Last summer, the Department of the Navy contracted with a California-based outfit called Security 20/20 to buy $9,232 worth of bicycles for use in Bosnia and Herzegovina.

Security 20/20, also known as Security Pro USA, advertises Fuji Police Patrol bicycles at its Online Security Super Center, for $549.99 a piece. Security 20/20 can also assist customers of all kinds in getting their hands on bomb detection equipment, body armor, stun guns, riot and crowd control products and much, much more. It's your one-stop online shopping center for homeland security products!

I know all this might sound as if I grabbed it from an episode of the television crime show "NCIS," but it's really just an example of the kind of thing one can learn from a few minutes of digging around at USAspending.gov.

In Fiscal Year 2008, various agencies of the U.S. government steered nearly $400,000 dollars to Security 20/20. That does not, however, bring Security 20/20 anywhere close to the top of the list of military contractors who suckle at the breast of the U.S. government. The front page of USASpending.gov, tells us that Lockheed Martin is number one -- with over $20 billion in Fiscal Year 2009 alone! Boeing, Northrup Grumman, General Dynamics, and Raytheon stack up at 2-5.

USASpending.gov (found via Barry Ritholtz's The Big Picture) is an incredibly powerful interface to a database of federal spending. Although it debuted on July 1, it's not exactly brand new -- it's actually a government organized relaunch of a previously existing Web site, fedspending.org, that was set up by the non-profit OMB Watch a couple of years ago. But it's slick, and it's fast, and it is supposed to gradually incorporate more and more data from government agencies.

I found out about the police bicycles sent to Bosnia Herzegovina just by plugging in the word "bicycles" into USASpending.gov and then snooping around. As a result, now I know where I need to go should I ever desire some Kevlar body armor. More importantly, I also know the first place I'm going to go when trying to get hard numbers on who is getting what from the Feds.

All this gives us yet another opportunity to reflect on the strange quandary afflicting modern journalism. The rise of the Internet is obliterating journalism business models. No one has a good answer for the question of how we are going to fund investigative journalism in the future. But our tools for investigative journalism are extraordinarily more powerful than anything we had access to five, ten, or twenty years ago.

Is that a fair trade-off? I guess we'll see.

Simon Johnson, the notoriously indefatigable critic of the Obama administration's approach to resolving the financial crisis, suggests today in the New York Times that a split is emerging between Larry Summers and Timothy Geithner on economic policy.

The two "are not on convergent paths," he writes, while suggesting that Summers is moving toward a more Wall Street-adversarial position closer to that of David Axelrod and Rahm Emanuel.

This theory will no doubt cause consternation for those for whom Summers is the root of all neoliberal deregulatory evil. But at best, Johnson's column is thinly sourced. One data point is an unsourced assertion in a Times article earlier this month that has Summers supposedly favoring "nationalizing some big banks." Johnson also writes that "behind the scenes, the banking lobby complains about [Summers' National] economic council but not about Treasury."

The whole thing has the feel of some serious inside baseball. Not so long ago, we were hearing about how Geithner was Summers' protégé and how well the two worked together. Now, Johnson, who may not actually be an Obama advisor, but has been working very hard to influence administration policy, seems to be sticking a crowbar into an almost invisible crack, hoping to lever it into a gaping chasm.

We will await further revelations. But for the moment, this serving of Kremlinology seems like thin gruel.

Thursday brings us a rare labor market two-fer: Both the non-farm payroll report for the month of June, and the weekly new jobless claims data. An incurable optimist might be able to find some room for encouragement in the jobless claims report -- both new and continuing claims appear to be continuing a downward trend, but you'd have to be Doctor Pangloss to feel anything resembling happy: The Department of Labor reported 614,000 new jobless claims in the week ended June 27. That's still a very big number, and a bad omen, going forward.

As for the non-farm payroll report -- the consensus expectation of economists was that the number would come close to last month's 345,000 jobs lost. The consensus was wrong. The Bureau of Labor Statistics pegged June's job losses at 467,000. By every meaningful measure -- hours worked, temporary employment -- the report is a big disappointment to "green shoots" seekers, as corroborated by an immediate stock market plunge. The number of unemployed people in the U.S. has risen by 7.2 million since December 2007.

And that's not all. Look around the Web and you will you find news reports with headlines suggesting that the ongoing cratering of U.S. car sales is beginning to slow. Not really points out  UC San Diego economist James Hamilton.

Some analysts seemed to take comfort in the fact that the decrease in auto sales from June 08 to June 09 was more modest than the year-over-year decline for earlier months had been. But that's primarily a reflection of the fact that June 08 had been a significant deterioration relative to earlier months of 08.

Americans bought fewer light vehicles in June 09 than they did in May 09, and that holds for every category -- car or light truck, domestic or import. You'll have to look elsewhere for your latest "green shoot" fix.

Continued bad employment numbers will put further pressure on the housing market -- as proven by yesterday's news that homeowners with "prime" mortgages are beginning to fall behind on their monthly payments in increasing numbers.

But there is some good news. If you are employed by a Wall Street bank, your salary is likely getting a big boost.

The Wall Street Journal's Aaron Lucchetti reports:

Business is back on Wall Street. If the good times continue to roll, lofty pay packages may be set for a comeback as well.

Based on analysts' earnings forecasts for 2009, Goldman Sachs Group Inc. is on track to pay out as much as $20 billion this year, or about $700,000 per employee. That would be nearly double the firm's $363,000 average last year, and slightly higher than the $661,000 for the average Goldman employee in fiscal 2007, according to analyst estimates reviewed by The Wall Street Journal.

If the good times continue to roll?

Say it ain't so -- even the Amish fell victim to the seductive lures of the boom-time economy. Such is the hook of a depressing Wall Street Journal article by Douglas Belkin, "A Bank Run Teaches the 'Plain People' About the Risks of Modernity."

For some, the good life is a hot tub on the back porch and plasma HD flat screen. In a 20,000-person community of Amish in northern Indiana, fancy Dutch Harness horses and carriages lined "in dark velvet and illuminated ... with battery-powered LED lighting" were the definition of living large. But no matter what your value system, when the economy turns south and you're suddenly living beyond your means, trouble looms.

Belkin goes to considerable length to show that these Amish abandoned some important standbys of their traditional way of life, while constructing a classic morality tale. As a reporter, his treatment is restrained, but there's also a sense in which we're invited as spectators to shake our heads at these farmers, who in the past made such a big deal of cutting off the outside world, nonetheless becoming entrapped in it.

"People wanted bigger weddings, newer carriages," Mr. Lehman says. "They were buying things they didn't need." Mr. Lehman spent several hundred dollars on a model-train and truck hobby, and about $4,000 on annual family vacations, he says. This year, there will be no vacation.

It became common practice for families to leave their carriages home and take taxis on shopping trips and to dinners out ...

Even the tradition of helping each other out began to unravel, Bishop Hochstetler says. Instead of asking neighbors for help, well-to-do Amish began hiring outsiders so they wouldn't have to reciprocate. "Factory work doesn't eliminate fellowship, but it does not encourage togetherness," the bishop says.

Modernity, yeah, she's a bitch. Ultimately, though, isn't the main lesson of Belkin's story that the Amish are just like the rest of us, albeit with cooler beards?

One of the squishier defenses of why we should try to be enthusiastic about the passage of a neutered energy-and-climate-change bill is the "baby steps" argument. In other words: Get this not-very-good bill passed, and then improve it, step-by-step, until it approaches something resembling acceptability. I say "squishier" because anyone who makes this argument (including me) is asking critics to take it on faith that there will be a: the will to keep working on it, and b: that such an evolutionary process is actually possible.

Encouragingly, The New Republic's Bradford Plumer, who I am increasingly coming to rely upon for insightful, up-to-the-minute analysis of environmental and energy issues, has some interesting history to share today on how landmark environmental legislation has taken shape in the past.

Looking back through history, every single piece of major environmental legislation in the United States evolved in fits and starts. The original Clean Air Act in 1963 dealt rather lightly with air pollution. But it kick-started innovation in scrubber technology and was expanded little by little, in 1965, 1966, and 1967, as awareness of the dangers of air pollution grew. Finally, by 1970, a new, much more comprehensive Clean Air Act was passed into law.... Similarly, Europe's cap-and-trade system has been bolstered over time, its weaknesses patched, its targets tightened....

...Indeed, that's essentially what happened with the push to curb CFCs and prevent the destruction of the ozone layer during the 1980s and '90s. As Michael Kraft, an environmental-policy expert at University of Wisconsin recounts, early moves on CFCs were modest, but the Montreal Protocol included a provision allowing countries to revisit the treaty every five years. As the science of ozone-layer destruction became clearer, and as people realized that transitioning away from CFCs didn't cost nearly as much as industry spokesman had warned, it became easier to accelerate the cleanup. "This sort of incremental decision-making is how the United States usually proceeds," notes Kraft.

Since President Obama seems exactly the kind of guy who has the temperament for a long-haul, incremental, step-by-step approach to solving problems, maybe it isn't so squishy after all to get a bad bill out the door and then work on making it just a little bit better.

Felix Salmon calls a 6000-word investigation of whether L.A.'s vegan restaurants are 100 percent authentically vegan "absolutely bonkers."

I'm not so sure about that. The piece seems to me like a pretty amazing example of authoritative investigative reporting -- involving industrial strength food testing and fanatical attention to detail. Obsessive perhaps, but if I was a vegan, I'd surely want to know which restaurants were living up to my exacting standards and which weren't. And I have nothing but respect for seekers of vegan truth who go so far as to call up the Bureau of Food Safety in Taiwan to get the full story on food labeling practices in the Republic of China.

I say this as someone who does get annoyed when barbecue guests inform me that they don't want their veggie burger cooked on a grill that has ever been touched by meat. Those people should not come to my barbecues -- I do not advertise 100 percent authentic vegan food preparation quality control in my back yard. But I digress.

The most interesting part, to me, of "Operation Pancake: Undercover Investigation of L.A. Vegan Restaurants" was the reasonable theory that the vegan eating establishments that failed the tests likely were getting their "fake meat" supplies from a Taiwanese manufacturer. Taiwan, I was unsurprised to learn, is the largest source of "fake meat" exports in the world, and there's a good reason why the product may include traces of egg or other non-vegan-approved materials.

In the Taiwanese and Chinese market [where most of these products are made and sold] vegetarian customers are only concerned with meat ingredients and not bothered at all if egg or milk ingredients are included [this is due to religious reasons in many cases, typically to accommodate Buddhists, who are often not vegan]

Buddhists, I have found, rarely have a problem with the sanctity of the grill, when getting their veggie burgers cooked. This is why they are always welcome at my bbqs.

Tyler Cowen, no fan of the welfare state, provides a link today to what he labels as a "A Polemic Against Sweden," published in the Guardian.

Authored by one Ruben Andersson, described by the Guardian as "an anthropologist, writer and journalist based in London," the opinion piece doesn't deserve the honor of the label "polemic" -- it's really just an odd rant declaring that the "Swedish model" is dead and the "Swedish dream is over." Sweden, once "in the vanguard of postwar social democracy ... has since the 1990s become a neoliberal experiment."

I wouldn't even be taking the time to mull it over if it weren't for one passage that struck my fancy. (Italics mine.)

... [I]t was Sweden's homemade financial meltdown of the 1990s that finally killed off the dream. Poverty was added to the pessimism. Savage cuts hit schools, unemployment rocketed, the krona sank -- leaving the social system in a disarray from which it has not recovered. The conservative government at the time has lately been praised worldwide for its handling of the crisis. Actually the bankers were rewarded, not punished, while the rest of the country is still reeling from the cuts, selloffs and dashed dreams the crisis provoked.

Sweden, readers will no doubt recall, is the country that resolved its banking crisis by guaranteeing the entire nation's bank debt and nationalizing two of the country's largest banks. Many critics (from the left) of the Obama administration's approach to resolving the banking crisis in the U.S., have held up the "Swedish model" as the appropriate kind of tough love necessary for a fundamental resolution of the ongoing problem.

And yet, for Ruben Andersson, bankers were rewarded -- which is exactly what the left believes has happened in the United States.

The overall tone of Andersson's rant doesn't incline me to invest his pronouncements with much in the way of credibility, but the through-the-looking-glass aspect of his declaration does strike me as kind of funny.

How the World Works is considering a new regular feature: Enraging Wall Street Fact of the Day.

Here's today's entry, courtesy of the Financial Times:

Citigroup has sharply increased interest rates on up to 15 million U.S. credit card accounts just months before curbs on such rises come into effect, in a move that could fuel political anger at the treatment of consumers by bailed-out banks.

People close to the situation said that Citi, which is about to cede a 34 percent stake to the U.S. government as part of its latest rescue, had upped rates on between 13 million and 15 million credit cards it co-brands with retailers such as Sears.

Citi's rate increases emerged on the day the government proposed legislation to create a new regulator with sweeping powers on consumer protection and a week after the bank was attacked by some politicians for raising employees' salaries.

The rate increases fell mostly on borrowers who failed to pay off their monthly balance in full. Let that be a lesson to us all.

On Friday, speaking in opposition to the Waxman-Markey energy bill, Spencer Bachus, R-Ala., the ranking GOP member of the House Financial Services Committee, warned that the bill's cap-and-trade system for restricting greenhouse gas emissions could set the stage for an economic meltdown of subprime-mortgage-like proportions.

Michele Chan of Friends of the Earth says if not properly regulated the offset derivatives could become what she calls "subprime carbon" -- futures contracts that promise emissions reductions but fail to deliver and then become toxic or worthless. Already the financial markets and speculators are planning how to slice and dice them and sell them to investors. It sounds altogether too familiar -- a brand new, hard to price, vast convoluted market of carbon derivatives. And if these warnings are correct, one that certainly could pose a systemic risk in the financial markets.

If you liked what Wall Street did with the securitization of subprime mortgages, you'll love what they are going to do with carbon derivatives.

Yes, you read that right: Spencer Bachus, conservative Republican from Alabama, approvingly quoting a position paper from the environmental group Friends of the Earth. Even better, he also quoted a Mother Jones story warning "that without strong financial regulation of the market you could have abuses, over leveraging and ultimately collapse of the market." Mirabile dictu -- the Republicans have finally seen the light!

Well, not exactly. What is actually happening here is that Republicans and some environmentalists are so united in their distaste for cap-and-trade that they are willing to employ any possible ammunition to use against it. Equating carbon trading with the subprime derivative mess that turned a housing bust into a global depression neatly fits the bill. But the motives of the two sides are wildly different. Republicans would prefer no restrictions on greenhouse gas emissions whatsoever. The environmentalists, by contrast, would rather have a carbon tax or direct government limits on emissions, without being forced to rely on any kind of market-based system that tries to steer industry to the right behavior via the profit incentive.

Like Kevin Drum, I am skeptical of claims that the carbon derivatives market will speedily rise to the point where it could threaten the stability of global financial markets. I don't think Wall Street is likely to make the same exact mistake twice in a row -- the usual modus operandi is to find some kind of new mistake to make. But there is definitely an issue of concern here. If a market for trading emissions allowances develops, there will be speculation by carbon traders, just as there is in oil, or pork bellies, or subprime mortgages, or any other market in which commodities of any kind are traded. And everyone who complains that so-called "carbon offsets" -- credits that are generated by planting a forest here, or capturing methane from a landfill there, or switching from coal to natural gas somewhere else -- are very difficult to measure or monitor for fraud are on the mark. The cap-and-trade system envisioned by the Waxman-Markey bill is complex and ripe for abuse, and traders will seek ways to manipulate it.

But the answer here is neither to dump any kind of climate change legislation altogether,as the right wants, or to scrap this bill and start all over in the hopes of passing a tougher bill that is more amenable to the desires of the left. The first option would be a dereliction of duty to the planet and the second option is a fool's dream. Given the political realities, a cap-and-trade system is the best we're going to get, and our only real option is figuring out how to make it work, and then to improve it over time -- just as the Europeans have steadily improved their own Emissions Trading System.

If Spencer Bachus is so worried about the potential of systemic risk from carbon derivatives trading, then he and the other House Republicans should get on board with comprehensive derivatives regulatory reform. Regulated derivatives trading in commodities has a long and useful history -- it's when you specifically legislate that certain derivatives markets be unregulated that you run into trouble.

But we won't hold our breath for that -- the GOP stance is entirely hypocritical, and I can 100 percent guarantee that when derivatives regulation does get debated before the House Financial Services Committee, Spencer Bachus will be doing his best to water down whatever Chairman Barney Frank is proposing, at the behest of exactly the same Wall Street special interests he was willing to demonize in his (failed) attempt to torpedo Waxman-Markey.

The environmentalist stance is less dishonest -- they want a stronger bill, not no bill at all. But they are deluded to think that they are going to get one.

Just look at the vote that passed Waxman-Markey in the House -- 219-212. I'm sure that if the House Democratic leadership had really wanted a bigger margin they could have gotten one -- the fact that eight Republicans voted for the bill and it won by a mere seven votes is evidence of superb vote-counting by Pelosi et al, who deftly managed to give cover to the maximum amount of Democrats possible for whom a yea vote would been politically perilous. But this was for a weak bill that is riven with compromises -- that absolutely no one thinks is ideal. By what logic can one imagine a bill passing, that was tougher on energy companies, that made fewer compromises with potentially affected industries and communities, and that ran the risk of creating an even stronger short-term economic impact?

I think Barkley Rosser at EconoSpeak sums it up nicely:

So, here it is, this big disappointment for many ... by all reports loaded down with even more giveaways, loopholes, breaks for farmers and corporations ... and the darned thing is so long (1300 pages?) that it will be a long time before we figure out what is in it really, although at least we know that it involves some sort of cap and trade mechanism, maybe, although with something like 85 percent of the permits given away rather than auctioned off, and emissions limits to go down so slowly that they will be considered a joke by the rest of the world in Copenhagen in December. What is a body to do or think of this?

Well, actually, the more I think about it, the more I think it is a genuine achievement, at least potentially. That the vote was so close is a reminder of how much opposition to doing anything about global warming there is in the Congress, and when it gets down to it, the public at large, despite all the polls showing people for doing something in the abstract. After all, 44 House Democrats voted against this. While there are Republicans who are lunatics and goofballs following wacko theories and listening to Rush Limbaugh, I suspect the solid majority of those 44 Dems believe that global warming is happening. But they do not see it as any near term threat to their districts, while they see serious potential costs to businesses and employment in their districts, something they are not keen on during a recession at all....

... If warming clearly continues, there is now a mechanism in place that can be used to tighten up and enforce CO2 emissions reductions... So, now we have to get it through the Senate, even if most of the rest of the world thinks it is a pathetic joke. It will still be better than doing the big fat nothing that has been done so far.

Americans are bumming out, and the jobs market is the No. 1 reason why. After getting progressively more optimistic about the economy since President Obama took office, consumers are suddenly less confident about future prospects.

From Bloomberg:

The share of consumers who said more jobs will be available in the next six months fell to 17.4 percent from 19.3 percent. The proportion of people who said they expect their incomes to rise over the next six months decreased to 9.8 percent from 10.8 percent.

The continued labor market weakness probably explains why mortgage delinquencies are rising even for prime mortgages.

Delinquency rates on the least risky mortgages more than doubled in the first quarter from a year earlier, indicating that the pain that began in the "subprime" area is spreading as more people struggle to meet their mortgage payments.

Prime mortgages 60 days or more past due climbed to 2.9 per cent, from 1.1 per cent at the same point in 2008, according to the Office of the Comptroller of the Currency and the Office of Thrift Supervision

But not to worry, Christina Romer, chairman of President Obama's council of economic advisers, told the Financial Times on Monday that the stimulus has not yet begun to fight.

Ms Romer said stimulus spending was "going to ramp up strongly through the summer and the fall".

"We always knew we were not going to get all that much fiscal impact during the first five to six months. The big impact starts to hit from about now onwards," she said.

That would be nice.