These Guys are Just Nasty

HYPOCRITE IN CHIEF: Jonathan Alter writes:

"When he was governor of Texas, George W. Bush presided over 152 executions, more than took place in the rest of the country combined. In at least a few of these cases, reasonable doubts about the guilt of the condemned were raised. But Bush cut his personal review time for each case from a half hour to a mere 15 minutes (most other governors spend many hours reviewing each capital case to assure themselves that there's no doubt of guilt). His explanation was that he trusted the courts to sort through the life-and-death complexities. That's right: the courts.

I bring up that story because it's just one of several ironies that have arisen in connection with the Terri Schiavo saga, in which the president said that the government "ought to err on the side of life." Fine, but whose life? The inmate who might not be guilty? The poor people across the country denied organ transplants (and thus life) because Medicaid—increasingly under the Bush budget knife—won't cover them? The poor people across the world starving to death because we won't go along with Tony Blair when it comes to addressing global poverty?

Could there be—perish the thought—politics at work here? Knowing that they cannot deliver on a gay-rights amendment or abortion ban, Karl Rove & Co. settled on bonding to the base with the Schiavo case. The beauty part, as Ross Perot used to say, was that they could be cynical and sincere at the same time, even if it meant twisting themselves into ideological pretzels. The same conservatives who have spent the last generation attacking "judicial activism" and federal intrusion in state jurisdictions were suddenly advocating what they had so long abhorred."
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From: CENTER FOR AMERICAN PROGRESS:
March 29th, 2005

UNPRINCIPLED ON SCHIAVO: Though President Bush's decision to abruptly end his vacation and fly to Washington to sign the Schiavo bill suggested his passion for the cause, it's worth noting how he reacted to the Asia tsunami disaster three months ago. As the Washington Post reminds us, Bush "continued to vacation, unseen and unheard [for three days], and the world may well have wondered what kind of catastrophe would be sufficient to interrupt the president's agenda of clearing brush and riding bikes." Now we know.

Yet, as with Tom DeLay, polls showing widespread disapproval with federal involvement in the Schiavo case prompted a quick turnaround on President Bush's part. After flying across the country to save her life, Bush then "retreated back to his ranch and remained largely out of sight as the nation wrestled with the great moral issues surrounding the fate of Terri Schiavo." His radio address on Saturday extolling a "culture that affirms life" didn't mention Schiavo once.

Fox Blocker: A Condom for your TV

Nifty little gadget to filter out Fox network from your cable mix.

The Essential Krugman: "What's Going On?"

What's Going On?
By PAUL KRUGMAN
NY Times Op-Ed
Published: March 29, 2005

Democratic societies have a hard time dealing with extremists in their midst. The desire to show respect for other people's beliefs all too easily turns into denial: nobody wants to talk about the threat posed by those whose beliefs include contempt for democracy itself.

We can see this failing clearly in other countries. In the Netherlands, for example, a culture of tolerance led the nation to ignore the growing influence of Islamic extremists until they turned murderous.

But it's also true of the United States, where dangerous extremists belong to the majority religion and the majority ethnic group, and wield great political influence.

Before he saw the polls, Tom DeLay declared that "one thing that God has brought to us is Terri Schiavo, to help elevate the visibility of what is going on in America." Now he and his party, shocked by the public's negative reaction to their meddling, want to move on. But we shouldn't let them. The Schiavo case is, indeed, a chance to highlight what's going on in America.

One thing that's going on is a climate of fear for those who try to enforce laws that religious extremists oppose. Randall Terry, a spokesman for Terri Schiavo's parents, hasn't killed anyone, but one of his former close associates in the anti-abortion movement is serving time for murdering a doctor. George Greer, the judge in the Schiavo case, needs armed bodyguards.

Another thing that's going on is the rise of politicians willing to violate the spirit of the law, if not yet the letter, to cater to the religious right.

Everyone knows about the attempt to circumvent the courts through "Terri's law." But there has been little national exposure for a Miami Herald report that Jeb Bush sent state law enforcement agents to seize Terri Schiavo from the hospice - a plan called off when local police said they would enforce the judge's order that she remain there.

And the future seems all too likely to bring more intimidation in the name of God and more political intervention that undermines the rule of law.

The religious right is already having a big impact on education: 31 percent of teachers surveyed by the National Science Teachers Association feel pressured to present creationism-related material in the classroom.

But medical care is the cutting edge of extremism.

Yesterday The Washington Post reported on the growing number of pharmacists who, on religious grounds, refuse to fill prescriptions for birth control or morning-after pills. These pharmacists talk of personal belief; but the effect is to undermine laws that make these drugs available. And let me make a prediction: soon, wherever the religious right is strong, many pharmacists will be pressured into denying women legal drugs.

And it won't stop there. There is a nationwide trend toward "conscience" or "refusal" legislation. Laws in Illinois and Mississippi already allow doctors and other health providers to deny virtually any procedure to any patient. Again, think of how such laws expose doctors to pressure and intimidation.

But the big step by extremists will be an attempt to eliminate the filibuster, so that the courts can be packed with judges less committed to upholding the law than Mr. Greer.

We can't count on restraint from people like Mr. DeLay, who believes that he's on a mission to bring a "biblical worldview" to American politics, and that God brought him a brain-damaged patient to help him with that mission.

What we need - and we aren't seeing - is a firm stand by moderates against religious extremism. Some people ask, with justification, Where are the Democrats? But an even better question is, Where are the doctors fiercely defending their professional integrity? I think the American Medical Association disapproves of politicians who second-guess medical diagnoses based on video images - but the association's statement on the Schiavo case is so timid that it's hard to be sure.

The closest parallel I can think of to current American politics is Israel. There was a time, not that long ago, when moderate Israelis downplayed the rise of religious extremists. But no more: extremists have already killed one prime minister, and everyone realizes that Ariel Sharon is at risk.

America isn't yet a place where liberal politicians, and even conservatives who aren't sufficiently hard-line, fear assassination. But unless moderates take a stand against the growing power of domestic extremists, it can happen here.

Halliburton Overcharge Report Heavily Redacted

Administration Withheld Halliburton Overcharges from International Auditors
March 29, 2005

Rep. Waxman revealed today that Administration officials, acting at the request of Halliburton, redacted a Pentagon report to conceal more than $100 million in fuel overcharges from international auditors. In letters to government auditors, Halliburton subsidiary KBR explains that it redacted statements that it considered "factually inaccurate or misleading" and gives consent for the release of the audits to international auditors "in redacted form." The Administration then sent the heavily redacted report to the International Advisory and Monitoring Board overseeing the Development Fund for Iraq, the fund established by the U.N. for the management of Iraq’s oil sales and foreign donations.

An interactive feature reveals the extent of the redactions in the first ten pages of the Pentagon report.

New Bankruptcy Law -
Unintended Consequences, or Something Else?

Judges Say Overhaul Would Weaken Bankruptcy System
By Peter G. Gosselin, LA Times Staff Writer

WASHINGTON — For nearly a decade, proponents of overhauling the nation's bankruptcy laws have described their aim as ensuring that Americans who enter bankruptcy court do not escape bills that they can truly afford to pay.

But only weeks before Congress is likely to approve the long-sought overhaul, bankruptcy judges across the country warn that the measure would undermine the very section of the law under which debtors are now repaying more than $3 billion annually to their creditors.

These judges say the effect of the overhaul would be to discourage most forms of personal bankruptcy, which for nearly two centuries has served as a safety net for people in economic trouble.

"The folks who brought you 'those who can pay, should pay' are pulling the stuffing out of the very part of the bankruptcy law where debtors do pay," said Keith Lundin, a federal bankruptcy judge in the eastern district of Tennessee in Nashville and an authority on bankruptcy repayment plans.

"The advocates aren't trying to fix the bankruptcy law; they're trying to mess it up so much that nobody can use it," Lundin charged.

In interviews, a dozen current or former bankruptcy judges, whose names were suggested by proponents as well as opponents of the overhaul legislation, described what they saw as the problems that could result from key provisions of the new measure.

Judges now have broad discretion to determine how much a debtor must pay to creditors and on what schedule after declaring bankruptcy under what is known as Chapter 13. But under the legislation, that discretion would be substantially curtailed.

The new legislation would bar courts from reducing the amount that many debtors would have to repay on their cars and other big-ticket items. It would also extend the length of time people would have to make repayments and impose repayment schedules that critics describe as so onerous that many debtors would fall behind.

The result, the judges said, would be the collapse of more repayment plans, forcing debtors out of bankruptcy court protection. Creditors then could try to force debtors to pay the full amount owed — not the reduced amount a judge had ordered — by moving to repossess their belongings or bringing legal actions. Many people would have to pay creditors far into the future, the critics said, and thus be unable to restart their economic lives, a long-held aim of bankruptcy.

Repayment plans "are pretty fragile documents to begin with, but they're going to get a lot more fragile under these conditions," said Ronald Barliant, a former bankruptcy judge from the northern district of Illinois in Chicago.

"It's going to take away of lot of the incentives" for people to enter repayment plans, said David W. Houston III, a bankruptcy judge from the northern district of Mississippi in Aberdeen.

Overhaul proponents respond to such criticisms by contending that the current bankruptcy system is rife with fraud and abuse and is stacked against creditors. Many proponents are deeply scornful of bankruptcy judges, who they charge have let the system spin out of control.

"They're part of the … problem," declared Jeff Tassey, a Washington lobbyist who heads the coalition of credit card companies, banks and others that has spearheaded the overhaul drive.

"They're not real judges, not Article 3 judges," Tassey said. He was referring to Article 3 of the U.S. Constitution, under which judges in the regular federal court system are appointed for life. Bankruptcy judges are appointed under Article 1 to 14-year renewable terms.

As matters now stand, financially distressed Americans generally have two options in bankruptcy. They can file a Chapter 7 case, in which they forfeit most of their assets in return for cancellation of most debts and a debt-free "fresh start." Or, they can file a Chapter 13 case, in which they get to keep most of their property but must agree to repay a portion of their debts over a period of time.

Some advocates for changing the system have contended that these provisions should be rewritten to address a kind of moral laxness in bankruptcy practices.

"When you have seen a system that has gone from a few hundred thousand cases to 1.5 million last year — most of that increase during the fat years of the Clinton administration — you must conclude something is not right," said Edith H. Jones, a federal appellate court judge in Houston who served on a blue-ribbon panel to review bankruptcy law in the 1990s and is widely believed to be seen as on President Bush's short list for a position on the Supreme Court.

"People have been encouraged to see bankruptcy as an easy way out of uncomfortable situations," Jones said.

Overhaul proponents have also said that the new measure is so narrowly cast that it would affect no more than 15% of bankruptcy filers.

The legislation would require courts to check whether people make more than their state's median income and can pass a "means test," which gauges whether they have enough to cover allowable living expenses, pay secured creditors such as mortgage lenders and still have some left over for unsecured creditors such as credit card companies. Those who are above the median and have the means would no longer be allowed to file under Chapter 7 and wipe out most of their debts, but would have to file Chapter 13 cases and agree to a repayment plan.

Nearly all congressional Republicans, together with many Democrats, support the overhaul measure, which the president has warmly endorsed and said he would sign. The Senate passed the measure this month in a 74-25 vote. Approval from the House is expected next month.

However, largely overlooked in the debate has been a series of proposed changes in Chapter 13 that critics say would make it harder for debtors to stick with repayment plans — the opposite effect of what supporters say they want.

Critics, including bankruptcy judges in California, North Carolina, Massachusetts, and Florida say there is nowhere near the fraud in the system that advocates claim.

They cite a study by the nonpartisan American Bankruptcy Institute, which concludes that only about 3% of those who wipe out their debts in Chapter 7 could afford to repay a portion in Chapter 13. Lobbyists for the credit card and banking industries estimate that 10% or more would be able to pay.

Those opposed to the changes contend that most people who file for bankruptcy are truly distressed financially — and say the success that courts have in collecting as much as they do under Chapter 13 shows the system is working.

According to figures from the U.S. Trustee Program, a Justice Department agency, Chapter 13 debtors repaid almost $3.6 billion in 2003, the latest year for which figures are available.

But critics say the courts' success with Chapter 13 is threatened by several little-noticed elements of the proposed legislation:

Auto Loans

Under current law, those who file under Chapter 13 must repay car loans only up to the amount the car is worth at the time they enter court, or they risk losing the vehicle. A debtor who bought a $24,000 sport utility vehicle and filed for bankruptcy two years later, for example, might have to pay far less because the vehicle had depreciated.

By reducing what debtors owe auto lenders in this fashion, the law ensures more money for other creditors. And, according to bankruptcy experts, it means that auto lenders are treated on an equal footing with other "secured" creditors — they are promised repayment only to the value of the item they could repossess.

Under the new measure, debtors would have to pay the full amount on any vehicle purchased within 2 1/2 years of bankruptcy, or risk losing the vehicle. The change may seem minor to an outsider, but not to Chapter 13 debtors or bankruptcy judges. "That's going to be a big deal," predicted A. Thomas Small, a bankruptcy judge for the eastern district of North Carolina in Raleigh. It would mean that many repayment plans that work now would fail under the new measure, he said.

Repayment Plans

Under current law, the debtor and his lawyer work out a repayment plan that they think represents the most the debtor can pay and still cover basic living expenses. A bankruptcy judge must eventually approve the plan, which usually has reduced or stretched-out payments to creditors. In the meantime, the debtor immediately begins making payments to a court-appointed trustee.

Under the legislation, many debtors would have to make full payments on such big-ticket items as houses, furniture and appliances. They would have to make those payments directly to the lenders. And at the same time, they would have to start paying the court-appointed trustee for debts to doctors, credit card companies and other unsecured creditors.

Many bankruptcy judges say debtors who come before them often do not have enough income to make both sets of payments.

The result, they warned, would be that many debtors' plans would quickly fail.

Starting Over

Under current bankruptcy law, two guiding principles are that debtors should not be required to repay indefinitely, or they effectively become indentured servants to their creditors, and that they should eventually be given a debt-free "fresh start" on their economic lives.

The legislation would require debtors to agree to repayment plans with a five-year minimum repayment schedule, up from the current three-year minimum. It would also boost the chances that debtors would be required to continue paying some debts even after a plan's successful completion.

Todd Zywicki, a law professor at George Mason University in Virginia, said the shift away from the "fresh start" philosophy is justified because another bedrock American value — that people who incur debts should pay them — is being sullied under the current system.

But many bankruptcy judges and independent experts warn that equally compelling values would be lost if the proposed measure becomes law.

Practically, they warn, debtors who would no longer qualify for Chapter 7 and fail to complete Chapter 13 repayment plans would either have to keep paying creditors indefinitely or drop out.

"If you're confronted with a mountain of debt and have no hope of getting out from under it, you're either going to go underground or turn to crime," said Kenneth N. Klee, a former Republican congressional staffer who was one of the chief authors of the last major bankruptcy law change in 1978 and now teaches law at UCLA.

More broadly, say judges and others, the ability to start over after running into financial problems should not be discounted.

"Loads of people have filed bankruptcy — Mark Twain, Buster Keaton, Walt Disney," said Lundin, the Nashville-based bankruptcy judge. "Bankruptcy is a very American safety net.

"It's part and parcel of the American dream."

Frost'isms

Robert Frost: American Poet: (1874-1963)

   "A jury consists of twelve persons chosen to decide who has the better lawyer."

   "Most of the change we think we see in life is due to truths being in and out of favor."

   "A liberal is a man too broadminded to take his own side in a quarrel."

   "Half the world is composed of those who have something to say but can't; the other half is of those who have nothing to say and keep on saying it." 

"You can't have an {American} dream if there is no accountability."

Spotlight: And now, the European Dream
By Eric Sylvers International Herald Tribune

Saturday, March 26, 2005
Pundit sees end of U.S. as model

MILAN:
He stares you straight in the eyes as he tells you the world can be a better place and that the European Union has the best chance of making it possible. He says it with such conviction that you know he believes it and he gesticulates with just enough emphasis that you find yourself believing it, too.
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So it goes with Jeremy Rifkin, consultant to companies and governments on both sides of the Atlantic, a best-selling author and president of the Washington-based Foundation on Economic Trends research institute. Rifkin's books are as varied as they are plentiful - there are almost 20. But for more than a decade he has railed against globalization and the widening income inequality between rich and poor countries and within the United States.
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"In a frontier economy, unfettered capitalism makes sense," Rifkin said in a recent interview in Turin, where he participated in a conference organized by the World Political Forum to mark 20 years since the beginning of perestroika, the series of liberalization measures undertaken by Mikhail Gorbachev in the final phase of the Soviet Union.
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"But times have changed and Adam Smith's dictum of everybody pursuing their self-interest doesn't make sense anymore now that everything and everybody are interconnected."
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Rifkin embraces that interconnectedness and says Europe should do the same to protect its way of life - long vacations, universal health care, strong pension plans and more developed workers' rights - and avoid joining the United States on the road to increased income inequality and uncontrolled capitalism. He wants a more integrated Europe that uses its massive internal market to dictate its own terms and avoid being drawn into competition with the United States and Asia based on lower wages and fewer workers' benefits.
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Rifkin, 60, was born in Colorado one day before the Soviet Army liberated Auschwitz, a coincidence that does not leave him indifferent. He takes it as a cue to ponder Europe then and now.
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"When I was born, they were still putting people to death in German concentration camps," he said, almost incredulous that the two events could have happened contemporaneously. "That was Europe when I was born."
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His latest efforts, and book, "The European Dream," are dedicated to informing the world that the American Dream is dying and that there is a European Dream, and way of life, that can become a permanent reality.
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This is nothing new for Rifkin, who has been pontificating about the European Dream since his book came out in September. Only now he is getting the ear of European leaders, including Chancellor Gerhard Schröder of Germany, who made reference to Rifkin's work in a recent speech. On March 23, Rifkin spoke at a hearing of the Social Democrats, Schröder's party, in Berlin and then in April he will debate with Foreign Minister Joschka Fischer on the merits of the American and European Dreams.
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If this all sounds a bit too fuzzy and academic for the real world, it is only because Rifkin uses the question of the dreams as a pretext to begin a discussion on where the United States and Europe are headed and what can be done to get them on what he maintains is the right road.
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"Many Europeans think they must give up their way of life and move toward the U.S. model, or else they won't be able to compete," said Rifkin, who has lived the past 34 years in Washington but spends about a third of his time in Europe. "These people say, 'Yes, the American model is brutal, draconian, but we must do it.' I don't see it like that.
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"The American model is not working and globalization under American stewardship has failed totally."
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But looking for answers in Rifkin's vision of the European Dream while trying to make European policies the default for the rest of the world is a cure some economists say will bring more bad than good.
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"Income inequality in the U.S. is a problem, but following European practices is not the answer," said Michael Plummer, an economics professor at Johns Hopkins University's School of Advanced International Studies in Bologna. "Many European policies, including labor laws, actually exacerbate inequality. There is no easy fix to income inequality, and it is naïve to think that Europe has all the answers."
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Rifkin does note that Europe is plagued by its own problems, including bloated welfare programs, a rigid labor market and an aging population. But he says that can be solved, at least in the short term, with more vigorous integration of the European Union.
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That will not be easy, he concedes, because the nation-state remains the paramount governmental institution. But it is possible if the member countries begin to see the region's 25 countries like the 50 states are seen in the United States, he says.
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"Europeans must start comparing Germany to California," Rifkin said. "Both are the biggest states in their region, yet Germany is larger so the EU comes out on top."
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The basic message: If Europeans can get around their fixation with the nation-state, then the EU can compete with the U.S. economy. Rifkin concedes that is a very big "if."
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The American Dream, though tarnished and fading, still holds lessons for Europeans, he said.
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"You can't have a dream if there is no accountability," he said. "You also need optimism, hope, and you need to be willing to take risk. This is what the American Dream still has to offer the Europeans."

Which is It?
Tort Reform or The Insurance Industry

Is the Insurance Industry Full Of It?
Paul Waldman (8:48AM) link

Two new studies give us yet more evidence that the phony tort reform being pushed by the insurance companies will do nothing to bring down the cost of malpractice insurance. All it will do is keep patients who have been harmed from being compensated and increase insurance company profits. First, we get this from Florida:

Florida doctors, particularly those in South Florida, have seen malpractice insurance rates rise an average of 30 percent to 50 percent since 2000. The increase has squeezed doctors and led many of them to go without malpractice insurance.

Doctors' groups and insurers have blamed soaring malpractice insurance premiums in part on an increase in claims and high payouts by sympathetic juries.

But the study -- which was led by Vidmar and Dr. Paul Lee, an ophthalmologist at Duke's medical school -- found that those arguments might not hold true in Florida.

The Duke researchers examined closed malpractice insurance claims filed with the state Department of Health between 1990 and 2003. Florida law requires insurers to submit reports on closed claims.

The study found that the per capita number of malpractice claims in 1990 was about the same as in 2003. It also found that the majority of payouts $1 million or more were not awarded by juries, but the parties settled outside court. Florida juries awarded 60 of the 801 million-dollar payouts made between 1990 and 2003.

"We should be looking at what's happening in the settlement rather than what's happening with the jury," Vidmar said. "The real action is happening in the negotiations rather than in the jury room."

The study also concluded that the average malpractice award went up and more million-dollar payouts were made. But the researchers also found the number of severe cases, which usually result in higher payouts, increased between 1990 and 2003.

The study comes just weeks after University of Texas researchers released a similar study that found malpractice payouts in the state remained fairly stable over the past 14 years.

Another study dovetails with the Duke researchers' findings. Tom Baker, a University of Connecticut professor specializing in insurance law, said he found that the amounts malpractice insurance companies nationwide are paying out for claims have not increased, leading him to conclude that lawsuits aren't the problem.

"When we're getting the same answer using completely different research methods, you can be pretty sure we're right," Baker said of the two studies. "If what you want to do is protect doctors from the next malpractice insurance crisis, tort reform is not going to do it."

A national study, furthermore, found that caps on non-economic (i.e. "pain and suffering") damages did't actually change the amount juries awarded:

An objective analysis of the efficacy of caps on non-economic damages in medical liability cases shows that awards for non-economic damages--pain and suffering, physical impairment, disfigurement, marital losses, anguish, and inconvenience--do not significantly and systematically reduce overall awards to plaintiffs. In fact, limiting non-economic damages may be contributing to a rise in economic damage--lost wages, medical expenses (past and future), rehabilitation expenses, and other financial costs...

Consistent with many studies by other researchers, Sharkey's analysis found that the severity of injury is a key determinant of overall compensatory damages awards: the more severe and permanent an injury, the greater the (statistically significant) effect on a plaintiff's recovery of compensatory damages. The more surprising discovery was that caps on non-economic damages--when controlling for the independent effects of severity of injury as well as myriad litigation, state law, and county demographic variables--have little to no effect on the size of overall compensatory damages in litigated cases.

What this suggests to me is that juries will come to a conclusion about what kind of compensation justice demands for a given case of malpractice. If they can apportion that number between economic and non-economic damages, they'll do that, but if they are restricted to economic damages, they'll just conclude that the economic damages are greater. Telling them they have only one box into which they can deliver the compensation instead of two doesn't change their calculation.

We have to put these findings alongside repeated other studies showing that capping damages doesn't bring down insurance rates, for the simple reason that jury awards aren't what pushed insurance rates up in the first place. When the Clinton boom turned to the Bush bust, the insurance companies lost much of the money they had made in the stock and bond markets, so they raised premiums to maintain their profits. At the same time, they started a PR campaign to convince doctors and the public that the reason rates had gone up was greedy patients.

Every time I write about tort reform and medical malpractice liability, I get letters from doctors telling me how much their premiums have gone up, and what a terrible problem this is. I don't know how to say it any clearer: The problem is not lawsuits and jury awards. If you're looking for somebody to blame for the rising cost of insurance, look at the people who are sending you the bills. It's the insurance companies - they're the ones squeezing you for their profits, they're the ones pushing limits on lawsuits.

And if progressives want to know how to fight the Republicans on tort reform, watch this ad. Here's a print version.

Your Editor Confesses to His Cigar Preferences

While there are literally dozens of cigar brands, and perhaps a hundred or more models of cigars that I've smoked, my preference is still for cigars from Esteli, Nicaragua factories, especially the Perdomo 2, Mayorga Robusto 2000's, and Bahia Gold's.

Just across the border from Esteli into Honduras, there are some tobacco factories turning out great smokes such as Padron 4000's, Camacho, Saint Luis Rey, and C.A.O. Torpedoes. While there is more variance in the Esteli/Danli brands than one sees in DR brands, they make up for the occasional lapses with cigars of real character, and considerable finesse, at a significant cost benefit. To obtain the equivalent of a $2 US Mayorga Robusto from Esteli, you would have to spend well over $5 US for an H. Upmann, or La Gloria Cubana smoke from the Dominican Republic.

If you can afford to spend over $100 for a box of smokes, then sure, the DR's Partagas, Fonseca, Cohiba, and Arturo Fuente brands will have an edge over anything currently available from Nicaragua. But since I light up 4-5 sticks a day, I'm not in the league where DR smokes are in my acceptable price range.

My long term favorite "cheap" cigar also comes from Esteli: the La Finca Joya's which sell for around $1.50 a stick; but is made with a long filler, robust binder, and smooth wrapper. You will not get to show-off the ash on them to the cognoceri; but the taste, flavor, and scent are exceptionally good. So, if you find yourself with a few extra dollars that you wish to pass on, pick up two boxes at your favorite online cigar store, and send one to me.

My main online store is called CMT and is here. Of course you can always pick them up from Thompson Cigar as well.

The Coming Real Estate Bubble Burst?

Trading Places: Real Estate Instead of Dot-Coms
By MOTOKO RICH and DAVID LEONHARDT
NY TImes

Real estate-crazed Americans have started behaving in ways that eerily recall the stock market obsession of the late 1990's.

In Naples, Fla., some houses have been bought twice in a single day, an early-21st-century version of day trading. Buying stocks on margin has morphed into buying homes with no money down. The over-the-top parties of Internet start-ups have been replaced by flashy gatherings where developers pitch condos to eager buyers.

Nobody can know whether the housing boom of the last decade will end as the dot-com frenzy did. But the parallels are raising alarms among many economists, even those who acknowledge that there are important differences between homes and stocks that significantly reduce the chances of another meltdown. For one thing, houses are not just paper wealth: you can live in them.

Still, perhaps the most troubling similarity, some analysts say, is the claim that the rules have somehow changed. In an echo of the blasé attitude that "new economy" investors took toward unprofitable companies, the growing ranks of real estate investors are buying houses they never expect to be able to rent at a profit. Instead, they think the prices of houses will just keep rising.

Indeed, the government reported yesterday that sales of new homes jumped sharply in February, in the biggest monthly increase in four years. A strong economy and an improving job market contributed to the gain. But many buyers were also trying to beat rising mortgage rates, which could eventually cool the market.

Adding to the parallels between stocks and housing, some of the doomsayers from the 1990's have returned with new warnings.

"We're going through something very similar in real estate that we did with stocks," said Robert J. Shiller - a professor of economics at Yale, whose prescient book on stocks, "Irrational Exuberance" (Princeton University Press, 2000), appeared just a few months before technology stocks began their slide. "It's driven by the same forces: that investments can't go bad; that it has the potential to make you rich; that you'll regret it if you don't do it; that it looks expensive but is really not."

The can't-miss aura of real estate has also helped nudge many families to invest more of their personal wealth in real estate by buying more expensive homes and taking on riskier mortgages - much as ordinary workers used their 401(k) plans to bet on company stocks.

There are certainly serious reasons to believe that house prices will not suffer the fate of technology stocks. Not only are houses more tangible, but people do not sell their homes as quickly as stocks, making a panic much less likely. Because of tax advantages, few owners are likely to sell and rent something else simply because local house prices start to decline.

As high as they might seem now on the coasts, home prices nationally have not quite doubled over the last decade; during the 1990's, the Standard & Poor's 500-stock index more than quadrupled.

The question that looms over these books is whether they will suffer the fate of another optimistic talisman, "Dow 36,000" (Times Books), which was a best seller in late 1999. Its authors, James K. Glassman and Kevin A. Hassett, argued that stock prices, despite five years of roaring gains, "could double, triple or even quadruple tomorrow and still not be too high."

The Dow Jones industrial average hovered around 11,000 when "Dow 36,000" was published. It dropped below 8,000 in 2002 and closed at 10,442.87 yesterday.

Another lingering echo of the stock market boom is the role of the Federal Reserve, the nation's central bank. In the 1990's, the Fed kept interest rates relatively low because it saw little risk of rising inflation despite a booming economy, helping feed a fever for stocks. Alan Greenspan, the Fed chairman, famously asked aloud in 1996 whether "irrational exuberance" was driving the stock market, but then backed off from second-guessing investors.

After the market plunged and the economy weakened, the Fed pushed interest rates down to 50-year lows, helping to fuel the housing boom. This month, Mr. Greenspan made some comments about housing that offered a faint echo of his 1996 musings.

"Analysts have conjectured that the extended period of low interest rates is spawning a bubble in housing prices in the United States that will, at some point, implode," Mr. Greenspan said in a speech in New York, adding that real estate speculation had shown a "marked increase." Nevertheless, he said he did not expect a "destabilizing" drop in prices, in part because home prices across the country have never fallen significantly.

But by one measure, houses in at least a few metropolitan areas are as expensive as telecommunications stocks were in 1999, relative to their underlying value.

The average house in San Jose, Calif., costs 35 times what it would cost to rent for a year, according to Economy.com, a research company. In New York and West Palm Beach, this ratio - a rough equivalent of the price-earnings ratio for stocks - is almost 25.

In March 2000, the price-earnings ratio of the Standard & Poor's 500 - the combined price of the stocks, divided by their profits per share - peaked around 32, and it was briefly even higher for telecommunications stocks. The S.& P.'s P.E. ratio has since fallen to around 20.

Recap: The Purpose-Driven Life

Book that freed a hostage was already making waves
'The Purpose-Driven Life' has spread the ideas of a California preacher everywhere from the Chinese government to the hands of Fidel Castro.
By Jane Lampman | Staff writer of The Christian Science Monitor

When ex-hostage Ashley Smith appeared on TV and told how she gained her freedom - and her captor's surrender - by reading to Brian Nichols from "The Purpose-Driven Life," her stirring story sent thousands off in search of the book.

Author Rick Warren, though, didn't really need her help. His work was already the bestselling nonfiction hardback in US history. Since the book's release in October 2002, people apparently hungry for a clearer sense of purpose and direction have snapped up more than 22 million copies.

Indeed, the story behind "The Purpose-Driven Life" is every bit as remarkable as that of Ms. Smith and the book's recent spurt in sales. It's the tale of a 20-something pastor who settled in a community full of "the unchurched," and, beginning in 1980, built Saddleback Valley Community Church in southern California into one of the largest megachurches in the US. And of how his paradigm for personal and church growth has since influenced tens of thousands worldwide.

Rick Warren has been a guest at two state dinners in China, where he told the country's leaders they couldn't have real economic progress without the underpinnings of freedom of religion and information. Fidel Castro has asked for an autographed copy. In the Philippines, the government wants to make use of the study program linked to the book - called 40 Days of Purpose.

Management guru Peter Drucker calls Warren "the inventor of perpetual revival" and his organizational model "the most significant sociological phenomena of the second half of [the 20th] century."

Yet there's also criticism that the purpose-driven approach reflects too much of a corporate mindset, and that its seeker-sensitive model goes too light on the demands of Christian living.

Despite a desire for a low profile (he gives few interviews), Warren is thrust increasingly into the spotlight. During a recent stop in Boston, he spoke at Harvard University and at a breakfast of the Marketplace Network - to some 600 evangelical business leaders. The tall, solid, sandy-haired pastor revealed his penchant for simple, straightforward language flecked with humor and clarity, and free of religious jargon.

"I'm more interested in [fostering] a relationship with God than a religion," he said. And he challenged the idea of just looking within for life's answers.

"I didn't create me, so I can't possibly tell myself what my purpose is," he told the curious, but somewhat skeptical Harvard crowd.

As a teenager in Northern California, the son of Baptist missionaries already hoped to help friends find God, starting a Christian club and newspaper and holding rock concerts after school. As a pastor fresh from divinity school, he shied from a traditional assignment to form a church designed for those who didn't attend church.

Going door-to-door for 12 weeks in his new California community, Warren says he found the main reasons people strayed from church were not theological: "Church members are unfriendly to visitors;" "Sermons are boring and don't relate to my life;" "They are more interested in your money than in you as a person."

So he designed his church services in response to those concerns. And, intent on showing that church was not about a building, he refused to build a church structure for 15 years, until the membership reached 10,000. (Now more than 20,000 attend each week.)

As Warren's stature grew, he declined a television ministry and focused instead on teaching local pastors of many denominations how to renew their churches. "Churchianity and Christianity are not the same thing," he says. And the great need is "to move churches from self-centeredness to selflessness."

Today, he also has a global Internet community that mentors more than 100,000 pastors around the world, and he travels abroad "planting" new churches.

Yet whatever the task, the laidback pastor - who at Saddleback gives 15-minute sermons attired in Hawaiian shirt and khakis - always draws on the same direct message: "if you turn your life over to [God], He'll do amazing things."

"The Purpose-Driven Life: What On Earth Am I Here For?" is an antiself-help book, taking the reader on a personal spiritual journey. The book explores God's intent for each of us, the essential role of a church community, the need to become like Christ, the importance of serving God and others and undertaking mission. Warren's church-growth strategy focuses on the same principles of worship, growth, community, service, and outreach.

Grace Chapel in Lexington, Mass., participated in the "40 Days of Purpose" program a year ago.

"People were amazed at how ready their friends and neighbors were to talk about spiritual things and to read the book," says the Rev. Bryan Wilkerson, senior pastor. Some churches say the program helped them grow by 30 percent or more.

But Warren's "purpose-driven" approach also has its critics. Some take issue with what they call watered-down theology (light on repentance and sin); others criticize the focus on numbers and a "market-driven methodology." ("The Purpose-Driven Life" was launched with a mass-marketed CD of songs, a radio campaign, and an invitation to churches to join the 40-day program.)

"It's been somewhat maligned, but it provides a necessary corrective to trends in conservative Christianity such as the prosperity gospel," says Scott Thumma, of Hartford Seminary in Connecticut.

Still, some younger pastors say its appeal is more attuned to baby boomers than to young people, who want more theological questioning.

Saddleback's pastor says that the message of Christianity stays the same and only the methods need to change. With his new-found affluence and influence, however, he's also had to take stock personally. To show he is not looking for money, he says, he has repaid all his salary of the past 25 years, and is tithing 90 percent and living on 10 percent of his income.

Praying to know what to do with his growing influence (he's considered second only to Billy Graham in his impact on churches), Warren says God woke him up: "He told me to use my influence for those who have no influence."

When Ashley Smith picked up "The Purpose-Driven Life" and read to her captor, Warren was in Africa, working with pastors on a new plan to strengthen churches there and meet the dire needs their people face.

News Flash ! "Local Couple Weds Today", more News at 10, on Fox. Stay Tuned... 

Finally ! Freecycle Arrives to Your Locale !!

Freecycling: Waste Not, Want Not
E-Magazine Online
by Miranda Spencer
Mar. 2005

Thanks to an international network of local volunteers, now there’s a cheap and convenient place to dispose of useful junk while promoting re-use: the Internet. Freecycle.org is a website that links people who want to discard household belongings to people in their area who want or need them. The only rules: everything offered must be free, legal and appropriate for all ages—sorry, no bongs or porn.

Freecycling combines the age-old barter process with online convenience.

With a single e-mail, anyone can join a freecycle group and begin posting donations or requests. A match is made—often within minutes—when someone replies, then giver and taker privately arrange the exchange. Among the most popular discards are items not usually accepted for recycling or routine pickup, including bulky furniture and appliances, and obsolete durable goods, such as baby clothes and computers.

This cyber flea market claims more than half a million members in nearly 1,700 cities and towns from Nebraska to Nepal, and is growing. List moderators note that participation cuts across all socioeconomic groups, especially in large U.S. and Canadian cities. The largest group, in Portland, Oregon, has nearly 11,000 members.

“There is this groundswell of people saying we don’t have to have all newest, latest greatest thingamajigs,” says Deron Beal of Tucson, Arizona, a self-described “tree hugger” with an MBA who created the concept in May 2003 and still oversees the site. “Clearly, we’ve tapped into a desire to reduce waste at the grassroots level.”

Beal, a part-time manager for a group that sends workers to pick up recyclables from businesses not served by the city’s curbside program, originally created the nonprofit website to streamline the task of finding charities to accept unwanted equipment. Within a month it had 200 members; when he added instructions on how to set up the system elsewhere, it quickly proliferated.

Freecycle is filling a waste-management niche, according to Wilson Hughes, waste reduction planner for the City of Tucson and the former co-director of the Garbology project at the University of Arizona. “We encourage it because it’s going to keep stuff out of the landfill,” he says.

Though no one can quantify the total volume of refuse Freecyclers have diverted, Beal’s conservative calculation is 33 tons per day. Philadelphia’s 4,400-member Phillyfreecycle tracked transactions by category and approximate weight and discovered it is keeping 15 tons of trash out of the waste stream every month. That’s no small thing considering that, according to a 2001 report from the EPA’s Office of Solid Waste, some 229 million tons of municipal solid waste is generated in the United States annually.

Last fall, Charlotte Hess, co-moderator of suburban Brevard County, Florida Freecycle, helped organize a public, freecycling “Free 4 All” to help residents (including herself) refurbish homes devastated by hurricanes. “Freecycle cuts out the middle man,” she observes.

There are still kinks to be worked out, such as purging spammers and the occasional forbidden items (like guns) from the lists. Beal also hopes to see Freecycle adopted widely in the developing world, where there is already more reuse than in the West.

DeLay is a Real Piece of Work !!

Tom DeLay: "It Is More Than Just Terry Schiavo"
Transcript: The embattled House Majority Leader finds parallels between Terri Schiavo's case and his own
By KAREN TUMULTY
Wednesday, Mar. 23, 2005
Last Friday, as the House and Senate were working out their differences over legislation to stop the removal of Terri Schiavo's feeding tube, embattled House Majority Leader Tom DeLay discussed the issue at a gathering of the Family Research Council at the Willard Hotel in Washington. In the speech, he drew parallels between Schiavo's situation and his own as he faces a barrage of ethics allegations, and he implicitly asked the conservatives to come to his defense as they have Schiavo's. A recording of the speech was supplied to TIME by Americans United for Separation of Church and State, an advocacy group:
<------------------------------------->

"It is more than just Terri Schiavo. This is a critical issue for people in this position, and it is also a critical issue to fight that fight for life, whether it be euthanasia or abortion. I tell you, ladies and gentlemen, one thing God has brought to us is Terri Schiavo to elevate the visibility of what's going on in America. That Americans would be so barbaric as to pull a feeding tube out of a person that is lucid and starve them to death for two weeks. I mean, in America that's going to happen if we don't win this fight.

"And so it's bigger than any one of us, and we have to do everything that is in our power to save Terri Schiavo and anybody else that may be in this kind of position, and let me just finish with this:

"This is exactly the kind of issue that's going on in America, that attacks against the conservative moment, against me and against many others. The point is, the other side has figured out how to win and to defeat the conservative movement, and that is to go after people personally, charge them with frivolous charges, link up with all these do-gooder organizations funded by George Soros, and then get the national media on their side. That whole syndicate that they have going on right now is for one purpose and one purpose only, and that is to destroy the conservative movement. It is to destroy conservative leaders, and not just in elected office, but leading. I mean, Ed Feulner, of the Heritage Foundation today was under attack in the National Journal. This is a huge nationwide concerted effort to destroy everything we believe in. And you need to look at this, and what's going on and participate in fighting back.

"You know, one way they stopped churches from getting into politics was Lyndon Johnson, who passed a law that said you couldn't get in politics or you're going to lose your tax-exempt status, because they were all opposed to him when he was running for President. That law we're trying to repeal. It's very difficult to do that, but the point is, when they can knock out a leader, then no other leader will step forward for a while, because they don't want to go through the same thing. If they go after and get a pastor, then other pastors shrink from what they should be doing. It forces Christians back into the church. That's what's going on in America. The world is too bad and I'm going to get inside this building and I'm not going to play in the world. That's not what Christ asked us to do.

"And so they understand that. It is a political maneuver, and they are going to try to destroy the conservative movement, and we have to fight back, so please, this afternoon, each and every one of you, if you know a senator, give them a call. They'll say our bill can pass in the House. Tell them, okay, your bill is fine, but the House bill is better, and I want the House bill. Particularly if you know Democrats. Don't let them get off the hook by hiding behind one House and the other is adjourned. We can do anything we need to do to pass any bill that we need to pass."

Virus New to Angola Kills 95; Travelers Told to Avoid North
NY Times
By MICHAEL WINES
Published: March 24, 2005

JOHANNESBURG, March 23 - Health officials urged travelers on Wednesday to avoid Uige Province, in northern Angola, after the World Health Organization identified the Marburg virus as the source of an epidemic that has killed at least 95 Angolans since October.

The Marburg virus, a close relative of Ebola, has been identified in Uganda, Kenya and Congo, where the last major outbreak was recorded from 1998 to 2000. But it had not been found before in Angola.

In recent months, tens of thousands of refugees from Angola's 21-year civil war have passed through Uige, returning from neighboring Congo under a repatriation program sponsored by the United Nations. United Nations officials suspended the program last week as evidence of the disease spread.

Three in four Angolan victims were 5 or younger, officials said, and some of the adults were health care workers who had come in direct contact with the bodily fluids of infected persons. At least seven more Angolans are infected with the virus, officials said.

The virus causes a high fever, diarrhea, vomiting and extensive hemorrhaging in the lungs and digestive tract. There is no cure or effective treatment. Victims in the Angola outbreak have generally died within a week of the onset of symptoms, the World Health Organization said Wednesday. The incubation, from infection to onset of the illness, is 5 to 10 days.

The virus was first discovered in 1967, when monkeys imported from Uganda infected laboratory workers in Marburg and Frankfurt, Germany, and Belgrade, Yugoslavia. It is spread largely by direct contact with infected people, and human outbreaks are exceedingly rare.

The latest instance is rivaled only by the 1998 epidemic in Congo, which infected 149 people and killed 123, mostly miners at Durba.

At a news conference on Tuesday, Angolan and United Nations health officials said the virus was first detected in the central hospital in U�ge, but had since spread to villages as far as 31 miles away. The government has begun a public awareness campaign stressing the need for cleanliness to combat the spread."

The New York Times Op-Ed: Frank Rich - The God Racket, From DeMille to DeLay
"We must wait for the court's ruling on whether the relics of a Hollywood relic breach the separation of church and state. Either way, it's clear that one principle, so firmly upheld by DeMille, has remained inviolate no matter what the courts have to say: American moguls, snake-oil salesmen and politicians looking to score riches or power will stop at little if they feel it is in their interests to exploit God to achieve those ends. While sometimes God racketeers are guilty of the relatively minor sin of bad taste - witness the crucifixion-nail jewelry licensed by Mel Gibson - sometimes we get the demagoguery of Father Coughlin or the big-time cons of Jimmy Swaggart and Jim Bakker.

The religio-hucksterism surrounding the Schiavo case makes DeMille's Hollywood crusades look like amateur night. This circus is the latest and most egregious in a series of cultural shocks that have followed Election Day 2004, when a fateful exit poll question on 'moral values' ignited a take-no-prisoners political grab by moral zealots. During the commercial interruptions on 'The Ten Commandments' last weekend, viewers could surf over to the cable news networks and find a Bible-thumping show as only Washington could conceive it. Congress was floating such scenarios as staging a meeting in Ms. Schiavo's hospital room or, alternatively, subpoenaing her, her husband and her doctors to a hearing in Washington. All in the name of faith."

Trial By Legislation
Court Watch
March 19, 2005

(CBS) Attorney Andrew Cohen analyzes legal issues for CBS News and CBSNews.com. After lurking as a local and regional issues for years, the Terri Schiavo case suddenly has mushroomed into a grand constitutional showdown with national implications. Because legal and political developments are occuring at an exceptionally fast rate, and because the dynamics of the current legal dispute are so extraordinary, it's worth a quick look at some of the fundamental questions that are likely to arise over the next few days, as well as my best guesses as to what some answers will be.

QUESTION: First, some context and perspective. How unusual is this scenario, this mix of legal and political agendas, this confrontation between Congress and the courts over the outcome of a single case?

ANSWER: It is so rare that you probably have to go back to the Civil Rights era of the 1950s and 1960s to find a similar situation where there was such a blatant power struggle between the federal government and a state and between politicians and judges. Even the Florida Recount struggle that tainted the presidential election of 2000 did not rise to this level of open combat between the two branches of government. And I say that, and everything else below, acknowledging at the outset that this is a tragic case in which there are, or should be, no winners or losers regardless of the outcome. It is so sad that a private family drama has to play itself out on the most public of stages, with people in critical moments of their lives using and being used by politicians to further one agenda or another.

QUESTION: Step off the soapbox for a minute and give me the facts. So Congress is on the verge of passing legislation about the Schiavo case that President Bush is almost certain to sign into law. First, what does the legislation actually say?

ANSWER: The draft legislation passed around Saturday evening, the "compromise" that legislators say they will enact and then present to the President, starts off with the words "for the relief of the parents of Theresa Marie Schiavo." The bill would give the U.S. District Court for the Middle District of Florida jurisdiction "to hear, determine, and render judgment on a suit or claim by or on behalf of Theresa Marie Schiavo for the alleged violation of any right... under the Constitution or laws of the United States relating to the withholding or withdrawal of food, fluids, or medical treatment necessary to sustain her life." But it would specifically not "confer additional jurisdiction" on courts to hear disputes about assisted suicide or "create substantive rights not otherwise secured" already in federal or state law.

The proposed law also gives Terri Schiavo's parents procedural help. It gives them standing to start a case on behalf of their daughter in the Middle District of Florida and it requires the federal trial judge to determine "de novo any claim of a violation of any right" Terri Schiavo may have. It also requires the federal courts to push the case to the front of the litigation line and requires the federal courts to issue "such declaratory and injunctive relief as may be necessary to protect the rights of" Schiavo." The law gives Schiavo's parents, or "any other person who was a party to State court proceedings relating" to the case, to file a lawsuit within 30 day.

QUESTION: What does all of that mean? Explain it to me like I'm a fifth-grader.

ANSWER: It means that Congress has literally made a "federal case" out of the Schiavo dispute. It means that Schiavo's parents now have a right to assert essentially the same claims they already have asserted in state court in Florida in a new forum-- federal court-- and applying federal constitutional principles instead of state constitutional principles. It means that the federal trial judge who presides over the case must review all of the facts and law from scratch, without deferring to the legal judgments and factual conclusions the Florida courts have reached after many years of litigation-- and 21 separate, written, published rulings in the case. It means that the federal trial judge may order the tube reinserted into Terri Schiavo almost immediately upon getting the case. It means that Congress has interjected itself into a state law dispute, at the end of that dispute, on the side of one litigant over another.

QUESTION: Got it. Let's assume the President signs the legislation on Sunday night. What happens next?

ANSWER: Next there would be a race to the federal courthouse. Terri Schiavo's parents would file a lawsuit seeking to exercise the rights that Congress just gave them. And Michael Schiavo, Terri's husband, would go into federal court and ask for a ruling that declares the Congressional effort unconstitutional. It doesn't really matter which side gets to court first, though. The cases, the claims, almost certainly would be consolidated anyway before the same federal judge. And then the judge would hold an initial hearing before determining what to do next.

QUESTION: What's the time frame for all of this? How soon will everyone be in court?

ANSWER: It will happen quick-- recount-like, quick. If the President signs the bill on Sunday, I suspect we will see some sort of court hearing by Monday afternoon at the latest. Somewhere, in the Middle District of Florida, there is a federal judge whose name in the next few days is going to be well-known to everyone following the case.

QUESTION: So what happens at the hearing?

ANSWER: Plenty. Terri Schiavo's parents presumably will immediately ask the judge to reinsert their daughter's feeding tube until the federal case is resolved. Michael Schiavo presumably will ask the judge to immediately declare the law void. If Michael Schiavo prevails, the case would immediately be appealed to the 11th Circuit U.S. Court of Appeals and then to the United States Supreme Court which, for the first time in this case, would be looking at the issues involved with some Congressional guidance on the matter. But even if Terri Schiavo's parents were to prevail and get the feeding tube initially reinserted-- a decent bet-- the case would move very quickly. First, the federal judge would have to decide the merits of Michael Schiavo's arguments. If those arguments don't prompt the judge to reject the law, then the case would move to the underlying issue of whether Terri Schiavo's constitutional rights are being deprived.

QUESTION: Let's start first then with Michael Schiavo's expected arguments. Does he stand a chance of getting this law declared unconstitutional?

ANSWER: Absolutely he has a chance. There are plenty of serious constitutional issues raised by this law. First, it applies only to one family and thus may create equal protection problems-- after all, why shouldn't other people who want to keep their loved ones on life support over the objections of others not also received tailor-made legislation? Second, as Harvard Law School Professor Laurence Tribe points out, it arguably deprives Terri Schiavo herself of the constitutional right to "halt the unwanted bodily invasion by a tube" and does so without any due process to her (and her husband and guardian). Third, it raises big separation of powers problems and also federalism concerns-- the Supreme Court in particular hasn't been receptive to federal intrusion into matters normally resolved by the states-- matters like guardianship laws.

QUESTION: So you are saying that it is not a slam dunk that this effort by Congress ultimately will succeed even in getting another round of substantive hearings on the merits of Terri Schiavo's rights?

ANSWER: That is exactly what I am saying. And I will go a little further. I'm also saying that there are probably some smart folks on Capitol Hill who are supporting this legislation knowing that ultimately the courts will strike it down. That way, being the politicians that they are, they will be able to blame the heartless judiciary for the result and still will be able to say to their constituents that they tried their best. It is the politics of cynicism at its very best (or very worst).

QUESTION: Okay, settle down. Now take me through the scenario if the law initially is declared constitutional.

ANSWER: Assuming the law is declared constitutional, and Terri Schiavo's lifeline is returned to her, there likely would be a series of quick hearings on the merits of her claims. It's likely that any federal judge willing to declare the law constitutional and return Schiavo to the status quo ante (the tube is back in) also would be willing to hold an evidentiary hearing on her parents' claims that depriving her of her feeding tube violates her constitutional rights. Such a hearing would likely be rather complicated, with testimony from doctors and others about Schiavo's condition. In essence, the hearing would be a lot like what Michael Schiavo and Terri Schiavo's parents already have gone through in state court in Florida. And, remember, those state-court hearings ultimatley resulted in a finding-- supported by two, neutral, court-appointed physicians, that Terri Schiavo is in a "persistent vegitative state" with no hope of recovery and that she had expressed a wish to have medical treatment withheld in these circumstances.

QUESTION: So the years of state-court litigation would be wiped off the map, as if it never took place?

ANSWER: If Congress gets its way, yes. That's why the legislators in Washington put the words "de novo" into the legislation, so that the federal courts would not be bound by anything the state courts in Florida had done. Terri Schiavo's parents still would have to convince the federal judge that her rights are being violated, and they would have to have the medical evidence to back that up (which they did not have in the state case), but the state case would not act as a mandated precedent in federal court.

QUESTION: What does that concept do the regular give and take between the court systems, the idea of comity and cooperation between judges?

ANSWER: It destroys it. But that's the whole point of this Congressional action. Not liking a particular result in a case that has been litigated fully and completely by a court with competent jurisdiction, Congress now has said that the game must be re-done with new rules that heavily favor one side over the other. The implications of this move are astonishing. Just think about it. Anytime Congress doesn't like the result in a particular case, it could swoop in and call a "do-over," which is essentially what this legislation represents. And this from a Congress that has for a decade or so tried to keep all sorts of citizens-- including disabled employees-- out of federal court. If this law is declared valid, no decision in any state court in the country will be immune from Congressional second-guessing. It would throw out of whack the entire concept of separation of powers. The constitutional law expert Tribe calls it "trial by legislation" and he is right.

QUESTION: You are getting agitated again. Doesn't the legislation specifically say that it does not "constitute a precedent with respect to future legislation, including the provision of private relief bills"?

ANSWER: Yes, it says that. But so what. It said that the last time Congress did this and it didn't stop Congress from doing this now. Look, there is no other way to put it: this is the most blatant and egregious power-grab by one branch over another in my lifetime. Congress is intruding so far into the power of the judiciary, on behalf of a single family, that it is breathtaking. It truly will be fascinating to see how federal court judges react to this-- whether they simply bow down to this end-run or whether they back up their state-court colleagues. And it will be interesting in particular to see what the Supreme Court does with this case. Even the conservatives on the High Court-- and the Chief Justice in particular-- must be concerned about the precedent this sort of legislation would set.

QUESTION: Has the Supreme Court looked at this issue before?

ANSWER: Yes and no. For example, in 1989, the Justices decided the Nancy Cruzan case out of Missouri. There was no intra-family fight in that case. Like Terri Schiavo, Cruzan was in a persistent vegitative state. Cruzan's parents wanted to take her off life-support but the Missouri courts said that they could not-- that there was no "clear and convincing evidence" that Cruzan would have wanted her feeding tube removed. In the Schiavo case, the Florida courts have found that Terri Schiavo indeed declared her wishes to her husband and that he is entitled to see them carried out. So the Cruzan case would be a guiding precedent but it would not automatically resolve the matter in favor of Terri Schiavo's parents. One question certainly for the Justices-- and the federal trial judge who first would look at the case-- would be how strong the proof is that Terri Schiavo would have wanted to be taken off life-support. It's possible, I suppose, that this proof was good enough for legions of Florida judges but not good enough for the federal judiciary.

QUESTION: What do you think is going to happen? Best guess.

ANSWER: I honestly don't know. I think the law, once passed, probably will result in the re-insertion of Terri Schiavo's feeding tube. The question is for how long. If Michael Schiavo prevails, it could be a matter of days. If not, it could be a longer. In the end, however-- and here I truly am speculating-- I don't see even the federal courts stripping Michael Schiavio of his power to make the tough call he has made. Terri Schiavo's parents and their supporters say that she has been deprived of her due process rights. But I think it is slightly more likely than not that the federal courts will declare that the Florida courts gave all the parties in this sad case extensive rights and opportunities to fairly litigate their dispute.

QUESTION: Any final thoughts.

ANSWER: Yes. If there is a lesson in all of this ugliness, in all of this unseemliness, it is that everyone who can should have a "living will," a clear, unambiguous, direct declaration of what you want done (or not done) in case you reach the point that Terri Schiavo sadly has reached. Living wills are not expensive, they don't take a long time to complete, and they can help guide families during the worst moments of their lives. It's funny, if Congress in the name of Terri Schiavo had passed legislation aiding in the effort to get people to make living wills it would have earned my praise today instead of my scorn.

The Politicization of Terri Schiavo


American Progress Action
Fund: March 21, 2005

Just like countless other families, the family of Terri Schiavo has struggled for years with the intensely difficult decision of how to match her course of treatment to her wishes.  Now President George W. Bush, Rep. Tom DeLay (R-TX) and Sen. Bill Frist (R-TN) are using the tragic case of Schiavo – a severely brain-damaged woman who has been incapacitated for the past 15 years – as an opportunity for political grandstanding. A memo, which the AP reports was distributed by Senate leadership to right-wing members, called Schiavo "a great political issue" and urged senators to talk about her because "the pro-life base will be excited." Over the weekend, DeLay and Frist held special sessions of Congress to facilitate passage of a bill that would allow a federal court to overturn years of Florida jurisprudence – encompassing seven courts and 19 judges – and intervene in the Schiavo case. (Underscoring that this was about the politics of the Schiavo case and not policy, the bill was written explicitly to apply only to Terri Schiavo.) President Bush played his part in the spectacle, flying to Washington from his ranch in Crawford to sign the bill, even though waiting a few hours for the bill to be flown to him would likely "have made no difference in whether Ms. Schiavo lives."

BUSH SIGNED LAW ALLOWING HOSPITALS TO DISCONTINUE LIFE SUPPORT: In a statement released early this morning, President Bush said he will "continue to stand on the side of those defending life for all Americans." But the facts make it hard to believe that Bush is standing on principle. In 1999, then Gov. Bush signed a law that "allows hospitals [to] discontinue life sustaining care, even if patient family members disagree." Just days ago the law permitted Texas Children's Hospital to remove the breathing tube from a 6-month-old boy named Sun Hudson. The law may soon be used to remove life support from Spiro
Nikolouzos, a 68-year-old man. Bush has not commented on either case.

DELAY VOTED TO SLASH FUNDING THAT PAID FOR SCHIAVO'S CARE: At every opportunity, Tom DeLay has sanctimoniously proclaimed his concern for the well-being of Terri
Schiavo, saying he is only trying to ensure she has the chance "we all deserve." Schiavo's medications are paid for by Medicaid. Just last week, DeLay marshaled a budget resolution through the House of Representatives that would cut funding for Medicaid by at least $15 billion, threatening the quality of care for people like Terri
Schiavo. Because the Senate voted to restore the funding, DeLay is threatening to hold up the entire budget process if he doesn't get his way.

FRIST FIGHTING AGAINST FINANCIAL RECOVERY FOR PEOPLE LIKE SCHIAVO: Bill Frist has been positioning himself in the media as a champion for Schiavo's interests. Yet, much of Schiavo's medical care has been financed by $1,000,000 from two medical malpractice lawsuits Schiavo won after her heart attack 15 years ago. Frist has been leading the charge to limit recovery for people like Schiavo who are severely debilitated. If Frist is successful, people like Schiavo would not be able to recover any punitive damages no matter how severe their injuries.

Eschaton Blogspot Posting

Another Scary Precedent

One element of this Schiavo circus that hasn't yet gotten a lot of attention is the fact that we have a sitting member of Congress using his bully pulpit and media access to target and attack the character of someone who is mostly a private citizen and who has not been accused of or convicted of any crime. I'm sure this isn't entirely without precedent, but the level of volume and personal vitriol which Tom DeLay has directed at Michael Schiavo should give us all pause, as should the fact that the media is treating it as a perfectly ordinary thing. It's one thing to have Harpy Grace flaying you on CNN, it's another thing when Congressman DeLay feels it's a part of his job description."

Old Navy Guy Blog Posting on Eric's Altercation

MSNBC - Altercation Posting by Nicholas Pisano

Hometown: Destin, FL

Old Navy guy again. I held onto this comment for a few days to reflect. I have to tell you that it kills me to read the travails of Major Bateman and those with him. These young people are doing their job -and that is really the only way for them to look at it- but more on that point in just a moment. You can't really question too finely the soldiers or commanders on the ground in a situation where they are constantly under fire. The rules of engagement get very dicey where the enemy varies his tactics on a daily basis in response to the doctrine in place. The guys I fault the most are the senior commanders and politicians who put them there -not to mention the electorate that supports the prosecution of a lawless foreign policy.

Concerning the Major's specific comments, though, you really have to question how well 'disciplined' anyone can be in that situation. I write this just after Berlusconi has come out to say that the car did indeed stop but that the troops fired anyway -we'll see how the investigation shakes out. But there is the almost weekly story of civilians, including women and children, killed by violating the check points. Common sense will tell you that if the armed and trained military guy has a high 'pucker factor' on Route Irish wouldn't you think other non-military types may share that pucker factor and not be inclined to immediately stop at the sight of someone with a weapon?

On a tactical and operational level we sent these young men and women into a very tough situation based on a lie and self-delusion. The lie is well documented and the self-delusion, especially after the round of non-drug induced craziness on the part of the neo-cons over Lebanon, is grotesquely altering the character of what we are as a nation. It's apparent that conservatives and all those armchair warriors 'support the troops' as long as they say what conservatives want them to say regardless of the reality of the situation, that they go to war unprepared for the type of warfare they are asked to wage regardless of the need (especially if it means paying taxes) and that, after all, they are a professional military, get paid (minimally) and should just do what they're told -the equivalent (albeit larger and more sophisticated) of a uniformed security force for the country club community.

What troubles me is that even liberals don't necessarily get it, feeling that they need to make the obligatory bow to the military and to 'support the spread of democracy.' Michael Shellenberger, in an interview in the February issue of The Sun said that he has no problem with the United States being an imperial power as long as it spreads the right values. I respectfully disagree and here I return to first principles.

I do not think that we should go about, in the words of John Quincy Adams, 'abroad in search of monsters to destroy' in the process of prosecuting fanciful preventive wars that only serve to centralize power among elites and send young men like Major Bateman on a fool's errand. I can read Stupid's response in charging me with isolationism already but what I am advocating is just the opposite and I contend that it is unilateralism and the concept of preventive war that is in the tradition of the isolationists. (Hat off to Arthur Schlesinger for making this case in his latest book.)

But I base my disagreement on two premises that I think are being proven correctly:

1. The unilateralist/preventive war philosophy directly threatens democracy and liberty here at home by elevating militarism and the capriciousness of the executive (which then selects its elites to reward at the expense of civil society).

2. This policy isolates us from the world and leaves us to accept childish beliefs that explain the 9-11 attacks in terms of the terrorists attacking us because they 'hate our freedoms.' Modern terrorism as it is defined (loosely) is the very threat that requires engagement with the world -that is, multilateralism and international cooperation.

I dedicated myself to the profession of arms for most of my life and so I do not believe I can be accused of opposing its use when necessary. But military force is a blunt weapon, despite the illusions of minimized 'collateral damage' and other euphemisms used on a populace removed from the reality of the conflict.

You have dedicated a great deal of space in your articles to urge an understanding of the Palestinian issue and you have suffered more than a little slander for it. The position you urge in the end, I am confident, is the only reasonable one that will eventually win the day. The true enemy of civilization is fanaticism for a cause regardless of where it resides."

Just Another $510 Million Fine for Corporate American Titan: Time Warner Inc.

Time Warner and S.E.C. Settle for $300 Million
By GERALDINE FABRIKANT
NY Times
Published: March 22, 2005

Time Warner Inc. has agreed to pay $300 million to settle a complaint by the Securities and Exchange Commission that the company's AOL unit overstated revenue for nine quarters.

Time Warner had initially settled with the S.E.C. staff in December. Yesterday's final settlement with the S.E.C.'s commissioners neither admitted nor denied the allegations in the complaint, the S.E.C. said.

At the same time, the company agreed to have an independent examiner, who would either be an accountant or would hire one, determine if the company's historical accounting for some transactions was in accordance with generally accepted accounting principles.

The examiner is to report findings to the board within 180 days. Those findings could force the company to further rewrite historical results.

Yesterday's settlement mirrors a similar settlement reached in December that resulted from a separate investigation by the Justice Department.

The total cost of the two agreements is $510 million, but the settlements are slightly different. For example, the Justice Department's settlement required that AOL hire a person in its offices to monitor its accounting practices for at least 2 years and possibly as long as 30 months.

As part of yesterday's settlement, Time Warner has agreed to restate earlier advertising revenues by $500 million and to reflect more accurately the consolidation of AOL Europe, among other adjustments.

In a separate administrative action, three Time Warner executives reached settlements with the S.E.C. in which they neither admitted nor denied wrongdoing for improper accounting related to $400 million that Bertelsmann paid Time Warner. They are the chief financial officer, Wayne H. Pace; the controller, James W. Barge, and the deputy controller, Pascal Desroches.

The S.E.C. and the Justice Department could still file additional complaints against individuals involved in AOL's accounting scandals, and yesterday's settlement did not rule out further actions from both agencies related to other individuals. Yesterday, Linda Chatman Thomsen, deputy director of the S.E.C.'s division of enforcement, said, 'We have settled with Time Warner and three others, but the investigation is continuing.'

In December, Paul J. McNulty, the United States attorney for the Eastern District of Virginia, who is the lead government prosecutor in the criminal case, said the investigation was continuing and could result in additional criminal charges.

Still, the settlement puts a difficult period behind Time Warner. While under investigation, it was barred from some financial activities, including issuing stock. The chief executive, Richard D. Parsons, is eager to acquire more cable systems and has made a joint bid with the Comcast Corporation for the cable operations of Adelphia. The settlements allow the company to pursue those bids.

Among the transactions that raised questions with the S.E.C. was one in which Bertelsmann made $400 million in payments for ads on AOL. The commission said the money was used to make AOL's revenue look greater, when the money should have been accounted for as part of AOL's deal to buy out Bertelsmann's stake in AOL Europe.

The commission also said AOL misstated the number of its subscribers, and engaged in 'round-trip' transactions, paying smaller companies so they would have the money to buy advertising on AOL. Although each company presented these deals as separate, the aim was to inflate AOL's revenue, the S.E.C. said."

Rep. Henry A. Waxman's Statement about Congressional subpoenas in the Schaivo case

March 18th, 2005

"These subpoenas are a flagrant abuse of power. Congress is turning the Schiavo family's personal tragedy into a national political farce. The committee has no business inserting itself in the middle of an excruciating private family matter.

These subpoenas are unenforceable. A committee subpoena must be used to gather information. But these subpoenas are dictating the medical care that Ms. Schiavo receives. Congress has no authority to use subpoenas to tell doctors what treatment they can and cannot provide to any individual under their care.

These subpoenas were issued unilaterally by Tom Davis, acting at the request of the Republican leadership. There was no vote and no opportunity to debate the issue in committee. The process was a perversion of democracy."

Understanding Evolution by Stephen Jay Gould

Fall 1999
Transcript:

Q: Why do we humans have a hard time understanding, and sometimes accepting, evolution? What, in your opinion, is the major stumbling block?

A: Deep time is hard to grasp. I don't know that it or any one thing could be called "the" major stumbling block. The major stumbling block is that we're not quite ready, because we live in a veil of tears, and we know that bad things happen to good people. We're still desperate, many of us, to find factual answers out there that would make us feel better in a psychological sense about some of the cruel things that don't make sense in life. And that's a very hard one to get through, I think. Once you come to terms with the recognition that the answers to moral questions aren't out there in nature, and you shouldn't be seeking them there, you have to seek them inside yourself -- and that is the proper role of religion and humanities -- then it ceases to worry. But it does worry many people.

And since it does, there are a whole set of issues that then become very hard to accept, one of which is that most organisms are bacteria. And there isn't a linear progressive pattern that pervades evolution leading up to humans. Another is that humans are a tiny little twig representing one species among so many millions on this enormous arborescent tree of life. And a third is what we're talking about now, that this tiny little twig of Homo sapiens represents an eye blink of geological immensity.

I think they all go together, and they all represent our unwillingness to give up on the notion that there is meaning out there expressed in human terms, which is a kind of ultimate hubris. I don't deny that there's meaning out there that we have to find. But to think that the meaning of this immense complexity and variety of life should be framed only in terms of one funny little primate species Ö to think that it all exists because of us, or that its meaning is framed in terms of us, that's an ultimate kind of arrogance that I think is most unlikely to be correct in any sense.

Q: How does Darwin's theory rank among the great scientific discoveries of all time?

A: Sigmund Freud made a famous and often repeated comment that the few truly great revolutions in the history of science all have the common property that they not only reform our concept of the physical universe -- which obviously they do or we wouldn't call them revolutions -- but that they also ironically knock human arrogance off one pedestal after another of our previous beliefs and our own self importance. And clearly, that's where Darwin ranks so highly.

Freud said that there were really two great revolutions. The first that we associate with Copernicus, Newton, and Galileo that taught us that we weren't living on the central body of a limited universe. And that Darwin's was the second that taught us that we were not separately created in the image of a benevolent deity, but were part of a history of genealogical connectivity of all living things.

Now, in an odd sense, we know how contentious the first revolution was; we know the story of Galileo. But contrary to popular understanding, the church made its peace with Galileo. They may not have taken his books off the index or officially exonerated him until recently. But a few years after his death it was not a hot issue anymore because people knew the earth goes around the sun, and that's all there was to it. And it wasn't going to do much good to try and base a theology on getting nature backwards.

But the way I like to put it, I don't think that revolution was as important as Darwin's, because it's about real estate. The Darwinian revolution is about essence; it's deeper. The Darwinian revolution is about who we are, it's what we're made of, it's what our life means insofar as science can answer that question. Science cannot answer all aspects of that question. It can't tell us what our life means ethically. It can't tell us what we are meant to do as moral creatures. But insofar as science can understand what we're made of, and what we're related to, the Darwinian revolution completely revised our ideas about who we are, and what we're related to, and how long we've been here, and why we're on this earth -- again, in limited ways that science can apprehend or comprehend those questions.

So it, in many ways, was the singularly deepest and most discombobulating of all discoveries that science has ever made. And that it is so factually firm and so well documented merely makes it all the more salient, because it isn't just a conjecture; it's an entire reconstruction of our concept of ourselves and who we are that is as well documented as anything we've ever learned in science. So that does give the Darwinian revolution a unique status.

But, again, we shouldn't take it too far. Science, as any enterprise, has a limited frame. Science is an enterprise that deals with the factual world as we understand it and as we come to understand it better. And it deals with why the factual world works as it does, and not some other way in which it might work. That's roughly fact and theory, but there are many questions about human life and human nature that science can't answer. Science can't answer ethical questions. Science can't answer questions about meaning in the spiritual or theological sense. And we shouldn't pretend that it can.

Q: Can you talk about evolution as an amoral process?

A: I don't think there's moral messages of any kind in nature. The most you can get out of nature is an understanding of how the world operates, which is certainly material you want to factor into any moral debate you're going to have. It's not going to answer moral questions for you.

All that happens in evolution, at least under Darwinian natural selection, is that organisms are struggling in some metaphorical and unconscious sense for differential reproductive success, however it happens. Some succeed; most fail and die. Some succeed by things we don't happen to like, like killing others. Some succeed in it by things we do like, such as cooperation. And others succeed by inflicting enormous pain and harm upon others, including human beings. So we don't like it. But it has nothing to do with nature's ways. If bacterium or a virus gains differential reproduction success by making us sick and exploiting our bodies, then so be it.

Q: How can chance mutations result in adaptations that seem to be purposefully designed?

A: It's a common phrase that natural selection is chance and necessity. It goes back to the title of a book by the great French biologist Jacques Monod. But it's not really correct, because the chance part is not natural selection. Natural selection is actually a locally deterministic force.

If you want to say the Darwinian evolution has a component of chance, and a component of local necessity, that's quite accurate. But the basic argument goes like this: Because natural selection doesn't make anything, natural selection is an eliminative force. Natural selection can only differentially preserve certain variations in a spectrum of variation within a species. Now some other process produces that variation; ultimately it's mutation. And mutation is spread around through recombination and sexual organisms.

But because the causes of genetic mutation are occurring at the level of the gene, and bear no reference to the adaptive design of organisms, the variation among the organisms produced by mutation bears no relationship to what's for the good of organisms. So it's not random in the mathematical sense of flipping a coin and getting 50-50 [chance]. All we mean is that the variation which provides the fuel for natural selection occurs without reference to those characteristics that would be useful for an organism.

For example, if you have a bunch of elephants living in Siberia, and it's getting cold because there's an ice sheet advancing, there's going to be another Ice Age, you're going to have elephants with different amounts of hair on their bodies. But there isn't any internal force that produces more hair because that would be a good thing. You just have variation among these different elephants, and that's what we call random with respect to the direction of natural selection. And then you have the second force, which is natural selection, which is not necessity or determinism on a global scale. Natural selection doesn't make overall more progressive or better organisms; natural selection makes locally adapted organisms.

If you go back to that analogy, if you have a bunch of elephants and it's getting colder, on average, -- this is statistical phenomenon, not every time. After all, the hairiest elephant can fall into a crevasse and die or be sterile and have no kids. But it's a statistical phenomenon that elephants with more hair are going to leave more surviving offspring. And that's natural selection.

Q: Do scientists and the lay public sometimes misunderstand each other around evolution as conjecture, or around how much is really known?

A: Scientists and the lay public often misunderstand each other in the same sense that people who have deep technical knowledge about any subject tend not to talk about it very well to lay people. They often get into confusions. But I don't know that it's any worse for science than for others. There is obviously a particular context, because in the United States -- uniquely in the Western world, I might add -- there is a politically motivated bunch of folks out there who have a certain amount of local power, even though they keep losing court cases, who for their own political reasons are trying to push anti-evolutionism.

But putting that aside -- which has very little to do with the content of science, though it's an interesting sociopolitical issue in American history -- I don't know what to say, except that as a factual proposition, evolution is about as well-documented as anything we know very broadly in science; that there is a tree of life, that all organisms are tied by genealogical connectivity, that the history of life is, to use Darwin's words, "descent with modification." I would say that's as well known as that the earth goes around the sun, and not vice-versa.

Now there are all number of details that we don't know, because you're dealing with an enormously complex narrative history of life that often doesn't leave evidence of particular highways and byways. Just as I can't give you a list of every soldier who fought at the Battle of Marathon, but I don't doubt there was such a battle, I can't tell you every species of brachiopod that died out in the Permian extinction, but I can be pretty confident that large numbers of them did.

So I think we're very confident about the basic factuality of evolution. But there's so much we don't know about particulars of detailed pathways, and there's a lot we need to learn about mechanisms. But that's true of all science. Science is a continually self-correcting enterprise that doesn't always move triumphantly forward, but somehow works its way to a better understanding of a pretty complex factual reality out there.

Q: How much do we owe who we are today, our bodies and our beings, to the 4 billion year history of environments and environmental change?

A: Evolution is the only process behind the construction of our bodies, in a biological sense. Clearly all the sciences are involved. The periodic table explains the elements that we're made out of. Physics gets to the particles. But if you want to talk about the history of life, that subject is evolution, the distinctive characteristics of this one funny little primate species that is us, or a function of that history. So evolutionary biology is the right subject to consult.

We're basically a pretty ordinary mammal, with one absolutely stunningly remarkable and powerful invention -- what we call, for better or worse, "consciousness." But it's important not to mistake the power of that invention, which is undoubted -- I don't think anything else has ever happened in the history of evolution that has so quickly given one funny little species such power over a planet or over other living things. But you mustn't confuse the impact of something with its fundamental mystery. It still remains an aspect of evolutionary history that consciousness enables us to do all sorts of things that were not anticipated or not part of the actual reason why it all happened. It just adds to the interest. But there it is.

Q: How do you help students understand the importance of the earth's history and changing environments to evolution?

A: The basic theory of natural selection talks not about predictable universal progress, or any inherent direction of evolution. It's only a theory of adaptation to changing local environments. That's really all it is. The parasite that becomes morphologically simplified, living inside the body of its host, is as well adapted to its environment as the complex bird flying through the air. That's all it is: a theory of adaptation to changing local environments.

Now because the history of the earth, its four-and-a-half billion years, is a story of environmental change -- a story of mountains building and seas moving in and out, and ice ages coming and going -- the story of life history, insofar as it's regulated by natural history, is a constant interplay and dance back and forth. Environments change; creatures change to match those environments.

It's not an automatic, mechanical process. Because by environment we just don't mean it gets colder and an animal gets hair. Environment is a complex construction that includes the other organisms that share it with you. When you adapt to your environment, that environment isn't only the climate and the mountains and the oceans; it's also the other organisms in that world.

In the same sense that human history is wonderfully complex and unpredictable, because you never know when the next river is going to break through, the next army is going to invade, the history of life is the same way. It's a constant process of adaptation by natural selection to changing local environments. And the vector of those environmental changes through time is effectively random. That makes the history of life itself unpredictable, but still eminently documentable.

American Progress Action Fund Report

An Unhappy Anniversary: March 18th, 2005

This weekend marks the two-year anniversary of the U.S. invasion of Iraq. Two years ago, the White House had waged an aggressive campaign for invading Iraq. Since that time, however, all of the rationales posed by the White House as justification for the war have been thoroughly debunked. There were no weapons of mass destruction. Saddam had no collaborative ties to al
Qaeda. Even more egregious, however, is while there was a comprehensive plan for getting into the war, the White House never implemented a real plan for winning the peace and establishing a secure Iraq. Today, more than 1,500 American soldiers have been killed. There still is no exit strategy for U.S. troops. There is no standard for determining when Iraqi security forces will be ready to take over responsibility for their own security. Corruption is rampant, reconstruction is woefully behind, and the American public is becoming increasingly disillusioned with this "war of choice." (According to a new Washington Post-ABC News poll, 53 percent of Americans said the war was not worth fighting and 70 percent said the number of U.S. casualties is an unacceptable price.)

COST OF WAR, THEN AND NOW: In the days after the invasion two years ago, the Bush administration famously predicted the war would pay for itself. Andrew
Natsios, head of USAID, remember, told Congress: "In terms of the American taxpayers contribution, [$1.7 billion] is it for the US. The rest of the rebuilding of Iraq will be done by other countries and Iraqi oil revenues." Deputy Secretary of State Paul Wolfowitz backed him up, saying Iraq was a country "that can really finance its own reconstruction and relatively soon." Today, the U.S. is on track to spend more than $300 billion to maintain our troops.

INSURGENCY, THEN AND NOW: Two years ago, the White House claimed U.S. troops would be greeted as liberators by an overjoyed Iraqi people. In July 2003, there were an estimated 5,000 insurgents fighting against U.S. troops. Today, that estimate is closer to 18,000. And while a year ago, there were an average of 14 attacks against U.S. troops per day, now there are more than 70.

IRAQI FORCES, THEN AND NOW: The Pentagon has long been saying Iraqi security forces are on the cusp of taking over responsibility for their own security. It's a lot of politics with very little truth. A new report by the Government Accountability Office found "U.S. government agencies do not report reliable data on the extent to which Iraqi security forces are trained and equipped." For example, the number of Iraqi security forces is consistently overstated. Secretary Donald Rumsfeld has said, for example, that there are 145,000 Iraqi troops trained; Sen. Joe Biden (D-DE), ranking member of the Senate Committee on Foreign Relations, puts that number at closer to 4,000.

RECONSTRUCTION, THEN AND NOW: Two years ago, the White House promised to restore prosperity to Iraq. However, instead of sending seasoned experts to lead the massive reconstruction, the administration instead sent very young, inexperienced ideologues, chosen for their loyalty rather than their training. Money was bottlenecked; contracts were botched. And that lack of attention had serious consequences. AP reports, "Two years after the U.S.-led invasion of Iraq, the tattered and dangerous country has become one of the world's poorest, ranking at the level of Haiti and Senegal." Today, Iraq produces about 700,000 barrels of oil a day less than before the invasion. Electrical capacity has gone backwards. Last June, Iraq was generating less electricity than before the war, leaving most Iraqis with only 12 to 14 hours of power a day. Today, that's fallen even further. According to State Department figures, "Iraq now averages just 8.5 hours of electricity a day, with some provinces getting as little as five hours."

USING CONTRACTORS, THEN AND NOW: The administration put the burden of reconstruction on the shoulders of private, no-bid, outside contractors, many of whom saw it as an easy way to make a quick buck. Today, for example, Pentagon auditors have discovered Halliburton has overcharged American taxpayers by $108 million. Just this week, in the first criminal case of contracting fraud in Iraq, a former manager for Halliburton subsidiary KBR was indicted on 10 counts by a federal jury for cheating the government out of nearly $4 million in Kuwait. A separate audit also found Halliburton can't account for $1.8 billion in a separate contract to repair oil fields in Iraq. It's not just U.S. money missing: the Coalition Provisional Authority also can't account for almost $9 billion in spent Iraqi funds.

Letters to the Editor: (cont)

To the Editor:

"Does anyone really think that the same Paul D. Wolfowitz who assured us that the Iraqi reconstruction would pay for itself is the right choice to head any bank, let alone the World Bank?

With John R. Bolton, a critic of multinational institutions, as the new United States representative at the United Nations, with Karen Hughes managing America's public relations to the world from the State Department, and with Paul D. Wolfowitz steering World Bank policy to coincide with American national interests as defined by the neoconservatives, America is on track to become more isolated and despised around the world than ever before.

Not that the Bush administration cares much about that result, as shown by its recent appointments."

Michael J. Kelly
Omaha, March 17, 2005
The writer is an associate professor of international law at Creighton University.
<------------------------------------->

The Essential Krugman: Wolfowitz & The World Bank

The Ugly American Bank
By PAUL KRUGMAN
NY Times Op-Ed
Published: March 18, 2005

You can say this about Paul Wolfowitz's qualifications to lead the World Bank: He has been closely associated with America's largest foreign aid and economic development project since the Marshall Plan.

I'm talking, of course, about reconstruction in Iraq. Unfortunately, what happened there is likely to make countries distrust any economic advice Mr. Wolfowitz might give. Let's not focus on mismanagement. Instead, let's talk about ideology.

Before the Iraq war, Pentagon hawks shut the State Department out of planning. This excluded anyone with development experience. As a result, the administration went into Iraq determined to demonstrate the virtues of radical free-market economics, with nobody warning about the likely problems.

Journalists who spoke to Paul Bremer when he was running Iraq remarked on his passion when he spoke about privatizing state enterprises. They didn't note a comparable passion for a rapid democratization.

In fact, economic ideology may explain why U.S. officials didn't move quickly after the fall of Baghdad to hold elections - even though assuring Iraqis that we didn't intend to install a puppet regime might have headed off the insurgency. Jay Garner, the first Iraq administrator, wanted elections as quickly as possible, but the White House wanted to put a "template" in place by privatizing oil and other industries before handing over control.

The oil fields never did get privatized. Nonetheless, the attempt to turn Iraq into a laissez-faire showpiece was, in its own way, as much an in-your-face rejection of world opinion as the decision to go to war. Dogmatic views about the universal superiority of free markets have been losing ground around the world.

Latin Americans are the most disillusioned. Through much of the 1990's, they bought into the "Washington consensus" - which we should note came from Clinton administration officials as well as from Wall Street economists and conservative think tanks - which said that privatization, deregulation and free trade would lead to economic takeoff. Instead, growth remained sluggish, inequality increased, and the region was struck by a series of economic crises.

The result has been the rise of governments that, to varying degrees, reject policies they perceive as made in America. Venezuela's leader is the most obstreperous. But the most dramatic example of the backlash is Argentina, once the darling of Wall Street and the think tanks. Today, after a devastating recession, the country is run by a populist who often blames foreigners for the country's economic problems, and has forced Argentina's foreign creditors to accept a settlement that gives them only 32 cents on the dollar.

And the backlash has reached our closest neighbor. Mexico's current president, Vicente Fox, a former Coca-Cola executive, is a firm believer in free markets. But his administration is widely considered a failure. Meanwhile, Mexico City's leftist mayor, Manuel López Obrador, has become immensely popular. And his populist rhetoric has raised fears that if he becomes president he will roll back the free-market and free-trade policies of the past two decades.

Mr. Fox is trying to use a minor violation of the law to keep Mr. López off the presidential ballot. If he succeeds, many Mexicans will believe that democracy was sacrificed on the altar of foreign capital.

Not long ago, the growing alienation of Latin America from the United States would have been considered a major foreign policy setback. So much has gone wrong lately that we've defined disaster down, but it's still not a good thing.

Where does Mr. Wolfowitz fit into all this? The advice that the World Bank gives is as important as the money it lends - but only if governments take that advice. And given the ideological rigidity the Pentagon showed in Iraq, they probably won't. If Mr. Wolfowitz says that some free-market policy will help economic growth, he'll be greeted with as much skepticism as if he declared that some country has weapons of mass destruction.

Moisés Naím, editor of Foreign Policy, says that the Wolfowitz nomination turns the World Bank into the American Bank. Make that ugly American bank: rightly or not, developing countries will see Mr. Wolfowitz's selection as a sign that we're still trying to impose policies they believe have failed.

Less Like a Hammer, More Like A Cucaracha. 

Yes, You Too Can Help Stem the Tide !!

No Need to Stew: A Few Tips to Cope With Life's Annoyances
By IAN URBINA
Published: March 15, 2005

When Seth Shepsle goes to Starbucks, he orders a "medium" because "grande" - as the coffee company calls the size, the one between big and small - annoys him.

Meg Daniel presses zero whenever she hears a computerized operator on the telephone so that she can talk to a real person. "Just because they want a computer to handle me doesn't mean I have to play along," she said.

When subscription cards fall from magazines Andrew Kirk is reading, he stacks them in a pile at the corner of his desk. At the end of each month, he puts them in the mail but leaves them blank so that the advertiser is forced to pay the business reply postage without gaining a new subscriber.

Life can involve big hardships, like being fired or smashing up your car. There is only so much you can do about them. But far more prevalent - and perhaps in the long run just as insidious - are life's many little annoyances.

These, you can do something about.

To examine the little weapons people use for everyday survival is to be given a free guidebook on getting by, created by the millions who feel that they must. It is a case study in human inventiveness, with occasional juvenile and petty passages, and the originators of these tips are happy to share them.

"They're an integral part of how people cope," said Prof. James C. Scott, who teaches anthropology and political science at Yale University, and the author of "Weapons of the Weak," about the feigned ignorance, foot-dragging and other techniques Malaysian peasants used to avoid cooperating with the arrival of new technology in the 1970's. "All societies have them, but they're successful only to the extent that they avoid open confrontation."

Wesley A. Williams spent more than a year exacting his revenge against junk mailers. When signing up for a no-junk-mail list failed to stem the flow, he resorted to writing at the top of each unwanted item: "Not at this address. Return to sender." But the mail kept coming because the envelopes had "or current resident" on them, obligating mail carriers to deliver it, he said. Next, he began stuffing the mail back into the "business reply" envelope and sending it back so that the mailer would have to pay the postage. "That wasn't exacting a heavy enough cost from them for bothering me," said Mr. Williams, 35, a middle school science teacher who lives in Melrose, N.Y., near Albany.

After checking with a postal clerk about the legality of stepping up his efforts, he began cutting up magazines, heavy bond paper, and small strips of sheet metal and stuffing them into the business reply envelopes that came with the junk packages.

"You wouldn't believe how heavy I got some of these envelopes to weigh," said Mr. Williams, who added that he saw an immediate drop in the amount of arriving junk mail. A spokesman for the United States Postal Service, Gerald McKiernan, said that Mr. Williams's actions sounded legal, as long as the envelope was properly sealed.

Sometimes, small acts of rebellion offer big doses of relief.

"I've come to realize that I'm almost addicted to the sick little pleasure I get from lashing out at these things," said Mr. Kirk, 24, a freelance writer from Brooklyn who collects and returns magazine inserts. When ordering a pizza from Domino's, Mr. Kirk says he always requests a "small," knowing that he will be corrected and told that medium is the smallest available size. "It makes me feel better to point out that their word games aren't fooling anyone," he said.

The Internet offers a booming trade to help with this type of annoyance-fighting behavior. For example, shared passwords to free Web sites are available at www.bugmenot.com to help people avoid dealing with long registration forms. To coexist with loud cellphone talkers, the Web offers hand-held jammers that, although illegal in the United States, can block all signals within a 45-foot radius.

President Supports DeLay as Investigations Widen
By ELISABETH BUMILLER
NY Times
Published: March 17, 2005

WASHINGTON, March 16 - President Bush expressed crucial support on Wednesday for Representative Tom DeLay, the House majority leader, who is facing growing inquiries here and his home state, Texas, over accusations of illegal fund-raising and improper ties to lobbyists. A Texas grand jury has indicted two of Mr. DeLay's associates on charges involving illegal campaign contributions. In Washington, the Justice Department and a Senate committee are investigating lobbying for Indian tribes by a prominent Republican consultant tied to Mr. DeLay and Mr. DeLay's former spokesman, who now works in public relations.

On Capitol Hill, the senior Democrat on the House ethics panel said he did not believe that the committee could consider Mr. DeLay's request to review his travel records for improprieties until an impasse that has paralyzed the panel has been resolved. "I don't think we can move forward on any matter where a member is at risk of sanction unless we are duly constituted," said the Democrat, Representative Alan B. Mollohan of West Virginia.

Mr. Mollohan is refusing to allow the committee to conduct business until Republicans rescind new rules that could make it harder to pursue misconduct investigations. Hoping to dispel accusations that he broke House rules on two trips underwritten by groups outside Congress, Mr. DeLay offered on Tuesday to sit down with the leaders of the ethics panel to explain why he considered those assertions unfounded.

Mr. DeLay also opposes overturning the new ethics rules, saying they will prevent the committee from being used for partisan attacks. His spokesman, Dan Allen, said the two positions were not at odds.

"The majority leader made it clear that he wants to sit down with the chairman and Congressman Mollohan to get the facts out and dispel the fiction that is out there right now," Mr. Allen said. "He also wants to make sure the House has a working ethics committee. It seems the only people who do not want to move forward are the Democrats."

Separately, Republican officials said Speaker J. Dennis Hastert used a private session with lawmakers to encourage them to remain solidly behind the new rules, as well. "I don't want ethics to be a political football on one side or another," Mr. Hastert later told reporters.

Let Them Eat Cake Redux

HOUSE BUDGET RESOLUTION CUTS KEY LOW-INCOME PROGRAMS
Yet Budget Finds Room for Further Tax Cuts for the Wealthy
By Sharon Parrott and Isaac Shapiro
Article from: Center on Budget and Policy Priorities
March 11, 2005

The budget resolution passed by the House Budget Committee on March 9 includes substantial reductions in key programs for low-income families, seniors, and people with disabilities while calling for large tax cuts whose benefits would flow largely to wealthy Americans. The budget resolution calls for an estimated $30 billion to $35 billion in cuts over the next five years from low-income “mandatory” (also known as “entitlement”) programs, including Medicaid, food stamps, and the Earned Income Tax Credit — a significantly higher level of cuts than were proposed in the President’s budget. Low-income Americans would absorb a large and disproportionate share of the cuts in mandatory programs. As much as half of the mandatory cuts would come from low-income programs.

The budget resolution the House Budget Committee adopted also calls for $106 billion in tax cuts over the next five years and puts $45 billion of these tax cuts on a legislative “fast track” to ease their enactment. The budget resolution includes an explicit assumption that the capital gains and dividend tax cuts would be extended. Analysis by the Urban Institute-Brookings Tax Policy Center shows that nearly half — 46 percent — of the benefits from the dividend and capital gains tax cuts accrue to the nation’s small handful of people with incomes exceeding $1 million a year, a group that constitutes only 0.2 percent of U.S. households.

The cuts proposed in low-income mandatory programs likely would result in increases in the number of low-income Americans who are uninsured or underinsured, reductions in key supports for low-income working families with children, increases in the extent and depth of poverty among seniors and people with disabilities, and reductions in nutrition assistance provided to poor families and individuals. These reductions are not part of a shared-sacrifice budget that reins in the deficit and restores fiscal discipline. Instead, these cuts are proposed as part of a budget that showers more tax benefits on wealthy Americans and increases the federal deficit over the next five years as compared to what the deficit would be under current policies.

Anti-Cancer Compound in Green Tea Identified
Tue Mar 15, 2005 12:36 PM ET
By Patricia Reaney

LONDON (Reuters) - Spanish and British scientists have discovered how green tea helps to prevent certain types of cancer.

Researchers at the University of Murcia in Spain (UMU) and the John Innes Center (JIC) in Norwich, England have shown that a compound called EGCG in green tea prevents cancer cells from growing by binding to a specific enzyme.

"We have shown for the first time that EGCG, which is present in green tea at relatively high concentrations, inhibits the enzyme dihydrofolate reductase (DHFR), which is a recognized, established target for anti-cancer drugs, " Professor Roger Thorneley, of JIC, told Reuters.

"This is the first time, to our knowledge, a known target for an anti-cancer drug has been identified as being inhibited by EGCG," he added.

Green tea has about five times as much EGCG as regular tea, studies have shown. It decreased rates of certain cancers but scientists were not sure what compounds were involved or how they worked. Nor had they determined how much green tea a person would have to drink to have a beneficial effect, he said.

Thorneley said EGCG is probably just one of a number of anti-cancer mechanisms in green tea.

"We have identified this enzyme in tumor cells that EGCG targets and understand how it stops this enzyme from making DNA. This means we may be able to develop new anti-cancer drugs based on the structure of the EGCG molecule," Thorneley explained.

The scientists decided to look at ECGC after they realized its structure was similar to a cancer drug called methotrexate.

"We discovered that EGCG can kill cancer cells in the same way as methotrexate," Dr Jose Neptuno Rodriguez-Lopez, of UMU, a joint author of the research published in the journal Cancer Research.

EGCG binds strongly to DHFR, which is essential in both healthy and cancerous cells. But it does not bind as tightly as methotrexate, so its side effects on healthy cells could be less severe than those of the drug.

Thorneley said EGCG could be a lead compound for new anti-cancer drugs.

The findings could also explain why women who drink large amounts of green tea around the time they conceive and early in their pregnancy may have an increased risk of having a child with spina bifida or other neural tube disorders.

Women are advised to take supplements of folic acid because it protects against spina bifida. But large amounts of green tea could decrease the effectiveness of folic acid.

"This enzyme, (DHFR), is the one folic acid supplements are given for. Folic acid deficiency leads to neural tube development defects," Thorneley added.

Latest Business News and Financial Information | Reuters.com: "WorldCom's Ebbers Found Guilty
Tue Mar 15, 2005 06:04 PM ET
NEW YORK (Reuters) - Former WorldCom Inc. Chief Executive Bernard Ebbers, a one-time milkman who turned an obscure long distance phone carrier into a telecommunications giant, was found guilty on Tuesday of orchestrating an $11-billion accounting scandal that drove the company into bankruptcy."

The Essential Krugman: The $600 Billion Man

NY Times OP-ED COLUMNIST
By PAUL KRUGMAN
Published: March 15, 2005

The argument over Social Security privatization isn't about rival views on how to secure the program's future - even the administration admits that private accounts would do nothing to help the system's finances. It's a debate about what kind of society America should be.

And it's a debate Republicans appear to be losing, because the public doesn't share their view that it's a good idea to expose middle-class families, whose lives have become steadily riskier over the past few decades, to even more risk. As soon as voters started to realize that private accounts would replace traditional Social Security benefits, not add to them, support for privatization collapsed.

But the Republicans' loss may not be the Democrats' gain, for two reasons. One is that some Democrats, in the name of centrism, echo Republican talking points. The other is that claims to be defending average families ring hollow when you defer to corporate interests on votes that matter.

Let's start with the case of the bogus $600 billion.

In his Jan. 15 radio address, President Bush made a startling claim: "According to the Social Security trustees, waiting just one year adds $600 billion to the cost of fixing Social Security." The $600 billion cost of each year's delay has become a standard administration talking point, repeated by countless conservative pundits - who have apparently not looked at what the trustees actually said.

In fact, the trustees never said that waiting a year to "fix" Social Security costs $600 billion. Mr. Bush was grossly misrepresenting the meaning of a technical discussion of accounting issues (it's on Page 58 of the 2004 trustees' report), which has nothing to do with the cost of delaying changes in the retirement program.

The same type of "infinite horizon" calculation applied to the Bush tax cuts says that their costs rise by $1 trillion a year. That's not a useful measure of the cost of not repealing those cuts immediately.

So anyone who repeats the $600 billion line is helping to spread a lie. That's why it was disturbing to read a news report about the deputy commissioner of the Social Security Administration, who must know better, doing just that at a pro-privatization rally.

But in his latest radio address, Mr. Bush - correctly, this time - attributed the $600 billion figure to a "Democrat leader." He was referring to Senator Joseph Lieberman, who, for some reason, repeated the party line - the Republican party line - the previous Sunday.

My guess is that Mr. Lieberman thought he was being centrist and bipartisan, reaching out to Republicans by showing that he shares their concerns. At a time when the Democrats can say, without exaggeration, that their opponents are making a dishonest case for policies that will increase the risks facing families, Mr. Lieberman gave the administration cover by endorsing its fake numbers.

The push to privatize Social Security will probably fail all the same - but such attempts at accommodation may limit the Democrats' political gain.

Meanwhile, the party missed a big opportunity to make its case against increasing families' risk by acquiescing to the credit card industry's demand for harsher bankruptcy laws.

As it happens, Mr. Lieberman stated clearly what was wrong with the bankruptcy bill: "It failed to close troubling loopholes that protect wealthy debtors, and yet it deals harshly with average Americans facing unforeseen medical expenses or a sudden military deployment," making it unfair to "working Americans who find themselves in dire financial straits through no fault of their own." A stand against the bill would have merged populism with patriotism, highlighting Democrats' differences with Republicans' vision of America.

But many Democrats chose not to take that stand. And Mr. Lieberman was among them: his vote against the bill was an empty gesture. On the only vote that opponents of the bill had a chance of winning - a motion to cut off further discussion - he sided with the credit card companies. To be fair, so did 13 other Democrats. But none of the others tried to have it both ways.

It isn't always bad politics to say things that aren't true and claim to support things you actually oppose: just look at who's running the country. But Democrats who engage in these tactics right now create big problems for a party that has been given a special chance - maybe its last chance - to remind the country of what Democrats stand for, and why.

A Personal Episode at Carrabbas Restaurant in Kennesaw

Last Saturday night after having a nice dinner at the bar, I felt lightheaded, and eventually passed out on the floor. Usually my wife and I go out to eat together; but she didn't feel well that night, so I went alone. Fortunately there were a couple of folks at the restaurant that had some medical training, and contacted 911 and my wife. The paramedics came and took me to Kennestone Hospital for observation. No problems were detected, and I was released to go home that night/Sunday morning.

But the reason for this message is two-fold:

a) to offer my sincere appreciation to your staff, and most especially Jessica Wheelock who made the episode a thousand times better than any of the other paramedics, guests, or other staff. She went above and beyond the call of duty, and I intend on honoring her with a EE Savings Bond, and a Thank You Card. Ms. Wheelock knows how to aid and comfort those who need medical care. She apparently was an instructor at White Water Theme Park who trained the lifeguards on how to administer first aid to guests. She is an extremely pleasant, caring, and attentive person who is, and could become a huge asset to Carrabbas Inc. Which leads me to -

b) with the aging "boomers" now entering their sixties, episodes like mine, or similar, will most likely occur again at one of your restaurants, and in fact throughout almost every public venue imaginable in the coming years. At Hyatt Corp. we instituted training sessions for departmental managers and supervisors in emergency first-aid, mostly the Heimlick manuever, CPR, cuts and burns. This was twenty years ago. I have no idea what Hyatt, or anyone else is doing now; but the point I wish to make is that you consider some level of first aid training across your corp. properties...to make sure someone, like Ms. Wheelock is proficient at medical care as a first responder at each property.

There was a guest/private person who attempted to assist me during my episode; but unfortunately her contribution was perceived by me to be ineffective or at least unwelcome or mildly unpleasant. Ms. Wheelock knew what to do, say, and not say. That takes training. Someone who spoke to my wife apparently mis-stated the facts and said that I was "unconscious for about forty-five minutes", (instead of less than a minute as was the case). Medically there is a huge difference in the implications associated with each situation.

In summary then, I again compliment Carrabbas @ Barrett Parkway for the care, and attention paid to me over the weekend, and I will try to stop writing to you, or passing out on the floor, as I am sure you have better things to do with your time, and facilities.

"How Long Can G.M. Tread Water?
By DANNY HAKIM
NY Times
Published: March 11, 2005

DETROIT, March 10 - Since the Depression, General Motors has reigned as the world's largest automaker and a pillar of American economic might. But now the company is broadly struggling and facing the humbling possibility that it will be displaced by Toyota at the top of the auto industry within a few years.

General Motors, which controlled nearly half the American market as recently as the late 1970's, held about one-quarter in February. Last week, the company said that it would produce 300,000 fewer cars and trucks in North America in the first half of this year, a 10 percent drop from a year ago."

Under Bush, a New Age of Prepackaged TV News
By DAVID BARSTOW and ROBIN STEIN
NY Times
This the kind of TV news coverage every president covets.

"Thank you, Bush. Thank you, U.S.A.," a jubilant Iraqi-American told a camera crew in Kansas City for a segment about reaction to the fall of Baghdad. A second report told of "another success" in the Bush administration's "drive to strengthen aviation security"; the reporter called it "one of the most remarkable campaigns in aviation history." A third segment, broadcast in January, described the administration's determination to open markets for American farmers.

To a viewer, each report looked like any other 90-second segment on the local news. In fact, the federal government produced all three. The report from Kansas City was made by the State Department. The "reporter" covering airport safety was actually a public relations professional working under a false name for the Transportation Security Administration. The farming segment was done by the Agriculture Department's office of communications.

Under the Bush administration, the federal government has aggressively used a well-established tool of public relations: the prepackaged, ready-to-serve news report that major corporations have long distributed to TV stations to pitch everything from headache remedies to auto insurance. In all, at least 20 federal agencies, including the Defense Department and the Census Bureau, have made and distributed hundreds of television news segments in the past four years, records and interviews show. Many were subsequently broadcast on local stations across the country without any acknowledgement of the government's role in their production.

This winter, Washington has been roiled by revelations that a handful of columnists wrote in support of administration policies without disclosing they had accepted payments from the government. But the administration's efforts to generate positive news coverage have been considerably more pervasive than previously known. At the same time, records and interviews suggest widespread complicity or negligence by television stations, given industry ethics standards that discourage the broadcast of prepackaged news segments from any outside group without revealing the source.

Federal agencies are forthright with broadcasters about the origin of the news segments they distribute. The reports themselves, though, are designed to fit seamlessly into the typical local news broadcast. In most cases, the "reporters" are careful not to state in the segment that they work for the government. Their reports generally avoid overt ideological appeals. Instead, the government's news-making apparatus has produced a quiet drumbeat of broadcasts describing a vigilant and compassionate administration.

Some reports were produced to support the administration's most cherished policy objectives, like regime change in Iraq or Medicare reform. Others focused on less prominent matters, like the administration's efforts to offer free after-school tutoring, its campaign to curb childhood obesity, its initiatives to preserve forests and wetlands, its plans to fight computer viruses, even its attempts to fight holiday drunken driving. They often feature "interviews" with senior administration officials in which questions are scripted and answers rehearsed. Critics, though, are excluded, as are any hints of mismanagement, waste or controversy.

Some of the segments were broadcast in some of nation's largest television markets, including New York, Los Angeles, Chicago, Dallas and Atlanta.

An examination of government-produced news reports offers a look inside a world where the traditional lines between public relations and journalism have become tangled, where local anchors introduce prepackaged segments with "suggested" lead-ins written by public relations experts. It is a world where government-produced reports disappear into a maze of satellite transmissions, Web portals, syndicated news programs and network feeds, only to emerge cleansed on the other side as "independent" journalism.

It is also a world where all participants benefit.

Local affiliates are spared the expense of digging up original material. Public relations firms secure government contracts worth millions of dollars. The major networks, which help distribute the releases, collect fees from the government agencies that produce segments and the affiliates that show them. The administration, meanwhile, gets out an unfiltered message, delivered in the guise of traditional reporting.

The practice, which also occurred in the Clinton administration, is continuing despite President Bush's recent call for a clearer demarcation between journalism and government publicity efforts. "There needs to be a nice independent relationship between the White House and the press," Mr. Bush told reporters in January, explaining why his administration would no longer pay pundits to support his policies.

In interviews, though, press officers for several federal agencies said the president's prohibition did not apply to government-made television news segments, also known as video news releases. They described the segments as factual, politically neutral and useful to viewers. They insisted that there was no similarity to the case of Armstrong Williams, a conservative columnist who promoted the administration's chief education initiative, the No Child Left Behind Act, without disclosing $240,000 in payments from the Education Department.

What is more, these officials argued, it is the responsibility of television news directors to inform viewers that a segment about the government was in fact written by the government. "Talk to the television stations that ran it without attribution," said William A. Pierce, spokesman for the Department of Health and Human Services. "This is not our problem. We can't be held responsible for their actions."

Yet in three separate opinions in the past year, the Government Accountability Office, an investigative arm of Congress that studies the federal government and its expenditures, has held that government-made news segments may constitute improper "covert propaganda" even if their origin is made clear to the television stations. The point, the office said, is whether viewers know the origin. Last month, in its most recent finding, the G.A.O. said federal agencies may not produce prepackaged news reports "that conceal or do not clearly identify for the television viewing audience that the agency was the source of those materials."

It is not certain, though, whether the office's pronouncements will have much practical effect. Although a few federal agencies have stopped making television news segments, others continue. And on Friday, the Justice Department and the Office of Management and Budget circulated a memorandum instructing all executive branch agencies to ignore the G.A.O. findings. The memorandum said the G.A.O. failed to distinguish between covert propaganda and "purely informational" news segments made by the government. Such informational segments are legal, the memorandum said, whether or not an agency's role in producing them is disclosed to viewers.

Even if agencies do disclose their role, those efforts can easily be undone in a broadcaster's editing room. Some news organizations, for example, simply identify the government's "reporter" as one of their own and then edit out any phrase suggesting the segment was not of their making.

So in a recent segment produced by the Agriculture Department, the agency's narrator ended the report by saying "In Princess Anne, Maryland, I'm Pat O'Leary reporting for the U.S. Department of Agriculture." Yet AgDay, a syndicated farm news program that is shown on some 160 stations, simply introduced the segment as being by "AgDay's Pat O'Leary." The final sentence was then trimmed to "In Princess Anne, Maryland, I'm Pat O'Leary reporting."

Brian Conrady, executive producer of AgDay, defended the changes. "We can clip 'Department of Agriculture' at our choosing," he said. "The material we get from the U.S.D.A., if we choose to air it and how we choose to air it is our choice."

Spreading the Word: Government Efforts and One Woman's Role

Karen Ryan cringes at the phrase "covert propaganda." These are words for dictators and spies, and yet they have attached themselves to her like a pair of handcuffs.

Not long ago, Ms. Ryan was a much sought-after "reporter" for news segments produced by the federal government. A journalist at ABC and PBS who became a public relations consultant, Ms. Ryan worked on about a dozen reports for seven federal agencies in 2003 and early 2004. Her segments for the Department of Health and Human Services and the Office of National Drug Control Policy were a subject of the accountability office's recent inquiries.

The G.A.O. concluded that the two agencies "designed and executed" their segments "to be indistinguishable from news stories produced by private sector television news organizations." A significant part of that execution, the office found, was Ms. Ryan's expert narration, including her typical sign-off - "In Washington, I'm Karen Ryan reporting" - delivered in a tone and cadence familiar to television reporters everywhere.

Last March, when The New York Times first described her role in a segment about new prescription drug benefits for Medicare patients, reaction was harsh. In Cleveland, The Plain Dealer ran an editorial under the headline "Karen Ryan, You're a Phony," and she was the object of late-night jokes by Jon Stewart and received hate mail.

"I'm like the Marlboro man," she said in a recent interview.

In fact, Ms. Ryan was a bit player who made less than $5,000 for her work on government reports. She was also playing an accepted role in a lucrative art form, the video news release. "I just don't feel I did anything wrong," she said. "I just did what everyone else in the industry was doing."

It is a sizable industry. One of its largest players, Medialink Worldwide Inc., has about 200 employees, with offices in New York and London. It produces and distributes about 1,000 video news releases a year, most commissioned by major corporations. The Public Relations Society of America even gives an award, the Bronze Anvil, for the year's best video news release.

Several major television networks play crucial intermediary roles in the business. Fox, for example, has an arrangement with Medialink to distribute video news releases to 130 affiliates through its video feed service, Fox News Edge. CNN distributes releases to 750 stations in the United States and Canada through a similar feed service, CNN Newsource. Associated Press Television News does the same thing worldwide with its Global Video Wire.

"We look at them and determine whether we want them to be on the feed," David M. Winstrom, director of Fox News Edge, said of video news releases. "If I got one that said tobacco cures cancer or something like that, I would kill it."

In essence, video news releases seek to exploit a growing vulnerability of television news: Even as news staffs at the major networks are shrinking, many local stations are expanding their hours of news coverage without adding reporters.

"No TV news organization has the resources in labor, time or funds to cover every worthy story," one video news release company, TVA Productions, said in a sales pitch to potential clients, adding that "90 percent of TV newsrooms now rely on video news releases."

Federal agencies have been commissioning video news releases since at least the first Clinton administration. An increasing number of state agencies are producing television news reports, too; the Texas Parks and Wildlife Department alone has produced some 500 video news releases since 1993.

Under the Bush administration, federal agencies appear to be producing more releases, and on a broader array of topics.

A definitive accounting is nearly impossible. There is no comprehensive archive of local television news reports, as there is in print journalism, so there is no easy way to determine what has been broadcast, and when and where.

Still, several large agencies, including the Defense Department, the State Department and the Department of Health and Human Services, acknowledge expanded efforts to produce news segments. Many members of Mr. Bush's first-term cabinet appeared in such segments.

A recent study by Congressional Democrats offers another rough indicator: the Bush administration spent $254 million in its first term on public relations contracts, nearly double what the last Clinton administration spent.

Karen Ryan was part of this push - a "paid shill for the Bush administration," as she self-mockingly puts it. It is, she acknowledges, an uncomfortable title.

Ms. Ryan, 48, describes herself as not especially political, and certainly no Bush die-hard. She had hoped for a long career in journalism. But over time, she said, she grew dismayed by what she saw as the decline of television news - too many cut corners, too many ratings stunts.

In the end, she said, the jump to video news releases from journalism was not as far as one might expect. "It's almost the same thing," she said.

There are differences, though. When she went to interview Tommy G. Thompson, then the health and human services secretary, about the new Medicare drug benefit, it was not the usual reporter-source exchange. First, she said, he already knew the questions, and she was there mostly to help him give better, snappier answers. And second, she said, everyone involved is aware of a segment's potential political benefits.

Her Medicare report, for example, was distributed in January 2004, not long before Mr. Bush hit the campaign trail and cited the drug benefit as one of his major accomplishments.

The script suggested that local anchors lead into the report with this line: "In December, President Bush signed into law the first-ever prescription drug benefit for people with Medicare." In the segment, Mr. Bush is shown signing the legislation as Ms. Ryan describes the new benefits and reports that "all people with Medicare will be able to get coverage that will lower their prescription drug spending."

The segment made no mention of the many critics who decry the law as an expensive gift to the pharmaceutical industry. The G.A.O. found that the segment was "not strictly factual," that it contained "notable omissions" and that it amounted to "a favorable report" about a controversial program.

And yet this news segment, like several others narrated by Ms. Ryan, reached an audience of millions. According to the accountability office, at least 40 stations ran some part of the Medicare report. Video news releases distributed by the Office of National Drug Control Policy, including one narrated by Ms. Ryan, were shown on 300 stations and reached 22 million households. According to Video Monitoring Services of America, a company that tracks news programs in major cities, Ms. Ryan's segments on behalf of the government were broadcast a total of at least 64 times in the 40 largest television markets.

Even these measures, though, do not fully capture the reach of her work. Consider the case of News 10 Now, a cable station in Syracuse owned by Time Warner. In February 2004, days after the government distributed its Medicare segment, News 10 Now broadcast a virtually identical report, including the suggested anchor lead-in. The News 10 Now segment, however, was not narrated by Ms. Ryan. Instead, the station edited out the original narration and had one of its reporters repeat the script almost word for word.

The station's news director, Sean McNamara, wrote in an e-mail message, "Our policy on provided video is to clearly identify the source of that video." In the case of the Medicare report, he said, the station believed it was produced and distributed by a major network and did not know that it had originally come from the government.

Ms. Ryan said she was surprised by the number of stations willing to run her government segments without any editing or acknowledgement of origin. As proud as she says she is of her work, she did not hesitate, even for a second, when asked if she would have broadcast one of her government reports if she were a local news director.

"Absolutely not."

Little Oversight: TV's Code of Ethics, With Uncertain Weight

"Clearly disclose the origin of information and label all material provided by outsiders."

Those words are from the code of ethics of the Radio-Television News Directors Association, the main professional society for broadcast news directors in the United States. Some stations go further, all but forbidding the use of any outside material, especially entire reports. And spurred by embarrassing publicity last year about Karen Ryan, the news directors association is close to proposing a stricter rule, said its executive director, Barbara Cochran.

Whether a stricter ethics code will have much effect is unclear; it is not hard to find broadcasters who are not adhering to the existing code, and the association has no enforcement powers.

The Federal Communications Commission does, but it has never disciplined a station for showing government-made news segments without disclosing their origin, a spokesman said.

Could it? Several lawyers experienced with F.C.C. rules say yes. They point to a 2000 decision by the agency, which stated, "Listeners and viewers are entitled to know by whom they are being persuaded."

In interviews, more than a dozen station news directors endorsed this view without hesitation. Several expressed disdain for the prepackaged segments they received daily from government agencies, corporations and special interest groups who wanted to use their airtime and credibility to sell or influence.

But when told that their stations showed government-made reports without attribution, most reacted with indignation. Their stations, they insisted, would never allow their news programs to be co-opted by segments fed from any outside party, let alone the government.

"They're inherently one-sided, and they don't offer the possibility for follow-up questions - or any questions at all," said Kathy Lehmann Francis, until recently the news director at WDRB, the Fox affiliate in Louisville, Ky.

Yet records from Video Monitoring Services of America indicate that WDRB has broadcast at least seven Karen Ryan segments, including one for the government, without disclosing their origin to viewers.

Mike Stutz, news director at KGTV, the ABC affiliate in San Diego, was equally opposed to putting government news segments on the air.

"It amounts to propaganda, doesn't it?" he said.

Again, though, records from Video Monitoring Services of America show that from 2001 to 2004 KGTV ran at least one government-made segment featuring Ms. Ryan, 5 others featuring her work on behalf of corporations, and 19 produced by corporations and other outside organizations. It does not appear that KGTV viewers were told the origin of these 25 segments.

"I thought we were pretty solid," Mr. Stutz said, adding that they intend to take more precautions.

Confronted with such evidence, most news directors were at a loss to explain how the segments made it on the air. Some said they were unable to find archive tapes that would help answer the question. Others promised to look into it, then stopped returning telephone messages. A few removed the segments from their Web sites, promised greater vigilance in the future or pleaded ignorance.

Afghanistan to Memphis: An Agency's Report Ends Up on the Air

On Sept. 11, 2002, WHBQ, the Fox affiliate in Memphis, marked the anniversary of the 9/11 attacks with an uplifting report on how assistance from the United States was helping to liberate the women of Afghanistan.

Tish Clark, a reporter for WHBQ, described how Afghan women, once barred from schools and jobs, were at last emerging from their burkas, taking up jobs as seamstresses and bakers, sending daughters off to new schools, receiving decent medical care for the first time and even participating in a fledgling democracy. Her segment included an interview with an Afghan teacher who recounted how the Taliban only allowed boys to attend school. An Afghan doctor described how the Taliban refused to let male physicians treat women.

In short, Ms. Clark's report seemed to corroborate, however modestly, a central argument of the Bush foreign policy, that forceful American intervention abroad was spreading freedom, improving lives and winning friends.

What the people of Memphis were not told, though, was that the interviews used by WHBQ were actually conducted by State Department contractors. The contractors also selected the quotes used from those interviews and shot the video that went with the narration. They also wrote the narration, much of which Ms. Clark repeated with only minor changes.

As it happens, the viewers of WHBQ were not the only ones in the dark.

Ms. Clark, now Tish Clark Dunning, said in an interview that she, too, had no idea the report originated at the State Department. "If that's true, I'm very shocked that anyone would false report on anything like that," she said.

How a television reporter in Memphis unwittingly came to narrate a segment by the State Department reveals much about the extent to which government-produced news accounts have seeped into the broader new media landscape.

The explanation begins inside the White House, where the president's communications advisers devised a strategy after Sept. 11, 2001, to encourage supportive news coverage of the fight against terrorism. The idea, they explained to reporters at the time, was to counter charges of American imperialism by generating accounts that emphasized American efforts to liberate and rebuild Afghanistan and Iraq.

An important instrument of this strategy was the Office of Broadcasting Services, a State Department unit of 30 or so editors and technicians whose typical duties include distributing video from news conferences. But in early 2002, with close editorial direction from the White House, the unit began producing narrated feature reports, many of them promoting American achievements in Afghanistan and Iraq and reinforcing the administration's rationales for the invasions. These reports were then widely distributed in the United States and around the world for use by local television stations. In all, the State Department has produced 59 such segments.

United States law contains provisions intended to prevent the domestic dissemination of government propaganda. The 1948 Smith-Mundt Act, for example, allows Voice of America to broadcast pro-government news to foreign audiences, but not at home. Yet State Department officials said that law does not apply to the Office of Broadcasting Services. In any event, said Richard A. Boucher, a State Department spokesman: "Our goal is to put out facts and the truth. We're not a propaganda agency."

Even so, as a senior department official, Patricia Harrison, told Congress last year, the Bush administration has come to regard such "good news" segments as "powerful strategic tools" for influencing public opinion. And a review of the department's segments reveals a body of work in sync with the political objectives set forth by the White House communications team after 9/11.

In June 2003, for example, the unit produced a segment that depicted American efforts to distribute food and water to the people of southern Iraq. "After living for decades in fear, they are now receiving assistance - and building trust - with their coalition liberators," the unidentified narrator concluded.

Several segments focused on the liberation of Afghan women, which a White House memo from January 2003 singled out as a "prime example" of how "White House-led efforts could facilitate strategic, proactive communications in the war on terror."

Tracking precisely how a "good news" report on Afghanistan could have migrated to Memphis from the State Department is far from easy. The State Department typically distributes its segments via satellite to international news organizations like Reuters and Associated Press Television News, which in turn distribute them to the major United States networks, which then transmit them to local affiliates.

"Once these products leave our hands, we have no control," Robert A. Tappan, the State Department's deputy assistant secretary for public affairs, said in an interview. The department, he said, never intended its segments to be shown unedited and without attribution by local news programs. "We do our utmost to identify them as State Department-produced products."

Representatives for the networks insist that government-produced reports are clearly labeled when they are distributed to affiliates. Yet with segments bouncing from satellite to satellite, passing from one news organization to another, it is easy to see the potential for confusion. Indeed, in response to questions from The Times, Associated Press Television News acknowledged that they might have distributed at least one segment about Afghanistan to the major United States networks without identifying it as the product of the State Department. A spokesman said it could have "slipped through our net because of a sourcing error."

Kenneth W. Jobe, vice president for news at WHBQ in Memphis, said he could not explain how his station came to broadcast the State Department's segment on Afghan women. "It's the same piece, there's no mistaking it," he said in an interview, insisting that it would not happen again.

Mr. Jobe, who was not with WHBQ in 2002, said the station's script for the segment has no notes explaining its origin. But Tish Clark Dunning said it was her impression at the time that the Afghan segment was her station's version of one done first by network correspondents at either Fox News or CNN. It is not unusual, she said, for a local station to take network reports and then give them a hometown look.

"I didn't actually go to Afghanistan," she said. "I took that story and reworked it. I had to do some research on my own. I remember looking on the Internet and finding out how it all started as far as women covering their faces and everything."

At the State Department, Mr. Tappan said the broadcasting office is moving away from producing narrated feature segments. Instead, the department is increasingly supplying only the ingredients for reports - sound bites and raw video. Since the shift, he said, even more State Department material is making its way into news broadcasts.

Meeting a Need: Rising Budget Pressures, Ready-to-Run Segments

WCIA is a small station with a big job in central Illinois.

Each weekday, WCIA's news department produces a three-hour morning program, a noon broadcast and three evening programs. There are plans to add a 9 p.m. broadcast. The staff, though, has been cut to 37 from 39. "We are doing more with the same," said Jim P. Gee, the news director.

Farming is crucial in Mr. Gee's market, yet with so many demands, he said, "it is hard for us to justify having a reporter just focusing on agriculture."

To fill the gap, WCIA turned to the Agriculture Department, which has assembled one of the most effective public relations operations inside the federal government. The department has a Broadcast Media and Technology Center with an annual budget of $3.2 million that each year produces some 90 "mission messages" for local stations - mostly feature segments about the good works of the Agriculture Department.

"I don't want to use the word 'filler,' per se, but they meet a need we have," Mr. Gee said.

The Agriculture Department's two full-time reporters, Bob Ellison and Pat O'Leary, travel the country filing reports, which are vetted by the department's office of communications before they are distributed via satellite and mail. Alisa Harrison, who oversees the communications office, said Mr. Ellison and Mr. O'Leary provide unbiased, balanced and accurate coverage.

"They cover the secretary just like any other reporter," she said.

Invariably, though, their segments offer critic-free accounts of the department's policies and programs. In one report, Mr. Ellison told of the agency's efforts to help Florida clean up after several hurricanes.

Bush cheats those he owes
by Cynthia Tucker
Atlanta Journal Constitution Columnist
Published on: 03/13/05

President Bush didn't campaign on a promise to make it harder for average Americans to regain their financial footing after filing for bankruptcy. Even if he had, he probably would have been re-elected anyway.

Most Americans haven't noticed the president's relentless assault on programs and policies that protect the middle-class against the caprice of the marketplace. If average Americans are living with a higher degree of financial anxiety, they blame outsourcing or high taxes or illegal Mexican immigrants. They haven't recognized that the Republicans have middle America in their cross hairs and that Bush has given the order to fire.

The war on working- and middle-class America continued apace last week when a piece of legislation favored by bankers and credit card companies — and pushed by the president — passed in the U.S. Senate. The new bankruptcy bill would make it harder for middle-income individuals to file under Chapter 7, which usually allows some debt-forgiveness. Under the new law, individuals (with some exceptions) have to keep working to pay off their debts, even if it takes several years.

Financial industry lobbyists claim they are only going after deadbeats who can afford to pay, but the research suggests otherwise. A few deadbeats may indeed file for bankruptcy to get out of paying for cars or big-screen TVs they knew they couldn't afford. But the vast majority, experts say, have been forced into substantial debt by some unforeseen personal catastrophe — death of the major breadwinner, job loss or medical crisis, for example.

Meanwhile, the rich will not be held to the same standard. They are free to be deadbeats. Senators defeated an amendment to the bill that would have closed loopholes allowing the wealthy to hold onto their mansions and other assets when they file for bankruptcy. They also turned back an amendment that would prevent corrupt companies, such as Enron, from sheltering assets that ought to go to former employees. But the Senate wouldn't accept an amendment that would have allowed the not-rich elderly to keep their houses if they go bankrupt.

More than a hundred bankruptcy experts sent a letter to Congress predicting that the people most likely to be hurt by the new bankruptcy law live in the red states that always vote for the GOP, including Tennessee, Georgia, Arkansas, Alabama and Mississippi. With many of their residents struggling to stay afloat, those states have a substantial number of personal bankruptcy filings. The letter made not one bit of difference.

Years from now, sociologists and political scientists may be able to explain how Republicans persuaded so many voters to act against their own economic interests. Even as the GOP heaps more and more benefits on the wealthy and Big Business — tax breaks, so-called tort reform, anti-union policies — and strips them from average workers, the party continues to get much of its support from those same workers.

It's a mystery.

Perhaps it can be partly explained by the virtue of self-reliance, an ethic broadly embedded in the American psyche, but which conservatives claim is theirs alone. But a sense of invulnerability has also made it easier for the GOP to carry out this assault on average Americans: most people don't think they'll be the victims of a financial crisis until the crisis befalls them.

The rewrite of the bankruptcy laws comes after a series of other developments that have frayed the safety net for average families. Even as job security declines, unemployment compensation has been reduced. Guaranteed pensions are disappearing, as is employer-provided health insurance. While wealthy Americans are coddled, working Americans are being subjected to the whims of a rapacious capitalism.

But Bush didn't say that during the last campaign. Instead, he talked about an "ownership society." He neglected to explain that most of the owning would be done by the rich.

Budget Deficit Widens to Record in Feb.
Thu Mar 10, 2005 02:54 PM ET

WASHINGTON (Reuters) - The United States posted a record $113.94 billion budget deficit in February, above most Wall Street forecasts, as higher government receipts were not enough to cover a spending increase. The February deficit, reported on Thursday in the U.S. Treasury Department's monthly budget statement, exceeded the $96.70 billion budget deficit in February 2004.

Note: The longer this goes on, the worse it will be when the bubble bursts. You'd better prepare for it while you still have time!

Putting Last Things First

NY Time Editorial
Published: March 10, 2005
Editorial: Putting Last Things First

This week, there was more evidence that the world has begun edging away from the dollar. International data showed that several more nations who have been big customers for American debt - including China and India - have diversified their portfolios away from the American greenback. To us, that sounds like a serious threat to the long-term soundness of the national currency. But the Bush administration hasn't come close to addressing any of the economic fundamentals that have helped spawn the dollar's decline (the budget deficit comes to mind). Instead, the White House has been busy lobbying for new tax cuts that will make the situation worse.

Meanwhile, in a world in which the United States desperately needs international cooperation on everything from curbing the trade in terrorist weaponry to presenting a united front to countries like Iran and Syria, President Bush is spending his political capital on getting John Bolton, a longtime critic of multilateralism, as representative to the United Nations.

We had hoped, when Mr. Bush was re-elected, that he'd rethink his goals once the next campaign was no longer an issue. There are so many critical problems facing the nation. But the president seems determined to ignore the biggest challenges and to home in on politically charged side issues. Medicare faces a perilous future, given growing health costs and the aging of the baby boomer population, and anything approaching a resolution would require hard bipartisan work. But the White House instead decided to make privatizing Social Security its chief priority. Social Security's long-term problems are relatively minor compared with Medicare's, and the fixes are pretty obvious.

The list goes on and on. When we look at problems that cry out for White House involvement, one that leaps out is our dependency on foreign oil. That not only leaves us hostage to some of the shakiest and most unappetizing oil-producing nations around the globe, but also threatens the entire economy over the long term, given that rising oil prices make the trade deficit even bigger and the dollar even weaker. Another huge economic threat, at least for some agricultural regions, is the growing international pressure to end our irrational subsidy program for crops like cotton. Both of these are tricky political issues that require steady and firm presidential intervention.

We haven't heard Mr. Bush make a big deal about either, except for his fixation with drilling in the Arctic wildlife preserve. Meanwhile in Congress, all the political capital is being directed toward putting an anti-environmental former lobbyist for mining interests on the federal bench, and passing a new law that will make it difficult for middle-class credit card users who suffer a life catastrophe - like sudden illness or divorce - to get back on their feet after they have to declare bankruptcy. The priorities of this administration never cease to amaze.

The Essential Krugman: The Bankruptcy Law Change Before the Senate

The Debt-Peonage Society
By PAUL KRUGMAN
NY Times Op-Ed
Published: March 8, 2005

Today the Senate is expected to vote to limit debate on a bill that toughens the existing bankruptcy law, probably ensuring the bill's passage. A solid bloc of Republican senators, assisted by some Democrats, has already voted down a series of amendments that would either have closed loopholes for the rich or provided protection for some poor and middle-class families.

The bankruptcy bill was written by and for credit card companies, and the industry's political muscle is the reason it seems unstoppable. But the bill also fits into the broader context of what Jacob Hacker, a political scientist at Yale, calls "risk privatization": a steady erosion of the protection the government provides against personal misfortune, even as ordinary families face ever-growing economic insecurity.

The bill would make it much harder for families in distress to write off their debts and make a fresh start. Instead, many debtors would find themselves on an endless treadmill of payments.

The credit card companies say this is needed because people have been abusing the bankruptcy law, borrowing irresponsibly and walking away from debts. The facts say otherwise.

A vast majority of personal bankruptcies in the United States are the result of severe misfortune. One recent study found that more than half of bankruptcies are the result of medical emergencies. The rest are overwhelmingly the result either of job loss or of divorce.

To the extent that there is significant abuse of the system, it's concentrated among the wealthy - including corporate executives found guilty of misleading investors - who can exploit loopholes in the law to protect their wealth, no matter how ill-gotten.

One increasingly popular loophole is the creation of an "asset protection trust," which is worth doing only for the wealthy. Senator Charles Schumer introduced an amendment that would have limited the exemption on such trusts, but apparently it's O.K. to game the system if you're rich: 54 Republicans and 2 Democrats voted against the Schumer amendment.

Other amendments were aimed at protecting families and individuals who have clearly been forced into bankruptcy by events, or who would face extreme hardship in repaying debts. Ted Kennedy introduced an exemption for cases of medical bankruptcy. Russ Feingold introduced an amendment protecting the homes of the elderly. Dick Durbin asked for protection for armed services members and veterans. All were rejected.

None of this should come as a surprise: it's all part of the pattern.

As Mr. Hacker and others have documented, over the past three decades the lives of ordinary Americans have become steadily less secure, and their chances of plunging from the middle class into acute poverty ever larger. Job stability has declined; spells of unemployment, when they happen, last longer; fewer workers receive health insurance from their employers; fewer workers have guaranteed pensions.

Some of these changes are the result of a changing economy. But the underlying economic trends have been reinforced by an ideologically driven effort to strip away the protections the government used to provide. For example, long-term unemployment has become much more common, but unemployment benefits expire sooner. Health insurance coverage is declining, but new initiatives like health savings accounts (introduced in the 2003 Medicare bill), rather than discouraging that trend, further undermine the incentives of employers to provide coverage.

Above all, of course, at a time when ever-fewer workers can count on pensions from their employers, the current administration wants to phase out Social Security.

The bankruptcy bill fits right into this picture. When everything else goes wrong, Americans can still get a measure of relief by filing for bankruptcy - and rising insecurity means that they are forced to do this more often than in the past. But Congress is now poised to make bankruptcy law harsher, too.

Warren Buffett recently made headlines by saying America is more likely to turn into a "sharecroppers' society" than an "ownership society." But I think the right term is a "debt peonage" society - after the system, prevalent in the post-Civil War South, in which debtors were forced to work for their creditors. The bankruptcy bill won't get us back to those bad old days all by itself, but it's a significant step in that direction.

And any senator who votes for the bill should be ashamed.

Got a Problem With, or Suggestion for, eBay? Here's Your Response

"Thank you for taking the time to write eBay with your concerns. I'm happy to help you further.

Many of the changes made on the site are due to suggestions received from our eBay Members. While we are unable to implement every suggestion, we do review all of the suggestions we receive.

You can send your suggestions by following these directions:

1. Click on "site map" located at the very top of every eBay page.

2. Click on the link titled "Suggestion Box" found in the third column near the bottom.

3. Click on the link titled "Send us your suggestion to improve the eBay site."

I am sorry for the frustration and concern you have experienced in this situation. While I know it might not feel like it right now, please be assured that eBay has done all that it can to help you in this matter while still staying within the strict guidelines of our Member Agreement.

Please remember that eBay does not participate in the buying or selling of any items. We simply provide a place where our members can meet to sell, and buy just about anything, at anytime, from anywhere, in a variety of formats, including a fixed price format and an auction-style format commonly referred to as an "online auction."

As eBay is not involved in the actual transaction between Buyers and Sellers, we have no control over the quality, safety or legality of the items advertised, the truth or accuracy of the listings, the ability of Sellers to sell items or the ability of Buyers to buy items. We cannot ensure that a buyer or seller will actually complete a transaction.

Think of eBay like an Internet version of the newspaper classifieds. We help buyers and sellers find each other, but we take no responsibility for the merchandise changing hands. If a transaction goes wrong on eBay, you need to address this with your transaction partner - just as if a car you bought through the classifieds broke down, you wouldn't call the newspaper that printed the ad, you would contact the seller.

If you are having a hard time resolving this situation with your buyer or seller, please refer to our help pages for some useful information: http://pages.ebay.com/help/confidence/overview.html

You can also read more about mediation at: http://pages.ebay.com/help/buy/dispute-res.html

Again, I sympathize with your situation. I know you must be very frustrated right now, and I'm very sorry. Please understand that there is simply nothing more we can do in this case. I hope that this information will be helpful to you. You also may want to look into our Q&A board and ask for some advice of our other Members. This page can be
found at: http://chatboards.ebay.com/chat.jsp?forum=1&thread=21

We are committed to your online trading safety and success.
Regards,
Darnell
PowerSeller Team
eBay Trust & Safety
<------------------------------------->

The New York Times > Washington > Drug Makers Are Still Giving Gifts to Doctors, F.D.A. Official Says: "Dr. Bruce Psaty, a professor of medicine and epidemiology at the University of Washington, told the panel that the agency had become too focused on approving new drugs at the expense of making sure that approved ones were safe.

'In the office of new drugs, more than 1,000 employees work to review a few dozen new drugs per year,' Dr. Psaty said. 'In the office of drug safety, 109 employees work to evaluate the safety of thousands of drugs currently on the market.'"

The Essential Krugman: Deficits and Deceit

Deficits and Deceit
By PAUL KRUGMAN
NY Times Op-Ed
Published: March 4, 2005

Four years ago, Alan Greenspan urged Congress to cut taxes, asserting that the federal government was in imminent danger of paying off too much debt.

On Wednesday the Fed chairman warned Congress of the opposite fiscal danger: he asserted that there would be large budget deficits for the foreseeable future, leading to an unsustainable rise in federal debt. But he counseled against reversing the tax cuts, calling instead for cuts in Social Security, Medicare and Medicaid.

Does anyone still take Mr. Greenspan's pose as a nonpartisan font of wisdom seriously?

When Mr. Greenspan made his contorted argument for tax cuts back in 2001, his reputation made it hard for many observers to admit the obvious: he was mainly looking for some way to do the Bush administration a political favor. But there's no reason to be taken in by his equally weak, contorted argument against reversing those cuts today.

To put Mr. Greenspan's game of fiscal three-card monte in perspective, remember that the push for Social Security privatization is only part of the right's strategy for dismantling the New Deal and the Great Society. The other big piece of that strategy is the use of tax cuts to "starve the beast."

Until the 1970's conservatives tended to be open about their disdain for Social Security and Medicare. But honesty was bad politics, because voters value those programs.

So conservative intellectuals proposed a bait-and-switch strategy: First, advocate tax cuts, using whatever tactics you think may work - supply-side economics, inflated budget projections, whatever. Then use the resulting deficits to argue for slashing government spending.

And that's the story of the last four years. In 2001, President Bush and Mr. Greenspan justified tax cuts with sunny predictions that the budget would remain comfortably in surplus. But Mr. Bush's advisers knew that the tax cuts would probably cause budget problems, and welcomed the prospect.

In fact, Mr. Bush celebrated the budget's initial slide into deficit. In the summer of 2001 he called plunging federal revenue "incredibly positive news" because it would "put a straitjacket" on federal spending.

To keep that straitjacket on, however, those who sold tax cuts with the assurance that they were easily affordable must convince the public that the cuts can't be reversed now that those assurances have proved false. And Mr. Greenspan has once again tried to come to the president's aid, insisting this week that we should deal with deficits "primarily, if not wholly," by slashing Social Security and Medicare because tax increases would "pose significant risks to economic growth."

Really? America prospered for half a century under a level of federal taxes higher than the one we face today. According to the administration's own estimates, Mr. Bush's second term will see the lowest tax take as a percentage of G.D.P. since the Truman administration. And don't forget that President Clinton's 1993 tax increase ushered in an economic boom. Why, exactly, are tax increases out of the question?

O.K., enough about Mr. Greenspan. The real news is the growing evidence that the political theory behind the Bush tax cuts was as wrong as the economic theory.

According to starve-the-beast doctrine, right-wing politicians can use the big deficits generated by tax cuts as an excuse to slash social insurance programs. Mr. Bush's advisers thought that it would prove especially easy to sell benefit cuts in the context of Social Security privatization because the president could pretend that a plan that sharply cut benefits would actually be good for workers.

But the theory isn't working. As soon as voters heard that privatization would involve benefit cuts, support for Social Security "reform" plunged. Another sign of the theory's falsity: across the nation, Republican governors, finding that voters really want adequate public services, are talking about tax increases.

The best bet now is that Mr. Bush will manage to make the poor suffer, but fail to make a dent in the great middle-class entitlement programs.

And the consequence of the failure of the starve-the-beast theory is a looming fiscal crisis - Mr. Greenspan isn't wrong about that. The middle class won't give up programs that are essential to its financial security; the right won't give up tax cuts that it sold on false pretenses. The only question now is when foreign investors, who have financed our deficits so far, will decide to pull the plug.

Budget Deficits Are Unsustainable

Greenspan Pounds Away at Broken Budget Process: John M. Berry

March 4 (Bloomberg) -- The essential message Federal Reserve Chairman Alan Greenspan is trying to pound into the heads of members of Congress in his recent testimony is that the federal budget process is so broken that it has become a danger to the nation's long-term economic health.

One can only hope he is also pounding privately on President George W. Bush, his White House aides and his secretary of the Treasury. The fundamental problem is a lack of restraint at the White House and on Capitol Hill in spending money and cutting taxes. Both are politically popular, of course, and with interest rates and inflation low and the economy moving forward nicely, what the heck.

The very first set of questions Greenspan was asked during his testimony on March 2 before the House Budget Committee provided a good example of the problem.

Greenspan, as he has done several times in the past, urged Congress to renew the so-called pay-go rules which, until they expired in 2002, required that the budget impact of any cut in taxes or increase in entitlement program benefits be offset by other tax increases or spending cuts.

The Bush administration, which has several new tax cuts and extensions of some set to expire in future years on the table, would apply pay-go only to entitlements.

`Political Economy'

Budget Committee Chairman Jim Nussle, an Iowa Republican, likes that version too.

Why, if pay-go had applied to tax cuts in 2003, Congress couldn't have enacted ``a partial elimination of the double taxation of dividends,'' which was controversial, Nussle said.

``Why do you stick to this position, as you have very forcefully over the years'' when that important tax change ``most likely would not have been done as a result of an arbitrary budget rule?'' Nussle asked the Fed chairman.

Responded Greenspan, ``I think we require that to be symmetrical, because it's the principle that I think is involved here, namely that you cannot continuously introduce legislation which tends to expand the budget deficit.''

``Down the road the impact of an ever-rising deficit, especially as a percent of GDP, creates a significant weakness in the structure of the economy,'' Greenspan explained.

``So it's not an issue of economics. It's an issue of, if you want to put it that way, political economy,'' he said.

Nussle wouldn't buy that.

``One of the challenges that we have is that because you stick to that position, there are those who say that we're not doing proper budgeting out here, because we don't `pay for taxes,' quote, unquote,'' Nussle complained.

Political Compromise

``It was part of the political compromise that was reached a number of years ago. It had its impact, it worked for a time, but it has been used as a political hammer, an anvil, against good tax policy at a time when our economy needed that kind of shot in the arm,'' Nussle said.

That's probably exactly why Greenspan thinks pay-go should be reintroduced, even though he loves the dividends tax cut -- if its budget impact is offset.

In his prepared testimony, the Fed chairman said that in advocating a return to some of the budget making procedures in effect in the 1990s, ``I do not mean to suggest that the nation's budget problems will be solved simply by adopting a new set of rules.''

Difficult Choices

``The fundamental fiscal issue is the need to make difficult choices among budget priorities, and this need is becoming ever more pressing in light of the unprecedented number of individuals approaching retirement age,'' Greenspan said.

``For example, future congresses and presidents will, over time, have to weigh the benefits of continued access, on current terms, to advances in medical technology against other spending priorities as well as against tax initiatives that foster increases in economic growth and the revenue base,'' he said.

That's what is really broken in the budget process. No one wants to make choices and the process doesn't force them to do so.

In this regard, Bush, in some ways, has behaved like President Lyndon Johnson did in the mid-1960s.

Then the choice was between paying for Johnson's new Great Society social programs and paying for the Vietnam War. Johnson opted to conceal the cost of the war so he could have both guns and butter.

Hiding the Impact

The cost of the wars and reconstruction in Afghanistan and Iraq haven't been nearly as important to the budget and the economy as was Vietnam. Nevertheless, administration officials have downplayed them at every turn and this year again refused to include them in the fiscal 2006 budget sent to Congress.

Meanwhile, there has been a new set of tax cuts or extensions proposed each year, and the hugely expensive Medicare drug benefit has been passed at the urging of the president.

And the long-term impact of all this has been obscured, quite deliberately, by administration changes in budget documents. For instance, it switched from a 10-year budget window to a five-year window.

In addition, exactly the sort of long-term fiscal analysis Greenspan says is so crucial in making budget choices, which used to appear each year in a budget document entitled ``Analytical Perspectives,'' is no longer included.

These attempts to hide the real impact of tax and spending proposals have been possible only because most members of Congress have gone along with the fictions. After all, in 2001, Congress played numerous games with the revenue loss associated with that year's big tax cut, including repealing its provisions in year 10.

In that case, the fiction was there for all to see. Still, it allowed everyone favoring the tax cut provisions to understate the revenue loss with a straight face. And those were the numbers in the news story headlines.

There is a level of dishonesty in all of this that's appalling, and no one much seems to care. The alternative, after all, might be to make some of those ``difficult choices among budget priorities.''

PayPal Problems from a Sellers Perspective

Question: 

    Do you accept PayPal? 

Answer:

    Short Answer:    That depends. And in
general, not any longer.

---

    Long Answer: We have accepted PayPal as a payment option for eBay auctions almost as soon as PayPal went online in Winter 2000; and have a rating of well over 1,000 with them. While there are several features of PayPal that we appreciate and use regularly, we can no longer accept PayPal payments routinely due to several issues such as:

a) where PayPal has refunded the entire payment to a buyer who claimed one of our items was not as represented, (when in our opinion it clearly was), which directly caused us to lose the payment for the item, (by a chargeback to our PayPal account), had to paid eBay and PayPal their listing, closing, and processing fees, had our item shipped back to us in damaged condition, had the buyer post negative feedback on the transaction on us without just cause, and had to spend well over two hours answering emails. The buyer is "no longer
registered" on eBay. 

b) where PayPal allows buyers to simply file a claim with them, based solely on a perception by the buyer that an item was "not as described" on an eBay listing.

c) whenever there is a complaint with a buyer, or seller for that matter, for an eBay transaction which experiences difficulty, eBay passes off response to PayPal if the item was paid through PayPal. The inherent fairness that previously existed between buyer and seller on eBay has been usurped, and now a seller is much more vulnerable to a malicious, or even casually deceptive buyer experiencing buyer's remorse. 

d) as soon as a claim is filed against a transaction, PayPal puts a hold on funds in the sellers account for the full amount of the transaction paid by the buyer; regardless of the clearly stated mandate by the seller that shipping
costs are not refundable. 

e) if the claim is approved by PayPal, the buyer gets his money back in toto, PayPal and eBay keep their fees, negative feedback posted by the buyer against the seller is almost impossible to have removed, the seller receives their item back, (in most cases), and the item is always returned in much worse condition than when it was sent. There is no penalty of any kind for the buyer. The seller can add that buyer's email address to their blocked bidder list; but that is after the damage has already been done, and there is no way of preventing that same buyer from bidding on the seller's item using another account name.

f) as a wholly owned subsidiary of eBay, PayPal has enjoyed a monopoly on favorable treatment from eBay for auction item payments. Every page of every form sent out by eBay extols the virtues of PayPal, while plainly and overtly "bad-mouthing" every alternative such as C2IT, BIDPAY, PAYINGFAST, etc. 

g) PayPal is not a bank, and does not have to abide by stringent government rules that regulate their behavior. The only regulations they seem to be subject to are from the FTC, and SEC. PayPal has already been fined several times, but the monopoly power they have amassed makes every effort at regulation ex post facto, and easy for PayPal to draw out for months, if not years. 

h) PayPal can offer a Seller a Visa/Mastercard debit card funded by their PayPal account balance, and then have full legal authority to hold funds for chargeback claims. It is legally questionable whether absent that mechanism they
could legally seize funds in the account. Both eBay and PayPal strongly emphasize that a Seller account be linked to a bank account, and add warning notices to Seller listing, as well as their internal/external correspondence forms using "scare tactics" wording if a Seller does not attach a bank account to a eBay or PayPal account.

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There are lots and lots of "horror stories" about PayPal, some of which are patently self-serving; but a careful reader can tell that a problem does exist, yet that neither PayPal nor eBay has corrected, or even addressed
the issue in any meaningful way.

• Class Action Against PayPal: 3. WHAT IS THIS LAWSUIT ABOUT? In early 2002, Plaintiffs Roberta Toher and Jeffrey Resnick filed separate lawsuits against PayPal, Inc. These two cases were later consolidated into one lawsuit in the United States District Court for the Northern District of California, San Jose Division, entitled In re PayPal Litigation, Case No. CV 02 01227-JF (PVT). The lawsuit alleges that PayPal violated the federal Electronic Fund Transfer Act ("EFTA"), 15 U.S.C. §§ 1693 et seq., including provisions requiring PayPal to supply customers with information about dispute resolution procedures and to follow certain procedures when investigating complaints of unauthorized or incorrect electronic fund transfers. For example, the lawsuit claims that PayPal did not provide account statements in the manner required by the EFTA. The lawsuit further alleges that PayPal has placed inappropriate restrictions or other limits on customers' accounts and engaged in other improper practices. Based on these practices, the lawsuit asserts claims under California state law for conversion, money had and received, negligence, and violations of consumer protection statutes. 


• A person who took PayPal to Small Claims Court for seizing his funds without recourse


• AuctionBytes reports on the demise of C2IT: CitiBank closes C2IT after four years. CitiBank had earlier tried to buy PayPal, but was rebuffed.


• California laws related to chargebacks shows why the Case shown above faired better in California than it would have in Delaware


• Re-read
  the PayPal chargeback webform provided for "outside" use


• PayPal's recent addition to the form above states: "Publish your return policy in your auction listings or on your website. Also include your policy in email correspondence with your customer. Please note that federal law and credit card issuer policies provide that buyers may have chargeback rights for merchandise that is not delivered or is defective, even if your policy indicates that all sales are final and that you do not allow returns.


• LexisNexis Chargeback Defender product description: "Chargeback Defender utilizes a unique set of identity and high risk data to calculate the Chargeback Defender score. The score and accompanying reason codes can help you quickly and easily identify credit card risk in most transactions. If you sell products or services online and accept credit cards, Chargeback Defender can save you time, money, and risk exposure due to chargebacks.


• Neither eBay nor PayPal offers robust AVS or FICO style data on Buyers for access by Sellers before they ship an item won on eBay. Sellers can incorporate AVS or FICO style protections into their eBay payment processing; but it must be integrated into the checkout process IN SPITE of eBay's payment methodologies.


• There are dozens of third party entities offering some element of support for Sellers: ChannelAdvisor Pro, Andale, Vendio, Amazon 1-Click, Verisign, LinkPoint, Auction Checkout, Pay-Me-Now, Billpoint, etc; but unfortunately
  eBay can make a change that affects the API's, and the third party programs croak, or have various difficulties. eBay and PayPal get first dibs on changes that favor them. Third party programmers cannot long offer a useful product before eBay/PayPal supplant it with an alternative offering, or just outright blocks access to the related data or service.


• In summary, it appears now that sellers who are more concerned with the potential downsides of post-sales activity than with other marketing/pre-sale concerns should immediately disconnect their eBay and PayPal accounts from any related bank accounts. They should pay their auction fees from a restricted credit card account held by an unaffiliated bank. Acceptable payment options for item purchases should be either in certified funds, or via Western Union BidPay. Sellers should also fully state EVERY possible concern in the text of their listings, especially including product description variances, return privileges, payment terms, feedback postings, and every other CYA option available! The "bad guys" are coming out in force, and if sellers sit on their duffs waiting for "things to get back to normal", they will end up regretting that behavior!


• And finally, for those of you who have been selling online for several years: Did you have the eBay/PayPal style problems on Haggle Online? It's way too early to forcast the demise of eBay - PayPal; but the recent 20% drop in eBay's share price should tell these folks that they had better get their s*** together pretty soon on this, and other fronts. Powerful, greedy, and self-righteous monopolies can tumble all too quickly, especially when they are perceived as operating beyond the realm of reasonable behavior.

USA Today: Sellers on eBay Are Getting Restlessl

Some eBay sellers are going, going, gone
By Jon Swartz, USA TODAY
By Paul Sakuma, AP

For six years, she sold enough scrapbooks, children's clothes and health products to pay bills and squirrel away cash. Last month, she all but ended her association because of higher fees.

"They can charge whatever they want. They're a monopoly," says Dixon, 25, of Anaconda, Mont. She estimates her monthly eBay bill will jump 50%, to $1,500.

Prices aren't the only thing eBay (EBAY) raised when it announced changes to some online-auction services last month. It raised the ire of thousands of its small-business sellers, many of whom are threatening to ditch eBay when the price increases go into effect Feb. 18.

"We feel betrayed and abused," says Rhonda Gorman, 46, who sells clothing and household goods out of her cramped apartment in Costa Mesa, Calif. "We're getting stomped and need to go elsewhere." (Related chart: How price increases will affect eBay Stores)

The budding backlash, punctuated by eBay-bashing Web sites and online message groups, underscores a rough patch for the usually Teflon Silicon Valley giant. Last month, eBay missed quarterly earnings estimates for the first time in at least two years, sending its stock tumbling more than 20% over two days. EBay shares sank 4.4% to $77.93 in trading Tuesday.

The defection of some small-business users among 135.5 million registered users won't register a blip on eBay's finances. But the level of resistance this time, after several price changes the past five years, appears to be more deeply rooted at a time when eBay is aggressively reaching out to small businesses with more generous credit lines and financing options.

About 430,000 individuals and small businesses make part or all of their income from listings on eBay — nearly three times the number in late 2002.

The charges themselves are small for casual sellers, but add up for small businesses that sell hundreds of items a month. "I want eBay to realize it's the little guys that got them to where they are," says Suzie Eads, 37, who has sold more than 10,000 books and collectibles on eBay since 1998. The price increases would increase her monthly eBay bill 40% to $700. She plans to sell fewer items on eBay, and more on rivals Overstock.com and Amazon.com.

More choices

Each time eBay has tinkered with prices, customers threatened to bolt. But few have followed through because they had limited options. That is changing. Smaller auction sites Bidville, ePier.com and iOffer.com, among others, report an increase in new users. Wagglepop.com says 2,700 sellers, most of them eBay defectors, have lined up to join when it starts later this month. "We struck a nerve at the right time," says CEO Ray Romeo, a former eBay user.

Amazon offers digital real estate for small merchants to hawk new and used goods. And businesses increasingly are advertising on search engines such as Google and Yahoo.

Overstock will drop listing fees in half for a month when eBay's new prices start. Its auction listings have soared 79%, to 42,600, since eBay made its announcement last month. EBay listings are up slightly to 13 million over the same period, according to www.dealscart.com, which monitors auction traffic.

"The beautiful thing about the Internet is sellers have a lot of choices," says Michael Dearing, an eBay vice president and general merchandise manager.

Executives at eBay say the fee increases apply to optional features, such as photos of listings and a buy-it-now option, and are intended to stimulate more auction activity — not revenue. "It's about managing the marketplace, not the top line," Dearing says, adding that eBay's take from items sold on the site has hovered near 7% since 2002.

Indeed, eBay's fee increases won't bring in much — about $60 million, or a little over 1% of the company's expected $4.3 billion in 2005 sales — says analyst Mark Mahaney of American Technology Research.

Until recently, the fee-based tinkering has contributed to eBay's explosive growth. Registered users soared 42% to 135 million last year. The value of goods sold on the site improved 44% to $34.2 billion. Meanwhile, an internal survey of sellers by eBay found that four-fifths of them consider the company a "trustworthy business partner."

What is more, the changes apply only to eBay Stores, small businesses that buy and sell more frequently than casual users. They accounted for just 7% of eBay's 1.4 billion listings last year. "Many sellers who think they will be affected aren't," Dearing says. EBay is explaining its new rules via its Web site, e-mail and phone calls, he says. It's the first price increase for eBay Stores owners since 2001.

Deeper issues

Still, the wrenching outcry — disgruntled sellers have resorted to calling it FeeBay and GreedBay — could reflect deeper issues, says Ina Steiner, editor of AuctionBytes.com.

EBay customers are "fed up with shrinking profits, more complicated policies, the occasional fraud and inadequate customer support," Steiner says. "To hear how well eBay is doing financially, and to see ongoing problems on the service, is discouraging."

Many claim eBay's "nickel-and-dime charges" are driving away sellers of inexpensive items. "It's not worth selling anything under $10, if you factor in the costs of listing fees, shipping, packaging and gas to go to the post office," Dixon says. She is donating Tupperware and other items to charity as a tax write-off rather than lose money on eBay.

Marilyn Baker, 42, a seller of lingerie in Streator, Ill., is particularly irked by eBay's decision to charge 35 cents instead of a quarter for a photo with each listing. "It's hard to sell clothing unless you have photos, but I can't afford this," she says. Baker is resurrecting a Web site and for the first time opening a physical store this spring. She's also moving 1,300 items to iOffer.com and Wagglepop.com.

Despite the criticisms, eBay's Dearing insists the company "has been, and always will be, the place for people to build small businesses." "The small seller built this company," he says.

Yet as business novices learn the entrepreneurial ropes on eBay, many are weaning themselves off of it and creating Web sites and storefronts, which they advertise on search engines and through eBay listings.

Bobby Beeman, 42, used to sell antique toys out of a Dallas store before he discovered eBay in the late 1990s. Now, like other eBay sellers, he is considering reopening a physical store. "EBay used to save me money," Beeman says. "But with all these extra charges, I'm not sure anymore."

Cont: Setting Minimum Buyer Requirements on eBay

This is a continuation of the thread on eBay Forums in response to the original question:

"There currently is no way for Sellers to require certain minimums of bidders beyond the most elementary criteria.

After reviewing a random sample of bidders that we have had problems with, exactly 50% are no longer registered users; and over 50% had a feedback score below 10. This was on a base of over 1,100 buyers, over 97% which were satisfactory transactions, or better.

Why doesn't eBay permit Sellers to set their own bidder requirements, such as: any Bidder must have a feedback score of at least ten? From my sample it appears that would go a long way toward making life a bit easier for Sellers, and I forsee no down side to the requirement. So why hasn't it been done?
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The thread continues here.
Archive Copies of the First Seventeen Messages are here.
Archive Copies of the Second Seventeen Messages are here.