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A Resonating Film

Allison Silver — Tue, 08 Jul 2008 05:03:53 GMT

When you see a great movie, it can stop you in your tracks. It makes your day suddenly brighter. When you see a great movie that also happens to be a huge success -- I also tend to wonder, why? What about it works for so many people?

This happened when I saw 'Wall-E" this weekend. Frank Rich wrote about "Wall-E" Sunday and, as usual, he did a masterful job in connecting popular culture to the tenor of the times.

I want to add to this discussion about the wonder, the sheer joy of this movie. The title character is a Chaplain-esqe little robot -- and the children in my audience in downtown Washington seemed enraptured. I would bet double or nothing that they have never seen a Little Tramp movie. Probably many of their parents and most of the teenagers who filled the theater haven't either. Yet, there was something beguilingly familiar in the robot's actions. Every member of the audience seemed equally enchanted.

There is so much about "Wall-E" that grabs you. The tropes the story is built around -- chases, rescues, finding love -- are somehow built into our hard wiring. There is also something very American here -- the notion of the promise of a better tomorrow. Which is what all the immigrants who came to America, and all those who journeyed West, were seeking. Their dream was that life can be better, more fulfilling, grander. They could reinvent themselves, re-envision themselves for the better. As the movie says, with the requisite hard work, we can pull off anything -- including making the planet green and healthy again.

In addition, America is unique in being a nation built by "the wretched refuse of the teeming shore." The cast-offs, the detritus, the junk of foreign lands, the "homeless tempest-tost," come here to build a better life. In this brave new world, the old world's dispossessed, its strays, could become citizens, could be equals.

Some astute critics, including A.O. Scott at The New York Times, have commented that this a movie that takes junk -- which is what Wall-E spends his days gathering and compacting -- and makes it into art. Which you could also say about America.

This is true even of the inner workings of this movie. "Wall-E" is based on cinematic detritus -- bits and pieces of famous sci-fi movies like "2001: a Space Odyssey" and "Alien" and "E.T." are jumbled together to make something valuable. But the most improbable thing -- and something the sophisticated Pixar filmmakers surely know -- is that the pivot of "Wall-E" is a decidedly junky musical comedy.

"Hello Dolly" is considered less than first-rate by musical theater cognoscenti. It is, of course, based on a lovely Thornton Wilder play, "The Matchmaker," but the musical iteration is regarded as middling at best. And the movie version of this musical, excerpted throughout "WALL-E" as a key plot point, is notorious for being uniquely terrible. The ultimate junk.

"Hello Dolly," the film, is regularly cited as the death knoll for the movie musical. Yet it is part of the legacy of one of the two greatest movie dancers -- Gene Kelly. (The other, if you are wondering, is Fred Astaire.) Kelly directed this lumbering behemoth and tried every trick he could to breath life into it. But the film was reviled when it opened. It not only drove a stake into the heart of movie musicals, it helped to almost destroy 20th Century Fox, the studio that produced it. Fox sold off its back lot -- now Century City in Los Angeles -- and the studio's executive suite paid a price as well.

Yet this is the movie that inspires Wall-E, that shows him a magical life -- with a companion and music -- that the little robot can only dream of. And like the garbage that Wall-E combs through, the viewer sees not the unsavory whole of "Hello Dolly," but charming bits and pieces. In fact, the real plot of "Hello Dolly" has been ruthlessly discarded in favor of a small patch of the subplot -- two store clerks in search of the promise of a better life, of love.

So the seemingly banal words of a simpering musical comedy emerge here as impossibly moving. Which is what art is all about. And, I guess, America as well.

Iowa Underwater

Jefferson Morley — Sun, 15 Jun 2008 16:20:00 GMT

The apes of Des Moines are safe but farmers face disaster and Cedar Rapids has already suffered three quarters of a billion dollars in property damage. Iowa Independent reports on America's soggiest state in pictures and video.

Why Is Clement Out?

Matthew Blake — Thu, 15 May 2008 20:22:26 GMT

Paul Clement, the Bush administration's top litigator -- who many thought would replace Alberto Gonzales as Attorney General- is leaving after three years on the job as solicitor general. Clement represented the White House in 49 Supreme Court cases, which included arguing that military commissions, absent habeas corpus rights, are constitutional. A Justice Department spokesman told Reuters that Clement left to spend time with family.

Besides devotion to loved ones, why would Clement decide not to stick it out until the bitter end? His timing is a little odd, considering the Supreme Court is about to decide, again, whether military commissions are constitutional. It also comes when Congress has subpoenaed Justice Dept. officials to testify about the Guantanamo Bay procedures that Clement defended.

Beyond his most high-profile work defending the "war on terror," Clement fought the conservative fight on issues like withholding federal money from college's that ban military recruiters (school's do so on grounds that the military discriminates against gays).

Clement is not entirely without his contradictions, though. He created some hand-wringing by the right over his recent defense of D.C.'s ban on handguns. And hipper conservatives have taken to Clement for his fondness of dance punk band Franz Ferdinand.

Prospects Bleaker for Kids Already Left Behind

Mary Kane — Thu, 08 May 2008 18:49:34 GMT

One consequence of the new restrictions on international adoption that we wrote about Wednesday will be longer waiting times for older children languishing in orphanages.

American adopters have been unique in the world their willingness to adopt older children, some of whom have spent many years in orphanages, noted Tom DiFilipo, president of the Joint Council on International Children's Services.

The French, in particular, and adopters from many other countries generally prefer to adopt only infants and babies under one year old, DiFilipo said. Some children who aren't adopted by the time they turn three years old or so, for whatever reason, can end up spending their entire childhoods in orphanages or in foster care. Some are abandoned or never adopted because they have easily corrected medical conditions, such as a cleft palate.

International adoption can be controversial, especially in impoverished countries, because scandals sometimes erupt over whether birthmothers intended to give up their babies for adoption or whether they were misled or enticed by money. But when it comes to older children, there's been no debate. Those children clearly were left behind years earlier. Placing them with families is difficult, and with countries curtailing their adoption programs, it only gets harder.

Adoption advocates are hoping they can get exceptions from new restrictions for older children and for those with special needs, but that's not guaranteed.

Some descriptions of the world's waiting children can be found here and at other adoption agency websites.

Ayn Rand 101

Bruce McCall — Wed, 07 May 2008 17:13:00 GMT

John Allison, CEO of the banking giant BB&T, calls Ayn Rand's novel "Atlas Shrugged," "the best defense of capitalism ever written." He says that Rand changed his life, and he's working to ensure that the deceased author isn't left out of the nation's college curricula.

Since 2005, the BB&T Charitable Foundation has given 25 colleges and universities several million dollars to start programs devoted to the study of Rand's books and economic philosophy. In January, the company announced it was donating $1 million to Marshall University in West Virginia. The money would establish a course dedicated to Rand's "Atlas Shrugged" and Adam Smith's The Wealth of Nations, and help create the BB&T Center for the Advancement of American Capitalism on campus.

--Clark Davis, NPR "Morning Edition"

AYN RAND SYLLABUS

I: Course overview: Introduction to reality in metaphysics, reason in epistemology, rational egoism in ethics.

Assignment: If professor cannot satisfactorily explain this to your liking, punch him/her in the face. If he/she appeals to reason, punch him/her again.

II: “Jail the Tax Man”:

Assignment: Describe the triumph of free enterprise and laissez-faire capitalism in America’s 19th-century “Golden Age” of child labor, union-busting, monopolies, debtors’ prisons. Tell why Upton Sinclair was a quiche head.

-- Pretending you are the attorney general of the United States in 1885, write a 50-page attack on coal miners that blames Black Lung on their sniveling and moral slackness.

-- Show in a separate paper why Howard Roark would never contract Black Lung.

III: “Throw the Bawling Baby Off the Cliff”:

Joys of viewing man as a heroic being with his own happiness as the moral purpose of his life, where reason alone dictates values and actions and rational self-interest and happiness of the individual always comes first. Discuss.

-- Assignment: Dramatize in a one-act play involving a dying mother and her only son’s need to sell her apartment for money to finance his vacation in Cancun.

IV: “Forget It -- There’s Just Food Enough For Me.”

The stupidity of sacrifice.

V: “Jackbooted Gov’t Goons Be Gone!”

Specify why postal service, public sanitation and environmental controls weaken the moral fabric of a nation.

-- Assignment: Write an essay depicting a social paradise where the government consists only of cops and an army.

VI: “Shut Down the Orphanage”:

Explain in 5,000 words why charity sucks. Give examples.

-- Field assignment: Hand out exploding cigars to the homeless in your neighborhood.

VII: “Why Ayn Rand Would Come Back as a Cat”:

Review the virtues of selfishness, willfully ignoring needs of others,

it's-about-me attitude.

Be sure to belittle craven, dependent, altruistic behavior of dogs.

VIII: "The Fountainhead"

How many pages can you read at one sitting and still stay awake?

-- Write 50 adjectives that describe Howard Roark. Include sexual prowess.

-- Write a l0,000 word novel featuring Howard Roark as not an architect

but a) South American dictator, b) Head of Homeland Security, c) Mafia don.

X: "Atlas Shrugged"

Industrialists are America’s heroes. List 100 ways that industrialists

beat Mother Theresa, Madame Curie and Helen Keller in every major economic sector.

-- Compose a Nobel Prize speech for a strip-mining corporation that

caused a giant mudslide fatal to three West Virginia towns. Mention the

presidential pardon.

Bruce McCall, a humorist, is a regular contributor to The New Yorker and Vanity Fair. He is the author of "All Meat Looks Like South America: The World of Bruce McCall" and "Zany Afternoons."

'Why Are We Bombing These People?'

Mike Lillis — Wed, 07 May 2008 13:59:30 GMT

At Tuesday's White House press conference with Dana Perino, long-time Washington reporter Helen Thomas, now a columnist with Hearst Newspapers, had a few pointed questions about the mission at hand in Iraq. From the official transcript:

THOMAS: Yesterday, according to The New York Times, we dropped a bomb on a home in Sadr City and burned alive a pregnant woman and her children. How long is the siege of Sadr -- how long are we going to keep bombing Iraqis?

PERINO: Well, I'm not aware of that particular report. I have not -- I've not seen it.

THOMAS: Well, it was pretty buried in the story.

PERINO: Okay. Well, the operation against the militias in Sadr City will continue until they root them out. And that is expressly in order to protect people like you just mentioned.

THOMAS: Root who out, Iraqis, in their own country?

PERINO: It is Prime Minister Maliki's government which is going after the militia, which is appropriate.

THOMAS: Why are we bombing these people?

PERINO: Any time anyone that is an innocent civilian is hurt in a conflict, we obviously regret it, and we go out of our way to make sure it doesn't happen.

THOMAS: Thank you.

Usually Ducking and Spinning, Perino Takes Up Referring

Mike Lillis — Wed, 07 May 2008 13:23:58 GMT

Could it be fatigue, stonewalling or just symptom of a lame-duck administration that White House press secretary Dana Perino -- usually well versed in the fine craft of artful spin -- has taken instead to a habit of deflecting questions to other administration offices?

Asked at a press conference Tuesday why the U.S. chose to give just $3 million in assistance to Burma, Perino said, "I think I would have to refer you to the USAID…"

Asked how Cheney chief of staff David Addington will respond to the congressional subpoena approved in the House today, Perino said, "I'm going to refer you to the office of the vice president."

Asked about reports that VA officials have withheld the number of attempted suicides among Iraq war vets, Perino responded, "I would refer you to Department of Veterans Affairs for more on the statistics."

Asked about a Peace Corps volunteer fired for being HIV-positive, Perino said, "The Peace Corps would have more information for you."

Judging from today's briefing, you'd almost think the White House doesn't control these people anymore.

Doan Speaks, Envisions Victory Dance

Matthew Blake — Mon, 05 May 2008 19:10:28 GMT

On Friday, The New York Times had a pithy assessment of ousted GSA Administrator Lurita Doan: "She exits as a minor but revealing character in a far more sweeping tale of the partisan undermining of public service."

Well, it's not like Lurita Doan to take such swipes lying down. Today she fired back on the airwaves of Federal News Radio, giving an interview that was over-the-top even by Doan's standards. The news from the interview is that White House Chief of Staff Josh Bolten and Counsel Fred Fielding told Doan she had to go, because she was a "distraction." Here are some other highlights:

-On the New York Times: "I think Thomas Jefferson said it right. He said the most accurate thing in the newspapers are the advertisements." Doan says The Times is advancing the "seductive theory" that Doan was fired for violating the Hatch Act. The real reason, Doan says, (and this might be true) is her endless feud with GSA Inspector General Brian Miller.

- On the White House demanding her resignation: Doan describes it as "bizarre" and "absolutely surreal" meeting with White House officials who called her a "distraction to progress at GSA."

-On what's ahead: Doan said she spoke with President Calderon of Mexico and they had a great discussion of port of entry issues, but Doan was embarrassed because she didn't speak any Spanish. So she's going to take Spanish classes. Before becoming GSA Administrator, Doan started new Technology Management which made millions in border surveillance government contracts.

-On her eventual vindication: "I'll be in my garden one day, maybe listening to Federal News Radio, and you guys will talk about excessive regulations...I'm going to put down my shovel and hope I get to do a little victory dance."

Why Is Doan Out?

Matthew Blake — Wed, 30 Apr 2008 18:49:28 GMT

The White House had any number of reasons to demand that General Services Administration Administrator Lurita Doan resign, which she did yesterday evening. Top of the list was probably when the independent Office of Special Counsel found last May that she was in violation of the Hatch Act, the law that's supposed to keep partisan politics out of the federal bureaucracy.

But it would appear that Doan is finished not merely because of political maneuvering that backfired. While Doan's violation of the Hatch Act has attracted the most national attention, it is her constant battles with employees at the GSA's office of inspector general that have most marked her two-year tenure. The fact that she again blasted the people who audit GSA contracts may be the real reason for her dismissal.

Since becoming head of GSA, Doan has been in near-constant struggle with agency Inspector General Brian Miller. Doan has equated Miller with a terrorist for doing his job of auditing government contracts awarded by GSA. When Miller said that Doan was harassing and intimidating office of inspector general employees, Doan turned the tables and said it was Miller committing the harassment.

Doan has equated Miller with a terrorist for doing his job of auditing government contracts awarded by GSA. She filed a complaint to this effect last year with the President's Council on Integrity and Efficiency, the oversight body in charge of inspecting the inspectors general. As an independent federal agency, the performance of an inspector general can be reviewed by both the administrator and the PCIE. The PCIE found no wrongdoing, but recommended another independent review. So the charges were taken to a second oversight body, the inspector general for the Corporation for National and Community Service.

Vincent Mulloy, counsel to the inspector general at the Corporation for National and Community Service, found the charges against Miller groundless. Last March, Mulloy dismissed the harassment charges as "personnel management" concerns. "The complaint should be considered without merit, and closed, to end the distraction of GSA office of inspector general personnel from their duties," Mulloy wrote.

In response to the National and Community Services findings, Sen. Charles Grassley, (R-Ia.) wrote a letter dated April 15 to Doan, telling her to consider the harassment matter closed. "I encourage you and IG Miller to demonstrate to all GSA employees the professionalism and character we all expect of top administrators in the Federal Government," Grassley wrote. "I trust that you will move past this matter and will work cooperatively with the GSA office of inspector general."

Grassley's words were not heeded. Friday, Doan told Government Executive that her pursuit of Miller would not be dropped. Doan argued that National and Community Services did not interview the unidentified employees, who blew the whistle on Miller for creating a "hostile workplace."

"This issue will not be put to rest until their complaints are investigated and a finding of fact is made," Doan said. "Ignoring these complaints and pretending the program will self-correct is not going to work."

Doan's email exchange with Government Executive's Robert Brodsky looked like a full-blown return to her flamboyant past, when she was publicly unapologetic about possible Hatch Act violations, as well as charges of threatening employees and rewarding no-bid contracts to friends. Doan vowed to Brodsky that she will stay on the harassment issue "like a dog on a bone."

White House spokeswoman Dana Perino declined to comment at a press conference today about whether Doan's continued pursuit of Miller was the straw that broke the camel's back. Employees at the GSA's Inspector General office described the mood as one of surprise and relief this morning.

Few had heard the decision before they came into work, even though Doan had emailed a resignation notice to GSA employees last night. Miller declined an interview but did release a statement. "We hope that the change at GSA will enable everyone in the agency to work more closely, together, now, in focusing on important tasks," the statement said. "Doing the best for American taxpayers should be our common goal."

Rep. Henry A. Waxman, chairman of the House Committee on Oversight and Government Reform, had called on Doan to resign in June due to the Hatch Act allegations, employee intimidation charges and possibly committing perjury in testimony before the committee. "GSA should now be able to return to its nonpartisan tradition and its work as our government's premier contracting agency," Waxman said in a statement today.

Grassley, who has looked into Doan's threats against the inspector general's office for more than a year, said in a statement today that under Doan, "The taxpayer was not [GSA's] top concern. Instead, we found questionable actions, finger-pointing and stonewalling."

That Doan managed to stay in office after the independent Office of Special Counsel recommended she step down last May for Hatch Act Violations and employee intimidation was remarkable. It would seem that any further slip might force the White House to dismiss her, something that lawmakers and newspaper editorial boards widely called for and expected.

Doan has since laid low, perhaps not wanting to draw attention to her continued presence as GSA administrator. But her penchant for publicly rebuking Miller proved too hard to overcome.

Burger King Responds

Arthur Allen — Tue, 29 Apr 2008 13:00:33 GMT

Here's more on Burger King from yesterday. The company didn't receive the farm worker petitions calling for a penny more in pay per pound of tomatoes picked, which were left outside its Miami headquarters. But eventually the company distanced itself from the comments attributed to Grover: "We have a robust vendor code of conduct which mandates zero tolerance for worker exploitation and abuse, and we are open to any responsible suggestions for improvement," spokeswoman Denise Wilson said in a statement. "Comments attributed to Steve Grover do not reflect Burger King's desire to find a way to assure decent wages and modern working conditions for the tomato harvesters in Immokalee." An Associated Press reporter who tried repeatedly to contact Grover said he didn't return calls to his house and office.

Workers Petition Burger King

Arthur Allen — Mon, 28 Apr 2008 21:41:24 GMT

About 100 demonstrators allied with the Coalition of Immokalee Workers, a grassroots farmworker organization, presented 85,000 petition signatures at the company's headquarters in Miami on Monday. The farmworkers want Burger King to agree to pay them an additional penny per pound of tomatoes they pick, a move that would increase their wages by about 75 percent.

Burger King has refused the demand, although Yum Brands and McDonalds earlier agreed to it. A Florida paper reported that Steve Grover, a company vice-president and spokesman, had been sniping at the coalition on line, using his daughter's email address as an alias. Grover called the Coalition leaders "bloodsuckers" and "the lowest form of life" and claimed they were using the campaign to line their own pockets. There's absolutely no evidence to back up this claim, which may be why Grover made it in such an exulted form. "Burger King has the obligation to clarify if Mr. Grover's words represent the position of the company," Gerardo Reyes, a Coalition member, said in a speech. "If it does, they should come down and say it to our faces instead of hiding like cowards in the shadows of the Internet." Grover came down from the company's gigantic brown-marble building to address reporters at a similar demonstration last year. On Monday, however, the executives stayed indoors. It was awfully hot outside.

As of this writing, Burger King hadn't responded to my phone calls.

Guards Blame Understaffing for Deadly Prison Riot

Jefferson Morley — Tue, 22 Apr 2008 23:45:00 GMT

Two inmates were killed in a massive riot Sunday in the country's highest security prison, according to Colorado Confidential. Early news reports blamed racial tensions ignited by white prisoners celebrating Adolf Hitler's birthday but reporter Erin Rosa says the problems run deeper at the Federal Correctional Complex in Florence.

Colorado Confidential obtained a internal memo in March showing the Bureau of Prisons was facing a projected budget shortfall of $289 million in funding and could be force to cut correctional staff positions to the point "where safety and security of staff and inmates could be in jeopardy."

Rosa reported last September that the prison guards at the Florence facility were fearful and demoralized about low staffing levels.

"Either a [correctional officer's] going to have to get hurt or an inmate's going to die before it gets corrected," one officer said.

Scientists Ignored on Toxic Trailers

Suemedha Sood — Wed, 02 Apr 2008 00:00:22 GMT

Senior management at the Agency for Toxic Substances and Disease Registry, the toxins arm of the CDC, got slammed today at a congressional hearing examining the agency's response when the government trailers housing Hurricane Katrina victims were found to be toxic.

The House Committee on Science and Technology's Subcommittee on Investigations and Oversight today held hearings into how and why the agency failed to protect public health when those trailers were found to be emitting dangerous levels of formaldehyde.

"In almost every respect ATSDR failed to fulfill its mission to protect the public from exposure to formaldehyde at levels known to cause ill-health effects," said Subcommittee Chairman Brad Miller (D-NC), who blamed a "collapse of senior management and leadership."

At the hearing, it became clear that a leading government expert on formaldehyde had tried to alert his superiors about the toxicity levels of the government trailers in New Orleans, but was repeatedly ignored. Ultimately, he was demoted. Today his superiors said they should have followed his advice, but they did not address why they "reassigned" him to a new position.

Dr. Christopher De Rosa, former director of toxicology and environmental medicine at the Agency for Toxic Substances and Disease Registry, said today that his superiors ignored his concerns about formaldehyde levels, kept him out of correspondence regarding its public health consultation and told him to stop writing them emails expressing his concerns about that consultation.

De Rosa, who has worked for the federal government for 28 years, said he learned that his division, which handles toxicology, was kept out of the loop of the agency's work on the trailer issue.. He said today that information regarding the agency's public health consultation was not shared with his division. This was unusual, he explained, because health consultations involving toxicology studies require review from De Rosa's division.

ATSDR Director Dr. Howard Frumkin admitted that the health report did not make its way to De Rosa's division, but said this was because the agency was trying to deliver an expedited emergency response. Frumkin said the division of toxicology was left out of correspondence because the agency needed to act quickly. "In retrospect, clearance in the division [of toxicology] did not occur," Frumkin said. "[S]taff went through the emergency response chain, so only that chain was used." The health consultation went directly from the "emergency chain" to Frumkin's office.

De Rosa maintains that he was kept out of the loop on purpose. When he finally did review the consultation, he immediately contacted Frumkin's office with his concerns. In his emails, De Rosa said the consultation failed to assess the long-term effects of formaldehyde, including the potential for cancer. "Despite my repeated efforts to bring these issues to the attention of my management," said De Rosa, "we had very little constructive follow-up."

De Rosa wasn't the only one who talked about ATSDR's shortcomings. Dr. Meryl Kerol of the University of Pittsburgh also testified today. Kerol, an expert in toxicology, said the report seemed insufficient in its coverage of formaldehyde's long-term health effects, reproductive effects and carcinogenic effects.

The Sierra Club's Becky Gillette went a step further. She testified at the hearing that the "health consultation was a huge disappointment." "[ATSDR] gave completely erroneous advice, covering up this problem when the health of thousands was at stake," said Gillette. She said the agency downplayed formaldehyde levels, which were higher than safe levels according to the agency's own standards.

Gillette added that this wasn't a surprise, though. "Contaminated communities often feel let down by ATSDR," she said.

Frumkin, the agency's director, acknowledged at the hearing that the initial public health consultation was "narrowly focused [and had] an inappropriate level of concern." He also said that the revised report took longer to complete than it should have.

In October 2007, agency scientist De Rosa was demoted. This was a year after he had received a performance-based raise and a bonus.

Frumkin assured the committee that neither he nor the agency had any intention of firing De Rosa. But De Rosa said he has been physically moved around three times, making it difficult for him to interact with other scientists.

At today's hearing, Miller praised what he described as De Rosa's whistle-blowing. "It is not second nature for many managers to value whistle-blowers," Miller said, "but the loyalty we expect is the loyalty of the mission of the agency, the loyalty to protect public health."

McCain Green Reality Check

Jefferson Morley — Thu, 27 Mar 2008 14:30:02 GMT

Sen. John McCain is drilling for oil and gas money at the Petroleum Club in Denver Thursday, reports Colorado Confidential.

McCain talks a good game on global warming, notes reporter Wendy Norris, but he has accepted more than half a million dollars from oil and gas interests over the past 30 years. Since he launched his 2008 bid, he's taken more than $230,000 from employees and PACs of energy conglomerations. And his top advisers and fundraisers have received $6.5 million in contracts from oil interests. How green can you be when your greenbacks come from the carbon lobby?

Credit Check Induces Panic Selling

Mary Kane — Thu, 27 Mar 2008 14:02:25 GMT

Stocks took a tumble after Treasury Secretary Henry M. Paulson Jr. said yesterday that investment banks might be required to provide more information on their dealings in return for access to money from the Fed. Note that Paulson didn't go as far to recommend the "R" word - Regulation.

But apparently any possible intrusion into the investment banking world merits panic.

This is all very rich, considering the financial services industry has been claiming for years that any regulation would freeze up the markets by drying up capital. Considering the scope of the credit crunch, they seem to have done a fine job of doing that all by themselves.

What About Main Street?

Mary Kane — Wed, 26 Mar 2008 04:13:33 GMT

Now that JPMorganChase has raised its bid for Bear Stearns, angry shareholders seemed to have calmed down and Wall Street isn't as worried that the investment bank's problems will drag down the rest of the financial markets.

But among people who've been dealing for a long time with the fallout from the kind of subprime loans Bear Stearns aggressively pursued and profited from, emotions are running high.

They're stunned that the Federal Reserve Bank stepped in to engineer the deal and to provide $30 billion in guarantees, considering consumer advocates have badgered the Fed repeatedly for years to curb subprime lending, to no avail. They can't believe that the Fed demanded nothing in return from the banks -- like accepting more lending oversight or modifying high-rate mortgages. They find it hard to sympathize with reports of billionaire shareholders losing money or Bear Stearns employees crying in their offices while selling off their wine collections. Mostly, they can't believe the question of fairness surrounding the deal isn't being debated more during a heated presidential campaign.

"We see people who are going without food, without heat, sleeping on the floor or doing anything they can to keep their house," said Diane Thompson, former director of the Land of Lincoln Legal Assistance Foundation in East St. Louis, Ill., and now a housing consultant to the National Consumer Law Center. "One of those bottles of wine would pay for their entire mortgage. This is all completely out of perspective."

The financial hits for Bear Stearns employees and shareholders hardly compare to the pain of facing foreclosure, said Kathleen Keest, senior policy counsel for the Center for Responsible Lending, a nonpartisan research group. "Probably none of them will be losing the roof over their heads," she said.

Unless it's the roof on the second home in the Hamptons.

Jim Rokakis, the Cuyahoga County Treasurer in Cleveland, where foreclosures are high, recalled holding a conference on predatory lending in March 2001, with the late Federal Reserve Gov. Edward Gramlich as the keynote speaker. Advocates presented the Fed with complaints about the subprime products that Bear Stearns and other investment banks were buying. They warned the Fed then, and on many subsequent occasions, that subprime loans were likely to fail and that homeowners were in trouble. Gramlich pushed without success for the Fed to regulate the subprime market.

So it's especially grating to Rokakis when he sees the Fed make such a bold move only when it involved saving a once-powerful Wall Street player.

"We've been talking about this forever," Rokakis said. "But we're nobodies. We're Cleveland. We're Detroit. We're just fly-over country to them."

He added that he's "completely stunned" that none of the candidates reacted immediately to the deal, particularly the fairness of it. "I'm really disappointed that this isn't more of an issue," he said.

Both Sen. Hillary Rodham Clinton and Sen. Barack Obama have introduced plans to deal with the housing crisis, with both supporting relief packages for homeowners. Both also say they favor tighter regulation of the mortgage industry. On Monday, Clinton unveiled a newer plan for dealing with foreclosures and began to mention Bear Stearns, saying that the federal government should help people in the same way it rescued Bear Stearns, and with a similar $30-billion fund. She has called for an emergency working group on foreclosures, to be led in part by former Federal Reserve Chairman Alan Greenspan.

On Tuesday, the Republican nominee-to-be Sen. John McCain spoke out against any government intervention to stave off foreclosures, and criticized proposals to do so.

Yet, as foreclosures continue to rise, the fairness question might become more contentious, said Dimitri Papadimitriou, president of the Levy Economics Institute of Bard College in New York. Government bailouts in the past, like the Carter administration rescue plan for Chrysler Corp. in 1979, that involved $1.5 billion in federal loan guarantees and concessions from unions, bankers and dealers, usually have created controversy. "And in this crisis, so many people have been left to hang out to dry, without any help from the government," he said. "So it will have to become political."

But the candidates nonetheless will probably continue to shy away from the specifics of the Bear Stearns buy-out, and for good reason, he said. There's no way to come out ahead politically. If you oppose it, you look like you want to see the markets fail. If you support it, you seem to be favoring businesses over homeowners. Not to mention that both Obama and Clinton have accepted substantial contributions from the mortgage industry. "You'll never be right, no matter what you say," Papadimitriou said.

For housing advocates, the deal also presents a dilemma. They don't want to criticize the Fed too much, considering a collapse in financial markets would have created widespread economic pain.

"There's part of me that says, this is just outrageous. Here's a company that was probably more responsible than any other single firm for having created this problem," said Alan Mallach, a senior fellow at the National Housing Institute. "On the other hand, had Bear Stearns gone under, it would have created a run on the financial system that would have been disastrous for everybody, and not just rich people."

Mallach said advocates are moving beyond their anger toward using the Fed's action to their own advantage -- arguing that it proves the government should intervene further in the housing crisis. For some time, he and others have been pushing for the government to create an agency to buy up abandoned and foreclosed properties and rehab or sell them, similar to what the Resolution Trust Corp. did in the 1980s.

David Berenbaum, executive vice president of the National Community Reinvestment Coalition, also said the Fed's action proves government should be doing more to help homeowners. His group recently proposed HELP Now, an emergency loan program that would involve the Treasury Dept. buying up pools of subprime loans at a steep discount, then selling them back to the private market once the loans are discounted and modified.

If it's fair game to step in on behalf of Bear Stearns, then it's harder to argue the government shouldn't get more involved in stemming the housing crisis, he said. "We don't want to say, 'I told you so,'" Berenbaum said, "but we've been pushing for regulatory intervention for a long time."

Credit experts who have been fighting to allow mortgages to be modified in bankruptcy also see an opening now. Mortgage loan servicers in particular have strongly opposed the idea, but the Fed's move may change the political landscape, noted Adam Levitin, a Georgetown University law professor and bankruptcy expert.

For now, however, most advocates say the Fed's actions toward Bear Stearns contrast strongly with the lack of government involvement in the foreclosure mess. Government action has been confined to pressing loan servicers to work with nonprofit groups and troubled borrowers to redo loans on more affordable terms. But a voluntary program aimed at doing just that, the Hope Now hotline, has been widely criticized for making few gains. "If you're working with people all the time on the ground, you'll quickly find that this stuff is worse than useless," said Thompson, the housing consultant.

She and other advocates now say they've got even more reasons to feel the government's response has been unfair to homeowners.

The Federal Reserve for the first time opened its discount window to Goldman Sachs, Lehman Brothers and other Wall Street lenders recently -- meaning it will lend money to them on the same favorable terms it does to commercial banks, which are subject to regulation. That means it will be easier and cheaper for many lenders that profited from subprime lending, while the credit crunch makes it harder and more expensive for consumers to get loans.

And then there's the possibility that the Fed will begin buying up mortgage-backed bonds outright to ease the crisis, which housing advocates say would be tantamount to a total investor bailout - something that would give the unfairness controversy a very high profile.

"I don't know why investors should be let off the hook at all," Thompson said. "There would be no lessons learned here."

Milking It

Suemedha Sood — Wed, 26 Mar 2008 00:25:58 GMT

New York state dairy farmer John Bunting doesn't use an artificial bovine growth hormone on his cows for one key reason. He doesn't want them getting sick. "I care about my cows," he said, "I like my cows."

The growth hormone in question is made by the Monsanto Company. The current debate about Monsanto's hormone involves labels. The multinational agricultural biotech company seems to be getting nervous about the prospect of telling consumers what's in their milk - or rather, what's not in their milk.

A Monsanto-backed advocacy group is now going from state to state, fighting labels that declare dairy products free from the bovine growth hormone. Monsanto is the only producer of an artificial hormone, the Posilac brand recombinant bovine somatotropin (rBST or rBGH), that increases milk production in cows. Labels saying "rBST-free" could lead to financial losses for the corporation.

The growth hormone can mean more milk at cheaper prices. But Posilac has been linked to health problems in both cows and humans -- one reason the European Union and Canada both banned its use. Anti-labeling measures by Monsanto are facing a backlash from consumers who want to know what goes into their milk. Labeling would alert many to the fact that a large majority of American dairy products come from cows injected with the hormone. Many dairy processors are now using rBST-free alternative to meet these growing consumer concerns, for the hormone has been linked to cancer and other problems. Yet it doesn't look like the FDA-approved synthetic hormone will be pushed out of the market any time soon.

The advocacy group making the argument for Monsanto is American Farmers for the Advancement and Conservation of Technology (AFACT) -- an organization that gets at least some financial backing from Monsanto. AFACT was established in 2007 by the consultant Monty G. Miller of the Colorado firm International Performance Solutions, whose client list includes Monsanto. In launching AFACT, Miller received help from the public relations firm Osborn & Barr, whose CEO, Steve Barr, is a former Monsanto marketing executive.

AFACT has been pressuring state agriculture departments and state legislators to introduce bills that would restrict hormone labels. Bills restricting "rBST-free" labels have popped up in several state legislatures -- including Kansas, Utah, Indiana and Missouri. In Pennsylvania and New Jersey, similar pro-hormone bills have already been voted down.

Most of the nation's leading dairy processors use milk from cows treated with the bovine growth hormone in at least some products. Land O'Lakes, Good Humor-Breyers, Dreyers, Dannon, Yoplait and Sargento are some of the biggest buyers of milk from rBST-treated cows. Dean Foods and Kraft, the leading U.S. dairy producers, use rBST milk in many products, but not all. In June, Kraft will introduce a line of rBST-free 2-percent milk products.

Kraft spokesman Basil Maglaris says the company is responding to a growing consumer movement. "We do understand that some consumers -- not all -- are looking for products from cows not treated with [rBST]," said Maglaris. "So we are converting the line to give those consumers an option."

Converting the line will mean an increase in price for those 2-percent products. But Kraft says that rBST-free products will attract new customers.

Many of those customers are pointing to related health concerns -- for both cows and humans. According to Oregon Physicians for Social Responsibility, rBST increases the risk of cancer by elevating levels of another hormone, IGF-1. High levels of IGF-1 can promote breast cancer, prostate cancer and colon cancer.

"If you have even just subtle amounts of IGF-1, there's a link to breast, prostate and colon cancer," said Dr. Jenny Pompilio, an internist with Kaiser Permanente in Oregon. "It's been known for years that that particular hormone is linked with cancers [because of its] effects on the endocrine system. The endocrine system is so sensitive that subtle effects can [make a difference]."

The other health concern affects first cows and then humans, says the Oregon physicians group. People who consume these dairy products could become resistant to antibiotics -- making them prone to bacterial infections. The resistance is directly related to health problems of cows injected with the hormone. These cows have higher rates of udder infections, or mastitis. When they are treated with antibiotics, resistant bacteria can grow. People who later eat dairy products from these cows can also build up resistance. When antibiotics cease to be effective, the threat of infectious diseases increases.

Monsanto says its synthetic hormone does not create problems. "POSILAC is perfectly healthy for cows," said Monsanto spokesperson Lori Hoag, "bST is a naturally occurring hormone in every cow -- rbST is an additional supplement of that naturally occurring hormone."

Hoag says that there is no difference between milk from cows injected with rBGH/rBST and other milk. "[A]ll milk is the same. All milk has bST, all milk has hormones," she said. "Labels that claim "rbST-free" are misleading to consumers, making them believe there is a difference in the milk, when, in fact, there is none."

But New York dairy farmer Bunting disagrees. He says that rBST is a whole protein off from naturally occurring BST. "If you created a molecule one protein different, you could not honestly say there could be no difference [between the two]," said Bunting. "Monsanto and the FDA are asking farmers and consumers to take a risk for which there is no known benefit."

While there may be no benefits when it comes to human health, economic gains could be great for some. Cows injected with the hormone produce roughly a gallon more milk a day than untreated cows. (On average, untreated cows produce about eight gallons a day.) That means dairy farmers can produce more milk at lower costs, and dairy processors can make their products at lower costs. Big dairy farmers, big dairy processors and Monsato all get more money.

But Bunting says that rBST poses risks to smaller dairy farms, including his own. He says big farms that use rBST to produce more milk could lead to smaller farms going under. "More milk means fewer farmers," said Bunting, "It does not benefit the [whole] farm community."

It could benefit consumers, though. Using rBST brings milk prices down. Monsanto's product therefore provides an option for people who just want less expensive milk, cheese and ice cream.

Monsanto says that labeling could be unfair to certain corporations. "[B]ecause there is no difference [between BST and rBST]," said spokesperson Hoag, "there is no way to verify whether or not rbST was used as a supplement. So, even though some processors claim their milk to be 'rbST-free,' they cannot prove that to be true."

The ice cream company GoodHumor-Breyers has concerns about this. "We purchase our dairy ingredients from cooperatives, and are unable to guarantee that rBGH is not used," said GoodHumor-Breyers spokesperson Andon Tate, "Currently, there is no test available that can distinguish between the naturally-occurring BST and the rBGH growth hormone."

But even consumers who don't care about the growth hormone's health effects, says consumer advocate Jill Richardson of Recipe for America, are speaking out against Monsanto's efforts to restrict dairy labeling. "Some people even say that they don't personally mind the idea of milk with rBST," she said, "but the dishonesty of this [anti-labeling] tactic makes them furious."

Boston Financier's Newest Fund

Luis Rumbaut — Mon, 24 Mar 2008 23:25:00 GMT

Last week, a California wrestling promoter put on a match to raise funds for immigrants arrested in a raid. He brought in $4,000. Two days earlier, a Boston millionaire had put up $200,000 to bail out 40 factory workers arrested in an immigration raid last March. (Sign of the times: they were making vests and backpacks for U.S. soldiers in the Middle East.)

The 40 immigrants, among 361 arrested at the time, were to be sent to Texas to await deportation -- unless they posted bail. They got the money from an unexpected benefactor, Bob Hildreth, who had lived in Bolivia and made his money trading Latin American bonds. Hildreth has already given several million dollars for literacy and citizenship classes in Lynn, Mass.; for a preschool in an Boston neighborhood with many immigrant residents, and for an endowed chair in Latin American studies at the School of Advanced International Studies at Johns Hopkins University.

Hildreth said that breaking up these families was "extremely un-American."

That's not what everyone thought. A local talk-radio show said, "I would ask him to show the same compassion for American workers displaced by these illegal aliens." That's the kind of talk-radio show that does not mention off-shoring, or union-busting, or a foundering economy, in connection with jobs -- at least not when blaming immigrants. And Hildreth can expect more of the same. A local lawyer who represents some of the immigrants warned, "He'll get hate mail."

As cases are resolved, Hildreth has gotten back some of the bail money he posted. He's now putting it aside as a fund for future cases.

Maybe he can get some others to invest in the fund.

Super Mojado Beats INS

Luis Rumbaut — Mon, 24 Mar 2008 22:02:00 GMT

If you guessed that this took place in Los Angeles, you're right: more precisely, in Van Nuys, a district north of Hollywood. And if you guessed that it involved a masked wrestler, Mexican style, you know about Lucha Libre.

Last Saturday, Super Mojado, the masked hero of undocumented workers, beat the two-man team of Ronnie K, an unmasked white man, and Viper, the masked traitor to his Latino brothers.

The Immigration and Naturalization Service, the former INS, does not exist anymore, so the bad guys in this battle were the Irresistible Notorious Studs. That's not to say that immigration control, now called ICE, for Immigration and Customs Enforcement, was out of the picture.

The match was a fund-raiser for 138 workers arrested by ICE agents during a raid of Micro Solutions Enterprises, a computer-printer cartridge factory in Van Nuys, on Feb. 7.

Joseph Medina, a wrestling promoter who came up with the program, said the event raised $4,000.

An ICE spokeswoman, Viriginia Kice, sounded less than amused. She called the match "a tasteless exploitative publicity stunt."

Medina, for his part, said it was engaging for the audience. "You go there and yell at the wrestlers," he said, "and you get your stresses out."

Super Mojado is not like the Harlem Globetrotters, and INS are not like the Washington Generals, but they do come to mind.

With Sheriffs Like These...

Mike Lillis — Mon, 24 Mar 2008 21:04:19 GMT

After spending untold billions of dollars securing the nation's airlines from ill-intentioned passengers, it seems there's a new menace in the nation's skies. A gun being carried by a U.S. Airways pilot accidentally discharged on a Saturday flight between Denver and Charlotte with 124 passengers on board, according to reports.

Why a pilot was carrying a loaded weapon on a passenger flight seems the logical question, but apparently a program launched after the 9/11 attacks -- the Transportation Security Administration's Federal Flight Deck Officer program -- allows certain airline personnel, including pilots, to carry guns on flights to defend against terrorist threats. Why the pilot would be handling it in the cockpit without the safety lock engaged remains under investigation.

This tale has a happy ending: no one was injured. But a suggestion for the airlines: If you intend to arm your pilots, how about an on-the-house adult beverage for the passengers, just for some delusional peace of mind? Because when bullets start flying, I don't want to be sober.