We The People Screwed By The Supreme Court Three Times In One Day

The Supreme Court delivered three opinions yesterday that set aside state laws, underscoring the dominant role of Congress in regulating commerce among states.

The rulings involved three different states and dealt with unrelated issues: product liability in New York for a faulty medical device, Maine's attempt to keep cigarettes from minors and a California law aimed at protecting star-struck Hollywood hopefuls from unscrupulous talent agents. In each case and by votes unanimous -- or nearly so -- the justices made clear that federal power is to be read broadly, with state authority surviving only when Congress explicitly permits it a role.

FEDERAL POWERS

• The News: The Supreme Court set aside state laws as it ruled on three cases dealing with unrelated issues -- product liability, selling cigarettes to minors and contract arbitration.
• The Bottom Line: In unanimous, or nearly unanimous decisions, the court made clear that federal power is to be read broadly, with state authority surviving only when Congress explicitly permits it a role.
The medical-device case may have the widest impact, because of the high-profile nature of medical-liability cases. The question at issue was whether traditional private-product lawsuits, as well as state regulations, may be pre-empted by federal law.

After a catheter ruptured during angioplasty, the patient and his wife sued the manufacturer, Medtronic Inc. Lower courts in New York dismissed the suit, finding that a 1976 law immunized Minneapolis-based Medtronic, because its catheter had been approved for sale by the Food and Drug Administration.


Jess Brevin discusses three opinions issued by the Supreme Court on Wednesday that overruled state laws.
Writing for an 8-1 court, Justice Antonin Scalia noted that Congress acted after a slew of medical-device failures, and decided it would be better to have a single national standard instead of varying state laws. Justice Scalia added that states remained free to permit private lawsuits "for claims premised on a violation of FDA regulations."

In dissent, Justice Ruth Bader Ginsburg wrote that the 1976 law was intended to add to consumer protections under existing state product-liability laws, not to replace them. (Riegel v. Medtronic Inc.)

The Maine case involved a different kind of health question -- that of keeping cigarettes from minors. Concerned that youngsters could evade proof-of-age rules by ordering cigarettes online, the state adopted a law requiring shipping companies delivering cigarettes to verify the recipient's identity and age.

Maine said its law wasn't intended to displace federal law regulating private shippers, but rather to protect public health -- and noted that Congress itself had pushed states to discourage youth smoking. A trade group representing delivery companies complained that Maine's requirements were costly, burdensome and contrary to a 1994 federal law that pre-empted state trucking regulations.

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• Split Decisions: Cases That Have Divided the Court1
The Supreme Court unanimously agreed. The opinion, by Justice Stephen Breyer, said the Maine law "produces the very effect that the federal law sought to avoid, namely a State's direct substitution of its own governmental commands for 'competitive market forces.'" Congress had created no exception for "public health," and since the term "public health" was so vague, inferring it into the statute could lead to different rules imposed by various states, frustrating the goal of a single, efficient market for delivery services. (Rowe v. New Hampshire Motor Transport Association)

In the California case, the justices underlined the wide scope of the Federal Arbitration Act, finding that when two parties sign a contract agreeing to arbitrate disputes, it supplants a state law assigning such conflicts to a regulatory agency. The court has heard many arbitration cases over the years, and every day, millions of television viewers watch arbitration in action, on TV "court" shows, where a retired judge, dressed in robes, settles disputes as an arbitrator. But, as reported in a page-one article2 in The Wall Street Journal last month, never before had the worlds of the Supreme Court and "The People's Court" intersected.

In this case, Alex Ferrer, a former Florida state judge who now stars in "Judge Alex," a TV show, had sought to void an arbitration clause in a contract with his former manager, Arnold Preston. Mr. Ferrer argued that California's Talent Agencies Act, which assigns disputes between agents and clients to the state labor commissioner, took precedence over the arbitration clause. A California state court agreed, only to be reversed 8-1 yesterday. Writing for the majority, Justice Ginsburg observed that "under the contract he signed, [Mr. Ferrer] cannot escape resolution of those rights in an arbitral forum." "Judge Alex" is produced by Twentieth Television, a unit of News Corp., which also owns The Wall Street Journal. (Preston v. Ferrer)

Link.

The Disaster Is Far Broader Than Just Too Many Bad Subprime Mortgages

With the economy sputtering and banks pulling back on lending, the noose is starting to tighten around a host of struggling companies.

For years, companies had access to easy money for everything from expansions to acquisitions to leveraged buyouts. For many, this global credit boom forestalled painful plant closings, job cuts and asset sales.

Now, the day of reckoning is arriving for some of them, as skittish corporate lenders push them to the brink of bankruptcy and beyond. Yesterday, the credit crisis hit two national retailers: San Francisco-based Sharper Image, which sells high-tech gadgets such as air purifiers and massage chairs, and Lillian Vernon Corp., which sells low-cost gifts such as Easter baskets and welcome mats. Both filed for federal Chapter 11 bankruptcy protection. (See related article.1)


The mounting woes of the banks that supply corporate capital are contributing to the crisis. "The banks really don't know what kind of room they have to add new loans for companies until [the banks] fill the hole on their nonperforming loans," including mortgages, credit-card debt and auto loans that are souring, says Henry Miller, chairman of Miller Buckfire, a financial restructuring firm. "The dominoes have started to fall."

Corporate defaults and bankruptcies have risen sharply this year. The total value of corporate-bond defaults is already approaching the total for all of 2007. Moody's Investors Service now lists 41 companies it considers to be at risk of violating terms of their loan agreements, compared with 25 at the end of last June. Many companies that depend on consumers are on the list, including movie-rental company Blockbuster Inc. and the Landry's Restaurants Inc. chain.

Even some companies already operating under federal bankruptcy protection are feeling the squeeze. Auto-parts maker Delphi Corp. and chemicals concern Solutia Corp. have been unable to line up financing to emerge from court protection.

"The last couple years had been all about delaying the pain," says Scott Brubaker, managing director for the corporate turnaround firm Alvarez & Marsal. "Troubled companies refinanced in 2005 and 2006 that maybe shouldn't have. Now credit markets have snapped the other way, and some companies that should be able to refinance can't or will struggle to."

The companies at risk range across already-weakened sectors such as home builders and mortgage providers. A squeeze in the broader economy is expected to bring tougher times for trucking firms, restaurant chains and retailers.

Edward Altman, an expert on bankruptcy and corporate defaults who teaches at New York University's business school, says that if his forecasts prove correct, companies could default on more than $220 billion of high-yield corporate bonds, leveraged loans and other nonbank debt this year and next. The spike in defaults and bankruptcies, he argues, is a leading indicator of economic trouble.

'Contagion Effect'

"There is a contagion effect the credit markets have on the real economy," he says. "The traditional view had been: The economy impacts defaults, so peak defaults come at the end of a recession. But in the last two recessions, the default rate went up even before the recession."

UBS AG and Credit Suisse Group are among the banks that have recently written down the value of corporate loans on their books. They announced last week a combined $400 million decline in the value of their leveraged loans. Bank losses on corporate loans, which are expected to grow, will come on top of more than $100 billion in write-downs financial firms have taken on subprime-mortgage holdings.


One concern is that banks grappling with such losses will grow more reluctant to lend to fundamentally creditworthy companies.

"There will be big, sound, reasonable companies out there that will be left on the outside looking in," says John G. Chigounis, chairman of Global Investment Advisors, a $1.8 billion investment fund and division of Reich & Tang Asset Management LLC. "They didn't get their refinancing when they should have, and now the window is shut and the credit markets have closed."

Both Sharper Image and Lillian Vernon suffered through abysmal Christmas seasons. Lillian Vernon, a catalog and Internet retailer based in Virginia Beach, Va., has already laid off about 200 people, about half of its work force. The company said in a news release it is weighing a sale or liquidation.

At Sharper Image, sales declined 25% in 2007. Like a growing number of distressed companies, the retailer found itself unable to borrow more money in recent months, as it had done between 2004 and mid-2007, people familiar with the matter say.

Its lender, Wells Fargo & Co., was unwilling to refinance Sharper Image's debt, in part because it found no interest when it looked to sell pieces of the loan to outside investors, these people say. As a result, the retailer "never got the last $10 million" of the financing it expected, one of these people says. Keeping Sharper Image out of bankruptcy court, he says, "was going to take tremendous financing," which wasn't available in the tight credit markets. A spokeswoman for Wells Fargo declined to comment.

Sharper Image, which employs about 2,500, said yesterday it expects to close nearly half its 190 stores and reorganize the remaining operations. The company "could well be sold" during the bankruptcy process, says the person familiar with the situation, but company officials have yet to begin looking for a buyer. Calls for comment to Sharper Image weren't returned.

Sharper Image "was a classic bankruptcy, because it was a company that wasn't able to address its problems for lack of time, lack of cash, and then, lack of credit," says Ted Stenger, managing director at the turnaround and consulting firm AlixPartners LLP. "A year ago, lenders could have found time to refinance. Not anymore."

Closing Stores

Mr. Stenger says Sharper Image may eventually choose to close even more stores and adopt "premier market" strategy: Keep just a few stores in major cities like New York, and rely on its Internet, licensing and mail-order businesses.

Pressure also is building on other retailers. Kohl's Corp., Gottschalks Inc. and Bon-Ton Stores Inc., for example, all posted double-digit sales declines in December.

Bon-Ton, based in York, Pa., is trying to manage a substantial debt load as the retail outlook worsens. It employs about 33,000 at 280 stores across the Northeast and Midwest. In 2006, when money was cheap, it took on more than $1.7 billion in debt to buy 142 former Saks stores from Northern Department Store Group.

The move allowed it to expand from its core markets in New York, Pennsylvania and Ohio into Illinois, Wisconsin, Minnesota and the Dakotas. It has proved costly to integrate the two companies and to market in the new regions, among other things. The 110-year-old retailer had just $24 million in cash and cash equivalents on hand on Nov. 3, a public filing indicates.

Like many regional department stores, Bon-Ton has faced stiff competition from giants like Target. December was an especially difficult month. Bon-Ton's holiday sales were down 11.3%. It has lowered earnings projections twice since November, and its shares were trading yesterday afternoon at $7.12 on the Nasdaq Stock Market, down from $36 a year ago. A spokeswoman for the company declined to comment on its situation.

Bon-Ton has seen customer traffic drop in recent months, despite spending heavily to upgrade its stores. On the second floor of a Bon-Ton store in Lancaster, Pa., on a recent Monday afternoon, construction workers and clerks outnumbered shoppers seven to two.

The dismal Christmas season has led to numerous markdowns. For much of February, Bon-Ton's store in Reading, Pa., has been holding what it calls a Yellow Dot Clearance sale, with aisles of purses, women's apparel, men's jackets and baby clothing marked down, first by 25% to 30%, and then 70% to 75% off the marked-down price.

Last week, Moody's lowered the company's credit rating by one notch, saying that poor consumer traffic over the holidays could force the company to resort to "heavy markdowns." The ratings agency said that it believes that over the next 12 to 18 months, Bon-Ton's cash flow "will not be sufficient to cover all of the cash requirements, including the working-capital needs....Bon-Ton has limited alternative sources of liquidity since all of its assets are pledged to the bank facility and mortgage loans."

Beyond Retailers

Such adverse conditions are hitting more than just retailers. Restaurant chain Buffets Holdings Inc., which owns Ryan's Steakhouse and Old Country Buffet, recently sought bankruptcy protection. It has shut about 50 locations.

Plastech Engineered Products Inc., which makes plastic parts for car makers, also filed for bankruptcy protection recently. Like other auto suppliers, it has been hurt by declining auto sales at customers such as Ford Motor Co. and General Motors Corp. It has also moved to shed employees.

Tight credit markets are also proving a problem for companies operating under bankruptcy protection. In order for a reorganized company to emerge from court supervision, it must line up new capital, called exit financing.

Chemicals giant Solutia and auto-parts supplier Delphi have been unable to secure the billions of dollars each one needs to get out of bankruptcy proceedings. St. Louis-based Solutia, the former Monsanto chemicals division, claimed in a lawsuit that three banks backed out of a commitment to provide about $2 billion in exit financing. The banks said they terminated the deal because they couldn't find other lenders to participate in the loan.

Delphi is seeking $6.1 billion in such financing. It may need to turn to its former parent company, General Motors, for more funding if banks and lenders remain unwilling to step up.

Advisers who specialize in guiding troubled companies through such ordeals are bulking up for a restructuring boom. Miller Buckfire, for example, now numbers about 60 professionals, double where it was three years ago.

"The warning signs were there when you saw companies that had seven-times leverage decide the answer to their problems was to add more debt," says Mr. Miller. "They were doing that when the economy was getting soft. You do the math."

Link.

A Perspective On Waterboarding

Of course it's torture, but it's also an old American tradition practiced under another Republican administration so it's a GOP tradition as well.

Its history is here.

St. John Indeed

The truth is he's really just a dumb (well, fucking stupid) putz (as in: New boss same as the old boss). As for moral character, op cit the 80s savings and loan crisis, Charles Keating, etc.Or read the long version below -- sorta like Johnny's greatest hits, so to speak.

Raw Story has the short version:

The New York Times is detailing explosive charges that Republican presidential front-runner Sen. John McCain had what could be construed as an inappropriate relationship with a Washington lobbyist.

In an article entitled "For McCain, Self-Confidence on Ethics Poses Its Own Risk," Times reporters write that the lobbyist, named as Vicki Iseman, "had been turning up with [McCain] at fund-raisers, in his offices and aboard a client's corporate jet. Convinced the relationship had become romantic, some of his top advisers intervened to protect the candidate from himself — instructing staff members to block the woman's access, privately warning her away and repeatedly confronting him, several people involved in the campaign said on the condition of anonymity."

The article continues that when news organizations reported McCain "had written letters to government regulators on behalf of the lobbyist's clients, the former campaign associates said, some aides feared for a time that attention would fall on her involvement."

McCain and Iseman, according to the Times, both say they never had a romantic relationship.

In a press release at his official campaign website, the McCain campaign issued the following statement:

"It is a shame that the New York Times has lowered its standards to engage in a hit and run smear campaign. John McCain has a 24-year record of serving our country with honor and integrity. He has never violated the public trust, never done favors for special interests or lobbyists, and he will not allow a smear campaign to distract from the issues at stake in this election.

"Americans are sick and tired of this kind of gutter politics, and there is nothing in this story to suggest that John McCain has ever violated the principles that have guided his career."
Not long after the NY Times article was published, Iseman's bio was apparently removed from the website of Alcalde & Faye, the firm that employs her. Huffington Post captured a screenshot of the bio. Blogger Will Bunch has an undated photo of Iseman posing with George W. Bush.

Journalist and author Ron Rosenbaum wrote in a blog post from October of last year that he had "run into a well-connected media person, who told me flatly, unequivocally that 'everyone knows' The LA Times was sitting on a story, all wrapped up and ready to go about what is a potentially devastating sexual scandal involving a leading Presidential candidate." The LA Times apparently never did publish the piece, if it is indeed the same story as reported by the NY Times.

Wait, what about that spiked L.A. Times piece?

So I was down in DC this past weekend and happened to run into a well-connected media person, who told me flatly, unequivocally that “everyone knows” The LA Times was sitting on a story, all wrapped up and ready to go about what is a potentially devastating sexual scandal involving a leading Presidential candidate. “Everyone knows” meaning everyone in the DC mainstream media political reporting world. “Sitting on it” because the paper couldn’t decide the complex ethics of whether and when to run it. The way I heard it they’d had it for a while but don’t know what to do. The person who told me )not an LAT person) knows I write and didn’t say “don’t write about this”.
If it’s true, I don’t envy the LAT. I respect their hesitation, their dilemma, deciding to run or not to run it raises a lot of difficult journalism ethics questions and they’re likely to be attacked, when it comes out—the story or their suppression of the story—whatever they do.

I’ve been sensing hints that something’s going on, something’s going unspoken in certain insider coverage of the campaign (and by the way this rumor the LA Times is supposedly sitting on is one I never heard in this specific form before. By the way, t’s not the Edwards rumor, it’s something else.
And when my source said “everyone in Washington”, knows about it he means everyone in the elite Mainstream media, not just the LA Times, but everyone regularly writing about the Presdidential campaign knows about it and doesn’t know what to do with it. And I must admit it really is was juicy if true. But I don’t know if it’s true and I can’t decide if I think it’s relevant. But the fact that “everyone” in the elite media knew about it and was keeping silent about it, is, itself, news. But you can’t report the “news” without reporting the thing itself. Troubling!
It raises all sorts of ethical questions. What about private sexual behavior is relevant? What about a marriage belongs in the coverage of a presidential campaign? Does it go to the judgment of the candidate in question? Didn’t we all have a national nervous breakdown over these questions nearly a decade ago?
Now, as I say it’s a rumor; I haven’t seen the supporting evidence. But the person who told me said it offhandedly as if everyone in his world knew about it. And if you look close enough you can find hints of something impending, something potentially derailing to this candidate in the reporting of the campaign. Which could mean that something unspoken, unwritten about is influencing what is written, what we read.
Why are well wired media elite keeping silent about it? Because they think we can’t handle the truth? Because they think it’s substantively irrelevant? What standards of judgment are they using? Are they afraid that to print it will bring on opprobrium. Are they afraid not printing it will bring on opprobrium? Or both?
But alas if it leaks out from less “responsible” sources. then all their contextual protectiveness of us will have been wasted.
And what about timing? They, meaning the DC elite media, must know if it comes out before the parties select their primary winners and eventual nominees, voters would have the ability to decide how important they felt it to the narrative of the candidate in question. Aren’t they, in delaying and not letting the pieces fall where they potentially may, not refusing to act but acting in a different way—taking it upon themselves to decide the Presidential election by their silence?
If they waited until the nominees were chosen wouldn’t that be unfair because, arguably, it could sink the candidacy of one of the potential nominees after the nomination was finalized? And doesn’t the fact that they “all” know something’s there but can’t say affect their campaign coverage in a subterranean, subconscious way that their readers are excluded from?
I just don’t know the answer. I’m glad in a situation like this, if there is in fact truth to it, that I wouldn’t have to be the “decider”. I wouldn’t want to be in a position of having to make that choice. But it’s a choice that may well decide a crucial turning point in history. Or maybe not: Maybe voters will decide they don’t think it’s important, however juicy. But should it be their choice or the choice of the media elites? It illustrates the fact that there are still two cultures at war within our political culture, insiders and outsiders. As a relative outsider I have to admit I was shocked not just by this but by several other things “everyone” down there knows.
There seem to be two conflicting imperatives here. The new media, Web 2.0 anti-elitist preference for transparency and immediacy and the traditional elitist preference for reflection, judgment and standards—their reflection, their small-group judgment and standards. Their civic duty to “protect” us from knowing too much.
I feel a little uneasy reporting this. No matter how well “nailed” they think they have it, it may turn out to be untrue. What I’m really reporting on is the unreported persistence of a schism between the DC media elites and their inside knowlede and the public that is kept in the dark. For their own good? Maybe they’d dismiss it as irrelevant, but shouldn’t they know?
I don’t know.

Let's take a break and meet Johnny's babe.

And the long version:

Early in Senator John McCain’s first run for the White House eight years ago, waves of anxiety swept through his small circle of advisers.

A female lobbyist had been turning up with him at fund-raisers, visiting his offices and accompanying him on a client’s corporate jet. Convinced the relationship had become romantic, some of his top advisers intervened to protect the candidate from himself — instructing staff members to block the woman’s access, privately warning her away and repeatedly confronting him, several people involved in the campaign said on the condition of anonymity.

When news organizations reported that Mr. McCain had written letters to government regulators on behalf of the lobbyist’s client, the former campaign associates said, some aides feared for a time that attention would fall on her involvement.

Mr. McCain, 71, and the lobbyist, Vicki Iseman, 40, both say they never had a romantic relationship. But to his advisers, even the appearance of a close bond with a lobbyist whose clients often had business before the Senate committee Mr. McCain led threatened the story of redemption and rectitude that defined his political identity.

It had been just a decade since an official favor for a friend with regulatory problems had nearly ended Mr. McCain’s political career by ensnaring him in the Keating Five scandal. In the years that followed, he reinvented himself as the scourge of special interests, a crusader for stricter ethics and campaign finance rules, a man of honor chastened by a brush with shame.

But the concerns about Mr. McCain’s relationship with Ms. Iseman underscored an enduring paradox of his post-Keating career. Even as he has vowed to hold himself to the highest ethical standards, his confidence in his own integrity has sometimes seemed to blind him to potentially embarrassing conflicts of interest.

Mr. McCain promised, for example, never to fly directly from Washington to Phoenix, his hometown, to avoid the impression of self-interest because he sponsored a law that opened the route nearly a decade ago. But like other lawmakers, he often flew on the corporate jets of business executives seeking his support, including the media moguls Rupert Murdoch, Michael R. Bloomberg and Lowell W. Paxson, Ms. Iseman’s client. (Last year he voted to end the practice.)

Mr. McCain helped found a nonprofit group to promote his personal battle for tighter campaign finance rules. But he later resigned as its chairman after news reports disclosed that the group was tapping the same kinds of unlimited corporate contributions he opposed, including those from companies seeking his favor. He has criticized the cozy ties between lawmakers and lobbyists, but is relying on corporate lobbyists to donate their time running his presidential race and recently hired a lobbyist to run his Senate office.

“He is essentially an honorable person,” said William P. Cheshire, a friend of Mr. McCain who as editorial page editor of The Arizona Republic defended him during the Keating Five scandal. “But he can be imprudent.”

Mr. Cheshire added, “That imprudence or recklessness may be part of why he was not more astute about the risks he was running with this shady operator,” Charles Keating, whose ties to Mr. McCain and four other lawmakers tainted their reputations in the savings and loan debacle.

During his current campaign for the Republican presidential nomination, Mr. McCain has played down his attacks on the corrupting power of money in politics, aware that the stricter regulations he championed are unpopular in his party. When the Senate overhauled lobbying and ethics rules last year, Mr. McCain stayed in the background.

With his nomination this year all but certain, though, he is reminding voters again of his record of reform. His campaign has already begun comparing his credentials with those of Senator Barack Obama, a Democratic contender who has made lobbying and ethics rules a centerpiece of his own pitch to voters.

“I would very much like to think that I have never been a man whose favor can be bought,” Mr. McCain wrote about his Keating experience in his 2002 memoir, “Worth the Fighting For.” “From my earliest youth, I would have considered such a reputation to be the most shameful ignominy imaginable. Yet that is exactly how millions of Americans viewed me for a time, a time that I will forever consider one of the worst experiences of my life.”

A drive to expunge the stain on his reputation in time turned into a zeal to cleanse Washington as well. The episode taught him that “questions of honor are raised as much by appearances as by reality in politics,” he wrote, “and because they incite public distrust they need to be addressed no less directly than we would address evidence of expressly illegal corruption.”

A Formative Scandal

Mr. McCain started his career like many other aspiring politicians, eagerly courting the wealthy and powerful. A Vietnam war hero and Senate liaison for the Navy, he arrived in Arizona in 1980 after his second marriage, to Cindy Hensley, the heiress to a beer fortune there. He quickly started looking for a Congressional district where he could run.

Mr. Keating, a Phoenix financier and real estate developer, became an early sponsor and, soon, a friend. He was a man of great confidence and daring, Mr. McCain recalled in his memoir. “People like that appeal to me,” he continued. “I have sometimes forgotten that wisdom and a strong sense of public responsibility are much more admirable qualities.”

During Mr. McCain’s four years in the House, Mr. Keating, his family and his business associates contributed heavily to his political campaigns. The banker gave Mr. McCain free rides on his private jet, a violation of Congressional ethics rules (he later said it was an oversight and paid for the trips). They vacationed together in the Bahamas. And in 1986, the year Mr. McCain was elected to the Senate, his wife joined Mr. Keating in investing in an Arizona shopping mall.

Mr. Keating had taken over the Lincoln Savings and Loan Association and used its federally insured deposits to gamble on risky real estate and other investments. He pressed Mr. McCain and other lawmakers to help hold back federal banking regulators.

For years, Mr. McCain complied. At Mr. Keating’s request, he wrote several letters to regulators, introduced legislation and helped secure the nomination of a Keating associate to a banking regulatory board.

By early 1987, though, the thrift was careering toward disaster. Mr. McCain agreed to join several senators, eventually known as the Keating Five, for two private meetings with regulators to urge them to ease up. “Why didn’t I fully grasp the unusual appearance of such a meeting?” Mr. McCain later lamented in his memoir.

When Lincoln went bankrupt in 1989 — one of the biggest collapses of the savings and loan crisis, costing taxpayers $3.4 billion — the Keating Five became infamous. The scandal sent Mr. Keating to prison and ended the careers of three senators, who were censured in 1991 for intervening. Mr. McCain, who had been a less aggressive advocate for Mr. Keating than the others, was reprimanded only for “poor judgment” and was re-elected the next year.

Some people involved think Mr. McCain got off too lightly. William Black, one of the banking regulators the senator met with, argued that Mrs. McCain’s investment with Mr. Keating created an obvious conflict of interest for her husband. (Mr. McCain had said a prenuptial agreement divided the couple’s assets.) He should not be able to “put this behind him,” Mr. Black said. “It sullied his integrity.”

Mr. McCain has since described the episode as a unique humiliation. “If I do not repress the memory, its recollection still provokes a vague but real feeling that I had lost something very important,” he wrote in his memoir. “I still wince thinking about it.”

A New Chosen Cause

After the Republican takeover of the Senate in 1994, Mr. McCain decided to try to put some of the lessons he had learned into law. He started by attacking earmarks, the pet projects that individual lawmakers could insert anonymously into the fine print of giant spending bills, a recipe for corruption. But he quickly moved on to other targets, most notably political fund-raising.

Mr. McCain earned the lasting animosity of many conservatives, who argue that his push for fund-raising restrictions trampled free speech, and of many of his Senate colleagues, who bristled that he was preaching to them so soon after his own repentance. In debates, his party’s leaders challenged him to name a single senator he considered corrupt (he refused).

“We used to joke that each of us was the only one eating alone in our caucus,” said Senator Russ Feingold, Democrat of Wisconsin, who became Mr. McCain’s partner on campaign finance efforts.

Mr. McCain appeared motivated less by the usual ideas about good governance than by a more visceral disapproval of the gifts, meals and money that influence seekers shower on lawmakers, Mr. Feingold said. “It had to do with his sense of honor,” he said. “He saw this stuff as cheating.”

Mr. McCain made loosening the grip of special interests the central cause of his 2000 presidential campaign, inviting scrutiny of his own ethics. His Republican rival, George W. Bush, accused him of “double talk” for soliciting campaign contributions from companies with interests that came before the powerful Senate commerce committee, of which Mr. McCain was chairman. Mr. Bush’s allies called Mr. McCain “sanctimonious.”

At one point, his campaign invited scores of lobbyists to a fund-raiser at the Willard Hotel in Washington. While Bush supporters stood mocking outside, the McCain team tried to defend his integrity by handing the lobbyists buttons reading “McCain voted against my bill.” Mr. McCain himself skipped the event, an act he later called “cowardly.”

By 2002, he had succeeded in passing the McCain-Feingold Act, which transformed American politics by banning “soft money,” the unlimited donations from corporations, unions and the rich that were funneled through the two political parties to get around previous laws.

One of his efforts, though, seemed self-contradictory. In 2001, he helped found the nonprofit Reform Institute to promote his cause and, in the process, his career. It collected hundreds of thousands of dollars in unlimited donations from companies that lobbied the Senate commerce committee. Mr. McCain initially said he saw no problems with the financing, but he severed his ties to the institute in 2005, complaining of “bad publicity” after news reports of the arrangement.

Like other presidential candidates, he has relied on lobbyists to run his campaigns. Since a cash crunch last summer, several of them — including his campaign manager, Rick Davis, who represented companies before Mr. McCain’s Senate panel — have been working without pay, a gift that could be worth tens of thousands of dollars.

In recent weeks, Mr. McCain has hired another lobbyist, Mark Buse, to run his Senate office. In his case, it was a round trip through the revolving door: Mr. Buse had directed Mr. McCain’s committee staff for seven years before leaving in 2001 to lobby for telecommunications companies.

Mr. McCain’s friends dismiss questions about his ties to lobbyists, arguing that he has too much integrity to let such personal connections influence him.

“Unless he gives you special treatment or takes legislative action against his own views, I don’t think his personal and social relationships matter,” said Charles Black, a friend and campaign adviser who has previously lobbied the senator for aviation, broadcasting and tobacco concerns.

Concerns in a Campaign

Mr. McCain’s confidence in his ability to distinguish personal friendships from compromising connections was at the center of questions advisers raised about Ms. Iseman.

The lobbyist, a partner at the firm Alcalde & Fay, represented telecommunications companies for whom Mr. McCain’s commerce committee was pivotal. Her clients contributed tens of thousands of dollars to his campaigns.

Mr. Black said Mr. McCain and Ms. Iseman were friends and nothing more. But in 1999 she began showing up so frequently in his offices and at campaign events that staff members took notice. One recalled asking, “Why is she always around?”

That February, Mr. McCain and Ms. Iseman attended a small fund-raising dinner with several clients at the Miami-area home of a cruise-line executive and then flew back to Washington along with a campaign aide on the corporate jet of one of her clients, Paxson Communications. By then, according to two former McCain associates, some of the senator’s advisers had grown so concerned that the relationship had become romantic that they took steps to intervene.

A former campaign adviser described being instructed to keep Ms. Iseman away from the senator at public events, while a Senate aide recalled plans to limit Ms. Iseman’s access to his offices.

In interviews, the two former associates said they joined in a series of confrontations with Mr. McCain, warning him that he was risking his campaign and career. Both said Mr. McCain acknowledged behaving inappropriately and pledged to keep his distance from Ms. Iseman. The two associates, who said they had become disillusioned with the senator, spoke independently of each other and provided details that were corroborated by others.

Separately, a top McCain aide met with Ms. Iseman at Union Station in Washington to ask her to stay away from the senator. John Weaver, a former top strategist and now an informal campaign adviser, said in an e-mail message that he arranged the meeting after “a discussion among the campaign leadership” about her.

“Our political messaging during that time period centered around taking on the special interests and placing the nation’s interests before either personal or special interest,” Mr. Weaver continued. “Ms. Iseman’s involvement in the campaign, it was felt by us, could undermine that effort.”

Mr. Weaver added that the brief conversation was only about “her conduct and what she allegedly had told people, which made its way back to us.” He declined to elaborate.

It is not clear what effect the warnings had; the associates said their concerns receded in the heat of the campaign.

Ms. Iseman acknowledged meeting with Mr. Weaver, but disputed his account.

“I never discussed with him alleged things I had ‘told people,’ that had made their way ‘back to’ him,” she wrote in an e-mail message. She said she never received special treatment from Mr. McCain’s office.

Mr. McCain said that the relationship was not romantic and that he never showed favoritism to Ms. Iseman or her clients. “I have never betrayed the public trust by doing anything like that,” he said. He made the statements in a call to Bill Keller, the executive editor of The New York Times, to complain about the paper’s inquiries.

The senator declined repeated interview requests, beginning in December. He also would not comment about the assertions that he had been confronted about Ms. Iseman, Mr. Black said Wednesday.

Mr. Davis and Mark Salter, Mr. McCain’s top strategists in both of his presidential campaigns, disputed accounts from the former associates and aides and said they did not discuss Ms. Iseman with the senator or colleagues.

“I never had any good reason to think that the relationship was anything other than professional, a friendly professional relationship,” Mr. Salter said in an interview.

He and Mr. Davis also said Mr. McCain had frequently denied requests from Ms. Iseman and the companies she represented. In 2006, Mr. McCain sought to break up cable subscription packages, which some of her clients opposed. And his proposals for satellite distribution of local television programs fell short of her clients’ hopes.

The McCain aides said the senator sided with Ms. Iseman’s clients only when their positions hewed to his principles.

A champion of deregulation, Mr. McCain wrote letters in 1998 and 1999 to the Federal Communications Commission urging it to uphold marketing agreements allowing a television company to control two stations in the same city, a crucial issue for Glencairn Ltd., one of Ms. Iseman’s clients. He introduced a bill to create tax incentives for minority ownership of stations; Ms. Iseman represented several businesses seeking such a program. And he twice tried to advance legislation that would permit a company to control television stations in overlapping markets, an important issue for Paxson.

In late 1999, Ms. Iseman asked Mr. McCain’s staff to send a letter to the commission to help Paxson, now Ion Media Networks, on another matter. Mr. Paxson was impatient for F.C.C. approval of a television deal, and Ms. Iseman acknowledged in an e-mail message to The Times that she had sent to Mr. McCain’s staff information for drafting a letter urging a swift decision.

Mr. McCain complied. He sent two letters to the commission, drawing a rare rebuke for interference from its chairman. In an embarrassing turn for the campaign, news reports invoked the Keating scandal, once again raising questions about intervening for a patron.

Mr. McCain’s aides released all of his letters to the F.C.C. to dispel accusations of favoritism, and aides said the campaign had properly accounted for four trips on the Paxson plane. But the campaign did not report the flight with Ms. Iseman. Mr. McCain’s advisers say he was not required to disclose the flight, but ethics lawyers dispute that.

Recalling the Paxson episode in his memoir, Mr. McCain said he was merely trying to push along a slow-moving bureaucracy, but added that he was not surprised by the criticism given his history.

“Any hint that I might have acted to reward a supporter,” he wrote, “would be taken as an egregious act of hypocrisy.”

Statement by McCain

Mr. McCain’s presidential campaign issued the following statement Wednesday night:

“It is a shame that The New York Times has lowered its standards to engage in a hit-and-run smear campaign. John McCain has a 24-year record of serving our country with honor and integrity. He has never violated the public trust, never done favors for special interests or lobbyists, and he will not allow a smear campaign to distract from the issues at stake in this election.

“Americans are sick and tired of this kind of gutter politics, and there is nothing in this story to suggest that John McCain has ever violated the principles that have guided his career.”

Obama Tunes 2

Obama Tunes 1

Top Model Indeed!

The false goddess of the IRL. Couldn't win a race on a top team with a significant advantage over the other racers.

But see this and see why it doesn't really matter....

http://sportsillustrated.cnn.com/features/2008_swimsuit/danica-patrick/08_danica-patrick_1.html

Now For Something Completely Different

I never told you it would All Politics All The Time....

The Mortgage Disaster, Explained Simply

Here.

Imagine This! The Poor Get Worse Medical Care And Are Therefore Likelier To Die

The Times says it's so:

A nationwide study has found that the uninsured and those covered by Medicaid are more likely than those with private insurance to receive a diagnosis of cancer in late stages, often diminishing their chances of survival.

Next, They'll figure out this Iraq WMD thing.

Quote Of The Day; Ponder This!

"Under democracy one party always devotes its chief
energies to trying to prove that the other party is unfit
to rule - and both commonly succeed, and are right."
-- H. L. Mencken

Quote Of The Day; Ponder This!

"Under democracy one party always devotes its chief
energies to trying to prove that the other party is unfit
to rule - and both commonly succeed, and are right."
-- H. L. Mencken

Rhetorical Questions Of The Day

If do-gooders do so much good, why is the world so crappy? Is Man actually just no damn good?

Guys With Waaay Too Much Time On Their Hands

Lessig On Corruption

Larry Lessig For Congress

Dunno who he is or his importance? Google him.

Meanwhile, he announces his not-quite announcement:

This site hosts this video to explain the launch of two exploratory projects — first, a Change Congress movement, and second, my own decision whether to run for Congress in the California 12th.

I have decided I want to give as much energy as I can to the Change Congress movement. I will decide in the next week or so whether it makes sense to advance that movement by running for Congress.

Many friends have weighed in on that decision — both strongly in favor and strongly opposed. Many more have joined draftlessig.org and a Facebook group asking me to consider it.

Watch or listen and you will understand some of my reasoning. Feel free to send your thoughts or advice to lessig@lessig08.org (though please excuse any slowness in my response).

— Larry Lessig, February 19, 2008

Johnny Mac's Flip-Flop Of The Day

On ABC's This Week today, host George Stephanopoulos asked Sen. John McCain (R-AZ) about Democratic proposals to protect "middle-income Americans" and "only raise" taxes "on the wealthy." In response, McCain bristled at Stephanopoulos's distinction, mockingly warning against rhetoric that talks about "who the, quote, 'wealthy' are in America":

MCCAIN: But more importantly, we'll argue about whether we should increase your taxes or decrease them. Obviously, I'm for decreases in taxes. Maybe Americans want their taxes increased. We'll argue about...
STEPHANOPOULOS: ... for middle-income Americans, only raise them on the wealthy?
MCCAIN: Oh, yes, sure, the wealthy, the wealthy. Always be interested in when people talk about who the, quote, "wealthy" are in America. I find it interesting.

Now that he has to court the hardline anti-tax factions of the conservative movement, McCain is changing his story on tax policy. In 2000, 2001, and 2003, McCain was one of the people "interested" in talking about "who the, quote, 'wealthy' are in America" when he argued against Bush's tax cuts that "mostly benefit the wealthy":

"There's one big difference between me and the others-I won't take every last dime of the surplus and spend it on tax cuts that mostly benefit the wealthy." [McCain campaign commercial, January 2000]
"I am disappointed that the Senate Finance Committee preferred instead to cut the top tax rate of 39.6% to 36%, thereby granting generous tax relief to the wealthiest individuals of our country at the expense of lower- and middle-income American taxpayers." [McCain Senate floor statement, May 21, 2001]
"But when you look at the percentage of the tax cuts that-as the previous tax cuts-that go to the wealthiest Americans, you will find that the bulk of it, again, goes to wealthiest Americans." [NBC's "Today," Jan. 7, 2003]

McCain now appears more interested in protecting the "wealthy" than he does in straight talk.

Link.

PSA Of The Day, Part 3

PSA Of The Day, Part 2

PSA Of The Day, Part 1

I Shall Live Forever!

The more you complain, the longer God lets you live. -- /. (at the moment)

Our Leaders' Success

Ronnie Raygun's big campaign mantra was "Are you better off now than four years ago?"

The fair question to ask now is "Is the world better off now than eight years ago"?

I'm sure any reasonable person would agree with me that the answer is a swift, certain No.

Exhibit-in-support for the day:

Here in Egypt and across the Middle East, many young people are being forced to put off marriage, the gateway to independence, sexual activity and societal respect. Stymied by the government’s failure to provide adequate schooling and thwarted by an economy without jobs to match their abilities or aspirations, they are stuck in limbo between youth and adulthood.

“I can’t get a job, I have no money, I can’t get married, what can I say?” Mr. Sayyid said one day after becoming so overwhelmed that he refused to go to work, or to go home, and spent the day hiding at a friend’s apartment.

In their frustration, the young are turning to religion for solace and purpose, pulling their parents and their governments along with them.

With 60 percent of the region’s population under the age of 25, this youthful religious fervor has enormous implications for the Middle East. More than ever, Islam has become the cornerstone of identity, replacing other, failed ideologies: Arabism, socialism, nationalism.

The wave of religious identification has forced governments that are increasingly seen as corrupt or inept to seek their own public redemption through religion. In Egypt, Jordan, Syria, Morocco and Algeria, leaders who once headed secular states or played down religion have struggled to reposition themselves as the guardians of Islamic values. More and more parents are sending their children to religious schools, and some countries have infused more religious content into their state educational systems.

Link.

And this is the bed from which grow Islamofascist terrorists: inept, corrupt governments that serve only their respective elites to the detriment of the majority, creating desperation, fanaticism, nihilism. Is this good for the world? No it is not.

This is the world brought by Our Leaders, and global capital, the world that John McCain would continue to enable.

Want to talk bubbles? This is a bubble that makes the so-called subprime crisis look like a sheet of bubble wrap.

Flippy-Floppy Funnies

Link.

Something Johnny Mac Can Offer

Fear. What else would a GOP rightist run on other than something (or more) to fear?

"We have terrorists to fear," says Kristol. "And we have people who want to kill Americans to fear, and people who want to totally destabilize the Middle East to fear."

"And," Kristol concludes, "I think that's a pretty good argument for McCain to make against Obama."

More.

Important Announcement From Yours Truly!!!

Look over there to the right, under this blog's portrait of Beloved Leader acting all presidential!

YOU CAN NOW SUBSCRIBE TO THIS BLOG!

SO DO IT!!

NOW!!!

Johnny Mac's Forever War

Here.

Of course, he's been known to change his mind....

A Rightist Rants Against Future Beloved Leader Johnny Mac

This is all lovely, but they wingnuts will all come out to vote for him in November, specially but not only if the Huck is one the ticket, holding their nose if they must. They'll hope this one will give them more than lip service and even if he doesn't, they'll like the lies they're told.

So the following is enjoyable but of no significance. "The sound and the fury", as it were....

A Close Ally With Even Less Respect For Free Elections Than Our Leaders Have

Link.

Our Allies: Can't Be Bothered With Our Interests

Of course, it's unrealistic to expect that we could completely control our allies, especially major ones who we depend on for oil and investments. But to get such little from them and to have them blithely work against our interests....

Saudi Arabia's rulers threatened to make it easier for terrorists to attack London unless corruption investigations into their arms deals were halted, according to court documents revealed yesterday.

Previously secret files describe how investigators were told they faced "another 7/7" and the loss of "British lives on British streets" if they pressed on with their inquiries and the Saudis carried out their threat to cut off intelligence.

Prince Bandar, the head of the Saudi national security council, and son of the crown prince, was alleged in court to be the man behind the threats to hold back information about suicide bombers and terrorists. He faces accusations that he himself took more than £1bn in secret payments from the arms company BAE.

He was accused in yesterday's high court hearings of flying to London in December 2006 and uttering threats which made the prime minister, Tony Blair, force an end to the Serious Fraud Office investigation into bribery allegations involving Bandar and his family.

The threats halted the fraud inquiry, but triggered an international outcry, with allegations that Britain had broken international anti-bribery treaties.

Lord Justice Moses, hearing the civil case with Mr Justice Sullivan, said the government appeared to have "rolled over" after the threats. He said one possible view was that it was "just as if a gun had been held to the head" of the government.

The SFO investigation began in 2004, when Robert Wardle, its director, studied evidence unearthed by the Guardian. This revealed that massive secret payments were going from BAE to Saudi Arabian princes, to promote arms deals.

Yesterday, anti-corruption campaigners began a legal action to overturn the decision to halt the case. They want the original investigation restarted, arguing the government had caved into blackmail.

The judge said he was surprised the government had not tried to persuade the Saudis to withdraw their threats. He said: "If that happened in our jurisdiction [the UK], they would have been guilty of a criminal offence". Counsel for the claimants said it would amount to perverting the course of justice.

Wardle told the court in a witness statement: "The idea of discontinuing the investigation went against my every instinct as a prosecutor. I wanted to see where the evidence led."

But a paper trail set out in court showed that days after Bandar flew to London to lobby the government, Blair had written to the attorney general, Lord Goldsmith, and the SFO was pressed to halt its investigation.

The case officer on the inquiry, Matthew Cowie, was described by the judge as "a complete hero" for standing up to pressure from BAE's lawyers, who went behind his back and tried to secretly lobby the attorney general to step in at an early stage and halt the investigations.

The campaigners argued yesterday that when BAE failed at its first attempt to stop the case, it changed tactics. Having argued it should not be investigated in order to promote arms sales, it then recruited ministers and their Saudi associates to make the case that "national security" demanded the case be covered up.

Moses said that after BAE's commercial arguments failed, "Lo and behold, the next thing there is a threat to national security!" Dinah Rose, counsel for the Corner House and the Campaign against the Arms Trade, said: "Yes, they start to think of a different way of putting it." Moses responded: "That's very unkind!"

Documents seen yesterday also show the SFO warned the attorney general that if he dropped the case, it was likely it would be taken up by the Swiss and the US. These predictions proved accurate.

Bandar's payments were published in the Guardian and Switzerland subsequently launched a money-laundering inquiry into the Saudi arms deal. The US department of justice has launched its own investigation under the foreign corrupt practices act into the British money received in the US by Bandar while he was ambassador to Washington.

Prince Bandar yesterday did not contest a US court order preventing him from taking the proceeds of property sales out of the country. The order will stay in place until a lawsuit brought by a group of BAE shareholders is decided. The group alleges that BAE made £1bn of "illegal bribe payments" to Bandar while claiming to be a "highly ethical, law-abiding corporation".

Link.

The Straight Talker's Flip-Flop Of The Day

Arianna:

Has there ever been a more repugnant example of political pandering than John McCain's decision to vote against a bill banning waterboarding, putting hoods on prisoners, forcing them to perform sex acts, subjecting them to mock executions, or depriving them of food, water, and medical treatment?

That's right, John McCain, the former POW who has long been an outspoken critic of the Bush administration's disturbing embrace of extreme interrogation techniques.

But that was before his desperate attempt to win over the lunatic fringe that is running the Grand Old Party.

Earlier this week, I showed how outdated the image of McCain as an independent-thinking maverick had become -- and called on the media and independent voters to snap out of their 2000 reverie and see the 2008 McCain for what he has turned into: a Rove-embracing Bush clone, willing to jettison his principles in his hunger for the presidency.

And now comes this latest unconscionable capitulation, which should drive a stake through the heart of the McCain-as-straight-talker meme once and for all.

McCain the maverick had been unequivocal in his condemnation of torture, and eloquent in expressing why. "We've sent a message to the world that the United States is not like the terrorists," he said at an Oval Office appearance in December 2005, after he had forced the president to endorse an earlier torture ban McCain had authored and pushed through (a ban the president quickly subverted with a signing statement). "What we are is a nation that upholds values and standards of behavior and treatment of all people, no matter how evil or bad they are. And I think this will help us enormously in winning the war for the hearts and minds of people throughout the world in the war on terror."

He made a similar case on the campaign trail in Iowa in October 2007: "When I was imprisoned, I took heart from the fact that I knew my North Vietnamese captors would never be treated like I was treated by them. There are much better and more effective ways to get information. You torture someone long enough, he'll tell you whatever he thinks you want to know."

And there was this pithy and powerful summation of why torture should never be an option: "It's not about who they are, it's about who we are."

Of course, all that was before he put his conscience in leg irons -- and before caving to the would-be Torquemadas on the Right became his campaign strategy.

Now we get tortured logic instead. Taking to the Senate floor to justify his vote against the torture ban yesterday, McCain twisted himself in knots trying to explain how he could sponsor a bill -- the 2006 Detainee Treatment Act -- that prohibits the use of any cruel, inhumane, or degrading treatment by the military while voting against a bill that would extend that ban to the CIA and other intelligence agencies: "It is important to the war on terror that the CIA have the ability to [detain and interrogate terrorists]. At the same time the CIA's interrogation program has to abide by the rules, including the standards of the Detainee Treatment Act."

Got that? The CIA has to abide by rules prohibiting torture but we can't tie the CIA's hands by making it abide by rules prohibiting torture. Straight talk, RIP.

What's more, McCain said he voted against the bill because it would be a mistake to "tie the CIA to the Army Field Manual" -- a Manual he gave a ringing endorsement to in a November debate: "I just came back from visiting a prison in Iraq. The army general there said that techniques under the Army Field Manual are working and working effectively, and he didn't think they need to do anything else. My friends, this is what America is all about."

But not apparently once you have the White House in your sights. Then all bets -- and deeply held convictions -- are off.

The media and independent voters need to stop offering McCain valentines, and start interrogating him -- humanely, of course -- about the Faustian bargain he has struck.

Someone Writes Beloved Leader

President George W. Bush

The White House

1600 Pennsylvania Ave., NW

Washington, DC 20500

Dear Mr. President:

The Preamble to our Constitution states that one of our highest duties as public officials is to "provide for the common defence." As an elected Member of Congress, a senior Member of the House Armed Services Committee, and Chairman of the House Permanent Select Committee on Intelligence, I work everyday to ensure that our defense and intelligence capabilities remain strong in the face of serious threats to our national security.

Because I care so deeply about protecting our country, I take strong offense to your suggestion in recent days that the country will be vulnerable to terrorist attack unless Congress immediately enacts legislation giving you broader powers to conduct warrantless surveillance of Americans' communications and provides legal immunity for telecommunications companies that participated in the Administration's warrantless surveillance program.

Today, the National Security Agency (NSA) has authority to conduct surveillance in at least three different ways, all of which provide strong capability to monitor the communications of possible terrorists.

First, NSA can use its authority under Executive Order 12333 to conduct surveillance abroad of any known or suspected terrorist. There is no requirement for a warrant. There is no requirement for probable cause. Most of NSA's collection occurs under this authority.

Second, NSA can use its authority under the Protect America Act, enacted last August, to conduct surveillance here in the U.S of any foreign target. This authority does not "expire" on Saturday, as you have stated. Under the PAA, orders authorizing surveillance may last for one year - until at least August 2008. These orders may cover every terrorist group without limitation. If a new member of the group is identified, or if a new phone number or email address is identified, the NSA may add it to the existing orders, and surveillance can begin immediately. We will not "go dark."

Third, in the remote possibility that a new terrorist organization emerges that we have never previously identified, the NSA could use existing authority under the Foreign Intelligence Surveillance Act (FISA) to monitor those communications. Since its establishment nearly 30 years ago, the FISA Court has approved nearly every application for a warrant from the Department of Justice. In an emergency, NSA or the Federal Bureau of Investigation (FBI) may begin surveillance immediately, and a FISA Court order does not have to be obtained for three days. The former head of FISA operations for the Department of Justice has testified publicly that emergency authorization may be granted in a matter of minutes.

As you know, the 1978 FISA law, which has been modernized and updated numerous times since 9/11, was instrumental in disrupting the terrorist plot in Germany last summer. Those who say that FISA is outdated do not understand the strength of this important tool.

If our nation is left vulnerable in the coming months, it will not be because we don't have enough domestic spying powers. It will be because your Administration has not done enough to defeat terrorist organizations - including al Qaeda -- that have gained strength since 9/11. We do not have nearly enough linguists to translate the reams of information we currently collect. We do not have enough intelligence officers who can penetrate the hardest targets, such as al Qaeda. We have surged so many intelligence resources into Iraq that we have taken our eye off the ball in Afghanistan and Pakistan. As a result, you have allowed al Qaeda to reconstitute itself on your watch.

You have also suggested that Congress must grant retroactive immunity to telecommunications companies. As someone who has been briefed on our most sensitive intelligence programs, I can see no argument why the future security of our country depends on whether past actions of telecommunications companies are immunized.

The issue of telecom liability should be carefully considered based on a full review of the documents that your Administration withheld from Congress for eight months. However, it is an insult to the intelligence of the American people to say that we will be vulnerable unless we grant immunity for actions that happened years ago.

Congress has not been sitting on its hands. Last November, the House passed responsible legislation to authorize the NSA to conduct surveillance of foreign terrorists and to provide clarity and legal protection to our private sector partners who assist in that surveillance.

The proper course is now to conference the House bill with the Senate bill that was passed on Tuesday. There are significant differences between these two bills and a conference, in regular order, is the appropriate mechanism to resolve the differences between these two bills. I urge you, Mr. President, to put partisanship aside and allow Republicans in Congress to arrive at a compromise that will protect America and protect our Constitution.

I, for one, do not intend to back down - not to the terrorists and not to anyone, including a President, who wants Americans to cower in fear.

We are a strong nation. We cannot allow ourselves to be scared into suspending the Constitution. If we do that, we might as well call the terrorists and tell them that they have won.

Sincerely,

Silvestre Reyes

Member of Congress

Chairman, House Permanent Select Committee on Intelligence

Link.

Olbermann Disses Beloved Leader

But he does it so well....

“Who’s to blame?” Mr. Bush also said this afternoon, “Look, these folks in Congress passed a good bill late last summer… The problem is, they let the bill expire. My attitude is: if the bill was good enough then, why not pass the bill again?”

You know, like The Gulf of Tonkin Resolution.

Or Executive Order 90-66.

Or The Alien and Sedition Acts.

Or Slavery.

Mr. Bush, you say that our ability to track terrorist threats will be weakened and our citizens will be in greater danger.

Yet you have weakened that ability!

You have subjected us, your citizens, to that greater danger!

This, Mr. Bush, is simple enough even for you to understand.

For the moment, at least, thanks to some true patriots in the House, and your own stubbornness, you have tabled telecom immunity, and the FISA act.

You.

By your own terms and your definitions — you have just sided with the terrorists.

You got to have this law or we’re all going to die.

But practically speaking, you vetoed this law.

It is bad enough, sir, that you were demanding an Ex Post Facto law, which could still clear the AT&Ts and the Verizons from responsibility for their systematic, aggressive, and blatant collaboration with your illegal and unjustified spying on Americans under this flimsy guise of looking for any terrorists who are stupid enough to make a collect call or send a mass e-mail.

But when you demanded it again during the State of the Union address, you wouldn’t even confirm that they actually did anything for which they deserved to be cleared.

“The Congress must pass liability protection for companies believed to have assisted in the efforts to defend America.” Believed?

Don’t you know?

Don’t you even have the guts Dick Cheney showed in admitting they did collaborate with you?

Does this endless presidency of loopholes and fine print extend even here?

If you believe in the seamless mutuality of government and big business — come out and say it!

There is a dictionary definition, one word that describes that toxic blend.

You’re a fascist — get them to print you a t-shirt with “fascist” on it!

What else is this but fascism?

Did you see Mark Klein on this newscast last November?

Mark Klein was the AT&T Whistleblower, the one who explained in the placid, dull terms of your local neighborhood I-T desk, how he personally attached all AT&T circuits — everything — carrying every one of your phone calls, every one of your e-mails, every bit of your web browsing into a secure room, room number 641-A at the Folsom Street facility in San Francisco, where it was all copied so the government could look at it.

Not some of it, not just the international part of it, certainly not just the stuff some spy — a spy both patriotic and telepathic — might able to divine had been sent or spoken by — or to — a terrorist.

Everything!

Every time you looked at a naked picture.

Every time you bid on eBay.

Every time you phoned in a donation to a Democrat.

“My thought was,” Mr. Klein told us last November, “George Orwell’s 1984. And here I am, forced to connect the big brother machine.”

And if there’s one thing we know about Big Brother, Mr. Bush, is that he is — you are — a liar.

“This Saturday at midnight,” you said today, “legislation authorizing intelligence professionals to quickly and effectively monitor terrorist communications will expire. If Congress does not act by that time, our ability to find out who the terrorists are talking to, what they are saying, and what they are planning, will be compromised…You said that “the lives of countless Americans depend” on you getting your way.

This is crap.

And you sling it, with an audacity and a speed unrivaled even by the greatest political felons of our history.

Richard Clarke — you might remember him, sir, he was one of the counter-terror pro’s you inherited from President Clinton, before you ran the professionals out of government in favor of your unreality-based reality — Richard Clarke wrote in the Philadelphia Inquirer:

“Let me be clear: Our ability to track and monitor terrorists overseas would not cease should the Protect America Act expire. If this were true, the president would not threaten to terminate any temporary extension with his veto pen. All surveillance currently occurring would continue even after legislative provisions lapsed because authorizations issued under the act are in effect up to a full year.”

You are a liar, Mr. Bush, and after showing some skill at it, you have ceased to even be a very good liar.

And your minions like John Boehner — your Republican congressional crash dummies who just happen to decide to walk out of Congress when a podium-full of microphones await them — they should just keep walking, out of Congress and if possible, out of the country.

For they — and you, sir — have no place in a government of the people, by the people, for the people.

The lot of you, are the symbolic descendants of the despotic middle managers of some banana republic, to whom “Freedom” is an ironic brand name, a word you reach for, when you want to get away with its opposite.

Thus, Mr. Bush, your panoramic invasion of privacy is dressed up as “protecting America.”

Thus, Mr. Bush, your indiscriminate domestic spying becomes the focused monitoring, only of “terrorist communications.”

Thus, Mr. Bush, what you and the telecom giants have done, isn’t unlawful, it’s just the kind of perfectly legal, passionately patriotic thing for which you happen to need immunity!

Richard Clarke is on the money, as usual.

That the President was willing to veto this eavesdropping, means there is no threat to the legitimate counter-terror efforts underway.

As Senator Kennedy reminded us in December:

“The President has said that American lives will be sacrificed if Congress does not change FISA. But he has also said that he will veto any FISA bill that does not grant retroactive immunity.

No immunity, no FISA bill. So if we take the President at his word, he’s willing to let Americans die to protect the phone companies.”

And that literally cannot be.

Even Mr. Bush could not overtly take a step that actually aids the terrorists.

I am not talking about ethics here.

I am talking about blame.

If the President seems to be throwing the baby out with the bathwater, it means we can safely conclude… there is no baby.

Because if there were, sir, now that you have vetoed an extension of this eavesdropping, if some terrorist attack were to follow…

You would not merely be guilty of siding with the terrorists…

You would not merely be guilty of prioritizing the telecoms over the people…

You would not merely be guilty of stupidity…

You would not merely be guilty of treason, sir…

You would be personally, and eternally, responsible.

And if there is one thing we know about you, Mr. Bush, one thing that you have proved time and time again… it is that you are never responsible.

As recently ago as 2006, we spoke words like these with trepidation.

The idea that even the most cynical and untrustworthy of politicians in our history — George W. Bush — would use the literal form of terrorism against his own people — was dangerous territory. It seemed to tempt fate, to heighten fear.

We will not fear any longer.

We will not fear the international terrorists — we will thwart them.

We will not fear the recognition of the manipulation of our yearning for safety — we will call it what it is: terrorism.

We will not fear identifying the vulgar hypocrites in our government — we will name them.

And we will not fear George W. Bush.

Nor will we fear because George W. Bush wants us to fear.

How McCain Will Run And Govern

Four more years. That's it. Got it??


Link.

Beloved Leader, Still Lying

Beloved Leader's claim below is an utter and complete lie. (Yeah, yeah, just like everything that comes out of his mouth.)

Bush spoke at some length about torture in his Fox News interview. All in all, it sounded like he was walking back spokesman Tony Fratto's assertion last week that the president might approve more waterboarding. Bush sided in the interview with CIA director Michael Hayden's view that waterboarding was legal when it was conducted in 2002 and 2003, but may no longer be legal.

Said Bush: "First of all, whatever we have done was legal, and whatever decision I will make will be reviewed by the Justice Department to determine whether or not the legality is there. And the reason why there is a difference between what happened in the past and today, there is a new law."

Then, however, Bush made an unsupported claim, and issued a challenge that the media and his critics should pick up with vigor: "The American people have got to know that what we did in the past gained information that prevented an attack. And for those who criticize what we did in the past, I ask them, which attack would they rather have not permitted -- stopped? Which attack on America did they -- would they have said, well, you know, maybe it wasn't all that important that we stop those attacks."

But if the American people have "got to know" that torture gained information that prevented an attack, Bush needs to start making a better case. As I've written repeatedly, he has yet to offer any evidence that intelligence produced by torture thwarted a single plot or saved a single life.

The media should demand that he back it up or take it back.

Link.

More Straight Talk: The Politics Of Home

Straight Talk: The Video

Earth-Shattering News

Watch this and feel the earth shake.

Today's Straight Talk

We report, you decide. Our Next Leader explains Iraq to us (subject, I suppose, to change at his next straight-talking flip-flop).

Our Leaders' Success At Making Our Nation Safer

American Samoa's delegate to the U.S. Congress is calling for an investigation into the death of a baby at Honolulu International Airport.

Delegate Eni Faleomavaega has asked the Department of Homeland Security to begin an investigation into death of 14-day-old Michael Tony Futi last Friday.

The baby had been flown to Honolulu for emergency heart surgery. He died while detained inside a customs' room at the Honolulu airport with his mother and a nurse.

A lawyer for the family announced plans to sue the federal government over the baby's death.

Faleomavaega called for the probe in a letter issued to Homeland Security chief Michael Chertoff.

Link.

Video Of The Day: Just Some Guy Doing Something To Make Senior Home Shut-ins Happy

It Must Be A Historical Financial Crisis; A Conservative Capitalist Says It Is

I mean, this isn't an anti-capitalist or some weird rightist wingnut. This is an experienced, knowledgeable businessman. My favorite part is the dis of these robotic interest rate cuts. Of course, in this case, the problem came from an excess of loose capital used for speculation so, of course, throwing oil on the flames is a good idea (not).

ONE OF THE GRANDEST OF THINKERS AND MOST ELOQUENT of oracles, Jeremy Grantham has long been the voice of reason in an industry prone to excesses and embellishment. By taking the long view, blending quantitative strategies and technical analysis with sound and experienced judgment, Grantham, chairman of Boston-based GMO, consistently uncovers with his team the best values among a wide range of global asset classes.

The payoff is outstanding performance and risk management. In return, clients have entrusted the firm with about $150 billion. As the man who warned early of a worldwide bubble forming, we turned to him as that bubble has started bursting.

"It was late '06 when [Fed Chairman Benjamin] Bernanke said he thought the high prices of homes in the U.S. merely reflected a strong U.S. economy. Was he not looking at the data?" -- Jeremy Grantham

Barron's: You, along with George Soros, have called this the worst financial crisis we've had in the post-war era.

Grantham: This is much more global than, say, the savings-and-loan crisis was. The world is obviously much more globalized than at any time since the late 19th century and much more interrelated in almost every way, certainly financially. To have the leading economy and the reserve currency having a major-league credit crisis would by itself make it more important than earlier ones.

Secondly, this occurred at a time of what I believe is the first global bubble in pretty well all asset prices, so there is a much greater degree of broad-based vulnerability. Then it is a question of degree, and how carried away the sloppy lending was: It was very carried away. Not just in the design of needlessly complicated instruments, but in the enthusiasm -- recklessness one might say -- with which they were sold.

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Can these bubbles burst if the Fed is easing the way they are?

Well, this is an amazing little tidbit. People think the Federal Reserve can stop a bear market because they can throw money at it and lower interest rates. It is even more certain we can collectively stop a bear market if some fiscal stimulus is thrown in. To which I say, 'Oh, you mean like 2000 and 2002?' -- when they threw what I call the greatest stimulus in American history, an unparalleled series of interest-rate cuts, cumulating in two, almost three, years of negative real returns, real interest rates coupled with a really substantial tax cut, which would never have happened without 9/11.

The combination would have gotten the dead to walk, and it stopped the bear market eventually. But the Standard & Poor's 500 was down 50% and the Nasdaq -- which was all anyone talked about back then -- went down 78%. And a puny five to six years later, people are saying there is not going to be a bear market because the Fed is going to lower rates and because the government is going to have a stimulus package. But we have just been there, done that, and we had a nice bear market.

What about places to hide?

That isn't something we can laugh off. Last time, there were plenty of opportunities: Bonds were cheap and TIPS (Treasury-inflation protective securities) were brilliant; real estate was cheap and REITs were brilliant. Even within equities, emerging markets were much cheaper than U.S. equities, and within U.S. equities, value stocks were only a little expensive and small-caps were only a little expensive and small-cap value was actually a little bit cheap. So you could really hide and could reasonably expect to make money, which we did in each of the three years of the bear market.

Since then, all those areas appear to have read the book on mean-reversion. Ten years would be a perfectly normal period of time to go from a peak of a great bubble [like the one in 2000], based on the history of bubbles and their aftermath, to the low. I have long thought that 2010 would be when we hit the biggest discount to fair value. Trend-line value on the S&P, by the way, in 2010 is 1100. (The S&P 500 traded at 1334 late last week.)

What should we expect from the market between now and 2010?

In the fourth year of a presidential cycle, where you have a lame-duck president, the typical pattern of S&P 500 performance has been something like 10% below the normal long-term average (a 5.2% gain, inflation-adjusted), and worse if it is an overpriced market. A first year is never very pleasant: They average about 3% below normal. If they are overpriced, they do four points worse than that.

But if the party in power changes, first years tend to be eight points below normal. The following year is ugly, too. The average year two, since 1932, has been 10 points below normal and, if the market is overpriced, 15 points below normal. This is unpleasant. By a nice coincidence, those averages suggest the market will decline to 1100 in 2010, which is exactly the number we get to from a completely different technique -- building it from the grass roots through fundamental value. We do that by taking average corporate-profit margins, actually a generous average, assigning a normal market price/earnings ratio, and that gives you 1100 in 2010. This year, next year and the year after will all be uncomfortable years. One of them might be up, but my guess is it won't be up by much.

What exactly will make them more uncomfortable?

Profit margins, the great prop to the market, surprisingly defied the laws of gravity for three years in the developed world and, particularly, in the emerging world and even in Japan. That was because the global economy was stronger than any corporation counted on and, in the U.S., consumption was always higher and our savings rate was always lower than any corporate economist would have suggested, going into negative territory. But there are a few near certainties in this business -- not many, but a few -- and one of them is that abnormally high profit margins will go back to normal. The timing is unfortunately shrouded in fog. The other near certainty is that house prices will go back to a normal multiple of family income. In the end, we, the people, have to be able to afford the houses and they are affordable at something around 2.8 times family income. When they peak in Boston at 6 times and nationally at 3.9 times, you know you are in for tough times.

Incidentally, it was late in '06 when [Fed Chairman Benjamin] Bernanke said he thought the high prices of homes in the U.S. merely reflected a strong U.S. economy. Was he not looking at the data? Did he not measure long-term house prices? Had he not seen how they ebbed and flowed as a multiple of family income, which they do here and in the U.K. and everywhere else? And with it being so obviously a bubble, how could he have said that?

He was taking his cue from Alan Greenspan, who said we should all be taking out adjustable-rate mortgages.

Greenspan and Bernanke have taken a hands-off approach for two consecutive great bubbles, first in TMT -- telecommunications, media and technology -- and second, in housing. A hands-off approach is a polite way of saying they facilitated this. And what is the point of a 125-basis-point rate reduction, other than to provide reinforcement for the people who borrow short and lend long? From bankers who have committed every crime you could possibly accuse a banker of, to hedge funds who borrow short, leverage, and invest long in the stock market -- that's who really benefits from the interest-rate reduction. The economy, broadly defined, does not.

I have an exhibit that shows the 30 years prior to 1982 when the debt-to-gross domestic product ratio was completely flat at 1.2 times. Total debt is defined as government debt, personal debt, corporate debt and financial debt. Then in the 25 years after 1982, the flat line goes up at a 45 degrees angle from 1.2 times to 3.1 times GDP. Massive. In the first 30 years, when debt is flat, annual GDP growth is its usual battleship, growing at 3.5% and hardly twitching. After the massive increase in debt, GDP, far from accelerating, grew at 3%. So debt in the aggregate does not drive the economy. The economy is driven by education, man-hours worked, capital investment and technology. It is not driven by what I owe you and you owe me.

So the Fed's actions won't stave off a slowdown?

Since when did the thought of an economic slowdown induce such hysteria? That was a response to the decline in global markets. It was aimed at the stock market. It was aimed at banking disorder and banking profits. It doesn't have that much of a powerful effect on the economy. If it had any more profound effect, there would be a positive relationship between debt increasing and GDP growth, and there is none.

But it is driving down the dollar.

It drives down the dollar, which is inflationary, and, eventually, it could be seriously inflationary.

I understand you are most concerned with further fallout in the private-equity arena?

Yes. I have yet to meet a private-equity firm that put into its spreadsheet the assumption that system-wide profit margins could decline by 20% to 30%. They have taken the current, abnormally high profit margins as a given and then determined to improve them by, let's say, 15% and assume everything works out pretty well.

But if the base declines by 20%, even if they end up improving margins by 15%, they are going backwards. And if they pay the 25% premium up front, which was normal, and if they leverage 4-to-1, which was normal, then they almost precisely wipe out all of the clients' money, all of the 20% in equity and if, perish the thought, they don't add 15%, but add perhaps zero to 5%, then they do more than wipe out the equity, they leave the underlying debt in ragged disarray. That is the next shoe to drop on the credit side.

Where else does this housing crisis lead us?

It has a lot to go. It still has to drop 20% to 25% to reach more normal levels, or if you prefer, it could wait five years for income to catch up, barring no big recessions. With the housing market gone, people turned to credit cards and with economic times slowing down -- whether there's a recession or not -- consumers are going to slow down a lot, are slowing down or have slowed down a lot.

What about the dollar?

Currency is a real problem, I've got to admit. There was a time not that many years ago when we had a huge high-confidence bet against the dollar. It was technically overpriced, and we were running a huge trade deficit. Now, it is technically substantially cheap. But we are running an even bigger deficit. It is a conundrum. I don't think it should be a major, major bet. We are reasonably happy owning emerging currencies as a packet against the dollar for a several-year time horizon. I'm not particularly happy owning a packet of other developed currencies against the dollar.

Personally, I'm long the yen, the Singapore dollar and the Swiss franc. I'm certainly not long the pound: shorting the pound is a better bet than shorting the dollar.

What other bets would you take here?

My favorite bet on Jan. 1 and today, for that matter, is going long very-high-quality U.S. blue chips with 50% of my dough, and long emerging markets for 50%, and shorting the Russell 2000 for 100%, or a complete hedge. In that bet, I'm long value because both of those components are cheaper than the Russell 2000. I'm long liquidity on average. I'm long momentum on average.

What about growth stocks? Isn't there value there?

Growth stocks are expensive, but not quite as expensive as value stocks or low-growth stocks. Quality stocks are expensive but substantially less so than anything else. Emerging is expensive, but less so than anything less, and the fundamentals are so much superior to the rest of the world. Everything is expensive. All we are trying to do is extract some relative money, or by going short, actually make some real money.

But how do you define quality these days?

We always defined high-quality companies as those with high and stable returns and low debt. Recently, we had to override, and exclude several banks from that list. Whether you like it or not, you have got to treat banks separately.

What about the deal market, will that provide any lift to stocks? Microsoft's bid for Yahoo! hasn't done much for the market.

You might say that is a company in serious trouble being acquired by a company that is worried, maybe desperate. And that doesn't sound like a very strong deal to anybody.

Link (sub. required, that's why I ran nearly the whole piece).