Via Atrios, Senate leader Reid proposes taxing the AIG bonuses:

Senate Democrats want to tax the controversial bonuses doled out to AIG employees who work for the division that led to the company's downfall. Senate Majority Leader Harry Reid announced on the Senate floor Tuesday that the tax-writing Senate Finance Committee will pursue a legislative fix in such a way that the "recipients of those bonuses will not be able to keep all their money — and that's an understatement."

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Politico is reporting that Republicans are pushing Norm Coleman to go to the Supreme Court with his Bush v. Gore argument:

Top Republicans are encouraging Coleman to be as litigious as possible and take his fight all the way to the U.S. Supreme Court if he loses this round, believing that an elongated court fight is worth it if they can continue to deny Democrats the 59th Senate seat that Franken would represent. And in pushing a possible Supreme Court conclusion, Republicans are raising case history that makes Democrats shudder: Bush v. Gore.

I shudder at the mention of Bush v. Gore, but not because I fear its impact in this case. I shudder because it was the most blatant example of a lack of judicial honesty that I have seen. More . . .

The I.R.S. announced today that victims of Bernie Madoff's ponzi scheme will be entitled to tax refunds if they paid taxes on phantom profits.

Madoff investors should have been reporting earnings from their investments with him through the years and thus paid taxes on those earnings. Given that some of those were "phantom" profits, investors have said they should be entitled to refunds of the taxes they paid.

....By some estimates, the IRS could be out as much as $17 billion in lost tax revenue from refunds to investors who earned fictitious profits in the Madoff scheme.

IRS Commmission Douglas Shulman told Congress today the IRS will be issuing guidelines to Madoff's bilked investors: [More...]

With defenders like Richard Cohen, the Media hardly needs critics. Cohen's defense of CNBC:

They didn't cover up the story of financial shenanigans. They didn't even know it existed.

That can be CNBC's (and the Media's) new slogan - "They don't know anything." I think that resolves all the arguments about the Media.

Speaking for me only

After writing that "[AIG's] remaining $1.6 trillion derivatives portfolio is like one of those delicate, world-destroying time bombs that James Bond used to have to disarm in the movies; the difference here is that the only people who appear to be knowledgeable enough to dismantle the bomb are the ones who built it[,]", the WaPo Ed Board admits "[l]ike most of the people writing about AIG, we have no idea whether this threat is empty."

Ever wonder why the Washington Post exists? In any event, a new slogan for the WaPo -- "We have no idea."

Speaking for me only

When I was in law school, Grant Gilmore's 1974 book The Death of Contract was a part of the discussion of a theory of contract. Gilmore's work was answered by Charles Fried in his 1981 book Contract as Promise, in which Fried was critical of the theory of efficient breach.

In the NYTimes, it is argued that the AIG bonuses should be paid because "the “fundamental value” in question here is the sanctity of contracts. . . . If government officials were to break the contracts, they would be 'breaking a bond[.]' Even companies that have not turned to Washington might seize the opportunity to break inconvenient contracts." (Emphasis mine.) This is, in a word, nonsense. While I have argued here that, at first blush, the AIG bonuses agreements will be hard to break legally, it never would occur to me that there is some moral obligation to honor these contracts. Indeed, the "morality" of the situation, such as it is, would seem to militate towards not honoring the contract.

More . . .

The Seattle Post-Intelligencer is the latest casualty in what seems like a never-ending stream of newspaper failures. Today is its final issue.Unlike the Rocky Mountain News, it will continue as an online publication.

What's next -- the San Francisco Chronicle or the Miami Herald? Both have been struggling and it seems like newspaper closings are but a sign of the times. [More...]

Boy, the AIG Financial Products division really is filled with cluelessness and chutzpah. An "AIG senior financial products Manager:

"It's going to blow up," said a senior Financial Products manager, who spoke on condition of anonymity because he was not authorized to speak for the company. "I have a horrible, horrible, horrible feeling that this is going to end badly."

It's going to blow up? You mean it hasn't already? This is going to end badly? You mean it hasn't already? At this point, AIG needs a compelling argument why it should not just be shut down. This type of talking ain't it.

Speaking for me only

Of all the ways to get rid of a prosecutor, this is not one of them:

A scorned Denver woman, who police say was working as an escort, now is in jail, accused of trying to have her ex-husband, a Pitkin County prosecutor, killed....On Saturday, Dvir allegedly offered an undercover police officer posing as a hit man $2,000 to kill her former husband, Richard Nedlin, court records say.

...."If the body disappeared that's fine, but I'd prefer it to look like an accident, like stuff his body with cocaine, like an overdose," Dvir said, according to the affidavit. "It's got to be done in a very smart way. I just don't want it to backfire on me."

The couple are in midst of a messy custody battle. Ms. Dvir is entitled to the presumption of innocence and I'm somewhat skeptical because she was set up by a jailhouse snitch, but the charge alone is not likely to go over well in divorce court. And it's definitely not the way to beat your opponent in court.

After 7 years, Sara Jane Olson, now 62, is leaving prison. She's scheduled to return to Minnesota on parole, but Gov. Tim Pawlenty is trying to block that and force her to remain in California.

As I wrote here, Sara Jane Olson is not a yo-yo and they should stop treating her like one. Here are some older posts I wrote on Sara Jane's life in prison, on how her prison term got extended and how the extension was later thrown out.

Here's more on her guilty plea to the second degree murder charge. And from CNN on her re-arrest after being paroled the first time.

Unless Minnesota is unable to supervise Ms. Olson, she should go back to Minnesota where her family is. The Governor and the police organizations need to get off her case. It's not up to them, nor should it be.

When the Rocky Mountain News went under, many of the reporters who were left without a job banded together online at I Want My Rocky and kept reporting.

Today they held a press conference. They have some capital (from three Denver entrepreneurs) and will launch an online paper May 4, provided they get 50,000 paying subscribers by April 23.

The proposed publication would be called InDenverTimes.com. Subscriptions will be available on a tiered-rate system, with 12-month subscriptions priced at $4.99 a month, six months for $5.99 a month and three months for $6.99 a month.

News will be free to all, but the other features will require a subscription. [More...]

This is an Open Thread.