Category Archives: News Roundup

NEWS & VIEWS ROUNDUP: September 29

The revenge of ideas: Karl Polanyi and Susan Strange

Karl Polanyi’s The Great Transformation: The Political and Economic Origins of Our Time (1944)… is a book of imaginative and wide-ranging historical sociology that traces the rise of the modern capitalist market from the industrial revolution in England in the late 18th century (the “great transformation” of the book’s title) to the convulsions of the 1920s and 1930s and the outbreak of the second world war.

Polanyi’s book begins in the unlikely setting of the Pelican Inn – a pub in Dorset, England’s “west country”, where in the 1790s agricultural labourers met to protect their living standards. It goes on to provide a compelling, if wilfully digressive, account of how modern markets work; and in particular of the inbuilt instability, and inexorable swings and oscillations, that they embody. The author challenges the idea that there is anything “natural” or universal about the modern market; Polanyi emphasises the cultural and political underpinnings of markets, and shows how this complex phenomenon – at once generating wealth and provoking instability and poverty – is the particular outcome of modern industrial society.

His conclusion is a product of the broad, social-democratic, and informed liberal opinion of the time – that is, in the aftermath of the great depression in the 1930s and during a global war: that markets are human and contingent entities that have to be regulated, and managed, by states. There is no such thing as a “hidden hand”. A “pure” market unanchored to other social institutions and practices cannot exist. [continued…]

A little problem with capitalism

What’s happening now on Wall Street is seen as a new story. It is not. It is a very old one.

Karl Marx wrote about it; so did John Maynard Keynes. More recently, tycoon George Soros has pronounced on it, as has the redoubtable Economist, a decidedly pro-free market financial magazine.

This old story is quite simple: Capitalism is unstable. It is an economic system that can be ruthlessly productive. But is also one of wheels within wheels – internal contradictions Marx called them – that can, and regularly do, spin out of control.

Marx, a German philosopher suffering from boils, saw these contradictions as opportunities; he figured that capitalism’s self-destruction would lead to a better world.

Keynes, a British economist who liked to speculate in foreign currency over his morning tea and toast, saw them as problems that could destroy a world he rather liked. The welfare state edifice that bears his name was designed in the post-1945 period to, literally, save capitalism from itself. [continued…]

Washington’s waning way: how bail-outs poison a free market recipe for the world

Debating with Al Gore in the presidential election eight years ago, George W. Bush defined a new, humbler attitude towards the rest of the world. “I’m not so sure the role of the United States is to go around the world and say, ‘this is the way it has got to be’,” he said. “I just don’t think it’s the role of the United States to walk into a country and say: ‘we do it this way, so should you’.”

In one area Mr Bush might be about to get his wish, though not perhaps in the way he expected.

The events of the past few weeks on Wall Street have handed ammunition to the opponents of free markets well outside the financial sector and way beyond America’s shores. A model of freewheeling finance the US has pushed around the world, which had already undergone some tactical withdrawals over the past decade, appears in headlong retreat.

For some, the retreat of the Washington model risks turning into a rout. David Rothkopf, a senior Commerce department official during the administration of President Bill Clinton, says the world is at a turning point. “This is a watershed,” he says. “This is the end of 25 years of Reagan-Thatcherism, ‘leave it to the market, less government is better government’. That is over – period.” [continued…]

Bankrupt economics

What we are witnessing, in the broadest sense, is the bankruptcy of modern economics. Its conceit has been that we had solved the problem of stability. Oh, there would be periodic recessions, but the prospects of a major economic collapse were negligible because we knew how the system worked and could take steps to prevent it. What’s been so unsettling about the present crisis is that it has not conformed to the standard model of business cycles and has not submitted to familiar textbook solutions.

A hallmark of the crisis has been the stark contrast between the “real economy” of production and jobs and the tumultuous financial markets of stocks, bonds, banks, money funds and the like. Even with the 60 percent drop in housing construction since early 2006, the real economy has so far suffered only modest setbacks. Yes, there are 605,000 fewer payroll jobs than there were in December; still, 137.5 million jobs remain. Meanwhile, financial markets verge on hysteria. The question is whether this hysteria will drive the real economy into a deep recession or worse — and what we can do to prevent that. [continued…]

Daring to say loans made no sense

Sometimes, if you want the real answer, you have to ask a dumb question.

Alex Blumberg, a producer at “This American Life,” a public radio show that specializes in old-fashioned storytelling about local slices of Americana, has never owned a house or had a mortgage, let alone covered the financial industry. Nonetheless, he was fascinated as he watched the subprime mess unfold.

His dumb question? “Why are they lending money to people who can’t afford to pay it back?”

In 2006, Mr. Blumberg began bothering his friend Adam Davidson, an experienced business reporter at National Public Radio, about subprime loans. Mr. Davidson, who had a broad knowledge of global capital markets, patiently walked him through collateralized debt obligations, yield and risk curves, and the growing amount of international capital in need of a home. But Mr. Blumberg still didn’t get it. How could securities based on lending money to bad risks be good business?

“I was embarrassed for him,” Mr. Davidson said. “I understood how money flowed around the world and I was talking to big-picture thinkers.”

Soon, Mr. Blumberg was madly surfing the Web and torturing his wife and friends with arcane talk about loan syndication and credit-default swaps. “It was a very unhealthy obsession,” he says now. “I just couldn’t understand how they could expect to be paid off when everyone I knew was maxed out on their credit cards. And these were very big loans.”

He decided to do the story for “This American Life,” a show that has a reputation for discussing things like summer camp and inner demons.

“I told him, I don’t know how you’re going to do a story about mortgage securitization for ‘This American Life,’ but good luck,” Mr. Davidson said. But by December of last year, both Mr. Davidson and the broader markets were beginning to have their doubts about whether the fallout from subprime lending had actually been contained.

The more they talked, the more Mr. Davidson realized the education was going both ways. They eventually came up with a one-hour collaboration between NPR News and “This American Life” called “The Giant Pool of Money” that was broadcast last May and became a much downloaded primer on all the mayhem that followed. [continued…]

Analysis: the failure of the bailout bill

The failure of the financial bailout bill in the House is a classic example of an old adage: all politics is local.

Despite the fact that President George W. Bush and the leadership of both parties lined up behind the bill, the rank and file of both parties — particularly on the Republican side — rebelled in light of polling that showed the American public is deeply skeptical about a planned $700 billion bailout for the financial industry.

With just over one month left before the November election, politicians of both partisan stripes are concerned primarily about one thing: their own political futures. [continued…]

Why the bailout bill failed

So how could a major bill described by the president and both parties’ leaders as critical to well-being of the nation’s — and the world’s — economy go down to defeat?

There are no easy answers here, as the House’s stunning defeat moments ago of the financial bailout legislation is putting us into seemingly uncharted territory. But while the final tally, with 133 Republicans and 95 Democrats voting no, was a surprise — all morning, Hill sources were predicting narrow passage — the signs were there that the measure was in trouble: [continued…]

Bailout plan splits free-market backers

A furious family squabble is raging among free-market advocates over the Bush administration’s economic-rescue plan, between those who say let debt-ridden businesses fail and those who warn of a deep recession if government doesn’t bail them out.

The fight has divided conservatives as well their grass-roots supporters, who make up a large part of the Republicans’ political base and threaten to undermine party unity in the middle of a close presidential election. That grass-roots backlash has to a large degree fueled House Republican opposition to the Treasury’s bailout plan.

Lawmakers say they have been inundated by a wave of voter anger to the proposed bailout of troubled banks and other financial institutions. Republican Sen. John Cornyn of Texas says his offices “have received more calls and e-mails on this issue in a short period of time than were logged even on the contentious immigration issue in 2007.” [continued…]

Obama goes to rural Virginia

Barack Obama’s September 9th trip to Lebanon, Virginia, in the southwestern hill country, came at a moment of deep unease among Democrats. John McCain’s selection of Sarah Palin as his running mate, eleven days earlier, had yielded rich results, in Republican enthusiasm and in polling numbers. Several polls showed McCain pulling ahead of Obama, and some Democrats worried that Obama’s slogan of “Change” was a frail substitute for an emphatic message spelling out just what change he hoped to bring about. It seemed that the Obama camp had been knocked off balance by the Palin factor. Some Democrats feared that Obama himself—cool, cerebral, aloof—was a problem, reflected by the campaign’s apparent inability to counter McCain’s bold communications strategy effectively. Most disturbing, polling revealed that voters were increasingly inclined to trust McCain on the economy—an issue on which the Democrat should have the advantage.

If Obama was feeling deflated, he did not show it when he bounded onto the stage that afternoon in the Lebanon High School gymnasium. The crowd of about two thousand had been warmed up by Cecil Roberts, the fire-breathing president of the United Mine Workers of America (who offered the observation, which was making the rounds that week, that “Jesus was a community organizer”). Obama, shedding his suit jacket and rolling up his shirtsleeves, worked the crowd hard for more than an hour. He joked about the hubbub surrounding McCain’s choice of running mate (“I’ve been to forty-nine states now. The only one I haven’t been to is Alaska, and I realize now that maybe I should have gone up there”), and then began a performance that was as populist in theme and as personal in style as a Harvard lawyer could credibly deliver. He portrayed an America that had lost its dream, becoming a nation whose people stood in unemployment lines as their homes were being foreclosed on. He decried C.E.O.s who “give themselves million-dollar bonuses, even as they’re closing down a plant.” And he portrayed John McCain as being hopelessly out of touch.

“I don’t think John McCain is a bad man,” Obama said. “I just think that he doesn’t get it. I just think that he doesn’t understand what the American people are going through right now.” Obama attacked Republicans for their trickle-down economic theories, and McCain for buying into them. “They call it the ownership society in Washington,” he said. “What they really mean is, You’re on your own. Your plant closes up and you lose your job, you’re on your own. You’re sailing along, trying to look after your kids, if you want to go back to college, you’re on your own. You’re a poor kid, lift yourself up by your bootstraps, you’re on your own. . . . Now, I guess if you think that somebody making four million dollars is still middle class, maybe you think it’s worked. But if you’re like an ordinary person, making thirty or forty or fifty thousand dollars, then you realize how tough things are. And that’s why I’m running for President, because that’s what I come from, that’s where I’ve been.” [continued…]

Union leaders confronted by resistance to Obama

When Mike Pyne and other union foot soldiers knock on doors to promote Senator Barack Obama, they often confront a tricky challenge: how to persuade union members to vote on the basis of their wallets rather than on issues like abortion, gun rights and race.

In battleground states like this one, union voters could be vital to the outcome of the election, and the labor movement has mounted a huge push on behalf of Mr. Obama, the Democratic presidential nominee, built largely around the message that with unemployment rising, the financial system reeling and gasoline and food prices soaring, the nation cannot afford to have another Republican in the White House.

The labor effort appears to be making headway. Social issues have moved to the background while the economy is foremost in the minds of many voters, and Mr. Obama appears to be benefiting politically. People like Tom Crooks, an electrician at a paper company’s research center, are telling union canvassers that they are “definitely leaning” toward Mr. Obama because they are worried about their financial well-being. [continued…]

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NEWS & VIEWS ROUNDUP & EDITOR’S COMMENTS: September 28

Revealed: secret Taliban peace bid

The Taliban have been engaged in secret talks about ending the conflict in Afghanistan in a wide-ranging ‘peace process’ sponsored by Saudi Arabia and supported by Britain, The Observer can reveal.

The unprecedented negotiations involve a senior former member of the hardline Islamist movement travelling between Kabul, the bases of the Taliban senior leadership in Pakistan, Saudi Arabia and European capitals. Britain has provided logistic and diplomatic support for the talks – despite official statements that negotiations can be held only with Taliban who are ready to renounce, or have renounced, violence.

Sources in Afghanistan confirmed the controversial talks, though they said that in recent weeks they had ‘lost momentum’. According to Afghan government officials in Kabul, the intensity of the fighting this summer has been one factor. Another is the inconsistency of the Taliban’s demands.

‘They keep changing what they are asking for. One day it is one thing, the next another,’ one Afghan government adviser with knowledge of the negotiations said. One aim of the initiative is to drive a wedge between Osama bin Laden’s al-Qaeda and the Taliban. [continued…]

Editor’s Comment — Had America not been burdened by a bonehead in the White House surrounded by neoconservative handlers, a weak-kneed Congress, and a too easily terrorized populace, serious dialogue with the Taliban could have started in September 2001. With patience and perhaps not even a single shot fired, al Qaeda could have been dismantled and its leadership captured and there would have neither been a war in Afghanistan, nor in Iraq.

Over the intervening seven years who can say with any certainty that either the Taliban or Saddam would have been able to retain power? At the same time, so many ruptures across the region and around the globe could without doubt have been avoided.

A lack of courage forestalled the quiet approach, while an excess of fear drove the recourse to violence.

Why the West thinks it is time to talk to the Taliban

For the past few months an incongruous figure has passed through the airports of the Middle East and Europe: a senior Afghan cleric who defected from the Taliban. Bearded and in traditional dress, he has unsurprisingly needed the help of the Saudi Arabian and British intelligence services – among others – to pass unhindered between capitals.

He has always travelled in great secrecy, his movements known only to a few individuals at the highest levels of the Afghan government, in Riyadh and among certain Western allies. His mission: to talk to the Taliban leadership about a possible peace deal.

The backing given by the West to these talks is a measure of how badly things have gone wrong in Afghanistan, and how far Western governments are prepared to go to stabilise a deteriorating situation which is costing more in men, money and political capital than they ever imagined. The equally worrying situation in Pakistan, where the Taliban are largely based and where a separate but related insurgency has broken out, has given the initiative a new urgency. [continued…]

McCain’s suspension bridge to nowhere

What we learned last week is that the man who always puts his “country first” will take the country down with him if that’s what it takes to get to the White House.

For all the focus on Friday night’s deadlocked debate, it still can’t obscure what preceded it: When John McCain gratuitously parachuted into Washington on Thursday, he didn’t care if his grandstanding might precipitate an even deeper economic collapse. All he cared about was whether he might save his campaign. George Bush put more deliberation into invading Iraq than McCain did into his own reckless invasion of the delicate Congressional negotiations on the bailout plan.

By the time he arrived, there already was a bipartisan agreement in principle. It collapsed hours later at the meeting convened by the president in the Cabinet Room. Rather than help try to resuscitate Wall Street’s bloodied bulls, McCain was determined to be the bull in Washington’s legislative china shop, running around town and playing both sides of his divided party against Congress’s middle. Once others eventually forged a path out of the wreckage, he’d inflate, if not outright fictionalize, his own role in cleaning up the mess his mischief helped make. Or so he hoped, until his ignominious retreat. [continued…]

Palin punching over her weight on foreign policy

In recent days, conservatives have been circulating an e-mail equating Palin’s meager executive experience with that of Theodore Roosevelt, who had been governor of New York for only two years when William McKinley picked him as his running mate in 1900.

Like Palin, the colorful, outspoken patrician was ridiculed by his opponents.

But there the comparison ends. Roosevelt, who traveled widely, had a passionate, omnivorous intellect.

He wrote 35 books on subjects ranging from wildlife to the history of the American West. He had been a combat unit commander — the famous Rough Riders — in Cuba, and an assistant secretary of the Navy.

Equating him to Palin is obscene. But if a comparison be made, it is this: Roosevelt knew what he was talking about.

Palin is a babe in the woods. And the wolves are ready. [continued…]

In search of Sarah Palin

I was struck watching her in St. Paul, where she appeared after five days of relentless media pressure and blew the doubts away, that she had the jauntiness of one who knew her own gifts: knew she could connect to a crowd and raise the roof and stomp her opponent with her sensible high heels. And of course, benefit from her critics’ instinct to underestimate her.

Now that confidence seems gone, replaced by cockiness — which is just insecurity on steroids. With Charlie Gibson the waters were smooth if shallow; with Katie Couric she seemed forever at risk of drowning in her own syntax. But if she’s growing less surefooted with each passing day of cramming, who can blame her, when the highly experienced Republican pols around her don’t seem to trust her to talk past her talking points. Talk about undermining your brand; if she was picked as the Outsider Original Maverick with the experience and courage to help clean up Washington, you can’t argue that she’s not giving interviews because the press is so mean to her. She’s ready for a cage fight with Nancy Pelosi but won’t sit down with Campbell Brown? [continued…]

Editor’s Comment — The fact that Sarah Palin is neither ready nor likely would ever be ready to become vice president of president, does not need to be belabored. And the fact that she has remained shielded from the press merely reveals either that she’s as scared as are her handlers of the risks involved in speaking for herself, or, she can’t stand up for herself.

The most important questions now are not about Palin but about the process that led to her choice. Either McCain didn’t know enough about her — in which case he’s a reckless fool — or he was so cynical, arrogant and contemptuous as to imagine that her appearances could be stage-managed so rigorously that her deficits could sufficiently be concealed for just two months. In other words, he saw her as an expendable commodity. He took a wager on a Palin tactic but had no interest in a Palin strategy.

What a surge can’t solve in Afghanistan

If there was one foreign policy issue on which Barack Obama and John McCain agreed during Friday night’s debate, it was that the United States should send more troops to Afghanistan. The bipartisan enthusiasm for this surge is so strong that there has been relatively little discussion of whether this strategy makes sense.

So here’s a skeptical look at the issue, drawn from conversations during a visit to Afghanistan this month with Defense Secretary Robert Gates. Rather than more troops, the real game-changer in Afghanistan may be Gates’s plan to spend an extra $1.3 billion on surveillance technology to find and destroy the leadership of the insurgency. [continued…]

Taliban revival sets fear swirling through Kabul

Maryam Rahmani was asleep in her parents’ house in Kabul last month when she was woken by loud praying in the street. “Most of us when we heard that thought, ‘This is it, the Taliban have come to the city’,” she said, nervously fingering the orange shawl wrapped round her against the autumn chill.

In fact it was a lunar eclipse and people had come outside to offer special prayers. But Rahmani’s reaction reflects the jumpiness in Kabul as the Taliban move to within 20 minutes’ drive of the Afghan capital.

“Everyone’s nervous, particularly educated women,” said Rahmani, 26, who works at a women’s project and is completing an economics degree at Kabul University. “I’m hurrying to finish my thesis so I can get my diploma in case the Taliban come back. All my friends are applying for Indian visas.” [continued…]

Bush’s third war

President Bush will leave office without concluding either of the two wars he initiated after 9/11. Now, in the waning months of his administration, the president seems intent on expanding his “global war on terror” still farther. To the existing fronts in Afghanistan and Iraq, he is adding a third: Pakistan.

Eclipsed perhaps only by Iraq, Pakistan ranks in the very top tier of the Bush administration’s foreign policy blunders. Even as it vowed following 9/11 to never compromise with evil, the administration wasted no time in forging an alliance with Pakistani President Pervez Musharraf, the army general who seized power in 1999 through a military coup. Although Musharraf was anything but a democrat, Bush proclaimed him a close friend and ally. Washington quickly began funneling military and economic aid toward Islamabad, the total since 2001 exceeding $13 billion.

Unfortunately, Musharraf was not only a dictator, he was incompetent. Two themes defined his presidency: a gradual erosion of domestic legitimacy that paralyzed and then doomed his regime, and a steady erosion of Pakistan’s already shaky control over its frontier provinces bordering Afghanistan. For Taliban and Al Qaeda fighters ousted from their Afghan sanctuaries, the Pakistani Northwest Frontier became a refuge in which to establish training camps and support areas. Although U.S. civilian and military officials pushed and prodded Musharraf to crack down on this Taliban and Al Qaeda presence, little effective action resulted. [continued…]

The long road to chaos in Pakistan

Hours after a truck bomber slew 53 people last weekend at the Marriott Hotel in Islamabad, Pakistan, the country’s interior minister laid responsibility for the attack on Taliban militants holed up in the Federally Administered Tribal Areas, or FATA, the remote, wild region that straddles the border with Afghanistan.

“All roads lead to FATA,” Interior Minister Rehman Malik said.

If the past is any guide, Mr. Malik’s statement is almost certainly correct.

But what Mr. Malik did not say was that those same roads, if he chose to follow them, would very likely loop back to Islamabad itself. [continued…]

Race for president builds characters

This election campaign is about more than its issues, slogans, proposals, strategies, tactics, attacks or counterattacks. Like most presidential elections, it represents a collision of myths. Every four years, various versions of America wrestle with one another, and through this combat, the nation inspects itself, turns itself over and over, striving to choose not only how it wants to be led but what it wants to affirm, how it wants to be known — really, what it wants to be.

Americans, of course, aren’t always focused on these grand stakes; day to day, they see a more down-to-earth campaign — the stump speeches, the barbs and one-liners, the attack ads. Pettiness consumes the attention of journalists and the prurient interest of the jaded. Sometimes the combat rises to the level of issues and policies. Sometimes it even approximates a rational contest as the candidates try to explain what they think is wrong and what they propose to do about it. Petty or substantive, all these are elements of the surface campaign, which may, in the end, determine who wins and loses but also obscures what is really at stake.

The true campaign is the deep campaign, the subsurface campaign, which concerns not just what the candidates say but who they are and what they represent — what they symbolize. [continued…]

Everybody calm down. A government hand in the economy is as old as the republic.

It has become fashionable to fret that the current crisis on Wall Street marks the end of American capitalism as we know it. “This massive bailout is not the solution,” Sen. Jim Bunning (R-Ky.) warned Tuesday. “It is financial socialism, and it is un-American.” It is neither. The near-collapse of the U.S. financial system and Washington’s sudden and massive intervention to try to shore it up certainly mark a major turning point, but a bailout would represent a thoroughly American next step for our economic system — and one that will probably lead to better times.

Americans may assume that the basics of capitalism have been firmly established here since time immemorial, but historical cataclysms such as the Great Depression strongly suggest otherwise. Simply put, capitalism evolves. And we need to understand its trajectory if we are to bring our economic system into greater accord with the other great source of American strength: the best principles of our democracy. [continued…]

The lost tycoons

With breathtaking speed, the world of large Wall Street investment banks has vanished. Fabled firms, some more than a century old, have been merged out of existence (Bear Stearns, Merrill Lynch), gone bankrupt (Lehman Brothers), or sought asylum as commercial bank holding companies (Goldman Sachs, Morgan Stanley). Why on earth did this happen?

The death of Wall Street has been a long-running, slow-motion crisis, barely discernible to participants who had still booked huge profits in recent years. Beneath the razzle-dazzle of trading desks and the wizardry of esoteric finance lay the inescapable fact that these firms had shed their original reason for being: providing capital to American business. [continued…]

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NEWS & VIEWS ROUNDUP & EDITOR’S COMMENT: September 26

McCain decides to participate in debate

Senator John McCain’s campaign said Friday morning that he will attend tonight’s debate with Senator Barack Obama at the University of Mississippi, reversing his earlier call to postpone the debate so he could participate in the Congressional negotiations over the $700 billion bailout plan for financial firms. [continued…]

Editor’s Comment — As John McCain effortlessly polishes his image as a maverick, he seems to have overlooked what should be obvious: the value a maverick serves is in bucking authority and challenging conventions, yet these are not qualities that most people are looking for when they choose a president.

What McCain has accomplished is to invert the equation that would have cast him as the seasoned and more reliable leader by instead cultivating the impression that it is he — not Obama — who is the unknown quantity. Indeed, the more McCain displays his appetite for unpredictability, the more reason there is to believe that this tendency would be accentuated — not tempered — by high office.

Have a passion for rolling dice? Vote McCain!

What the world wants to know

How would you work with America’s allies in the Muslim world to turn around the widely held misperception there, as evidenced in opinion polls, that the global war against terrorism is actually a war against Islam?

— ASIF ALI ZARDARI, the president of Pakistan

***

Many developing countries — mine included — have made sacrifices to carry out tough economic reforms and have sought “trade and not aid.” To succeed, we need to compete on a level playing field with more developed economies. Is the United States ready to shoulder some of the burden by advocating the elimination or tempering of protectionism and subsidies? The United Nations by itself, with its faults and many achievements, does not lead. Nation-states do. American commitment and leadership is a must for effective multilateral cooperation. Will you demonstrate a renewed commitment to multilateralism and the rule of international law? Will you negotiate actively to agree on a post-Kyoto treaty on global warming and seek to join the United Nations Human Rights Council? Lastly, what would you do to regain the trust of your allies who would like to see the United States engaging in respectful dialogue and leading the way in the fight not merely against terrorism — which must be done — but also against world hunger, poverty, inequality and disease?

— MICHELLE BACHELET, the president of Chile [continued…]

McCain resurrects an old stunt

No wonder John McCain “suspended” his presidential campaign Wednesday to focus in a bipartisan manner on a grave national crisis — he’s been pulling the same stunt for nearly a decade now, boosting his poll ratings by pretending not to care about them.

You probably remember his suspension of the Republican National Convention’s first day of business in order to raise funds and awareness for the victims of Hurricane Gustav (a move that, besides allowing umpteen convention speakers to praise McCain’s selfless patriotism, neatly airbrushed the unpopular sitting president and vice president from the proceedings).

But McCain first used the tactic to spectacular effect way back in March 1999, when — even though his White House run had been chugging along for five months — he postponed the “official announcement” of his candidacy so that the nation could focus as one on the week-old war in Kosovo. “It’s not appropriate at this time,” the somber senator said then, “to launch a political campaign.” [continued…]

Where are the grown-ups?

Many people on both the right and the left are outraged at the idea of using taxpayer money to bail out America’s financial system. They’re right to be outraged, but doing nothing isn’t a serious option. Right now, players throughout the system are refusing to lend and hoarding cash — and this collapse of credit reminds many economists of the run on the banks that brought on the Great Depression.

It’s true that we don’t know for sure that the parallel is a fair one. Maybe we can let Wall Street implode and Main Street would escape largely unscathed. But that’s not a chance we want to take.

So the grown-up thing is to do something to rescue the financial system. The big question is, are there any grown-ups around — and will they be able to take charge? [continued…]

Government seizes WaMu and sells some assets

Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night, in what is by far the largest bank failure in American history.

Regulators simultaneously brokered an emergency sale of virtually all of Washington Mutual, the nation’s largest savings and loan, to JPMorgan Chase for $1.9 billion, averting another potentially huge taxpayer bill for the rescue of a failing institution. [continued…]

Palin talks to Couric — and if she’s lucky, few are listening

A global financial crisis and a not-quite-suspended presidential campaign dominated newspaper front pages and television reports over the last couple of days.

Bad news for America. But good news for Sarah Palin.

The economic crisis and John McCain’s surprising response have drawn attention away from the Republican vice presidential nominee just as she has started to answer more pointed questions from the media.

Her third nationally televised interview, with CBS anchor Katie Couric, found Palin rambling, marginally responsive and even more adrift than during her network debut with ABC’s Charles Gibson. [continued…]

An Open Letter to the American People

This year’s presidential election is among the most significant in our nation’s history. The country urgently needs a visionary leader who can ensure the future of our traditional strengths in science and technology and who can harness those strengths to address many of our greatest problems: energy, disease, climate change, security, and economic competitiveness.

We are convinced that Senator Barack Obama is such a leader, and we urge you to join us in supporting him.

During the administration of George W. Bush, vital parts of our country’s scientific enterprise have been damaged by stagnant or declining federal support. The government’s scientific advisory process has been distorted by political considerations. As a result, our once dominant position in the scientific world has been shaken and our prosperity has been placed at risk. We have lost time critical for the development of new ways to provide energy, treat disease, reverse climate change, strengthen our security, and improve our economy.

We have watched Senator Obama’s approach to these issues with admiration. We especially applaud his emphasis during the campaign on the power of science and technology to enhance our nation’s competitiveness. In particular, we support the measures he plans to take – through new initiatives in education and training, expanded research funding, an unbiased process for obtaining scientific advice, and an appropriate balance of basic and applied research – to meet the nation’s and the world’s most urgent needs.

Senator Obama understands that Presidential leadership and federal investments in science and technology are crucial elements in successful governance of the world’s leading country. We hope you will join us as we work together to ensure his election in November.

Signed,

Click here [PDF] to read the original with signers]

Pakistan warns U.S. troops after exchange of fire

Pakistan warned U.S. troops not to intrude on its territory Friday, after the two anti-terror allies traded fire along the volatile border with Afghanistan.

Thursday’s five-minute clash adds to already heightened tensions at a time the United States is stepping up cross-border operations in a region known as a haven for Taliban and al-Qaida militants.

The clash — the first serious exchange with Pakistani forces acknowledged by the U.S. — follows a string of other alleged border incidents and incursions that have angered many here. [continued…]

Pakistan says 1,000 militants killed near Afghan border

Pakistan said Friday that troops have killed 1,000 Islamist militants in a huge offensive, a day after President Asif Ali Zardari lashed out at US forces over a clash on the Afghan border.

Five top Al-Qaeda and Taliban commanders were among those killed in a month-long operation in Bajaur, currently the most troubled of Pakistan’s unstable tribal areas along the porous frontier, a top official said.

But in a further sign of the instability gripping Pakistan since the bombing of the Marriott Hotel in Islamabad last weekend, three suicide bombers blew themselves up in a shootout with police in Karachi. [continued…]

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NEWS & VIEWS ROUNDUP & EDITOR’S COMMENT: September 25 – updated

Israel asked US for green light to bomb nuclear sites in Iran

Israel gave serious thought this spring to launching a military strike on Iran’s nuclear sites but was told by President George W Bush that he would not support it and did not expect to revise that view for the rest of his presidency, senior European diplomatic sources have told the Guardian.

The then prime minister, Ehud Olmert, used the occasion of Bush’s trip to Israel for the 60th anniversary of the state’s founding to raise the issue in a one-on-one meeting on May 14, the sources said. “He took it [the refusal of a US green light] as where they were at the moment, and that the US position was unlikely to change as long as Bush was in office”, they added.

The sources work for a European head of government who met the Israeli leader some time after the Bush visit. Their talks were so sensitive that no note-takers attended, but the European leader subsequently divulged to his officials the highly sensitive contents of what Olmert had told him of Bush’s position. [continued…]

Editor’s Comment — Israel — with the support of many American political leaders — likes to burnish it’s image as a free and unpredictable player in the Middle East but when it comes to its options on confronting Iran the idea that Israel might “go it alone” is a fantasy only given life by those who want to use the idea as a political tool.

Even if Bush’s exchange with Olmert was a closely guarded secret, he actually made it quite clear that the military option — forever present, though well bolted down, on that proverbial table — was not going to be used while he remained in office.

The president told The Jerusalem Post yesterday that before leaving office he wants a structure in place for dealing with Iran.

That was on May 12. Bush has subsequently not been pressed to explain what this structure might look like, but as I’ve previously speculated, if the president wants to salvage some sort of legacy, then it could well take a diplomatic form through an opening to Iran. As an “October surprise” that would undermine McCain, but I wouldn’t discount the possibility that it comes as a November surprise, right after the election.

As the New York Times said a few days ago:

Secretary of State Condoleezza Rice had hoped to salvage at least part of President Bush’s legacy, and her own, by brokering an Israeli-Palestinian peace deal before Mr. Bush leaves office. That’s looking ever less likely. Ms. Rice could still make history if she got on a plane to Tehran to deliver an offer of a grand bargain.

She could prove that she was serious by proposing to immediately open an American interests section in Tehran — an idea her aides floated a few months ago that seems to have disappeared.

We don’t know if any mix of sanctions and rewards can persuade Iran’s leaders to abandon their nuclear program. But without such an effort, we are certain that Tehran will keep pressing ahead, while the voices in the United States and Israel arguing for military action will only get louder.

Stopping a financial crisis, the Swedish way

A banking system in crisis after the collapse of a housing bubble. An economy hemorrhaging jobs. A market-oriented government struggling to stem the panic. Sound familiar?

It does to Sweden. The country was so far in the hole in 1992 — after years of imprudent regulation, short-sighted economic policy and the end of its property boom — that its banking system was, for all practical purposes, insolvent.

But Sweden took a different course than the one now being proposed by the United States Treasury. And Swedish officials say there are lessons from their own nightmare that Washington may be missing. [continued…]

A bailout we don’t need

Now that all five big investment banks — Bear Stearns, Merrill Lynch, Lehman Brothers, Goldman Sachs and Morgan Stanley — have disappeared or morphed into regular banks, a question arises.

Is this bailout still necessary?

The point of the bailout is to buy assets that are illiquid but not worthless. But regular banks hold assets like that all the time. They’re called “loans.”

With banks, runs occur only when depositors panic, because they fear the loan book is bad. Deposit insurance takes care of that. So why not eliminate the pointless $100,000 cap on federal deposit insurance and go take inventory? If a bank is solvent, money market funds would flow in, eliminating the need to insure those separately. If it isn’t, the FDIC has the bridge bank facility to take care of that. [continued…]

Save the world? Hank just didn’t have a clue

The Emperor has no clothes. If you want to know why American capitalism is on the brink of disaster, but also want to understand what will save it, then log on to the C-Span congressional website and watch the interrogations of Henry Paulson, the US Treasury Secretary, by the Senate and House banking committees.

Until last week, I was in a minority of one in arguing that Mr Paulson was personally responsible for suddenly turning the painful but manageable credit crunch that had been grinding away 18 months in the background of the US economy into a global catastrophe. Mr Paulson’s appearances on Capitol Hill, marked by the characteristic Bush-era combination of arrogance and incompetence, are turning my once-outlandish view into conventional wisdom: Henry Paulson is to finance what Donald Rumsfeld was to military strategy, Dick Cheney to geopolitics and Michael Chertoff to flood defence.

Mr Paulson may be a former chairman of Goldman Sachs, but as US Treasury Secretary he does not know what he is doing. His recent blunders, starting with the “rescue” of Fannie Mae, have triggered unintended consequences around the world, resulting in the death-spiral of financial values. But last Friday Mr Paulson outdid even these Rumsfeldian achievements, when he demanded $700 billion from Congress for a “comprehensive and fundamental” solution to the global financial crisis, without apparently having any idea of what he would actually do. [continued…]

U.S. appeals abroad fall flat as leaders see no crisis at home

As the world watched Congress struggle yesterday with a plan to bail out the U.S. financial system, foreign leaders balked at similar fixes for their own economies, a few even dismissing the credit meltdown as an American problem. Some foreign investors who had previously provided crucial injections of capital remained on the sidelines.

Senior U.S. officials, notably Treasury Secretary Henry M. Paulson Jr., have in recent days urged the leaders of other industrialized countries to help prop the global financial system. But the appeals have fallen short. While policymakers and economic analysts in Europe and Latin America said yesterday that they recognized the severity of the challenge facing the global financial system, they saw little need at the moment for major rescue packages in their own countries.

“The situation we face here in Europe is less acute, and member states do not at this point consider that a U.S.-style plan is needed,” said Joaquín Almunia, the European Commissioner for Economic and Monetary Policy in Brussels. [continued…]

Bush aides linked to talks on interrogations

Senior White House officials played a central role in deliberations in the spring of 2002 about whether the Central Intelligence Agency could legally use harsh interrogation techniques while questioning an operative of Al Qaeda, Abu Zubaydah, according to newly released documents.

In meetings during that period, the officials debated specific interrogation methods that the C.I.A. had proposed to use on Qaeda operatives held at secret C.I.A. prisons overseas, the documents show. The meetings were led by Condoleezza Rice, then the national security adviser, and attended by Defense Secretary Donald H. Rumsfeld, Attorney General John Ashcroft and other top administration officials.

The documents provide new details about the still-murky early months of the C.I.A.’s detention program, when the agency began using a set of harsh interrogation techniques weeks before the Justice Department issued a written legal opinion in August 2002 authorizing their use. Congressional investigators have long tried to determine exactly who authorized these techniques before the legal opinion was completed. [continued…]

The time has come for a final report on the 43rd president of the US

As the two men who would succeed him train like Olympic athletes for tomorrow’s foreign policy debate, pause for a moment to complete your final report on the 43rd president of the United States. What would you say?

I would sum up his two terms in four words: hubris followed by nemesis.

Remember the mood music of eight years ago. The greatest power the world has ever seen. Rome on steroids. An international system said to be unipolar, and Washington’s unabashed embrace of unilateralism. The US as “Prometheus unbound”, according to the neoconservative commentator Charles Krauthammer. Wall Street investment bankers bestriding the financial globe as Pentagon generals did the military globe and Harvard professors the soft power one. Masters of the universe. Personifying that hubristic moment: George Walker Bush.

And now: nemesis. The irony of the Bush years is that a man who came into office committed to both celebrating and reinforcing sovereign, unbridled national power has presided over the weakening of that power in all three dimensions: military, economic and soft. [continued…]

As crime increases in Kabul, so does nostalgia for Taliban

Mirza Kunduzai, 58, a slight man with a short white goatee, had almost reached his house after a day of trading in the capital’s open-air currency market when his taxi was forced to stop by six heavily armed men dressed in Afghan National Army uniforms.

For the next week, Kunduzai recounted, he endured one horror after another — beaten unconscious, hooded and handcuffed, strung up by his wrists and ankles, dumped in a filthy latrine — while his family frantically tried to raise the kidnappers’ astronomical ransom demand of $2 million.

“I was 95 percent sure I was a dead man,” Kunduzai said last week. “They said if my family went to the police, they would chop off my fingers and send them to my wife. I begged them to be reasonable. I offered them my house and my farmland back home. Finally, they agreed to settle for $500,000 and released me. I am poor again, but I am thankful to be alive.” [continued…]

Iraq passes provincial elections law

After months of negotiation, Iraq’s Parliament passed a crucial election law on Wednesday, but only by setting aside for future debate the most divisive political issues.

The law could clear the way for provincial elections to take place in much of the country early next year. The elections are viewed by many Iraqi and American officials as crucial for the nation to heal its deep-running political and religious fissures and also to shore up the fragile security gains that have been achieved in recent months.

The question of how to settle a fierce dispute over control of the ethnically mixed and oil-rich northern city of Kirkuk, however, was given to a committee for further study. And an article in an earlier version of the law that provided a limited number of provincial council seats for Iraq’s Christians and other minorities was eliminated from the new bill, stirring outrage among the groups. [continued…]

Contact man’s murder delays Syria nuclear probe: IAEA

The UN atomic watchdog’s probe into alleged illicit nuclear work in Syria has been delayed because the agency’s contact man in Syria was murdered, IAEA chief Mohamed ElBaradei revealed Thursday.

“The reason that Syria has been late in providing additional information (is) that our interlocutor has been assassinated in Syria,” ElBaradei told a closed-door session of the International Atomic Energy Agency’s 35-member board. A recording of his remarks was obtained by AFP.

He did not provide any further details about the identity of the man or circumstances of the assassination. [continued…]

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NEWS & VIEWS ROUNDUP: September 24

It’s judgment day for McCain

Last week, Republican presidential candidate John McCain called for a commission to “find out what went wrong” on Wall Street. It was an excellent suggestion: Public inquiries into Wall Street practices served the country well in the 1930s.

And Mr. McCain has a special advantage to bring to any such investigation — many of the relevant witnesses are friends or colleagues of his. In fact, he can probably get to the bottom of the whole mess just by cross-examining the people riding on his campaign bus. So the candidate should take a deep breath, remind himself that the country comes first, pull the Straight Talk Express over at a rest stop, whistle up his media pals, and begin.

Topic A should be deregulation. Financial institutions are dropping everywhere after playing with poorly regulated financial instruments; the last investment banks standing are begging the government for stricter oversight; and some of our nation’s leading champions of laissez faire have ditched that theory in an extraordinary attempt to rescue the collapsing industry.

The philosophy of government that has dominated Washington for almost three decades is now in ruins, and it is up to Mr. McCain to find out exactly why we believed it in the first place. Why did government stand back and permit all the misconduct that generated all this bad debt? What particular ideas led us to believe that government should just keep its hands off and let markets run their course? [continued…]

McCain aide’s firm was paid by Freddie Mac

One of the giant mortgage companies at the heart of the credit crisis paid $15,000 a month from the end of 2005 through last month to a firm owned by Senator John McCain’s campaign manager, according to two people with direct knowledge of the arrangement.

The disclosure undercuts a remark by Mr. McCain on Sunday night that the campaign manager, Rick Davis, had had no involvement with the company for the last several years. [continued…]

The power of negative thinking

Greed — and its crafty sibling, speculation — are the designated culprits for the financial crisis. But another, much admired, habit of mind should get its share of the blame: the delusional optimism of mainstream, all-American, positive thinking.

As promoted by Oprah Winfrey, scores of megachurch pastors and an endless flow of self-help best sellers, the idea is to firmly believe that you will get what you want, not only because it will make you feel better to do so, but because “visualizing” something — ardently and with concentration — actually makes it happen. You will be able to pay that adjustable-rate mortgage or, at the other end of the transaction, turn thousands of bad mortgages into giga-profits if only you believe that you can.

Positive thinking is endemic to American culture — from weight loss programs to cancer support groups — and in the last two decades it has put down deep roots in the corporate world as well. Everyone knows that you won’t get a job paying more than $15 an hour unless you’re a “positive person,” and no one becomes a chief executive by issuing warnings of possible disaster. [continued…]

Editor’s Comment — As people mature, so do cultures. American culture is still in its infancy. It craves instant gratification. It has boundless energy and little sense of caution. It lives through sensation but has yet to master conceptualization.

Barbara Ehrenreich’s remedy of realism for what she sees as an excess of positivity is easy to advocate, but human beings — whether shaped by a culture in its infancy or one that has acquired maturity — are, as living entities, unrealistic. The will to live, is by its nature, death-denying. In perfect realism, we should be reconciled to our non-existence but the thrust of life pushes us elsewhere.

America is not so much burdened by its positivity than it is by the banality of its aspirations. It’s not that we want too much, but that what we want is so lacking in value. We don’t think too big; we don’t think big enough.

The United States of Mind

Certain regional stereotypes have long since become cliches: The stressed-out New Yorker. The laid-back Californian.

But the conscientious Floridian? The neurotic Kentuckian?

You bet — at least, according to new research on the geography of personality. Based on more than 600,000 questionnaires and published in the journal Perspectives on Psychological Science, the study maps regional clusters of personality traits, then overlays state-by-state data on crime, health and economic development in search of correlations. [continued…]

Rebuilding America, rebuilding ourselves

Seventy-five years ago, our country faced an even deeper depression. Millions of men had neither jobs, nor job prospects. Families were struggling to put food on the table. And President Franklin Delano Roosevelt acted. He created the Civilian Conservation Corps, soon widely known as the CCC.

From 1933 to 1942, the CCC enrolled nearly 3.5 million men in roughly 4,500 camps across the country. It helped to build roads, build and repair bridges, clear brush and fight forest fires, create state parks and recreational areas, and otherwise develop and improve our nation’s infrastructure — work no less desperately needed today than it was back then. These young men — women were not included — willingly lived in primitive camps and barracks, sacrificing to support their families who were hurting back home.

My father, who served in the CCC from 1935 to 1937, was among those young men. They earned $30 a month for their labor — a dollar a day — and he sent home $25 of that to support the family. For those modest wages, he and others like him gave liberally to our country in return. The stats are still impressive: 800 state parks developed; 125,000 miles of road built; more than two billion trees planted; 972 million fish stocked. The list goes on and on in jaw-dropping detail. [continued…]

Guantanamo: government says six years is not long eough to prepare evidence

Imagine being seized in Afghanistan or Pakistan, where you were, perhaps, a completely innocent man, sold for a bounty, or a Muslim soldier, fighting other Muslims in a civil war whose roots lay in the resistance to the Soviet occupation of the 1980s, which was partly funded by the United States.

Then imagine that, both during and after being treated with appalling brutality by US forces, you are given no opportunity to establish whether you are an innocent man seized by mistake, a soldier, or the victim of bounty hunters, and you are, instead, flown halfway around the world to an experimental offshore prison, where you are interrogated about your connections to al-Qaeda and Osama bin Laden.

At no point are you offered the protection of the Geneva Conventions (to which your captors are a signatory), which were designed to prevent the “humiliating and degrading treatment” of prisoners seized during wartime, and also to prevent their interrogation (prisoners may be questioned, but any form of “physical or mental coercion” is prohibited). Moreover, if you struggle to answer the questions put to you — perhaps because you know nothing about al-Qaeda or Osama bin Laden — you are not only interrogated relentlessly, you are also subjected to an array of “enhanced interrogation techniques,” which contravene the UN Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, to which your captors are also a signatory.

Now imagine that, after six and a half years of this imprisonment — in which, unlike convicted criminals on the US mainland, you have never been charged or tried, and have not been allowed a single visit from your loved ones — the highest court in the United States rules, in Boumediene v. Bush, that you have habeas corpus rights; in other words, the right to know why you are being held. And finally, imagine that, in response to this ruling, when the judges responsible for establishing the reviews have ordered the cases to be addressed “as expeditiously as possible,” and have set a deadline for the government to comply, your captors turn around and say that, after holding you for up to 2,444 days in Guantánamo, they need more time to prepare a case against you. [continued…]

High stakes in Islamabad and Washington

George Bush and Pakistan’s president, Asif Ali Zardari, have more in common than one might think. As younger men, both had reputations as playboy hell-raisers. As the current, more sober leaders of their respective countries, both are deeply unpopular with large numbers of fellow citizens. For his part, Bush is on his way out. And if the Islamists who bombed the Islamabad Marriott at the weekend have their way, Zardari, husband of the murdered Benazir Bhutto, will surely follow him – one way or another.

The stakes for this odd couple are high. Zardari is engaged in an increasingly fraught political and military campaign not only to retain power but, more importantly, hold the country together in the teeth of an existential threat to democratic, secular governance. The war in Afghanistan has taken deep root inside Pakistan and is now spreading beyond the tribal areas and North-West Frontier Province. Afghan Taliban and foreign jihadis from Kunan, in eastern Afghanistan and beyond, temporarily abandoning the fight with Nato, are now reportedly flocking to Bajaur, Kohat and Swat to join battle with the Pakistani army.

Pakistani military analysts and commentators warn that the challenge to the country’s integrity, though seemingly familiar, is growing more formidable with each passing week. Suicide bombings, almost unknown five years ago, have claimed over 300 lives this year. Recent days have seen heavy fighting, with the army claiming to have killed 60 insurgents. The economy is in deep, destabilising trouble. The UN meanwhile launched an emergency appeal today for $17m to assist more than a quarter of a million internally displaced people in the western border areas. [continued…]

Gates is pessimistic on Pakistani support

Pakistan’s leaders and military cannot publicly support U.S. cross-border operations against militant groups in Pakistan’s western tribal areas, but such strikes are needed to protect American troops in Afghanistan and defend the United States against its gravest terrorist threat, Defense Secretary Robert M. Gates said yesterday.

“We will do what is necessary to protect our troops,” Gates told the Senate Armed Services Committee. Asked whether Pakistan’s government would back unilateral U.S. military operations into Pakistan, he said: “I don’t think they can do that.”

Gates said that despite a growing insurgency in Afghanistan, fueled by fighters from Pakistan, the spring of 2009 is the earliest the Pentagon would be able to send as many as three more U.S. combat brigades there to meet a request of American commanders for about 10,000 more troops. [continued…]

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NEWS & VIEWS ROUNDUP: September 23

FBI investigating companies at heart of meltdown

The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration, The Associated Press has learned.

Two law enforcement officials said Tuesday the FBI is looking at potential fraud by mortgage finance giants Fannie Mae and Freddie Mac, and insurer American International Group Inc. Additionally, a senior law enforcement official said Lehman Brothers Holdings Inc. also is under investigation.

The inquiries will focus on the financial institutions and the individuals that ran them, the senior law enforcement official said. [continued…]

Buyout plan for Wall Street is a hard sell on Capitol Hill

Treasury Secretary Henry M. Paulson Jr. received an angry and skeptical reception on Tuesday when he appeared before the Senate Banking Committee to ask Congress to promptly give him wide authority to rescue the nation’s financial system.

Mr. Paulson urged lawmakers “to enact this bill quickly and cleanly, and avoid slowing it down with other provisions that are unrelated or don’t have broad support.”

The Federal Reserve chairman, Ben S. Bernanke, who appeared with Mr. Paulson, said the financial system “continues to be very unpredictable, and very worrisome,” and that inaction could lead to a recession. [continued…]

House GOP rises up against Cheney

There was a time when Dick Cheney could turn back a Republican revolt on Capitol Hill.

That time is gone.

House Republicans rose up en masse against their vice president on Tuesday morning to blast an administration proposal that would grant Treasury historic authority to start buying hundreds of billions of dollars in devalued mortgage-related assets, according to members present.

The lines to speak were long, the questions many and sentiment in the Cannon Caucus Room Tuesday swayed heavily against the Treasury proposal. [continued…]

Getting real — and letting the cat out of the bag

Whoa — it seems that Ben Bernanke ditched his prepared testimony and, instead, let the cat at least partly out of the bag.

I believe that under the Treasury program, auctions and other mechanisms could be devised that will give the market good information on what the hold-to-maturity price is for a large class of mortgage-related assets. If the Treasury bids for and then buys assets at a price close to the hold-to-maturity price, there will be substantial benefits.

First, banks will have a basis for valuing those assets and will not have to use fire sale prices. Their capital will not be unreasonably marked down …

As I wrote earlier this morning, the whole “take these assets off the balance sheets” line is fundamentally disingenuous; the key question is what price Treasury pays for the assets. And here we have Bernanke effectively saying that it’s going to pay above-market prices — prices that allegedly reflect “hold-to-maturity” value, but still more than private investors are willing to pay. [continued…]

Abrams as McCain’s top foreign policy aide?

Not terribly surprising, but I have it from a reliable source that Elliott Abrams, currently Deputy National Security Adviser for Global Democracy Strategy who also heads the NSC’s Near East office, is regularly briefing the McCain campaign — Randy Scheunemann appears to be the main contact — and has told friends and colleagues that he is confident that he will get a top post in a McCain administration. Now, assuming Abrams is not talking through his hat, I very much doubt that a Democratic-majority Senate would confirm Abrams, who pleaded guilty to essentially lying to Congress during the Iran-Contra affair, to any position that required confirmation (especially as long as Chris Dodd, who clashed frequently and bitterly with Abrams when the latter served as Assistant Secretary of State for Inter-American Affairs under Reagan, remains alive). That would leave his current abode — the NSC — as his most likely destination. But he is already a deputy national security adviser. Does that mean that he thinks he will be THE Deputy National Security Adviser — in charge of the day-to-day operations of the NSC — or even THE National Security Adviser in the McCain White House? [continued…]

Obama’s foreign policy advantage

A funny thing happened on the morning of July 19 — Prime Minister Nouri al-Maliki of Iraq endorsed Barack Obama’s plan for a 16-month withdrawal timeline from Iraq in an interview with Der Spiegel magazine. In a stroke, the entire conservative argument on Iraq was demolished. Withdrawal, they’d been telling us, was abject surrender and the abandonment of our Iraqi allies. The conservative counter that this was merely political posturing by Maliki made no sense — if the reason Maliki was calling for withdrawal was the overwhelming demand for withdrawal on the part of the Iraqi public, that was all the more reason for us to leave. And, of course, looking backward John McCain was (and is) still committed to the idea that, even in retrospect, invading Iraq was a good idea. It looked to me like the election was in the bag. Democrats were going to win the national-security argument, and hence, the election. [continued…]

Ten national security myths

The Iraq War is a testament to the great damage a foreign policy based on myths, lies and distortions can do to our nation’s security and well-being. As the election draws near, a new set of myths and fallacies as misleading as those that led the Senate to support George W. Bush’s invasion of Iraq have become embedded in our foreign policy discourse. Many of them are being perpetuated by the very same political forces that peddled the myth of mushroom clouds coming from Saddam Hussein’s Iraq. Others are the product of muddled thinking on the part of both Republicans and Democrats. If left unchallenged, these myths and fallacies could influence the outcome of the election and shape policy in the next administration. In this special feature, put together by Nation editors with Sherle Schwenninger, a frequent Nation contributor and director of the Global Economic Policy Program at the New America Foundation, we dissect ten of them and offer what we believe is a more accurate depiction of what is at stake for the United States and the world. [continued…]

Poll: Most Americans think U.S. is losing war on terrorism

A majority of Americans think the United States isn’t winning the war on terrorism, a perception that could undermine a key Republican strength just as John McCain and Barack Obama head into their first debate Friday night, a clash over foreign policy and national security. A new Ipsos/McClatchy online poll finds a solid majority of 57 percent thinking that the country can win the war on terrorism but a similar majority of 54 percent saying that the country is NOT winning it.

The poll came just days before the two major-party candidates meet for the first of three debates, a 90-minute showdown Friday on foreign policy and national security at the University of Mississippi.

Jim Lehrer of PBS will moderate the debate between Republican McCain and Democrat Obama, which will be televised nationally starting at 9 pm EDT. [continued…]

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NEWS & VIEWS ROUNDUP & EDITOR’S COMMENTS: September 23

CEO pay emerges as bailout barrier

Flying in the face of Congress and both presidential campaigns, Treasury is resisting efforts to impose pay limits on Wall Street executives and bankers whose companies stand to be helped by the government’s $700 billion rescue plan for the financial markets.

As markets reopen Monday, the issue is a surprising flash point between Treasury Secretary Henry Paulson and House Democrats, who have drafted a bill giving Paulson much of what he wants but requiring that Treasury also demand “appropriate standards for executive compensation.”

Treasury argues that such requirements would make it harder to persuade companies to sell their troubled assets to the government. But Democrats, who otherwise admire Paulson, say that the former Goldman Sachs chairman is blind to the politics of the situation and the huge divide between the average taxpayer and the financial world now seeking relief from bad debts that have clogged the credit system — and that threaten the entire economy. [continued…]

Editor’s Comment — Here we are, supposedly, on the brink of global economic catastrophe, but the government’s rescue plan might fail if a few fat cats on Wall Street are forced to take a pay cut. Are they so well insulated from the impending calamity that the worst that could happen to them is that they could lose a multimillion dollar bonus?

The idea that constraints on excessive executive compensation in return for public funding could be described as “punitive” is absurd and obscene. What seems called for here is a new criminal designation: crimes against society.

This is a label that would apply to those offenses less egregious than genocide; crimes which might seem mundane in as much as they are far more commonplace but which involve harm to thousands or millions of people as the result of the ruthless pursuit of self-interest by those who wield immense economic or political power.

For those CEOs who would regard a pay cut as punitive, I would propose that the alternative would be that they be charged with the above described crimes against society and that they face the possibility of neither imprisonment nor fines but of destitution (through losing the right to own property) and public humiliation (through a 21st century equivalent of being placed in the stocks).

These parasitic CEOs should be grovelling in gratitude at the idea they might suffer something so minor as a pay cut. What sort of hyper-inflated vanity could regard such a thing as punitive?

A TIMELY REMINDER: How the Bush Administration stopped the states from stepping in to help consumers

Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers’ ability to repay, making loans with deceptive “teaser” rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.

Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York’s, enacted laws aimed at curbing such practices.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no. [continued…]

Loan titans paid McCain adviser nearly $2 million

Senator John McCain’s campaign manager was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations, current and former officials say.

Mr. McCain, the Republican candidate for president, has recently begun campaigning as a critic of the two companies and the lobbying army that helped them evade greater regulation as they began buying riskier mortgages with implicit federal backing. He and his Democratic rival, Senator Barack Obama, have donors and advisers who are tied to the companies.

But last week the McCain campaign stepped up a running battle of guilt by association when it began broadcasting commercials trying to link Mr. Obama directly to the government bailout of the mortgage giants this month by charging that he takes advice from Fannie Mae’s former chief executive, Franklin Raines, an assertion both Mr. Raines and the Obama campaign dispute.

Incensed by the advertisements, several current and former executives of the companies came forward to discuss the role that Rick Davis, Mr. McCain’s campaign manager and longtime adviser, played in helping Fannie Mae and Freddie Mac beat back regulatory challenges when he served as president of their advocacy group, the Homeownership Alliance, formed in the summer of 2000. Some who came forward were Democrats, but Republicans, speaking on the condition of anonymity, confirmed their descriptions. [continued…]

Editor’s Comment — A major campaign story — one would think. But apparently not in the eyes of the editors of the NYT — it didn’t merit a place on the front page!

Cash for trash

Some skeptics are calling Henry Paulson’s $700 billion rescue plan for the U.S. financial system “cash for trash.” Others are calling the proposed legislation the Authorization for Use of Financial Force, after the Authorization for Use of Military Force, the infamous bill that gave the Bush administration the green light to invade Iraq.

There’s justice in the gibes. Everyone agrees that something major must be done. But Mr. Paulson is demanding extraordinary power for himself — and for his successor — to deploy taxpayers’ money on behalf of a plan that, as far as I can see, doesn’t make sense. [continued…]

Visible hands

When Hank Paulson, a successful investment banker turned Republican treasury secretary, caps his career by nationalizing two financial institutions so large that even Norman Thomas in his socialist heyday would have paused before taking them onto the government’s balance sheet, and a conservative central banker agrees to bail out an insurance company to the tune of $85 billion, you know that a fundamental change is underway. The day when that engine of capitalism, the financial market, was allowed to operate more or less unimpeded by government has passed. We are entering an era in which a high tolerance for risk is being replaced by the eager embrace of regulation, and where the overriding imperative, efficiency, has been replaced by an increasing desire for equity. [continued…]

A prescription for recovery

This week, Congress is expected to commit hundreds of billions of taxpayer funds to a revitalization program to halt our financial hemorrhaging. Twenty years ago, in the midst of another financial crisis, I was part of a banking industry effort to solve the savings and loan problem. The result of that effort was the Resolution Trust Corporation, which, under Bill Seidman’s masterful leadership, cleaned up the S&L mess in 48 months.

The situation then was very different. The S&L problem involved only one sector of the economy and was just 3 percent of gross domestic product. We were not so dependent on foreign savings, and the crushing pressure on our federal budget from tax policies and entitlements was far off. This crisis is many times larger than that created by the S&Ls. We are deeply dependent on savings from other countries, and our fiscal resources are limited and shrinking.

One lesson is clear: If Congress commits money without firm principles to guide its use, the cost to taxpayers will be far higher and the economy will remain weaker longer. Before the 1989 legislation, efforts to stem losses growing inside the S&L industry lacked firm principles; as a result, they did not remove the swelling tumor of losses and in some instances actually helped it grow. [continued…]

Paulson’s folly

The deal proposed by Paulson is nothing short of outrageous. It includes no oversight of his own closed-door operations. It merely gives congressional blessing and funding to what he has already been doing, ad hoc. He plans to retain Wall Street firms as advisers to decide just how to cut deals to value and mop up Wall Street’s dubious paper. There are to be no limits on executive compensation for the firms that get relief, and no equity share for the government in exchange for this massive infusion of capital. Both Obama and McCain have opposed the provision denying any judicial review of decisions made by Paulson — a provision that evokes the Bush administration’s suspension of normal constitutional safeguards in its conduct of foreign policy and national security.

Though the administration’s line is that these securities are not trading because of a crisis of confidence, so many are ultimately backed by loans that will not be paid back that they will eventually be sold for a fraction of their face value. Firms that have marked these securities down or have otherwise gotten them off their books have valued them at around 30 cents on the dollar or less. If Paulson had proposed such a deal in his old job as CEO of Goldman Sachs — putting $700 billion of the firm’s capital at risk in exchange for junk bonds of unknown value — he would have been fired in short order. But this is merely taxpayer money. [continued…]

Big financiers start lobbying for wider aid

Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it.

Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages.

At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees.

Nobody wants to be left out of Treasury’s proposal to buy up bad assets of financial institutions. [continued…]

When atheists attack

The problem, as far as our political process is concerned, is that half the electorate revels in Palin’s lack of intellectual qualifications. When it comes to politics, there is a mad love of mediocrity in this country. “They think they’re better than you!” is the refrain that (highly competent and cynical) Republican strategists have set loose among the crowd, and the crowd has grown drunk on it once again. “Sarah Palin is an ordinary person!” Yes, all too ordinary.

We have all now witnessed apparently sentient human beings, once provoked by a reporter’s microphone, saying things like, “I’m voting for Sarah because she’s a mom. She knows what it’s like to be a mom.” Such sentiments suggest an uncanny (and, one fears, especially American) detachment from the real problems of today. The next administration must immediately confront issues like nuclear proliferation, ongoing wars in Iraq and Afghanistan (and covert wars elsewhere), global climate change, a convulsing economy, Russian belligerence, the rise of China, emerging epidemics, Islamism on a hundred fronts, a defunct United Nations, the deterioration of American schools, failures of energy, infrastructure and Internet security … the list is long, and Sarah Palin does not seem competent even to rank these items in order of importance, much less address any one of them. [continued…]

The evolution of John McCain

Despite the media feeding frenzy, we still may be asking ourselves, “Just who exactly is Sarah Palin?” Mixed in with the Davy-Crockett-meets-SuperMom vignettes — all those moose hunting, ice fishing, snowmobiling, baby-juggling, and hockey-momming moments — we’ve also learned that she doesn’t care much for her former brother-in-law and wasn’t afraid to use her office to go after his job as a state trooper; that she was for the “bridge to nowhere” before she was against it; that she’s against earmarks unless they benefit her constituents; that she can deliver a snappy wisecracking speech, thinks banning books in libraries is okay, considers herself a pit bull with lipstick, and above all else, wants to drill the ever-lovin’ daylights out of every corner of her home state (which John McCain’s handlers have somehow translated into being against Big Oil, since she insisted on a marginally bigger cut of the profits for Alaskans).

Oh, and — not that this is very important to Americans or the planet — she now thinks that global warming might possibly be human-made… sorta… though she didn’t before, despite the fact that the state she governs is on the frontline of climate change. And, of course, she’s a classic right-wing, fundamentalist Christian: against abortion — check; against same-sex marriage — check; against stem-cell research — check; favors teaching Creationism in public schools — check.

It’s that last item, her willingness to put Creationism up against the teaching of evolutionary science in the classroom on a he-says-she-says basis, that’s far more revealing of just who our new Republican vice presidential candidate is than we generally assume. It deserves the long, hard look that it hasn’t yet gotten. Most Democrats and progressives tend to think of the teaching of Creationism as a mere sidebar item on their agenda of political don’t-likes, but it’s not. Sarah Palin’s bias towards Creationism is a window into her political soul and a measure of John McCain’s hypocrisy. [continued…]

Steering the McCain campaign, a lot of old Bush hands

When Gov. Sarah Palin flew home to Alaska for the first time since being named the Republican vice presidential nominee, she brought along at least half a dozen new advisers to conduct briefings, stage-manage her first television interview and help her prepare for a critical debate next month.

And virtually every member of the team shared a common credential: years of service to President Bush.

From Mark Wallace, a Bush appointee to the United Nations, to Tucker Eskew, who ran strategic communications for the Bush White House, to Greg Jenkins, who served as the deputy assistant to Bush in his first term and was executive director of the 2004 inauguration, Palin was surrounded on the trip home by operatives deeply rooted in the Bush administration.

The clutch of Bush veterans helping to coach Palin reflects a larger reality about Sen. John McCain’s presidential campaign: Far from being a group of outsiders to the Republican Party power structure, it is now run largely by skilled operatives who learned their crafts in successive Bush campaigns and various jobs across the Bush government over the past eight years. [continued…]

Pakistani Taliban suspected in Marriott Hotel blast

The massive explosion that devastated the Marriott Hotel in Pakistan’s capital, Islamabad, Saturday – killing at least 53 people and wounding hundreds – is being seen as a warning from Islamist militants over the Pakistani government’s cooperation with the United States.

The hotel, which is popular with both diplomats and other foreigners, was struck by at least one truck filled with more than a ton of explosives in one of the country’s worst acts of terrorism. The Czech ambassador and two Americans and about a dozen foreigners were among the dead.

“This was definitely a clear signal that this is no longer a safe place for foreigners, especially Americans,” says Ayesha Siddiqa, an independent security analyst based in the city. “And it’s a message to the Pakistani government: ‘Can you handle us?’ ” [continued…]

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NEWS & VIEWS ROUNDUP: September 21

Obama: Bailout is ‘price tag, not a plan’

In his first critical remarks about the government response to the financial market crisis, Barack Obama said Sunday that the Bush administration has “offered a concept with a staggering price tag, not a plan.”

“We must work quickly in a bipartisan fashion to resolve this crisis to avert an even broader economic catastrophe,” Obama said at a rally here. “But Washington also has to recognize that economic recovery requires that we act, not just to address the crisis on Wall Street, but also the crisis on Main Street and around kitchen tables across America.”

Obama took aim at the three-page bailout plan from Treasury Secretary Henry Paulson, saying the “American people must be assured that the deal reflects the basic principles of transparency, fairness and reform.” [continued…]

On economy, Obama offers ideas, McCain blames rival

As officials in Washington raced to put together a bailout plan for the nation’s teetering financial system, Sen. John McCain hammered Sen. Barack Obama as part of the problem while Obama said any rescue should include a new stimulus package for working families.

Gyrating stock markets and the intensity of the discussions in Washington overshadowed the two presidential candidates on Friday. But the winner probably will find that his administration will be deeply affected by the results of what happens over the next few weeks.

Efforts to stabilize the financial system not only could affect the size of the federal budget deficit, but will add another large problem on top of the wars in Iraq and Afghanistan and make it more difficult for Obama and McCain to make their mark with a big domestic initiative. [continued…]

Frank says rescue plan may make companies limit executive pay

House Financial Services Committee Chairman Barney Frank said the federal government may require companies participating in a proposed financial rescue plan to agree to curtail their executives’ compensation.

“We will again be talking about compensation packages,” Frank said in a speech today before the Washington-based advocacy group AARP. “If you want to participate in this, we want you to show us that you’ve got rules that don’t allow'” the “excessive golden parachutes.”

He scoffed at suggestions such restrictions may dampen companies’ enthusiasm for the bailout.

“Are they telling us that the financial leaders of this country who clearly welcome this” bailout program, “who understand why it’s necessary and who would get some near-term benefit for their own institutions” would “boycott it if it’s going to cost them a few million of the many millions they have?” he said. “I would be hesitant to impute that degree of lack of public-spiritedness to them.” [continued…]

A bad bank rescue

With truly extraordinary speed, opinion has swung behind the radical idea that the government should commit hundreds of billions in taxpayer money to purchasing dud loans from banks that aren’t actually insolvent. As recently as a week ago, no public official had even mentioned this option. Now the Treasury, the Fed and congressional leaders are promising its enactment within days. The scheme has gone from invisibility to inevitability in the blink of an eye. This is extremely dangerous.

The plan is being marketed under false pretenses. Supporters have invoked the shining success of the Resolution Trust Corporation as justification and precedent. But the RTC, which was created in 1989 to clean up the wreckage of the savings-and-loan crisis, bears little resemblance to what is being contemplated now. The RTC collected and eventually sold off loans made by thrifts that had gone bust. The administration proposes to buy up bad loans before the lenders go bust. This difference raises several questions.

The first is whether the bailout is necessary. In 1989, there was no choice. The federal government insured the thrifts, so when they failed, the feds were left holding their loans; the RTC’s job was simply to get rid of them. But in buying bad loans before banks fail, the Bush administration would be signing up for a financial war of choice. It would spend billions of dollars on the theory that preemption will avert the mass destruction of banks. There are cheaper ways to stabilize the system. [continued…]

Truthiness stages a comeback

Not until 2004 could the 9/11 commission at last reveal the title of the intelligence briefing President Bush ignored on Aug. 6, 2001, in Crawford: “Bin Laden Determined to Strike in U.S.” No wonder John McCain called for a new “9/11 commission” to “get to the bottom” of 9/14, when the collapse of Lehman Brothers set off another kind of blood bath in Lower Manhattan. Put a slo-mo Beltway panel in charge, and Election Day will be ancient history before we get to the bottom of just how little he and the president did to defend America against a devastating new threat on their watch.

For better or worse, the candidacy of Barack Obama, a senator-come-lately, must be evaluated on his judgment, ideas and potential to lead. McCain, by contrast, has been chairman of the Senate Commerce Committee, where he claims to have overseen “every part of our economy.” He didn’t, thank heavens, but he does have a long and relevant economic record that begins with the Keating Five scandal of 1989 and extends to this campaign, where his fiscal policies bear the fingerprints of Phil Gramm and Carly Fiorina. It’s not the résumé that a presidential candidate wants to advertise as America faces its worst financial crisis since the Great Depression. That’s why the main thrust of the McCain campaign has been to cover up his history of economic malpractice. [continued…]

Hey U.S., welcome to the Third World!

Dear United States, Welcome to the Third World!

It’s not every day that a superpower makes a bid to transform itself into a Third World nation, and we here at the World Bank and the International Monetary Fund want to be among the first to welcome you to the community of states in desperate need of international economic assistance. As you spiral into a catastrophic financial meltdown, we are delighted to respond to your Treasury Department’s request that we undertake a joint stability assessment of your financial sector. In these turbulent times, we can provide services ranging from subsidized loans to expert advisors willing to perform an emergency overhaul of your entire government.

As you know, some outside intervention in your economy is overdue. Last week — even before Wall Street’s latest collapse — 13 former finance ministers convened at the University of Virginia and agreed that you must fix your “broken financial system.” Australia’s Peter Costello noted that lately you’ve been “exporting instability” in world markets, and Yashwant Sinha, former finance minister of India, concluded, “The time has come. The U.S. should accept some monitoring by the IMF.” [continued…]

Rough week, but America’s era goes on

Does Wall Street’s meltdown presage the end of the American century? Many commentators have warned that the past week’s financial mayhem signaled a major political setback for the United States as well as an economic one. “Why should the rest of the world ever again take seriously the American free-market model after this debacle?” a leading British journalist asked me last Thursday. This crisis, he argued, was to economics what the Iraq war was to U.S. foreign policy: a fatal blow to the credibility of American claims to global primacy.

Certainly, if the talk of a “unipolar moment” after the collapse of the Soviet empire was hubris, then the credit crunch has been a very American nemesis. Ten years ago, there was a strange competition in the United States to see who could be more arrogant. Neoconservatives argued that the rest of the world should hurry up and embrace the American political way or prepare to be bombed into the democratic age. But equally smug were the neoliberal economists, who argued that the rest of the world should hurry up and embrace the so-called Washington consensus of expanding trade, attacking inflation and encouraging foreign investment, or prepare to be sold short. One lot derided the political failure of the Muslim world; the other lot heaped scorn on Asian “crony capitalism,” supposedly the root cause of the 1997-98 Asian financial crisis.

The neocons got their comeuppance in Iraq, where American forces were not, after all, ultimately embraced as liberators. The neolibs got theirs this month, as a Republican Treasury Department, headed by the former CEO of Goldman Sachs, effectively nationalized first the country’s biggest mortgage lenders and then its biggest insurance company. As the presidential candidates, in rare unison, heap opprobrium on Wall Street gamblers and slumbering regulators, the stage seems set for the demise of “market fundamentalism,” in George Soros’s phrase. [continued…]

Pakistan on the brink

For the past seven years, the Bush administration studiously ignored the Afghan Taliban and Al Qaeda leadership gathering in the tribal areas of Pakistan, and now scrambles to make up for lost time. US elections are looming, and facing the humiliating prospect of Osama bin Laden outlasting a two-term presidency and even expanding his reach, President Bush has pushed the Pentagon into a do-or die-hunt for bin Laden. Whether the search for an “October surprise” for the election succeeds or not, the radical threat is now beyond easy military solution.

It’s a sign of desperation that on September 16, the Chairman of the US Joint Chiefs of Staff Admiral Mike Mullen was in Islamabad meeting the Pakistan army chief General Ashfaq Kayani, his boss Secretary of Defence Bob Gates was in Kabul, while Pakistan’s newly elected President Asif Ali Zardari was in London begging Prime Minister Gordon Brown to get the Americans off his back and deliver aid to a beleaguered country rather than angry ripostes.

Pakistan is at the centre of a gathering firestorm engulfing south and central Asia in the most volatile confrontation since 9/11. Pakistan, Afghanistan, the US and NATO all bear heavy responsibility for the crisis. President Bush had neither the inclination nor urge to do right by Afghanistan, despite pleas by President Hamid Karzai to eliminate cross-border terrorist strikes from Pakistan and effectively rebuild the country. Senior US officers serving in Afghanistan say they begged the White House and the State Department for action in 2006, but Bush was cosy with Pakistan’s former President Pervez Musharraf and Iraq occupied US attention. Meanwhile, veteran John McCain flails in effectively playing the national security card against Barack Obama because Republican policies failed to secure the homeland against future Al Qaeda attacks. [continued…]

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NEWS & VIEWS ROUNDUP: September 19

The worst is yet to come

In the deteriorating climate he sees unfolding, Gundlach said, the Standard & Poor’s 500 Index could fall another 30%, giant Citigroup could become an “AIG-sized debacle,” Morgan Stanley would merge with a banking company, Wachovia won’t be able to stand alone, default rates on even prime mortgages could soar, and European banks’ woes are just beginning.

“This is no market for old men,” said Gundlach, who also manages TCW’s flagship Total Return Bond Fund. “This is no market for old-school thinking.”

Gundlach based his assessment on a belief that housing prices still face several more years of decline, a protracted slump, he said, not seen since the Great Depression. Moreover, Gundlach said it’s possible that home prices could be sluggish until 2022.

“If it’s like the Depression experience — and it sure is shaping up that way — it could take several years. Maybe we won’t see a bottom in home prices until 2014,” he said. [continued…]

Do central banks have an exit strategy?

A year into the global financial crisis, several key central banks remain extraordinarily exposed to their countries’ shaky private financial sectors. So far, the strategy of maintaining banking systems on feeding tubes of taxpayer-guaranteed short-term credit has made sense. But eventually central banks must pull the plug. Otherwise they will end up in intensive care themselves as credit losses overwhelm their balance sheets.

The idea that the world’s largest economies are merely facing a short-term panic looks increasingly strained. Instead, it is becoming apparent that, after a period of epic profits and growth, the financial industry now needs to undergo a period of consolidation and pruning. Weak banks must be allowed to fail or merge (with ordinary depositors being paid off by government insurance funds), so that strong banks can emerge with renewed vigor. [continued…]

Wall Street’s just deserts

At the risk of speaking ill of the dead, what good was Lehman Brothers, anyway? And if Merrill Lynch was so bullish on America, why is it that, despite the torrent of foreign investment that flowed in to Lehman, Merrill and their Wall Street peers over the past half-decade, so few jobs were created in America during that period of “recovery”?

During the late, lamented Wall Street boom, America’s leading investment institutions were plenty bullish on China’s economy, on exotic financial devices built atop millions of bad loans, and, above all — judging by the unprecedented amount of wealth they showered on the Street — on themselves. The last thing our financial community was bullish on was America — that is, the America where the vast majority of Americans live and work. [continued…]

How financial madness overtook Wall Street

Fear is so pervasive today because for years the financial markets — and many borrowers — showed no fear at all. Wall Streeters didn’t have to worry about regulation, which was in disrepute, and they didn’t worry about risk, which had supposedly been magically whisked away by all sorts of spiffy nouveau products — derivatives like credit-default swaps. (More on those later.) This lack of fear became a hothouse of greed and ignorance on Wall Street — and on Main Street as well. When greed exceeds fear, trouble follows. Wall Street has always been a greedy place and every decade or so it suffers a blow resulting in a bout of hand-wringing and regret, which always seems to be quickly forgotten.

This latest go-round featured hedge-fund operators, leveraged-buyout boys (who took to calling themselves “private-equity firms”) and whiz-kid quants who devised and plugged in those new financial instruments, creating a financial Frankenstein the likes of which we had never seen. Great new fortunes were made, and with them came great new hubris. The newly minted masters of the universe even had the nerve to defend their ridiculous income tax break — much of the private-equity managers’ piece of their investors’ profits is taxed at the 15% capital-gains rate rather than at the normal top federal income tax rate of 35% — as being good for society. (“Hey, we’re creating wealth — cut us some slack.”)

Warren Buffett, the nation’s most successful investor, back in 2003 called these derivatives — which it turned out almost no one understood — “weapons of financial mass destruction.” But what did he know? He was a 70-something alarmist fuddy-duddy who had cried wolf for years. No reason to worry about wolves until you hear them howling at your door, right? [continued…]

Wall Street and Washington

What is Washington to do as the financial system collapses? Clearly, stark differences in approach as well as in public policy have already emerged. Bail-out Bear Stearns and pump up the brokerage and investment business with new lines of credit. Nationalize Fannie Mae and Freddie Mac on the backs of the taxpayer — but let Lehman drown. Tell the financial community to save itself, after which Bank of America salutes and buys Merrill Lynch. Then, the Fed gets cold feet and decides it can’t let an institution the size of the insurance giant AIG go under as well. Washington is left staring into the abyss. The old rules no longer apply.

And that’s the point. At moments of crisis since the mid-1980s, the relationship between Washington and Wall Street has changed fundamentally, at least when compared to anything that would have been recognizable in the previous century. As a result, the road ahead is dark and unknown.

During the nineteenth century, Washington was generally happy to do favors for Wall Street financiers. Railroad tycoons, who often used those railroads as vehicles of extravagant speculation, enjoyed subsidies, tax exemptions, loans, and a whole smorgasbord of financial fringe benefits supplied by pliable Congressmen and Senators (not to mention armadas of state and local officials). [continued…]

Tutu says West complicit in Palestinian suffering

South African Nobel Peace laureate Desmond Tutu on Thursday accused the West of complicity in Palestinian suffering by its silence, suggesting it did not want to criticise Israel because of the Holocaust.

Archbishop Tutu spoke after delivering a report to the United Nations about Israel’s deadly shelling of the town of Beit Hanoun in Gaza in November 2006, which he said may constitute a war crime.

He criticised the international community for failing to speak out against the suffering in Gaza, home to 1.5 million Palestinians, under an Israeli blockade. [continued…]

U.S. strike reported as Mullen consults Pakistanis

A new reported U.S. missile strike inside Pakistan on Wednesday threatened to undermine American efforts to defuse a growing confrontation with Pakistan over aggressive U.S. military actions against Islamist extremists in the country’s turbulent northwest border region.

The strike in the South Waziristan tribal area, which officials said killed six people, came as the United States’ top military officer pledged during a hastily arranged visit to Islamabad, the capital of Pakistan, that Washington would respect that nation’s sovereignty. He did not specifically rule out further raids, however.

According to a statement from the U.S. Embassy in Islamabad, Adm. Michael Mullen, chairman of the Joint Chiefs of Staff, told Pakistani officials that he “appreciated the positive role Pakistan is playing in the war on terror” and “reiterated the U.S. commitment to respect Pakistan’s sovereignty” and to develop further bilateral cooperation on critical security issues. [continued…]

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NEWS & VIEWS ROUNDUP & EDITOR’S COMMENTS: September 18

Get your class war on

There is simply no way to blame this disaster, as Republicans used to do, on labor unions or over-regulation. No, this is the conservatives’ beloved financial system doing what comes naturally. Freed from the intrusive meddling of government, just as generations of supply-siders and entrepreneurial exuberants demanded it be, the American financial establishment has proceeded to cheat and deceive and beggar itself — and us — to the edge of Armageddon. It is as though Wall Street was run by a troupe of historical re-enactors determined to stage all the classic panics of the 19th century.

By the way, this is the same system the Republicans would still apparently like to put in charge of Social Security. The same system that is minting millionaire CEOs, that is holding the line on wages, and that we will be bailing out for years.

On Monday, John McCain blamed the disaster on “greed by some based in Wall Street.” It’s a personal failing of some evil few, in other words, and presumably capitalism will start working again once we squeeze the self-interest out of it. In the weeks to come, maybe Sen. McCain will also take a bold stand against covetousness and sloth.

But the structural changes of the past 28 years that have made all this possible — the waves of deregulation, the takeover of government itself by business interests — these haven’t made too much of an impression on him. In March Mr. McCain actually called for more deregulation in response to the crisis, and at the Republican convention two weeks ago an ebullient Mitt Romney promised that Mr. McCain would take “a weed-whacker to excessive regulation.” [continued…]

Editor’s Comment — Since now’s a good time to trash capitalism and dream about a few judicious regulations that might improve the economy, here’s an idea that sure not to catch on – but I’ll toss it out anyway.

Since it’s widely accepted that a minimum wage serves the common good, why shouldn’t there (at least in publicly-owned companies) be a maximum wage?

Supposedly, placing a cap on how much executives can make would stifle talent. Talent and the desire to become obscenely wealthy apparently go hand-in-hand – or so the argument implicitly seems to go.

But Wall Street seems to have demonstrated otherwise. In fact, greed and the lust for power would seem to be countervailing forces that constrain the expression of talent.

Rewarding greed, feeds greed and greed is inherently short-sighted. On the other hand, talent — well-employed — is its own reward. Sure, it should be well “compensated” (a term that would better only be applied to the millions whose work provides no other reward), but the reward should not be allowed to metastasize into an economic perversion.

The end of American capitalism (as we knew it)

The proximate cause of the demise of AIG as a private firm was its “monoline” activities, its exposure to massive amounts of credit-risk derivatives like CDS, many of them linked to the United States real-estate sector.

The largest insurance supermarket in the world, with a balance sheet in excess of $1 trillion nationalised because it was deemed too big and too globally interconnected to fail! The fear that drove this extraordinary decision is that AIG’s failure would increase counterparty risk – actual and perceived, throughout the financial system of the US and the rest of the world alike – to such an extent that no financial institution would have been willing to extend credit to any other financial institution. Credit to households and non-financial enterprises would have been the next domino to fall – and, voilà!, financial Armageddon.

I cannot judge the likelihood of the disaster scenario, but if there ever was a case for applying the precautionary principle in economic analysis, then this is it. It was also done in the right way, by insisting on controlling public ownership, i.e. nationalisation, of the company. [continued…]

Free market lions on Wall Street are all comrades now

It is a measure of the existential nature of the crisis we are witnessing that, over just the past two weeks, that the US government has invested something like more than $US285 billion in what can only be characterised as the nationalisation of three major financial institutions.

On September 7, US taxpayers stumped up $US200 billion to re-float, and take control of, the near-terminal mortgage twins Fannie Mac and Freddie Mac.

Now they have bailed out the world’s biggest insurer.

Suddenly the great advocates of markets unfettered by government intervention are not so convinced by the old theory of moral hazard, that in free markets corporations should be allowed to fail. [continued…]

Europe and Asia see U.S. as no longer practicing what it preaches

Is the United States no longer the global beacon of unfettered, free-market capitalism?

In extending a last-minute $85 billion lifeline to AIG, the troubled insurer, Washington has not only turned away from decades of rhetoric about the virtues of the free market and the dangers of government intervention, it has also likely undercut future American efforts to promote such policies abroad.

“I fear the government has passed the point of no return,” says Ron Chernow, a leading American financial historian. “We have the irony of a free-market administration doing things that the most liberal Democratic administration would never have been doing in its wildest dreams.” [continued…]

Editor’s Comment — “It’s pure crisis management,” Chernow said. “It’s the Treasury and the Federal Reserve lurching from crisis to crisis without a clear statement on how financial failures will be handled in the future. They’re afraid to articulate such a policy. The safety net they are spreading seems to widen every day with no end in sight.”

There is of course another dimension to the policy vacuum. The POTUS is AWOL – Bush is in his bunker. The ship of state has no one at the helm. Whether his presence or absence best serves the crisis is open to debate, but the idea that this is a moment where presidential leadership is called for seems beyond question.

Wall Street’s unraveling

Wall Street as we know it is kaput. It is not just that Merrill Lynch agreed to be purchased by Bank of America or that the legendary investment bank Lehman Brothers filed for bankruptcy or that the insurance giant AIG is floundering. It is not even that these events followed the failure of the investment bank Bear Stearns or the government’s takeover of Fannie Mae and Freddie Mac, the largest mortgage lenders. What’s really happened is that Wall Street’s business model has collapsed.

Greed and fear, which routinely govern financial markets, have seeded this global crisis. Just when it will end isn’t clear. What is clear is that its origins lie in the ways that Wall Street — the giant investment houses, brokerage firms, hedge funds and “private equity” firms — has changed since 1980. Its present business model has three basic components. [continued…]

Suspected US missile strike kills 6 in Pakistan

A suspected U.S. missile strike killed at least six people Wednesday, hours after the top U.S. military officer told Pakistani leaders that America respected Pakistan’s sovereignty amid a furor over American strikes into Pakistan’s northwest. [continued…]

Washington risking war with Pakistan

As Wall Street collapsed with a bang, almost no one noticed that we’re on the brink of war with Pakistan. And, unfortunately, that’s not too much of an exaggeration. On Tuesday, the Pakistan’s military ordered its forces along the Afghan border to repulse all future American military incursions into Pakistan. The story has been subsequently downplayed, and the chairman of the joint chiefs of staff, Mike Mullen, flew to Islamabad, Pakistan’s capital, to try to ease tensions. But the fact remains that American forces have and are violating Pakistani sovereignty. [continued…]

Pakistan tribal chiefs warn US on raids

Leaders of an estimated 500,000 tribesmen who have so far remained largely neutral over the conflict in Afghanistan warned last night they were poised to support al-Qa’ida and the Taliban unless US forces retreated from their strategy of attacking targets inside Pakistan.

In a major jolt to Washington’s new policy of allowing cross-border raids in defiance of the Government in Islamabad, key tribal elders were reported to have met and warned that they were also prepared to raise an army to fight coalition forces in Afghanistan.

“If America doesn’t stop attacks in the tribal areas, we will prepare a lashkar (army) to attack US forces in Afghanistan,” Pashtun tribal chief Malik Nasrullah Khan was reported as saying in Miranshah, the largest town in North Waziristan, which has been the target of repeated US attacks in the past week. [continued…]

Timidity abroad, feudal ferocity at home

It would appear that the wimpish political leadership, in the wake of the no-nonsense statements of the army and air chiefs, has finally reconciled to the fact that the nation could not continue to accept the expanding US military intrusions into Pakistan. Of course, Prime Minister Gilani continued to show his timidity in the face of the US by declaring that we could only deal with the US diplomatically, and Zardari has yet to make a comment on the issue, but eventually the Pakistani security forces took action against US forces seeking intrusion into Pakistan and their non-lethal firing sent the proper message to the would-be invaders. Equally comforting was the fact that the Wazir tribesmen actively supported the security forces – showing once again that when the state is in consonance with its people rather than with hostile external players, the people will show their support.

This is just the beginning of a new threat Pakistani is now going to face, given the noises coming out of the US – especially from its aspiring leadership. The Republicans have now got a religious extremist as their vice-presidential candidate so God help the Muslim world if the McCain-Palin ticket is successful. After all, if Palin sees Iraq as “God’s War”, one can rest assured she will see other US invasions in a similar vein. As for Obama, he has been itching to have the US forces enter Pakistan since the time he began his campaign. So for Pakistan specifically, and for the Muslim world in general, the new US administration will offer no respite from the bigotry and extremism that dominates the American polity today.

Therefore, Pakistan has to be prepared to fight a dual terrorist threat – from the militants within our own polity and the state terrorism of the US that is now directly threatening Pakistan. That is why there has to be complete clarity and resoluteness on a rational national policy to combat these threats. [continued…]

Plans for Palin shed some light on ticket

Although she’s been a candidate for the second-highest office in the country for more than two weeks, there is still a lot Americans don’t know about Sarah Palin. But now we have a better sense of what John McCain knows about her, and how he plans to use her in the White House.

Surprising many at a rally in Golden, Colo., on Monday, Palin laid out the role she would play in a McCain administration. “John and I have worked out a plan, what I want to concentrate on and what he would like to kind of tap into me to help with,” she told the crowd. “My mission is going to be energy security and government reform. And — another thing near and dear to my heart — it’s going to be helping families who have special needs and children with special needs.”

Lost in the breaking news of the financial crisis and the aftermath of Hurricane Ike, the announcement made an important implicit statement about how active Palin would be if McCain were to win the White House. [continued…]

GOP group behind negative Obama poll

A Republican group is taking responsibility for a poll that has roiled the Jewish community by asking sharply negative questions about Senator Barack Obama.

The Republican Jewish Coalition, which is launching a campaign against Obama on behalf of Senator John McCain, sponsored the poll to “understand why Barack Obama continues to have a problem among Jewish voters,” the group’s executive director, Matt Brooks, told Politico.

The poll asked voters their response to negative statements about Obama, including reported praise for him from a leader of the Palestinian terror group Hamas and a friendship early in his career with a pro-Palestinian university professor. Some Jewish Democrats who received the poll – including a New Republic writer who lives in Michigan – were outraged by the poll, describing it in interviews as “ugly” and disturbing. A group that supports Obama, the Jewish Council for Education and Research even staged a protest outside the Manhattan call center from which the calls originated Tuesday. [continued…]

Another country

In the mid-1990s, polling that my firm conducted showed that more than 60 percent of voters were more concerned that “the federal government will try to do too much, not do it well and raise taxes.” This year, 60 percent chose the survey’s other option, expressing greater worry that “the federal government will not do enough to help ordinary people deal with the problems they face.” Americans who used to be wary of government involvement are now calling for it.

We have documented a similar, if less drastic, shift in public views of morality. Just three years ago, a majority of those we surveyed said that “there are absolute standards of right and wrong that apply to everyone in almost every situation.” Today, however, respondents by a narrow margin say they believe that “everyone has to decide for themselves what is right and wrong in particular situations.”

Surveys by the Pew Research Center reveal a concomitant change in foreign policy values. Well before 9/11, in the mid-1980s, Americans supported the concept of peace through military strength by a 14-point margin. By 2007, despite the intervening attack on the United States, that margin fell to just two points. [continued…]

Counties with minorities in the majority grow in rural America

A quarter of the people living in rural America make their homes in counties where the majority of the population is made up of racial/ethnic minorities — Hispanic, African American or Native American. And more than half of the rural and exurban population in the United States lives in counties with minority populations that will likely become majorities by mid-century, according to an analysis of recent U.S. Census reports.

Rural America continues to grow more diverse as minorities, particularly Hispanics, have moved out of large urban areas and into smaller cities and rural communities. From July 2006, to July 2007, for example, St. Joseph, Missouri, an hour north of Kansas City, had a 21 percent increase in its Hispanic population. That was the largest increase in the country. [continued…]

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NEWS & VIEWS ROUNDUP: September 17

Politicians lie, numbers don’t

If you’re wondering why a formerly honorable man like John McCain would build his presidential campaign around issues that are simultaneously beside-the-point, trivial, and dishonest (sex education for kindergartners, lipstick on pigs), the numbers presented here may help to solve that mystery. Since the conventions ended, McCain has mired the presidential race in dishonest trivia because he doesn’t want it to focus on what voters say is the most important issue this year: the economy.

There is no secret about any of this. The figures below are all from the annual Economic Report of the President, and the analysis is primitive. Nevertheless, what these numbers show almost beyond doubt is that Democrats are better at virtually every economic task that is important to Republicans. [continued…]

The power of political misinformation

Have you seen the photo of Republican vice presidential nominee Sarah Palin brandishing a rifle while wearing a U.S. flag bikini? Have you read the e-mail saying Democratic presidential nominee Barack Obama was sworn into the U.S. Senate with his hand placed on the Koran? Both are fabricated — and are among the hottest pieces of misinformation in circulation.

As the presidential campaign heats up, intense efforts are underway to debunk rumors and misinformation. Nearly all these efforts rest on the assumption that good information is the antidote to misinformation.

But a series of new experiments show that misinformation can exercise a ghostly influence on people’s minds after it has been debunked — even among people who recognize it as misinformation. In some cases, correcting misinformation serves to increase the power of bad information. [continued…]

The fruit of hypocrisy

Houses of cards, chickens coming home to roost – pick your cliche. The new low in the financial crisis, which has prompted comparisons with the 1929 Wall Street crash, is the fruit of a pattern of dishonesty on the part of financial institutions, and incompetence on the part of policymakers.

We had become accustomed to the hypocrisy. The banks reject any suggestion they should face regulation, rebuff any move towards anti-trust measures – yet when trouble strikes, all of a sudden they demand state intervention: they must be bailed out; they are too big, too important to be allowed to fail.

Eventually, however, we were always going to learn how big the safety net was. And a sign of the limits of the US Federal Reserve and treasury’s willingness to rescue comes with the collapse of the investment bank Lehman Brothers, one of the most famous Wall Street names. [continued…]

Why experience matters

Philosophical debates arise at the oddest times, and in the heat of this election season, one is now rising in Republican ranks. The narrow question is this: Is Sarah Palin qualified to be vice president? Most conservatives say yes, on the grounds that something that feels so good could not possibly be wrong. But a few commentators, like George Will, Charles Krauthammer, David Frum and Ross Douthat demur, suggesting in different ways that she is unready.

The issue starts with an evaluation of Palin, but does not end there. This argument also is over what qualities the country needs in a leader and what are the ultimate sources of wisdom. [continued…]

The American war moves to Pakistan

The decision to make public a presidential order of last July authorizing American strikes inside Pakistan without seeking the approval of the Pakistani government ends a long debate within, and on the periphery of, the Bush administration. Senator Barack Obama, aware of this ongoing debate during his own long battle with Hillary Clinton, tried to outflank her by supporting a policy of U.S. strikes into Pakistan. Senator John McCain and Vice Presidential candidate Sarah Palin have now echoed this view and so it has become, by consensus, official U.S. policy.

Its effects on Pakistan could be catastrophic, creating a severe crisis within the army and in the country at large. The overwhelming majority of Pakistanis are opposed to the U.S. presence in the region, viewing it as the most serious threat to peace.

Why, then, has the U.S. decided to destabilize a crucial ally? Within Pakistan, some analysts argue that this is a carefully coordinated move to weaken the Pakistani state yet further by creating a crisis that extends way beyond the badlands on the frontier with Afghanistan. Its ultimate aim, they claim, would be the extraction of the Pakistani military’s nuclear fangs. If this were the case, it would imply that Washington was indeed determined to break up the Pakistani state, since the country would very simply not survive a disaster on that scale.

In my view, however, the expansion of the war relates far more to the Bush administration’s disastrous occupation in Afghanistan. It is hardly a secret that the regime of President Hamid Karzai is becoming more isolated with each passing day, as Taliban guerrillas move ever closer to Kabul. [continued…]

Tariq Ali’s brief message for Barack Obama:

Top Pentagon official in surprise visit to Pakistan

The chairman of the Joint Chiefs of Staff, America’s top military official, made a hastily arranged visit to Pakistan on Tuesday for talks about a recent incursion by American commandos based in neighboring Afghanistan.

The visit by the chairman, Adm. Mike Mullen, came as an uproar continued to grow in Pakistan about the incursion on Sept. 3, which severely strained relations between the United States and Pakistan, its top Muslim ally in the war against terrorism. The visit also coincided with conflicting accounts about a possible second American raid on Monday, as well as a warning by the Pakistan military that it would shoot at any foreign forces who crossed the border.

A Pakistani military spokesman, Maj. Gen. Athar Abbas, said the army reserved the right to use force to defend the country and its people, but he said there was “no change in policy.” [continued…]

The West begins to doubt Georgian leader

Last week German Foreign Minister Frank-Walter Steinmeier publicly called for clarification on the question of who is to blame for the Caucasus war. “We do need to know more about who bears what portion of the responsibility for the military escalation and to what extent,” Steinmeier told a meeting of Germany’s more than 200 ambassadors in Berlin. The European Union, he said, must now “define our relations with the parties to the conflict for the medium and long term,” and that the time has come to have concrete information.

Much depends on the clarification of this question of blame. After this war, the West must ask itself whether it truly wants to accept a country like Georgia into NATO, especially if this means having to intervene militarily in the Caucasus if a similar conflict arises. And what sort of partnership should it seek in the future with Russia, which, for the first time, has now become as insistent as the United States on protecting its spheres of influence?

The attempt to reconstruct the five-day war in August continues to revolve around one key question: Which side was the first to launch military strikes? Information coming from NATO and the Organization for Security and Cooperation in Europe (OSCE) now paints a different picture than the one that prevailed during the first days of the battle for the South Ossetian capital Tskhinvali — and is fueling the doubts of Western politicians. [continued…]

Big-bang report blasts Iran

One week ahead of the annual gathering of world leaders at the United Nations in New York, the International Atomic Energy Agency (IAEA) has issued a new report that while confirming the agency’s full-scope inspection and verification of Iran’s nuclear activities, discovering no evidence of any military diversion, is permeated with “serious concerns” and “outstanding questions”.

These questions relate to certain “alleged studies” and the overall effect could be a shot in the arm for the flagging “Iran Six” multilateral diplomacy on Iran involving the United States, Britain, France, Russia and China plus Germany. This could lead to even more sanctions on Iran, or worse, an Israeli or American strike against Iran’s nuclear infrastructure.

The IAEA describes a collection of weaponization designs and documents that suggest Iran has tried to develop a nuclear warhead as “alleged studies” and wants Tehran to identify the factually corrects parts of the documents and those it considers fabricated. [continued…]

Five ex-secretaries of state urge talks with Iran

Five former secretaries of state, gathering to give their best advice to the next president, agreed Monday that the United States should talk to Iran.

The wide-ranging, 90-minute session in a packed auditorium at The George Washington University, produced exceptional unity among Madeleine Albright, Colin Powell, Warren Christopher, Henry A. Kissinger and James A. Baker III.

But they didn’t agree on who should move into the Oval Office next January. [continued…]

Iraq’s Nouri Maliki breaking free of U.S.

Once dependent on American support to keep his job, Prime Minister Nouri Maliki has consolidated power and is asserting his independence, sharply reducing Washington’s influence over the future of Iraq.

Iraq’s police and army now operate virtually on their own, and with Washington’s mandate from the United Nations to provide security here expiring in less than four months, Maliki is insisting on imposing severe limits on the long-term U.S. military role, including the withdrawal of American forces from all cities by June.

America’s eroded leverage has left Iran, with its burgeoning trade and political ties, in a better position to affect Iraqi government policies. [continued…]

Arrests of Sunni tribal leaders risk giving al-Qaida a way back, says Iraqi vice-president

The Iraqi government is in danger of pushing Sunni tribal leaders back into the arms of al-Qaida and re-igniting major violence across Iraq if it fails to take more Sunnis into the security forces, the country’s leading Sunni politician has warned.

Many tribal leaders who opposed the US occupation switched sides on promises of jobs in the previously Shia-dominated army and police. In a sign of the success of the so-called Awakening movement (al Sahwa), which is also known as the “Sons of Iraq”, the US recently handed Anbar province – once a centre of the insurgency – back to Iraqi control.

But in Diyala province, north of the capital, as well as in Baghdad suburbs, the Iraqi army and police have arrested dozens of al-Sahwa leaders in recent weeks because of their previous anti-American and anti-government activity. The government is dragging its feet on a pledge to take a fifth of the estimated 100,000 al-Sahwa members into the security forces. [continued…]

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NEWS & VIEWS ROUNDUP: September 16

More radical than Bush

John Goodman is a conservative economist who thinks all the fuss over people without health insurance is just hooey. As Goodman explained to a reporter from The Dallas Morning News last week, everybody can get medical care from an emergency room, so why not just stop tallying the uninsured altogether? “Voil à,” Goodman quipped. “Problem solved.” Like many far-right policy experts, Goodman had said such things before. But, unlike many far-right policy experts, Goodman isn’t just some random wonk. As the Morning News noted, Goodman had helped craft McCain’s health care plan. In other words, he is a McCain adviser.

Or, at least, he used to be. When Goodman’s quote got the attention of reporters, a McCain spokesman issued a terse statement: “John Goodman is not an adviser to this campaign.” When that position became untenable–it turns out Goodman had identified himself as an adviser not only to the Morning News but also in a recent Wall Street Journal op-ed, to which the McCain campaign never objected–the official story changed. Yes, Goodman had offered advice to McCain. But it was on an unpaid, voluntary basis, and McCain had since made clear that Goodman’s input was not necessary. “John McCain could not disagree more strongly with Mr. Goodman,” a spokesman said. “John McCain believes that addressing the problem of the nation’s uninsured is one of our most pressing national priorities.” (Goodman has been traveling and unavailable for comment.)

It wasn’t the first time this campaign season that McCain distanced himself from a conservative adviser over controversial statements. Former Texas senator Phil Gramm, as a top economic adviser, had far more influence than Goodman. Fortune magazine actually called him “McCain’s econ brain.” But, in June, Gramm told a Washington Times reporter that the economy was stronger than most Americans realized. The real problem, he suggested, was a “mental recession”–that “we have sort of become a nation of whiners.” Again, Gramm was offering a refrain common among conservatives, who think the press constantly dwells on bad economic news. But did McCain believe it, too? This time, McCain himself issued a denial. “Phil Gramm does not speak for me,” he said. “America is in great difficulty. And we are experiencing enormous challenges.” Soon Gramm was told his services, too, were no longer required. [continued…]

McCain blasts Wall street failure, neglects to mention his adviser helped cause it

As the news broke of the Lehman Brothers meltdown and the rest of the latest financial crisis, John McCain, speaking at a campaign rally in Florida on Monday, angrily declared,

We will never put America in this position again. We will clean up Wall Street. This is a failure.

And in a statement released by his campaign, McCain called for greater “transparency and accountability” on Wall Street.

If McCain wants to hold someone accountable for the failure in transparency and accountability that led to the current calamity, he should turn to his good friend and adviser, Phil Gramm.

As Mother Jones reported in June, eight years ago, Gramm, then a Republican senator chairing the Senate banking committee, slipped a 262-page bill into a gargantuan, must-pass spending measure. Gramm’s legislation, written with the help of financial industry lobbyists, essentially removed newfangled financial products called swaps from any regulation. Credit default swaps are basically insurance policies that cover the losses on investments, and they have been at the heart of the subprime meltdown because they have enabled large financial institutions to turn risky loans into risky securities that could be packaged and sold to other institutions. [continued…]

Financial Russian roulette

Will the U.S. financial system collapse today, or maybe over the next few days? I don’t think so — but I’m nowhere near certain. You see, Lehman Brothers, a major investment bank, is apparently about to go under. And nobody knows what will happen next.

To understand the problem, you need to know that the old world of banking, in which institutions housed in big marble buildings accepted deposits and lent the money out to long-term clients, has largely vanished, replaced by what is widely called the “shadow banking system.” Depository banks, the guys in the marble buildings, now play only a minor role in channeling funds from savers to borrowers; most of the business of finance is carried out through complex deals arranged by “nondepository” institutions, institutions like the late lamented Bear Stearns — and Lehman.

The new system was supposed to do a better job of spreading and reducing risk. But in the aftermath of the housing bust and the resulting mortgage crisis, it seems apparent that risk wasn’t so much reduced as hidden: all too many investors had no idea how exposed they were. [continued…]

On the stump, Obama moves past hope

The poetic defenses of hope, the playful jokes about being a distant relative of Vice President Cheney and the glancing attention to policy have been replaced by an emphasis on economic fears — an issue-by-issue argument of why the American dream is slipping away and the Republican ticket has no plan to rescue it. He furrows his brow, wags his finger and broadcasts exasperation at the idea that a 26-year veteran of Washington is co-opting his mantra of change.

The Obama campaign has even replaced the wistful slogan, “Change We Can Believe In,” with the more imperative “Change We Need.” [continued…]

Outrage at McCain’s “lies” is a total loser strategy

Mark Halperin’s three pieces of advice for Obama seem sound. (They are 1. Ignore Palin; 2. Get in McCain’s head the way McCain’s getting in Obama’s; and 3. Refocus on the economy in an accessible way.) … To which I’d add:

4. It’s a good week for point 3!

5. The current lib blog-MSM-campaign tack–getting outraged by McCain’s “lies”–is a total loser strategy. Why? [continued…]

Even before VP nomination, Palin’s e-mail use questioned

Moments after Gov. Sarah Palin’s first speech as Republican John McCain’s running mate, she sat with her kids backstage, thumbing one of the two BlackBerrys that are always with her. You can see them in photographs from that day on the campaign blog of one of McCain’s daughters.

The tech-savvy governor has one of the devices (which allow users to read and send e-mails) for state business and another for personal matters, but those worlds intertwine.

Palin routinely uses a private Yahoo e-mail account to conduct state business. Others in the governor’s office sometimes use personal e-mail accounts, too.

The practice raises questions about backdoor secrecy in an administration that vowed during the 2006 campaign to be “open and transparent.” [continued…]

Afghanistan is in its worst shape since 2001, European diplomat says

One of the most experienced Western envoys in Afghanistan said Sunday that conditions there had become the worst since 2001. He urged a concerted American and foreign response, even before a new American administration took office, to avoid “a very hot winter for all of us.”

The envoy, Francesc Vendrell, a Spanish diplomat with eight years’ experience in Afghanistan, especially criticized the growing number of civilian deaths in attacks by American and international forces.

Those deaths have created “a great deal of antipathy” and widened the distance between the Afghan government and citizens, he said here at an annual review of global strategy organized by the London-based International Institute for Strategic Studies. Mr. Vendrell recently stepped down as the European Union envoy in Kabul. [continued…]

Confusion over Afghan border clash

Confusion swirled over a possible incursion by United States forces into Pakistani territory in South Waziristan on Monday.

Local residents and a Pakistani government official said two American helicopters were repulsed when Pakistani soldiers fired at them, but the Pakistani and United States military publicly denied any such incident, and a Pakistani intelligence official said that an American helicopter had mistakenly crossed the border briefly, leading Pakistani ground forces to fired into the air.

The Pakistani official, a senior official who deals with the tribal areas and who spoke on condition of anonymity, said that American troops had tried to land in South Waziristan at a town called Angoor Adda, in a mountainous region with thick forest on the border with Afghanistan. [continued…]

Iraq: Al-Qaida intensifies its stranglehold in the world’s most dangerous city

It is the most dangerous city in the world’s most dangerous country, a sad, half-empty relic whose rich and middle classes have long since fled. To reach it, one has to travel incognito in convoys of rundown small cars whose drivers conceal their walkie-talkies and weapons under the seats. Their bodyguards sometimes switch to dented taxis with shattered windshields as an extra disguise.

Mosul – the de facto capital of northern Iraq – should have been as safe as Basra and Baghdad if a massive military offensive by Iraqi and US forces, which was launched in May, had succeeded. But most al-Qaida insurgents slipped away before it began – and they are now slipping back. “They use car bombs and roadside bombs, and target areas which used to be very safe. Now they are assassinating people with pistols that have silencers. The offensive was not as successful as expected,” said Doraid Kashmoula, the provincial governor.

In June, the Americans trumpeted the killing of Abu Khalaf, who they described as al-Qaida’s local kingpin, and the “emir of Mosul”. “Killing this man didn’t help. When the security forces kill one emir, they have 10 others to replace him,” the governor added. [continued…]

Israel outraged after settler rampage in West Bank

Israel expressed outrage on Sunday after a mob of Jewish settlers rampaged through a Palestinian village in the West Bank to avenge the stabbing of a nine-year-old boy in a nearby settlement.

Israeli Prime Minister Ehud Olmert condemned Saturday’s settler attack on the village, during which four Palestinians were shot and wounded, and vowed to halt settler “pogroms” in the occupied territory.

“This phenomenon of taking the law into their own hands and of brutal and violent attacks is intolerable and will receive the strictest and most severe treatment,” Olmert told reporters ahead of a weekly cabinet meeting. [continued…]

Danger of Jewish terror

The violent revenge attack staged by dozens of settlers from Yitzhar at the nearby Palestinian village Asira al-Kabaliya is the tip of the iceberg: The iceberg of Jewish terror whose edges are exposed to the Israeli public on occasion.

In the week before this attack, we saw two more cases attesting to this reality. Civilian Administration representatives who sought to confiscate construction equipment at the illegal outpost Yair were attacked because they arrived “on short notice” according to the settlers. Later that day, dozens of settlers attacked a nearby IDF base, clashed with the soldiers there to guard them, and set a dog on a company commander. The deputy regiment commander broke his finger in the attack.

Yet despite the incident in Asira al-Kabaliya, while the police and army shirk their responsibility for maintaining law and order, the prime minister and defense minister made statements such as “we won’t let pogroms take place in Israel.” The wild riot by settlers during Shabbat was condemned by many, including the Yesha Council. However, there are those who can make do with a condemnation and those whose job it is to do something. The defense minister and prime minister are responsible for enforcing the law in the West Bank. However, so far they have condemned, but did nothing. [continued…]

As peace talks sputter, Israelis and Palestinians eye Plan B

Over the past two decades of Israeli-Palestinian negotiations, deadlines for peace agreements have come and gone with precious few treaties.

Now, amid low expectations for an agreement before the expiration of the Bush administration’s target for an accord by the end of 2008, voices are growing on both sides advocating abandoning talks on Palestinian statehood if they miss the mark yet again.

“We certainly need to think outside the box,” says Hanan Ashrawi, a Palestinian legislator and longtime supporter of peace talks. “The business-as-usual approach hasn’t worked.” [continued…]

The Army’s totally serious mind-control project

Soldiers barking orders at each other is so 20th Century. That’s why the U.S. Army has just awarded a $4 million contract to begin developing “thought helmets” that would harness silent brain waves for secure communication among troops. Ultimately, the Army hopes the project will “lead to direct mental control of military systems by thought alone.”

If this sounds insane, it would have been as recently as a few years ago. But improvements in computing power and a better understanding of how the brain works have scientists busy hunting for the distinctive neural fingerprints that flash through a brain when a person is talking to himself. The Army’s initial goal is to capture those brain waves with incredibly sophisticated software that then translates the waves into audible radio messages for other troops in the field. “It’d be radio without a microphone, ” says Dr. Elmar Schmeisser, the Army neuroscientist overseeing the program. “Because soldiers are already trained to talk in clean, clear and formulaic ways, it would be a very small step to have them think that way.”

B-movie buffs may recall that Clint Eastwood used similar “brain-computer interface” technology in 1982’s Firefox, named for the Soviet fighter plane whose weapons were controlled by the pilot’s thoughts. (Clint was sent to steal the plane, natch.) Yet it’s not as far-fetched as you might think: video gamers are eagerly awaiting a crude commercial version of brain wave technology — a $299 headset from San Francisco-based Emotiv Systems — in summer 2009. [continued…]

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NEWS & VIEWS ROUNDUP & EDITOR’S COMMENT: September 14

How does President Palin sound?

For first time in modern history, a presidential race is actually going to be decided by the vice presidential pick.

Thanks to Sarah Palin, this is no longer a contest between Barack Obama and John McCain – it’s between Brother Barack and Sistah Sarah.

Rock star vs. rock star. Inexperienced vs. inexperienced. Newcomer vs. newcomer. Change vs. change. [continued…]

Editor’s Comment — Willie Brown isn’t profound, but depth isn’t what’s called for here. Instead of being cry-babies who complain about McCain’s lack of integrity, and instead of hysterically endlessly pointing out Palin’s lack of experience (as though we all just got religion and decided that the candidate’s level of experience is the thing), Democrats need to focus on McCain by focusing on Palin. What’s that mean?

Sarah Palin is de facto the top of the Republican ticket. It’s a contest between Palin and Obama. Obama doesn’t need to pull Palin down; he needs to hold her up to the point where McCain has to reclaim his own candidacy.

Indeed, if Obama wants to shake things up some more, he could try this for a game changer:

In acknowledging that McCain’s choice of running mate has so radically shaken up the race, let’s have two additional debates: McCain against Biden and Palin against Obama.

Believe me, that would take guts on Obama’s part because I honestly don’t know how he’d fair.

But the main point is to get voters to earnestly focus on the real choice at hand:

Do we want to see President Obama in the Oval Office or President Palin?

The Sixty-Day War

At 37, with a 225-pound frame, a Kojak-bald head, wraparound shades, and a Bluetooth headset invariably jacked into his ear, [Steve] Schmidt cuts an imposing figure. His affect, which alternates between steely, monotonal stoicism and fierce combativeness, is cultivated, designed to be intimidating. His cardinal professional virtues are relentlessness, focus, and a capacity for nearly infinite repetition. The GOP consultant Alex Castellanos says Schmidt is more purely pragmatic than Rove, less ideological, and hence even more lethal—“the perfect political killing machine.” His former boss accordingly nicknamed him The Bullet. His current one ritually refers to him as Sergeant Schmidt.

The bond between Schmidt and McCain was formed a year ago, in the wake of the near immolation of the McCain campaign in a bonfire of chaos, indiscipline, and mismanagement. Schmidt and his family lived in California, where he’d helped engineer Arnold Schwarzenegger’s landslide reelection in 2006. Even as McCain’s campaign faltered, he stuck loyally by his side. “He earned his stripes in the foxhole,” recalls McCain’s former media adviser Mark McKinnon. “He talked to McCain when no one was returning his phone calls.”

But it wasn’t until June that Schmidt assumed near-total control over McCain-land, after confronting the candidate over what he perceived as an incipient crisis similar to the one in 2007. The lack of focus. The internecine strife. The sloppy, listing message. Schmidt informed McCain bluntly that if he didn’t make significant changes in his operation, he was going to lose. [continued…]

The Palin-whatshisname ticket

Karl Rove for once gave the Democrats a real tip rather than a bum steer when he wrote last week that if Obama wants to win, “he needs to remember he’s running against John McCain for president,” not Palin for vice president. Obama should keep stepping up the blitz on McCain’s flip-flops, confusion, ignorance and blurriness on major issues (from education to an exit date from Iraq), rather than her gaffes and résumé. If he focuses voters on the 2008 McCain, the Palin question will take care of itself.

Obama’s one break last week was the McCain camp’s indication that it’s likely to minimize its candidate’s solo appearances by joining him at the hip with Palin. There’s a political price to be paid for this blatant admission that he needs her to draw crowds. McCain’s conspicuous subservience to his younger running mate’s hard-right ideology and his dependence on her electioneering energy raise the question of who has the power in this relationship and who is in charge. A strong and independent woman or the older ward who would be bobbing in a golf cart without her? The more voters see that McCain will be the figurehead for a Palin presidency, the more they are likely to demand stepped-up vetting of the rigidly scripted heir apparent. [continued…]

With White House push, U.S. arms sales jump

The Bush administration is pushing through a broad array of foreign weapons deals as it seeks to rearm Iraq and Afghanistan, contain North Korea and Iran, and solidify ties with onetime Russian allies.

From tanks, helicopters and fighter jets to missiles, remotely piloted aircraft and even warships, the Department of Defense has agreed so far this fiscal year to sell or transfer more than $32 billion in weapons and other military equipment to foreign governments, compared with $12 billion in 2005.

The trend, which started in 2006, is most pronounced in the Middle East, but it reaches into northern Africa, Asia, Latin America, Europe and even Canada, through dozens of deals that senior Bush administration officials say they are confident will both tighten military alliances and combat terrorism.

“This is not about being gunrunners,” said Bruce S. Lemkin, the Air Force deputy under secretary who is helping to coordinate many of the biggest sales. “This is about building a more secure world.”

The surging American arms sales reflect the foreign policy tides, including the wars in Iraq and Afghanistan and the broader campaign against international terrorism, that have dominated the Bush administration. Deliveries on orders now being placed will continue for several years, perhaps as one of President Bush’s most lasting legacies. [continued…]

Shadow of Guantanamo follows freed inmates back to their homes

They call them the Bandi Guantánamo, the Guantánamo returnees, and their welcome home is far from warm. All across Afghanistan in recent months, scores of men have been coming back from a long journey halfway around the world. About 100 have been released from Guantánamo Bay by United States authorities in the last 12 months as Washington, under mounting pressure from governments around the world, attempts to moderate the damage done to America’s image by the Cuba-based detention centre. A third are Afghan and more are due to return in the coming weeks.

After more than five years in detention thousands of miles away, often traumatised, often angry, or just broken and poor, the Bandi Guantánamo try to build new lives, with limited success. Most claim innocence. Others are unashamed of their acts of violence. Interviewed in Kabul last month, Mohammed Umr described how he had trained in terrorist techniques, met Osama bin Laden and fought at the battle of Tora Bora in 2001. Released 10 weeks ago, he spoke of how angry the presence of his former jailers in his homeland made him. ‘If they have come here to help us, why do they kill civilians and why can’t they even provide electricity to Kabul seven years after invading?’, asked the 30-year-old former footballer, arrested in Pakistan during the closing days of the war of 2001. [continued…]

Iraq: Violence is down – but not because of America’s ‘surge’

The perception in the US that the tide has turned in Iraq is in part because of a change in the attitude of the foreign, largely American, media. The war in Iraq has now been going on for five years, longer than the First World War, and the world is bored with it. US television networks maintain expensive bureaux in Baghdad, but little of what they produce gets on the air. When it does, viewers turn off. US newspaper bureaux are being cut in size. The result of all this is that the American voter hears less of violence in Iraq and can suppose that America’s military adventure there is finally coming good.

An important reason for this optimism is the fall in the number of American soldiers killed. (The 30,000 US soldiers wounded in Iraq are seldom mentioned.) This has happened because the war that was being waged against the American occupation by the Sunni community, the 20 per cent of Iraqis who were in control under Saddam Hussein, has largely ended. It did so because the Sunni were being defeated, not so much by the US army as by the Shia government and the Shia militias.

Sunni insurgent leaders who were nationalists or Baathists realised that they had too many enemies. Not only was al-Qa’ida trying to take over from traditional tribal leaders, it was also killing Sunni who took minor jobs with the government. The Awakening, or al-Sahwa, movement of Sunni fighters was first formed in Anbar province at the end of 2006, but it was allied to the US, not the Iraqi government. This is why, despite pressure from General Petraeus, the government is so determined not to give the 99,000 al-Sahwa members significant jobs in the security forces when it takes control of – and supposedly begins to pay – these Sunni militiamen from 1 October. The Shia government may be prepared to accommodate the Sunni, but not at the cost of diluting Shia dominance.

If McCain wins the presidential election in November, his lack of understanding of what is happening in Iraq could ignite a fresh conflict. In so far as the surge has achieved military success, it is because it implicitly recognises America’s political defeat in Iraq. Whatever the reason for President George Bush’s decision to invade Iraq and overthrow Saddam Hussein in 2003, it was not to place the Shia Islamic parties in power and increase the influence of Iran in the country; yet that is exactly what has happened. [continued…]

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NEWS & VIEWS ROUNDUP & EDITOR’S COMMENT: September 12

Tiptoeing through the mud

[Obama’s] task is to remind Americans that the stakes in this election are far higher than the matter of who said what and when about Palin. He isn’t doing that.

Yes, Democrats are a gloomy lot, inclined to see catastrophe around every corner and the other side as tougher, meaner and more manipulative. Imbibing this potion of false pride about Democratic virtue mixed with paranoia about the Republicans’ dark genius only leads to defeat followed by glorious disillusionment.

Nonetheless, it’s clear that Obama has lost control of this campaign. And he will not seize back the initiative with the sometimes halting, conversational and sadly reluctant sound bites he has been producing. The excitement Obama created at the beginning of the year has vanished, perhaps because his campaign (and, yes, many columnists) bought into the McCain campaign’s demonization of the big rallies. Absurdly, McCain is now contesting the terrain of change — and doing so at celebrity rallies of his own.

Editor’s Comment — The reason Obama has lost control of this campaign is that he’s succumbed to his fear of losing. The last time he showed a flash of boldness was when he responded to the Jeremiah Wright fiasco by giving his speech on race. Ever since then, it’s been caution all the way.

When McCain looked like he was destined for irrelevance he took a risk and picked Palin. His gamble paid off. Now it’s time for Obama to show he’s not being crippled by fear.

First off, he should rebuke his own supporters for treating Sarah Palin as though she’s a threat to the universe. 50% of the attention she’s getting is driven by the hysteria of those who’ve become obsessed about stirring a pot of scorn, venom, and fear, that merely serves to elevate her importance.

Next, Obama needs to dump the word “change”. It was flimsy to start with; now it’s an albatros around his neck. It’s time to focus on fear — as in shining a glaring light on well-founded fears that the Republicans want to play down — and to turn the Obama rhetorical flair into some fire and brimstone passion.

Is America a nation of frogs that’s going to let itself get boiled alive, or can we look at the economic carnage of the last decade and decide that there’s no time left if we want to avert a disaster?

Instead of whining about the tone of the campaign and its lack of substance — a response that merely reinforces the image of Democrats as cry-babies — Obama needs to take command and show that when it comes to change he’s not afraid of changing his own campaign.

Obama’s woes have nothing to do with ‘lipstick’

… if I were an Obama partisan I would be worried that his mistakes have a common thread – pride.

Obama seems to want to do things on his own, and on his own terms. It’s understandable. Obama has his own crowd – from Chicago, from Harvard, and from a new cadre of wealthy, Ivy-educated movers and shakers.

“He’s an arrogant S.O.B.,” one of the latter told me today. “He wants to do it his way, and his way alone.” But politics doesn’t work that way. And has Obama should know, or is about to find out, that everyone needs a little help.

Bill Clinton’s advice to Barack Obama

There they were in Harlem Thursday, the 42nd president and the Democrat who hopes to be the 44th, for a two-hour lunch hour chat at Bill Clinton’s office.

It is not at all clear that Barack Obama particularly wants Clinton’s advice about how to win the presidency—after all, he kept the former president at a cool distance, with just occasional phone calls, for months—but many Democrats believe it is increasingly clear that he could use it.

Bush said to give orders allowing raids in Pakistan

President Bush secretly approved orders in July that for the first time allow American Special Operations forces to carry out ground assaults inside Pakistan without the prior approval of the Pakistani government, according to senior American officials.

The classified orders signal a watershed for the Bush administration after nearly seven years of trying to work with Pakistan to combat the Taliban and Al Qaeda, and after months of high-level stalemate about how to challenge the militants’ increasingly secure base in Pakistan’s tribal areas.

American officials say that they will notify Pakistan when they conduct limited ground attacks like the Special Operations raid last Wednesday in a Pakistani village near the Afghanistan border, but that they will not ask for its permission.

Iraq, U.S.-funded militia at loggerheads

A meeting Thursday aimed at sowing faith between Iraq’s government and leaders of U.S.-funded paramilitary forces instead highlighted distrust between the sides, three weeks before Iraq takes control of the armed groups.

Leaders of the so-called Sons of Iraq disputed Iraqi plans to absorb only 20% of the fighters into the Iraqi military and police, and they expressed doubts that their members would be protected when the U.S. military turned over responsibility for the units to Iraqi officials.

Does killing Afghan civilians keep us safe?

This week, as we remember the nearly 3,000 American citizens who died in the rubble of the World Trade Center and the Pentagon or in a remote field in Pennsylvania on Sept. 11, 2001, we also should think about the civilians who are still dying in Afghanistan.

Consider, for instance, the recent American airstrikes on Azizabad, a village in western Afghanistan, on Aug. 22. The United Nations, Afghan government officials and independent witnesses all say that the United States killed about 90 civilians in these strikes, most of them women and children. Cellphone videos of the scene show motionless children lying under checkered shawls and veiled women shrieking alongside them.

According to a report by Carlotta Gall of the New York Times, dozens of freshly dug graves are scattered in the village’s cemeteries, some so small they could fit only children. The U.S. initially said that many fewer civilians had died, but it has now promised a thorough investigation.

It’s a grisly story but hardly an isolated one. The month before the Azizabad incident, Afghan officials say that American airstrikes near Kabul killed 27 civilians at a wedding party — including the bride. In another incident, on March 4, 2007, nine civilians died when their mud home north of Kabul was hit by two 2,000-pound bombs dropped by U.S. aircraft. American officials said they were aiming for two insurgents seen entering the house after firing a rocket at a U.S. military outpost, according to Human Rights Watch.

An anatomy of collateral damage in the Bush era

In a little noted passage in her bestselling book, The Dark Side, Jane Mayer offers us a vision, just post-9/11, of the value of one. In October 2001, shaken by a nerve-gas false alarm at the White House, Vice President Dick Cheney, reports Mayer, went underground. He literally embunkered himself in “a secure, undisclosed location,” which she describes as “one of several Cold War-era nuclear-hardened subterranean bunkers built during the Truman and Eisenhower administrations, the nearest of which were located hundreds of feet below bedrock…” That bunker would be dubbed, perhaps only half-sardonically, “the Commander in Chief’s Suite.”

Oh, and in that period, if Cheney had to be in transit, “he was chauffeured in an armored motorcade that varied its route to foil possible attackers.” In the backseat of his car (just in case), adds Mayer, “rested a duffel bag stocked with a gas mask and a biochemical survival suit.” And lest danger rear its head, “rarely did he travel without a medical doctor in tow.”

When it came to leadership in troubled times, this wasn’t exactly a profile in courage. Perhaps it was closer to a profile in paranoia, or simply in fear, but whatever else it might have been, it was also a strange kind of statement of self-worth. Has any wartime president — forget the vice-president — including Abraham Lincoln when southern armies might have marched on Washington, or Franklin D. Roosevelt at the height of World War II, ever been so bizarrely overprotected in the nation’s capital? Has any administration ever placed such value on the preservation of the life of a single official?

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NEWS & VIEWS ROUNDUP & EDITOR’S COMMENTS: September 11

Sarah Palin’s myth of America

Sarah Palin has arrived in our midst with the force of a rocket-propelled grenade. She has boosted John McCain’s candidacy and overwhelmed the presidential process in a way that no vice-presidential pick has since Thomas Eagleton did the precise opposite — sinking his sponsor, George McGovern, in 1972. Obviously, something beyond politics is happening here. We don’t really know Palin as a politician yet, whether she is wise or foolhardy, substantive or empty. Our fascination with her — and it is a nonpartisan phenomenon — is driven by something more primal. The Palin surge illuminates the mythic power of the Republican Party’s message since the advent of Ronald Reagan.

To start with the obvious, she’s attractive. Her husband (“And two decades and five children later, he’s still my guy…”) is a hunk. They have a gorgeous family, made more touching and credible by the challenges their children face. Her voice is more distinctive than her looks: that flat, northern twang that screams, I’m just like you! Actually, the real message is: I’m just like you want to be, a brilliantly spectacular…average American. The Palins win elections and snowmobile races in a state that represents the last, lingering hint of that most basic Huckleberry Finn fantasy — lighting out for the territories. She quoted Westbrook Pegler, the F.D.R.-era conservative columnist, in her acceptance speech: “We grow good people in our small towns…” And then added, “I grew up with those people. They’re the ones who do some of the hardest work in America, who grow our food and run our factories and fight our wars. They love their country in good times and bad, and they’re always proud of America.”

Editor’s Comment — Those of us who initially scoffed at McCain’s VP choice might eventually be vindicated, but right now it looks like we were dead wrong. Indeed, the near hysterical reaction against Sarah Palin may well be doing more to reinforce than undermine her political strength.

This looks like a classic case of underestimating the opposition. There are two ways of responding to the mistake: work hard to prove that it wasn’t a mistake, or try to see what can be learned.

Joe Klein, from his perch in Manhattan, wants us to see this as yet another case in which the Republicans are succeeding in hoodwinking average Americans, yet in pressing his argument he pedals a few myths of his own.

We haven’t been a nation of small towns for nearly a century. It is the suburbanites and city dwellers who do the fighting and hourly-wage work now, and the corporations who grow our food.

Well, when it comes to dying in Iraq, researchers have run the numbers and Klein is dead wrong. Tom Engelhardt quoted demographer William O’Hare from the University of New Hampshire whose study [PDF] quantified the disproportionately high mortality of rural soldiers sent to Iraq:

We know that soldiers from rural America are dying at higher rates than those from urban America, strikingly higher, 60% higher. We know, from other research, that the rural young join the military at higher rates than those from metropolitan areas. The dearth of opportunity in rural areas simply leaves more young people there with fewer alternatives to the military.

America might no longer be a nation of small towns but even now, a quarter of Americans live in the rural America that Klein seems to think is a thing of the past. And even if the small towns have dwindled in size, the small-town mentality is clearly alive and well.

The McCain campaign has made huge strides in closing the so-called enthusiasm gap — but it’s not just because of Sarah Palin. Obama’s genuflections to the establishment had already helped make the gap much narrower to cross. The challenge Obama now faces is in crossing the ordinariness gap.

Doing this doesn’t demand finding his own icon of average America. (With hindsight, Jim Webb looks like he would have been a much more effective running mate than either Biden or Clinton because, unlike them, he melded working class roots with the appearance of being a Washington outsider. Moreover, he would have done far more to make Obama look bold rather than cautious.) But Obama and the campaign desperately need to find ways of showing that they understand an America that now feels it is looked down upon.

The way to respond to the Palin challenge is not to focus on what’s wrong with her; it’s to show that you respect the source of her appeal. The white working-class America that is weary of Obama might be better served by a Democratic administration, but what it wants first of all is respect.

Speak your piece: Sarah Palin and frog bait

The biggest catch I ever saw was a 15-pound catfish. Cousin Boojer Tweedy of Knickerbocker, Texas, pulled it out of the creek one summer about midnight. “Any fish’ll bite if you got good bait….” This lunker took a live frog.

Which brings us to Sarah Palin. Just as Barack Obama seemed to have worked off his April blunder about helpless rural Americans who “cling” to guns and religion, the Alaska governor leaps into the campaign.

“I was just your average hockey mom, and signed up for the PTA” Palin told the Republican convention, “because I wanted to make my kids’ public education better. When I ran for city council, I didn’t need focus groups and voter profiles because I knew those voters, and knew their families, too. Before I became governor of the great state of Alaska, I was mayor of my hometown.
And since our opponents in this presidential election seem to look down on that experience, let me explain to them what the job involves….”

Wooee, the Democratic catfish are hungry! …

From the bleacher seats here at Daily Yonder, Palin’s small-town swagger and the wrath it’s incurred have been fascinating to watch (as seeing a catfish skinned alive can be). James Joyner of outside the beltway admits he’s “rather baffled that the ‘small town mayor’ meme is catching on so readily.” I’m not. Palin’s rural upbringing and experience as mayor of Wasilla, Alaska, have inspired something rare: a chance to look inside the many public prejudices – reverential and damning, both — about rural America.

For that’s really what Palin’s candidacy offers: live bait. It’s a way for some to suck on their fantasy of rural goodness, and for others to gnaw their rural bigotry down to the bone.

Obama can’t win against Palin

Of all the advantages Gov. Sarah Palin has brought to the GOP ticket, the most important may be that she has gotten into Barack Obama’s head. How else to explain Sen. Obama’s decision to go one-on-one against “Sarah Barracuda,” captain of the Wasilla High state basketball champs?

It’s a matchup he’ll lose. If Mr. Obama wants to win, he needs to remember he’s running against John McCain for president, not Mrs. Palin for vice president.

Editor’s Comment — The Obama campaign shouldn’t have to hear this from Karl Rove to know it’s true. But here’s an idea for a gutsy ad that would toss the Palin appeal back in McCain’s face. Here’s a first draft as I make this up on the fly:

Does John McCain need to start watching his back?

Until just a few days ago he was having trouble pulling out a crowd.

Now the crowds are roaring, but they’re not shouting his name — (audio clip: “Sarah, Sarah, Sarah…”).

Are John McCain’s newly enthusiastic supporters dreaming about seeing him enter the oval office or are dreaming about his replacement?

Big Bang machine starts. World doesn’t end.

As the biggest scientific experiment in history got started on Wednesday morning, Andy McSmith in The Independent wrote: “It was Oscar Wilde who declared that ‘all art is useless’ – which was not a condemnation, but a proclamation. If you want to create something of beauty, he meant, do not be distracted by people who ask what it is for. On that basis, whatever emerges from the £4.4bn experiment that begins today in the vast complex built at the Cern – The European Organisation for Nuclear Research – laboratory near Geneva, where infinitesimally small particles travelling at mind-boggling speeds will crash together with so much force that they almost replicate the Big Bang, could be called the most expensive work of art in human history.

“Mathematicians and physicists have a sense of the aesthetic, as surely as poets and dramatists. In Einstein’s theory of relativity or Kepler’s laws of planetary motion, they see works of great simplicity and beauty. What they long for now is a simple and beautiful ‘theory of everything’ that will explain the whole of physics, from the movement of galaxies to the behaviour of subatomic particles, because there is a hole in theoretical physics which causes more distress to the 6,500 scientists working on Cern’s Large Hadron Collider (LHC) than the scary speculation about the black hole that some people think will swallow up earth if their experiment goes wrong.”

Drop in violence in Iraq attributed to secret assassination programme

“The dramatic drop in violence in Iraq is due in large part to a secret programme the US military has used to kill terrorists, according to a new book by Pulitzer Prize-winning journalist Bob Woodward,” CNN reported.

“The programme – which Woodward compares to the World War II era Manhattan Project that developed the atomic bomb – must remain secret for now or it would ‘get people killed,’ Woodward said Monday on CNN’s Larry King Live.

” ‘It is a wonderful example of American ingenuity solving a problem in war, as we often have,’ Woodward said.

All counterinsurgency is local

June was the deadliest month for the U.S. military in Afghanistan since the invasion in October 2001. July became the second straight month in which casualties exceeded those in Iraq, where four times as many U.S. troops are on the ground. More Americans have been killed in Afghanistan since the invasion began than in the first nine years of the Vietnam War, from 1956 to 1964.

As in Vietnam, the U.S. has never lost a tactical engagement in Afghanistan, and this tactical success is still often conflated with strategic progress. Yet the Taliban insurgency grows more intense and gains more popular traction each year. More and more, the American effort in Afghanistan resembles the Vietnam War—with its emphasis on body counts and air strikes, its cross-border sanctuaries, and its daily tactical victories that never affected the slow and eventually decisive erosion of rural support for the counterinsurgency.

As the Russian ambassador to Afghanistan, Zamir Kabulov, noted in a blunt interview with the BBC in May, the current military engagement is also beginning to look like the Soviets’ decade-long Afghan adventure, which ended ignominiously in 1989. That intervention, like the current one, was based on a strategy of administering and securing Afghanistan from urban centers such as Kabul and the provincial capitals. The Soviets held all the provincial capitals, just as we do, and sought to exert influence from there. The mujahideen stoked insurgency in the rural areas of the Pashtun south and east, just as the Taliban do now.

The Petraeus doctrine

For a military accustomed to quick, easy victories, the trials and tribulations of the Iraq War have come as a rude awakening. To its credit, the officer corps has responded not with excuses but with introspection. One result, especially evident within the U.S. Army, has been the beginning of a Great Debate of sorts.

Anyone who cares about the Army’s health should take considerable encouragement from this intellectual ferment. Yet anyone who cares about future U.S. national-security strategy should view the debate with considerable concern: it threatens to encroach upon matters that civilian policy makers, not soldiers, should decide.

What makes this debate noteworthy is not only its substance, but its character—the who and the how.

Right at the edge

Late in the afternoon of June 10, during a firefight with Taliban militants along the Afghan-Pakistani border, American soldiers called in airstrikes to beat back the attack. The firefight was taking place right on the border itself, known in military jargon as the “zero line.” Afghanistan was on one side, and the remote Pakistani region known as the Federally Administered Tribal Areas, or FATA, was on the other. The stretch of border was guarded by three Pakistani military posts.

The American bombers did the job, and then some. By the time the fighting ended, the Taliban militants had slipped away, the American unit was safe and 11 Pakistani border guards lay dead. The airstrikes on the Pakistani positions sparked a diplomatic row between the two allies: Pakistan called the incident “unprovoked and cowardly”; American officials regretted what they called a tragic mistake. But even after a joint inquiry by the United States, Pakistan and Afghanistan, it remained unclear why American soldiers had reached the point of calling in airstrikes on soldiers from Pakistan, a critical ally in the war in Afghanistan and the campaign against terrorism.

The mystery, at least part of it, was solved in July by four residents of Suran Dara, a Pakistani village a few hundred yards from the site of the fight. According to two of these villagers, whom I interviewed together with a local reporter, the Americans started calling in airstrikes on the Pakistanis after the latter started shooting at the Americans.

Reduced dominance is predicted for U.S.

An intelligence forecast being prepared for the next president on future global risks envisions a steady decline in U.S. dominance in the coming decades, as the world is reshaped by globalization, battered by climate change, and destabilized by regional upheavals over shortages of food, water and energy.

The report, previewed in a speech by Thomas Fingar, the U.S. intelligence community’s top analyst, also concludes that the one key area of continued U.S. superiority — military power — will “be the least significant” asset in the increasingly competitive world of the future, because “nobody is going to attack us with massive conventional force.”

Fingar’s remarks last week were based on a partially completed “Global Trends 2025” report that assesses how international events could affect the United States in the next 15 to 17 years. Speaking at a conference of intelligence professionals in Orlando, Fingar gave an overview of key findings that he said will be presented to the next occupant of the White House early in the new year.

In hunt for bin Laden, a new approach

Frustrated by repeated dead ends in the search for Osama bin Laden, U.S. and Pakistani officials said they are questioning long-held assumptions about their strategy and are shifting tactics to intensify the use of the unmanned but lethal Predator drone spy plane in the mountains of western Pakistan.

The number of Hellfire missile attacks by Predators in Pakistan has more than tripled, with 11 strikes reported by Pakistani officials this year, compared with three in 2007. The attacks are part of a renewed effort to cripple al-Qaeda’s central command that began early last year and has picked up speed as President Bush’s term in office winds down, according to U.S. and Pakistani officials involved in the operations.

There has been no confirmed trace of bin Laden since he narrowly escaped from the CIA and the U.S. military after the battle near Tora Bora, Afghanistan, in December 2001, according to U.S., Pakistani and European officials. They said they are now concentrating on a short list of other al-Qaeda leaders who have been sighted more recently, in hopes that their footprints could lead to bin Laden.

Secrets of the Taliban’s success

Kandahar has traditionally been the city of Afghan royalty, warlords and the center of resistance movements against the British and Russia. It was also the spiritual heartland of the student militia, the Taliban, that emerged in the 1990s to combat the vicious civil war that was tearing the country apart.

The Taliban took over Kabul in 1996 and opened the country to al-Qaeda’s training camps, while Osama bin Laden settled in Kandahar. After the September 11, 2001, attacks on the United States and the US-led invasion of Afghanistan a few months later, the Taliban agreed to lose their government but, in the tradition of the Afghan code of honor of Pashtunwali, they refused to hand over their most wanted guests to the Americans.

Seven years after 9/11, the resurgent Taliban movement is exclusively led by Kandahari clans, which still boast of their sacrifices for the Islamic brotherhood in the name of Pashtunwali, but they maintain that the Taliban have never harbored – and never will – an aggressive agenda towards the world community.

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NEWS & VIEWS ROUNDUP & EDITOR’S COMMENTS: September 9

Obama to Palin: ‘Don’t mock the Constitution’

Sen. Barack Obama delivered an impassioned defense of the Constitution and the rights of terrorism suspects tonight, striking back at one of the biggest applause lines in Republican vice presidential nominee Sarah Palin’s speech to the GOP convention.

It was in St. Paul last week that Palin drew raucous cheers when she delivered this put-down of Obama: “Al-Qaeda terrorists still plot to inflict catastrophic harm on America and he’s worried that someone won’t read them their rights.”

Obama had a few problems with that.

“First of all, you don’t even get to read them their rights until you catch ’em,” Obama said here, drawing laughs from 1,500 supporters in a high school gymnasium. “They should spend more time trying to catch Osama bin Laden and we can worry about the next steps later.”

If the plotters of the Sept. 11 attacks are in the government’s sights, Obama went on, they should be targeted and killed.

“My position has always been clear: If you’ve got a terrorist, take him out,” Obama said. “Anybody who was involved in 9/11, take ’em out.”

But Obama, who taught constitutional law at the University of Chicago for more than a decade, said captured suspects deserve to file writs of habeus corpus.

Calling it “the foundation of Anglo-American law,” he said the principle “says very simply: If the government grabs you, then you have the right to at least ask, ‘Why was I grabbed?’ And say, ‘Maybe you’ve got the wrong person.'”

Editor’s Comment — This is a contest to decide who on January 20, 2009, gets to pledge that he will “preserve, protect and defend the Constitution of the United States.”

For the last seven years the Republicans (with an unconscionable degree of acquiescence on the part of Democrats) have been chipping away at the foundations of American democracy. It’s time for Obama — empowered with his experience as a constitutional scholar — to run with this theme. Defending the constitution is the most solemn pledge that a president makes. Political consultants might say that this is too high-minded to have popular appeal, but however ignorant much of the electorate might be, the idea that America and its constitution are indivisible, resonates even among those who can’t explain what that means.

America can’t afford to have another president who’s soft on the Constitution.

What’s the difference between Palin and Muslim fundamentalists? Lipstick

John McCain announced that he was running for president to confront the “transcendent challenge” of the 21st century, “radical Islamic extremism,” contrasting it with “stability, tolerance and democracy.” But the values of his handpicked running mate, Sarah Palin, more resemble those of Muslim fundamentalists than they do those of the Founding Fathers. On censorship, the teaching of creationism in schools, reproductive rights, attributing government policy to God’s will and climate change, Palin agrees with Hamas and Saudi Arabia rather than supporting tolerance and democratic precepts. What is the difference between Palin and a Muslim fundamentalist? Lipstick.

McCain pledged to work for peace based on “the transformative ideals on which we were founded.” Tolerance and democracy require freedom of speech and the press, but while mayor of Wasilla, Alaska, Palin inquired of the local librarian how to go about banning books that some of her constituents thought contained inappropriate language. She tried to fire the librarian for defying her. Book banning is common to fundamentalisms around the world, and the mind-set Palin displayed did not differ from that of the Hamas minister of education in the Palestinian government who banned a book of Palestinian folk tales for its sexually explicit language. In contrast, Thomas Jefferson wrote, “Our liberty cannot be guarded but by the freedom of the press, nor that be limited without danger of losing it.”

On Nov. 4, Remember 9/11

The next president must do one thing, and one thing only, if he is to be judged a success: He must prevent Al Qaeda, or a Qaeda imitator, from gaining control of a nuclear device and detonating it in America. Everything else — Fannie Mae, health care reform, energy independence, the budget shortfall in Wasilla, Alaska — is commentary. The nuclear destruction of Lower Manhattan, or downtown Washington, would cause the deaths of thousands, or hundreds of thousands; a catastrophic depression; the reversal of globalization; a permanent climate of fear in the West; and the comprehensive repudiation of America’s culture of civil liberties.

Editor’s Comment — When Jeffrey Goldberg, or anyone else, gravely pronounces that preventing a nuclear attack on America is a supreme responsibility for the next president, it’s hard to dispute — but I will.

Why?

Would the global significance of a terrorist nuclear attack be any less if the target was Paris, or Istanbul, or Tel Aviv, or New Delhi?

America could take no comfort if it happens not to be the target and the fact that the attack could (and in fact is more likely) to occur elsewhere merely underlines that a global threat of this kind demands an international response. In this — as in confronting global warming — success or failure hinges on the ability to develop and sustain international cooperation. “United we stand” has to be more than a patriotic rallying cry; it has to be a recognition and expression of collective interests.

9/11 rumors that become conventional wisdom

Seven years later, it remains conventional wisdom here that Osama bin Laden and Al Qaeda could not have been solely responsible for the attacks of Sept. 11, 2001, and that the United States and Israel had to have been involved in their planning, if not their execution, too.

This is not the conclusion of a scientific survey, but it is what routinely comes up in conversations around the region — in a shopping mall in Dubai, in a park in Algiers, in a cafe in Riyadh and all over Cairo.

“Look, I don’t believe what your governments and press say. It just can’t be true,” said Ahmed Issab, 26, a Syrian engineer who lives and works in the United Arab Emirates. “Why would they tell the truth? I think the U.S. organized this so that they had an excuse to invade Iraq for the oil.”

It is easy for Americans to dismiss such thinking as bizarre. But that would miss a point that people in this part of the world think Western leaders, especially in Washington, need to understand: That such ideas persist represents the first failure in the fight against terrorism — the inability to convince people here that the United States is, indeed, waging a campaign against terrorism, not a crusade against Muslims.

Pulling the curtain on Palin

John McCain’s campaign acknowledged this weekend that Sarah Palin is unprepared to be vice president or president of the United States.

Of course, McCain’s people said no such thing. But their actions told you all you needed to know.

McCain, Barack Obama and Joe Biden all subjected themselves to tough questioning on the regular Sunday news programs. Palin was the only no-show. And it’s not just the Sunday interviews. She has not opened herself to any serious questioning since McCain picked her to be next in line for the presidency.

Record contradicts Palin’s ‘bridge’ claims

The Bridge to Nowhere argument isn’t going much of anywhere.

Despite significant evidence to the contrary, the McCain campaign continues to assert that Alaska Gov. Sarah Palin told the federal government “thanks but no thanks” to the now-famous bridge to an island in her home state.

The McCain campaign released a television advertisement Monday morning titled “Original Mavericks.” The narrator of the 30-second spot boasts about the pair: “He fights pork-barrel spending. She stopped the Bridge to Nowhere.”

Gov. Palin, who John McCain named as his running mate less than two weeks ago, quickly adopted a stump line bragging about her opposition to the pork-barrel project Sen. McCain routinely decries.

But Gov. Palin’s claim comes with a serious caveat. She endorsed the multimillion dollar project during her gubernatorial race in 2006. And while she did take part in stopping the project after it became a national scandal, she did not return the federal money. She just allocated it elsewhere.

Palin billed state for nights spent at home

Alaska Gov. Sarah Palin has billed taxpayers for 312 nights spent in her own home during her first 19 months in office, charging a “per diem” allowance intended to cover meals and incidental expenses while traveling on state business.

The governor also has charged the state for travel expenses to take her children on official out-of-town missions. And her husband, Todd, has billed the state for expenses and a daily allowance for trips he makes on official business for his wife.

Palin, who earns $125,000 a year, claimed and received $16,951 as her allowance, which officials say was permitted because her official “duty station” is Juneau, according to an analysis of her travel documents by The Washington Post.

Olmert indicted as deputy is accused of war crimes

The Israeli Attorney General has been urged to launch a criminal investigation into whether Shaul Mofaz, a leading prime ministerial candidate, ordered “war crimes” to be committed when he was the military’s chief of staff.

A leading Israeli law professor has written to justice officials, calling for the investigation into claims – highlighted by The Independent last month – that during a briefing to army officers in May 2001, after the start of the second Palestinian uprising, Mr Mofaz ordered a daily “quota” of Palestinian deaths.

Last night, Israeli police recommended to prosecutors that the Prime Minister, Ehud Olmert, be indicted in a corruption investigation. With Mr Olmert committed to resigning after his Kadima party holds a leadership vote a week today, the recommendation will have no immediate impact on his tenure and does not guarantee an indictment by the Attorney General.

U.S. rules out unilateral steps against Russia

The Bush administration, after considerable internal debate, has decided not to take direct punitive action against Russia for its conflict with Georgia, concluding that it has little leverage if it acts unilaterally and that it would be better off pressing for a chorus of international criticism to be led by Europe.

In recent interviews, senior administration officials said the White House had concluded that American punishments like economic sanctions or blocking Russia from world trade groups would only backfire, deepening Russia’s intransigence and allowing the Kremlin to narrow the regional and global implications of its invasion of Georgia to an old-fashioned Washington-Moscow dispute.

Even as they vowed to work with allies, administration officials conceded that they wished the European Union had been willing to take firmer action than issuing tepid statements criticizing Russia’s conduct. But the officials said the benefits of remaining part of a united front made it prudent for the United States to accept the softer approach advocated by Italy and Germany, among other allies.

Caution over confrontation

In the month since the Russian invasion of Georgia, the Bush administration has crafted a policy that should please some liberal critics and upset conservative hard-liners — a low-key approach that tries to help the Georgians recover without backing Russia further into a corner.

The Georgia strategy is premised on working jointly with European allies, and on avoiding the sort of unilateral U.S. military threats that would scare them off. It is also tempered by the administration’s earlier mistakes in dealing with mercurial Georgian President Mikheil Saakashvili, which set the stage for his unwise Aug. 8 attack on South Ossetia that provoked the punishing Russian reaction.

It’s a policy, in short, that distills some of the foreign-policy lessons learned at the shank end of the Bush presidency. And its contours, interestingly enough, arguably are closer to the thrust of Barack Obama’s initial, cautious reaction to the Georgia crisis than to the more confrontational approach of John McCain.

U.S. and Iraqi officials try to reassure citizen patrols about transfer

Gathered in the domed hall of a palace built by Saddam Hussein, Awakening Council leaders in the Adhamiya neighborhood met with Iraqi and American military officers on Monday to learn what the future holds for them once the Sunni-dominated citizen patrols begin reporting to the Iraqi government on Oct. 1.

About 75 leaders and rank-and-file members from the western side of the neighborhood listened and murmured as Brig. Gen. Tarek Abdul Hameed explained what would happen when responsibility for paying and directing 54,000 Awakening patrol members in and around Baghdad was transferred from the Americans to the Iraqi government.

The meeting, the Iraqi and American officers said, was called in part to quash rumors that there would be mass arrests of Awakening members and that American forces would no longer be involved with the patrols.

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NEWS & VIEWS ROUNDUP: September 8

Afghanistan: civilian deaths from airstrikes on the rise

Civilian deaths in Afghanistan from US and NATO airstrikes nearly tripled from 2006 to 2007, with recent deadly airstrikes exacerbating the problem and fuelling a public backlash, Human Rights Watch said in a new report released today. The report also condemns the Taliban’s use of “human shields” in violation of the laws of war.

Though operational changes advocated by Human Rights Watch have reduced the rate of civilian casualties since they spiked in July 2007, continuing tragedies, such as the July 6, 2008 strike on a wedding party and the August 22, 2008 bombing in Azizabad, have greatly undermined local support for the efforts of international forces providing security in Afghanistan.

The 43-page report, “‘Troops in Contact’: Airstrikes and Civilian Deaths in Afghanistan,” analyzes the use of airstrikes by US and NATO forces and resulting civilian casualties, particularly when used to make up for the lack of ground troops and during emergency situations. Human Rights Watch found few civilian deaths resulted from planned airstrikes, while almost all deaths occurred in unplanned airstrikes.

Evidence points to civilian toll in Afghan raid

To the villagers here, there is no doubt what happened in an American airstrike on Aug. 22: more than 90 civilians, the majority of them women and children, were killed.

The Afghan government, human rights and intelligence officials, independent witnesses and a United Nations investigation back up their account, pointing to dozens of freshly dug graves, lists of the dead, and cellphone videos and other images showing bodies of women and children laid out in the village mosque.

Cellphone images seen by this reporter show at least 11 dead children, some apparently with blast and concussion injuries, among some 30 to 40 bodies laid out in the village mosque. Ten days after the airstrikes, villagers dug up the last victim from the rubble, a baby just a few months old. Their shock and grief is still palpable.

For two weeks, the United States military has insisted that only 5 to 7 civilians, and 30 to 35 militants, were killed in what it says was a successful operation against the Taliban: a Special Operations ground mission backed up by American air support. But on Sunday, Gen. David D. McKiernan, the senior American commander in Afghanistan, requested that a general be sent from Central Command to review the American military investigation in light of “emerging evidence.”

Is the Maliki government jumping off the American ship of state?

…with significantly lower levels of violence in Iraq extending into a second year, Washington insiders have begun crediting themselves with — finally — a winning strategy (a claim neatly punctured by Juan Cole, among other Middle East experts). In this context, actual Bush policy aims have, once again, emerged more clearly, but so has the administration’s striking and continual failure to implement them — thanks to the Iraqis.

In the past few weeks, the Iraqi government of Prime Minister Nouri al-Maliki has made it all too clear that, in the long run, it has little inclination to remain “aligned with U.S. interests” in the region. In fact, we may be witnessing a classic “tipping point,” a moment when Washington’s efforts to dominate the Middle East are definitively deep-sixed.

The client state that the Bush administration has spent so many years and hundreds of billions of dollars creating, nurturing, and defending has shown increasing disloyalty and lack of gratitude, as well as an ever stronger urge to go its own way. Under the pressure of Iraqi politics, Maliki has moved strongly in the direction of a nationalist position on two key issues: the continuing American occupation of the country and the future of Iraqi oil. In the process, he has sought to distance his government from the Bush administration and to establish congenial relationships, if not an outright alliance, with Washington’s international adversaries, including the Bush administration’s mortal enemy, Iran.

U.S. teams weaken insurgency in Iraq

By the time he was captured last month, the man known among Iraqi insurgents as “the Tiger” had lost much of his bite. Abu Uthman, whose fierce attacks against U.S. troops and Iraqi civilians in Fallujah had earned him a top spot on Iraq’s most-wanted list, had been reduced to shuttling between hideouts in a Baghdad slum, hiding by day for fear neighbors might recognize him.

In the end, a former associate-turned-informant showed local authorities the house where Uthman was sleeping. On Aug. 11, U.S. troops kicked in the door and handcuffed him. They quietly ended the career of a man Pentagon officials describe as the kidnapper of American journalist Jill Carroll and also as one of a dwindling number of veteran commanders of the Sunni insurgent group known as al-Qaeda in Iraq (AQI).

Uthman, whose given name is Salim Abdallah Ashur al-Shujayri, was one of the bigger fish to be landed recently in a novel anti-insurgent operation that plays out nightly in Baghdad and throughout much of Iraq. U.S. intelligence and defense officials credit the operation and its unusual tactics — involving small, hybrid teams of special forces and intelligence officers — with the capture of hundreds of suspected terrorists and their supporters in recent months.

White House set to put aside U.S.-Russia nuclear agreement

The White House plans to formally pull from congressional consideration an agreement with Russia for civilian nuclear cooperation, perhaps as soon as today, Bush administration sources said over the weekend.

The move would be the latest effort by the administration to convey its displeasure with Russia over its military actions in Georgia in the past month. Last week, the White House proposed a $1 billion package of humanitarian and economic assistance to help Georgia recover from its war with Russia over the breakaway region of South Ossetia.

Days later, Vice President Cheney traveled to Tbilisi, Georgia’s capital, to pledge U.S. support and, at a conference in Italy on Saturday, blasted Moscow over its invasion of Georgian territory, saying, “Russia’s actions are an affront to civilized standards and are completely unacceptable.”

India given go-ahead on nuclear trade despite proliferation fears

India celebrated its admission to the world’s nuclear club yesterday after a decision by the 45 nations that legally supply atomic fuel and technology to lift a decades-old ban on nuclear trade with the country.

The Nuclear Suppliers’ Group (NSG) agreed on Saturday to waive its restrictions on India, even though it has not signed the Nuclear NonProliferation Treaty or the Comprehensive Test Ban Treaty, and tested nuclear weapons as recently as 1998.

The NSG was set up after India shocked the world by testing its first atomic device in 1974 and has prevented Delhi ever since from importing the nuclear material it needs to help to meet rocketing domestic energy demand.

India and the United States had lobbied hard for the waiver, which they need to activate a bilateral nuclear deal, struck in 2005, that allows India to import American nuclear supplies and is the cornerstone of a new strategic relationship between them.

McCain’s convenient untruth

When it comes to fighting wars, John McCain stands up and calls for sacrifice. “We never hide from history; we make history,” he declared in his convention speech. But when it comes to taxes, McCain is unwilling to demand even a teensy bit of sacrifice. In a McCain administration, Americans would not have to surrender a dime more of their money to a cause larger than themselves.

Why this bipolar attitude toward sacrifice? Start with the answer that McCain himself provides. “My tax cuts will create jobs. His tax increases will eliminate them,” he said at the convention, offering one of the speech’s few policy contrasts between Obama’s platform and his own. In other words, McCain is not calling for tax sacrifice because he believes it would be counterproductive. On taxes, he is saying, you can selfishly avoid sacrifice — and serve the public good.

This, unfortunately, is a convenient untruth. Tax hikes taken to an extreme can indeed backfire, harming growth and job creation. But it’s a stretch to assert that Barack Obama’s tax plan would do that. And it’s downright scandalous to pretend that the economy can be strengthened in anything other than the short run by unaffordable tax cuts.

Can you say ‘sexist’?

I never thought I would live long enough to see the day when the Republican presidential candidate would cite membership in the PTA as evidence of executive experience, when the far right would laud the full-time working mothers of newborns, when social conservatives would stare down teenage pregnancy and replace their pursed-lip accusations of promiscuity with hosannas about choosing life.

The Republican Party has undergone a surprising metamorphosis since Sarah Palin was chosen as its vice presidential candidate. In Palin I recognize a fellow traveler, a woman whose life would have been impossible just a few decades ago. If she had been born 30 years earlier, the PTA would likely have been her last stop, not her first. Her political ascendancy is a direct result of the women’s movement, which has changed the world utterly for women of all persuasions. It is therefore notable that Palin has found her home in a party, and in a wing of that party, that for many years has reviled, repelled and sought to roll back the very changes that led her to the Alaska Statehouse.

Sarah Palin: George Bush in lipstick?

A core Democratic talking point against Sarah Palin is beginning to take shape: she is, critics say, the female counterpart of the current President of the United States, not only in terms of policy and social conservatism, but even personality.

“She’s not a pitbull in lipstick,” said one female Democratic operative, referencing a line from Palin’s convention speech. “She’s George Bush in lipstick.”

From her hard-right stances on abortion and contraception and the deep affection she engenders from conservative evangelical leaders, to her involvement in a possible “abuse of power” scandal in Alaska and even her charming demeanor, some see in Palin the second coming of the 43rd president.

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NEWS & VIEWS ROUNDUP & EDITOR’S COMMENTS: September 7

Obama takes first direct shot at Palin

Barack Obama made his first direct criticism of Republican vice presidential nominee Sarah Palin on Saturday, saying she pretends to oppose spending earmarks when she actually has embraced them.

Speaking to 800 people at the Wabash Valley Fairgrounds in Terre Haute, Ind., the Democratic presidential nominee ridiculed John McCain and his running mate, the Alaska governor, for describing themselves as agents of change at this week’s GOP convention.

“Don’t be fooled,” Obama told the crowd surrounding him in a large barn. “John McCain’s party, with the help of John McCain, has been in charge” for nearly eight years.

“I know the governor of Alaska has been saying she’s change, and that’s great,” Obama said. “She’s a skillful politician. But, you know, when you’ve been taking all these earmarks when it’s convenient, and then suddenly you’re the champion anti-earmark person, that’s not change. Come on! I mean, words mean something, you can’t just make stuff up.”

Palin and McCain’s shotgun marriage

Given the actuarial odds that could make Palin our 45th president, it would be helpful to know who this mystery woman actually is. Meanwhile, two eternal axioms of our politics remain in place. Americans vote for the top of the ticket, not the bottom. And in judging the top of the ticket, voters look first at the candidates’ maiden executive decision, their selection of running mates. Whatever we do and don’t know about Palin’s character at this point, there is no ambiguity in what her ascent tells us about McCain’s character and potential presidency.

He wanted to choose the pro-abortion-rights Joe Lieberman as his vice president. If he were still a true maverick, he would have done so. But instead he chose partisanship and politics over country. “God only made one John McCain, and he is his own man,” said the shafted Lieberman in his own tedious convention speech last week. What a pathetic dupe. McCain is now the man of James Dobson and Tony Perkins. The “no surrender” warrior surrendered to the agents of intolerance not just by dumping his pal for Palin but by moving so far to the right on abortion that even Cindy McCain seemed unaware of his radical shift when being interviewed by Katie Couric last week.

That ideological sellout, unfortunately, was not the worst leadership trait the last-minute vice presidential pick revealed about McCain. His speed-dating of Palin reaffirmed a more dangerous personality tic that has dogged his entire career. His decision-making process is impetuous and, in its Bush-like preference for gut instinct over facts, potentially reckless.

McCain-Palin becoming Palin-McCain?

The banners, buttons and signs say McCain-Palin, but the crowds say something else.

“Sa-rah! Pa-lin!” came the chant at a Colorado Springs rally on Saturday moments before Republican nominee John McCain took the stage with Alaska Gov. Sarah Palin, a woman who was virtually unknown to the nation just a week earlier. The day before, thousands screamed “Sa-rah! Sa-rah! Sa-rah!” at an amphitheater outside Detroit.

“Real change with a real woman,” read one sign at a Wisconsin rally. “Hurricane Sarah leaves liberals spinning,” cried another.

Editor’s Comment — If the McCain campaign thought it had closed the “enthusiasm gap”, it’s also ironically opened it up: the more adulation Palin gets, the less of a leader McCain looks. Come November, no one’s going to the voting booth to elect a vice president.

Palin’s true north

Long before the slogan known to 48-hour libertines — What happens in Vegas, stays in Vegas – became commonplace, I heard a variant of that in Alaska, and not just at closing time in fishermen’s bars.

Distance breeds isolation, and in Alaska that often means an arm’s-length code of personal privacy. The state is full of people who have left behind marriages, debts and places that simply weren’t big enough to contain their personalities.

As she showed Wednesday night with her acceptance speech, Gov. Sarah Palin fits the mold of a certain kind of Alaskan – “take it from a gal who knows,” as she said. The state has a unique political ecosystem, as quirky, odd and compelling as the big land itself.

But it is John McCain’s biggest gamble to hope that there is enough of Palin’s Last Frontier in the rest of the country to carry his ticket to the next frontier.

Watching ‘Friends’ in Gaza: a culture clash

In a dingy storefront on a noisy block in the middle of Gaza City, metal shelves bulge with dusty audiotapes extolling Hamas, Fatah and Islamic Jihad. Alongside them, a pouty Jennifer Lopez beckons from the cover of a CD. DVDs are also on offer, of not-yet-officially-released movies like “Wanted,” “Hancock” and “You Don’t Mess With the Zohan,” the Adam Sandler comedy about a Mossad agent turned hairdresser in a New York City salon run by a Palestinian woman.

Amer Kihail, 32, a slender man with an elastic, hangdog face, runs the store, called New Sound. Do Gazans living under Hamas buy much Western music or many Western movies? Mr. Kihail looked baffled, and maybe even a little annoyed, by the question.

“Of course,” he said.

Ruled by Hamas, penned in by Israel, grappling with daily shortages of food and supplies, Gazans need an escape. Culture turns out to be not just an afterthought but, many say, essential to surviving here. Especially for young Gazans, what’s on satellite television and the Internet, on tapes and compact discs, is a window to the world beyond the armored checkpoints, and a link to Arab society elsewhere and, crucially, to the West.

And in what is clearly an emerging struggle within Hamas between political pragmatists, trying to consolidate their new authority, and extremists who have begun pressing a more fundamentalist agenda, culture is a central battleground for control of Gaza. A release from confinement and hardship, even mundane television becomes freighted in this context.

Editor’s Comment — Here’s the key quote: “… you cannot joke with Hamas.”

Puritans, ideologues and extremists all share the same blind spot: the inability to experience delight in ambiguity.

In this failing is contained the most profound constraint on human freedom: the failure to recognize that the world is bigger and richer than the representations through which we attempt to understand it.

Russia’s role in the Iran crisis

It is one of the rites of passage of the fall – every September, the Bush administration returns to the United Nation for another sanctions resolution against Iran. However, this time there is much consternation in Washington that Russia’s invasion of Georgia – and the subsequent chill that has descended on relations between Russia and the West – has ended any possibility of cooperation between the United States and Russia in dealing with Iran’s nuclear imbroglio. Such fears are overblown.

Russia’s assault on Georgia may produce no measurable change of its Iran policy. Indeed, President Dmitry Medvedev of Russia made it clear that, despite the harsh rhetoric that has been exchanged between Moscow and Washington, Russia continues to support efforts to prevent Iran from obtaining nuclear weapons.

The primary reason for the continuity is that both Iran and Russia are essentially satisfied with existing US-European policy of applying incremental and largely symbolic UN sanctions on Tehran. Moscow feels that as long as the diplomatic process remains in play, America is in no position to launch a military strike that could destabilize the Middle East. At the same time, the theocratic regime has increasingly adjusted to a sanctions policy whose impact is negated by increasing oil prices.

Although Tehran would be grateful for a Russian veto of any future sanctions resolutions, it does seem content with a Russian policy that waters down UN mandates while deepening its commercial ties with Iran. On the one hand, Moscow has supported three previous Security Council injunctions against Iran, yet it has also signed lucrative trade deals and expanded its diplomatic representation in Iran. The incongruity of today’s situation is that Russia rebukes Iran for its nuclear infractions while providing technical assistance to the Bushehr plant, which is a critical component of Iran’s atomic industry.

Shimon Peres warns Israel’s hawks over Iran strike

Israel’s president, Shimon Peres, has warned the prime minister that a military attack on Iran’s nuclear facilities could provoke a broader conflict.

Peres is the first senior politician to advise Ehud Olmert against such an attack at a time of growing tension when other leading figures are threatening airstrikes unless Tehran halts its nuclear programme.

The Israeli air force has rehearsed an operation to destroy sites connected with the project.

“The military way will not solve the problem,” said Peres, the 85-year-old founder of the Jewish state’s nuclear programme, in an interview with The Sunday Times.

China calls for peaceful resolution of nuclear standoff

President Hu Jintao of China urged other nations on Saturday to negotiate a resolution to Iran’s nuclear issue during a meeting with Iran’s president, Mahmoud Ahmadinejad, making clear again that China disapproves of any move by Western countries to attack Iran with military force.

Mr. Hu met with Mr. Ahmadinejad on Saturday in the Great Hall of the People here after Mr. Ahmadinejad flew into Beijing to attend the opening ceremony of the Paralympic Games, which began in the evening.

“At present, the Iran nuclear issue is faced with a rare opportunity for the resumption of talks, and we hope all parties concerned could seize the opportunity and show flexibility to push for a peaceful settlement of the issue,” Mr. Hu said in the meeting, Xinhua, the state news agency, reported.

Maliki drops the mask

What’s up with Nouri al-Maliki? As security anxieties subside in this slowly calming city, political speculation has rarely been so intense. First, it was Maliki’s demand that all US troops leave Iraq by the end of 2011. Then came signs that his government wants to undermine the Sunni tribal militias, known as the Awakening councils, on whom the Americans have relied to defeat al-Qaida in Iraq. Now there are moves to take on the powerful Kurdish peshmerga troops and push them out of disputed areas in the strategic central province of Diyala.

Why is the prime minister doing this? Is “the puppet breaking his strings”, as one Arab newspaper put it? Or is the more appropriate metaphor “dropping the mask”? Those who knew Maliki in exile in Syria during Saddam Hussein’s time now recall that he opposed the US-led invasion. His Daawa party did not attend the eve-of-invasion conference of US- and UK-supported exiles in London, and he opposed the party’s decision six months later to join the hand-picked “governing council” set up by the first occupation overlord, Paul Bremer.

Maliki’s new line has discomforted the Americans. Some officials put on a brave face, saying it is a sign of Iraqi confidence in their own sovereignty, a development that, of course, they support as proof that the Bush administration’s strategy of rebuilding a proud country is succeeding. Others say it reflects overconfidence, even hubris, as Iraq is a long way from being able to survive without US military protection.

Zero hour for Zardari

Zardari does not immediately stand out as the person best equipped to tackle Pakistan’s myriad problems. Yet because he is expected to renege on a promise to curb the sweeping authority accumulated by Musharraf, he is set to become the country’s most powerful civilian president ever. Some see this as a high price to pay for democracy.

“Some people call Pakistan a rogue state. Now it’s going to be a rogue’s state,” said a former senior government official. “Zardari will have the power to appoint a prime minister, dissolve parliament and appoint the chief of the armed forces. He will be in charge of the nuclear command authority, which oversees Pakistan’s nuclear weapons arsenal. His style of leadership combines arrogance with ignorance and cronyism. He has no real party platform. What we are looking at is the rise of a civilian dictator.”

So harsh a verdict, delivered before Zardari takes office, may be a trifle premature. Less impassioned observers say two factors are key to whether he will be an effective leader. One is the attitude of the US. On pragmatic grounds but also because of its ideological commitment to supporting democracy, Washington has taken a back seat so far as the political process unfolds. For his part Zardari pledged this week to maintain the US alliance and help prosecute the “war on terror”. But his reliability is questioned.

Hamid Karzai blames Britain for Taliban resurgence

The president of Afghanistan, Hamid Karzai, has blamed Britain for the resurgence of the Taliban and its growing activity in large tracts of the country.

His remarks, made to Afghan MPs, follow a clash with Gordon Brown over the Kabul regime’s links with warlords and drugs barons.

Karzai claims Brown has threatened to withdraw British troops from Helmand province, where 31 of them have died this year, if the president reinstates two provincial governors sacked for alleged dealings in the heroin trade.

One of them is Sher Mohammed Akhundzada, the former governor of Helmand, who was forced out under British pressure two years ago after nine tons of opium and heroin were discovered in his basement. Karzai’s plan to reinstate the governors has alarmed western diplomats in Kabul and dismayed British officials.

A leader beyond denial, as war plans flounder

In this fourth volume of his quartet of books on the Bush White House, Bob Woodward reaches a damning conclusion about the presidency of George W. Bush. “A president must be able to get a clear-eyed, unbiased assessment of the war,” he writes. “The president must lead. For years, time and again, President Bush has displayed impatience, bravado and unsettling personal certainty about his decisions. The result has too often been impulsiveness and carelessness and, perhaps most troubling, a delayed reaction to realities and advice that run counter to his gut.”

“After ordering the invasion,” Mr. Woodward goes on, “the president spent three years in denial and then delegated a strategy review to his national security adviser. Bush was intolerant of confrontations and in-depth debate. There was no deadline, no hurry. The president was engaged in the war rhetorically but maintained an odd detachment from its management. He never got a full handle on it, and over these years of war, too often he failed to lead.”

In this respect, Mr. Woodward’s portrait of Mr. Bush in “The War Within” — a book Stephen J. Hadley, the national security adviser, has called incomplete and misleading — amplifies the one he drew in his last book, “State of Denial” (2006), in which the president emerged as a passive, stubborn and intellectually incurious leader, given to an almost religious certainty about his decision making and inclined to make instinctive gut calls. It stands in striking contrast to the laudatory portrait in the first book in this series, “Bush at War” (2002), which depicted the president in Rovian terms as a strong, resolute, even visionary leader.

Doubt, distrust, delay

During the summer of 2006, from her office adjacent to the White House, deputy national security adviser Meghan O’Sullivan sent President Bush a daily top secret report cataloging the escalating bloodshed and chaos in Iraq. “Violence has acquired a momentum of its own and is now self-sustaining,” she wrote July 20, quoting from an intelligence assessment.

Her dire evaluation contradicted the upbeat assurances that President Bush was hearing from Gen. George W. Casey Jr., the U.S. commander in Iraq. Casey and Defense Secretary Donald H. Rumsfeld were pushing to draw down American forces and speed the transfer of responsibility to the Iraqis. Despite months of skyrocketing violence, Casey insisted that within a year, Iraq would be mostly stable, with the bulk of American combat troops headed home.

Publicly, the president claimed the United States was winning the war, and he expressed unwavering faith in Casey, saying, “It’s his judgment that I rely upon.” Privately, he was losing confidence in the drawdown strategy. He questioned O’Sullivan that summer with increasing urgency: “What are you hearing from people in Baghdad? What are people’s daily lives like?”

“It’s hell, Mr. President,” she answered, determined not to mislead or lie to him.

‘Noise of terrorism’

A Pakistani neuroscientist and mother of three suspected of being a “fixer” for al-Qaida, moving money to support terrorist operations, has been charged with assault and attempted murder in federal court in Manhattan.

Aafia Siddiqui, 36, holds a bachelor’s degree from MIT and a doctorate from Brandeis University.

Siddiqui’s lawyers and human rights groups claim Siddiqui was abducted by intelligence agents and tortured at secret interrogation facilities for five years, until she became a cause celebre in Pakistan and authorities engineered her sudden reappearance with her eldest son, an 11-year-old, in Afghanistan this summer. It is thought she may have been held at the Bagram Theater Internment Facility, an American detention facility located at Bagram Air Base in Afghanistan.

According to the indictment, Siddiqui appeared in Ghazni on July 17 carrying a bag packed with chemicals and notes about a “mass casualty attack” involving the Empire State Building or other US landmarks. The following day, she allegedly grabbed an M-4 rifle from a US Army officer and fired it, while stating “her intent and desire to kill Americans.”

She had vanished with her children in March 2003, while the FBI sought her for questioning about suspected ties to al-Qaida and the September 11, 2001, terrorist attacks.

She is not accused of any terrorist crimes, though prosecutors say the investigation is ongoing.

“There’s all the noise of terrorism, but it’s not in the charges,” said Joanne Mariner, an attorney with Human Rights Watch in New York who has followed the case.

Legal experts say if her lawyers are right, Siddiqui, already unique for being the only woman suspected of high-level al-Qaida involvement, would be the first person to face prosecution in a US criminal court after being held in secret intelligence custody.

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