Republican's Gift Held Racial Parody of Obama

FROM KEYSTONE: I missed this story.. both about Saltsman, The Republican Party and its chairmanship candidates, AND about Limbaugh.

Both should resign, just as David Duke was ostracized for such behavior. Anyone supporting it is no better than any other Klan member. Pehaps they just want to be able to feel it's OK to act like that even though they know it's wrong.

Sort of like kids when they were under 5.. . except they all have better inner compasses than these folks to begin with.So long Saltsman and Limbaugh. Your time has passed. And it was wrong in any time.

By Michael D. Shear
Washington Post Staff Writer
Saturday, December 27, 2008; A05

Chip Saltsman, a candidate for chairman of the Republican National Committee, sent committee members this month a holiday music CD that included "Barack the Magic Negro," a parody song first aired in 2007 by talk show host Rush Limbaugh.

Created by conservative satirist Paul Shanklin, the song puts new lyrics to the tune of "Puff the Magic Dragon," and it is performed as if black activist Al Sharpton were singing it. Limbaugh played it after the Los Angeles Times ran an opinion piece with the same title.

"A guy from the LA paper said it made guilty whites feel good, they'll vote for him and not for me cuz he's not from the hood," the song goes. "Oh, Barack the magic negro lives in DC, the LA Times they called him that because he's black but not authentically."

The CD accompanied holiday greetings from Saltsman, a Tennessee resident who managed former Arkansas governor Mike Huckabee's campaign for president. Saltsman announced his bid to lead the Republican Party this month.

He did not return a call seeking comment last night. Saltsman had earlier told the Hill newspaper, which first reported the incident, that the song is meant as a joke. "Paul Shanklin is a longtime friend, and I think that RNC members have the good humor and good sense to recognize that his songs for 'The Rush Limbaugh Show' are light-hearted political parodies," he told the newspaper.

Another candidate to lead the GOP, South Carolina party chair Katon Dawson, drew headlines this fall by resigning his membership of 12 years in a whites-only country club, weeks before launching his run for the national job.

The incidents for both men come as Republicans are reeling from losing the presidency and dozens of House and Senate seats, and as many in the party are trying to improve relations with African Americans, who voted in record numbers for Barack Obama and other Democratic candidates last month.

Among the candidates for RNC chairman are two African Americans: Michael Steele, the former lieutenant governor of Maryland; and Ken Blackwell, a former secretary of state in Ohio. Neither could be reached last night for comment.

A spokesman for President-elect Obama also declined to comment.

The RNC is scheduled to vote for chairman at the end of January

Curbing Credit Card Predators

NY Times Editorial

Federal regulators are finally doing something about the unfair and deceptive credit card practices that have helped to keep millions of Americans permanently mired in debt. New rules issued last week will limit or prohibit some of the most blatant abuses. But the next Congress must do more if Americans are to get fair, clear credit card rules that allow them to make informed spending decisions.

In recent years, credit card companies have stealthily adopted a variety of billing strategies that are designed to maximize penalties and fees, meanwhile driving up interest rates to 25 percent or higher. The companies hook cardholders with attractively low teaser interest rates — while reserving the right to raise those rates at any time and for any reason.

To make matters worse, credit card contracts are often 30 pages long and written in language even lawyers find hard to understand.

The billing strategies are designed to lure cardholders into the debt trap and keep them there. Under a strategy known as universal default, for example, rates can be raised — even retroactively, on old purchases — when cardholders fail to pay bills not related to the credit card account. Congress, which is considering several bills to curtail unfairness, should outlaw this.

The new rules don’t forbid universal default. But they would at least prohibit retroactive rate increases, unless the cardholder is more than 30 days late on the credit card payment itself. Another change announced last week prohibits the widespread practice of charging cardholders interest on debts they have already paid.

Another important change limits the usurious fees that companies often charge to cardholders simply because they have poor credit histories. These fees, consumer advocates say, can amount to half of the credit these cardholders are offered.

The new rules do not take effect until 2010. That’s not soon enough. Congress could make these and other changes immediate by promptly passing a credit card reform package.

Stop Being Stupid

By BOB HERBERT

I’ve got a new year’s resolution and a new slogan for the country.

The resolution may be difficult, but it’s essential. Americans must resolve to be smarter going forward than we have been for the past several years.

Look around you. We have behaved in ways that were incredibly, astonishingly and embarrassingly stupid for much too long. We’ve wrecked the economy and mortgaged the future of generations yet unborn. We don’t even know if we’ll have an automobile industry in the coming years. It’s time to stop the self-destruction.

The slogan? “Invest in the U.S.” By that I mean we should stop squandering the nation’s wealth on unnecessary warfare overseas and mindless consumption here at home and start making sensible investments in the well-being of the American people and the long-term health of the economy.

The mind-boggling stupidity that we’ve indulged in was hammered home by a comment almost casually delivered by, of all people, Bernie Madoff, the mild-mannered creator of what appears to have been a nuclear-powered Ponzi scheme. Madoff summed up his activities with devastating simplicity. He is said to have told the F.B.I. that he “paid investors with money that wasn’t there.”

Somehow, over the past few decades, that has become the American way: to pay for things — from wars to Wall Street bonuses to flat-screen TVs to video games — with money that wasn’t there.

Something for nothing became the order of the day. You want to invade Iraq? Convince yourself that oil revenues out of Baghdad will pay for it. (Meanwhile, carve out another deficit channel in the federal budget.) You want to pump up profits in the financial sector? End the oversight and let the lunatics in the asylum run wild.

For those who wanted a bigger house in a nicer neighborhood, there were mortgages with absurdly easy terms. Credit-card offers came in the mail like confetti, and we used them like there was no tomorrow. For students stunned by the skyrocketing cost of tuition, there were college loans that could last a lifetime.

Money that wasn’t there.

Plenty of people managed their credit wisely. But much of the country, including many of the top government officials and financial titans who were supposed to be guarding the nation’s wealth, acted as if there would never be a day of reckoning, a day when — inevitably — the soaring markets would crash and the bubbles explode.

We were stupid in so many ways. We shipped American jobs overseas by the millions and came up with the fiction that this was a good deal for just about everybody. We could have and should have taken the time and made the effort to think globalization through, to be smarter about it and craft ways to cushion its more harmful effects and to share its benefits more equitably.

We bought into the dopey idea that you could radically cut taxes and still maintain critical government services — and fight two wars to boot!

We were living in a dream world. The general public, and to a great extent the press, closed its eyes to the increasingly complex and baffling machinations of the financial industry, which kept screaming that oversight would ruin everything.

We should have known better. It didn’t require a genius (or even an economics degree) to understand a crucial point that popped up some years ago in a front-page article in The Wall Street Journal: “Markets are a great way to organize economic activity, but they need adult supervision.”

Did Alan Greenspan not understand that? Bob Rubin? Larry Summers?

Now that the reality of a stunning economic downturn has so roughly intervened, we at least have the option of being smarter going forward. There is broad agreement that we have no choice but to go much more deeply into debt to jump-start the economy. But we have tremendous choices as to how we use that debt.

We should use it to invest in the U.S. — in a world-class infrastructure (in its broadest sense) to serve as the platform for a world-class, 21st-century economy, and in a system of education that actually prepares American youngsters to deal successfully with the real world they will be encountering.

We need to invest in a health care system that improves the quality of American lives, enhances productivity, puts large numbers of additional people to work and eases the competitive burden of U.S. corporations.

We need to care for our environment (if long-term survival means anything to us) and get serious about weaning ourselves from foreign oil.

And, finally, we need to start living within our means and get past the nauseating idea that the essence of our culture and the be-all and end-all of the American economy is the limitless consumption of trashy consumer goods.

It’s time to stop being stupid.

A Race to the Bottom

By BOB HERBERT

Toward the end of an important speech in Washington last month, the president of the American Federation of Teachers, Randi Weingarten, said to her audience:

“Think of a teacher who is staying up past midnight to prepare her lesson plan... Think of a teacher who is paying for equipment out of his own pocket so his students can conduct science experiments that they otherwise couldn’t do... Think of a teacher who takes her students to a ‘We, the People’ debating competition over the weekend, instead of spending time with her own family.”

Ms. Weingarten was raising a cry against the demonizing of teachers and the widespread, uninformed tendency to cast wholesale blame on teachers for the myriad problems with American public schools. It reminded me of the way autoworkers have been vilified and blamed by so many for the problems plaguing the Big Three automakers.

But Ms. Weingarten’s defense of her members was not the most important part of the speech. The key point was her assertion that with schools in trouble and the economy in a state of near-collapse, she was willing to consider reforms that until now have been anathema to the union, including the way in which tenure is awarded, the manner in which teachers are assigned and merit pay.

It’s time we refocused our lens on American workers and tried to see them in a fairer, more appreciative light.

Working men and women are not getting the credit they deserve for the jobs they do without squawking every day, for the hardships they are enduring in this downturn and for the collective effort they are willing to make to get through the worst economic crisis in the U.S. in decades.

In testimony before the U.S. Senate this month, the president of the United Auto Workers, Ron Gettelfinger, listed some of the sacrifices his members have already made to try and keep the American auto industry viable.

Last year, before the economy went into free fall and before any talk of a government rescue, the autoworkers agreed to a 50 percent cut in wages for new workers at the Big Three, reducing starting pay to a little more than $14 an hour.

That is a development that the society should mourn. The U.A.W. had traditionally been a union through which workers could march into the middle class. Now the march is in the other direction.

Mr. Gettelfinger noted that his members “have not received any base wage increase since 2005 at G.M. and Ford, and since 2006 at Chrysler.”

Some 150,000 jobs at General Motors, Ford and Chrysler have vanished outright through downsizing over the past five years. And like the members of Ms. Weingarten’s union (and other workers across the country, whether unionized or not), the autoworkers are prepared to make further sacrifices as required, as long as they are reasonably fair and part of a shared effort with other sectors of the society.

We need some perspective here. It is becoming an article of faith in the discussions over an auto industry rescue, that unionized autoworkers should be taken off of their high horses and shoved into a deal in which they would not make significantly more in wages and benefits than comparable workers at Japanese carmakers like Toyota.

That’s fine if it’s agreed to by the autoworkers themselves in the context of an industry bailout at a time when the country is in the midst of a financial emergency. But it stinks to high heaven as something we should be aspiring to.

The economic downturn, however severe, should not be used as an excuse to send American workers on a race to the bottom, where previously middle-class occupations take a sweatshop’s approach to pay and benefits.

The U.A.W. has been criticized because its retired workers have had generous pensions and health coverage. There’s a horror! I suppose it would have been better if, after 30 or 35 years on the assembly line, those retirees had been considerate enough to die prematurely in poverty, unable to pay for the medical services that could have saved them.

Randi Weingarten and Ron Gettelfinger know the country is going through a terrible period. Their workers, like most Americans, are already getting clobbered and worse is to come.

But there is no downturn so treacherous that it is worth sacrificing the long-term interests — or, equally important — the dignity of their members.

Teachers and autoworkers are two very different cornerstones of American society, but they are cornerstones nonetheless. Our attitudes toward them are a reflection of our attitudes toward working people in general. If we see teachers and autoworkers as our enemies, we are in serious need of an attitude adjustment.

The World According to Cheney

Vice President Dick Cheney has a parting message for Americans: They should quit whining about all the things he and President Bush did to undermine the rule of law, erode the balance of powers between the White House and Congress, abuse prisoners and spy illegally on Americans. After all, he said, Franklin Roosevelt and Abraham Lincoln did worse than that.

So Mr. Cheney and Mr. Bush managed to stop short of repeating two of the most outrageous abuses of power in American history — Roosevelt’s decision to force Japanese-Americans into camps and Lincoln’s declaration of martial law to silence his critics? That’s not exactly a lofty standard of behavior.

Then again, it must be exhausting to rewrite history as much as Mr. Cheney has done in a series of exit interviews where he has made those comments. It seems as if everything went just great in the Bush years.

The invasion of Iraq was exactly the right thing to do, not an unnecessary war that required misleading Americans. The postinvasion period was not bungled to the point where Americans got shot up by an insurgency that the Bush team failed to see building.

The horrors at Abu Ghraib were not the result of the Pentagon’s decision to authorize abusive and illegal interrogation techniques, which Mr. Cheney endorsed. And only three men were subjected to waterboarding. (Future truth commissions take note.)

In Mr. Cheney’s reality, the crippling budget deficit was caused mainly by fighting two wars and by essential programs like “enhancing the security of our shipping container business.”

Well, no. The Bush team’s program to scan cargo for nuclear materials at air, land and sea ports has been mired in delays, cost overruns and questions about effectiveness. As for the deficit, the Congressional Budget Office has said the Bush-Cheney tax cuts for the wealthy were the biggest reason that the budget went into the red.

Some of Mr. Cheney’s comments were self-serving spin (as when The Washington Times helpfully prodded him to reveal that even though the world might have seen Mr. Bush as insensitive to the casualties of war, Mr. Cheney himself made a “secret” mission to comfort the families of the dead.)

Mr. Cheney was simply dishonest about Mr. Bush’s decision to authorize spying on Americans’ international calls without a warrant. He claimed the White House kept the Democratic and Republican Congressional leadership fully briefed on the program starting in late 2001. He said he personally ran a meeting at which “they were unanimous, Republican and Democrat alike” that the program was essential and did not require further Congressional involvement.

But in a July 17, 2003, letter to Mr. Cheney, Senator John Rockefeller IV, then vice chairman of the Senate Intelligence Committee, said he wanted to “reiterate” the concerns he expressed in “the meeting today.” He said “the activities we discussed raise profound oversight issues” and created “concern regarding the direction the Administration is moving with regard to security, technology and surveillance.”

Mr. Cheney mocked Vice President-elect Joseph Biden for saying that he does not intend to have his own “shadow government” in the White House. Mr. Cheney said it was up to Mr. Biden to decide if he wants “to diminish the office of vice president.”

Based on Mr. Cheney’s record and his standards for measuring these things, we’re certain a little diminishing of that office would be good for the country.

Who Wants to Kick a Millionaire?

By Frank Rich, NY Times

DURING the Great Depression, American moviegoers seeking escape could ogle platoons of glamorous chorus girls in “Gold Diggers of 1933.” Our feel-good movie of the year is “Slumdog Millionaire,” a Dickensian tale in which we root for an impoverished orphan from Mumbai’s slums to hit the jackpot on the Indian edition of “Who Wants to Be a Millionaire.”

It’s a virtuoso feast of filmmaking by Danny Boyle, but it’s also the perfect fairy tale for our hard times. The hero labors as a serf in the toilet of globalization: one of those mammoth call centers Westerners reach when ringing an 800 number to, say, check on credit card debt. When he gets his unlikely crack at instant wealth, the whole system is stacked against him, including the corrupt back office of a slick game show too good to be true.

We cheer the young man on screen even if we’ve lost the hope to root for ourselves. The vicarious victory of a third world protagonist must be this year’s stocking stuffer. The trouble with “Slumdog Millionaire” is that it, like all classic movie fables, comes to an end — as it happens, with an elaborately choreographed Bollywood musical number redolent of “Gold Diggers of 1933.” Then we are delivered back to the inescapable and chilling reality outside the theater’s doors.

Just when we thought that reality couldn’t hit a new bottom it did with Bernie Madoff, a smiling shark as sleazy as the TV host in “Slumdog.” A pillar of both the Wall Street and Jewish communities — a former Nasdaq chairman, a trustee at Yeshiva University — he even victimized Elie Wiesel’s Foundation for Humanity with his Ponzi scheme. A Jewish financier rips off millions of dollars devoted to memorializing the Holocaust — who could make this stuff up? Dickens, Balzac, Trollope and, for that matter, even Mel Brooks might be appalled.

Madoff, of course, made up everything. When he turned himself in, he reportedly declared that his business was “all just one big lie.” (The man didn’t call his 55-foot yacht “Bull” for nothing.) As Brian Williams of NBC News pointed out, the $50 billion thought to have vanished is roughly three times as much as the proposed Detroit bailout. And no one knows how it happened, least of all the federal regulators charged with policing him and protecting the public. If Madoff hadn’t confessed — for reasons that remain unclear — he might still be rounding up new victims.

There is a moral to be drawn here, and it’s not simply that human nature is unchanging and that there always will be crooks, including those in high places. Nor is it merely that Wall Street regulation has been a joke. Of what we’ve learned about Madoff so far, the most useful lesson can be gleaned from how his smart, well-heeled clients routinely characterized the strategy that generated their remarkably steady profits. As The Wall Street Journal noted, they “often referred to it as a ‘black box.’ ”

In the investment world “black box” is tossed around to refer to a supposedly ingenious financial model that is confidential or incomprehensible or both. Most of us know the “black box” instead as that strongbox full of data that is retrieved (sometimes) after a plane crash to tell the authorities what went wrong. The only problem is that its findings arrive too late to save the crash’s victims. The hope is that the information will instead help prevent the next disaster.

The question in the aftermath of the Madoff calamity is this: Why do we keep ignoring what we learn from the black boxes being retrieved from crash after crash in our economic meltdown? The lesson could not be more elemental. If there’s a mysterious financial model producing miraculous returns, odds are it’s a sham — whether it’s an outright fraud, as it apparently is in Madoff’s case, or nominally legal, as is the case with the Wall Street giants that have fallen this year.

Wall Street’s black boxes contained derivatives created out of whole cloth, deriving their value from often worthless subprime mortgages. The enormity of the gamble went undetected not only by investors but by the big brains at the top of the firms, many of whom either escaped (Merrill Lynch’s E. Stanley O’Neal) or remain in place (Citigroup’s Robert Rubin) after receiving obscene compensation for their illusory short-term profits and long-term ignorance.

There has been no punishment for many of those who failed to heed this repeated lesson. Quite the contrary. The business magazine Portfolio, writing in mid-September about one of the world’s biggest insurance companies, observed that “now that A.I.G is battling to survive, it is its black box that may save it yet.” That box — stuffed with “accounting or investments so complex and arcane that they remain unknown to most investors” — was so huge that Washington might deem it “too big to fail.”

Sure enough — and unlike its immediate predecessor in collapse, Lehman Brothers — A.I.G. was soon bailed out to the tune of $123 billion. Most of that also disappeared by the end of October. But not before A.I.G. executives were caught spending $442,000 on a weeklong retreat to a California beach resort.

There are more black boxes still to be pried open, whether at private outfits like Madoff’s or at publicly traded companies like General Electric, parent of the opaque GE Capital Corporation, the financial services unit that has been the single biggest contributor to the G.E. bottom line in recent years. But have we yet learned anything? Incredibly enough, as we careen into 2009, the very government operation tasked with repairing the damage caused by Wall Street’s black boxes is itself a black box of secrecy and impenetrability.

Last week ABC News asked 16 of the banks that have received handouts from the Treasury Department’s $700 billion Troubled Asset Relief Program the same two direct questions: How have you used that money, and how much have you spent on bonuses this year? Most refused to answer.

Congress can’t get the answers either. Its oversight panel declared in a first report this month that the Treasury is doling out billions “without seeking to monitor the use of funds provided to specific financial institutions.” The Treasury prefers instead to look at “general metrics” indicating the program’s overall effect on the economy. Well, we know what the “general metrics” tell us already: the effect so far is nil. Perhaps if we were let in on the specifics, we’d start to understand why.

In its own independent attempt to penetrate the bailout, the Government Accountability Office learned that “the standard agreement between Treasury and the participating institutions does not require that these institutions track or report how they plan to use, or do use, their capital investments.” Executives at all but two of the bailed-out banks told the G.A.O. that the “money is fungible,” so they “did not intend to track or report” specifically what happens to the taxpayers’ cash.

Nor is there any serious accounting for executive pay at these seminationalized companies. As Amit Paley of The Washington Post reported, a last-minute, one-sentence loophole added by the Bush administration to the original bailout bill gutted the already minimal restrictions on executive compensation. And so when Goldman Sachs, Henry Paulson’s Wall Street alma mater, says that it is not using public money to pay executives, we must take it on faith.

In the wake of the Madoff debacle, there are loud calls to reform the Securities and Exchange Commission, including from the president-elect. Under both Clinton and Bush, that supposed watchdog agency ignored repeated and graphic warnings of Madoff’s Ponzi scheme as studiously as Bush ignored Al Qaeda’s threats during the summer of 2001.

But fixing that one agency is no panacea. All the talk about restoring “confidence” and “faith” in capitalism will be worthless if we still can’t see what’s going on in the counting rooms. In his role as chairman of the Federal Reserve Bank of New York, Timothy Geithner, Barack Obama’s nominee for Treasury secretary, has been at the center of the action in the bailout’s black box, including the still-murky and conflicting actions (and nonactions) taken with Lehman and A.I.G. His confirmation hearings demand questions every bit as tough as those that were lobbed at the executives from Detroit’s Big Three.

On Friday, Geithner’s partner in bailout management, Paulson, asked Congress to give the Treasury the second half of the $700 billion bailout stash. But without transparency and accountability in Washington’s black box, as well as Wall Street’s, there will continue to be no trust in the system, no matter how many cops the S.E.C. puts on the beat. Even the family-owned real-estate company of Eliot Spitzer, the former “Sheriff of Wall Street,” had entrusted money with Madoff.

We’ll keep believing, not without reason, that the whole game is as corrupt as the game show in “Slumdog Millionaire” — only without the Hollywood/Bollywood ending. We’ll keep wondering how so many at the top keep avoiding responsibility and reaping taxpayers’ billions while relief for those at the bottom remains as elusive as straight answers from those Mumbai call centers fielding American debtors.

This wholesale loss of confidence is a catastrophe that not even the new president’s most costly New Deal can set right.

Hope Amid the Gloom

By BOB HERBERT

Is the end of the war in sight?

I don’t mean Iraq. I’m talking about the war against working people in the U.S. that has taken such a vicious economic toll over the past three decades.

Even as Americans by the thousands sign up for jobless benefits in this horrendous holiday season, or line up to declare bankruptcy, or stand sorrowfully aside as their homes are foreclosed upon, there are some slender reasons to hope.

On Friday, George W. Bush, in the slapstick final weeks of his disastrous presidency, grudgingly announced that, yes, emergency loans would be made available to prevent the collapse of the U.S. auto industry. He looked like a boy who had been forced to eat his spinach, or drink his castor oil.

But the economy is in such an awful state that even the most backward administration of our lifetime recognized that risking the chain reaction of a complete auto industry meltdown was not an option. (The Bush deal is unfairly onerous to auto workers, but the loans will serve as a bridge to the Obama era, when, presumably, a more equitable arrangement could be worked out.)

Mr. Bush’s announcement came a day after it was learned that President-elect Obama had chosen Representative Hilda Solis of California, a fierce advocate of workers, to be his labor secretary. The Obama administration also is committed to moving quickly on an economic stimulus package that could reach $1 trillion over two years.

These are developments that portend a radically different environment for the nation’s workers. From Ronald Reagan’s voodoo economics to Henry Paulson’s $700 billion Troubled Asset Relief Program, we’ve put the mighty resources of the national government overwhelmingly on the side of those who were already rich and powerful.

Ordinary workers have suffered. It took years to get a lousy little boost in the minimum wage for the working poor. Attempts to expand health insurance coverage were fought almost to a standstill. Guaranteed pensions vanished. And the maniacs who set fire to the economy with their incendiary financial instruments (yet another form of voodoo) were hot to privatize Social Security.

As Andy Stern, president of the huge Service Employees International Union, told me on Friday: “We’ve had a 25-year experience with market-worshipping, deregulating, privatizing, trickle-down policies, and it has ended us up with the greatest economy on earth staggering, and with the greatest amount of inequality since the Great Depression.”

The contempt for workers over this long period has hardly been hidden. Until Mr. Bush was forced by circumstances to tap the TARP program for the auto industry loans (small potatoes compared with the gargantuan Wall Street bailouts), the administration had gone out of its way to keep the program’s hundreds of billions of dollars reserved for the elites of the financial services industry and their associates.

These elites, of course, were the geniuses who ruined the most powerful economy on earth. When Citigroup went into yet another swoon last month, the rush to rescue it was breathtaking. Posses don’t come more elegant: the outgoing treasury secretary, Hank Paulson; the incoming treasury secretary (and president of the Federal Reserve Bank of New York), Timothy Geithner; and a former treasury secretary (not to mention Citigroup board member), Robert Rubin.

They materialized magnificently, armed with hundreds of billions in taxpayer bailout cash.

Leo Gerard, president of the steelworkers union, summed up the government’s attitude nicely when he said: “Washington will bail out those who shower before work, but not those who shower afterwards.”

Working people have been treated like enemies, a class to be preyed upon. Labor unions were ferociously attacked. Jobs were shipped overseas by the millions. People were hired as temps or consultants so benefits could be denied.

All of this may finally be changing. It remains to be seen how strong a voice Ms. Solis will have in the Obama administration, but she is pro-worker to her core, a politician who actually knows what it’s like to walk a picket line.

And there have been other promising developments. More than 200 laid-off workers staged a successful six-day sit-in at a factory in Chicago this month, demanding and eventually getting severance pay and benefits that they were owed by law.

A more substantial victory occurred in Tar Heel, N.C., last week when workers, after a brutal 15-year struggle, succeeded in organizing the notorious Smithfield Packing slaughterhouse, the largest hog-killing and processing plant in the world.

These are shaky steps in the overall scheme of things, to be sure. But at long last, they are steps in the right direction.

Gail Collins is off today.

The Madoff Economy

By PAUL KRUGMAN

The revelation that Bernard Madoff — brilliant investor (or so almost everyone thought), philanthropist, pillar of the community — was a phony has shocked the world, and understandably so. The scale of his alleged $50 billion Ponzi scheme is hard to comprehend.

Yet surely I’m not the only person to ask the obvious question: How different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole?

The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole.

Let’s start with those paychecks. Last year, the average salary of employees in “securities, commodity contracts, and investments” was more than four times the average salary in the rest of the economy. Earning a million dollars was nothing special, and even incomes of $20 million or more were fairly common. The incomes of the richest Americans have exploded over the past generation, even as wages of ordinary workers have stagnated; high pay on Wall Street was a major cause of that divergence.

But surely those financial superstars must have been earning their millions, right? No, not necessarily. The pay system on Wall Street lavishly rewards the appearance of profit, even if that appearance later turns out to have been an illusion.

Consider the hypothetical example of a money manager who leverages up his clients’ money with lots of debt, then invests the bulked-up total in high-yielding but risky assets, such as dubious mortgage-backed securities. For a while — say, as long as a housing bubble continues to inflate — he (it’s almost always a he) will make big profits and receive big bonuses. Then, when the bubble bursts and his investments turn into toxic waste, his investors will lose big — but he’ll keep those bonuses.

O.K., maybe my example wasn’t hypothetical after all.

So, how different is what Wall Street in general did from the Madoff affair? Well, Mr. Madoff allegedly skipped a few steps, simply stealing his clients’ money rather than collecting big fees while exposing investors to risks they didn’t understand. And while Mr. Madoff was apparently a self-conscious fraud, many people on Wall Street believed their own hype. Still, the end result was the same (except for the house arrest): the money managers got rich; the investors saw their money disappear.

We’re talking about a lot of money here. In recent years the finance sector accounted for 8 percent of America’s G.D.P., up from less than 5 percent a generation earlier. If that extra 3 percent was money for nothing — and it probably was — we’re talking about $400 billion a year in waste, fraud and abuse.

But the costs of America’s Ponzi era surely went beyond the direct waste of dollars and cents.

At the crudest level, Wall Street’s ill-gotten gains corrupted and continue to corrupt politics, in a nicely bipartisan way. From Bush administration officials like Christopher Cox, chairman of the Securities and Exchange Commission, who looked the other way as evidence of financial fraud mounted, to Democrats who still haven’t closed the outrageous tax loophole that benefits executives at hedge funds and private equity firms (hello, Senator Schumer), politicians have walked when money talked.

Meanwhile, how much has our nation’s future been damaged by the magnetic pull of quick personal wealth, which for years has drawn many of our best and brightest young people into investment banking, at the expense of science, public service and just about everything else?

Most of all, the vast riches being earned — or maybe that should be “earned” — in our bloated financial industry undermined our sense of reality and degraded our judgment.

Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that “the financial system as a whole has become more resilient” — thanks to derivatives, no less? The answer, I believe, is that there’s an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they’re doing.

After all, that’s why so many people trusted Mr. Madoff.

Now, as we survey the wreckage and try to understand how things can have gone so wrong, so fast, the answer is actually quite simple: What we’re looking at now are the consequences of a world gone Madoff.

The Torture Report

New York Times Editorial

Most Americans have long known that the horrors of Abu Ghraib were not the work of a few low-ranking sociopaths. All but President Bush’s most unquestioning supporters recognized the chain of unprincipled decisions that led to the abuse, torture and death in prisons run by the American military and intelligence services.

Now, a bipartisan report by the Senate Armed Services Committee has made what amounts to a strong case for bringing criminal charges against former Defense Secretary Donald Rumsfeld; his legal counsel, William J. Haynes; and potentially other top officials, including the former White House counsel Alberto Gonzales and David Addington, Vice President Dick Cheney’s former chief of staff.

The report shows how actions by these men “led directly” to what happened at Abu Ghraib, in Afghanistan, in Guantánamo Bay, Cuba, and in secret C.I.A. prisons.

It said these top officials, charged with defending the Constitution and America’s standing in the world, methodically introduced interrogation practices based on illegal tortures devised by Chinese agents during the Korean War. Until the Bush administration, their only use in the United States was to train soldiers to resist what might be done to them if they were captured by a lawless enemy.

The officials then issued legally and morally bankrupt documents to justify their actions, starting with a presidential order saying that the Geneva Conventions did not apply to prisoners of the “war on terror” — the first time any democratic nation had unilaterally reinterpreted the conventions.

•

That order set the stage for the infamous redefinition of torture at the Justice Department, and then Mr. Rumsfeld’s authorization of “aggressive” interrogation methods. Some of those methods were torture by any rational definition and many of them violate laws and treaties against abusive and degrading treatment.

These top officials ignored warnings from lawyers in every branch of the armed forces that they were breaking the law, subjecting uniformed soldiers to possible criminal charges and authorizing abuses that were not only considered by experts to be ineffective, but were actually counterproductive.

One page of the report lists the repeated objections that President Bush and his aides so blithely and arrogantly ignored: The Air Force had “serious concerns regarding the legality of many of the proposed techniques”; the chief legal adviser to the military’s criminal investigative task force said they were of dubious value and may subject soldiers to prosecution; one of the Army’s top lawyers said some techniques that stopped well short of the horrifying practice of waterboarding “may violate the torture statute.” The Marines said they “arguably violate federal law.” The Navy pleaded for a real review.

The legal counsel to the chairman of the Joint Chiefs of Staff at the time started that review but told the Senate committee that her boss, Gen. Richard Myers, ordered her to stop on the instructions of Mr. Rumsfeld’s legal counsel, Mr. Haynes.

The report indicates that Mr. Haynes was an early proponent of the idea of using the agency that trains soldiers to withstand torture to devise plans for the interrogation of prisoners held by the American military. These trainers — who are not interrogators but experts only on how physical and mental pain is inflicted and may be endured — were sent to work with interrogators in Afghanistan, in Guantánamo and in Iraq.

On Dec. 2, 2002, Mr. Rumsfeld authorized the interrogators at Guantánamo to use a range of abusive techniques that were already widespread in Afghanistan, enshrining them as official policy. Instead of a painstaking legal review, Mr. Rumsfeld based that authorization on a one-page memo from Mr. Haynes. The Senate panel noted that senior military lawyers considered the memo “ ‘legally insufficient’ and ‘woefully inadequate.’ ”

Mr. Rumsfeld rescinded his order a month later, and narrowed the number of “aggressive techniques” that could be used at Guantánamo. But he did so only after the Navy’s chief lawyer threatened to formally protest the illegal treatment of prisoners. By then, at least one prisoner, Mohammed al-Qahtani, had been threatened with military dogs, deprived of sleep for weeks, stripped naked and made to wear a leash and perform dog tricks. This year, a military tribunal at Guantánamo dismissed the charges against Mr. Qahtani.

The abuse and torture of prisoners continued at prisons run by the C.I.A. and specialists from the torture-resistance program remained involved in the military detention system until 2004. Some of the practices Mr. Rumsfeld left in place seem illegal, like prolonged sleep deprivation.

•

These policies have deeply harmed America’s image as a nation of laws and may make it impossible to bring dangerous men to real justice. The report said the interrogation techniques were ineffective, despite the administration’s repeated claims to the contrary.

Alberto Mora, the former Navy general counsel who protested the abuses, told the Senate committee that “there are serving U.S. flag-rank officers who maintain that the first and second identifiable causes of U.S. combat deaths in Iraq — as judged by their effectiveness in recruiting insurgent fighters into combat — are, respectively, the symbols of Abu Ghraib and Guantánamo.”

We can understand that Americans may be eager to put these dark chapters behind them, but it would be irresponsible for the nation and a new administration to ignore what has happened — and may still be happening in secret C.I.A. prisons that are not covered by the military’s current ban on activities like waterboarding.

A prosecutor should be appointed to consider criminal charges against top officials at the Pentagon and others involved in planning the abuse.

•

Given his other problems — and how far he has moved from the powerful stands he took on these issues early in the campaign — we do not hold out real hope that Barack Obama, as president, will take such a politically fraught step.

At the least, Mr. Obama should, as the organization Human Rights First suggested, order his attorney general to review more than two dozen prisoner-abuse cases that reportedly were referred to the Justice Department by the Pentagon and the C.I.A. — and declined by Mr. Bush’s lawyers.

Mr. Obama should consider proposals from groups like Human Rights Watch and the Brennan Center for Justice to appoint an independent panel to look into these and other egregious violations of the law. Like the 9/11 commission, it would examine in depth the decisions on prisoner treatment, as well as warrantless wiretapping, that eroded the rule of law and violated Americans’ most basic rights. Unless the nation and its leaders know precisely what went wrong in the last seven years, it will be impossible to fix it and make sure those terrible mistakes are not repeated.

We expect Mr. Obama to keep the promise he made over and over in the campaign — to cheering crowds at campaign rallies and in other places, including our office in New York. He said one of his first acts as president would be to order a review of all of Mr. Bush’s executive orders and reverse those that eroded civil liberties and the rule of law.

That job will fall to Eric Holder, a veteran prosecutor who has been chosen as attorney general, and Gregory Craig, a lawyer with extensive national security experience who has been selected as Mr. Obama’s White House counsel.

A good place for them to start would be to reverse Mr. Bush’s disastrous order of Feb. 7, 2002, declaring that the United States was no longer legally committed to comply with the Geneva Conventions.

Fixing Agriculture

NY Times Editorial

Tom Vilsack, President-elect Barack Obama’s choice to lead the Agriculture Department has the merit of being unsatisfactory to both extremes of the farm-policy debates.

Zealous advocates of sustainable agriculture question his support of biotechnology, while partisans of the status quo find him insufficiently loyal to the system of farm subsidies. That leaves him with a very large center of support. He’ll need it to move this country’s broken agricultural policy in a new direction.

During his days as governor of Iowa, Mr. Vilsack embraced innovation — encouraging the use of farmland to produce energy from ethanol and wind power, while promoting better treatment of migrant workers. He has the additional advantage of having governed a state where small, innovative farms are emerging.

The department he will inherit, while responsible for extraordinary gains in research and productivity, has long favored the biggest farmers. That has produced a sterile landscape of factory farms, broken towns and endless miles of row crops like corn and soybeans.

Last year’s terrible farm bill left the old subsidy system essentially intact. But Mr. Vilsack can prepare the ground for the next one. He should endorse a modest cap on price supports so that they would benefit small farmers. He also has expressed a welcome desire to end the vertical integration in the packing industry that allows giant meatpackers to own the animals they process.

He also must take an impartial look at corn ethanol. Congress has mandated a big increase in production as a prelude to more advanced biofuels. But first the country needs an honest assessment of corn ethanol’s pluses and minuses, its effect on climate change and food prices and its reliability as a source of income for farmers.

The Agriculture Department also houses the Forest Service, which means Mr. Vilsack will be responsible for the national forests. The Bush administration has waged an eight-year assault on President Bill Clinton’s roadless rule, which offered permanent protection from commercial development to about 60 million roadless acres. Mr. Vilsack should reaffirm that rule and expand its protections to include Alaska’s Tongass National Forest.

The department’s programs influence many critical issues — conservation, nutrition, rural development and, through the food-stamp program, the well-being of lower-income Americans. These are powerful tools for change and equity. The next secretary must use them wisely.