The House tonight passed the Protect Life Act. The vote was 251 to 172. Only 15 of the "aye" votes were Democrat. 170 Democrats and 2 Republicans voted against the bill. Who were the bad apples? You can view the vote here or here.

The bill is H.R. 358, Protect Life Act. [More...]

Martin Feldstein writes:

To halt the fall in house prices, the government should reduce mortgage principal when it exceeds 110 percent of the home value. About 11 million of the nearly 15 million homes that are “underwater” are in this category. If everyone eligible participated, the one-time cost would be under $350 billion. Here’s how such a policy might work:

If the bank or other mortgage holder agrees, the value of the mortgage would be reduced to 110 percent of the home value, with the government absorbing half of the cost of the reduction and the bank absorbing the other half. For the millions of underwater mortgages that are held by Fannie Mae and Freddie Mac, the government would just be paying itself. And in exchange for this reduction in principal, the borrower would have to accept that the new mortgage had full recourse — in other words, the government could go after the borrower’s other assets if he defaulted on the home. This would all be voluntary.

This won't work. The reason is the banks can not recognize these losses. The lack of clothing for the emperor would become apparent. Without a stick, the banks won't do it. There were sticks available in early 2009, but Geithner protected his Wall Street buddies. In any event, why not HOLC?

Krugman yesterday:

I’ve written a lot about the evils of soaring inequality. But I have not gone that route. I’m not ruling out a connection between inequality and the mess we’re in, but for now I don’t see a clear mechanism, and I often annoy liberal audiences by saying that it’s probably possible to have a full-employment economy largely producing luxury goods for the richest 1 percent. More equality would be good, but not, as far as I can tell, because it would restore full employment.

I still think Krugman is utterly wrong here. Take for instance the issue of homeowner debt, which everyone seems to agree is the major drag on our economy now.. Certainly it is possible to ignore income inequality as a major reason for this problem, but it would be foolhardy in my opinion. I just don't understand Krugman on this issue. See my previous posts on this here and here.

Bump and Update: Raj Rajaratnam was sentenced to 11 years, far less than the 19.5 to 24.5 years sought by the Government. The judge did consider his failing health (saying he's likely to need a kidney transplant and suffers from advanced diabetes) and charitable works, but also bumped his guidelines for both having a supervisory role and obstruction of justice in a related civil proceeding (discussed below.)

The Wall. St. Journal reports the judge denied Rajaratman's request for an appeal bond but allowed him to voluntarily surrender to the designated prison on November 28, so he wasn't taken into custody.(See below, the Government did not object to a voluntary surrender of 21 days.)

According to the Times and other media sources, it's the longest sentence ever imposed for insider trading. Raj will serve 85% of the sentence since there is no parole in the federal system, and everyone gets the same amount of good time -- 54 days a year after the first year. [More...]

I've got a busy day at work. Here's an Open Thread, all topics welcome.

BTD - me too.

Dominique Strauss-Kahn will not be prosecuted in France for an alleged attempted rape on journalist Tristane Bannon.

The Paris prosecutor's office on Thursday dropped an investigation into a writer's claim that Dominique Strauss-Kahn tried to rape her, citing lack of sufficient proof, though it said the former IMF chief admitted to a lesser charge of sexual assault.

The prosecutor said there was evidence of sexual aggression but that charge was beyond the statute of limitations.

The statute of limitations on sexual aggression is three years; on the greater charge of attempted rape, it's 10 years. While DSK admitted the aggression, he denied that he attempted to rape Bannon.

There's lots of TV on tonight -- Survivor, Harry's Law, the X Factor (The X Factor is postponed so Fox can air a delayed baseball game) and America's Next Top Model, to name a few. The second episode of Showtime's Homeland was better than the first, it could be a good show.

For those of you with other things on your mind, here's an open thread, all topics welcome.

Warning: Don't look at these photos if you are squeamish about death by hanging.

From earlier today in Iran: The barbarism of the death penalty is brought home in these 25 photos, published today by the Fars News Agency in Iran. Four young men in their 20's were executed by hanging in public. The photos start with the men alive and being led to slaughter. The crowds watching are huge. They end with the men being cut down and put in body bags. There are close-ups of their faces as they are hanged. Photos by a different news agency here. [More...]

Testimony began today in the trial of Viktor Bout (background here.)

The first government witness today was William Brown, a U.S. Drug Enforcement Administration agent who managed the investigation. The three undercover sources used to make contact with Bout and his associates and pretend to be FARC members were paid almost $1 million for their work on the case, he testified.

Bout, like other recent defendants in New York's Southern District kidnapped from foreign countries and brought to the U.S. for trial, lost his motion to dismiss the case based on manufactured jurisdiction. The judge granted his motion to suppress his statements to the DEA following his arrest in Thailand. [More...]

Here's the subpoena the House Oversight Committee issued to Attorney General Eric Holder over "Fast and Furious."

Purely Republican grandstanding. Holder is right to downplay it.

Umar Farouk Abdulmutallab, whose trial on charges that he attempted to blow up an airplane on Christmas Day in 2009 with a bomb in his underwear began yesterday, pleaded guilty today to all 8 counts against him. Several charges against him carry 30 years to life. Some require a mandatory 30 year sentence and some of them require a consecutive sentence. Sentencing is set for January 12, 2012.

Abdumutallab made a statement in court. [More....]

That didn't take long. On its Twitter account, the State Department posted this alert tonight -- its first tweet in four days.

@TravelGov Travel - State Dept

#Worldwide #Travel alert - potential for anti-U.S. actions due to disruption of terrorist act in U.S. linked to Iran: goo.gl/RKo7B

The gist:

The U.S. government assesses that this Iranian-backed plan to assassinate the Saudi Ambassador may indicate a more aggressive focus by the Iranian Government on terrorist activity against diplomats from certain countries, to include possible attacks in the United States.

Background on the plot is in our earlier post here.

What's this really about?