a filibuster in the Senate.

So, okay, Herman Cain’s not going to be president. Who cares? But it drives me nuts that the guy can get taken seriously by some conservative activists and voters without him taking the process seriously at all. The president of Uzbekistan is Islam Karimov. Maybe Cain doesn’t know. Fine. It’s a trivia question. But say, I dunno, something about American foreign policy in Central Asia. Try to demonstrate some command of the issues. But Cain is transparently running for talk radio host or something. If it wouldn’t make a good subject for a 10-minute drive time segment, he doesn’t want to talk about it.

The contrast with someone like Al Franken is, to me, telling. A comedian running for Senate naturally faces some voter skepticism even if, like Franken, he’s been politically engaged and active for years. So Franken clearly went out of his way during and after his campaign to show that he’s well-briefed and well-versed in the issues. He had a higher bar to cross than your average candidate, so he did the work to clear it. Cain, trying to leap from ex-CEO of third-rate pizza chain to president of the United States, doesn’t think he needs to do anything.

- Here’s a quick round-up of our coverage of yesterday’s hearing on the Defense of Marriage Act:

- Was Sen. Grassley Talking About Maggie Gallagher? No.
- Sen. Leahy: Are children better off off if their parents can marry? Focus on the Family: Yes.
- Sen. Franken: I frankly don’t really know how we can trust the rest of your testimony.
- Why Focus on the Family’s “fatherless” studies are a red herring.
- Sen. Schumer: Same-sex couples in  New York will still face inequality after they marry.

- One Iowa has launched a petition calling for The FAMiLY LEADER’s Bob Vander Plaats to apologize for laughing at a “faggot” joke. Vander Plaats also has a history of encouraging birtherism.

- President Obama has nominated a fourth openly gay judge to the federal judiciary.

- The Center for Military Readiness, one of the chief opponents of Don’t Ask Don’t Tell’s repeal, apparently has not been managing its finances very effectively.

- An AP article about resistance to New York’s marriage equality avoids quoting one pro-gay person and refers to what would have been the “best” chance to block the new law.

- The Toronto Sun offers the “Top 10 places to celebrate gay rights.”

- Stephen Colbert stepped out of his Colbert Report character to offer a sincere and heartfelt “It Gets Better” video. Watch it:

HARMON: Are you confident that Minnesotans will vote against putting discrimination into the state constitution?

FRANKEN: I think we’ll win this one, but I think it will be very close. We’re a very divided state, and on this issue I don’t have the strongest sense on where it’s going to be. I know there are people who just have their views and are against marriage equality.

HARMON: Rep. Michele Bachmann being one of them.

FRANKEN: Yes, I think she’ll vote for the amendment.

Franken — a prominent supporter of LGBT equality in Congress — reiterated that he opposes Bachmann’s views on gay people, but said he liked her personally. “[W]e fly on a plane together, we’ve gone to funerals together, we’ve cried together, we’ve laughed together. Here [in Washington, D.C.,] we had a Minnesota hotdish-off — she was the only Republican who came; she wore a Twins apron. I think she was the only other member in the delegation besides me who actually made the hotdish. She made venison kielbasi, sauerkraut, and noodles, and we had a fun time.”

DeMint’s dangerous political posturing, however, drew scoffs from Sen. Al Franken (D-MN). Speaking with ThinkProgress at Netroots Nation this past weekend, Franken blasted DeMint and the GOP’s “hostage-taking” on the debt ceiling as an “unconscionable” gamble with the “full faith and credit” of the U.S.:

FRANKEN: I think it’s unconscionable. This is really playing with the full faith and credit of the United States government. We don’t know for sure what the effect would be, but we may be risking a worldwide depression by doing this. Basically, the world economy is based on the dollar and based on the Treasury. And for us to allow the default on treasuries would be, I think, an absolute disaster. This kind of hostage-taking to me is unconscionable.

Watch it:

Given the comprehensive nature of the consequences of failing to raise the debt ceiling, “absolute disaster” may be putting it lightly. Federal Reserve Chairman Ben Bernanke recently noted that even a short-term default could result in cuts to vital programs like Social Security, Medicare, and the military. The Wall Street Journal noted that, if Republicans hold out long enough, their failure could serve to negate all of the expected 2011 economic growth. The U.S default would also land a severe blow an already fragile housing market that is currently experiencing a downward spiral worse than that of the Great Depression. Be it “absolute disaster” or “unconscionable,” Franken’s characterization of this issue is undeniably more accurate than that of the GOP.

Even with a huge Exhibit A staring them in the face in the form of the 469,000-acre Wallow fire in Arizona — the largest in the state’s history — Senate Republicans on the Energy and Natural Resources Committee couldn’t be drawn into a discussion of the realities of climate change yesterday.

Committee chairman Sen. Jeff Bingaman (D-NM) gave them an opening at the outset of the hearing on federal wildland fire policy. He drew the link between climate change and the four Arizona fires now burning that have in total burned over 663,000 acres – more than 1,000 square miles. With climate change, Bingaman correctly noted, “droughts will be more frequent in the Southwest and they will last longer than they have in the past.”

But committee Republicans Lisa Murkowski (R-AK), James Risch (R-ID) and Dean Heller (R-NV) preferred to talk about the federal government’s aging fleet of air tankers, this year’s heavy snowpack in the northern Rockies, the threat of an endangered species listing of the sage grouse and those (overblown) environmental lawsuits against forest thinning projects. Actually looking into a key driver of the last decade’s huge increase in big western wildfires? A non-starter.

That left it to Sen. Al Franken (D-MN) to draw out U.S. Forest Service chief Tom Tidwell, who unequivocally said his agency’s scientists see climate change at work in the desert southwest: more drought, quicker snowmelt, longer wildfire seasons. “I’ve been on a lot of large fires in my career,” said Tidwell, who flew over the Wallow fire last weekend. “It definitely topped anything I’ve seen before.” Franken noted that his colleagues should recognize that these fires are “the cost of climate change”:

A lot of what we are talking about today is the cost of climate change. And sometimes when we talk about energy and we talk about the amount of carbon dioxide that goes into our atmosphere, and we talk about cost, I think that it would be really good for members to take into account this kind of cost. This is a real cost. We’re talking about real dollars here. A lot of the focus of this hearing today has been the cost of this. And I think that it would be well and good for members to understand that this is related to climate change, and how important it is for us to address this and to take national action to reduce our carbon emissions.

Watch it:

The Wallow Fire is now expected to become the largest fire in Arizona history, bigger even than the 2002 Rodeo-Chediski fire that burned about 470,000 acres.

For years now, models and studies have predicted that climate change would bring more and larger fires. As Climate Progress’ Joe Romm pointed out recently:

Back in 2004, researchers at the U.S. Forest Services Pacific Wildland Fire Lab looked at past fires in the West to create a statistical model of how future climate change may affect wildfires. Their paper, “Climatic Change, Wildfire, and Conservation,” published in Conservation Biology, found that by century’s end, states like Montana, New Mexico, Washington, Utah, and Wyoming could see burn areas increase five times.

Here’s a figure from a presentation made by the President’s science adviser Dr. John Holdren in Oslo last year:

For completeness’s sake — and because I remain optimistic that someday the media will routinely make the connection between increased forest fires and global warming — let me note that back in 2006 Science magazine published a major article analyzing whether the recent soaring wildfire trend was due to a change in forest management practices or to climate change. The study, led by the Scripps Institute of Oceanography, concluded climate change is increasing wildfires:

Robust statistical associations between wildfire and hydroclimate in western forests indicate that increased wildfire activity over recent decades reflects sub-regional responses to changes in climate. Historical wildfire observations exhibit an abrupt transition in the mid-1980s from a regime of infrequent large wildfires of short (average of 1 week) duration to one with much more frequent and longer burning (5 weeks) fires. This transition was marked by a shift toward unusually warm springs, longer summer dry seasons, drier vegetation (which provoked more and longer burning large wildfires), and longer fire seasons. Reduced winter precipitation and an early spring snowmelt played a role in this shift.

That 2006 study noted global warming — from human-caused emissions of greenhouse gases such as carbon dioxide — will further accelerate all of these trends during this century. Worse still, the increased wildfires will themselves release huge amounts of carbon dioxide, which will serve as a vicious circle, accelerating the very global warming that is helping to cause more wildfires.

Roll Call reports that Cornyn is demanding that Alaskans simply deserve full representation, and is hoping the legal challenges regarding the 2010 Alaska senate election do not deprive the state of its senator when Congress convenes in January:

An Alaska state court judge is expected to make a ruling on the Senate race by Friday, but with an appeal to the state Supreme Court likely, National Republican Senatorial Committee Chairman John Cornyn said he hopes the court process concludes soon. As we’ve reported, the ongoing battle has put Republicans on Capitol Hill in a tough spot. The Texan addressed that concern Wednesday in an interview with Roll Call. “We just have to be patient and wait for the judge to decide,” said Cornyn, a former judge. “I understand that could be as early as [Thursday], and I hope it doesn’t go on much longer because I think the people of Alaska deserve to have a Senator when we reconvene again in January, and not still have that up in the air.”

When it comes to a Republican senator, Cornyn urgently believes that Alaska (population 698,473) deserves full representation in Congress. However, he was more than happy to deprive 5,266,214 Minnesotans a vote in the senate because of partisan reasons. Cornyn prevented Franken from taking his seat using the threat of a filibuster. Cornyn’s National Republican Campaign Committee also provided lawyers for Coleman to keep Franken out of the Senate for six months.

Last night on Rachel Maddow’s show, former FEC chairman Scott Thomas — who was appointed by Ronald Reagan and re-appointed to the commission by George H.W. Bush and Bill Clinton — said “if it turns out that any money in fact is being knowingly put into the process from foreign companies or from foreign government sources, that would be a serious problem.” Watch it:

Norman Ornstein, resident scholar at the right-wing American Enterprise Institute, went further. He told ThinkProgress that there was “absolutely no doubt” that there is a potential for the Chamber to violate election law, and called for much tougher enforcement of campaign finance regulations:

To me there is absolutely no doubt that this is a back-door way to get around what are long-standing and legitimate restrictions. This is happening not just because of Citizen’s United, it’s also happening because we have an utterly worthless and feckless Federal Election Commission and an IRS code that needs serious toughening and revamping. We also have a very serious need to have the IRS look at the regulations involving 527s and especially 501(c)(4)s — regulations that are being flouted and abused even as we speak.

Good government groups are weighing in as well. Fred Wertheimer, president of Democracy 21, a nonpartisan organization that works on democracy and governance issues, said that the ThinkProgress report “raises a series of very important questions that must be addressed”:

The CAP article shows that we need an immediate investigation to determine whether the Chamber of Commerce is using foreign money to fund its $75 million campaign to influence the 2010 federal elections, since that would be illegal. If the Chamber wants to make the case that they are keeping their foreign funds away from being spent on campaign activities, they ought to do so publicly and disclose how they are accomplishing this since money is fungible.

David Donnelly, national campaigns director for Public Campaign Action Fund, said:

The Chamber opposes transparency in political spending. They support outsourcing jobs overseas. They’re taking foreign money. And now they basically say, “trust us” when there’s mounting evidence they’re outsourcing the funding of their political attacks ads? Yeah, right. They should immediately pull any ads they’re running, and any candidate benefiting from their spending ought to join us in demanding the Chamber come clean.

Not all groups agree, of course. The conservative Center for Competitive Politics asserted in a memo that the Chamber should simply be trusted. “[I]n America, that’s exactly how it’s supposed to work. Individuals and groups are not presumed to have violated the law based on a bogus blog post from a political opponent which cites tenuous evidence to show ‘likely’ violations of the law.” When pressed during a phone interview with ThinkProgress, Jeff Patch, the group’s communications director and author of the memo, reiterated that the Chamber should simply be trusted. “It doesn’t seem to be that there’s any evidence they’ve used the funds for political activity,” he said. “I think the answer is generally, yeah, we do trust organizations unless there’s a clear indication they violated the law.” It’s hard to consider evidence, however, when the Chamber refuses to release any evidence whatsoever of their accounting methods. Patch acknowledged this, but said “I don’t know what they would do besides releasing a forensic audit of their funds.” If the outcry continues and the FEC does begin a serious investigation, perhaps that’s exactly what will happen.

Dave Weigel enters the counterfactual sweepstakes and wonders how different America might be today absent the long delay in seating Al Franken:

If Franken had eked out another 1000 votes in Minnesota, or if Republicans simply decided not to keep suing to overturn the recount he won, the Democratic agenda would have been radically different. In January and February, the 59 — not 58 — Democrats in the Senate would have only needed to grab one Republican to pass the stimulus. That probably would have resulted in a larger stimulus bill, with extra billions of dollars (maybe $110 billion) going to tax cuts or spending. Democrats would have had the votes for card check, and gotten that out of the way quickly, while Ted Kennedy was still healthy. Just having that extra vote to play with when Obama’s popularity was peaking might have shaken up the whole schedule, gotten nominees like Dawn Johnson into their jobs, and led to more action in the Senate that pleased the Democratic base and — possibly — had a marginal impact on the economy. As it was, Democrats only had a functioning “supermajority” from September 2009 (Franken in the Senate, Paul Kirk in Ted Kennedy’s seat) to January 2010, and all they did with it was pass health care.

I think that’s wrong on card check, where resistance inside the Democratic caucus was pretty big. But the larger point is correct—we likely would have had bigger stimulus, more growth, more nominees confirmed, and it’s possible the Rahm Tipping Point Theory of legislating would have worked. At a minimum, we’d have a somewhat more progressive policy status quo, somewhat less joblessness, and probably a somewhat different outlook for the midterms.

Weigel notes that “Here’s something amazing about the Franken mess: Republicans appear to have paid no price for it.” Exactly. I think that this highlights one of the most admirable things about the Republican congressional caucus. Both its leadership and its rank and file show a good deal more commitment to the substance of things and less concern about transient matters of appearance. Senate Republicans clearly understood that legislative outcomes in 2009 were a very important issue and focused their energy pretty decisively on playing an objectively weak hand to influence them. Senate Democrats, dealt a strong hand, spent an amazing amount of time fretting about process and superficial matters and only really buckled down in 2010 by which time their hand was much weaker.

U.S. Sen. Al Franken gave a quip-filled speech at the Democratic County Chairmen’s Association breakfast Wednesday, attacking Republicans for opposing the building of a mosque blocks from Ground Zero in New York City. [...] Franken said conservative opposition to the mosque is “one of the most disgraceful things that I’ve heard.”

“I don’t know how many of you have been to New York, but if a building is two blocks away from anything, you can’t see it. It’s a community center. They’re going to have a gym. They’re going to have point guards. Muslim point guards,” Franken said, to laughter and applause.

Unfortunately, Gov. Pat Quinn (D-IL), who shared the stage with Franken at the event, came out against the mosque on the same day. “I think we should be sensitive to people on Planet Earth in these special places whether its Auschwitz, Pearl Harbor or Ground Zero, that they not be subject to political controversy that could cause great harm,” he said.

Questioned by the Wonk Room why Senate Majority Leader Harry Reid (D-NV) shied away from introducing a comprehensive climate bill for full Senate consideration as energy crises pile up during the hottest summer ever recorded, the senators noted the ability of Republicans to thwart the will of the majority through the abuse of parliamentary procedures. They recognized Reid’s decision to try for quick action with a limited package in what little time is left during this Congress. However, they relished the chance to debate the promise of a green economy before the November elections, seeing the issue as a political winner:

CARDIN: I think we need political clarity. I wasn’t so concerned about having a vote before August. But we needed the clarity of the bill.

FRANKEN: If you want to rev up people, and say Democrats believe in this — one of the gaps they’re talking about is the enthusiasm gap. So maybe, politically, that is the right way to go. I think that Harry tends to want to get half a loaf or a third of a loaf rather than no loaf at all. This bill could be considered a first step. A lot of that is strategic, in terms of positioning yourself for the election. I was sort of of the school that we should go for pricing carbon, and if we lose, we lose. But that’s not what we did.

UDALL: Our two classes — the class of 2006 and the class of 2008 — I think have a real passion for all of the things you talked about and a desire to do something. We’re rattling all the cages in the committees we’re on, doing the things that we can do. But there is kind of an institutional thing going on there that slows everything down. There’s no doubt about that.

MERKLEY: This generational factor is why, if we can create a course that at least puts us on the right track for the next six to eight years, we will have with each subsequent election more and more folks coming in — based on what I hear at the university level, and graduate school level, and based on the difference between our class and the several classes ahead of us — there is just a growing commitment and passion to fighting this fight on climate and energy.

Watch Udall, Merkley, and Franken discuss their efforts to bring new passion to the climate and energy fight:

The Democrats described by Sen. Cardin as the “new class” overwhelmingly support strong green economy legislation, unlike the older generation peppered with climate peacocks. In fact, according to Politico, every one of the 12 Democrats elected in 2008 would vote for cloture on comprehensive climate and energy reform. Of the ten Democrats elected in 2006, only Sen. Claire McCaskill (D-MO) and Sen. Jim Webb (D-VA) make polluter-friendly arguments against clean energy reform.

“This is going to be a generational battle,” Merkley explained. “We’re going to have keep working and pushing because even our most optimistic bill has fairly weak goals for 2020. We’re going to have to be a lot more aggressive between 2020 and 2050 if we’re going to address carbon dioxide.”

“We can’t give up,” Cardin said during his interview, “because the stakes are too high for our country.”

A few hours before the event, ThinkProgress sat down with Franken and asked him about the public’s frustration with the Senate’s gridlock. Franken told us that the new Senate will likely take up filibuster reform next year, an effort that he supports. He also discussed the need for other procedural reforms:

TP: Is there any other ideas that aren’t being talked about as much that you think would help the Senate be more productive?

FRANKEN: Well, I think there are, you know, a lot of this is procedural reform on how you offer amendments, and again, obviously, on cloture, and filibusters, and how many hours you have to have of debate even after cloture. One easy idea is, you have to wait 30 hours after a cloture vote to vote, because there’s supposedly 30 hours of debate. Well, sometimes they’ve had cloture votes where it’s — we’ve had to vote cloture on something that isn’t controversial at all, like a nominee who ends up passing 98-nothing. There’s no debate over the next 30 hours. So, you could say, I mean, one easy reform would be, say, either side or both sides can give up 15 hours. So, instead of it being 30 hours, it’s 15 hours. I mean, a lot of all of this was just to slow-foot, to slow things down.

In a clear example of Republicans trying to “slow things down,” the Washington Post notes today that the Senate GOP — along with a few conservative Democrats — “have blocked measures that would offer summer jobs to teenagers, give aid to states to prevent layoffs of teachers and other state employees, and expand funding of Pell grants — arguing that all would raise the budget deficit.” Franken attributed their obstruction to crass partisan motives:

And Republicans sort of take this stance that the best thing we can do is slow everything down so as little can happen as possible, so that we can both blame Democrats for not having stuff happen, like jobs bills and stuff like that. And so that, you know, I mean sometimes it’d be a legitimate difference of opinion on something, but sometimes it’s been ridiculous. But I do think that this whole approach of slowing everything down, in many ways I think it’s so that, they don’t want a jobs bill because they don’t want people to get jobs before the election. It’s a harsh thing to say, and I don’t want to impugn the motives of my colleagues, but I don’t get what they’re doing otherwise.

Watch it:

Franken has had experience with the filibuster dating back to before he was even seated as a U.S. senator. As Republicans attempted to drag out the recount process in Minnesota (even though it became clear that Franken was the winner of the election), the GOP promised to filibuster any attempt to seat Franken early.

Transcript:

TP: There’s a lot of frustration, especially at Netroots, that the Senate is gridlocked and can’t get anything done. You know, I think obviously some people think that if one party were in power more would get done, but do you think that the Senate –

FRANKEN: If what?

TP: Sorry — if one party had more of a majority, things would get done.

FRANKEN: Yeah, if we had more than 60, yeah.

TP: Right. But, do you think that there is some fundamental institutional change that needs to be done, such as filibuster reform?

FRANKEN: I think we’re going to be looking very closely at filibuster reform. I think there will be, it’s just, I’m not sure exactly what form it’ll take. But I think there will be reform, and it’ll have to happen, I think, at that point when the new Senate comes in.

TP: Is that something that you would back?

FRANKEN: Yeah. I just have to see what the different proposals are, but sure.

TP: Is there any other ideas that aren’t being talked about as much that you think would help the Senate be more productive?

FRANKEN: Well, I think there are, you know, a lot of this is procedural reform on how you offer amendments, and again, obviously, on cloture, and filibusters, and how many hours you have to have of debate even after cloture. One easy idea is, you have to wait 30 hours after a cloture vote to vote, because there’s supposedly 30 hours of debate. Well, sometimes they’ve had cloture votes where it’s — we’ve had to vote cloture on something that isn’t controversial at all, like a nominee who ends up passing 98-nothing. There’s no debate over the next 30 hours. So, you could say, I mean, one easy reform would be, say, either side or both sides can give up 15 hours. So, instead of it being 30 hours, it’s 15 hours. I mean, a lot of all of this was just to slow-foot, to slow things down.

And Republicans sort of take this stance that the best thing we can do is slow everything down so as little can happen as possible, so that we can both blame Democrats for not having stuff happen, like jobs bills and stuff like that. And so that, you know, I mean sometimes it’d be a legitimate difference of opinion on something, but sometimes it’s been ridiculous. But I do think that this whole approach of slowing everything down, in many ways I think it’s so that, they don’t want a jobs bill because they don’t want people to get jobs before the election. It’s a harsh thing to say, and I don’t want to impugn the motives of my colleagues, but I don’t get what they’re doing otherwise.

Al Franken campaign photo

I missed this when it happened, but it seems that on Tuesday the Conference Committee sort of gutted Al Franken’s amendment on rating agencies. Tim Fernholz explains:

An all-day fight ensued behind the scenes among Democratic members of the Senate delegation over whether to protect Franken’s idea or accept the House’s language. Franken’s proposal, despite a strong vote in the Senate, is still viewed skeptically by some Democrats because it preserves the existing ratings agencies and by others because agencies have lobbied hard against it. Eventually, a compromise was brokered, directing the SEC to implement Franken’s plan — after a year-long study. It’s a classic Washington agreement, at once meaningless and damaging since regulators could ignore legislators’ intent after public scrutiny subsides.

“Today’s compromise is not everything we wanted, but it’s a major step in the right direction,” Franken said later. “The language agreed on by the conference committee means more time and more study than I think is necessary, but it also means definite action will be taken.”

In essence, I agree with Fernholz’s take on the dynamics. But I think further study of this might actually be a good idea. Franken’s proposal is that instead of the issuer of a security picking which rating agency he wants to have rate his security, that instead the security should be submitted to a pool that then randomly assigns it to a rater. In theory, this should curb conflicts of interest that allegedly undermined the soundness of the ratings process.

The thing is that I’m not sure conflicts of interest are really the problem here. For a lengthy account, see my salad-rating analogy, but the short version is that nobody would tell his friends “yeah guys, let’s go see The A-Team, the film critic the studio hired to review it said it was awesome.” The thing is that if you want to read a movie review, you presumably actually want to know if the movie is good. By contrast, there are lots of regulatory-compliance reasons why you might want to buy a AAA-rated security that are to a large extent independent of whether or not the security deserves a AAA rating. You take care of this by changing things on the regulatory side, which I believe both versions of the bill do.

Franken-style randomizing could do some good, or else it could replace a conflict of interest (bad) with a scenario in which agencies have no incentive whatsoever to invest time and money in sound methods (worse). But that may be wrong or there may be good ways around it—I’d actually like to see this studied.

There were two main schools of thought as to what should be done to improve the ratings agencies. One said that the problem was conflicts of interest and wanted to solve this through random assignment of raters. Another said the problem was cartelization and wanted to solve this through forcing agencies to sell accuracy rather than franchise value. Today, it seems to me that today the Senate passed amendments reflecting both those ideas.

First, Al Franken’s amendment passed:

Franken’s measure would create a central clearinghouse, regulated by the Securities and Exchange Commission, to assign firms a credit rating agency to give an initial rating on a security, eliminating the practice of banks shopping around for the highest marks. Financial firms could seek out subsequent ratings on their own, but any discrepancies between the assigned and unassigned ratings would be made public.

But George LeMieux’s amendment also passed:

“There is a handful of federally-approved rating agencies that gave their top marks to some of the worst investments. Those stellar ratings made bad investments seem sound, up until when they crashed the markets,” said LeMieux. “An investment rating should mean something, but today it doesn’t. Removing their federal endorsement will end the dangerous over-reliance on these ratings and allow sound measures of risk to re-emerge in the marketplace-giving investors confidence an investment’s true risk is known.”

It’s not totally clear to me what LeMieux means by this and I haven’t seen a clearer explanation of the amendment anywhere. But he seems to be saying that he’s going to have the SEC stop designating official Nationally Recognized Statistical Ratings Organizations.

These are both decent ideas, but they’re also contradictory. The Franken process assumes there’s some finite number of authorized raters—NRSROs or some equivalent, but the LeMieux concept is precisely that there shouldn’t be any such set of privileged raters. Sometimes when faced with two ideas about how to solve a problem, doing both is smart. But as best I can tell that doesn’t apply in this case.

I think Al Franken is right about this:

Franken wouldn’t relent.

“The president of the United States comes up here, you come here, and none of you are telling us what we’re going to do about health care,” he continued. “He should apologize to everyone here for his stupid idea during the campaign to put this all on C-SPAN.”

More generally, I wish we could influence the norms of campaign coverage so as to discourage presidents from making promises that are outside the scope of their authority. The President of the United States has a powerful role to play in the legislative process, but it’s also a bounded one. For a candidate to be making promises about the nature of congressional procedure seems generally unwise, over and above the fact that this specific promise was a silly one. I’d be fascinated to hear David Plouffe or David Axelrod explain to me how many votes they think they swung with this idea. I’d be shocked if as many as two people found this a compelling reason to vote for Obama, and yet it wound up dominating a couple of news cycles.