Governor Rod Blagojevich of Illinois might have just been impeached but he still doesn't think he did anything wrong. In a news conference today just hours after the Illinois House voted 114 to 1 against him, Blago said he will fight "every step of the way," adding that he's confident he'll be "properly exonerated." He went on to accuse the House of impeaching him not for attempting to sell Barack Obama's vacated Senate seat, but for trying to cut property taxes and expand health care benefits to Illinois residents. "Is that an impeachable offense?" he asked. It is the first time in Illinois history that a governor has been impeached. The matter now moves on to the state Senate, where a two-thirds vote is required to remove the governor from office.

With the loss of 2.6 million jobs—including 1.9 million in the past four months alone—last year turned out to be the worst year for employment since 1945, the Labor Department reported Friday morning. The U.S. economy shed 524,000 in December, notching the unemployment rate to 7.2% (11.1 million people), the highest in 16 years. "It's going to be devastating in terms of consumer confidence and spending," said one economist ahead of the report's release. "The next couple of months will be dismal."

He might have less than two weeks left in the White House, but President Bush isn’t done yet. According to senior administration officials, Bush, backed by the Obama team, is planning to ask Congress to release the second half of the $700 billion financial rescue package before he leaves office. If Congress declines, a possibility given its general opposition to that idea, Bush, not Obama, would wield the veto pen. Under legislation passed in October, the administration must inform Congress that it wants access to the money. Unless Congress rejects the request within 15 days, the Treasury can start tapping into the funds. If Congress does deny the request, the president could veto the decision and the Treasury can move forward. The Bush administration is coordinating its efforts with Obama’s transition team.

Former Treasury Secretary Robert Rubin has resigned as a senior counselor and a director of Citigroup, according to The Wall Street Journal. Rubin has been under pressure to take responsibility for the company's turmoil after the financial giant lost $20 billion last year and received a government bailout over $45 billion. Rubin, for his part, benefited from $115 million in compensation since 1999, aside from stock options. Citi's stock has tumbled 90% since the end of 2006. Rubin is expected to turn his focus to non-profit work.

During the election, Obama said he was willing to meet with America’s enemies without preconditions, though he later trimmed his answer saying some preliminary talks may be needed. In the case of Hamas, Obama is apparently making good on his pledge—that is if The Guardian’s “sources close to the transition team” are to be believed. The paper’s three sources say that “there is no talk of Obama approving direct diplomatic negotiations with Hamas early on, but he is being urged by advisers to initiate low-level or clandestine approaches, and there is growing recognition in Washington that the policy of ostracizing Hamas is counter-productive.” Extraordinary–if true.

Bernard Madoff’s alleged Ponzi scheme may have lost billions, but that doesn’t mean you can’t make a quick buck on it. On eBay, there's a host of Madoff-themed collectibles up for sale. Authentic promotional items that Madoff doled out include soft-sided coolers (currently $101), T-shirts ($20-30), caps (as much as $152), drink coozies ($10), binoculars ($50) old Christmas and business cards ($10-20). And while authentic merchandise may be "collectible," the gag gifts are plain funny, from a Madoff-themed urinal screen ($2.50) to voodoo dolls ($10 to $50,000 minimum bids) to the BernieMadoff.com domain name ($10,000 minimum).

In these trying times, even the Somali pirates have to write down their assets: After demanding originally $25 million for the captured oil tanker Sirius Star, they settled today for about a $3 million ransom. The oil onboard the ship was valued at over $75 million. All of the ship’s crew members are said to be safe. The Sirius Star set sail for international waters after the pirates disembarked.

Sasha and Malia better be on their best behavior; their grandma’s moving into the White House. Transition officials confirmed today that Michelle Obama's mother Marian Robinson will move into the president’s home with the rest of the family later this month. The 71-year-old Chicagoan was a mainstay of the Obama campaign, caring for Sasha and Malia while their parents were on the trail, and is expected to perform a similar role in the White House. The person happiest about the announcement? Joe Biden, who had previously been designated for the post of babysitter-in-chief.

Patrick Swayze—who told Barbara Walters earlier this week that his Stage 4 pancreatic cancer means he's expected to live less than five years—has been hospitalized for pneumonia. "As anyone who has had a friend or family member that has undergone treatment for cancer, chemotherapy can take a toll on you immune system," the president of A&E said Friday. "Yeah, I'm scared. Yeah, I'm angry," he told Walters. Swayze's new series The Beast premieres next week.

Governor David Paterson dealt Caroline Kennedy a severe blow to her hopes of becoming a US senator in succession to Hillary Clinton after he told reporters she lacked the relevant experience. "Caroline Kennedy obviously does have a tremendous relationship with [Obama],  that's certainly a plus," he said. "She does not have much political, I mean, legislative experience, which is a minus." Paterson said Caroline was one of 15 serious contenders for the job; he has spoken to 10 of them. Others in the frame include New York Attorney General Andrew Cuomo, Nassau County Executive Tom Suozzi, and Reps. Carolyn Maloney, Steve Israel, Jerrold Nadler, Kirsten Gillibrand and Brian Higgins.

Where does Cheney plan on spending his post-vice presidency? Fishing the Snake River, he told the Associated Press. Not, apparently, sitting in the dock at the International Court of Justice in The Hague. “I don't have any reason to believe that anybody in the agency did anything illegal," he said before mounting a spirited defense of waterboarding. "It's been used with great discrimination by people who know what they're doing and has produced a lot of valuable information and intelligence.” Cheney was similarly unrepentant on the economy, insisting that the administration was blameless. “I don't think [Bush] needs to apologize. I think what he needed to do is take bold, aggressive action and he has," Cheney said. "I don't think anybody saw it coming."

Sex addiction: real problem, or as fake as they come? Although, by some counts, there are some 9 to 18 million sex addicts in America, public acceptance of the addiction is still decades behind alcoholism. This is in part because there’s no accepted definition of what sex addiction is. Sex, like other dopamine elevators, “might generate dependency, especially in people who dealt with childhood trauma,” A.J. Grossman writes in Elle. Recovery takes three to five years of treatment, including group therapy, 12-step work, and cognitive behavior modification.

Sean Hannity's new show sans Alan Colmes, "Great American Panel," debuts on Monday night and the first crop of panelists fulfill, at least, the "American" part of the title's promise: They are Al Sharpton, Minnesota Representative Michelle Bachmann (who suggested to Chris Matthews that we investigate "anti-American" members of Congress), and Meatloaf. The first show will feature a sit-down interview with President Bush, though it's unclear whether Sharpton (or Meatloaf) will have a chance to question the president. The Sharpton-Bachmann-Meatloaf trio are not permanent panelists, but the first in a rotating batch.

Late last night the UN Security Council voted 14-0 on a resolution demanding that Israel and Hamas cease firing in Gaza. America abstained. Libya promoted the Arab League's draft resolution in the Council. America argued it didn't do enough to address Israel's concerns about Hamas rearming and resuming rocket attacks on Israeli citizens. The resolution "stresses the urgency of and calls for an immediate, durable and fully respected cease-fire, leading to the full withdrawal of Israeli forces from Gaza" while calling for member states to “prevent illicit trafficking in arms and ammunition.” Condi Rice said America supported the resolution in principle but didn’t want the Egyptian-French talks in Cairo to be jeopardized. Israeli premier Olmert will arrive in Cairo today and Palestinian Authority President Mahmoud Abbas on Saturday. Palestinian officials say 758 Palestinians, including 257 children and 56 women, have died in the attacks. Israel says 390 were Hamas fighters.

Pirates of the Horn of Africa, beware. America is setting up a an anti-piracy task force. Three US Naval vessels and two helicopters will join forces with the European Union’s anti-piracy fleet made up of six British Royal Navy warships. More than 20 nations are expected to take part. The new American led force --  codenamed CTF-151 and it will be headed by U.S. Navy Rear Admiral Terence McKnight – intends to bring to justice the ruthless pirates who terrorize the high seas along the coast of Somalia. At least 15 ships with more than 200 crew are still being held in towns along the central Somali coastline, among them the Saudi supertanker Sirius Star, seized in November along with its crude oil worth more than $85 million. Pirates in the area made about $110 million from ransoms last year.

Next Wednesday Marvel Comics releases Spiderman comic book number 583 in which the arachnid superhero prevents the Chameleon from disrupting Obama’s inauguration. Obama shows his gratitude by fist bumping the super hero and continuing with the swearing in. At one point, Spider-Man says he mistook Vice President-elect Joe Biden for the perennial Marvel villain the Vulture. The special inauguration issue will sell for $3.99, though comic book vendors expect it to be in short supply and quickly attain a premium price of as much as $20. Presidents have been supporting characters in comic strips before: During World War II, superheroes fought Hitler as Franklin Roosevelt cheered them on. John F. Kennedy appeared in Action Comics #309 in 1963, when he helped protect Clark Kent's secret identity. "If I can't trust the president of the United States, who can I trust?" Superman tells Kennedy.

The fashion world is abuzz with the thought that Vogue editrix Anna Wintour is to be dispatched to the Court of St. James, London, or Paris to become Obama’s new ambassador. Not known for her diplomacy or, if we are to believe The Devil Wears Prada, her people skills, fur loving Ms. Wintour has been the subject of repeated whispers she is about to be bumped from her Vogue lair by the editor of French Vogue Carine Roitfeld. (Page Six dismisses this as nonsense, quoting one anon “fashion source” saying, “I don’t see how you could give it to Carine. She barely speaks English.”) If Wintour is to return to her native London as America’s chicest ambassador, it would put an end to competing rumors that the post is to be filled by Caroline Kennedy, if she doesn’t become a senator, following in the footsteps of her defeatist grandfather, Joe.

A 30-year-old murder mystery has been solved after the release of court papers filed in a Brooklyn court. Mob captain John Gotti Sr. ordered his Howard Beach next door neighbor John Favara shot dead and his remains dissolved in a barrel of acid for accidentally killing Gotti’s 12-year-old son Frank in a road crash. Five months after the accident, Favara, a furniture warehouse worker, went missing. According to Jerry Capeci, an expert on Gotti, "Favara's body [was] put into a cement-filled oil drum and dropped in the ocean." Charles Carneglia, a former mobster, is named in the court documents as the hit man assigned to take revenge on Gotti’s behalf.

When Houghton Mifflin Harcourt fired one of its top editors, Drenka Willen, 79, CEO Tony Lucki could not have expected the level of outrage. “She was what publishing used to be. She was the example of what we all went into this for,” fellow pink slip holder Ann Patty explained to the New York Observer’s Leon Neyfakh. But Willen’s authors wouldn’t take her removal lying down. And what authors! None other than Günter Grass led the charge to have the doyenne of editing reinstated and he wrote a stiff note to the not so lucky Lucki, and had fellow literary geniuses Umberto Eco, José Saramago, Amos Oz, and Wislawa Szymborska countersign it. Not long after, the luckless Lucki was on bended knee inviting the living legend he had just fired to come back on her own terms, which, after a little thought, she agreed to do. Her first task? To oversee a new translation of Grass’s The Tin Drum, due out in the fall in honor of the book’s 50th anniversary.

Who’s Al Gore’s latest environmental ally? How about Rex Tillerson, CEO of Exxon Mobil. Something must be afoot. In a speech in Washington, Tillerson said he favored a flat carbon tax imposed on greenhouse-gas emissions, rather than the politically more-viable cap-and-trade system. Tillerson called a flat tax a "more direct, a more transparent, and a more effective approach." A fellow at the Center for American Progress thinks, however, that Tillerson is bluffing. Calling for a carbon tax could be a ploy because few observers believe such a tax is politically feasible in our Congress," said Daniel J. Weiss.

Two of the FBI’s most wanted terrorists, Usama al-Kini, chief of Al Qaeda operations in Pakistan, and his lieutenant Sheikh Ahmed Salim Swedan, have been killed in the tribal lands of South Waziristan in Pakistan on the Afghan border. Both were indicted for the 1998 bombings of American embassies in Tanzania and Kenya. They were also believed to be behind the suicide bombing of the Marriott Hotel in Islamabad last September which killed 55 and a failed attempt to assassinate Pakistani premier Benazir Bhutto, who later died at the hands of a terrorist bomber. Although American military sources declined to say exactly when and how the two top Al Qaeda killers were killed, it is believed a drone aircraft killed them on New Year’s Day.

Looks like Europe won’t be freezing to death this winter. The European Union struck a deal with Ukraine and Russia late last night to restart shipments of natural gas to the continent. Czech Prime Minister Mirek Topolanek announced the deal after meeting with Putin and German Chancellor Angela Merkel. Russia originally cut off gas supplies to Ukraine, then cut off all supplies to Europe, saying Ukraine was siphoning off them. Russian and EU officials will jointly supervise the flow of gas in pipelines that traverse Ukraine.

BlackBerry’s iPhone competitor, the Storm, garnered less-than-stellar reviews. Might Palm have better success  with its new smartphone? The original leading manufacturer of hand held devices is hoping to reboot its flagging fortunes with the Pre, a new touch-screen device with a new operating system, WebOS, which provides quick Web access and multitasking. Palm currently ranks fourth in smartphones in use, behind BlackBerry, Apple, and Windows-based phones. The Pre will be carried exclusively by Sprint.

Kimberly Rivera, a first class army private stationed in Fort Carson, Colorado, is heading back to America after refusing to return to Iraq and deserting. She has been living in Toronto, Canada, for the last three years with her husband and children. Canadian authorities declined her request to remain on humanitarian and compassionate grounds. She may be liable for a prison sentence of up to five years when she eventually faces a court martial. Four other American deserters who sought refuge in Canada also face deportation. There are believed to be about 200 American deserters in Canada, many of them living under false names to avoid discovery. During the Vietnam War, up to 90,000 Americans successfully sought asylum in Canada, most of them to avoid the military draft.

Is there nothing our new president can’t do? The Chicago Tribune remembers that back in 2001, when a local station was preparing the pilot of a new food and restaurant program called Check Please!, the producer asked Obama to critique his local Hyde Park eateries, Dixie Kitchen & Bait Shop. The result was never broadcast. According to the show’s producer, David Manilow, Obama was “too good—too thoughtful, too articulate, not enough of an amateur. He ended up dominating the conversation.” "It was unbalanced," he said, "to put it charitably." Now the Los Angeles Times has dug the lost Obama episode out of the archive and put it online. Lap it up.

The election may be over, but Sarah Palin is still unloading on the press. Palin told a documentary filmmaker that she think the media is going easier on Caroline Kennedy than it did on her and that class played its part in her rough reception at the hands of reporters. “It’s going to be interesting to see how that plays out and I think that as we watch that we will perhaps be able to prove that there is a class issue here also that was such a factor in the scrutiny of my candidacy versus, say, the scrutiny of what her candidacy may be,” she said, barely taking a breath but noticeably failing to say “You know” even once. Palin also complained that Tina Fey and Katie Couric have been “capitalizing on” and “exploiting” her. You betcha!