Josh Marshall

Josh Marshall is editor and publisher of TalkingPointsMemo.com.

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Scott McClellan responded yesterday, though that may be a generous characterization, to press questions about the president's Gulf Coast Wage Cut. I've posted the transcript here.

Just another note on <$NoAd$> the 'LoBiondo letter' -- the letter from House Republicans calling on President Bush to call off the Gulf Coast Wage Cut. It doesn't really ask him to call it off. The letter, which is supposedly going to be released tomorrow, asks for him to leave it in place for no more than sixty days. Specifically, the signatories speak of

our severe concerns with your decision to issue a presidential proclamation suspending indefinitely the application of the Davis-Bacon Act in areas along the Gulf Coast devastated by Hurricane Katrina. We respectfully urge you to immediately provide a date certain for the termination of the proclamation suspending Davis-Bacon of no later than November 8, 2005. Such an action on your part will help prevent potential legislative action by the Congress, and help restore federal procurement stability in the reconstruction effort.

But, really, why even wait sixty days? It was a bad idea to start with. And all the excuses about cutting red tape are bunk. Can't they do better?

TPM Reader LH reports <$NoAd$> in ...

A brief note on the evacutation of the Houston area. Galveston and all the coast was successfully evacuated but Wednesday night there occured throughout Houston a simultaneous mass (hysterical) evacuation. All the freeways and highways leaving Houston are at a dead standstill as of 11am Thursday. People have been in their vehicles as long as 12 hours without traveling more than 40 miles. Now they are running out of gas and there will soon be another chaotic storm evacuation situation. The local government and the mayor of Houston don't seem to realize that cars need gas and folks need facilities. The city has waited too long to open all freeway lanes to outbound traffic. The truth is, the feds, state, and locals do not know how to evacuate a major metropolitan area. Another catastrophe is only a day away.

Let's hope not.

Mark Schmitt hits the nail on the head. Santorum dumping on Bush on Social Security phase-out -- aka, the fat lady singing on privatization.

As The Carpetbagger Report notes, the anti-Wage Cut bill in the House is picking up steam. It's got 15 more cosponsors, for a total of 186. As it was yesterday, every one is a Democrat.

I've also heard that the LoBiondo letter is going to come out tomorrow. That's the letter circulating among moderate House Republicans (basically the standard northeasterners, as near as I can figure) calling on the president to undo the Wage Cut.

Apparently, though, they're refusing to sign on to H.R. 3763 because it's too tied to the Dems.

There's a lot of discussion and detail in Thursday's Post story about the Frist stock sale. But this passage at the end sticks out like a sore thumb ...

According to Thomson Financial, a reporting service, seven senior HCA executives sold 574,882 shares worth $19,942,610 between May 17 and June 10. A company spokesman, Jeff Prescott, said the executives are entitled "like other stockholders [to] make personal decisions . . . about when to sell." He said the executives complied with "blackout restrictions" imposed by the SEC to prevent dealing within a certain period prior to restatements of earnings.

An SEC spokesman said it is the commission's policy not to comment on investigations, and would neither confirm nor deny that it is probing insider trading at HCA.

The passage is left sort of <$NoAd$> hanging there, without context or further explanation. In fact, that last graf is the end of the article. Is Frist in some real trouble over this? And if he is, who can explain how a guy with such vaunting ambitions for higher office would do something so foolish and, it would appear, easy to detect?

More on blind trusts from TPM Reader PW ...

Speaking from experience, someone who puts assets in a blind trust but still sees their own tax returns will generally have a decent-to-exact idea of what original assets are in the trust, because sales generate accountings of gross proceeds and bases (even if the stock names are blocked out). Unless you were completely out of touch with your holdings, that's enough to know what's still in the trust and what's gone. It's not unusual for the trustee and the beneficiary to talk in general terms about investment strategies, and occasionally in more specific terms. Any "instruction" about what to sell and what to hold, of course, would violate at least the spirit and possibly the letter of the trust.

(The trustee -- who is it for frist? -- is between a rock and a hard place here, because once they have good reason to believe that a transaction will serve the beneficiary's financial interests, they have a fiduciary duty to execute it; it's not clear that there's an exception for insider information there.)

(The question of who the trustee is might be important for other reasons -- if it's a family member or close associate, the relevant flow of information might have been in the other direction, and it would be very significant to see which other members of the clan also sold in the same period. By claiming to have given instructions, Frist might be covering for the trustee.)

More <$NoAd$> soon.

TPM Reader JS points us to this definition of 'blind trust' at investopedia.com ...

A trust in which the executors have full discretion over the assets, and the trust beneficiaries have no knowledge of the holdings of the trust ... Blind trusts are generally used when a trustor wishes to keep the beneficiary unaware of the specific assets in the trust, such as to avoid conflict of interest between the beneficiary and the investments.

Guess that mean some unnamed Senate Majority Leader didn't really have a blind trust?

With this now-bubbling issue of Sen. Frist's blind trust and the quite timely sale of his shares in the family company, I've got to say that maybe I didn't understand what a 'blind trust' was.

The press accounts make it sound like he put in a call to the trustee of the trust much like other folks might put in a call to their broker.

I thought the whole point of a blind trust was that you retain ownership of the assets but give up both the knowledge of what the funds happen to be invested in (at least going forward from the creation of the trust) and the power to control the investments. Sounds like neither applied to Sen. Frist. So how was it a blind trust?