It's a new day of a new week...
therefore...l
Sunday, February 15, 2009
Thursday, February 12, 2009
Wednesday, February 11, 2009
CHERRY TREE LANE JOURNAL # 108
'tis really a new start as wireless networking is here to stay - hoorah!
the bad news - we are still in lockdown as the GI infection continues to run rampant - quite literally...
good news?? -
the bad news - we are still in lockdown as the GI infection continues to run rampant - quite literally...
good news?? -
Tuesday, February 3, 2009
CHERRY TREE LANE JOURNAL # 107
The library has been closed due to a gi infection going around....
...
...
Wednesday, January 28, 2009
CHERRY TREE LANE JOURNAL # 106
I have a cold and will miss therapy today but maybe I can write a little bit...
We have a new President, I wish him well...
We still don't have wireless Internet ...
We have a new President, I wish him well...
We still don't have wireless Internet ...
Sunday, January 18, 2009
Friday, January 2, 2009
Thursday, January 1, 2009
Sunday, December 28, 2008
CHERRY TREE LANE JOURNAL # 102
It is the day that begins the week so it is appropriate to begin anew...
...
...
...
...
Monday, December 22, 2008
Wednesday, December 10, 2008
CHERRY TREE LANE JOURNAL # 100
All I want for Xmas is my two front teeth...
and maybe a few more...
...
and maybe a few more...
...
Monday, December 8, 2008
CHERRY TREE LANE JOURNAL # 99
It's a beautiful day in the neighborhood won't you be mine? I remember hearing that line so many times with BJ growing up with Mr. Rogers...
Sunday, December 7, 2008
Saturday, December 6, 2008
CHERRY TREE LANE JOURNAL # 97
It's time for a test drive on the super-highway of life whatever the hell that means...
Obama Pledges Public Works on a Vast Scale
Obama Pledges Public Works on a Vast Scale
Friday, December 5, 2008
Thursday, December 4, 2008
CHERRY TREE LANE JOURNAL # 95
I will try to be as direct as possible...
I am fine I just need a break from the responsibility of doing anything...
I am fine I just need a break from the responsibility of doing anything...
Wednesday, December 3, 2008
CHERRY TREE LANE JOURNAL # 94
this is the largest bold type
this is the smallest
and this is normal
and this is large....
Tuesday, December 2, 2008
CHERRY TREE LANE JOURNAL # 93
Good Morning to All!
Today is Tuesday and it is the day I try Notepad 2008 in my blog...
Sayonara
Today is Tuesday and it is the day I try Notepad 2008 in my blog...
Sayonara
Monday, December 1, 2008
CHERRY TREE LANE JOURNAL # 92
A new Monday, a new Month and a new attempt to blog more productivly... hmm.../ is that a word???
Google’s Gatekeepers
Google’s Gatekeepers
Wednesday, November 26, 2008
CHERRY TREE LANE JOURNAL # 91
It's the day before Thanksgiving and I am getting hungry for turkey...
Saturday, November 22, 2008
Wednesday, November 12, 2008
CHERRY TREE LANE JOURNAL # 89
It's now been a week to remember with yesterday being Veteran's Day and tomorrow being Salmon Brook's Nemorial service...
Friday, November 7, 2008
CHERRY TREE LANE JOURNAL # 88
'tis Friday the end of the weak or the beginning of the end or just TGIF!!
Sayonara!
Sayonara!
Thursday, November 6, 2008
CHERRY TREE LANE JOURNAL # 87
It's time to bare all, to come clean or to communicate what happened to see where we go from here... The 'library box' got stolen or trashed... It had in it two self-inking stamps that said 'Salmon Brook Library', extra pens, the index cards that indicate the books that were checked out by dates...
Tuesday, November 4, 2008
Monday, November 3, 2008
CHERRY TREE LANE JOURNAL # 85
I'm not over my anger at the theft in the library so I won't be ....
Sayonara!
Sayonara!
Sunday, November 2, 2008
CHERRY TREE LANE JOURNAL # 84
Some Good News:
New York City Marathon
Elite Women Getting Older, and Better
By JULIET MACUR
Published: November 1, 2008
After nearly a decade of running marathons — 19 races that add up to 497.8 pounding miles — Catherine Ndereba insists there is one thing she cannot live without. Not her coach. Not her agent. Not even the occasional Philly cheese steak, her reward for training 90 to 100 miles a week.
It is her massage therapist.
“When I was younger, I never used to have a lot of fatigue in my muscles — never,” Ndereba, 36, said recently in Norristown, Pa., her training base in the United States. “But now, if I don’t have a massage at least twice a week, I feel like I can’t move. I don’t feel old; I still feel like I’m in my 20s. But, yes, sometimes, there are a few signs that my body doesn’t agree.”
Ndereba, a four-time winner of the Boston Marathon and two-time Olympic silver medalist for Kenya, is among the 41 elite women in the field for Sunday’s New York City Marathon. And many of them have probably noticed uncharacteristically sore muscles or creaky joints.
Their average age is about 33, one of the oldest groups of elite women, if not the oldest, in the history of the race, organizers said. Two-thirds are 30 or older, including the favorites Paula Radcliffe, 34, and Gete Wami, 33. Nearly half are 35 and older.
“It’s unusual to see so many really good women of that age, but this is probably a fluke that they are all so good at once,” Mary Wittenberg, the race director, said. “I do expect to see a changing of the guard because we are probably looking at the end of a superstar generation.”
“Gete, Paula, Catherine are in a class by themselves, but time is ticking,” she added. “They are probably getting close to the point of diminishing returns.”
Those runners are not pioneers in racing marathons — and often winning — into their 30s. At that age, many distance runners are in their prime, some experts say, because their bodies are accustomed to the mileage required to train for the 26.2-mile races.
Many also started running marathons only after they had built a foundation in shorter races, to prevent burnout and injuries. A widespread belief is that elite runners have a limited number of marathons in them, so they also tend to use their time in competition wisely.
Grete Waitz was 35 in 1988 when she won her ninth New York City Marathon. The year before, the British runner Priscilla Welch was a seemingly ancient 42 when she crossed the finish line first.
This year in Beijing, Constantina Tomescu of Romania won the Olympic marathon at 38. In September, Irina Mikitenko, 36, won the Berlin Marathon. She began running marathons last year, she said, because she was mentally tough enough to do so after having two children.
To some, the current wave of older women succeeding in marathons makes sense. More women are running the distance these days, they say, so more they are training at a higher level.
More women are also sticking with the marathon because of the economic incentive, said Ryan Lamppa, a researcher for Running USA, a nonprofit organization that tracks trends in distance running.
Top runners like Radcliffe and her peers receive six-figures appearance fees from big-city marathons, agents and race directors said. So a hefty payday is guaranteed just for showing up and finishing. Five of the women in Sunday’s field have made at least $1 million in prize money in their careers, according to the Association of Road Racing Statisticians. The top 10 women on Sunday will also receive prize money.
First place is worth $130,000 of the $301,000 purse, second place $65,000, third $40,000, fourth $25,000, fifth $15,000 and so on down to $1,000 for 10th place. In addition, bonuses ranging from $5,000 to $70,000 are paid for reaching certain time standards.
Twenty years ago, though, the total women’s purse in the New York City Marathon was $134,500, organizers said, and a decade ago, it was $165,000.
“If the sport was back in its amateur days, you definitely wouldn’t see as many 30-plus marathoners than you do now,” Lamppa said. “I don’t think they’re staying in the sport purely for the love of it. It’s a nice gig if you can do it long enough. But, you know, it’s a painful gig, too.”
To make a decent living at marathon running in your 30s and 40s, Lamppa added, athletes must remain fast enough to finish in the top 10. That could be a challenge for an aging athlete.
Hirofumi Tanaka, an exercise researcher at the University of Texas, said endurance athletes had the edge over sprinters as time marched on. He said sprinters peaked at 22 to 24, and marathoners peaked at 28 to 31. Some marathoners reach peak performance around 35, he added. The trick is finding the way to extend that time frame.
High-level marathoners should be able to do so, said Dr. Vonda Wright, a professor of orthopedics at the University of Pittsburgh. In a study published in March that looked at male and female American masters record-holders in distances from 100 to 10,000 meters for the past 50 years, Wright said she found less than a 1 percent decline per year in performance as they aged from 30 to 50.
The slow-twitch muscles needed in endurance sports do not decline significantly until athletes reach their late 30s or early 40s, she said. But fast-twitch muscles that sprinters rely on begin deteriorating in their late 20s and early 30s.
“If you are a runner in your 30s or 40s, it’s really a sweet spot to be in,” Wright said. “You’ve trained longer, so your heart works more efficiently and your lungs exchange oxygen more efficiently. You know your race, you know your body. Biology might not have taken over yet, so you don’t see that muscle physiology decline that would prevent them from being amazing.”
That decline, however, could happen any day — and there is no telling when the athlete will notice it. Waitz, one of the best female marathoners, said from the time she was 35 until she retired at 38, she could sense her body changing.
“The end sneaked up on me,” she said.
After 10 years and 20 marathons, Waitz said, it took longer to recover from races. She became injured more easily. But she said the change in the mental aspect of the marathon prompted her retirement.
Waitz said she did not feel as hungry to win as she once had, partly because she sensed that her body was not as strong.
“I always say that there are two ages of a person: a running age and your biological age,” she said. “So after all those marathons, I was old as a runner but still young as a person. I still felt fast, but I was not. It was time for me to go.”
Ndereba, a marathoner since 1999, said she had no idea when she would retire.
“Now why would I quit if I can still finish in the top five?” Ndereba said. “Why would I quit when there are people out there, so many people, who would want to run like Catherine, but they can’t? I will run until I feel I can’t do it anymore.”
With her massage therapist, she said, she still feels much faster and stronger than she did at 26, when she made her marathon debut in Boston.
Ndereba said she was in so much pain after finishing sixth in that race that she needed to be carted off in a wheelchair.
“So now, I don’t need a wheelchair when I finish,” she said with a smile. “It shows that I’m only getting better, right?”
More Articles in Sports » A version of this article appeared in print on November 2, 2008, on page SP1 of the New York edition.
New York City Marathon
Elite Women Getting Older, and Better
By JULIET MACUR
Published: November 1, 2008
After nearly a decade of running marathons — 19 races that add up to 497.8 pounding miles — Catherine Ndereba insists there is one thing she cannot live without. Not her coach. Not her agent. Not even the occasional Philly cheese steak, her reward for training 90 to 100 miles a week.
It is her massage therapist.
“When I was younger, I never used to have a lot of fatigue in my muscles — never,” Ndereba, 36, said recently in Norristown, Pa., her training base in the United States. “But now, if I don’t have a massage at least twice a week, I feel like I can’t move. I don’t feel old; I still feel like I’m in my 20s. But, yes, sometimes, there are a few signs that my body doesn’t agree.”
Ndereba, a four-time winner of the Boston Marathon and two-time Olympic silver medalist for Kenya, is among the 41 elite women in the field for Sunday’s New York City Marathon. And many of them have probably noticed uncharacteristically sore muscles or creaky joints.
Their average age is about 33, one of the oldest groups of elite women, if not the oldest, in the history of the race, organizers said. Two-thirds are 30 or older, including the favorites Paula Radcliffe, 34, and Gete Wami, 33. Nearly half are 35 and older.
“It’s unusual to see so many really good women of that age, but this is probably a fluke that they are all so good at once,” Mary Wittenberg, the race director, said. “I do expect to see a changing of the guard because we are probably looking at the end of a superstar generation.”
“Gete, Paula, Catherine are in a class by themselves, but time is ticking,” she added. “They are probably getting close to the point of diminishing returns.”
Those runners are not pioneers in racing marathons — and often winning — into their 30s. At that age, many distance runners are in their prime, some experts say, because their bodies are accustomed to the mileage required to train for the 26.2-mile races.
Many also started running marathons only after they had built a foundation in shorter races, to prevent burnout and injuries. A widespread belief is that elite runners have a limited number of marathons in them, so they also tend to use their time in competition wisely.
Grete Waitz was 35 in 1988 when she won her ninth New York City Marathon. The year before, the British runner Priscilla Welch was a seemingly ancient 42 when she crossed the finish line first.
This year in Beijing, Constantina Tomescu of Romania won the Olympic marathon at 38. In September, Irina Mikitenko, 36, won the Berlin Marathon. She began running marathons last year, she said, because she was mentally tough enough to do so after having two children.
To some, the current wave of older women succeeding in marathons makes sense. More women are running the distance these days, they say, so more they are training at a higher level.
More women are also sticking with the marathon because of the economic incentive, said Ryan Lamppa, a researcher for Running USA, a nonprofit organization that tracks trends in distance running.
Top runners like Radcliffe and her peers receive six-figures appearance fees from big-city marathons, agents and race directors said. So a hefty payday is guaranteed just for showing up and finishing. Five of the women in Sunday’s field have made at least $1 million in prize money in their careers, according to the Association of Road Racing Statisticians. The top 10 women on Sunday will also receive prize money.
First place is worth $130,000 of the $301,000 purse, second place $65,000, third $40,000, fourth $25,000, fifth $15,000 and so on down to $1,000 for 10th place. In addition, bonuses ranging from $5,000 to $70,000 are paid for reaching certain time standards.
Twenty years ago, though, the total women’s purse in the New York City Marathon was $134,500, organizers said, and a decade ago, it was $165,000.
“If the sport was back in its amateur days, you definitely wouldn’t see as many 30-plus marathoners than you do now,” Lamppa said. “I don’t think they’re staying in the sport purely for the love of it. It’s a nice gig if you can do it long enough. But, you know, it’s a painful gig, too.”
To make a decent living at marathon running in your 30s and 40s, Lamppa added, athletes must remain fast enough to finish in the top 10. That could be a challenge for an aging athlete.
Hirofumi Tanaka, an exercise researcher at the University of Texas, said endurance athletes had the edge over sprinters as time marched on. He said sprinters peaked at 22 to 24, and marathoners peaked at 28 to 31. Some marathoners reach peak performance around 35, he added. The trick is finding the way to extend that time frame.
High-level marathoners should be able to do so, said Dr. Vonda Wright, a professor of orthopedics at the University of Pittsburgh. In a study published in March that looked at male and female American masters record-holders in distances from 100 to 10,000 meters for the past 50 years, Wright said she found less than a 1 percent decline per year in performance as they aged from 30 to 50.
The slow-twitch muscles needed in endurance sports do not decline significantly until athletes reach their late 30s or early 40s, she said. But fast-twitch muscles that sprinters rely on begin deteriorating in their late 20s and early 30s.
“If you are a runner in your 30s or 40s, it’s really a sweet spot to be in,” Wright said. “You’ve trained longer, so your heart works more efficiently and your lungs exchange oxygen more efficiently. You know your race, you know your body. Biology might not have taken over yet, so you don’t see that muscle physiology decline that would prevent them from being amazing.”
That decline, however, could happen any day — and there is no telling when the athlete will notice it. Waitz, one of the best female marathoners, said from the time she was 35 until she retired at 38, she could sense her body changing.
“The end sneaked up on me,” she said.
After 10 years and 20 marathons, Waitz said, it took longer to recover from races. She became injured more easily. But she said the change in the mental aspect of the marathon prompted her retirement.
Waitz said she did not feel as hungry to win as she once had, partly because she sensed that her body was not as strong.
“I always say that there are two ages of a person: a running age and your biological age,” she said. “So after all those marathons, I was old as a runner but still young as a person. I still felt fast, but I was not. It was time for me to go.”
Ndereba, a marathoner since 1999, said she had no idea when she would retire.
“Now why would I quit if I can still finish in the top five?” Ndereba said. “Why would I quit when there are people out there, so many people, who would want to run like Catherine, but they can’t? I will run until I feel I can’t do it anymore.”
With her massage therapist, she said, she still feels much faster and stronger than she did at 26, when she made her marathon debut in Boston.
Ndereba said she was in so much pain after finishing sixth in that race that she needed to be carted off in a wheelchair.
“So now, I don’t need a wheelchair when I finish,” she said with a smile. “It shows that I’m only getting better, right?”
More Articles in Sports » A version of this article appeared in print on November 2, 2008, on page SP1 of the New York edition.
Saturday, November 1, 2008
Friday, October 31, 2008
Wednesday, October 29, 2008
CHERRY TREE LANE JOURNAL # 81
It's not isolation it's called 'containment'. The fire doors from the lobby to A-wing are closed thus preventing me from going to the kitchen, to the library or to Dick's room... Peg and I got online and ordered the dictionary and the stand for about $90.00 so we have about $10.00 left for the magnifying glass as we had $100.00 authorized from Resident Council...
Tuesday, October 28, 2008
Monday, October 27, 2008
CHERRY TREE LANE JOURNAL # 79
Monday ! Monday !
Sounds like the beginning of a song maybe by Simon & Garfunkel??
The Good News ?
The Barnyard Strategist
Sounds like the beginning of a song maybe by Simon & Garfunkel??
The Good News ?
The Barnyard Strategist
Sunday, October 26, 2008
CHERRY TREE LANE JOURNAL # 78
'tis the day for new beginnings, for renewed effort, for fortitude to see it through to the end of the beginning... hmm?? it seems we're in a loop....
Saturday, October 25, 2008
CHERRY TREE LANE JOURNAL # 77
It doesn't take much to make one day different from another... Yesterday we finally got rid of the 3 big closet wardrobes that were in the Rosewood dining hall and limiting the library from expanding....One was donated to the therapy alternative room and the other two went into the TV lounge... All credit goes to Peg Kinney fixer-upper extra-ordinaire...
Friday, October 24, 2008
CHERRY TREE LANE JOURNAL # 76
Whimsical... Going out on a whim...Turn right at the next whim...Isn't this fun???
Sayonara on a whim!!!
NYTimes Editorial
Barack Obama for President
Published: October 23, 2008
Hyperbole is the currency of presidential campaigns, but this year the nation’s future truly hangs in the balance.
The United States is battered and drifting after eight years of President Bush’s failed leadership. He is saddling his successor with two wars, a scarred global image and a government systematically stripped of its ability to protect and help its citizens — whether they are fleeing a hurricane’s floodwaters, searching for affordable health care or struggling to hold on to their homes, jobs, savings and pensions in the midst of a financial crisis that was foretold and preventable.
As tough as the times are, the selection of a new president is easy. After nearly two years of a grueling and ugly campaign, Senator Barack Obama of Illinois has proved that he is the right choice to be the 44th president of the United States.
•
Mr. Obama has met challenge after challenge, growing as a leader and putting real flesh on his early promises of hope and change. He has shown a cool head and sound judgment. We believe he has the will and the ability to forge the broad political consensus that is essential to finding solutions to this nation’s problems.
In the same time, Senator John McCain of Arizona has retreated farther and farther to the fringe of American politics, running a campaign on partisan division, class warfare and even hints of racism. His policies and worldview are mired in the past. His choice of a running mate so evidently unfit for the office was a final act of opportunism and bad judgment that eclipsed the accomplishments of 26 years in Congress.
Given the particularly ugly nature of Mr. McCain’s campaign, the urge to choose on the basis of raw emotion is strong. But there is a greater value in looking closely at the facts of life in America today and at the prescriptions the candidates offer. The differences are profound.
Mr. McCain offers more of the Republican every-man-for-himself ideology, now lying in shards on Wall Street and in Americans’ bank accounts. Mr. Obama has another vision of government’s role and responsibilities.
In his convention speech in Denver, Mr. Obama said, “Government cannot solve all our problems, but what it should do is that which we cannot do for ourselves: protect us from harm and provide every child a decent education; keep our water clean and our toys safe; invest in new schools and new roads and new science and technology.”
Since the financial crisis, he has correctly identified the abject failure of government regulation that has brought the markets to the brink of collapse.
The Economy
The American financial system is the victim of decades of Republican deregulatory and anti-tax policies. Those ideas have been proved wrong at an unfathomable price, but Mr. McCain — a self-proclaimed “foot soldier in the Reagan revolution” — is still a believer.
Mr. Obama sees that far-reaching reforms will be needed to protect Americans and American business.
Mr. McCain talks about reform a lot, but his vision is pinched. His answer to any economic question is to eliminate pork-barrel spending — about $18 billion in a $3 trillion budget — cut taxes and wait for unfettered markets to solve the problem.
Mr. Obama is clear that the nation’s tax structure must be changed to make it fairer. That means the well-off Americans who have benefited disproportionately from Mr. Bush’s tax cuts will have to pay some more. Working Americans, who have seen their standard of living fall and their children’s options narrow, will benefit. Mr. Obama wants to raise the minimum wage and tie it to inflation, restore a climate in which workers are able to organize unions if they wish and expand educational opportunities.
Mr. McCain, who once opposed President Bush’s tax cuts for the wealthy as fiscally irresponsible, now wants to make them permanent. And while he talks about keeping taxes low for everyone, his proposed cuts would overwhelmingly benefit the top 1 percent of Americans while digging the country into a deeper fiscal hole.
National Security
The American military — its people and equipment — is dangerously overstretched. Mr. Bush has neglected the necessary war in Afghanistan, which now threatens to spiral into defeat. The unnecessary and staggeringly costly war in Iraq must be ended as quickly and responsibly as possible.
While Iraq’s leaders insist on a swift drawdown of American troops and a deadline for the end of the occupation, Mr. McCain is still talking about some ill-defined “victory.” As a result, he has offered no real plan for extracting American troops and limiting any further damage to Iraq and its neighbors.
Mr. Obama was an early and thoughtful opponent of the war in Iraq, and he has presented a military and diplomatic plan for withdrawing American forces. Mr. Obama also has correctly warned that until the Pentagon starts pulling troops out of Iraq, there will not be enough troops to defeat the Taliban and Al Qaeda in Afghanistan.
Mr. McCain, like Mr. Bush, has only belatedly focused on Afghanistan’s dangerous unraveling and the threat that neighboring Pakistan may quickly follow.
Mr. Obama would have a learning curve on foreign affairs, but he has already showed sounder judgment than his opponent on these critical issues. His choice of Senator Joseph Biden — who has deep foreign-policy expertise — as his running mate is another sign of that sound judgment. Mr. McCain’s long interest in foreign policy and the many dangers this country now faces make his choice of Gov. Sarah Palin of Alaska more irresponsible.
Both presidential candidates talk about strengthening alliances in Europe and Asia, including NATO, and strongly support Israel. Both candidates talk about repairing America’s image in the world. But it seems clear to us that Mr. Obama is far more likely to do that — and not just because the first black president would present a new American face to the world.
Mr. Obama wants to reform the United Nations, while Mr. McCain wants to create a new entity, the League of Democracies — a move that would incite even fiercer anti-American furies around the world.
Unfortunately, Mr. McCain, like Mr. Bush, sees the world as divided into friends (like Georgia) and adversaries (like Russia). He proposed kicking Russia out of the Group of 8 industrialized nations even before the invasion of Georgia. We have no sympathy for Moscow’s bullying, but we also have no desire to replay the cold war. The United States must find a way to constrain the Russians’ worst impulses, while preserving the ability to work with them on arms control and other vital initiatives.
Both candidates talk tough on terrorism, and neither has ruled out military action to end Iran’s nuclear weapons program. But Mr. Obama has called for a serious effort to try to wean Tehran from its nuclear ambitions with more credible diplomatic overtures and tougher sanctions. Mr. McCain’s willingness to joke about bombing Iran was frightening.
The Constitution and the Rule of Law
Under Mr. Bush and Vice President Dick Cheney, the Constitution, the Bill of Rights, the justice system and the separation of powers have come under relentless attack. Mr. Bush chose to exploit the tragedy of Sept. 11, 2001, the moment in which he looked like the president of a unified nation, to try to place himself above the law.
Mr. Bush has arrogated the power to imprison men without charges and browbeat Congress into granting an unfettered authority to spy on Americans. He has created untold numbers of “black” programs, including secret prisons and outsourced torture. The president has issued hundreds, if not thousands, of secret orders. We fear it will take years of forensic research to discover how many basic rights have been violated.
Both candidates have renounced torture and are committed to closing the prison camp in Guantánamo Bay, Cuba.
But Mr. Obama has gone beyond that, promising to identify and correct Mr. Bush’s attacks on the democratic system. Mr. McCain has been silent on the subject.
Mr. McCain improved protections for detainees. But then he helped the White House push through the appalling Military Commissions Act of 2006, which denied detainees the right to a hearing in a real court and put Washington in conflict with the Geneva Conventions, greatly increasing the risk to American troops.
The next president will have the chance to appoint one or more justices to a Supreme Court that is on the brink of being dominated by a radical right wing. Mr. Obama may appoint less liberal judges than some of his followers might like, but Mr. McCain is certain to pick rigid ideologues. He has said he would never appoint a judge who believes in women’s reproductive rights.
The Candidates
It will be an enormous challenge just to get the nation back to where it was before Mr. Bush, to begin to mend its image in the world and to restore its self-confidence and its self-respect. Doing all of that, and leading America forward, will require strength of will, character and intellect, sober judgment and a cool, steady hand.
Mr. Obama has those qualities in abundance. Watching him being tested in the campaign has long since erased the reservations that led us to endorse Senator Hillary Rodham Clinton in the Democratic primaries. He has drawn in legions of new voters with powerful messages of hope and possibility and calls for shared sacrifice and social responsibility.
Mr. McCain, whom we chose as the best Republican nominee in the primaries, has spent the last coins of his reputation for principle and sound judgment to placate the limitless demands and narrow vision of the far-right wing. His righteous fury at being driven out of the 2000 primaries on a racist tide aimed at his adopted daughter has been replaced by a zealous embrace of those same win-at-all-costs tactics and tacticians.
He surrendered his standing as an independent thinker in his rush to embrace Mr. Bush’s misbegotten tax policies and to abandon his leadership position on climate change and immigration reform.
Mr. McCain could have seized the high ground on energy and the environment. Earlier in his career, he offered the first plausible bill to control America’s emissions of greenhouse gases. Now his positions are a caricature of that record: think Ms. Palin leading chants of “drill, baby, drill.”
Mr. Obama has endorsed some offshore drilling, but as part of a comprehensive strategy including big investments in new, clean technologies.
•
Mr. Obama has withstood some of the toughest campaign attacks ever mounted against a candidate. He’s been called un-American and accused of hiding a secret Islamic faith. The Republicans have linked him to domestic terrorists and questioned his wife’s love of her country. Ms. Palin has also questioned millions of Americans’ patriotism, calling Republican-leaning states “pro-America.”
This politics of fear, division and character assassination helped Mr. Bush drive Mr. McCain from the 2000 Republican primaries and defeat Senator John Kerry in 2004. It has been the dominant theme of his failed presidency.
The nation’s problems are simply too grave to be reduced to slashing “robo-calls” and negative ads. This country needs sensible leadership, compassionate leadership, honest leadership and strong leadership. Barack Obama has shown that he has all of those qualities.
More Articles in Opinion » A version of this article appeared in print on October 24, 2008, on page A30 of the New York edition.
Sayonara on a whim!!!
NYTimes Editorial
Barack Obama for President
Published: October 23, 2008
Hyperbole is the currency of presidential campaigns, but this year the nation’s future truly hangs in the balance.
The United States is battered and drifting after eight years of President Bush’s failed leadership. He is saddling his successor with two wars, a scarred global image and a government systematically stripped of its ability to protect and help its citizens — whether they are fleeing a hurricane’s floodwaters, searching for affordable health care or struggling to hold on to their homes, jobs, savings and pensions in the midst of a financial crisis that was foretold and preventable.
As tough as the times are, the selection of a new president is easy. After nearly two years of a grueling and ugly campaign, Senator Barack Obama of Illinois has proved that he is the right choice to be the 44th president of the United States.
•
Mr. Obama has met challenge after challenge, growing as a leader and putting real flesh on his early promises of hope and change. He has shown a cool head and sound judgment. We believe he has the will and the ability to forge the broad political consensus that is essential to finding solutions to this nation’s problems.
In the same time, Senator John McCain of Arizona has retreated farther and farther to the fringe of American politics, running a campaign on partisan division, class warfare and even hints of racism. His policies and worldview are mired in the past. His choice of a running mate so evidently unfit for the office was a final act of opportunism and bad judgment that eclipsed the accomplishments of 26 years in Congress.
Given the particularly ugly nature of Mr. McCain’s campaign, the urge to choose on the basis of raw emotion is strong. But there is a greater value in looking closely at the facts of life in America today and at the prescriptions the candidates offer. The differences are profound.
Mr. McCain offers more of the Republican every-man-for-himself ideology, now lying in shards on Wall Street and in Americans’ bank accounts. Mr. Obama has another vision of government’s role and responsibilities.
In his convention speech in Denver, Mr. Obama said, “Government cannot solve all our problems, but what it should do is that which we cannot do for ourselves: protect us from harm and provide every child a decent education; keep our water clean and our toys safe; invest in new schools and new roads and new science and technology.”
Since the financial crisis, he has correctly identified the abject failure of government regulation that has brought the markets to the brink of collapse.
The Economy
The American financial system is the victim of decades of Republican deregulatory and anti-tax policies. Those ideas have been proved wrong at an unfathomable price, but Mr. McCain — a self-proclaimed “foot soldier in the Reagan revolution” — is still a believer.
Mr. Obama sees that far-reaching reforms will be needed to protect Americans and American business.
Mr. McCain talks about reform a lot, but his vision is pinched. His answer to any economic question is to eliminate pork-barrel spending — about $18 billion in a $3 trillion budget — cut taxes and wait for unfettered markets to solve the problem.
Mr. Obama is clear that the nation’s tax structure must be changed to make it fairer. That means the well-off Americans who have benefited disproportionately from Mr. Bush’s tax cuts will have to pay some more. Working Americans, who have seen their standard of living fall and their children’s options narrow, will benefit. Mr. Obama wants to raise the minimum wage and tie it to inflation, restore a climate in which workers are able to organize unions if they wish and expand educational opportunities.
Mr. McCain, who once opposed President Bush’s tax cuts for the wealthy as fiscally irresponsible, now wants to make them permanent. And while he talks about keeping taxes low for everyone, his proposed cuts would overwhelmingly benefit the top 1 percent of Americans while digging the country into a deeper fiscal hole.
National Security
The American military — its people and equipment — is dangerously overstretched. Mr. Bush has neglected the necessary war in Afghanistan, which now threatens to spiral into defeat. The unnecessary and staggeringly costly war in Iraq must be ended as quickly and responsibly as possible.
While Iraq’s leaders insist on a swift drawdown of American troops and a deadline for the end of the occupation, Mr. McCain is still talking about some ill-defined “victory.” As a result, he has offered no real plan for extracting American troops and limiting any further damage to Iraq and its neighbors.
Mr. Obama was an early and thoughtful opponent of the war in Iraq, and he has presented a military and diplomatic plan for withdrawing American forces. Mr. Obama also has correctly warned that until the Pentagon starts pulling troops out of Iraq, there will not be enough troops to defeat the Taliban and Al Qaeda in Afghanistan.
Mr. McCain, like Mr. Bush, has only belatedly focused on Afghanistan’s dangerous unraveling and the threat that neighboring Pakistan may quickly follow.
Mr. Obama would have a learning curve on foreign affairs, but he has already showed sounder judgment than his opponent on these critical issues. His choice of Senator Joseph Biden — who has deep foreign-policy expertise — as his running mate is another sign of that sound judgment. Mr. McCain’s long interest in foreign policy and the many dangers this country now faces make his choice of Gov. Sarah Palin of Alaska more irresponsible.
Both presidential candidates talk about strengthening alliances in Europe and Asia, including NATO, and strongly support Israel. Both candidates talk about repairing America’s image in the world. But it seems clear to us that Mr. Obama is far more likely to do that — and not just because the first black president would present a new American face to the world.
Mr. Obama wants to reform the United Nations, while Mr. McCain wants to create a new entity, the League of Democracies — a move that would incite even fiercer anti-American furies around the world.
Unfortunately, Mr. McCain, like Mr. Bush, sees the world as divided into friends (like Georgia) and adversaries (like Russia). He proposed kicking Russia out of the Group of 8 industrialized nations even before the invasion of Georgia. We have no sympathy for Moscow’s bullying, but we also have no desire to replay the cold war. The United States must find a way to constrain the Russians’ worst impulses, while preserving the ability to work with them on arms control and other vital initiatives.
Both candidates talk tough on terrorism, and neither has ruled out military action to end Iran’s nuclear weapons program. But Mr. Obama has called for a serious effort to try to wean Tehran from its nuclear ambitions with more credible diplomatic overtures and tougher sanctions. Mr. McCain’s willingness to joke about bombing Iran was frightening.
The Constitution and the Rule of Law
Under Mr. Bush and Vice President Dick Cheney, the Constitution, the Bill of Rights, the justice system and the separation of powers have come under relentless attack. Mr. Bush chose to exploit the tragedy of Sept. 11, 2001, the moment in which he looked like the president of a unified nation, to try to place himself above the law.
Mr. Bush has arrogated the power to imprison men without charges and browbeat Congress into granting an unfettered authority to spy on Americans. He has created untold numbers of “black” programs, including secret prisons and outsourced torture. The president has issued hundreds, if not thousands, of secret orders. We fear it will take years of forensic research to discover how many basic rights have been violated.
Both candidates have renounced torture and are committed to closing the prison camp in Guantánamo Bay, Cuba.
But Mr. Obama has gone beyond that, promising to identify and correct Mr. Bush’s attacks on the democratic system. Mr. McCain has been silent on the subject.
Mr. McCain improved protections for detainees. But then he helped the White House push through the appalling Military Commissions Act of 2006, which denied detainees the right to a hearing in a real court and put Washington in conflict with the Geneva Conventions, greatly increasing the risk to American troops.
The next president will have the chance to appoint one or more justices to a Supreme Court that is on the brink of being dominated by a radical right wing. Mr. Obama may appoint less liberal judges than some of his followers might like, but Mr. McCain is certain to pick rigid ideologues. He has said he would never appoint a judge who believes in women’s reproductive rights.
The Candidates
It will be an enormous challenge just to get the nation back to where it was before Mr. Bush, to begin to mend its image in the world and to restore its self-confidence and its self-respect. Doing all of that, and leading America forward, will require strength of will, character and intellect, sober judgment and a cool, steady hand.
Mr. Obama has those qualities in abundance. Watching him being tested in the campaign has long since erased the reservations that led us to endorse Senator Hillary Rodham Clinton in the Democratic primaries. He has drawn in legions of new voters with powerful messages of hope and possibility and calls for shared sacrifice and social responsibility.
Mr. McCain, whom we chose as the best Republican nominee in the primaries, has spent the last coins of his reputation for principle and sound judgment to placate the limitless demands and narrow vision of the far-right wing. His righteous fury at being driven out of the 2000 primaries on a racist tide aimed at his adopted daughter has been replaced by a zealous embrace of those same win-at-all-costs tactics and tacticians.
He surrendered his standing as an independent thinker in his rush to embrace Mr. Bush’s misbegotten tax policies and to abandon his leadership position on climate change and immigration reform.
Mr. McCain could have seized the high ground on energy and the environment. Earlier in his career, he offered the first plausible bill to control America’s emissions of greenhouse gases. Now his positions are a caricature of that record: think Ms. Palin leading chants of “drill, baby, drill.”
Mr. Obama has endorsed some offshore drilling, but as part of a comprehensive strategy including big investments in new, clean technologies.
•
Mr. Obama has withstood some of the toughest campaign attacks ever mounted against a candidate. He’s been called un-American and accused of hiding a secret Islamic faith. The Republicans have linked him to domestic terrorists and questioned his wife’s love of her country. Ms. Palin has also questioned millions of Americans’ patriotism, calling Republican-leaning states “pro-America.”
This politics of fear, division and character assassination helped Mr. Bush drive Mr. McCain from the 2000 Republican primaries and defeat Senator John Kerry in 2004. It has been the dominant theme of his failed presidency.
The nation’s problems are simply too grave to be reduced to slashing “robo-calls” and negative ads. This country needs sensible leadership, compassionate leadership, honest leadership and strong leadership. Barack Obama has shown that he has all of those qualities.
More Articles in Opinion » A version of this article appeared in print on October 24, 2008, on page A30 of the New York edition.
Thursday, October 23, 2008
CHERRY TREE LANE JOURNAL # 75
Greenspan Concedes Error on Regulation
The Reckoning
Struggling to Keep Up as the Crisis Raced On
Articles in this series are exploring the causes of the financial crisis.Previous Articles in the Series »
Related
Times Topics: Credit Crisis — The Essentials
Times Topics: Treasury Department, U.S.
Times Topics: Henry M. Paulson Jr.
Todd Heisler/The New York Times
In nearly a century, no Treasury secretary has faced a more difficult financial crisis than the one Henry M. Paulson Jr. is contending with.
It was the weekend of Sept. 13, and the moment Treasury Secretary Henry M. Paulson Jr. had feared for months was finally upon him: Lehman Brothers was hurtling toward bankruptcy — fast.
Knowing that Lehman had billions of dollars in bad investments on its books, Mr. Paulson had long urged Lehman’s chief executive, Richard S. Fuld Jr., to find a solution for his firm’s problems. “He was asked to aggressively look for a buyer,” Mr. Paulson recalled in an interview.
But Lehman could not — despite what Mr. Paulson described as personal pleas to other firms to buy some of Lehman’s toxic assets and efforts to persuade another bank to acquire Lehman. With all options closed, he said, the government’s hands were tied. Although the Federal Reserve had helped bail out Bear Stearns — and was within days of bailing out the giant insurer American International Group — it could not help Lehman, even as its default threatened to wreak havoc on financial markets.
“We didn’t have the powers,” Mr. Paulson insisted, explaining a decision that many have since criticized — to allow Lehman to go bankrupt. By law, he continued, the Federal Reserve could bail out Lehman with a loan only if the bank had enough good assets to serve as collateral, which it did not.
“If someone thinks Hank Paulson could have made the Fed save Lehman Brothers, the answer is, ‘No way,’ ” he said.
But that is not the way that many who have scrutinized his actions see it. Bankers involved say they do not recall Mr. Paulson talking about Lehman’s impaired collateral. And they said that buyers walked away for one reason: because they could not get the same kind of government backing that facilitated the Bear Stearns deal. In retrospect, they added, it was emblematic of the miscalculations by the government in reacting to the crisis.
The day after Lehman collapsed, the Fed saved A.I.G. with an emergency $85 billion loan, but the credit markets around the world began freezing up anyway. It was at this point that Mr. Paulson — feeling outgunned by pursuers, like Butch and Sundance — decided he had to find a systemic solution and stop lurching from crisis to crisis, fixing one company’s problems only to find several more right behind.
“Ben said, ‘Will you go to Congress with me?’ ” said Mr. Paulson, referring to the Federal Reserve chairman, Ben S. Bernanke. “I said: ‘Fine, I’m your partner. I’ll go to Congress.’ ”
Seeing a Problem Earlier
In nearly a century, no Treasury secretary has faced a more difficult financial crisis than that Mr. Paulson is contending with. For months, he and his team have been working around the clock, often seven days a week, trying — in vain — to keep it from deepening. In an hourlong interview with The New York Times, Mr. Paulson defended Treasury’s actions, saying that he and his aides had done everything they could, given the deep-rooted problems of financial excess that had built up over the past decade.
“I could have seen the subprime problem coming earlier,” he acknowledged in the interview, quickly adding in his own defense, “but I’m not saying I would have done anything differently.”
History will be the final judge. But in contrast with Mr. Paulson’s perspective, other government officials and financial executives suggest that Treasury’s epic rescue efforts have evolved as chaotically as the crisis itself. Especially in the past month, as the financial system teetered on the abyss, questions have been raised about the government’s — and Mr. Paulson’s — decisions. Executives on Wall Street and officials in European financial capitals have criticized Mr. Paulson and Mr. Bernanke for allowing Lehman to fail, an event that sent shock waves through the banking system, turning a financial tremor into a tsunami.
“For the equilibrium of the world financial system, this was a genuine error,” Christine Lagarde, France’s finance minister, said recently. Frederic Oudea, chief executive of Société Générale, one of France’s biggest banks, called the failure of Lehman “a trigger” for events leading to the global crash. Willem Sels, a credit strategist with Dresdner Kleinwort, said that “it is the clear that when Lehman defaulted, that is the date your money markets freaked out. It is difficult to not find a causal relationship.”
In addition, Mr. Paulson and Mr. Bernanke have been criticized for squandering precious time and political capital with their original $700 billion bailout plan, which they presented to Congressional leaders days after the Lehman bankruptcy. The two men sold the plan as a vehicle for purchasing toxic mortgage-backed securities from banks and others.
But even after the House finally passed the bill on Oct. 3, markets remained in turmoil. It was not until Britain and other European countries moved to put capital directly into their banks, and the United States followed their lead, that some calm returned.
In the interview, Mr. Paulson said that even before the House acted, he had directed his staff to start drawing up a plan for using some of the $700 billion to recapitalize the banking system — something that Congress was never told and that he had publicly opposed.
Why? Because in the week before the plan passed Congress, conditions deteriorated significantly, Mr. Paulson said.
But many complain the worst of the turmoil might have been avoided if it hadn’t been for Mr. Paulson sticking with an original bailout plan that they viewed as poorly conceived and unworkable. “They were asking the most basic questions,” said one Wall Street executive who spoke to Treasury officials after the bailout bill was passed. “It was clear they hadn’t thought it through.” Senator Charles E. Schumer, Democrat of New York, who had called for an infusion of capital into banks in mid-September, said, “They are so much more on top of this recapitalization plan than they were about the auction plan.”
Even as he defended his actions, Mr. Paulson said he was worried that some of the government’s moves could wind up haunting future Treasury secretaries. He pointed in particular to the decision to guarantee all bank deposits and interbank loans, something the United States did to keep pace with similar decisions in Europe. “We had to,” Mr. Paulson said. “Our banks would not have been able to compete.”
But the federal guarantees could create “moral hazard” and simply encourage banks to take on dangerous risk, he acknowledged. “This is the last thing I wanted to do,” he said.
Summer of Eroding Conditions
The subprime mortgage debacle began emerging in the summer of 2007, about a year after Mr. Paulson left his job as head of Goldman Sachs and joined the Bush administration. But the true depth and extent of the losses did not become clear until earlier this year, Mr. Paulson said.
“We thought there was a reasonable chance of getting through this,” he recalled.
Then came the near failure in March of Bear Stearns, which was rescued in a takeover by JPMorgan Chase only after the Fed agreed to cover $29 billion in losses. That briefly lulled the markets into thinking the worst might be over. But during the summer, conditions deteriorated, and in early September the government was forced to take over Fannie Mae and Freddie Mac, the mortgage finance giants.
With increasing speed, other problems emerged, most notably Lehman and A.I.G., which was also burdened with bad mortgage-related investments. Both became the focus of intense meetings the weekend of Sept. 13-14.
Mr. Paulson, by then, had become frustrated with what he perceived as Mr. Fuld’s foot-dragging. “Lehman announced bad earnings around the middle of June, and we told Fuld that if he didn’t have a solution by the time he announced his third-quarter earnings, there would be a serious problem,” Mr. Paulson said. “We pressed him to get a buyer.”
Here the views of Mr. Paulson and his critics start to diverge, over what transpired in marathon meetings with Wall Street executives at the Federal Reserve Bank of New York that weekend.
Lehman officials said they believed the firm had not one but two potential buyers: Bank of America and Barclays, the big British bank. But both had conditions. Bank of America wanted the Fed to make a $65 billion loan to cover any exposure to Lehman’s bad assets, according to one person privy to the discussions who did not want to be identified because of their sensitive nature. Although this was more than double what the Fed had made available to facilitate the takeover of Bear Stearns by JPMorgan, Bank of America justified the request on the grounds that Lehman was larger.
Barclays also wanted a guarantee to protect against losses should Lehman’s business worsen before Barclays could compete its takeover.
The government initially was not clear in telling Bank of America and Barclays that no help would be forthcoming, participants said. The New York Fed president, Timothy F. Geithner, in particular, was uncomfortable about drawing a line in the sand against government support for a Lehman takeover. Participants said they were left with the impression from Mr. Paulson and Mr. Geithner that the government might well provide help for a serious buyer, with Mr. Paulson also trying to get Wall Street firms to create a $10 billion fund to absorb some of Lehman’s bad assets.
It remains unclear whether a more consistent message would have changed the outcome. But by Saturday, Bank of America, frustrated by the government’s unwillingness to commit to a deal, turned its attention to Merrill Lynch, which agreed to a takeover. Barclays, equally frustrated, walked away on Sunday, said the person with knowledge of the discussions.
Mr. Paulson said in the interview that Treasury was not at fault. The $10 billion industry fund had not worked because executives in the room realized that bailing out Lehman would not end the crisis. There were too many other firms that needed help. “I didn’t want to see Lehman go,” Mr. Paulson said. “I understood the consequences better than anybody.”
At a White House briefing on Sept. 15, Mr. Paulson shed no tears over Lehman’s failure. “I never once considered it appropriate to put taxpayer money on the line in resolving Lehman Brothers,” he told reporters.
In the interview, however, Mr. Paulson said the main issue was whether it was legal. Under the law, the Fed has the authority to lend to any nonbank, but only if the loan is “secured to the satisfaction of the Federal Reserve bank.” When pressed about why it was legal for the Fed to lend billions of dollars to Bear Stearns and A.I.G. but not Lehman Brothers, Mr. Paulson emphasized that Lehman’s bad assets created “a huge hole” on its balance sheet. By contrast, he said, Bear Stearns and A.I.G. had more trustworthy collateral.
People close to Lehman, however, say it was never told this by the government. “The Fed and the S.E.C. had their people on site at Lehman during 2008,” said a person in the Lehman camp. “The government saw everything in real time involving Lehman’s liquidity, funding, capital, risk management and marks — and never expressed any concerns about collateral or a hole in the balance sheet.”
The aftermath of the Lehman bankruptcy was disastrous. “Lehman was one of the single largest issuers of commercial paper in the world,” said Joshua Rosner, a managing director at Graham Fisher & Company, referring to short-term debt issued by companies to finance day-to-day operations; this market locked up in the wake of Lehman’s failure. “How could you let it go bankrupt and not expect the commercial paper market to be completely crushed?” Why Bear Stearns but not Lehman, wonders Representative Barney Frank. Mr. Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee, has generally been a supporter of Mr. Paulson during the crisis. “If it was the right thing to do, why did they do it only once?” he asked.
In response, Mr. Paulson said that only now that the bailout bill has been passed does the government have the authority to intervene in a nonbank failure in cases of firms that lack adequate collateral, like Lehman.
A Difficult Sell
Lehman’s failure was followed by another strategic misstep by Treasury, critics say. They assert that Mr. Paulson initially pushed the wrong systemic fix: a bailout plan that revolved around buying up toxic securities, rather than putting capital into the banking system, a far more direct way of providing assistance.
Mr. Paulson rejects this view. In the interview, he cited several reasons he and Mr. Bernanke concentrated initially on purchasing distressed assets. First, he said, this plan had been in the works for months and was much further developed. “If we had felt going in that the right way to deal with the problem was to put equity in, we would have taken some time and developed a program,” he said.
He also worried that Congress would not be receptive to the idea of Treasury taking an ownership stake in banks: “This is a very complicated and difficult sell. We want to put equity in, but we don’t want to nationalize the banks. And I don’t know how to sell that.”
But he doesn’t dispute that he changed direction. Mr. Paulson said that by Oct. 2, as he was departing for a weekend getaway to an island with his family — his first weekend off in nearly two months — he told his staff, “We are going to put capital into banks first.”
Although the bailout bill still had not passed, the financial markets had deteriorated. He did not, however, inform Congress of his change of heart, and the House debate revolved almost entirely around the asset-purchase plan.
Just 11 days later, Treasury had come up with a plan to inject capital into the banks — which Mr. Paulson sold to the nation’s nine largest financial institutions on Oct. 13. “I can imagine being dinged for some things,” he said, “but not for moving that quickly.”
He also defended Treasury’s recapitalization plan against critics who say that he did not extract a high enough price from the banks getting taxpayers’ money. “I could not see the United States doing things like putting in capital on a punitive basis that hurts investors. And we don’t want to run banks.”
The Global Extent
Asked what he might have done better, Mr. Paulson replied, “I could have made a better case to the public.”
He added, “I never felt worse than when the House voted no” on the bailout plan Sept. 26, its initial rejection before ultimately passing the plan.
As for Lehman, Mr. Paulson insisted that it was “a symptom and not a cause” of the financial meltdown that took place in recent weeks. The real problem, he contended, is that banks all over the world made wrong-headed loans that have now come back to haunt them. After meeting recently with European central bankers, he said, “the thing that took your breath away was the extent of the problem. Look at country after country that said they didn’t have a problem, and it turned out they had a huge problem.”
Mr. Paulson added, “Ten years from now no one is going to say that this crisis was brought about because Lehman Brothers went down.”
Nelson D. Schwartz and Stephen Labaton contributed reporting.
More Articles in Business » A version of this article appeared in print on October 23, 2008, on page A1 of the New York edition.
The Reckoning
Struggling to Keep Up as the Crisis Raced On
Articles in this series are exploring the causes of the financial crisis.Previous Articles in the Series »
Related
Times Topics: Credit Crisis — The Essentials
Times Topics: Treasury Department, U.S.
Times Topics: Henry M. Paulson Jr.
Todd Heisler/The New York Times
In nearly a century, no Treasury secretary has faced a more difficult financial crisis than the one Henry M. Paulson Jr. is contending with.
It was the weekend of Sept. 13, and the moment Treasury Secretary Henry M. Paulson Jr. had feared for months was finally upon him: Lehman Brothers was hurtling toward bankruptcy — fast.
Knowing that Lehman had billions of dollars in bad investments on its books, Mr. Paulson had long urged Lehman’s chief executive, Richard S. Fuld Jr., to find a solution for his firm’s problems. “He was asked to aggressively look for a buyer,” Mr. Paulson recalled in an interview.
But Lehman could not — despite what Mr. Paulson described as personal pleas to other firms to buy some of Lehman’s toxic assets and efforts to persuade another bank to acquire Lehman. With all options closed, he said, the government’s hands were tied. Although the Federal Reserve had helped bail out Bear Stearns — and was within days of bailing out the giant insurer American International Group — it could not help Lehman, even as its default threatened to wreak havoc on financial markets.
“We didn’t have the powers,” Mr. Paulson insisted, explaining a decision that many have since criticized — to allow Lehman to go bankrupt. By law, he continued, the Federal Reserve could bail out Lehman with a loan only if the bank had enough good assets to serve as collateral, which it did not.
“If someone thinks Hank Paulson could have made the Fed save Lehman Brothers, the answer is, ‘No way,’ ” he said.
But that is not the way that many who have scrutinized his actions see it. Bankers involved say they do not recall Mr. Paulson talking about Lehman’s impaired collateral. And they said that buyers walked away for one reason: because they could not get the same kind of government backing that facilitated the Bear Stearns deal. In retrospect, they added, it was emblematic of the miscalculations by the government in reacting to the crisis.
The day after Lehman collapsed, the Fed saved A.I.G. with an emergency $85 billion loan, but the credit markets around the world began freezing up anyway. It was at this point that Mr. Paulson — feeling outgunned by pursuers, like Butch and Sundance — decided he had to find a systemic solution and stop lurching from crisis to crisis, fixing one company’s problems only to find several more right behind.
“Ben said, ‘Will you go to Congress with me?’ ” said Mr. Paulson, referring to the Federal Reserve chairman, Ben S. Bernanke. “I said: ‘Fine, I’m your partner. I’ll go to Congress.’ ”
Seeing a Problem Earlier
In nearly a century, no Treasury secretary has faced a more difficult financial crisis than that Mr. Paulson is contending with. For months, he and his team have been working around the clock, often seven days a week, trying — in vain — to keep it from deepening. In an hourlong interview with The New York Times, Mr. Paulson defended Treasury’s actions, saying that he and his aides had done everything they could, given the deep-rooted problems of financial excess that had built up over the past decade.
“I could have seen the subprime problem coming earlier,” he acknowledged in the interview, quickly adding in his own defense, “but I’m not saying I would have done anything differently.”
History will be the final judge. But in contrast with Mr. Paulson’s perspective, other government officials and financial executives suggest that Treasury’s epic rescue efforts have evolved as chaotically as the crisis itself. Especially in the past month, as the financial system teetered on the abyss, questions have been raised about the government’s — and Mr. Paulson’s — decisions. Executives on Wall Street and officials in European financial capitals have criticized Mr. Paulson and Mr. Bernanke for allowing Lehman to fail, an event that sent shock waves through the banking system, turning a financial tremor into a tsunami.
“For the equilibrium of the world financial system, this was a genuine error,” Christine Lagarde, France’s finance minister, said recently. Frederic Oudea, chief executive of Société Générale, one of France’s biggest banks, called the failure of Lehman “a trigger” for events leading to the global crash. Willem Sels, a credit strategist with Dresdner Kleinwort, said that “it is the clear that when Lehman defaulted, that is the date your money markets freaked out. It is difficult to not find a causal relationship.”
In addition, Mr. Paulson and Mr. Bernanke have been criticized for squandering precious time and political capital with their original $700 billion bailout plan, which they presented to Congressional leaders days after the Lehman bankruptcy. The two men sold the plan as a vehicle for purchasing toxic mortgage-backed securities from banks and others.
But even after the House finally passed the bill on Oct. 3, markets remained in turmoil. It was not until Britain and other European countries moved to put capital directly into their banks, and the United States followed their lead, that some calm returned.
In the interview, Mr. Paulson said that even before the House acted, he had directed his staff to start drawing up a plan for using some of the $700 billion to recapitalize the banking system — something that Congress was never told and that he had publicly opposed.
Why? Because in the week before the plan passed Congress, conditions deteriorated significantly, Mr. Paulson said.
But many complain the worst of the turmoil might have been avoided if it hadn’t been for Mr. Paulson sticking with an original bailout plan that they viewed as poorly conceived and unworkable. “They were asking the most basic questions,” said one Wall Street executive who spoke to Treasury officials after the bailout bill was passed. “It was clear they hadn’t thought it through.” Senator Charles E. Schumer, Democrat of New York, who had called for an infusion of capital into banks in mid-September, said, “They are so much more on top of this recapitalization plan than they were about the auction plan.”
Even as he defended his actions, Mr. Paulson said he was worried that some of the government’s moves could wind up haunting future Treasury secretaries. He pointed in particular to the decision to guarantee all bank deposits and interbank loans, something the United States did to keep pace with similar decisions in Europe. “We had to,” Mr. Paulson said. “Our banks would not have been able to compete.”
But the federal guarantees could create “moral hazard” and simply encourage banks to take on dangerous risk, he acknowledged. “This is the last thing I wanted to do,” he said.
Summer of Eroding Conditions
The subprime mortgage debacle began emerging in the summer of 2007, about a year after Mr. Paulson left his job as head of Goldman Sachs and joined the Bush administration. But the true depth and extent of the losses did not become clear until earlier this year, Mr. Paulson said.
“We thought there was a reasonable chance of getting through this,” he recalled.
Then came the near failure in March of Bear Stearns, which was rescued in a takeover by JPMorgan Chase only after the Fed agreed to cover $29 billion in losses. That briefly lulled the markets into thinking the worst might be over. But during the summer, conditions deteriorated, and in early September the government was forced to take over Fannie Mae and Freddie Mac, the mortgage finance giants.
With increasing speed, other problems emerged, most notably Lehman and A.I.G., which was also burdened with bad mortgage-related investments. Both became the focus of intense meetings the weekend of Sept. 13-14.
Mr. Paulson, by then, had become frustrated with what he perceived as Mr. Fuld’s foot-dragging. “Lehman announced bad earnings around the middle of June, and we told Fuld that if he didn’t have a solution by the time he announced his third-quarter earnings, there would be a serious problem,” Mr. Paulson said. “We pressed him to get a buyer.”
Here the views of Mr. Paulson and his critics start to diverge, over what transpired in marathon meetings with Wall Street executives at the Federal Reserve Bank of New York that weekend.
Lehman officials said they believed the firm had not one but two potential buyers: Bank of America and Barclays, the big British bank. But both had conditions. Bank of America wanted the Fed to make a $65 billion loan to cover any exposure to Lehman’s bad assets, according to one person privy to the discussions who did not want to be identified because of their sensitive nature. Although this was more than double what the Fed had made available to facilitate the takeover of Bear Stearns by JPMorgan, Bank of America justified the request on the grounds that Lehman was larger.
Barclays also wanted a guarantee to protect against losses should Lehman’s business worsen before Barclays could compete its takeover.
The government initially was not clear in telling Bank of America and Barclays that no help would be forthcoming, participants said. The New York Fed president, Timothy F. Geithner, in particular, was uncomfortable about drawing a line in the sand against government support for a Lehman takeover. Participants said they were left with the impression from Mr. Paulson and Mr. Geithner that the government might well provide help for a serious buyer, with Mr. Paulson also trying to get Wall Street firms to create a $10 billion fund to absorb some of Lehman’s bad assets.
It remains unclear whether a more consistent message would have changed the outcome. But by Saturday, Bank of America, frustrated by the government’s unwillingness to commit to a deal, turned its attention to Merrill Lynch, which agreed to a takeover. Barclays, equally frustrated, walked away on Sunday, said the person with knowledge of the discussions.
Mr. Paulson said in the interview that Treasury was not at fault. The $10 billion industry fund had not worked because executives in the room realized that bailing out Lehman would not end the crisis. There were too many other firms that needed help. “I didn’t want to see Lehman go,” Mr. Paulson said. “I understood the consequences better than anybody.”
At a White House briefing on Sept. 15, Mr. Paulson shed no tears over Lehman’s failure. “I never once considered it appropriate to put taxpayer money on the line in resolving Lehman Brothers,” he told reporters.
In the interview, however, Mr. Paulson said the main issue was whether it was legal. Under the law, the Fed has the authority to lend to any nonbank, but only if the loan is “secured to the satisfaction of the Federal Reserve bank.” When pressed about why it was legal for the Fed to lend billions of dollars to Bear Stearns and A.I.G. but not Lehman Brothers, Mr. Paulson emphasized that Lehman’s bad assets created “a huge hole” on its balance sheet. By contrast, he said, Bear Stearns and A.I.G. had more trustworthy collateral.
People close to Lehman, however, say it was never told this by the government. “The Fed and the S.E.C. had their people on site at Lehman during 2008,” said a person in the Lehman camp. “The government saw everything in real time involving Lehman’s liquidity, funding, capital, risk management and marks — and never expressed any concerns about collateral or a hole in the balance sheet.”
The aftermath of the Lehman bankruptcy was disastrous. “Lehman was one of the single largest issuers of commercial paper in the world,” said Joshua Rosner, a managing director at Graham Fisher & Company, referring to short-term debt issued by companies to finance day-to-day operations; this market locked up in the wake of Lehman’s failure. “How could you let it go bankrupt and not expect the commercial paper market to be completely crushed?” Why Bear Stearns but not Lehman, wonders Representative Barney Frank. Mr. Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee, has generally been a supporter of Mr. Paulson during the crisis. “If it was the right thing to do, why did they do it only once?” he asked.
In response, Mr. Paulson said that only now that the bailout bill has been passed does the government have the authority to intervene in a nonbank failure in cases of firms that lack adequate collateral, like Lehman.
A Difficult Sell
Lehman’s failure was followed by another strategic misstep by Treasury, critics say. They assert that Mr. Paulson initially pushed the wrong systemic fix: a bailout plan that revolved around buying up toxic securities, rather than putting capital into the banking system, a far more direct way of providing assistance.
Mr. Paulson rejects this view. In the interview, he cited several reasons he and Mr. Bernanke concentrated initially on purchasing distressed assets. First, he said, this plan had been in the works for months and was much further developed. “If we had felt going in that the right way to deal with the problem was to put equity in, we would have taken some time and developed a program,” he said.
He also worried that Congress would not be receptive to the idea of Treasury taking an ownership stake in banks: “This is a very complicated and difficult sell. We want to put equity in, but we don’t want to nationalize the banks. And I don’t know how to sell that.”
But he doesn’t dispute that he changed direction. Mr. Paulson said that by Oct. 2, as he was departing for a weekend getaway to an island with his family — his first weekend off in nearly two months — he told his staff, “We are going to put capital into banks first.”
Although the bailout bill still had not passed, the financial markets had deteriorated. He did not, however, inform Congress of his change of heart, and the House debate revolved almost entirely around the asset-purchase plan.
Just 11 days later, Treasury had come up with a plan to inject capital into the banks — which Mr. Paulson sold to the nation’s nine largest financial institutions on Oct. 13. “I can imagine being dinged for some things,” he said, “but not for moving that quickly.”
He also defended Treasury’s recapitalization plan against critics who say that he did not extract a high enough price from the banks getting taxpayers’ money. “I could not see the United States doing things like putting in capital on a punitive basis that hurts investors. And we don’t want to run banks.”
The Global Extent
Asked what he might have done better, Mr. Paulson replied, “I could have made a better case to the public.”
He added, “I never felt worse than when the House voted no” on the bailout plan Sept. 26, its initial rejection before ultimately passing the plan.
As for Lehman, Mr. Paulson insisted that it was “a symptom and not a cause” of the financial meltdown that took place in recent weeks. The real problem, he contended, is that banks all over the world made wrong-headed loans that have now come back to haunt them. After meeting recently with European central bankers, he said, “the thing that took your breath away was the extent of the problem. Look at country after country that said they didn’t have a problem, and it turned out they had a huge problem.”
Mr. Paulson added, “Ten years from now no one is going to say that this crisis was brought about because Lehman Brothers went down.”
Nelson D. Schwartz and Stephen Labaton contributed reporting.
More Articles in Business » A version of this article appeared in print on October 23, 2008, on page A1 of the New York edition.
Wednesday, October 22, 2008
CHERRY TREE LANE JOURNAL # 74
Keep on truckin'... Keep on keeping on... Don't give up... Persevere as if your life depended on it which it does...
Tuesday, October 21, 2008
CHERRY TREE LANE JOURNAL # 73
I need to get a life... to experience the joy of living to the fullest... to taste the bittterness of defeat.. to be whole again and not segmented...
The Mommy Track
The Mommy Track
Monday, October 20, 2008
CHERRY TREE LANE JOURNAL # 72
I am reading a book by James Patterson titled 4th of July... and I have checked out in large print his 5th Horseman so I will be reading Patterson for a while...
Sunday, October 19, 2008
CHERRY TREE LANE JOURNAL # 71
A new week... a new beginning... I never did say more about my roommate, he is 95 and is a Commander in the U.S.Navy
Saturday, October 18, 2008
CHERRY TREE LANE JOURNAL # 70
It's difficult to stay focused.. to know what to say or how to say it...
Friday, October 17, 2008
CHERRY TREE LANE JOURNAL # 69
Another day, another dollar... and all is well... I have a new roommate... he can see, hear and speak...
Tuesday, October 14, 2008
CHERRY TREE LANE JOURNAL # 68
It's 0630 am and all is well... sorry I haven't been on the last week... problem with computers again...
More later...
More later...
Wednesday, October 8, 2008
Tuesday, October 7, 2008
CHERRY TREE LANE JOURNAL # 66
It's a beautiful day in the neighborhood, won't you be mine?
My roommate will be leaving next Wednesday...He has a female 'friend' who visits daily and they are obviously in love .. it's nice and he dosen't correct anyone who calls her his wife..
I'm having some major problems with therapy... I'll wait until I talk with Brian before I write about it here...
My roommate will be leaving next Wednesday...He has a female 'friend' who visits daily and they are obviously in love .. it's nice and he dosen't correct anyone who calls her his wife..
I'm having some major problems with therapy... I'll wait until I talk with Brian before I write about it here...
Monday, October 6, 2008
Sunday, October 5, 2008
CHERRY TREE LANE JOURNAL # 64
Pressured to Take More Risk, Fannie Hit a Tipping Point
As Credit Crisis Spiraled, Alarm Led to Action
Behind Insurer’s Crisis, Blind Eye to a Web of Risk
I listed these articles from the NYTimes to complete the series on what caused the meltdown...
As Credit Crisis Spiraled, Alarm Led to Action
Behind Insurer’s Crisis, Blind Eye to a Web of Risk
I listed these articles from the NYTimes to complete the series on what caused the meltdown...
Saturday, October 4, 2008
CHERRY TREE LANE JOURNAL # 63
I have experienced another roommate death... I have a new roommate who is blind but alert and vocal and friendly... The nurses were nice and concerned about me...
Friday, October 3, 2008
CHERRY TREE LANE JOURNAL # 62
The Reckoning
Agency’s ’04 Rule Let Banks Pile Up New Debt
As rumors swirled that Bear Stearns faced imminent collapse in early March, Christopher Cox was told by his staff that Bear Stearns had $17 billion in cash and other assets — more than enough to weather the storm.
Drained of most of its cash three days later, Bear Stearns was forced into a hastily arranged marriage with JPMorgan Chase — backed by a $29 billion taxpayer dowry.
Within six months, other lions of Wall Street would also either disappear or transform themselves to survive the financial maelstrom — Merrill Lynch sold itself to Bank of America, Lehman Brothers filed for bankruptcy protection, and Goldman Sachs and Morgan Stanley converted to commercial banks.
How could Mr. Cox have been so wrong?
Many events in Washington, on Wall Street and elsewhere around the country have led to what has been called the most serious financial crisis since the 1930s. But decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agency’s failure to follow through on those decisions also explains why Washington regulators did not see what was coming.
On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.
They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.
The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.
A lone dissenter — a software consultant and expert on risk management — weighed in from Indiana with a two-page letter to warn the commission that the move was a grave mistake. He never heard back from Washington.
One commissioner, Harvey J. Goldschmid, questioned the staff about the consequences of the proposed exemption. It would only be available for the largest firms, he was reassuringly told — those with assets greater than $5 billion.
“We’ve said these are the big guys,” Mr. Goldschmid said, provoking nervous laughter, “but that means if anything goes wrong, it’s going to be an awfully big mess.”
Mr. Goldschmid, an authority on securities law from Columbia, was a behind-the-scenes adviser in 2002 to Senator Paul S. Sarbanes when he rewrote the nation’s corporate laws after a wave of accounting scandals. “Do we feel secure if there are these drops in capital we really will have investor protection?” Mr. Goldschmid asked. A senior staff member said the commission would hire the best minds, including people with strong quantitative skills to parse the banks’ balance sheets.
Annette L. Nazareth, the head of market regulation, reassured the commission that under the new rules, the companies for the first time could be restricted by the commission from excessively risky activity. She was later appointed a commissioner and served until January 2008.
“I’m very happy to support it,” said Commissioner Roel C. Campos, a former federal prosecutor and owner of a small radio broadcasting company from Houston, who then deadpanned: “And I keep my fingers crossed for the future.”
The proceeding was sparsely attended. None of the major media outlets, including The New York Times, covered it.
After 55 minutes of discussion, which can now be heard on the Web sites of the agency and The Times, the chairman, William H. Donaldson, a veteran Wall Street executive, called for a vote. It was unanimous. The decision, changing what was known as the net capital rule, was completed and published in The Federal Register a few months later.
With that, the five big independent investment firms were unleashed.
In loosening the capital rules, which are supposed to provide a buffer in turbulent times, the agency also decided to rely on the firms’ own computer models for determining the riskiness of investments, essentially outsourcing the job of monitoring risk to the banks themselves.
Over the following months and years, each of the firms would take advantage of the looser rules. At Bear Stearns, the leverage ratio — a measurement of how much the firm was borrowing compared to its total assets — rose sharply, to 33 to 1. In other words, for every dollar in equity, it had $33 of debt. The ratios at the other firms also rose significantly.
The 2004 decision for the first time gave the S.E.C. a window on the banks’ increasingly risky investments in mortgage-related securities.
But the agency never took true advantage of that part of the bargain. The supervisory program under Mr. Cox, who arrived at the agency a year later, was a low priority.
The commission assigned seven people to examine the parent companies — which last year controlled financial empires with combined assets of more than $4 trillion. Since March 2007, the office has not had a director. And as of last month, the office had not completed a single inspection since it was reshuffled by Mr. Cox more than a year and a half ago.
The few problems the examiners preliminarily uncovered about the riskiness of the firms’ investments and their increased reliance on debt — clear signs of trouble — were all but ignored.
The commission’s division of trading and markets “became aware of numerous potential red flags prior to Bear Stearns’s collapse, regarding its concentration of mortgage securities, high leverage, shortcomings of risk management in mortgage-backed securities and lack of compliance with the spirit of certain” capital standards, said an inspector general’s report issued last Friday. But the division “did not take actions to limit these risk factors.”
Drive to Deregulate
The commission’s decision effectively to outsource its oversight to the firms themselves fit squarely in the broader Washington culture of the last eight years under President Bush.
A similar closeness to industry and laissez-faire philosophy has driven a push for deregulation throughout the government, from the Consumer Product Safety Commission and the Environmental Protection Agency to worker safety and transportation agencies.
“It’s a fair criticism of the Bush administration that regulators have relied on many voluntary regulatory programs,” said Roderick M. Hills, a Republican who was chairman of the S.E.C. under President Gerald R. Ford. “The problem with such voluntary programs is that, as we’ve seen throughout history, they often don’t work.”
As was the case with other agencies, the commission’s decision was motivated by industry complaints of excessive regulation at a time of growing competition from overseas. The 2004 decision was aimed at easing regulatory burdens that the European Union was about to impose on the foreign operations of United States investment banks.
The Europeans said they would agree not to regulate the foreign subsidiaries of the investment banks on one condition — that the commission regulate the parent companies, along with the brokerage units that the S.E.C. already oversaw.
A 1999 law, however, had left a gap that did not give the commission explicit oversight of the parent companies. To get around that problem, and in exchange for the relaxed capital rules, the banks volunteered to let the commission examine the books of their parent companies and subsidiaries.
The 2004 decision also reflected a faith that Wall Street’s financial interests coincided with Washington’s regulatory interests.
“We foolishly believed that the firms had a strong culture of self-preservation and responsibility and would have the discipline not to be excessively borrowing,” said Professor James D. Cox, an expert on securities law and accounting at Duke School of Law (and no relationship to Christopher Cox).
“Letting the firms police themselves made sense to me because I didn’t think the S.E.C. had the staff and wherewithal to impose its own standards and I foolishly thought the market would impose its own self-discipline. We’ve all learned a terrible lesson,” he added.
In letters to the commissioners, senior executives at the five investment banks complained about what they called unnecessary regulation and oversight by both American and European authorities. A lone voice of dissent in the 2004 proceeding came from a software consultant from Valparaiso, Ind., who said the computer models run by the firms — which the regulators would be relying on — could not anticipate moments of severe market turbulence.
“With the stroke of a pen, capital requirements are removed!” the consultant, Leonard D. Bole, wrote to the commission on Jan. 22, 2004. “Has the trading environment changed sufficiently since 1997, when the current requirements were enacted, that the commission is confident that current requirements in examples such as these can be disregarded?”
He said that similar computer standards had failed to protect Long-Term Capital Management, the hedge fund that collapsed in 1998, and could not protect companies from the market plunge of October 1987.
Mr. Bole, who earned a master’s degree in business administration at the University of Chicago, helps write computer programs that financial institutions use to meet capital requirements.
He said in a recent interview that he was never called by anyone from the commission.
“I’m a little guy in the land of giants,” he said. “I thought that the reduction in capital was rather dramatic.”
Policing Wall Street
A once-proud agency with a rich history at the intersection of Washington and Wall Street, the Securities and Exchange Commission was created during the Great Depression as part of the broader effort to restore confidence to battered investors. It was led in its formative years by heavyweight New Dealers, including James Landis and William O. Douglas. When President Franklin D. Roosevelt was asked in 1934 why he appointed Joseph P. Kennedy, a spectacularly successful stock speculator, as the agency’s first chairman, Roosevelt replied: “Set a thief to catch a thief.”
The commission’s most public role in policing Wall Street is its enforcement efforts. But critics say that in recent years it has failed to deter market problems. “It seems to me the enforcement effort in recent years has fallen short of what one Supreme Court justice once called the fear of the shotgun behind the door,” said Arthur Levitt Jr., who was S.E.C. chairman in the Clinton administration. “With this commission, the shotgun too rarely came out from behind the door.”
Christopher Cox had been a close ally of business groups in his 17 years as a House member from one of the most conservative districts in Southern California. Mr. Cox had led the effort to rewrite securities laws to make investor lawsuits harder to file. He also fought against accounting rules that would give less favorable treatment to executive stock options.
Under Mr. Cox, the commission responded to complaints by some businesses by making it more difficult for the enforcement staff to investigate and bring cases against companies. The commission has repeatedly reversed or reduced proposed settlements that companies had tentatively agreed upon. While the number of enforcement cases has risen, the number of cases involving significant players or large amounts of money has declined.
Mr. Cox dismantled a risk management office created by Mr. Donaldson that was assigned to watch for future problems. While other financial regulatory agencies criticized a blueprint by Mr. Paulson, the Treasury secretary, that proposed to reduce their stature — and that of the S.E.C. — Mr. Cox did not challenge the plan, leaving it to three former Democratic and Republican commission chairmen to complain that the blueprint would neuter the agency.
In the process, Mr. Cox has surrounded himself with conservative lawyers, economists and accountants who, before the market turmoil of recent months, had embraced a far more limited vision for the commission than many of his predecessors.
‘Stakes in the Ground’
Last Friday, the commission formally ended the 2004 program, acknowledging that it had failed to anticipate the problems at Bear Stearns and the four other major investment banks.
“The last six months have made it abundantly clear that voluntary regulation does not work,” Mr. Cox said.
The decision to shutter the program came after Mr. Cox was blamed by Senator John McCain, the Republican presidential candidate, for the crisis. Mr. McCain has demanded Mr. Cox’s resignation.
Mr. Cox has said that the 2004 program was flawed from its inception. But former officials as well as the inspector general’s report have suggested that a major reason for its failure was Mr. Cox’s use of it.
“In retrospect, the tragedy is that the 2004 rule making gave us the ability to get information that would have been critical to sensible monitoring, and yet the S.E.C. didn’t oversee well enough,” Mr. Goldschmid said in an interview. He and Mr. Donaldson left the commission in 2005.
Mr. Cox declined requests for an interview. In response to written questions, including whether he or the commission had made any mistakes over the last three years that contributed to the current crisis, he said, “There will be no shortage of retrospective analyses about what happened and what should have happened.” He said that by last March he had concluded that the monitoring program’s “metrics were inadequate.”
He said that because the commission did not have the authority to curtail the heavy borrowing at Bear Stearns and the other firms, he and the commission were powerless to stop it.
“Implementing a purely voluntary program was very difficult because the commission’s regulations shouldn’t be suggestions,” he said. “The fact these companies could withdraw from voluntary supervision at their discretion diminished the mandate of the program and weakened its effectiveness. Experience has shown that the S.E.C. could not bootstrap itself into authority it didn’t have.”
But critics say that the commission could have done more, and that the agency’s effectiveness comes from the tone set at the top by the chairman, or what Mr. Levitt, the longest-serving S.E.C. chairman in history, calls “stakes in the ground.”
“If you go back to the chairmen in recent years, you will see that each spoke about a variety of issues that were important to them,” Mr. Levitt said. “This commission placed very few stakes in the ground.”
More Articles in Business » A version of this article appeared in print on October 3, 2008, on page A1 of the New York edition.
Agency’s ’04 Rule Let Banks Pile Up New Debt
As rumors swirled that Bear Stearns faced imminent collapse in early March, Christopher Cox was told by his staff that Bear Stearns had $17 billion in cash and other assets — more than enough to weather the storm.
Drained of most of its cash three days later, Bear Stearns was forced into a hastily arranged marriage with JPMorgan Chase — backed by a $29 billion taxpayer dowry.
Within six months, other lions of Wall Street would also either disappear or transform themselves to survive the financial maelstrom — Merrill Lynch sold itself to Bank of America, Lehman Brothers filed for bankruptcy protection, and Goldman Sachs and Morgan Stanley converted to commercial banks.
How could Mr. Cox have been so wrong?
Many events in Washington, on Wall Street and elsewhere around the country have led to what has been called the most serious financial crisis since the 1930s. But decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agency’s failure to follow through on those decisions also explains why Washington regulators did not see what was coming.
On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.
They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.
The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.
A lone dissenter — a software consultant and expert on risk management — weighed in from Indiana with a two-page letter to warn the commission that the move was a grave mistake. He never heard back from Washington.
One commissioner, Harvey J. Goldschmid, questioned the staff about the consequences of the proposed exemption. It would only be available for the largest firms, he was reassuringly told — those with assets greater than $5 billion.
“We’ve said these are the big guys,” Mr. Goldschmid said, provoking nervous laughter, “but that means if anything goes wrong, it’s going to be an awfully big mess.”
Mr. Goldschmid, an authority on securities law from Columbia, was a behind-the-scenes adviser in 2002 to Senator Paul S. Sarbanes when he rewrote the nation’s corporate laws after a wave of accounting scandals. “Do we feel secure if there are these drops in capital we really will have investor protection?” Mr. Goldschmid asked. A senior staff member said the commission would hire the best minds, including people with strong quantitative skills to parse the banks’ balance sheets.
Annette L. Nazareth, the head of market regulation, reassured the commission that under the new rules, the companies for the first time could be restricted by the commission from excessively risky activity. She was later appointed a commissioner and served until January 2008.
“I’m very happy to support it,” said Commissioner Roel C. Campos, a former federal prosecutor and owner of a small radio broadcasting company from Houston, who then deadpanned: “And I keep my fingers crossed for the future.”
The proceeding was sparsely attended. None of the major media outlets, including The New York Times, covered it.
After 55 minutes of discussion, which can now be heard on the Web sites of the agency and The Times, the chairman, William H. Donaldson, a veteran Wall Street executive, called for a vote. It was unanimous. The decision, changing what was known as the net capital rule, was completed and published in The Federal Register a few months later.
With that, the five big independent investment firms were unleashed.
In loosening the capital rules, which are supposed to provide a buffer in turbulent times, the agency also decided to rely on the firms’ own computer models for determining the riskiness of investments, essentially outsourcing the job of monitoring risk to the banks themselves.
Over the following months and years, each of the firms would take advantage of the looser rules. At Bear Stearns, the leverage ratio — a measurement of how much the firm was borrowing compared to its total assets — rose sharply, to 33 to 1. In other words, for every dollar in equity, it had $33 of debt. The ratios at the other firms also rose significantly.
The 2004 decision for the first time gave the S.E.C. a window on the banks’ increasingly risky investments in mortgage-related securities.
But the agency never took true advantage of that part of the bargain. The supervisory program under Mr. Cox, who arrived at the agency a year later, was a low priority.
The commission assigned seven people to examine the parent companies — which last year controlled financial empires with combined assets of more than $4 trillion. Since March 2007, the office has not had a director. And as of last month, the office had not completed a single inspection since it was reshuffled by Mr. Cox more than a year and a half ago.
The few problems the examiners preliminarily uncovered about the riskiness of the firms’ investments and their increased reliance on debt — clear signs of trouble — were all but ignored.
The commission’s division of trading and markets “became aware of numerous potential red flags prior to Bear Stearns’s collapse, regarding its concentration of mortgage securities, high leverage, shortcomings of risk management in mortgage-backed securities and lack of compliance with the spirit of certain” capital standards, said an inspector general’s report issued last Friday. But the division “did not take actions to limit these risk factors.”
Drive to Deregulate
The commission’s decision effectively to outsource its oversight to the firms themselves fit squarely in the broader Washington culture of the last eight years under President Bush.
A similar closeness to industry and laissez-faire philosophy has driven a push for deregulation throughout the government, from the Consumer Product Safety Commission and the Environmental Protection Agency to worker safety and transportation agencies.
“It’s a fair criticism of the Bush administration that regulators have relied on many voluntary regulatory programs,” said Roderick M. Hills, a Republican who was chairman of the S.E.C. under President Gerald R. Ford. “The problem with such voluntary programs is that, as we’ve seen throughout history, they often don’t work.”
As was the case with other agencies, the commission’s decision was motivated by industry complaints of excessive regulation at a time of growing competition from overseas. The 2004 decision was aimed at easing regulatory burdens that the European Union was about to impose on the foreign operations of United States investment banks.
The Europeans said they would agree not to regulate the foreign subsidiaries of the investment banks on one condition — that the commission regulate the parent companies, along with the brokerage units that the S.E.C. already oversaw.
A 1999 law, however, had left a gap that did not give the commission explicit oversight of the parent companies. To get around that problem, and in exchange for the relaxed capital rules, the banks volunteered to let the commission examine the books of their parent companies and subsidiaries.
The 2004 decision also reflected a faith that Wall Street’s financial interests coincided with Washington’s regulatory interests.
“We foolishly believed that the firms had a strong culture of self-preservation and responsibility and would have the discipline not to be excessively borrowing,” said Professor James D. Cox, an expert on securities law and accounting at Duke School of Law (and no relationship to Christopher Cox).
“Letting the firms police themselves made sense to me because I didn’t think the S.E.C. had the staff and wherewithal to impose its own standards and I foolishly thought the market would impose its own self-discipline. We’ve all learned a terrible lesson,” he added.
In letters to the commissioners, senior executives at the five investment banks complained about what they called unnecessary regulation and oversight by both American and European authorities. A lone voice of dissent in the 2004 proceeding came from a software consultant from Valparaiso, Ind., who said the computer models run by the firms — which the regulators would be relying on — could not anticipate moments of severe market turbulence.
“With the stroke of a pen, capital requirements are removed!” the consultant, Leonard D. Bole, wrote to the commission on Jan. 22, 2004. “Has the trading environment changed sufficiently since 1997, when the current requirements were enacted, that the commission is confident that current requirements in examples such as these can be disregarded?”
He said that similar computer standards had failed to protect Long-Term Capital Management, the hedge fund that collapsed in 1998, and could not protect companies from the market plunge of October 1987.
Mr. Bole, who earned a master’s degree in business administration at the University of Chicago, helps write computer programs that financial institutions use to meet capital requirements.
He said in a recent interview that he was never called by anyone from the commission.
“I’m a little guy in the land of giants,” he said. “I thought that the reduction in capital was rather dramatic.”
Policing Wall Street
A once-proud agency with a rich history at the intersection of Washington and Wall Street, the Securities and Exchange Commission was created during the Great Depression as part of the broader effort to restore confidence to battered investors. It was led in its formative years by heavyweight New Dealers, including James Landis and William O. Douglas. When President Franklin D. Roosevelt was asked in 1934 why he appointed Joseph P. Kennedy, a spectacularly successful stock speculator, as the agency’s first chairman, Roosevelt replied: “Set a thief to catch a thief.”
The commission’s most public role in policing Wall Street is its enforcement efforts. But critics say that in recent years it has failed to deter market problems. “It seems to me the enforcement effort in recent years has fallen short of what one Supreme Court justice once called the fear of the shotgun behind the door,” said Arthur Levitt Jr., who was S.E.C. chairman in the Clinton administration. “With this commission, the shotgun too rarely came out from behind the door.”
Christopher Cox had been a close ally of business groups in his 17 years as a House member from one of the most conservative districts in Southern California. Mr. Cox had led the effort to rewrite securities laws to make investor lawsuits harder to file. He also fought against accounting rules that would give less favorable treatment to executive stock options.
Under Mr. Cox, the commission responded to complaints by some businesses by making it more difficult for the enforcement staff to investigate and bring cases against companies. The commission has repeatedly reversed or reduced proposed settlements that companies had tentatively agreed upon. While the number of enforcement cases has risen, the number of cases involving significant players or large amounts of money has declined.
Mr. Cox dismantled a risk management office created by Mr. Donaldson that was assigned to watch for future problems. While other financial regulatory agencies criticized a blueprint by Mr. Paulson, the Treasury secretary, that proposed to reduce their stature — and that of the S.E.C. — Mr. Cox did not challenge the plan, leaving it to three former Democratic and Republican commission chairmen to complain that the blueprint would neuter the agency.
In the process, Mr. Cox has surrounded himself with conservative lawyers, economists and accountants who, before the market turmoil of recent months, had embraced a far more limited vision for the commission than many of his predecessors.
‘Stakes in the Ground’
Last Friday, the commission formally ended the 2004 program, acknowledging that it had failed to anticipate the problems at Bear Stearns and the four other major investment banks.
“The last six months have made it abundantly clear that voluntary regulation does not work,” Mr. Cox said.
The decision to shutter the program came after Mr. Cox was blamed by Senator John McCain, the Republican presidential candidate, for the crisis. Mr. McCain has demanded Mr. Cox’s resignation.
Mr. Cox has said that the 2004 program was flawed from its inception. But former officials as well as the inspector general’s report have suggested that a major reason for its failure was Mr. Cox’s use of it.
“In retrospect, the tragedy is that the 2004 rule making gave us the ability to get information that would have been critical to sensible monitoring, and yet the S.E.C. didn’t oversee well enough,” Mr. Goldschmid said in an interview. He and Mr. Donaldson left the commission in 2005.
Mr. Cox declined requests for an interview. In response to written questions, including whether he or the commission had made any mistakes over the last three years that contributed to the current crisis, he said, “There will be no shortage of retrospective analyses about what happened and what should have happened.” He said that by last March he had concluded that the monitoring program’s “metrics were inadequate.”
He said that because the commission did not have the authority to curtail the heavy borrowing at Bear Stearns and the other firms, he and the commission were powerless to stop it.
“Implementing a purely voluntary program was very difficult because the commission’s regulations shouldn’t be suggestions,” he said. “The fact these companies could withdraw from voluntary supervision at their discretion diminished the mandate of the program and weakened its effectiveness. Experience has shown that the S.E.C. could not bootstrap itself into authority it didn’t have.”
But critics say that the commission could have done more, and that the agency’s effectiveness comes from the tone set at the top by the chairman, or what Mr. Levitt, the longest-serving S.E.C. chairman in history, calls “stakes in the ground.”
“If you go back to the chairmen in recent years, you will see that each spoke about a variety of issues that were important to them,” Mr. Levitt said. “This commission placed very few stakes in the ground.”
More Articles in Business » A version of this article appeared in print on October 3, 2008, on page A1 of the New York edition.
Thursday, October 2, 2008
CHERRY TREE LANE JOURNAL # 61
Good aftern00n it is indeed Thursday already, and I now have Internet service after only 3 days...
Sayonara!
Sayonara!
Tuesday, September 30, 2008
CHERRY TREE LANE JOURNAL # 60
Well it's been a while... would you believe a whole week without a computer that connected to the Internet...??? My room, the rec room and the library... 3 computers all having problems... I am now in my room using my laptop and it's about 11 pm so I am going to sleep ... I hope all remains well tomorrow...
Thursday, September 25, 2008
CHERRY TREE LANE JOURNAL # 59
I am connected via the 'wireless network' in my room using my laptop...
Sunday, September 21, 2008
Saturday, September 20, 2008
CHERRY TREE LANE JOURNAL # 57
Joyce was in to visit and brought me several birthday presents among them a pint of Cherry Garcia ice cream and it was delicious... It was good to visit with her and she looked fantastic...
More later...
More later...
Friday, September 19, 2008
CHERRY TREE LANE JOURNAL # 56
Today, Jason will be coming in to fix the problem with our routers and the wireless Internet connection... I just hope it's true...
Drug Label, Maimed Patient and Test for Justices
Saudi Women Find an Unlikely Role Model: Oprah
Sayonara!
Drug Label, Maimed Patient and Test for Justices
Saudi Women Find an Unlikely Role Model: Oprah
Sayonara!
Thursday, September 18, 2008
CHERRY TREE LANE JOURNAL # 55
A delicious breakfast served in the Rosewood dining room on Thursday morning...
U.S. Court, Long a Beacon, Guides Fewer Nations
You Just Can’t Kill It
Sayonara!
U.S. Court, Long a Beacon, Guides Fewer Nations
You Just Can’t Kill It
Sayonara!
Tuesday, September 16, 2008
CHERRY TREE LANE JOURNAL # 54
Thank you for the comment BJ, I too think it's a tossup between Hawaii and Vermont... I'm happy to report that the 'lockdown' is over and that the library is open full-time... that is to say Sunday thru Saturday 9-12 am , 1-4 pm and 6-7 pm... Volunteers needed...
E.R. Patients Often Left Confused After Visits
Gut Instinct’s Surprising Role in Math
Sayonara!
E.R. Patients Often Left Confused After Visits
Gut Instinct’s Surprising Role in Math
Sayonara!
Monday, September 15, 2008
CHERRY TREE LANE JOURNAL # 53
The 'lockdown' continues... Saturday I got a call from the library, a nurse asked me to help a male resident who was looking for a book on poetry... So they gave me special permission to sneak thru A-wing and go down to the library... It turns out I couldn't help him until after he left I thought about the Internet and I googled 'let me count the ways I love you' and it came back with the entire quote from Elisabeth Barrett Browning which is what he wanted to give to a couple on their wedding day...
Sayonara!
Sayonara!
Sunday, September 14, 2008
Saturday, September 13, 2008
CHERRY TREE LANE JOURNAL # 51
The institute is in a lockdown condition and it feels more like a prison... The 'neighborhoods' are isolated from each other so that whatever cold is spreading will be limited to one... No meals shared ... No Rec room activities... No therapy sessions unless you're in B wing.... No trips to the Salmon Brook Library... No going outside unless you are in rooms 12-16 C-Wing which are open to the main lobby... Lockdown...
No Bingo... oh my God there might be a rebellion...
Not good news not bad news just news to think about!
Sayonara!
No Bingo... oh my God there might be a rebellion...
Not good news not bad news just news to think about!
Sayonara!
Friday, September 12, 2008
CHERRY TREE LANE JOURNAL # 50
The library will now be asking for volunteers to 'staff' it' during the recommended open times.
The Good News of the Day:
A West Bank Ruin, Reborn as a Peace Beacon
By ETHAN BRONNER
Published: September 11, 2008
JENIN, West Bank — Pessimism is a steady companion these days for advocates of Middle East peace. A lame-duck Israeli government is negotiating with a weak Palestinian leadership in the twilight of an unpopular American administration. Few forecast success.
But a quiet revolution is stirring here in this city, once a byword for the extremes of violence between Israelis and Palestinians. In 2002, in response to a wave of suicide bombers from Jenin, Israeli tanks leveled entire neighborhoods.
From that rubble, now newly trained and equipped Palestinian security officials have restored order. Israeli soldiers have pulled back from bases and are in close touch with their Palestinian colleagues. Civilians are planning economic cooperation — an industrial zone to provide thousands of jobs, mostly to Palestinians, and another involving organic produce grown by Palestinians and marketed in Europe by Israelis. Ministers from both governments have been visiting regularly, often joined by top international officials. Israeli Arabs are playing a key role.
The aim is to stand conventional wisdom on its head. Instead of a shaky negotiated peace treaty imposing coexistence from the top down, a bottom-up set of relationships that lock the two societies together should, proponents argue, lead to a real two-state solution.
“We got a clear American message that the Palestinian state will start from Jenin,” asserted Col. Radi Asideh, the deputy commander of the Palestinian security forces here who have recently received new Land Rovers and AK-47 assault rifles. “The plan is to have a security model that can then be implemented all over Palestine.”
Those may sound like the hopeful words of a credulous officer. But here is Gen. James L. Jones, special American envoy to the region in an interview this week after visiting Jenin: “I see this as a kind of dress rehearsal for statehood, a crucible where the two sides can prove things to each other.”
And Ehud Barak, Israel’s defense minister, in an interview in his Tel Aviv office, said: “So far, Jenin is a great success. The Palestinian police have created a different mood there. We need to see money being poured into projects now to keep the momentum going. If done right, we think this could become an example.”
As one Western official involved in the plan noted, Israeli defense officials do not make a habit of speaking well of Palestinian police, so Mr. Barak’s words are telling. Still, Mr. Barak’s last point is also crucial because, unsurprisingly, not everyone agrees on what it means to do it right. Each side in the triangle — Israelis, Palestinians, international donors and facilitators — argues that it has done its part but that things are moving too slowly because of the others. Israel says Palestinian forces still do not deal with terrorists and so its forces must continue night incursions. Palestinians worry that the focus on Jenin will take away from the broader issues that need to be solved, like Jerusalem and refugees. The likelihood of failure still far outweighs that of success.
The choice of Jenin as a model might seem strange given the level of violence that emanated from here in the years of the second Palestinian intifada, or uprising. Since then, the city and region of Jenin have been severely economically depressed and chaotic.
Until late last year, for example, armed militia men used the hospital as a dormitory. Gunfire in the streets was common. One day, Colonel Asideh recounted, when militia paychecks failed to arrive, gunmen pumped bullets into four of the local ATMs, causing hundreds of thousands of dollars of damage.
Today, such men have given up their arms and the police walk the beat in this town. The hospital has been refurbished with American aid. Shops downtown stay open late. People feel they can breathe.
Jenin, officials on all sides say, offers many advantages for a pilot project, an idea arrived at by American and European officials in February when they sought ways to build peace on the ground.
First, they said, Hamas, the main Palestinian militant opposition in the West Bank, is relatively weak in Jenin. Second, after the evacuation of four Israeli settlements in the region in 2005, the area is essentially free of settlers, a major source of friction elsewhere. Third, the barrier that Israel has been building causes little friction in this area because it is right on the boundary between Israel and the West Bank, not over it so there is little territorial dispute.
There is also a fourth reason. Gilboa, the Israeli region that abuts Jenin, is an unusual and unusually well-suited neighbor. Small and rural with 30,000 people, it is 40 percent Arab and 60 percent Jewish and the inhabitants have worked assiduously to create their own kind of model — of Arab-Jewish coexistence in Israel.
Skip to next paragraph
Enlarge This Image
Rina Castelnuovo for The New York Times
MEETING OF MINDS Qadoura Moussa, left, governor of the Jenin area, with Daniel Atar, right, and Eid Salem, Gilboa officials.
The New York Times
Jenin was once a byword for Israeli-Palestinian violence.
An example was on display last month when high school students in Gilboa took part in what may be the only one of its kind in the world — the finals for the Bible-Koran contest. Twelve teams, each made up of one Jew and one Arab, were asked questions in both Hebrew and Arabic about the holy books. A mixed team of Jewish and Muslim teachers acted as judges. An Israeli Arab was the master of ceremonies.
Isaac Herzog, Israel’s minister of social welfare, was on hand and told the audience that Gilboa was a model for Israel, that every Israeli Jew should learn the Koran, that equality of opportunity should be the norm.
The head of the Gilboa regional council, Daniel Atar, is a Jew and his deputy, Eid Salem, is an Arab. Together they have built a warm relationship with the Palestinian governor of the Jenin area, Qadoura Moussa. The three meet frequently to formulate plans for economic cooperation in agriculture and commerce. Together, they have visited the French-German border area and Switzerland, seeking models of coexistence.
“There are two kinds of peace,” Mr. Atar said one recent afternoon in his office with Mr. Salem at his side. “There is the one on a piece of paper that doesn’t stand up to any test and there is the one built from the bottom up. That is the one we are hoping to build. It is increasingly clear that if Israeli Jews cannot figure out how to have good relations with Israeli Arabs, there won’t be peace beyond the borders, either. We have a choice in Israel of making peace or living in a bunker.”
One result of the discussions among the three leaders is a decision by the Israeli authorities to allow some Israeli Arabs into Jenin on a daily basis for the first time since the intifada. It has been a delicate move made with little fanfare because in principle it is illegal to allow certain Israeli citizens to do something others may not and also because movement across the boundary invites the possibility of security breaches.
It is delicate for another reason. In recent years, Israeli Jews have grown worried that among the 1.3 million Arabs who are Israeli citizens, there is a growing radicalization and identification with the Palestinian national cause and militant Islam. Increasing their contact with the West Bank could add to those concerns.
But Israeli Arabs have relatives here and want to do business here, and the Israeli authorities say they want to encourage that as a means of helping the Palestinian economy. If Israeli Arabs are permitted to do that in large numbers, that could represent an important change in their status in the eyes of Israeli Jews — from potential fifth column to bridge builder.
There are small signs of it already. Inside the Jenin refugee camp, a tough neighborhood of 16,000 inhabitants that is inside the city of Jenin, Fadi Abu Hijab, 27, owns a new sewing workshop with half a dozen employees. They make clothes on order from shops in Tel Aviv, he said, and Israeli Arabs are the brokers who come to deliver the material and pick up the finished products.
In addition, the university here has 80 Israeli Arab students and is working to attract several hundred more. The Israeli authorities have taken other steps — removing key checkpoints so that movement around Jenin is easier, granting V.I.P. checkpoint passes to about 1,500 Palestinian officials and businessmen, issuing work visas to some here, and agreeing on the building of new police stations, courthouses, schools and jails.
For anyone who remembers the Gilboa-Jenin boundary area a decade ago, however, all of the incipient changes seem minor. Until the 2000 uprising, thousands of Israelis — Jews and Arabs — shopped here regularly in their cars. Thousands of Palestinians from here worked in Israel. The industrial zone now being planned by Tony Blair — the international community’s envoy to build Palestinian institutions — and talked about as a major breakthrough, was supposed to be built then.
Today the main crossing point, then the site of a sprawling market, is a maze of security towers and checkpoints. Israeli soldiers refrain from cruising Jenin by day but still carry out occasional night raids and maintain overall security control of the region. And while Israeli Arabs are now being let in, they may not yet bring cars, greatly limiting the appeal of the trip and the shopping.
There are other concerns. The Palestinians have asked to base their newly trained battalion for Jenin in an abandoned Israeli settlement, a good spot in terms of location and infrastructure. But Israeli officials are worried about how it will play in Israel and have so far said no.
Israeli security officials say their Palestinian colleagues are good at law and order but not at stopping terrorist groups. They say that Islamic Jihad used to be strong here and is no longer because Israel spent years destroying its infrastructure and killing its militants, setting the stage for the Palestinian security takeover. But if they relax their vigilance, the Israelis say, the situation will deteriorate. Early on Wednesday morning, for example, Israeli soldiers and security men raided a home in Jenin and detonated a 30-pound pipe bomb.
The Palestinians complain that they are often urged to arrest someone just because he wears a beard. They add that as long as they are seen as puppets of the Israelis, the project is doomed. The key is for Palestinian security officials to be seen as agents of state building. Then the population will cooperate. This requires the kind of discretion that the Israeli Army has not been known for.
“The intifada turned them into enemies in one day,” Mr. Blair said in an interview. “Now we are trying to recreate a sense of mutual confidence after seven years. It is a very slow process. But what is happening in Gilboa and Jenin is exactly the direction we would like to go.”
Sayonara!
The Good News of the Day:
A West Bank Ruin, Reborn as a Peace Beacon
By ETHAN BRONNER
Published: September 11, 2008
JENIN, West Bank — Pessimism is a steady companion these days for advocates of Middle East peace. A lame-duck Israeli government is negotiating with a weak Palestinian leadership in the twilight of an unpopular American administration. Few forecast success.
But a quiet revolution is stirring here in this city, once a byword for the extremes of violence between Israelis and Palestinians. In 2002, in response to a wave of suicide bombers from Jenin, Israeli tanks leveled entire neighborhoods.
From that rubble, now newly trained and equipped Palestinian security officials have restored order. Israeli soldiers have pulled back from bases and are in close touch with their Palestinian colleagues. Civilians are planning economic cooperation — an industrial zone to provide thousands of jobs, mostly to Palestinians, and another involving organic produce grown by Palestinians and marketed in Europe by Israelis. Ministers from both governments have been visiting regularly, often joined by top international officials. Israeli Arabs are playing a key role.
The aim is to stand conventional wisdom on its head. Instead of a shaky negotiated peace treaty imposing coexistence from the top down, a bottom-up set of relationships that lock the two societies together should, proponents argue, lead to a real two-state solution.
“We got a clear American message that the Palestinian state will start from Jenin,” asserted Col. Radi Asideh, the deputy commander of the Palestinian security forces here who have recently received new Land Rovers and AK-47 assault rifles. “The plan is to have a security model that can then be implemented all over Palestine.”
Those may sound like the hopeful words of a credulous officer. But here is Gen. James L. Jones, special American envoy to the region in an interview this week after visiting Jenin: “I see this as a kind of dress rehearsal for statehood, a crucible where the two sides can prove things to each other.”
And Ehud Barak, Israel’s defense minister, in an interview in his Tel Aviv office, said: “So far, Jenin is a great success. The Palestinian police have created a different mood there. We need to see money being poured into projects now to keep the momentum going. If done right, we think this could become an example.”
As one Western official involved in the plan noted, Israeli defense officials do not make a habit of speaking well of Palestinian police, so Mr. Barak’s words are telling. Still, Mr. Barak’s last point is also crucial because, unsurprisingly, not everyone agrees on what it means to do it right. Each side in the triangle — Israelis, Palestinians, international donors and facilitators — argues that it has done its part but that things are moving too slowly because of the others. Israel says Palestinian forces still do not deal with terrorists and so its forces must continue night incursions. Palestinians worry that the focus on Jenin will take away from the broader issues that need to be solved, like Jerusalem and refugees. The likelihood of failure still far outweighs that of success.
The choice of Jenin as a model might seem strange given the level of violence that emanated from here in the years of the second Palestinian intifada, or uprising. Since then, the city and region of Jenin have been severely economically depressed and chaotic.
Until late last year, for example, armed militia men used the hospital as a dormitory. Gunfire in the streets was common. One day, Colonel Asideh recounted, when militia paychecks failed to arrive, gunmen pumped bullets into four of the local ATMs, causing hundreds of thousands of dollars of damage.
Today, such men have given up their arms and the police walk the beat in this town. The hospital has been refurbished with American aid. Shops downtown stay open late. People feel they can breathe.
Jenin, officials on all sides say, offers many advantages for a pilot project, an idea arrived at by American and European officials in February when they sought ways to build peace on the ground.
First, they said, Hamas, the main Palestinian militant opposition in the West Bank, is relatively weak in Jenin. Second, after the evacuation of four Israeli settlements in the region in 2005, the area is essentially free of settlers, a major source of friction elsewhere. Third, the barrier that Israel has been building causes little friction in this area because it is right on the boundary between Israel and the West Bank, not over it so there is little territorial dispute.
There is also a fourth reason. Gilboa, the Israeli region that abuts Jenin, is an unusual and unusually well-suited neighbor. Small and rural with 30,000 people, it is 40 percent Arab and 60 percent Jewish and the inhabitants have worked assiduously to create their own kind of model — of Arab-Jewish coexistence in Israel.
Skip to next paragraph
Enlarge This Image
Rina Castelnuovo for The New York Times
MEETING OF MINDS Qadoura Moussa, left, governor of the Jenin area, with Daniel Atar, right, and Eid Salem, Gilboa officials.
The New York Times
Jenin was once a byword for Israeli-Palestinian violence.
An example was on display last month when high school students in Gilboa took part in what may be the only one of its kind in the world — the finals for the Bible-Koran contest. Twelve teams, each made up of one Jew and one Arab, were asked questions in both Hebrew and Arabic about the holy books. A mixed team of Jewish and Muslim teachers acted as judges. An Israeli Arab was the master of ceremonies.
Isaac Herzog, Israel’s minister of social welfare, was on hand and told the audience that Gilboa was a model for Israel, that every Israeli Jew should learn the Koran, that equality of opportunity should be the norm.
The head of the Gilboa regional council, Daniel Atar, is a Jew and his deputy, Eid Salem, is an Arab. Together they have built a warm relationship with the Palestinian governor of the Jenin area, Qadoura Moussa. The three meet frequently to formulate plans for economic cooperation in agriculture and commerce. Together, they have visited the French-German border area and Switzerland, seeking models of coexistence.
“There are two kinds of peace,” Mr. Atar said one recent afternoon in his office with Mr. Salem at his side. “There is the one on a piece of paper that doesn’t stand up to any test and there is the one built from the bottom up. That is the one we are hoping to build. It is increasingly clear that if Israeli Jews cannot figure out how to have good relations with Israeli Arabs, there won’t be peace beyond the borders, either. We have a choice in Israel of making peace or living in a bunker.”
One result of the discussions among the three leaders is a decision by the Israeli authorities to allow some Israeli Arabs into Jenin on a daily basis for the first time since the intifada. It has been a delicate move made with little fanfare because in principle it is illegal to allow certain Israeli citizens to do something others may not and also because movement across the boundary invites the possibility of security breaches.
It is delicate for another reason. In recent years, Israeli Jews have grown worried that among the 1.3 million Arabs who are Israeli citizens, there is a growing radicalization and identification with the Palestinian national cause and militant Islam. Increasing their contact with the West Bank could add to those concerns.
But Israeli Arabs have relatives here and want to do business here, and the Israeli authorities say they want to encourage that as a means of helping the Palestinian economy. If Israeli Arabs are permitted to do that in large numbers, that could represent an important change in their status in the eyes of Israeli Jews — from potential fifth column to bridge builder.
There are small signs of it already. Inside the Jenin refugee camp, a tough neighborhood of 16,000 inhabitants that is inside the city of Jenin, Fadi Abu Hijab, 27, owns a new sewing workshop with half a dozen employees. They make clothes on order from shops in Tel Aviv, he said, and Israeli Arabs are the brokers who come to deliver the material and pick up the finished products.
In addition, the university here has 80 Israeli Arab students and is working to attract several hundred more. The Israeli authorities have taken other steps — removing key checkpoints so that movement around Jenin is easier, granting V.I.P. checkpoint passes to about 1,500 Palestinian officials and businessmen, issuing work visas to some here, and agreeing on the building of new police stations, courthouses, schools and jails.
For anyone who remembers the Gilboa-Jenin boundary area a decade ago, however, all of the incipient changes seem minor. Until the 2000 uprising, thousands of Israelis — Jews and Arabs — shopped here regularly in their cars. Thousands of Palestinians from here worked in Israel. The industrial zone now being planned by Tony Blair — the international community’s envoy to build Palestinian institutions — and talked about as a major breakthrough, was supposed to be built then.
Today the main crossing point, then the site of a sprawling market, is a maze of security towers and checkpoints. Israeli soldiers refrain from cruising Jenin by day but still carry out occasional night raids and maintain overall security control of the region. And while Israeli Arabs are now being let in, they may not yet bring cars, greatly limiting the appeal of the trip and the shopping.
There are other concerns. The Palestinians have asked to base their newly trained battalion for Jenin in an abandoned Israeli settlement, a good spot in terms of location and infrastructure. But Israeli officials are worried about how it will play in Israel and have so far said no.
Israeli security officials say their Palestinian colleagues are good at law and order but not at stopping terrorist groups. They say that Islamic Jihad used to be strong here and is no longer because Israel spent years destroying its infrastructure and killing its militants, setting the stage for the Palestinian security takeover. But if they relax their vigilance, the Israelis say, the situation will deteriorate. Early on Wednesday morning, for example, Israeli soldiers and security men raided a home in Jenin and detonated a 30-pound pipe bomb.
The Palestinians complain that they are often urged to arrest someone just because he wears a beard. They add that as long as they are seen as puppets of the Israelis, the project is doomed. The key is for Palestinian security officials to be seen as agents of state building. Then the population will cooperate. This requires the kind of discretion that the Israeli Army has not been known for.
“The intifada turned them into enemies in one day,” Mr. Blair said in an interview. “Now we are trying to recreate a sense of mutual confidence after seven years. It is a very slow process. But what is happening in Gilboa and Jenin is exactly the direction we would like to go.”
Sayonara!
Thursday, September 11, 2008
CHERRY TREE LANE JOURNAL # 49
Sorry it took so long getting back to this but the library claimed the time...
The cardiologist yesterday claimed another 'cure' for modern medicine and began weaning me off the nitrogen drug Imdur...
The cardiologist yesterday claimed another 'cure' for modern medicine and began weaning me off the nitrogen drug Imdur...
Monday, September 8, 2008
CHERRY TREE LANE JOURNAL # 48
The library is beginning to look nice but we need more shelves already...
Had another pain free night so can't complain...
Had another pain free night so can't complain...
Sunday, September 7, 2008
Saturday, September 6, 2008
CHERRY TREE LANE JOURNAL # 46
First - the Bad News...
And then Worse News...
Finally Good News...
And it almost the start of a new week, I guess that means today is Saturday... I have not had any chest pain since before Tuesday, the day of the operation...
Life is good...
And then Worse News...
Finally Good News...
And it almost the start of a new week, I guess that means today is Saturday... I have not had any chest pain since before Tuesday, the day of the operation...
Life is good...
Friday, September 5, 2008
CHERRY TREE LANE JOURNAL # 45
It's time for a moment of silence... Our friend Alberta died last night... She will be missed her cries were a part of the environment and her pain was our pain...
Sayonara!
Sayonara!
Thursday, September 4, 2008
CHERRY TREE LANE JOURNAL # 44
Welll, it's done and all is well. I have one new metal stent in the L.A.D. (left anterior dystolic) artery of my heart...
Monday, September 1, 2008
Sunday, August 31, 2008
CHERRY TREE LANE JOURNAL # 42
The day before Labor Day... The day before September starts... And two days before my operation...
The 'good' news:
Enough said...
The 'good' news:
Enough said...
Saturday, August 30, 2008
CHERRY TREE LANE JOURNAL # 41
It's the end of the week and thus the end of my medications, tomorrow I start the new week and a new method of self-medication, that is to say I will be popping my own pills out of their plastic bubbles and I will have to keep track of ordering replacements. It's also the end of the month tomorrow and I will have to turn in my sheet... On Sunday Trevor will be here and he will help move the bookcases out of the Rec room and to the Rosewood dining room... Also there will be a surprise Birthday party for Dick Kenney, Peg's husband...
For the bad and good news:
Books of The Times
Weapons of Mass Destruction and Other Imaginative Acts
By MARK DANNER
Published: August 27, 2008
Scandal is our growth industry. In our era, revelation of wrongdoing leads not to definitive investigation, punishment and expiation but to ... more scandal. Permanent scandal. Frozen scandal. The weapons of mass destruction that turn out not to exist. The torture of detainees who remain forever detained. The firing of prosecutors, which is forever investigated. These and other frozen scandals metastasize, ramify, self-replicate, clogging the cable news shows and the blogosphere and the bookstores. Unpurged and perpetually unresolved, scandal transcends political reality to become commercial fact.
Nancy Crampton
Ron Suskind
THE WAY OF THE WORLD
A Story of Truth and Hope in an Age of Extremism
By Ron Suskind
415 pages. Harper. $27.95.
Unfortunately, and somewhat misleadingly, “The Way of the World” by Ron Suskind comes smartly dressed in the garb of the genre: an embargoed release, strategic leaks to whet journalistic appetites, author interviews across the cable networks. And the book delivers, serving up two interlinked revelations that add materially to the W.M.D. megascandal: first, that more than three months before initiating the Iraq war President Bush and his highest officials received information, via the British, from Iraq’s intelligence chief, Tahir Habbush, that Saddam Hussein had destroyed all his weapons of mass destruction years before — information that the officials “buried” but that turned out to be true. And second, that after paying off Mr. Habbush to the tune of $5 million and resettling him in Jordan, White House officials used him to run a scam on the American people, drafting a letter over his name, backdated to the summer of 2001, in which Mr. Habbush informs Hussein that he has been training Mohammed Atta, soon to be the leader of the 9/11 attacks.
This forged letter, meant to establish beyond doubt a link between Saddam Hussein and 9/11, was leaked in December 2003 to an Iraqi politician and longtime C.I.A. asset — Ayad Allawi, soon to be named the first interim prime minister of Iraq — and thence made its way, via a prominent British journalist, to the front page of The Daily Telegraph, and from there into the American press, receiving prominent treatment in various places, including “Meet the Press” and an Op-Ed column by William Safire in The New York Times. Perhaps, as you nursed your coffee that day, you saw the program or read the piece? According to Mr. Suskind, that was your government at work.
Despite White House and C.I.A. denials, Mr. Suskind’s case, if not definitive, seems strong; and had Hussein not been captured the very day the article appeared in The Telegraph, the C.I.A.’s handiwork might have had a significant political effect. The letter also helpfully mentioned that Iraqi intelligence and “a small team from the Al Qaeda organization” arranged for a shipment from Niger to reach Iraq, presumably a reference to the elusive yellowcake that President Bush referred to in the notorious 16 words in his State of the Union address in January 2003. If you are going to use your intelligence service to fill the politically damaging holes in the case for war, you might as well fill all the holes.
Now using the C.I.A. to manipulate domestic politics in this way is — if one might venture to use a quaint word — illegal, and thus, as Mr. Suskind points out, “the sort of thing generally taken up in impeachment hearings.” In the age of frozen scandal, with a handful of months left of George W. Bush in the White House, such hearings are unlikely, though perhaps it is not utopian to hope that Congress, controlled now by the opposition party, might use its subpoena power to look into the matter. And though this particular scandal combines in an irresistible way all the darker aspects of the present administration — secrecy, self-dealing and the kind of solipsistic arrogance best embodied in Secretary of Defense Donald H. Rumsfeld’s vow that, in the occupation of Iraq, “We will impose our reality on them” — one can’t help regretting a bit that its shadow, self-projected as it is, has loomed so large over what is a complex, ambitious, provocative, risky and often maddening book.
In a crowded, highly talented field, Mr. Suskind bids fair to claim the crown as the most perceptive, incisive, dogged chronicler of the inner workings of the Bush administration. To him we owe many of the signature expressions of the era, among them “Mayberry Machiavellis” (from his essential and prescient 2003 Esquire piece on Karl Rove and John DiIulio, first chief of President Bush’s “faith-based initiative”) and “reality-based community” (from an October 2004 article for The New York Times Magazine). A Pulitzer Prize-winning former reporter for The Wall Street Journal, Mr. Suskind is at heart a storyteller whose chosen yarn, told and retold, is the “education of the innocent,” whether that wide-eyed rube is Mr. DiIulio; or Paul O’Neill, Mr. Bush’s first treasury secretary, whose rude and ill-fated coming of age is impeccably detailed in “The Price of Loyalty”; or the bevy of national security professionals whose desperate preoccupations as they improvise a “war on terror” are vividly described in “The One Percent Doctrine.”
Behind the highly promoted scandals in “The Way of the World” lies a complex web of intersecting stories, the plotlines of a varied traveling company of actors whose doings Mr. Suskind chronicles with meticulous care: an Energy Department intelligence official charged with preventing “the markets” from supplying terrorist groups with enough highly enriched uranium to make a bomb; an Afghan teenager brought to Denver as an exchange student; an Illinois lawyer determined to save her client, a Libyan — perhaps a terrorist, perhaps an unlucky baker — who seems to be slowly dying in his Guantánamo Bay cell; a former prime minister of Pakistan, immersed in a doomed crusade to retake her office; a Libyan-born Islamist cleric — and police informant — expelled from his perch at a “radical” London mosque; a Pakistani financial analyst rousted by Secret Service agents for making the mistake of adjusting the volume on his iPod at just the wrong moment. These narratives and others perform, in Mr. Suskind’s hands, an intricate arabesque and manage, to a rather remarkable degree, to show us, in this age of terror, “the true way of the world.”
Amid the intense and vivid storytelling here, Mr. Suskind takes many risks and not all succeed; the book will be criticized for sentimentality and a kind of wide-eyed, communal optimism that are easy to ridicule. Still, the reporting is solid and often sublime: one doesn’t have to believe entirely that Benazir Bhutto, twice Pakistan’s prime minister, twice deposed, was “evolving, in public” and “creating a powerful counterpoint to bin Laden’s saga of violence and salvation” to find Mr. Suskind’s account of her last campaign chilling and powerful.
And the revelation of an effort to steal and sell fissile material in Georgia’s now celebrated “breakaway region” of South Ossetia — one of “three dozen significant attempts” to traffic in such material, mostly uranium, since 1994 — is only the most terrifying of a dozen or more newsworthy disclosures in this book, all of them reflecting darkly on the obsessive secrecy, political ruthlessness, ideological single-mindedness and breathtaking incompetence of the Bush administration.
In a time less sated with scandal, many of these might have made headlines on their own account. Alas, scandal — subject, like everything else, to inflation — has become a highly overpriced commodity. At bottom, Mr. Suskind is intent on posing deeper questions: about transparency and the “dying cult” of secrecy; about “defining human progress together”; about the “lack of imagination about what the nation might yet become.” These are hard, frustrating, complicated matters to which he offers only tentative answers, some of them vague, sentimental, even naïve. But he is brave enough to try to discover, through relentless reporting and a sustained and admirable act of sympathy, the right questions. In this age of scandal, we must be grateful to him for that.
Mark Danner, the author most recently of “The Secret Way to War: The Downing Street Memo and the Iraq War’s Buried History,” will publish “Stripping Bare the Body: Politics Violence War” next spring.
For the bad and good news:
Books of The Times
Weapons of Mass Destruction and Other Imaginative Acts
By MARK DANNER
Published: August 27, 2008
Scandal is our growth industry. In our era, revelation of wrongdoing leads not to definitive investigation, punishment and expiation but to ... more scandal. Permanent scandal. Frozen scandal. The weapons of mass destruction that turn out not to exist. The torture of detainees who remain forever detained. The firing of prosecutors, which is forever investigated. These and other frozen scandals metastasize, ramify, self-replicate, clogging the cable news shows and the blogosphere and the bookstores. Unpurged and perpetually unresolved, scandal transcends political reality to become commercial fact.
Nancy Crampton
Ron Suskind
THE WAY OF THE WORLD
A Story of Truth and Hope in an Age of Extremism
By Ron Suskind
415 pages. Harper. $27.95.
Unfortunately, and somewhat misleadingly, “The Way of the World” by Ron Suskind comes smartly dressed in the garb of the genre: an embargoed release, strategic leaks to whet journalistic appetites, author interviews across the cable networks. And the book delivers, serving up two interlinked revelations that add materially to the W.M.D. megascandal: first, that more than three months before initiating the Iraq war President Bush and his highest officials received information, via the British, from Iraq’s intelligence chief, Tahir Habbush, that Saddam Hussein had destroyed all his weapons of mass destruction years before — information that the officials “buried” but that turned out to be true. And second, that after paying off Mr. Habbush to the tune of $5 million and resettling him in Jordan, White House officials used him to run a scam on the American people, drafting a letter over his name, backdated to the summer of 2001, in which Mr. Habbush informs Hussein that he has been training Mohammed Atta, soon to be the leader of the 9/11 attacks.
This forged letter, meant to establish beyond doubt a link between Saddam Hussein and 9/11, was leaked in December 2003 to an Iraqi politician and longtime C.I.A. asset — Ayad Allawi, soon to be named the first interim prime minister of Iraq — and thence made its way, via a prominent British journalist, to the front page of The Daily Telegraph, and from there into the American press, receiving prominent treatment in various places, including “Meet the Press” and an Op-Ed column by William Safire in The New York Times. Perhaps, as you nursed your coffee that day, you saw the program or read the piece? According to Mr. Suskind, that was your government at work.
Despite White House and C.I.A. denials, Mr. Suskind’s case, if not definitive, seems strong; and had Hussein not been captured the very day the article appeared in The Telegraph, the C.I.A.’s handiwork might have had a significant political effect. The letter also helpfully mentioned that Iraqi intelligence and “a small team from the Al Qaeda organization” arranged for a shipment from Niger to reach Iraq, presumably a reference to the elusive yellowcake that President Bush referred to in the notorious 16 words in his State of the Union address in January 2003. If you are going to use your intelligence service to fill the politically damaging holes in the case for war, you might as well fill all the holes.
Now using the C.I.A. to manipulate domestic politics in this way is — if one might venture to use a quaint word — illegal, and thus, as Mr. Suskind points out, “the sort of thing generally taken up in impeachment hearings.” In the age of frozen scandal, with a handful of months left of George W. Bush in the White House, such hearings are unlikely, though perhaps it is not utopian to hope that Congress, controlled now by the opposition party, might use its subpoena power to look into the matter. And though this particular scandal combines in an irresistible way all the darker aspects of the present administration — secrecy, self-dealing and the kind of solipsistic arrogance best embodied in Secretary of Defense Donald H. Rumsfeld’s vow that, in the occupation of Iraq, “We will impose our reality on them” — one can’t help regretting a bit that its shadow, self-projected as it is, has loomed so large over what is a complex, ambitious, provocative, risky and often maddening book.
In a crowded, highly talented field, Mr. Suskind bids fair to claim the crown as the most perceptive, incisive, dogged chronicler of the inner workings of the Bush administration. To him we owe many of the signature expressions of the era, among them “Mayberry Machiavellis” (from his essential and prescient 2003 Esquire piece on Karl Rove and John DiIulio, first chief of President Bush’s “faith-based initiative”) and “reality-based community” (from an October 2004 article for The New York Times Magazine). A Pulitzer Prize-winning former reporter for The Wall Street Journal, Mr. Suskind is at heart a storyteller whose chosen yarn, told and retold, is the “education of the innocent,” whether that wide-eyed rube is Mr. DiIulio; or Paul O’Neill, Mr. Bush’s first treasury secretary, whose rude and ill-fated coming of age is impeccably detailed in “The Price of Loyalty”; or the bevy of national security professionals whose desperate preoccupations as they improvise a “war on terror” are vividly described in “The One Percent Doctrine.”
Behind the highly promoted scandals in “The Way of the World” lies a complex web of intersecting stories, the plotlines of a varied traveling company of actors whose doings Mr. Suskind chronicles with meticulous care: an Energy Department intelligence official charged with preventing “the markets” from supplying terrorist groups with enough highly enriched uranium to make a bomb; an Afghan teenager brought to Denver as an exchange student; an Illinois lawyer determined to save her client, a Libyan — perhaps a terrorist, perhaps an unlucky baker — who seems to be slowly dying in his Guantánamo Bay cell; a former prime minister of Pakistan, immersed in a doomed crusade to retake her office; a Libyan-born Islamist cleric — and police informant — expelled from his perch at a “radical” London mosque; a Pakistani financial analyst rousted by Secret Service agents for making the mistake of adjusting the volume on his iPod at just the wrong moment. These narratives and others perform, in Mr. Suskind’s hands, an intricate arabesque and manage, to a rather remarkable degree, to show us, in this age of terror, “the true way of the world.”
Amid the intense and vivid storytelling here, Mr. Suskind takes many risks and not all succeed; the book will be criticized for sentimentality and a kind of wide-eyed, communal optimism that are easy to ridicule. Still, the reporting is solid and often sublime: one doesn’t have to believe entirely that Benazir Bhutto, twice Pakistan’s prime minister, twice deposed, was “evolving, in public” and “creating a powerful counterpoint to bin Laden’s saga of violence and salvation” to find Mr. Suskind’s account of her last campaign chilling and powerful.
And the revelation of an effort to steal and sell fissile material in Georgia’s now celebrated “breakaway region” of South Ossetia — one of “three dozen significant attempts” to traffic in such material, mostly uranium, since 1994 — is only the most terrifying of a dozen or more newsworthy disclosures in this book, all of them reflecting darkly on the obsessive secrecy, political ruthlessness, ideological single-mindedness and breathtaking incompetence of the Bush administration.
In a time less sated with scandal, many of these might have made headlines on their own account. Alas, scandal — subject, like everything else, to inflation — has become a highly overpriced commodity. At bottom, Mr. Suskind is intent on posing deeper questions: about transparency and the “dying cult” of secrecy; about “defining human progress together”; about the “lack of imagination about what the nation might yet become.” These are hard, frustrating, complicated matters to which he offers only tentative answers, some of them vague, sentimental, even naïve. But he is brave enough to try to discover, through relentless reporting and a sustained and admirable act of sympathy, the right questions. In this age of scandal, we must be grateful to him for that.
Mark Danner, the author most recently of “The Secret Way to War: The Downing Street Memo and the Iraq War’s Buried History,” will publish “Stripping Bare the Body: Politics Violence War” next spring.
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