O'Neill Says Bush Was Set on Cutting Taxes, Too:
"Mr. O'Neill has provoked a political firestorm with his contention that President Bush tilted toward war with Iraq almost as soon as he took office; the administration has vigorously denied that. But the former Treasury secretary described a similar pattern in Mr. Bush's push to cut taxes by at least $1.7 trillion over 10 years.
Mr. O'Neill was openly skeptical about the need for big tax cuts and expressed concern about frittering away what were then huge budget surpluses.
In hindsight, he may have been too sanguine about the economy's prospects in early 2001 and too dismissive of the value in cutting taxes as a way to soften the downturn. But Mr. O'Neill may also prove to have been prescient about other issues that are likely to have long-lasting significance. One was the idea of building 'triggers'' into Mr. Bush's tax cuts, provisions that would prevent some of the cuts from becoming effective if budget surpluses evaporated."
Behind the scenes, Mr. O'Neill described how he quietly collaborated with Alan Greenspan, chairman of the Federal Reserve, to press for such triggers.
As recounted by Mr. O'Neill, the president and his top advisers wanted no part in such precautions.
Though the Treasury secretary had one-on-one meetings with Mr. Bush almost once a week, Mr. O'Neill said the president listened to him in stony silence. And when Mr. Greenspan testified in favor of making future tax cuts conditional on the government's fiscal health, the White House balked.
There were questions about whether the triggers would have done any good. Congress, in theory, operated under "pay-as-you-go'' rules in the last years of the Clinton administration, under which any spending growth above the rate of inflation was supposed to be offset by budget cuts or tax increases. But tax revenue soared so quickly as a result of the stock market bubble and the booming economy that spending increased much faster than inflation.
Tax-cut advocates like R. Glenn Hubbard, then chairman of the White House Council of Economic Advisers, argued that the tax cuts had to be predictable and permanent to achieve their intended impact. If people thought the cuts would expire, he and others argued, they would have less confidence about spending their extra cash.
Shortly after the tax cuts, the government's seemingly inexhaustible surpluses evaporated. Revenues plunged as the economy slid into a recession and the stock market endured a three-year plunge that wiped out investment profits. Then came the terrorist attacks on Sept. 11, 2001, followed by huge increases in spending on domestic security and the wars in Afghanistan and Iraq.
Projections by Congress and the Bush administration of surpluses of $5.6 trillion over 10 years, the outlook in 2001, have turned into estimated deficits of at least $1.4 trillion and possibly as much as $5 trillion.
Mr. O'Neill strongly suggests that Mr. Bush worried little about budget deficits and did not want advice about them.…
http://www.nytimes.com/2004/01/18/business/yourmoney/18view.html?pagewanted=print&position=
Sunday, January 18, 2004
Fixing Democracy:
"The morning after the 2000 election, Americans woke up to a disturbing realization: our electoral system was too flawed to say with certainty who had won. Three years later, things may actually be worse. If this year's presidential election is at all close, there is every reason to believe that there will be another national trauma over who the rightful winner is, this time compounded by troubling new questions about the reliability of electronic voting machines.
This is no way to run a democracy."
Americans are rightly proud of their system of government, and eager to share it with the rest of the world. But the key principle behind it, that our leaders govern with the consent of the governed, requires a process that accurately translates the people's votes into political power. Too often, the system falls short. Throughout this presidential election year, we will be taking a close look at the mechanics of our democracy and highlighting aspects that cry out for reform. Among the key issues:
Voting Technology An accurate count of the votes cast is the sine qua non of a democracy, but one that continues to elude us. As now-discredited punch-card machines are being abandoned, there has been a shift to electronic voting machines with serious reliability problems of their own. Many critics, including computer scientists, have been sounding the alarm: through the efforts of a hacker on the outside or a malicious programmer on the inside, or through purely technical errors, these machines could misreport the votes cast.…
…There is a fast-growing list of elections in which electronic machines have demonstrably failed, or produced dubious but uncheckable results. One of the most recent occurred, fittingly enough, in Palm Beach and Broward Counties in Florida just this month. Touch-screen machines reported 137 blank ballots in a special election for a state House seat where the margin of victory was 12 votes. The second-place finisher charged that faulty machines might have cost him the election. "People do not go to the polls in a one-issue election and not vote," he said. But since the machines produce no paper record, there was no way to check.…
http://www.nytimes.com/2004/01/18/opinion/18SUN1.html?pagewanted=all&position=
"The morning after the 2000 election, Americans woke up to a disturbing realization: our electoral system was too flawed to say with certainty who had won. Three years later, things may actually be worse. If this year's presidential election is at all close, there is every reason to believe that there will be another national trauma over who the rightful winner is, this time compounded by troubling new questions about the reliability of electronic voting machines.
This is no way to run a democracy."
Americans are rightly proud of their system of government, and eager to share it with the rest of the world. But the key principle behind it, that our leaders govern with the consent of the governed, requires a process that accurately translates the people's votes into political power. Too often, the system falls short. Throughout this presidential election year, we will be taking a close look at the mechanics of our democracy and highlighting aspects that cry out for reform. Among the key issues:
Voting Technology An accurate count of the votes cast is the sine qua non of a democracy, but one that continues to elude us. As now-discredited punch-card machines are being abandoned, there has been a shift to electronic voting machines with serious reliability problems of their own. Many critics, including computer scientists, have been sounding the alarm: through the efforts of a hacker on the outside or a malicious programmer on the inside, or through purely technical errors, these machines could misreport the votes cast.…
…There is a fast-growing list of elections in which electronic machines have demonstrably failed, or produced dubious but uncheckable results. One of the most recent occurred, fittingly enough, in Palm Beach and Broward Counties in Florida just this month. Touch-screen machines reported 137 blank ballots in a special election for a state House seat where the margin of victory was 12 votes. The second-place finisher charged that faulty machines might have cost him the election. "People do not go to the polls in a one-issue election and not vote," he said. But since the machines produce no paper record, there was no way to check.…
http://www.nytimes.com/2004/01/18/opinion/18SUN1.html?pagewanted=all&position=
Theocracy and Democracy: The Cleric Spoiling U.S. Plans:
"The most important political figure in Iraq today is Grand Ayatollah Ali al-Sistani, an elderly Shiite Muslim cleric. He has not set foot outside his home in six years, yet the white-bearded ayatollah has effectively commandeered the Bush administration's planning for postwar democracy."
His pronouncement on who may write a new constitution (only Iraqis elected by Iraqis) forced Washington to upend its timetable for granting the country its independence. Last week, the ayatollah rejected the American proposal for choosing an interim legislature through caucuses, immobilizing the transition. His backers took to the streets to support him.
The ayatollah's influence recalls that of another once-reclusive Shiite cleric, Ruhollah Khomeini, who 25 years ago took the helm of the Iranian revolution and created an Islamic republic implacably hostile to the United States.
Ayatollah Sistani, though, is no Khomeini. At least that is what his own background and the recent history of Iraq's Shiites would indicate. His teachings have always reflected what is often called the quietist school of thought in modern Shiism, one that says that clerics should not run governments. Iran's system, the diametric opposite, invests clerics with absolute legal and political authority.…
In Iran, reformers have boldly challenged the Khomeini legacy by demanding that clerics accept truly free elections by giving up their power to disqualify candidates for the coming parliamentary vote. At the same time, in Iraq, where the long-oppressed Shiite majority is clamoring for power, Ayatollah Sistani is being drawn deeper and deeper into the fray.
"Sistani is incredibly sensitive to public opinion and what people say about him," said a Shiite member of the Iraqi Governing Council. "He renounces political power and yet, at the same time, he has to respond to the fact that people are hungry for a leader."
Although most of Iran's Shiites are of Persian descent and Iraq's are Arabs, religious teachers and students flowed back and forth between the two countries for centuries. Ayatollah Sistani, for example, was born in Iran but pursued his religious studies in Iraq. Until the Iranian revolution in 1979, Iranian pilgrims came to Iraq in droves to visit the Shiite shrines in Najaf and Karbala.
Ayatollah Khomeini himself spent the 15 years before the revolution in Najaf, and it was there that he refined his theory of "wilayat al-faqih," or the rule of the jurist. The theory, that an eminent Shiite cleric can be the absolute legal authority, is the foundation of Iran's present political system.
Even then, in his adopted city, his was the minority view. Ayatollah Sistani's teacher and the highest-ranking cleric in Iraq at the time, Grand Ayatollah Abu al Qassim al-Khoei, firmly believed that even the most learned of Shia scholars have no right to rule.
Still, many religious Iraqi Shiites, denied political power for more than 500 years by the Sunni minority, recall feeling thrilled at the birth of Iran's Islamic government.
The feeling did not last long. Fearing for his rule, Saddam Hussein intensified his persecution of Iraq's Shiites, imprisoning and executing anyone suspected of sympathizing with Iran. With the Iran-Iraq war in 1980, the image of Iran's mullahs was further poisoned.
As a result, many Iraqis say, the Iranian experience with clerical rule never developed a real following, except as a theory.…
http://www.nytimes.com/2004/01/18/weekinreview/18sach.html?pagewanted=all&position=
"The most important political figure in Iraq today is Grand Ayatollah Ali al-Sistani, an elderly Shiite Muslim cleric. He has not set foot outside his home in six years, yet the white-bearded ayatollah has effectively commandeered the Bush administration's planning for postwar democracy."
His pronouncement on who may write a new constitution (only Iraqis elected by Iraqis) forced Washington to upend its timetable for granting the country its independence. Last week, the ayatollah rejected the American proposal for choosing an interim legislature through caucuses, immobilizing the transition. His backers took to the streets to support him.
The ayatollah's influence recalls that of another once-reclusive Shiite cleric, Ruhollah Khomeini, who 25 years ago took the helm of the Iranian revolution and created an Islamic republic implacably hostile to the United States.
Ayatollah Sistani, though, is no Khomeini. At least that is what his own background and the recent history of Iraq's Shiites would indicate. His teachings have always reflected what is often called the quietist school of thought in modern Shiism, one that says that clerics should not run governments. Iran's system, the diametric opposite, invests clerics with absolute legal and political authority.…
In Iran, reformers have boldly challenged the Khomeini legacy by demanding that clerics accept truly free elections by giving up their power to disqualify candidates for the coming parliamentary vote. At the same time, in Iraq, where the long-oppressed Shiite majority is clamoring for power, Ayatollah Sistani is being drawn deeper and deeper into the fray.
"Sistani is incredibly sensitive to public opinion and what people say about him," said a Shiite member of the Iraqi Governing Council. "He renounces political power and yet, at the same time, he has to respond to the fact that people are hungry for a leader."
Although most of Iran's Shiites are of Persian descent and Iraq's are Arabs, religious teachers and students flowed back and forth between the two countries for centuries. Ayatollah Sistani, for example, was born in Iran but pursued his religious studies in Iraq. Until the Iranian revolution in 1979, Iranian pilgrims came to Iraq in droves to visit the Shiite shrines in Najaf and Karbala.
Ayatollah Khomeini himself spent the 15 years before the revolution in Najaf, and it was there that he refined his theory of "wilayat al-faqih," or the rule of the jurist. The theory, that an eminent Shiite cleric can be the absolute legal authority, is the foundation of Iran's present political system.
Even then, in his adopted city, his was the minority view. Ayatollah Sistani's teacher and the highest-ranking cleric in Iraq at the time, Grand Ayatollah Abu al Qassim al-Khoei, firmly believed that even the most learned of Shia scholars have no right to rule.
Still, many religious Iraqi Shiites, denied political power for more than 500 years by the Sunni minority, recall feeling thrilled at the birth of Iran's Islamic government.
The feeling did not last long. Fearing for his rule, Saddam Hussein intensified his persecution of Iraq's Shiites, imprisoning and executing anyone suspected of sympathizing with Iran. With the Iran-Iraq war in 1980, the image of Iran's mullahs was further poisoned.
As a result, many Iraqis say, the Iranian experience with clerical rule never developed a real following, except as a theory.…
http://www.nytimes.com/2004/01/18/weekinreview/18sach.html?pagewanted=all&position=
Saturday, January 17, 2004
Study: Most Spam Not Compliant With Law:
"Only 10 percent of junk e-mails comply with a new federal anti-spam law, according to two days' worth of messages analyzed by a spam filtering vendor."
The law, which took effect Jan. 1, does not prohibit unsolicited commercial e-mail as long as senders follow a set of rules, including using a correct subject line, a physical mailing address and a way to decline future mailings.
But most senders failed to do even that, Audiotrieve LLC said.
http://www.eweek.com/article2/0,4149,1440234,00.asp?kc=EWNWS011604DTX1K0000599
"Only 10 percent of junk e-mails comply with a new federal anti-spam law, according to two days' worth of messages analyzed by a spam filtering vendor."
The law, which took effect Jan. 1, does not prohibit unsolicited commercial e-mail as long as senders follow a set of rules, including using a correct subject line, a physical mailing address and a way to decline future mailings.
But most senders failed to do even that, Audiotrieve LLC said.
http://www.eweek.com/article2/0,4149,1440234,00.asp?kc=EWNWS011604DTX1K0000599
Schneier.com: Crypto-Gram: January 15, 2004 — Color-Coded Terrorist Threat Levels:
"… the threat levels are largely motivated by politics. There are two possble reasons for the alert.
Reason 1: CYA. Governments are naturally risk averse, and issuing vague threat warnings makes sense from that perspective. Imagine if a terrorist attack actually did occur. If they didn't raise the threat level, they would be criticized for not anticipating the attack. As long as they raised the threat level they could always say 'We told you it was Orange,' even though the warning didn't come with any practical advice for people. "
Reason 2: To gain Republican votes. The Republicans spent decades running on the "Democrats are soft on Communism" platform. They've just discovered the "Democrats are soft on terrorism" platform. Voters who are constantly reminded to be fearful are more likely to vote Republican, or so the theory goes, because the Republicans are viewed as the party that is more likely to protect us.
(These reasons may sound cynical, but I believe that the Administration has not been acting in good faith regarding the terrorist threat, and their pronouncements in the press have to be viewed under that light.)
I can't think of any real security reasons for alerting the entire nation, and any putative terrorist plotters, that the Administration believes there is a credible threat.
http://www.schneier.com/crypto-gram-0401.html#1
"… the threat levels are largely motivated by politics. There are two possble reasons for the alert.
Reason 1: CYA. Governments are naturally risk averse, and issuing vague threat warnings makes sense from that perspective. Imagine if a terrorist attack actually did occur. If they didn't raise the threat level, they would be criticized for not anticipating the attack. As long as they raised the threat level they could always say 'We told you it was Orange,' even though the warning didn't come with any practical advice for people. "
Reason 2: To gain Republican votes. The Republicans spent decades running on the "Democrats are soft on Communism" platform. They've just discovered the "Democrats are soft on terrorism" platform. Voters who are constantly reminded to be fearful are more likely to vote Republican, or so the theory goes, because the Republicans are viewed as the party that is more likely to protect us.
(These reasons may sound cynical, but I believe that the Administration has not been acting in good faith regarding the terrorist threat, and their pronouncements in the press have to be viewed under that light.)
I can't think of any real security reasons for alerting the entire nation, and any putative terrorist plotters, that the Administration believes there is a credible threat.
http://www.schneier.com/crypto-gram-0401.html#1
Friday, January 16, 2004
Op-Ed Columnist: Who Gets It?:
"Wesley Clark had some strong words about the state of the nation. 'I think we're at risk with our democracy,' he said. 'I think we're dealing with the most closed, imperialistic, nastiest administration in living memory. They even put Richard Nixon to shame.'
In other words, the general gets it: he understands that America is facing what Kevin Phillips, in his remarkable new book, 'American Dynasty,' calls a 'Machiavellian moment.' Among other things, this tells us that General Clark and Howard Dean, whatever they may say in the heat of the nomination fight, are on the same side of the great Democratic divide. "
Most political reporting on the Democratic race, it seems to me, has gotten it wrong. Some journalists do, of course, insist on trivializing the whole thing: what I dread most, in the event of an upset in Iowa, is the return of reporting about the political significance of John Kerry's hair.
But even those who refrain from turning political reporting into gossip have used the wrong categories. Again and again, one reads that it's about the left wing of the Democratic party versus the centrists; but Mr. Dean was a very centrist governor, and his policy proposals are not obviously more liberal than those of his rivals.
The real division in the race for the Democratic nomination is between those who are willing to question not just the policies but also the honesty and the motives of the people running our country, and those who aren't.…
http://www.nytimes.com/2004/01/16/opinion/16KRUG.html
"Wesley Clark had some strong words about the state of the nation. 'I think we're at risk with our democracy,' he said. 'I think we're dealing with the most closed, imperialistic, nastiest administration in living memory. They even put Richard Nixon to shame.'
In other words, the general gets it: he understands that America is facing what Kevin Phillips, in his remarkable new book, 'American Dynasty,' calls a 'Machiavellian moment.' Among other things, this tells us that General Clark and Howard Dean, whatever they may say in the heat of the nomination fight, are on the same side of the great Democratic divide. "
Most political reporting on the Democratic race, it seems to me, has gotten it wrong. Some journalists do, of course, insist on trivializing the whole thing: what I dread most, in the event of an upset in Iowa, is the return of reporting about the political significance of John Kerry's hair.
But even those who refrain from turning political reporting into gossip have used the wrong categories. Again and again, one reads that it's about the left wing of the Democratic party versus the centrists; but Mr. Dean was a very centrist governor, and his policy proposals are not obviously more liberal than those of his rivals.
The real division in the race for the Democratic nomination is between those who are willing to question not just the policies but also the honesty and the motives of the people running our country, and those who aren't.…
http://www.nytimes.com/2004/01/16/opinion/16KRUG.html
Thursday, January 15, 2004
Study Disputes View of Costly Surge in Class-Action Suits:
"A new study has concluded that both the average price of settling class-action lawsuits and the average fee paid to lawyers who bring them have held steady for a decade, even though companies have said the suits are driving up the cost of doing business, hurting the economy and lining lawyers' pockets."
The issue is a fiercely divisive one that has fueled a heated debate over whether to place limits on class-action lawsuits. Legislation to curb class actions is a priority of President Bush and many Republicans in Congress.
The two law school professors who conducted the study, which was not financed by corporations or by trial lawyers, expressed surprise themselves over the results. "We started out writing an article about fees," said Theodore Eisenberg, a law professor at Cornell and one author of the study, "but the shocking thing was that recoveries weren't up."
Senator Orrin G. Hatch, a Utah Republican and the chief sponsor of a bill that died in October in the Senate, has attacked the current system of class-action litigation as "jackpot justice, with attorneys collecting the windfall." Thomas J. Donohue, president and chief executive of the United States Chamber of Commerce, has complained that "companies spend millions of dollars each year to defend against class-action lawsuits - money that should be used to expand, develop new products and create jobs."
But the new study undermines some of those criticisms. It covers the biggest sample to date of class-action cases, ranging from civil rights violations to securities fraud. Its results, published in a new law publication, the Journal of Empirical Legal Studies, and already circulating, will certainly be used by lawyers trying to head off such legislation.
"This empirical study comes out and says the system is working correctly," said David S. Casey Jr., president of the Association of Trial Lawyers of America, who was in Washington last week meeting with officials planning the body's legislative strategy for 2004. "I'm glad there are empirical studies being done," Mr. Casey said. "The whole effort by what I call the tort reform industry is based on myth and fabrication."…
Reliable data on the total number of class-action lawsuits filed or settled in a given year do not exist. Such data could bolster corporate defendants' arguments that even if the size of settlements is not increasing, the number of cases is rising. The number of suits filed in federal court has risen steadily, roughly doubling from 1997 to 2002, according to the Administrative Office of United States Courts. But state courts probably oversee the most class-action suits, and they produce the least data, said Nicholas M. Pace, a researcher at the Rand Institute for Civil Justice, which studies legal issues for the RAND Corporation.
"People will continue to research this thing for years - and fight about it," Mr. Pace said.
In their article, Mr. Eisenberg and his co-author, Geoffrey P. Miller, a New York University law professor, write that if the effects of inflation are taken into account, then from 1993 through 2002, "contrary to popular belief, we find no robust evidence that either recoveries for plaintiffs or fees for their attorneys as a percentage of the class recovery increased."
According to the study, the average settlement over the 10-year period was $100 million in inflation-adjusted 2002 dollars. It rose as high as $274 million in 2000 - a result of four settlements that year for more than $1 billion each - and fell as low as $25 million in 1996. "The mean client recovery has not noticeably increased over the last decade," the professors wrote.
The study also found that "neither the mean nor the median level of fee awards has increased over time." The average fee rose as high as $31 million in 2000, but exceeded $10 million in only two other years. The professors also report that as one might expect, the larger a settlement, the smaller the percentage allocated to legal fees. For the largest 10 percent of settlements, which averaged $929 million, lawyers received an average of 12 percent. For the smallest 10 percent, which averaged $800,000, lawyers received nearly 30 percent. Fees were higher in cases that were more risky and were higher in federal court cases than in state courts.
"No real-dollar increase in the level of fee awards in major cases over the course of a decade is not the sort of fact we are accustomed to hearing," the professors wrote in the report.…
http://www.nytimes.com/2004/01/14/business/14law.html?pagewanted=all&position=
"A new study has concluded that both the average price of settling class-action lawsuits and the average fee paid to lawyers who bring them have held steady for a decade, even though companies have said the suits are driving up the cost of doing business, hurting the economy and lining lawyers' pockets."
The issue is a fiercely divisive one that has fueled a heated debate over whether to place limits on class-action lawsuits. Legislation to curb class actions is a priority of President Bush and many Republicans in Congress.
The two law school professors who conducted the study, which was not financed by corporations or by trial lawyers, expressed surprise themselves over the results. "We started out writing an article about fees," said Theodore Eisenberg, a law professor at Cornell and one author of the study, "but the shocking thing was that recoveries weren't up."
Senator Orrin G. Hatch, a Utah Republican and the chief sponsor of a bill that died in October in the Senate, has attacked the current system of class-action litigation as "jackpot justice, with attorneys collecting the windfall." Thomas J. Donohue, president and chief executive of the United States Chamber of Commerce, has complained that "companies spend millions of dollars each year to defend against class-action lawsuits - money that should be used to expand, develop new products and create jobs."
But the new study undermines some of those criticisms. It covers the biggest sample to date of class-action cases, ranging from civil rights violations to securities fraud. Its results, published in a new law publication, the Journal of Empirical Legal Studies, and already circulating, will certainly be used by lawyers trying to head off such legislation.
"This empirical study comes out and says the system is working correctly," said David S. Casey Jr., president of the Association of Trial Lawyers of America, who was in Washington last week meeting with officials planning the body's legislative strategy for 2004. "I'm glad there are empirical studies being done," Mr. Casey said. "The whole effort by what I call the tort reform industry is based on myth and fabrication."…
Reliable data on the total number of class-action lawsuits filed or settled in a given year do not exist. Such data could bolster corporate defendants' arguments that even if the size of settlements is not increasing, the number of cases is rising. The number of suits filed in federal court has risen steadily, roughly doubling from 1997 to 2002, according to the Administrative Office of United States Courts. But state courts probably oversee the most class-action suits, and they produce the least data, said Nicholas M. Pace, a researcher at the Rand Institute for Civil Justice, which studies legal issues for the RAND Corporation.
"People will continue to research this thing for years - and fight about it," Mr. Pace said.
In their article, Mr. Eisenberg and his co-author, Geoffrey P. Miller, a New York University law professor, write that if the effects of inflation are taken into account, then from 1993 through 2002, "contrary to popular belief, we find no robust evidence that either recoveries for plaintiffs or fees for their attorneys as a percentage of the class recovery increased."
According to the study, the average settlement over the 10-year period was $100 million in inflation-adjusted 2002 dollars. It rose as high as $274 million in 2000 - a result of four settlements that year for more than $1 billion each - and fell as low as $25 million in 1996. "The mean client recovery has not noticeably increased over the last decade," the professors wrote.
The study also found that "neither the mean nor the median level of fee awards has increased over time." The average fee rose as high as $31 million in 2000, but exceeded $10 million in only two other years. The professors also report that as one might expect, the larger a settlement, the smaller the percentage allocated to legal fees. For the largest 10 percent of settlements, which averaged $929 million, lawyers received an average of 12 percent. For the smallest 10 percent, which averaged $800,000, lawyers received nearly 30 percent. Fees were higher in cases that were more risky and were higher in federal court cases than in state courts.
"No real-dollar increase in the level of fee awards in major cases over the course of a decade is not the sort of fact we are accustomed to hearing," the professors wrote in the report.…
http://www.nytimes.com/2004/01/14/business/14law.html?pagewanted=all&position=
Tuesday, January 13, 2004
Market Watch: The No-Bang, All-Whimper Recovery:
"Economists had forecast an increase of 150,000 jobs in December. They were off by a mere 149,000."
Other aspects of the employment figures disappointed, too. More than 300,000 people dropped out of the job pool and the index of hours worked fell below the level of 1998. The manufacturing sector shed jobs, as it had for the previous 40 months, but so did the retail and financial service industries. Finally, November's upbeat job report was revised downward.
One economist who was unsurprised by the figures is Stephen S. Roach, chief economist at Morgan Stanley. Arguing for months that a lasting recovery cannot be built on an increasingly indebted consumer, a declining savings rate and widening current-account and trade deficits, Mr. Roach's has been a voice in the wilderness.
Bulls on the economy have snickered at his warnings that, contrary to some of the data, the domestic labor market was not rebounding. Now he looks prescient.
"We had a spectacular second half of '03 in G.D.P. because of tax cuts, the last-gasp spending of the refinance cycle and price cuts on motor vehicles," Mr. Roach said. "But we haven't had job growth and income generation. Consumers can't continue to carry the ball with their incomes lagging."
The consumer, of course, has been a stalwart spender for years in spite of significant job losses, a nonexistent savings rate and increasing personal debt. Counting out the consumer has been folly.
"I think the 90's taught people to spend not just out of their paychecks but also out of their assets," Mr. Roach said. First, the stock market, then their homes.
But the unpleasant reality remains that private-sector payrolls are now 7.5 million workers below the level that would be typical 25 months into an economic recovery, he said. This trend may well continue, he said, and for several troubling reasons.
They all have to do with the outsourcing phenomenon that has swept through the manufacturing world and is now threatening service jobs. Thanks to the Internet and the continued push for productivity, more American companies are turning to offshore workers.
And Mr. Roach sees no reason for that to change.…
http://www.nytimes.com/2004/01/11/business/yourmoney/11watch.html
"Economists had forecast an increase of 150,000 jobs in December. They were off by a mere 149,000."
Other aspects of the employment figures disappointed, too. More than 300,000 people dropped out of the job pool and the index of hours worked fell below the level of 1998. The manufacturing sector shed jobs, as it had for the previous 40 months, but so did the retail and financial service industries. Finally, November's upbeat job report was revised downward.
One economist who was unsurprised by the figures is Stephen S. Roach, chief economist at Morgan Stanley. Arguing for months that a lasting recovery cannot be built on an increasingly indebted consumer, a declining savings rate and widening current-account and trade deficits, Mr. Roach's has been a voice in the wilderness.
Bulls on the economy have snickered at his warnings that, contrary to some of the data, the domestic labor market was not rebounding. Now he looks prescient.
"We had a spectacular second half of '03 in G.D.P. because of tax cuts, the last-gasp spending of the refinance cycle and price cuts on motor vehicles," Mr. Roach said. "But we haven't had job growth and income generation. Consumers can't continue to carry the ball with their incomes lagging."
The consumer, of course, has been a stalwart spender for years in spite of significant job losses, a nonexistent savings rate and increasing personal debt. Counting out the consumer has been folly.
"I think the 90's taught people to spend not just out of their paychecks but also out of their assets," Mr. Roach said. First, the stock market, then their homes.
But the unpleasant reality remains that private-sector payrolls are now 7.5 million workers below the level that would be typical 25 months into an economic recovery, he said. This trend may well continue, he said, and for several troubling reasons.
They all have to do with the outsourcing phenomenon that has swept through the manufacturing world and is now threatening service jobs. Thanks to the Internet and the continued push for productivity, more American companies are turning to offshore workers.
And Mr. Roach sees no reason for that to change.…
http://www.nytimes.com/2004/01/11/business/yourmoney/11watch.html
Op-Ed Columnist: The Awful Truth:
"Ron Suskind's new book 'The Price of Loyalty' is based largely on interviews with and materials supplied by Mr. O'Neill. It portrays an administration in which political considerations — satisfying "the base" — trump policy analysis on every issue, from tax cuts to international trade policy and global warming. The money quote may be Dick Cheney's blithe declaration that "Reagan proved deficits don't matter." But there are many other revelations.
One is that Mr. O'Neill and Alan Greenspan knew that it was a mistake to lock in huge tax cuts based on questionable projections of future surpluses. In May 2001 Mr. Greenspan gloomily told Mr. O'Neill that because the first Bush tax cut didn't include triggers — it went forward regardless of how the budget turned out — it was "irresponsible fiscal policy." This was a time when critics of the tax cut were ridiculed for saying exactly the same thing."
Another is that Mr. Bush, who declared in the 2000 campaign that "the vast majority of my tax cuts go to the bottom end of the spectrum," knew that this wasn't true. He worried that eliminating taxes on dividends would benefit only "top-rate people," asking his advisers, "Didn't we already give them a break at the top?"
Most startling of all, Donald Rumsfeld pushed the idea of regime change in Iraq as a way to transform the Middle East at a National Security Council meeting in February 2001.
There's much more in Mr. Suskind's book. All of it will dismay those who still want to believe that our leaders are wise and good.
The question is whether this book will open the eyes of those who think that anyone who criticizes the tax cuts is a wild-eyed leftist, and that anyone who says the administration hyped the threat from Iraq is a conspiracy theorist.
The point is that the credentials of the critics just keep getting better. How can Howard Dean's assertion that the capture of Saddam hasn't made us safer be dismissed as bizarre, when a report published by the Army War College says that the war in Iraq was a "detour" that undermined the fight against terror? How can charges by Wesley Clark and others that the administration was looking for an excuse to invade Iraq be dismissed as paranoid in the light of Mr. O'Neill's revelations?
So far administration officials have attacked Mr. O'Neill's character but haven't refuted any of his facts. They have, however, already opened an investigation into how a picture of a possibly classified document appeared during Mr. O'Neill's TV interview. This alacrity stands in sharp contrast with their evident lack of concern when a senior administration official, still unknown, blew the cover of a C.I.A. operative because her husband had revealed some politically inconvenient facts.…
http://www.nytimes.com/2004/01/13/opinion/13KRUG.html?pagewanted=print&position=
"Ron Suskind's new book 'The Price of Loyalty' is based largely on interviews with and materials supplied by Mr. O'Neill. It portrays an administration in which political considerations — satisfying "the base" — trump policy analysis on every issue, from tax cuts to international trade policy and global warming. The money quote may be Dick Cheney's blithe declaration that "Reagan proved deficits don't matter." But there are many other revelations.
One is that Mr. O'Neill and Alan Greenspan knew that it was a mistake to lock in huge tax cuts based on questionable projections of future surpluses. In May 2001 Mr. Greenspan gloomily told Mr. O'Neill that because the first Bush tax cut didn't include triggers — it went forward regardless of how the budget turned out — it was "irresponsible fiscal policy." This was a time when critics of the tax cut were ridiculed for saying exactly the same thing."
Another is that Mr. Bush, who declared in the 2000 campaign that "the vast majority of my tax cuts go to the bottom end of the spectrum," knew that this wasn't true. He worried that eliminating taxes on dividends would benefit only "top-rate people," asking his advisers, "Didn't we already give them a break at the top?"
Most startling of all, Donald Rumsfeld pushed the idea of regime change in Iraq as a way to transform the Middle East at a National Security Council meeting in February 2001.
There's much more in Mr. Suskind's book. All of it will dismay those who still want to believe that our leaders are wise and good.
The question is whether this book will open the eyes of those who think that anyone who criticizes the tax cuts is a wild-eyed leftist, and that anyone who says the administration hyped the threat from Iraq is a conspiracy theorist.
The point is that the credentials of the critics just keep getting better. How can Howard Dean's assertion that the capture of Saddam hasn't made us safer be dismissed as bizarre, when a report published by the Army War College says that the war in Iraq was a "detour" that undermined the fight against terror? How can charges by Wesley Clark and others that the administration was looking for an excuse to invade Iraq be dismissed as paranoid in the light of Mr. O'Neill's revelations?
So far administration officials have attacked Mr. O'Neill's character but haven't refuted any of his facts. They have, however, already opened an investigation into how a picture of a possibly classified document appeared during Mr. O'Neill's TV interview. This alacrity stands in sharp contrast with their evident lack of concern when a senior administration official, still unknown, blew the cover of a C.I.A. operative because her husband had revealed some politically inconvenient facts.…
http://www.nytimes.com/2004/01/13/opinion/13KRUG.html?pagewanted=print&position=
What Price Security? US-VISIT:
"Attention taxpayers: The United States government is about to spend at least $10 billion to build a state-of-the-art nationwide computer system that will use biometrics to track the comings and goings of visitors to this country.
Hang on to your wallets and a copy of the Bill of Rights.…"
This system is supposed to enable the government to effectively check in and check out every non-citizen on arrival and departure. Presumably the government will also be able to use it to check out and check in every U.S. citizen who visits foreign lands. If it works, US-VISIT will link up federal law enforcement and intelligence databases to automatically identify suspected terrorists or common criminals who are wanted for arrest in the United States or overseas.
The designers are going to have to build massive databases to store and process the biometric data and link them to a variety of existing law enforcement agency databases. This alone will be a remarkable achievement considering that inter-agency rivalries helped ensure information wasn't shared in a highly automated fashion.
In short, building US-VISIT will be like building a new space shuttle from scratch. Delays and cost overruns are a virtual certainty.…
The problem is that when it comes to connecting biometrics to a global data processing system, nobody knows what is the state of the art. The government is going to have to pay somebody to invent it.
Late last year DHC asked Accenture LLP, Computer Sciences Corp. and Lockheed Martin Corp. to submit bids based on proposals the companies had submitted earlier. The government plans to choose one of these companies to be the lead contractor for US-VISIT by next May.
When the government tells you that it might cost as much as $10 billion to design, build and deploy such a system, increase that figure two or three times because US-VISIT is as complex and risky a project as some of the biggest weapons procurement programs in the country's history.
Just how risky can be judged from the federal government's atrocious record of trying to deploy modern and efficient data processing systems for fundamental public service agencies, such as the Social Security Administration or the Internal Revenue Service. The record is full of accounts about delays, cost overruns and outright failures in a multitude of government computer procurement programs.
Even with all of the engineering and computer science talent on their payrolls, neither the government nor the contractor candidates can be absolutely certain that they can successfully assemble this system—no matter what they might say publicly.…
It is a sad fact of history that most of the great advances in science and technology have been achieved only because governments are prepared to spend huge sums to build new weapons and defense systems.
The atomic bomb, nuclear submarines and the nascent U.S. antimissile system are just a few examples of the lengths that the government is prepared to go in the name of national security.
An early successful example of the government harnessing computer technology for national defense is a 1960s era museum piece called SAGE (Semi Automatic Ground Environment) developed by IBM based on research by the Massachusetts Institute of Technology. It used radar and computer power to allow air defense controllers to track intruding aircraft. It was a precursor of the current civil air traffic control systems used worldwide.
It was also nowhere near as complex as the US-VISIT system.
Even so, it is entirely possible with massive investments of money, time and human resources the government will actually deploy a US-VISIT system that reliably performs what it was designed to do. But that doesn't mean we will be one iota safer from attack by determined terrorists.
If we are very lucky, the nation will somewhat be less blind to terrorist threats than we were before 2001. We will have also paid a heavy price beyond the yet uncounted billions to build the system.…
http://www.eweek.com/print_article/0,3048,a=116163,00.asp
"Attention taxpayers: The United States government is about to spend at least $10 billion to build a state-of-the-art nationwide computer system that will use biometrics to track the comings and goings of visitors to this country.
Hang on to your wallets and a copy of the Bill of Rights.…"
This system is supposed to enable the government to effectively check in and check out every non-citizen on arrival and departure. Presumably the government will also be able to use it to check out and check in every U.S. citizen who visits foreign lands. If it works, US-VISIT will link up federal law enforcement and intelligence databases to automatically identify suspected terrorists or common criminals who are wanted for arrest in the United States or overseas.
The designers are going to have to build massive databases to store and process the biometric data and link them to a variety of existing law enforcement agency databases. This alone will be a remarkable achievement considering that inter-agency rivalries helped ensure information wasn't shared in a highly automated fashion.
In short, building US-VISIT will be like building a new space shuttle from scratch. Delays and cost overruns are a virtual certainty.…
The problem is that when it comes to connecting biometrics to a global data processing system, nobody knows what is the state of the art. The government is going to have to pay somebody to invent it.
Late last year DHC asked Accenture LLP, Computer Sciences Corp. and Lockheed Martin Corp. to submit bids based on proposals the companies had submitted earlier. The government plans to choose one of these companies to be the lead contractor for US-VISIT by next May.
When the government tells you that it might cost as much as $10 billion to design, build and deploy such a system, increase that figure two or three times because US-VISIT is as complex and risky a project as some of the biggest weapons procurement programs in the country's history.
Just how risky can be judged from the federal government's atrocious record of trying to deploy modern and efficient data processing systems for fundamental public service agencies, such as the Social Security Administration or the Internal Revenue Service. The record is full of accounts about delays, cost overruns and outright failures in a multitude of government computer procurement programs.
Even with all of the engineering and computer science talent on their payrolls, neither the government nor the contractor candidates can be absolutely certain that they can successfully assemble this system—no matter what they might say publicly.…
It is a sad fact of history that most of the great advances in science and technology have been achieved only because governments are prepared to spend huge sums to build new weapons and defense systems.
The atomic bomb, nuclear submarines and the nascent U.S. antimissile system are just a few examples of the lengths that the government is prepared to go in the name of national security.
An early successful example of the government harnessing computer technology for national defense is a 1960s era museum piece called SAGE (Semi Automatic Ground Environment) developed by IBM based on research by the Massachusetts Institute of Technology. It used radar and computer power to allow air defense controllers to track intruding aircraft. It was a precursor of the current civil air traffic control systems used worldwide.
It was also nowhere near as complex as the US-VISIT system.
Even so, it is entirely possible with massive investments of money, time and human resources the government will actually deploy a US-VISIT system that reliably performs what it was designed to do. But that doesn't mean we will be one iota safer from attack by determined terrorists.
If we are very lucky, the nation will somewhat be less blind to terrorist threats than we were before 2001. We will have also paid a heavy price beyond the yet uncounted billions to build the system.…
http://www.eweek.com/print_article/0,3048,a=116163,00.asp
Monday, January 12, 2004
Bush Sought to Oust Hussein From Start, Ex-Official Says:
"President Bush was focused on removing Saddam Hussein from power in Iraq from the start of his administration, more than seven months before the terrorist attacks that he later cited as the trigger for a more aggressive foreign policy, Paul H. O'Neill, Mr. Bush's first Treasury secretary, said in an interview broadcast on Sunday.
'From the very beginning, there was a conviction that Saddam Hussein was a bad person and that he needed to go,' Mr. O'Neill said in an interview with the CBS program '60 Minutes.'"
Mr. O'Neill, who was dismissed by Mr. Bush more than a year ago over differences on economic policy, said Iraq was discussed at the first National Security Council meeting after Mr. Bush's inauguration. The tone at that meeting and others, Mr. O'Neill said, was "all about finding a way to do it," with no real questioning of why Mr. Hussein had to go or why it had to be done then. "For me, the notion of pre-emption, that the U.S. has the unilateral right to do whatever we decide to do, is a really huge leap," Mr. O'Neill said.
Mr. O'Neill gave the interview to "60 Minutes" to promote a new book, "The Price of Loyalty," by Ron Suskind. Mr. O'Neill cooperated extensively on the book, turning over 19,000 documents from his two years as Treasury secretary, including transcripts of National Security Council meetings, Mr. Suskind told "60 Minutes."
Mr. O'Neill also gave an interview to Time magazine, which quoted him as casting doubt on the strength of the evidence Mr. Bush cited in making the case for war with Iraq.
"In the 23 months I was there, I never saw anything that I would characterize as evidence of weapons of mass destruction," Mr. O'Neill told Time, speaking of his tenure in the administration. "There were allegations and assertions by people. But I've been around a hell of a long time, and I know the difference between evidence and assertions and illusions or allusions and conclusions that one could draw from a set of assumptions.
"To me there is a difference between real evidence and everything else," he continued. "And I never saw anything in the intelligence that I would characterize as real evidence."…
http://www.nytimes.com/2004/01/12/politics/12ONEI.html
"President Bush was focused on removing Saddam Hussein from power in Iraq from the start of his administration, more than seven months before the terrorist attacks that he later cited as the trigger for a more aggressive foreign policy, Paul H. O'Neill, Mr. Bush's first Treasury secretary, said in an interview broadcast on Sunday.
'From the very beginning, there was a conviction that Saddam Hussein was a bad person and that he needed to go,' Mr. O'Neill said in an interview with the CBS program '60 Minutes.'"
Mr. O'Neill, who was dismissed by Mr. Bush more than a year ago over differences on economic policy, said Iraq was discussed at the first National Security Council meeting after Mr. Bush's inauguration. The tone at that meeting and others, Mr. O'Neill said, was "all about finding a way to do it," with no real questioning of why Mr. Hussein had to go or why it had to be done then. "For me, the notion of pre-emption, that the U.S. has the unilateral right to do whatever we decide to do, is a really huge leap," Mr. O'Neill said.
Mr. O'Neill gave the interview to "60 Minutes" to promote a new book, "The Price of Loyalty," by Ron Suskind. Mr. O'Neill cooperated extensively on the book, turning over 19,000 documents from his two years as Treasury secretary, including transcripts of National Security Council meetings, Mr. Suskind told "60 Minutes."
Mr. O'Neill also gave an interview to Time magazine, which quoted him as casting doubt on the strength of the evidence Mr. Bush cited in making the case for war with Iraq.
"In the 23 months I was there, I never saw anything that I would characterize as evidence of weapons of mass destruction," Mr. O'Neill told Time, speaking of his tenure in the administration. "There were allegations and assertions by people. But I've been around a hell of a long time, and I know the difference between evidence and assertions and illusions or allusions and conclusions that one could draw from a set of assumptions.
"To me there is a difference between real evidence and everything else," he continued. "And I never saw anything in the intelligence that I would characterize as real evidence."…
http://www.nytimes.com/2004/01/12/politics/12ONEI.html
By accepting the government's vague, poorly explained allegations, and by filling in the gaps in the government's case with its own assumptions about facts absent from the record, this court has converted deference into acquiescence.
Justices Refuse to Review Case on Secrecy and 9/11 Detentions:
"The justices let stand a ruling by a federal appeals court, which concluded last June that the Justice Department was within its rights when it refused to release the names of more than 700 people, most of them Arabs or Muslims, arrested for immigration violations in connection with the attacks.
Many of those arrested have been deported. Some were charged with crimes and others were held as witnesses. But so far only one person, Zacarias Moussaoui, is being prosecuted in connection with the attacks, and he was detained before Sept. 11."
The case that the justices declined today to review, Center for National Security Studies v. Justice Department, 03-472, pitted two fundamental values against each other — the right of the public to know details of how its government operates versus the government's need to keep some information secret to protect national security.
With today's refusal by the justices, the last word in the case apparently belongs to Judge David B. Sentelle of the United States Court of Appeals for the District of Columbia Circuit. In his opinion for the 2-to-1 majority on June 17, he noted that courts had always shown deference to executive branch officials in the field of national security.
Judge David S. Tatel offered a blistering dissent last June. "By accepting the government's vague, poorly explained allegations, and by filling in the gaps in the government's case with its own assumptions about facts absent from the record, this court has converted deference into acquiescence," he asserted.…
http://www.nytimes.com/2004/01/12/politics/12CND-SCOT.html
Sunday, January 11, 2004
Op-Ed Contributor: Call It the Family Risk Factor:
"On the heels of Friday's glum Labor Department report, Americans have a right to be confused. Soaring growth, stocks and consumer confidence have heartened investors. And yet, the country remains mired in a jobless recovery. The reality is that the economy has become more uncertain and anxiety-producing for most of us — not just over the past three years, but over the past 30. But by fixating on the day-to-day ups and downs, analysts have largely missed the more telling trend: an increasing shift of economic risk from government and corporations onto workers and their families.
Signs of this transformation are everywhere: in the laid-off programmer whose stock options are suddenly worthless, in the former welfare mom who can get a job but not health care or day care, in the family forced into bankruptcy by the sickness of a child. But these episodes, while viewed with sympathy, are usually seen in isolation, rather than as parts of a larger problem. This blinkered view stands in the way of both diagnoses of the causes of the new economic insecurity and prescriptions for its cure.…"
Optimists point out that Americans are much richer than they were in the 1970's. But while they are as a whole, incomes have grown little for the middle class and working poor — even as wages have become more unstable, the financial effects of losing a job have worsened, and the cost of things families need, from housing to education, has ballooned. Yet government and the private sector aren't just ignoring these problems, they are making them worse. Many programs for the poor, for example, have been substantially cut. And middle-class programs like Social Security have steadily eroded.
The truly staggering changes, however, are taking place in the private sector. The number of Americans without employment-based health benefits has been rising for decades. Employers are also restructuring workplace benefits to impose more risk on workers. Once, for instance, workers lucky enough to have a pension enjoyed a guaranteed benefit. Now, with so-called defined-contribution plans like 401(k)'s, workers have to put away their own wages and the returns of the plan depend entirely on their own investments.
What might be done to help families cope with the new economic insecurity? The essential first step is to shore up existing policies to ensure broad-based and secure unemployment, pension and health benefits.
Yet simply upgrading present efforts is not enough. I believe we need a new, flexible universal insurance program to protect families against catastrophic expenses and drops in income, before families fall into poverty. Universal insurance would, in turn, be coupled with tax-subsidized savings accounts that would help middle and lower-income families manage these expenses before they reached catastrophic levels.…
http://www.nytimes.com/2004/01/11/opinion/11HACK.html
"On the heels of Friday's glum Labor Department report, Americans have a right to be confused. Soaring growth, stocks and consumer confidence have heartened investors. And yet, the country remains mired in a jobless recovery. The reality is that the economy has become more uncertain and anxiety-producing for most of us — not just over the past three years, but over the past 30. But by fixating on the day-to-day ups and downs, analysts have largely missed the more telling trend: an increasing shift of economic risk from government and corporations onto workers and their families.
Signs of this transformation are everywhere: in the laid-off programmer whose stock options are suddenly worthless, in the former welfare mom who can get a job but not health care or day care, in the family forced into bankruptcy by the sickness of a child. But these episodes, while viewed with sympathy, are usually seen in isolation, rather than as parts of a larger problem. This blinkered view stands in the way of both diagnoses of the causes of the new economic insecurity and prescriptions for its cure.…"
Optimists point out that Americans are much richer than they were in the 1970's. But while they are as a whole, incomes have grown little for the middle class and working poor — even as wages have become more unstable, the financial effects of losing a job have worsened, and the cost of things families need, from housing to education, has ballooned. Yet government and the private sector aren't just ignoring these problems, they are making them worse. Many programs for the poor, for example, have been substantially cut. And middle-class programs like Social Security have steadily eroded.
The truly staggering changes, however, are taking place in the private sector. The number of Americans without employment-based health benefits has been rising for decades. Employers are also restructuring workplace benefits to impose more risk on workers. Once, for instance, workers lucky enough to have a pension enjoyed a guaranteed benefit. Now, with so-called defined-contribution plans like 401(k)'s, workers have to put away their own wages and the returns of the plan depend entirely on their own investments.
What might be done to help families cope with the new economic insecurity? The essential first step is to shore up existing policies to ensure broad-based and secure unemployment, pension and health benefits.
Yet simply upgrading present efforts is not enough. I believe we need a new, flexible universal insurance program to protect families against catastrophic expenses and drops in income, before families fall into poverty. Universal insurance would, in turn, be coupled with tax-subsidized savings accounts that would help middle and lower-income families manage these expenses before they reached catastrophic levels.…
http://www.nytimes.com/2004/01/11/opinion/11HACK.html
Saturday, January 10, 2004
News Analysis: Bush Seeks Ways to Create Jobs, and Fast:
"With a phalanx of women entrepreneurs at his side and a billboard covered with the word 'Jobs!' behind him, President Bush proclaimed his confidence about the economy here on Friday. But he made only passing reference to the latest news about employment.
The reason was clear: Friday's report on unemployment in December was much weaker than either the administration or most independent economists had predicted. Job creation was virtually nil, and the unemployment rate declined only because the labor force shrank by 309,000 workers. Many of those were people who had simply become too discouraged to keep looking for work."
The problem confronting Mr. Bush is that there is little he can do between now and the elections except wait and hope that the employment picture improves. And the administration is not likely to get much more help from the Federal Reserve, which has already reduced short-term interest rates to just 1 percent.
"In terms of big levers to pull, they don't have anything," said Pierre Ellis, a senior economist at Decision Economics, a forecasting company.…
Both the White House and the Fed are confronted by a recovery unlike any other in modern history. Economic growth has been soaring for months, corporate profits have shot up and the stock market has regained much of its old ebullience.
Yet job creation has been slower than in almost any previous recovery, and wage growth has slowed to a crawl. That appears to reflect another big new element that lies entirely outside the president's control: the enormous increases in productivity, which have made it possible for companies to squeeze more output from each worker.
"The evidence is powerful that we can have 4 or 5 percent growth without hiring much," said John Makin, a senior economist at the American Enterprise Institute. Mr. Makin has long been among the more pessimistic economic forecasters, but the employment and wage data on Friday came in far worse than even he had expected. "I was stunned, quite frankly," he said.…
http://www.nytimes.com/2004/01/10/business/10jobs.html
"With a phalanx of women entrepreneurs at his side and a billboard covered with the word 'Jobs!' behind him, President Bush proclaimed his confidence about the economy here on Friday. But he made only passing reference to the latest news about employment.
The reason was clear: Friday's report on unemployment in December was much weaker than either the administration or most independent economists had predicted. Job creation was virtually nil, and the unemployment rate declined only because the labor force shrank by 309,000 workers. Many of those were people who had simply become too discouraged to keep looking for work."
The problem confronting Mr. Bush is that there is little he can do between now and the elections except wait and hope that the employment picture improves. And the administration is not likely to get much more help from the Federal Reserve, which has already reduced short-term interest rates to just 1 percent.
"In terms of big levers to pull, they don't have anything," said Pierre Ellis, a senior economist at Decision Economics, a forecasting company.…
Both the White House and the Fed are confronted by a recovery unlike any other in modern history. Economic growth has been soaring for months, corporate profits have shot up and the stock market has regained much of its old ebullience.
Yet job creation has been slower than in almost any previous recovery, and wage growth has slowed to a crawl. That appears to reflect another big new element that lies entirely outside the president's control: the enormous increases in productivity, which have made it possible for companies to squeeze more output from each worker.
"The evidence is powerful that we can have 4 or 5 percent growth without hiring much," said John Makin, a senior economist at the American Enterprise Institute. Mr. Makin has long been among the more pessimistic economic forecasters, but the employment and wage data on Friday came in far worse than even he had expected. "I was stunned, quite frankly," he said.…
http://www.nytimes.com/2004/01/10/business/10jobs.html
Editorial Observer: Coming to Terms With the Problem of Global Meat:
"Industrial agriculture is indeed industrial. It is designed to move parts along a conveyor belt, no matter where the parts come from. And if one of the parts proves to be fatally defective — a dairy cow with the staggers, for instance — then shutting down the conveyor nearly always comes far too late.
It has been instructive watching American agriculture respond to this minicrisis. The usual players have retreated to their usual corners. Some cattle growers have publicly praised the beef checkoff program, which collects a small percentage of the sales from every producer for advertising, because it creates the illusion of a unified voice in a time of trouble. Supporters of country-of-origin labeling, which would identify the source of every cut of meat, have promoted its potential virtues, while opponents argue that it would make no difference or be too expensive. The real necessity is to provide accurate, detailed tracking of every individual animal, though the United States Department of Agriculture is poorly equipped to make it happen anytime soon. The inherent logic of all these positions is simply to make the status quo safer, so global meat can go about its business uninterrupted."
But what is needed to avert a major crisis is real change, from the bottom up. The global meat system is broken, as a machine and as a philosophy. In America, meatpacking has gone from being a widely distributed, widely owned web of local, independent businesses into a tightly controlled, cruelly concentrated industry whose assumptions are utterly industrial.
Modern meatpacking plants are enormous automated factories, as void of humans as possible. The machinery, like the now-notorious automated meat-recovery system, is very expensive. Profitability requires an uninterrupted flow of carcasses. To packers, that means that they, rather than independent farmers, should own the cattle, hogs and poultry moving through the line. The federal government agrees. Every effort to outlaw packers' ownership of livestock has failed.
The result is a system in which the average drives out the excellent, and the international drives out the local. I know a large-scale rancher in north-central Wyoming who does everything he can to raise beef cattle of the highest quality. That means good genetics, good grass and as few chemical and pharmaceutical inputs as he can possibly manage. But then the cattle are loaded onto trucks, shipped to feedlots and hauled to slaughter, where they merge with the great river of American meat, indistinguishable from all the rest. There is no real alternative to the concentrated meatpacking and distribution system. Any alternative — grass-fed, organic beef, separately slaughtered, separately marketed — is merely a niche so far.
In science fiction movies, there is often a moment when space colonists talk about "terra-forming" a suitable planet. They mean giving it a breathable atmosphere and terrestrial flora and fauna. We are going through a different process on the one planet we have. We are agri-forming it.…
http://www.nytimes.com/2004/01/10/opinion/10SAT3.html
"Industrial agriculture is indeed industrial. It is designed to move parts along a conveyor belt, no matter where the parts come from. And if one of the parts proves to be fatally defective — a dairy cow with the staggers, for instance — then shutting down the conveyor nearly always comes far too late.
It has been instructive watching American agriculture respond to this minicrisis. The usual players have retreated to their usual corners. Some cattle growers have publicly praised the beef checkoff program, which collects a small percentage of the sales from every producer for advertising, because it creates the illusion of a unified voice in a time of trouble. Supporters of country-of-origin labeling, which would identify the source of every cut of meat, have promoted its potential virtues, while opponents argue that it would make no difference or be too expensive. The real necessity is to provide accurate, detailed tracking of every individual animal, though the United States Department of Agriculture is poorly equipped to make it happen anytime soon. The inherent logic of all these positions is simply to make the status quo safer, so global meat can go about its business uninterrupted."
But what is needed to avert a major crisis is real change, from the bottom up. The global meat system is broken, as a machine and as a philosophy. In America, meatpacking has gone from being a widely distributed, widely owned web of local, independent businesses into a tightly controlled, cruelly concentrated industry whose assumptions are utterly industrial.
Modern meatpacking plants are enormous automated factories, as void of humans as possible. The machinery, like the now-notorious automated meat-recovery system, is very expensive. Profitability requires an uninterrupted flow of carcasses. To packers, that means that they, rather than independent farmers, should own the cattle, hogs and poultry moving through the line. The federal government agrees. Every effort to outlaw packers' ownership of livestock has failed.
The result is a system in which the average drives out the excellent, and the international drives out the local. I know a large-scale rancher in north-central Wyoming who does everything he can to raise beef cattle of the highest quality. That means good genetics, good grass and as few chemical and pharmaceutical inputs as he can possibly manage. But then the cattle are loaded onto trucks, shipped to feedlots and hauled to slaughter, where they merge with the great river of American meat, indistinguishable from all the rest. There is no real alternative to the concentrated meatpacking and distribution system. Any alternative — grass-fed, organic beef, separately slaughtered, separately marketed — is merely a niche so far.
In science fiction movies, there is often a moment when space colonists talk about "terra-forming" a suitable planet. They mean giving it a breathable atmosphere and terrestrial flora and fauna. We are going through a different process on the one planet we have. We are agri-forming it.…
http://www.nytimes.com/2004/01/10/opinion/10SAT3.html
Friday, January 09, 2004
Supreme Court Expands Review of 'Enemy Combatant' Cases:
"The Supreme Court stepped squarely into a momentous debate over national security and personal liberty today by agreeing to consider the case of a man who has been held without charges by the United States military since he was captured in the fighting in Afghanistan."
The justices agreed to hear the appeal of the captive, Yaser Esam Hamdi, who is believed to hold both American and Saudi citizenship and who is in a Navy brig in Charleston, S.C.
The Bush administration had urged the Supreme Court not to hear the Hamdi case, so the announcement today represented a sharp rebuff to the president, Attorney General John Ashcroft and other architects of administration policy.
In agreeing to hear the case, probably in April, the justices have decided in effect to subject the Bush's administration's antiterrorism policies to a close examination that could have consequences for decades to come.
The administration has argued that the threat of terrorism justifies some tough measures in dealing with suspected enemies of the United States — holding such people without specific charges in some cases or denying them access to counsel if such tactics can prevent more attacks like those of Sept. 11, 2001.
But some civil libertarians have expressed fears that in so doing the government, and the American people, may make mistakes that will be regretted many years from now, much as the internment of Japanese-Americans during World War II is today.
The justices' decision to take the Hamdi case appeared to increase the likelihood that they would also take another case that pits national security considerations against issues of personal freedom. That case comes from New York City, where the United States Court of Appeals for the Second Circuit ruled on Dec. 18 that President Bush lacks the authority to detain indefinitely a United States citizen arrested on American soil on suspicion of terrorism simply by declaring him "an enemy combatant." The authorities say that suspect, José Padilla, plotted with Al Qaeda to detonate a so-called "dirty bomb" in the United States.…
http://www.nytimes.com/2004/01/09/national/09CND-SCOT.html
"The Supreme Court stepped squarely into a momentous debate over national security and personal liberty today by agreeing to consider the case of a man who has been held without charges by the United States military since he was captured in the fighting in Afghanistan."
The justices agreed to hear the appeal of the captive, Yaser Esam Hamdi, who is believed to hold both American and Saudi citizenship and who is in a Navy brig in Charleston, S.C.
The Bush administration had urged the Supreme Court not to hear the Hamdi case, so the announcement today represented a sharp rebuff to the president, Attorney General John Ashcroft and other architects of administration policy.
In agreeing to hear the case, probably in April, the justices have decided in effect to subject the Bush's administration's antiterrorism policies to a close examination that could have consequences for decades to come.
The administration has argued that the threat of terrorism justifies some tough measures in dealing with suspected enemies of the United States — holding such people without specific charges in some cases or denying them access to counsel if such tactics can prevent more attacks like those of Sept. 11, 2001.
But some civil libertarians have expressed fears that in so doing the government, and the American people, may make mistakes that will be regretted many years from now, much as the internment of Japanese-Americans during World War II is today.
The justices' decision to take the Hamdi case appeared to increase the likelihood that they would also take another case that pits national security considerations against issues of personal freedom. That case comes from New York City, where the United States Court of Appeals for the Second Circuit ruled on Dec. 18 that President Bush lacks the authority to detain indefinitely a United States citizen arrested on American soil on suspicion of terrorism simply by declaring him "an enemy combatant." The authorities say that suspect, José Padilla, plotted with Al Qaeda to detonate a so-called "dirty bomb" in the United States.…
http://www.nytimes.com/2004/01/09/national/09CND-SCOT.html
APHIS | Hot Issues Bovine Spongiform Encephalopathy (BSE):
"Current BSE Situation"
01-08-04 BSE Update
http://www.aphis.usda.gov/lpa/issues/bse/bse_update01-08-04.html
Previous Updates
01/07/04 BSE Chronology
http://www.usda.gov/news/releases/2003/12/bsechronology.htm
01/06-04 Transcript of USDA technical briefing and Webcast On BSE with Canadian and U.S. Officials including Dr. Ron DeHaven, Chief Veterinary Officer, USDA and Dr. Brian Evans, Chief Veterinary Officer, Canadian Food Inspection Agency
http://www.usda.gov/news/releases/2004/01/0002.htm
http://www.aphis.usda.gov/lpa/issues/bse/bse.html
"Current BSE Situation"
01-08-04 BSE Update
http://www.aphis.usda.gov/lpa/issues/bse/bse_update01-08-04.html
Previous Updates
01/07/04 BSE Chronology
http://www.usda.gov/news/releases/2003/12/bsechronology.htm
01/06-04 Transcript of USDA technical briefing and Webcast On BSE with Canadian and U.S. Officials including Dr. Ron DeHaven, Chief Veterinary Officer, USDA and Dr. Brian Evans, Chief Veterinary Officer, Canadian Food Inspection Agency
http://www.usda.gov/news/releases/2004/01/0002.htm
http://www.aphis.usda.gov/lpa/issues/bse/bse.html
Phishing: Spam that can’t be ignored:
"If you haven’t already heard about phishing, then get ready. Like a lot spam, phishing is a form of unsolicited commercial email. Whereas all spam is not a scam, all attempts at phishing are scams, and the potential losses to corporations and consumers alike is stunning"
Phishing: Spam that can’t be ignored
By David Berlind, Tech Update
January 7, 2004
If you haven’t already heard about phishing, then get ready. Like a lot spam, phishing is a form of unsolicited commercial email. Whereas all spam is not a scam, all attempts at phishing are scams, and the potential losses to corporations and consumers alike is stunning.
Phishing, as the name implies, is when spam is used as means to “fish” for the credentials that are necessary to access and manipulate financial accounts. Invariably, the e-mail will ask the recipient for an account number and the related password using an explanation that their records need updating or a security procedure is being changed that requires confirming an account. Unsuspecting e-mail recipients that supply the information don’t know it, but within hours or even minutes, unauthorized transactions will begin to appear on whatever account was compromised.
By now, most people know that giving this information away on the Internet is a no-no. With phishing, however, it’s almost impossible to tell that the e-mail is a fraud. Like spam, e-mail from phishers usually contains spoofed FROM or REPLY TO addresses to make the e-mail look as though it came from a legitimate company.
In addition to the spoofed credentials, the e-mail is usually HTML-based. To an undiscerning eye, the e-mail bears the authentic trademarks, logos, graphics, and URLs of the spoofed company. In many cases, the HTML page is coded to retrieve and use the actual graphics of the site being spoofed. Most of the phishing I’ve received pretends to come from PayPal and contains plainly visible URLs that make it look as though clicking on them will take me to PayPal’s domain. Upon quick examination of the HTML tags behind the authentic looking link, the actual URL turns out to be an unrecognizable and cryptic looking IP address rather than an actual page within PayPal’s domain.
PayPal, the payment subsidiary of EBay, is a common target of phishing. If you get one and you’ve never joined PayPal, then you obviously know it’s a fraud. But if you are a PayPal member, as I am, the phisher has at that point broken through the unofficial security-by-obscurity layer that once protected you. It not difficult to see how PayPal members could be victimized by this technique.
According to Antiphishing Working Group Chairman David Jevans, PayPal isn’t the only target of phishers. “In about 35 percent of all reported phishing attacks, Ebay’s PayPal service is the biggest victim. But just about any financial institution, credit card issuer, retailer, or other business can be targeted. UK-based NatWest was phished badly in October 2003 and then even worse in December. The December attack was so bad that NatWest had to take down its site. Visa was another organization that was targeted over the holidays.”
At first blush, phishing appears to be sort of buyer-beware consumer issue since the e-mails themselves are prospecting for potential account holders to the spoofed institutions. Indeed, depending on the spoofed institution’s policies, a consumer could end up eating a loss. “So far,” said Jevans, “most of the transgressions against individuals have been in the hundreds of dollars because smaller transactions will sometimes go unnoticed for a while. But they go higher. The largest one on record so far is for $16,000. If the credentials obtained by a phisher are for a credit card account, then the risk is usually absorbed by either card issuer or a merchant.” This is when the hard dollar cost of phishing, which Jevans considers a form of identity theft, begins to be recognized by corporations and businesses instead of individuals.…
http://techupdate.zdnet.com/techupdate/stories/main/Phishing_Spam_that_cant_be_ignored.html
"If you haven’t already heard about phishing, then get ready. Like a lot spam, phishing is a form of unsolicited commercial email. Whereas all spam is not a scam, all attempts at phishing are scams, and the potential losses to corporations and consumers alike is stunning"
Phishing: Spam that can’t be ignored
By David Berlind, Tech Update
January 7, 2004
If you haven’t already heard about phishing, then get ready. Like a lot spam, phishing is a form of unsolicited commercial email. Whereas all spam is not a scam, all attempts at phishing are scams, and the potential losses to corporations and consumers alike is stunning.
Phishing, as the name implies, is when spam is used as means to “fish” for the credentials that are necessary to access and manipulate financial accounts. Invariably, the e-mail will ask the recipient for an account number and the related password using an explanation that their records need updating or a security procedure is being changed that requires confirming an account. Unsuspecting e-mail recipients that supply the information don’t know it, but within hours or even minutes, unauthorized transactions will begin to appear on whatever account was compromised.
By now, most people know that giving this information away on the Internet is a no-no. With phishing, however, it’s almost impossible to tell that the e-mail is a fraud. Like spam, e-mail from phishers usually contains spoofed FROM or REPLY TO addresses to make the e-mail look as though it came from a legitimate company.
In addition to the spoofed credentials, the e-mail is usually HTML-based. To an undiscerning eye, the e-mail bears the authentic trademarks, logos, graphics, and URLs of the spoofed company. In many cases, the HTML page is coded to retrieve and use the actual graphics of the site being spoofed. Most of the phishing I’ve received pretends to come from PayPal and contains plainly visible URLs that make it look as though clicking on them will take me to PayPal’s domain. Upon quick examination of the HTML tags behind the authentic looking link, the actual URL turns out to be an unrecognizable and cryptic looking IP address rather than an actual page within PayPal’s domain.
PayPal, the payment subsidiary of EBay, is a common target of phishing. If you get one and you’ve never joined PayPal, then you obviously know it’s a fraud. But if you are a PayPal member, as I am, the phisher has at that point broken through the unofficial security-by-obscurity layer that once protected you. It not difficult to see how PayPal members could be victimized by this technique.
According to Antiphishing Working Group Chairman David Jevans, PayPal isn’t the only target of phishers. “In about 35 percent of all reported phishing attacks, Ebay’s PayPal service is the biggest victim. But just about any financial institution, credit card issuer, retailer, or other business can be targeted. UK-based NatWest was phished badly in October 2003 and then even worse in December. The December attack was so bad that NatWest had to take down its site. Visa was another organization that was targeted over the holidays.”
At first blush, phishing appears to be sort of buyer-beware consumer issue since the e-mails themselves are prospecting for potential account holders to the spoofed institutions. Indeed, depending on the spoofed institution’s policies, a consumer could end up eating a loss. “So far,” said Jevans, “most of the transgressions against individuals have been in the hundreds of dollars because smaller transactions will sometimes go unnoticed for a while. But they go higher. The largest one on record so far is for $16,000. If the credentials obtained by a phisher are for a credit card account, then the risk is usually absorbed by either card issuer or a merchant.” This is when the hard dollar cost of phishing, which Jevans considers a form of identity theft, begins to be recognized by corporations and businesses instead of individuals.…
http://techupdate.zdnet.com/techupdate/stories/main/Phishing_Spam_that_cant_be_ignored.html
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