Internet consumers scored a victory in Washington last night, thanks to Senator John Sununu (R., N.H.), with big assists from Minority Leader Mitch McConnell (R., Ky.) and Oregon Democrat Ron Wyden. The Senate passed a seven-year extension of the Internet tax moratorium, with robust language that should stiff-arm even the most voracious state and local governments looking for loopholes to tax your email.

...If the House, as expected, passes the Senate bill early next week, President Bush can sign it into law before the current ban expires November 1.

[Tom] Carper [Del-D] and a handful of other senators, mostly Democrats, openly favor a temporary ban so that states can revisit the need to find new revenue sources in the face of changing technology.

WASHINGTON - The House's top Democratic tax writer outlined a $1 trillion plan Thursday to eliminate the alternative minimum tax and ease the tax burdens of most people by asking the rich and some companies to pay more.

One of the BIG stories of yesterday was the completion of the TXU LBO deal. I think the TXU deal was the biggest LBO deal EVER. While the media moaned over Merrill Lynch's $8.5 billion writeoff, the TXU deal got done. In today's Wall Street Journal (page C8) -- in the Credit Markets column -- the following was written:

Big Sale of TXU Debt Is Success Despite Risks

Energy Future Holdings, formerly known as TXU Corp., made history in the debt markets yesterday.

Bankers successfully placed $7.5 billion of bonds, the largest high-yield, or junk, bond issue ever, with a portion of the deal in risky pay-in-kind toggle notes that market participants weren't expecting in this round of debt sales for the leveraged buyout.

RJR Nabisco had been the record holder close to two decades with its $6.1 billion junk-bond issue sold in 1989.

Strong demand allowed the underwriters to increase the size of the offering from an originally estimated $4.5 billion.

The junk bond market and the leveraged loan market are both recovering rapidly. Yesterday's historic event was only seen by those who follow the bond market or who read deep inside the Wall Street Journal. Most people probably only read (or heard about) the front page -- "Merrill takes $8.4 billion credit hit."

The junk bond market, which "seized up" in August, is now alive and well. It's so WELL that history was made yesterday--positive history. But to read about it, you'll have to dig deep inside the Wall Street Journal. And don't expected to hear about it on CNBC.

PAUL KRUGMAN: ...Greenspan has a lot of influence. Nobody really wants to cross him. I mean, it’s -- hey, you know, I’ve been blackballed from the Fed summer conference at Jackson Hole, which I used to be a regular at, ever since I criticized him.

AMY GOODMAN: What is that?

PAUL KRUGMAN: Oh, it’s a big --

Update... He can't take it, but he sure can dish it out. And he wonders why his own newspaper's review of his book called it a "shrill polemic":

...when I started researching Conscience of a Liberal, I had no idea race would play such a huge role in the story. But it just jumps out of the cold, hard data. Without the white backlash against civil rights, and especially the great southern switch to the GOP, none of the right-wing triumphs of the past 30 years would have happened.

And once you start to look at modern American political economy with that in mind, the picture you see is nothing like the happy legends. I spend a lot of time in COAL on the real Ronald Reagan; he wasn’t an avuncular old fellow who advocated true conservatism — for most of his career, he was primarily a clever, insinuating race baiter, who found ways to appeal to racist sentiments — welfare queens driving Cadillacs, etc.. — without actually using the n-word.

Democratic presidential candidate Dennis Kucinich has claimed to have seen a UFO, according to Shirley MacLaine in her new book, "Sage-Ing While Age-Ing." Kucinich "had a close sighting over my home in Graham, Washington, when I lived there," the actress, a close Kucinich friend, wrote. "Dennis found his encounter extremely moving. The smell of roses drew him out to my balcony where, when he looked up, he saw a gigantic triangular craft, silent, and observing him. "It hovered, soundless, for 10 minutes or so, and sped away with a speed he couldn't comprehend. He said he felt a connection in his heart and heard directions in his mind."

...incomes and employment have grown by substantial amounts in every state (even in the so-called Rust Belt) since the passage of the North American Free Trade Agreement in 1993.

In fact, there is no convincing, data-driven proof that trade has led to any overall job loss during the last 30 years. To the contrary, the economy has grown at a slow but steady rate (a few brief recessions notwithstanding) with trade and employment rising in tandem.

As recently as 1979, 61% of female workers were in jobs that paid less than $25,000, and only 3% earned more than $50,000 a year. By contrast, more than 36% of new jobs that opened since 1979 for women pay more than $50,000 [all figures adjusted for inflation] and only 17% pay less than $25,000.

...There has been a tremendous growth in the number of men in high-paying jobs: In 1979, just 10% of male workers earned above $75,000, while fully 34% of new jobs since 1979 have paid this amount or more.

...For three-quarters of the workforce (women and the top half of male earners), economic growth translated into earnings gains. But for male workers in the bottom half of the earnings distribution, the decline of unionized manufacturing employment has led to the drying up of some middle-class jobs for those with no post-secondary education.

For the clear majority of the workforce, then, the job market has become more welcoming, not less so.

Warner Brothers (wait -- or is it Sony? -- now I'm confused) has been kind enough not to sue us for our adaptation of the Ghostbusters logo as the symbol of the Krugman Truth Squad. Hopefeully they won't be as generous with this ridiculous abuse of intellectual property -- the "Terrorist Busters" logo that's actually in use by the CIA. Doesn't a logo kind of defeat the whole purpose of undercover work, anyway? Thanks to a dear old friend in Los Angeles for the link.

Posted by Donald L. Luskin at 10:50 PM | link