The event is receiving significant institutional muster, with the Metropolitan Washington Council of AFL-CIO lending its organizing hand. Chris Garlock, a spokesperson for the labor group told The American Independent a march onto The U.S. Chamber of Commerce is planned for 3pm.

The Washington Peace Center has organized music and guest speakers to energize the demonstration crowds, whose numbers are skyrocketing. Tuesday’s turnout had only about 30 participants.

Sources close to the planning of the event told TAI that labor employees have been asked to volunteer their time and vehicles to corral more attendees.

Stay tuned to our network’s coverage of the Occupy Wall Street-styled proceedings springing up across the country.

[Sen. Richard] Shelby says Diamond lacks expertise in so-called monetary policy — the setting of interest rates and other tools that are used to influence the nation’s economic growth, employment and inflation.

“While the Nobel Prize for economics is a significant recognition, the Royal Swedish Academy of Sciences does not determine who is qualified to serve on the Board of Governors of the Federal Reserve System,” Shelby said Monday.

No, it is not the Nobel Committee. It is the Senate. Notably, most members of the Senate do think that Diamond is perfectly well-qualified for the position. But Shelby refuses to let them vote to show their support.

Here is more on Diamond’s work, which focuses on markets and unemployment.

But Diamond remains held up in the Senate confirmation process for a Federal Reserve seat, due to the objections of Republican senators over his qualifications. Again, they have questions about whether Diamond, who once taught Fed Chairman Ben Bernanke economics and now has won a Nobel prize, is qualified.

Here’s Sen. Richard Shelby (R-Ala.) on Diamond this summer: “I do not believe he’s ready to be a member of the Federal Reserve Board. I do not believe that the current environment of uncertainty would benefit from monetary policy decisions made by board members who are learning on the job.”

Here’s a scary thought: Let’s say the European sovereign debt crisis flares up again, and one or two Euro banks fail. (Not a bank like UBS or Deutsche Bank, but a medium-sized bank like Bank of Greece or a Landesbank.) That, in turn, causes a U.S. money market fund — many of which have large exposures to Euro banks — to “break the buck,” which leads to another run on money market funds.

The Fed would be powerless to help. The Fed’s emergency lending authority (the famed Section 13(3)) requires that any emergency lending facility to non-banks be approved “by the affirmative vote of not less than five members” of the Fed Board of Governors. Currently, there are only four members of the Fed board: Bernanke, Warsh, Elizabeth Duke, and Dan Tarullo. Donald Kohn retired earlier this month, and the Senate has yet to vote on Obama’s three nominees (Janet Yellen, Peter Diamond, and Sarah Bloom Raskin).

While I don’t expect this scenario to happen, it’s certainly not out of the realm of possibility. And if it did happen, the Fed would have to sit on the sidelines and watch the carnage unfold.

I understand that Senate floor time is scarce (really, I do), but this absolutely has to be at the top of the list. Yes, I know it would be time-consuming to overcome Sen. Shelby’s opposition, but you know what? Screw Shelby. This has to get done, and soon.

Let’s translate a bit. The worst of the financial crisis — not the whole recession, including housing and jobs and businesses and investment, just the part of the recession that really mucked up the United States’ big banks — hit in the fall of 2008. Lending markets seized. That did not just mean that banks could not give loans to homeowners or companies. It meant that banks had trouble loaning cash to one another.

The Federal Reserve recognized the credit crunch as a catastrophe, and immediately took extraordinary measures to prevent the equivalent of an old-fashioned bank run in the invisible interbank lending market. Out of thin air, the Fed created programs like the Term Asset Loan Facility, a $1 trillion fund to secure the asset-backed securitization market — a major source of financing for banks and other companies. The alphabet soup of emergency Fed programs, including TALF, helped to thaw credit markets and stabilize the banking system.

But, Economics of Contempt notes, due to the opposition of one senator — Richard Shelby (R-Ala.) — the Fed does not have enough seated members on its board to create such programs in a crisis. And Congress does not have the wherewithal or speed to create them itself. Granted, there’s no emergency on the horizon. But, given that the United States is suffering from, oh, possible disinflation, mass long-term unemployment and record high debts, now is hardly the time to short-staff the central bank.

At The New York Times, Sewell Chan has more details on the problem of vacancies in important economic positions.

Still, while banks foreclosed on more homes, the total number of filings has continued to fall, a sign that the foreclosure crisis might have peaked. Last month, 325,000 homes received a notice of default, auction or repossession — up 4 percent from June and down 10 percent from 2009.

All in all, it has been a horrible day in economic news, and housing news especially. Another report from Moody’s Analytics says the chance of a double dip — a return to technical recession, with the economy contracting rather than growing — has risen from 20 percent to 25 percent. Moody’s says that another drop in home values might catalyze a broader downturn, as economic growth is already slowing. During a double dip, home prices might fall a further 20 percent. They are already about 30 percent off their peak — more than 50 percent in Nevada.

A team of policy experts studied economic records from 1985 on, and found that 2009 and 2010 were the most insecure years on record. In 2009 and 2010, one in five Americans experienced a 25 percent or greater decline in household income. In some sense, the record data are to be expected. The index does not cover the bad recession of the very early 1980s, or the economic doldrums of the 1970s; and this recession is the worst since the Great Depression by some measures. Nevertheless, the index demonstrates the broad impact of the recession on security and well-being.

More troubling, economic insecurity has been on the rise for some time, the result of the rise of credit, the spiraling cost of health care and the fraying of the social safety net, among other factors. “The ESI data allows us to see that behind the economic cycle, there is a clear long-term upward trend in the economic insecurity of American families,” Hacker said in a statement. “[W]hile economic insecurity is substantially higher for less affluent and educated Americans than for other groups, it has risen across virtually all parts of American society — it’s an issue squarely confronting the American middle class.”

Some findings from the report:

• The index increased by one third between 1985 and the pre-recession year of 2007. It increased by half between 1985 and 2009. The proportion of Americans experiencing big income drops, measured with more limited data, has increased even more since the 1960s.
• The index classifies 46 million people as insecure in 2007 — before the recession.
• The index broadly tracks unemployment, but has proportionately spiked more than the unemployment rate during the recession.
• It takes an average individual experiencing an income shock six to eight years to return to the same income level.

Today, speaking with Talking Points Memo’s Brian Beutler, Sen. Mitch McConnell (R-Ky.) doubled down. “That’s been the majority Republican view for some time,” he said. “That there’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy. So I think what Senator Kyl was expressing was the view of virtually every Republican on that subject.”

This is factually incorrect, and Democrats should be all over this today. Tax cuts do not pay for themselves. Every dollar of tax cuts by making the Bush cuts permanent stimulates an additional 30 cents or so of economic activity. Unemployment insurance does not pay for itself, but it comes much closer. Every dollar of unemployment benefits stimulates around $1.60 of economic activity. Moreover, no economist on earth would say that tax cuts do not need to be offset, but spending increases do; in terms of the budgetary bottom line, there is no difference.

Here is a chart from Karl Smith, a professor of economics and government at the University of North Carolina, Chapel Hill, at the blog Modeled Behavior, showing the impact of the $1 trillion Bush tax cuts:

While it may sound logical to have an economist examining the economic impact of regulatory changes, Steinzor points out that Lutter has made some rather bizarre and disturbing arguments, including that the economic value of each of a child’s IQ points isn’t really all that much, so regulation to prevent lead poisoning ought not be so strict.

Lutter argues in this fascinating policy paper:

Benefits to parents of lower lead levels in their children are much less than federal regulatory agencies’ estimates of benefits, which they compute as the expected discounted gains to children’s lifetime earnings. … I show benefits to parents are between $1,100 and $1,900 per IQ point gained, or roughly one-sixth of the benefits to children estimated by federal agencies. … This analysis suggests lead standards will redistribute resources from parents to their children, because the benefits to parents are less than the costs of the standards.

In other words, the economic benefit to parents of an extra IQ point in their child is not as much as the cost of implementing new regulations that reduce lead in the environment. As a result, concludes Lutter, “The Environmental Protection Agency and the Department of Housing and Urban Development should reconsider their lead standards.”

Although it’s not exactly surprising to see the government weighing the costs and benefits of new regulations, the economic valuation to parents of their children’s IQ points would surely, if made public, be quite controversial.

Steinzor notes that less than 24 hours after she asked Sunstein at a meeting whether he would be hiring Lutter, “perhaps by coincidence, AEI had pulled many documents referring to Lutter off its web site, including his biography.”

Did you know that since 2003, when the subprime market really took off, April has been Financial Literacy Month? Now you do. But in an age where financial expertise seems so discredited what qualifies someone to be financially literate?

It’s a fair question. Unfortunately, the answers aren’t reassuring. First, as Konczal notes, “financial literacy” as a course of study doesn’t exactly exist in the economics field. There’s no incentive to get published on it; there’s little academic research as a result. What fills the gap? As we pointed out, subprime lenders align themselves with mainstream financial literacy groups and fund their efforts as a way to distract from the controversies surrounding their products. Konczal explains the problem goes even further, with unqualified “experts” dispensing their alleged personal finance wisdom.

There’s little academic backing, there’s no money for journals, research grants, conferences, the development of theory and expertise that is deployable into policy. That leaves the field wide open to be funded by credit card companies, subprime lenders, and others with a vested interest in certain modes of thought becoming the norm. And for expertise to be filled by people who come from motivational speaking backgrounds, and theory to end up as a mess of common-sense adages and low-level morality plays. The theme of Financial Literacy Month for 2008 was “Financial Responsibility Begins with Me”; why didn’t they call it “caveat emptor”?

One of the biggest hurdles facing the creation of legitimate and useful financial literacy programs will continue to be funding for non-biased, professional counselors.  It’s not a great time to push the government to provide more money to the nation’s Cooperative Extension System — but that national educational network remains a valuable source of credible personal finance research. And as we said, some corporations are beginning to incorporate financial literacy into their human resources responsibilities, given the problem of employees burdened with distracting financial problems.

In the end, that may really be what it takes to get untainted financial literacy education going — the overwhelming debt crisis facing American consumers. Maybe the government and the private sector will come to realize that partnering with credit card companies and subprime lenders isn’t going to get the job done. As Calculated Risk has repeatedly asked, why aren’t consumers being educated on the perils of not paying their credit card bills off in full every month? Probably because, in the absence of untainted financial literacy advice, a company like Visa is backing a high-profile financial literacy initiative. It seems unlikely advising people to pay off their credit cards is the focus of that effort.

As credit tightens, so will the need for legitimate financial literacy education. And as consumer debt becomes something harder to ignore, maybe the unholy alliance of creditors with a stake in the game and financial literacy education programs often aimed at younger borrowers in particular, will finally come to an end.

“Dow 36,000″ Author: Obama Tells American Businesses to Drop Dead.

Hassett and James Glassman argued that “stocks were undervalued” when the Dow Jones Index was roughly 25 percent higher than it is now.