The real danger of O'Reilly's ambush interviews

Bill O'Reilly's interview tactics are getting a lot of attention lately, ever since one of his producers ambushed Think Progress blogger Amanda Terkel after Terkel pointed out comments O'Reilly made suggesting he believed one rape victim had made herself a target. What happened to Terkel shouldn't be diminished, as that ambush was particularly egregious, but it's worth remembering that this frequent ploy of O'Reilly's can sometimes be even more damaging.

Last week, O'Reilly broadcast another ambush conducted by Jesse Watters, the same producer who targeted Terkel. This one was of J. Rodgers Padgett, a Florida judge who'd angered O'Reilly by releasing a convicted sex offender on bail pending appeal. This time, as you can see in the video below, Watters and Padgett nearly came to blows. The producer surprised Padgett inside a convenience store and then, when the judge tried to leave, Watters used his leg to block Padgett from closing his car door.

That this particular ambush nearly escalated to violence is bad enough, but what's worse is the way O'Reilly and Watters twisted the facts of the situation. Clearly, no one wants to see a newly convicted sex offender out on the street, certainly not one like the man convicted in this case, whose victim is mentally challenged. But O'Reilly and Watters made it seem as if the judge had a choice in the matter, with Watters even using some loaded language -- "obviously this guy's got some predilection to being soft on sex offenders" -- in a way that seemed to suggest that perhaps Padgett had ulterior motives.

Turns out, unsurprisingly, that the real story differs sharply from the way O'Reilly told it. John Campbell, a local defense lawyer, told Tampa's News Channel 8, "As a matter of law, Judge Padgett had no choice... I would like to see that gentleman locked up as well, but the law doesn't allow for it." According to Campbell, unless it was shown that the convict is a flight risk, he had to be let out on bail pending appeal.

Moreover, as he does in most cases -- Terkel's was an exception -- O'Reilly claimed that the only reason he sent Watters out for the ambush was that they had contacted Padgett, who'd refused to speak to the show. That may be true, but it ignores an important fact: As News Channel 8 reported, "Under Florida law, sitting judges are not allowed to discuss pending cases."

O'Reilly's broadcast has inspired protests from local residents. It's also done some damage to our legal system, the idea that people are entitled to due process. Cable news shows focusing on crime generally oversimplify the law, but this sort of thing is on a different level entirely. In O'Reilly's world, if a judge acts in a way we don't like, then it's time to get him, facts and law be damned. That sort of attitude won't end well for anyone.

America the Tarnished

By PAUL KRUGMAN, NY Times, March 30, 2009

Ten years ago the cover of Time magazine featured Robert Rubin, then Treasury secretary, Alan Greenspan, then chairman of the Federal Reserve, and Lawrence Summers, then deputy Treasury secretary. Time dubbed the three “the committee to save the world,” crediting them with leading the global financial system through a crisis that seemed terrifying at the time, although it was a small blip compared with what we’re going through now.

All the men on that cover were Americans, but nobody considered that odd. After all, in 1999 the United States was the unquestioned leader of the global crisis response. That leadership role was only partly based on American wealth; it also, to an important degree, reflected America’s stature as a role model. The United States, everyone thought, was the country that knew how to do finance right.

How times have changed.

Never mind the fact that two members of the committee have since succumbed to the magazine cover curse, the plunge in reputation that so often follows lionization in the media. (Mr. Summers, now the head of the National Economic Council, is still going strong.) Far more important is the extent to which our claims of financial soundness — claims often invoked as we lectured other countries on the need to change their ways — have proved hollow.

Indeed, these days America is looking like the Bernie Madoff of economies: for many years it was held in respect, even awe, but it turns out to have been a fraud all along.

It’s painful now to read a lecture that Mr. Summers gave in early 2000, as the economic crisis of the 1990s was winding down. Discussing the causes of that crisis, Mr. Summers pointed to things that the crisis countries lacked — and that, by implication, the United States had. These things included “well-capitalized and supervised banks” and reliable, transparent corporate accounting. Oh well.

One of the analysts Mr. Summers cited in that lecture, by the way, was the economist Simon Johnson. In an article in the current issue of The Atlantic, Mr. Johnson, who served as the chief economist at the I.M.F. and is now a professor at M.I.T., declares that America’s current difficulties are “shockingly reminiscent” of crises in places like Russia and Argentina — including the key role played by crony capitalists.

In America as in the third world, he writes, “elite business interests — financiers, in the case of the U.S. — played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive.”

It’s no wonder, then, that an article in yesterday’s Times about the response President Obama will receive in Europe was titled “English-Speaking Capitalism on Trial.”

Now, in fairness we have to say that the United States was far from being the only nation in which banks ran wild. Many European leaders are still in denial about the continent’s economic and financial troubles, which arguably run as deep as our own — although their nations’ much stronger social safety nets mean that we’re likely to experience far more human suffering. Still, it’s a fact that the crisis has cost America much of its credibility, and with it much of its ability to lead.

And that’s a very bad thing.

Like many other economists, I’ve been revisiting the Great Depression, looking for lessons that might help us avoid a repeat performance. And one thing that stands out from the history of the early 1930s is the extent to which the world’s response to crisis was crippled by the inability of the world’s major economies to cooperate.

The details of our current crisis are very different, but the need for cooperation is no less. President Obama got it exactly right last week when he declared: “All of us are going to have to take steps in order to lift the economy. We don’t want a situation in which some countries are making extraordinary efforts and other countries aren’t.”

Yet that is exactly the situation we’re in. I don’t believe that even America’s economic efforts are adequate, but they’re far more than most other wealthy countries have been willing to undertake. And by rights this week’s G-20 summit ought to be an occasion for Mr. Obama to chide and chivy European leaders, in particular, into pulling their weight.

But these days foreign leaders are in no mood to be lectured by American officials, even when — as in this case — the Americans are right.

The financial crisis has had many costs. And one of those costs is the damage to America’s reputation, an asset we’ve lost just when we, and the world, need it most.

Rising Powers Challenge U.S. on Role in I.M.F.

By MARK LANDLER, NY Times, March 30, 2009

WASHINGTON — Barely six months ago, the International Monetary Fund emerged from years of declining relevance, hurriedly cobbling together emergency loans for countries from Iceland to Pakistan, as the first wave of the financial crisis hit.

Now, with world leaders gathering this week in London to plot a response to the gravest global economic downturn since World War II, the fund is becoming a chip in a contest to reshape the postcrisis landscape.

The Obama administration has made fortifying the I.M.F. one of its primary goals for the meeting of the Group of 20, which includes leading industrial and developing countries and the European Union. But China, India and other rising powers seem to believe that the made-in-America crisis has curtailed the ability of the United States to set the agenda. They view the Western-dominated fund as a place to begin staking their claim to a greater voice in global economic affairs.

Treasury Secretary Timothy F. Geithner, who once worked at the fund, has called for its financial resources to be expanded by $500 billion, effectively tripling its lending capacity to distressed countries and cementing its status as the lender of last resort for much of the world.

Japan and the European Union have each pledged $100 billion; the United States has signaled it will contribute a similar sum, though its money will take longer to arrive because of the need for Congressional approval. China, with its mammoth foreign exchange reserves, is the next obvious donor.

Yet officials of China and other developing countries have served notice that they are reluctant to make comparable pledges without getting a greater say in the operations of the fund, which is run by a Frenchman, Dominique Strauss-Kahn, and is heavily influenced by the United States and Western Europe.

A senior Chinese leader, Wang Qishan, said Friday that Beijing was willing to kick in some money, but he called for an overhaul of the way the fund is governed. China wants its quota — which determines its financial contribution and voting power — adjusted to reflect its economic weight better.

China’s contribution, Mr. Wang said, should not be based on the size of its reserves but on its economic output per person, which is still modest. Some American officials now expect a pledge on the order of $50 billion from China.

“Their arms may yet be twisted, but they simply do not want to pony up based on vague promises of governance reform,” said Eswar S. Prasad, a professor of economics at Cornell University who has discussed the matter in recent days with Chinese and Indian officials.

Given the inevitability that these countries will have a growing influence, the London summit meeting, which begins Thursday, is likely to be remembered “as the last hurrah for the U.S. and Europe rescuing the world economy,” said Simon Johnson, a professor at M.I.T. and a former chief economist of the fund.

One reason the I.M.F. has emerged as such a popular cause is that the United States has been unable to rally countries behind its other major priority: economic stimulus. The European Union opposes further stimulus packages in 2010, arguing that its social safety net makes an increase in government spending unnecessary.

European and American officials are also still divided, to a lesser degree, on how to rewrite international financial regulations. France and Germany are more receptive than the United States to giving regulators supranational authority to scrutinize global banks and other financial companies.

“The United States is desperately trying to assert leadership, as if it were 10 years ago, when the U.S. set the agenda,” said Kenneth S. Rogoff, an economist at Harvard and another former chief economist of the fund.

With more countries slipping into crisis by the week, there is general agreement that the fund needs additional resources. Since last year, the I.M.F. has made nearly $50 billion in loans to 13 countries. It is streamlining the process for making loans and loosening its strings, hoping to counter the resentment that built up against it during past crises because of its stringent demands.

At a preparatory meeting two weeks ago, finance ministers of the Group of 20 agreed to “very substantially” increase financing, though the Europeans favored an extra $250 billion, not $500 billion.

Whatever their reservations about financing, the Chinese have seized on the fund for another purpose: to tweak the United States. The governor of China’s central bank, Zhou Xiaochuan, recently proposed that the American dollar be phased out as the world’s default reserve currency. As a replacement, he suggested using special drawing rights, or S.D.R.’s, the synthetic currency created by the fund that is used for transactions between it and its 185 member countries.

Few economists view that idea as a realistic one, at least for years to come. But the mere assertion that the dollar’s pre-eminence is waning — a theme picked up by Russian officials as well — sends a message.

“I don’t think the Chinese or Russians really believe the S.D.R. is a viable currency,” said Mr. Prasad, the Cornell economist. “But they’re laying down a very clear marker that they’re going to be much more assertive about their role.”

Mr. Geithner took the remarks seriously enough that he publicly reaffirmed the primacy of the dollar.

The United States will address China’s status this week, when it announces details of a new high-level strategic and economic dialogue with Beijing, led by Mr. Geithner and Secretary of State Hillary Rodham Clinton, according to a senior administration official, who spoke anonymously because the information was not yet public. The announcement will come after the first meeting between President Obama and the Chinese president, Hu Jintao, in London.

The Obama administration has personal reasons to support the fund. Mr. Geithner was the I.M.F. director of policy planning from 2001 to 2003, after his first stint in the Treasury Department. He recruited Edwin M. Truman, another former Treasury official and a longtime advocate of the fund, as a temporary adviser to develop policies for the Group of 20 meeting.

Just before leaving his academic position at the Peterson Institute for International Economics, Mr. Truman proposed that the fund issue $250 billion in S.D.R.’s on a one-time basis to be allocated to all its members, as another way of increasing its resources. Western European countries, he said, could use their S.D.R.’s to lend money to their troubled Eastern neighbors.

That proposal is in a current draft of the statement to be issued at the Group of 20 meeting. If all the American proposals for the fund are adopted, its resources will approach $1 trillion — a big number, even in these extraordinary times.

Yet for Mr. Johnson of M.I.T., it merely shows how difficult it is for the United States to marshal support for anything else.

“They can’t agree on fiscal policy; they can’t agree on regulations,” he said. “The only thing left is the I.M.F.”

Courting Disaster in South Carolina

Published: March 29, 2009

Now that Gov. Mark Sanford of South Carolina has polished his credentials with the Republican right by recklessly rejecting $700 million in federal education stimulus money, we keep hoping he will change his mind and put the needs of his recession-ravaged state ahead of his political ambitions.

It will be up to more responsible political leaders to act if Mr. Sanford sticks by his disastrous choice, which would drive an already depressed state economy deeper into a hole and place even more South Carolinians at risk of losing their homes.

In the State Legislature, it was encouraging to see influential Republicans’ distancing themselves from what State Senator Hugh Leatherman, the Finance Committee chairman, rightly describes as an irresponsible policy. In a letter sent to Mr. Sanford last week, Mr. Leatherman pleaded with him to change his mind, writing that rejecting the funds would “create absolute chaos in governmental agencies that perform core missions for the people, and will hurt tens of thousands of South Carolina families at a time when uncertainty and fear over the economy already pervade almost every household.”

The federal stimulus money is meant to shield schools from layoffs and reignite a national reform effort that still has a long way to go in places like South Carolina. Without the federal money, state lawmakers say, tuition at state-supported universities could increase dramatically and thousands of teachers could be laid off.

With South Carolina’s unemployment rate already one of the highest in the nation, state lawmakers seem poised to invoke a provision of the federal stimulus law that allows them to override the governor’s decision. They worry, however, that a legal challenge might tie up the issue in the courts beyond the beginning of the state’s next fiscal year.

It would be best, therefore, for Mr. Sanford to find a face-saving way to reverse himself. If he does not, voters should remember that their governor placed politics ahead of schoolchildren and the schools that are struggling to save them.

The Market Mystique

By PAUL KRUGMAN

On Monday, Lawrence Summers, the head of the National Economic Council, responded to criticisms of the Obama administration’s plan to subsidize private purchases of toxic assets. “I don’t know of any economist,” he declared, “who doesn’t believe that better functioning capital markets in which assets can be traded are a good idea.”

Leave aside for a moment the question of whether a market in which buyers have to be bribed to participate can really be described as “better functioning.” Even so, Mr. Summers needs to get out more. Quite a few economists have reconsidered their favorable opinion of capital markets and asset trading in the light of the current crisis.

But it has become increasingly clear over the past few days that top officials in the Obama administration are still in the grip of the market mystique. They still believe in the magic of the financial marketplace and in the prowess of the wizards who perform that magic.

The market mystique didn’t always rule financial policy. America emerged from the Great Depression with a tightly regulated banking system, which made finance a staid, even boring business. Banks attracted depositors by providing convenient branch locations and maybe a free toaster or two; they used the money thus attracted to make loans, and that was that.

And the financial system wasn’t just boring. It was also, by today’s standards, small. Even during the “go-go years,” the bull market of the 1960s, finance and insurance together accounted for less than 4 percent of G.D.P. The relative unimportance of finance was reflected in the list of stocks making up the Dow Jones Industrial Average, which until 1982 contained not a single financial company.

It all sounds primitive by today’s standards. Yet that boring, primitive financial system serviced an economy that doubled living standards over the course of a generation.

After 1980, of course, a very different financial system emerged. In the deregulation-minded Reagan era, old-fashioned banking was increasingly replaced by wheeling and dealing on a grand scale. The new system was much bigger than the old regime: On the eve of the current crisis, finance and insurance accounted for 8 percent of G.D.P., more than twice their share in the 1960s. By early last year, the Dow contained five financial companies — giants like A.I.G., Citigroup and Bank of America.

And finance became anything but boring. It attracted many of our sharpest minds and made a select few immensely rich.

Underlying the glamorous new world of finance was the process of securitization. Loans no longer stayed with the lender. Instead, they were sold on to others, who sliced, diced and puréed individual debts to synthesize new assets. Subprime mortgages, credit card debts, car loans — all went into the financial system’s juicer. Out the other end, supposedly, came sweet-tasting AAA investments. And financial wizards were lavishly rewarded for overseeing the process.

But the wizards were frauds, whether they knew it or not, and their magic turned out to be no more than a collection of cheap stage tricks. Above all, the key promise of securitization — that it would make the financial system more robust by spreading risk more widely — turned out to be a lie. Banks used securitization to increase their risk, not reduce it, and in the process they made the economy more, not less, vulnerable to financial disruption.

Sooner or later, things were bound to go wrong, and eventually they did. Bear Stearns failed; Lehman failed; but most of all, securitization failed.

Which brings us back to the Obama administration’s approach to the financial crisis.

Much discussion of the toxic-asset plan has focused on the details and the arithmetic, and rightly so. Beyond that, however, what’s striking is the vision expressed both in the content of the financial plan and in statements by administration officials. In essence, the administration seems to believe that once investors calm down, securitization — and the business of finance — can resume where it left off a year or two ago.

To be fair, officials are calling for more regulation. Indeed, on Thursday Tim Geithner, the Treasury secretary, laid out plans for enhanced regulation that would have been considered radical not long ago.

But the underlying vision remains that of a financial system more or less the same as it was two years ago, albeit somewhat tamed by new rules.

As you can guess, I don’t share that vision. I don’t think this is just a financial panic; I believe that it represents the failure of a whole model of banking, of an overgrown financial sector that did more harm than good. I don’t think the Obama administration can bring securitization back to life, and I don’t believe it should try.

Spanish Court Weighs Inquiry on Torture for 6 Bush-Era Officials

By MARLISE SIMONS, NY Times

LONDON — A Spanish court has taken the first steps toward opening a criminal investigation into allegations that six former high-level Bush administration officials violated international law by providing the legal framework to justify the torture of prisoners at Guantánamo Bay, Cuba, an official close to the case said.

The case, against former Attorney General Alberto R. Gonzales and others, was sent to the prosecutor’s office for review by Baltasar Garzón, the crusading investigative judge who ordered the arrest of the former Chilean dictator Augusto Pinochet. The official said that it was “highly probable” that the case would go forward and that it could lead to arrest warrants.

The move represents a step toward ascertaining the legal accountability of top Bush administration officials for allegations of torture and mistreatment of prisoners in the campaign against terrorism. But some American experts said that even if warrants were issued their significance could be more symbolic than practical, and that it was a near certainty that the warrants would not lead to arrests if the officials did not leave the United States.

The complaint under review also names John C. Yoo, the former Justice Department lawyer who wrote secret legal opinions saying the president had the authority to circumvent the Geneva Conventions, and Douglas J. Feith, the former under secretary of defense for policy.

Most of the officials cited in the complaint declined to comment on the allegations or could not be reached on Saturday. However their defenders have said their legal analyses and policy work on interrogation practices, conducted under great pressure after the 2001 terrorist attacks, are now being unfairly second-guessed after many years without a terrorist attack on the United States.

The court case was not entirely unexpected, as several human rights groups have been asking judges in different countries to indict Bush administration officials. One group, the Center for Constitutional Rights, had asked a German prosecutor for such an indictment, but the prosecutor declined.

Judge Garzón, however, has built an international reputation by bringing high-profile cases against human rights violators as well as international terrorist networks like Al Qaeda. The arrest warrant for General Pinochet led to his detention in Britain, although he never faced a trial. The judge has also been outspoken about the treatment of detainees at Guantánamo Bay.

Spain can claim jurisdiction in the case because five citizens or residents of Spain who were prisoners at Guantánamo Bay have said they were tortured there. The five had been indicted in Spain, but their cases were dismissed after the Spanish Supreme Court ruled that evidence obtained under torture was not admissible.

The 98-page complaint, a copy of which was obtained by The New York Times, is based on the Geneva Conventions and the 1984 Convention Against Torture, which is binding on 145 countries, including Spain and the United States. Countries that are party to the torture convention have the authority to investigate torture cases, especially when a citizen has been abused.

The complaint was prepared by Spanish lawyers, with help from experts in the United States and Europe, and filed by a Spanish human rights group, the Association for the Dignity of Prisoners.

The National Court in Madrid, which specializes in international crimes, assigned the case to Judge Garzón. His acceptance of the case and referral of it to the prosecutor made it likely that a criminal investigation would follow, the official said.

Even so, arrest warrants, if they are issued, would still be months away.

Gonzalo Boye, the Madrid lawyer who filed the complaint, said that the six Americans cited had had well-documented roles in approving illegal interrogation techniques, redefining torture and abandoning the definition set by the 1984 Torture Convention.

Secret memorandums by Mr. Yoo and other top administration lawyers helped clear the way for aggressive policies like waterboarding and other harsh interrogation techniques, which the C.I.A. director, the attorney general and other American officials have said amount to torture.

The other Americans named in the complaint were William J. Haynes II, former general counsel for the Department of Defense; Jay S. Bybee, Mr. Yoo’s former boss at the Justice Department’s Office of Legal Counsel; and David S. Addington, who was the chief of staff and legal adviser to Vice President Dick Cheney.

Mr. Yoo declined to comment on Saturday, saying that he had not seen or heard of the petition.

Mr. Feith, who was the top policy official at the Pentagon when the prison at Guantánamo was established, said he did not make the decision on interrogation methods and was baffled by the allegations. “I didn’t even argue for the thing I understand they’re objecting to,” he said.

But Mr. Boye said that lawyers should be held accountable for the effects of their work. Noting that the association he represents includes many lawyers, he said: “This is a case from lawyers against lawyers. Our profession does not allow us to misuse our legal knowledge to create a pseudo-legal frame to justify, stimulate and cover up torture.”

Prosecutions and convictions under the Torture Convention have been rare.

Reed Brody, a lawyer at Human Rights Watch who has specialized in this issue, said that even though torture was widely practiced, there were numerous obstacles, including “a lack of political will, the problem of gathering evidence in a foreign country and the failure of countries to pass the necessary laws.”

This year for the first time, the United States used a law that allows it to prosecute torture in other countries. On Jan. 10, a federal court in Miami sentenced Chuckie Taylor, the son of the former Liberian president, to 97 years in a federal prison for torture, even though the crimes were committed in Liberia.

Last October, when the Miami court handed down the conviction, Attorney General Michael B. Mukasey applauded the ruling and said: “This is the first case in the United States to charge an individual with criminal torture. I hope this case will serve as a model to future prosecutions of this type.”

The United States, however, would be expected to ignore an extradition request for former officials, although other investigations within the United States have been proposed. Calls for the Justice Department to open a criminal investigation have so far been resisted by the Obama administration, but for more than four years, the Justice Department ethics office has been conducting its own investigation into the work of Mr. Yoo and some of his colleagues.

While the officials named in the complaint have not addressed these specific accusations, Mr. Yoo defended his work in an opinion column in The Wall Street Journal on March 7, warning that the Obama administration risked harming national security if it punished lawyers like himself.

“If the administration chooses to seriously pursue those officials who were charged with preparing for the unthinkable, today’s intelligence and military officials will no doubt hesitate to fully prepare for those contingencies in the future,” Mr. Yoo wrote.

Scott Shane and Eric Schmitt contributed reporting from Washington.

Feeling Too Down to Rise Up

By SUDHIR VENKATESH

IN Chicago, during the summer of 1992, I watched a rally explode into a riot. Unruly public housing tenants were protesting high prices at local grocery stores. A request to speak with a manager turned into shouts and screams when the proprietor was spotted scurrying out the back door. In minutes, bottles flew overhead, gangs began shooting indiscriminately, people shouted for the heads of the management, and mothers scrambled to shelter infants from flying glass and bullets. In the eyes of the rioters, I could see both anger and euphoria.

These days, we are hearing a lot about “populist rage,” but so far no riots have broken out in front of the Treasury Department or the A.I.G. headquarters. The pundits assure us that Americans are furious, disgusted, mad as hell, but cabinet officials and chief executives haven’t been confronted by throngs of angry citizens. In fact, the only mass disturbance to make news lately was at an “America’s Next Top Model” audition, where three people were arrested on charges of “inciting a riot” — the cause of that uprising, for the record, was not the financial crisis.

The texture of discontent (or lack thereof) can say a lot about a nation, and that Americans today are less likely to rebel may not be an entirely positive sign.

It certainly doesn’t mean we have more love, patience or tolerance for one another. Indeed, it may mean just the opposite, that we tend not to trust one another and that we are more alienated from our neighbors than ever before. The lack of direct action could signal the weakening of a social contract that keeps people meaningfully invested in the fate of our country — which may, in turn, be hindering our ability to resolve this crisis.

Before blogs and radio call-in shows, people joined forces and turned to the streets as their most effective means of expression; a unified, angry crowd was often sufficient to win concessions from employers and governments. And so most rebellions of the 20th century were over bread-and-butter issues like unsafe work conditions, wages and high prices for basic commodities. Even “race riots” were usually motivated by competition between ethnic groups over access to jobs and housing subsidies.

But some outbreaks of lawlessness were also indicators of strong, shared sentiments and were driven by a sense of higher purpose. For example, in 1919 Chicago, black soldiers returned home from World War I to find segregated ghettos, white-dominated unions and racist government practices. Many joined their neighbors who battled white youth and police officers in the streets. They had fought an enemy overseas; now it was their moral duty to fight injustice at home.

Today widespread anger and collective passivity exist side by side. To explain this seeming contradiction, we might look for clues — as so many are doing — in 1930s America. Then, as now, the citizenry reacted angrily to high unemployment, mass layoffs and a crippled banking system.

But it was only several years after the stock market crash that large-scale protests, bread riots and street rebellions began to occur in small towns and big cities. That’s the most pertinent lesson of the Great Depression: people waited, with relative patience, for years for some government response before anyone looted a grocery store or fought off police officers who were evicting families. So it’s possible that if our economic hardships endure, civil unrest could follow.

But if American anger remains corralled on the Internet, into e-mail messages to Congress and in sporadic small-group protests, it is unlikely that the Obama administration will do much to assuage the anger of taxpayers. Administration officials certainly don’t seem concerned that rage will heat up and overflow; after all, anticipating unrest would mean a broad and intensive campaign to shore up housing, food and welfare safety nets. The proposed budget contains a few such line items, but a comprehensive, coordinated program to prevent violence and defuse anger would need sustained commitments from mayors, service providers and civic leaders.

Perhaps the lack of concern is warranted, as several factors make widespread revolt less likely today. Our cities are no longer dense, overcrowded industrial centers where unionized laborers and disgruntled strikers might take a public stand. Concentrated inner-city poverty has declined, too, so don’t expect 1960s-style ghetto unrest.

Our urban centers are instead corporate hubs and the victims of this recession include hundreds of thousands of white-collar workers. For obvious reasons, these folks tend not to have the particular sense of grievance — that a select few are receiving preferential treatment, that they’re on the losing end of a rigged game — that usually sets off a conflagration.

And in today’s cities, even when we share intimate spaces, we tend to be quite distant from one another. Mass disturbances are not highly orchestrated ballets. They require spontaneous interaction, a call and response among unidentified cries of rage, the possibility for a unified mass to form from a gathering of loosely connected individuals.

But these days, technology separates us and makes more of our communication indirect, impersonal and emotionally flat. With headsets on and our hands busily texting, we are less aware of one another’s behavior in public space. Count the number of people with cellphones and personal entertainment devices when you walk down a street. Self-involved bloggers, readers of niche news, all of us listening to our personal playlists: we narrowly miss each other. Effective rebellions require that we sing in unison.

We may also have anger fatigue. Each day brings more layoffs and more news of taxpayer-financed corporate office renovations. Add to this the Iraq war, which is six years old this month, and a national debt that will likely rise by trillions. Such reports provoke fury but after some time, even the righteously indignant can tire and accept the outrageous as status quo.

Ultimately, however, what could keep the lid on unrest is the very issue that has pushed us toward the cliff: our high levels of personal and household debt. The average American owes about $9,000 on credit cards alone. Indebtedness redirects an individual’s energies inward: failing to pay the mortgage and college tuition can bring up feelings of anxiety, shame and a sense of personal failure.

It’s easy to feel that one isn’t working hard enough, that one should try harder to save money or take on additional work. To rebel publicly, even to engage politically, would mean exposing your own inadequacies, so most people just hunker down and keep plugging away at those monthly payments.

As our shame grows, we shutter ourselves inside. Afraid of acknowledging our anger and unable to join those similarly suffering, we grow distant. Worse, we judge quickly and harshly the actions of others; we devolve into snark, which will never lead to meaningful change.

To restore our social bonds, each one of us must overcome our isolating feelings of embarrassment and humiliation and understand that this is a shared plight. We’ll also have to accept that anger, real anger, has a role to play in producing collective catharsis and fostering healing.

Fury, after all, can manifest itself in more productive ways than urban rioting or cable-TV ranting. Fury can inspire real protest, nonviolent civil disobedience, even good old-fashioned, town-hall meetings. That’s how we’ll recover our public life and perhaps help one another through this crisis — storming angrily into the streets and then, once we’re out there, actually talking to one another.

Sudhir Venkatesh, a professor of sociology at Columbia, is the author of “Gang Leader for a Day: A Rogue Sociologist Takes to the Streets.”

Vast Spy System Loots Computers in 103 Countries

By JOHN MARKOFF, NY Times, March 29, 2009

TORONTO — A vast electronic spying operation has infiltrated computers and has stolen documents from hundreds of government and private offices around the world, including those of the Dalai Lama, Canadian researchers have concluded.

In a report to be issued this weekend, the researchers said that the system was being controlled from computers based almost exclusively in China, but that they could not say conclusively that the Chinese government was involved.

The researchers, who are based at the Munk Center for International Studies at the University of Toronto, had been asked by the office of the Dalai Lama, the exiled Tibetan leader whom China regularly denounces, to examine its computers for signs of malicious software, or malware.

Their sleuthing opened a window into a broader operation that, in less than two years, has infiltrated at least 1,295 computers in 103 countries, including many belonging to embassies, foreign ministries and other government offices, as well as the Dalai Lama’s Tibetan exile centers in India, Brussels, London and New York.

The researchers, who have a record of detecting computer espionage, said they believed that in addition to the spying on the Dalai Lama, the system, which they called GhostNet, was focused on the governments of South Asian and Southeast Asian countries.

Intelligence analysts say many governments, including those of China, Russia and the United States, and other parties use sophisticated computer programs to covertly gather information.

The newly reported spying operation is by far the largest to come to light in terms of countries affected.

This is also believed to be the first time researchers have been able to expose the workings of a computer system used in an intrusion of this magnitude.

Still going strong, the operation continues to invade and monitor more than a dozen new computers a week, the researchers said in their report, “Tracking ‘GhostNet’: Investigating a Cyber Espionage Network.” They said they had found no evidence that United States government offices had been infiltrated, although a NATO computer was monitored by the spies for half a day and computers of the Indian Embassy in Washington were infiltrated.

The malware is remarkable both for its sweep — in computer jargon, it has not been merely “phishing” for random consumers’ information, but “whaling” for particular important targets — and for its Big Brother-style capacities. It can, for example, turn on the camera and audio-recording functions of an infected computer, enabling monitors to see and hear what goes on in a room. The investigators say they do not know if this facet has been employed.

The researchers were able to monitor the commands given to infected computers and to see the names of documents retrieved by the spies, but in most cases the contents of the stolen files have not been determined. Working with the Tibetans, however, the researchers found that specific correspondence had been stolen and that the intruders had gained control of the electronic mail server computers of the Dalai Lama’s organization.

The electronic spy game has had at least some real-world impact, they said. For example, they said, after an e-mail invitation was sent by the Dalai Lama’s office to a foreign diplomat, the Chinese government made a call to the diplomat discouraging a visit. And a woman working for a group making Internet contacts between Tibetan exiles and Chinese citizens was stopped by Chinese intelligence officers on her way back to Tibet, shown transcripts of her online conversations and warned to stop her political activities.

The Toronto researchers said they had notified international law enforcement agencies of the spying operation, which in their view exposed basic shortcomings in the legal structure of cyberspace. The F.B.I. declined to comment on the operation.

Although the Canadian researchers said that most of the computers behind the spying were in China, they cautioned against concluding that China’s government was involved. The spying could be a nonstate, for-profit operation, for example, or one run by private citizens in China known as “patriotic hackers.”

“We’re a bit more careful about it, knowing the nuance of what happens in the subterranean realms,” said Ronald J. Deibert, a member of the research group and an associate professor of political science at Munk. “This could well be the C.I.A. or the Russians. It’s a murky realm that we’re lifting the lid on.”

A spokesman for the Chinese Consulate in New York dismissed the idea that China was involved. “These are old stories and they are nonsense,” the spokesman, Wenqi Gao, said. “The Chinese government is opposed to and strictly forbids any cybercrime.”

The Toronto researchers, who allowed a reporter for The New York Times to review the spies’ digital tracks, are publishing their findings in Information Warfare Monitor, an online publication associated with the Munk Center.

At the same time, two computer researchers at Cambridge University in Britain who worked on the part of the investigation related to the Tibetans, are releasing an independent report. They do fault China, and they warned that other hackers could adopt the tactics used in the malware operation.

“What Chinese spooks did in 2008, Russian crooks will do in 2010 and even low-budget criminals from less developed countries will follow in due course,” the Cambridge researchers, Shishir Nagaraja and Ross Anderson, wrote in their report, “The Snooping Dragon: Social Malware Surveillance of the Tibetan Movement.”

In any case, it was suspicions of Chinese interference that led to the discovery of the spy operation. Last summer, the office of the Dalai Lama invited two specialists to India to audit computers used by the Dalai Lama’s organization. The specialists, Greg Walton, the editor of Information Warfare Monitor, and Mr. Nagaraja, a network security expert, found that the computers had indeed been infected and that intruders had stolen files from personal computers serving several Tibetan exile groups.

Back in Toronto, Mr. Walton shared data with colleagues at the Munk Center’s computer lab.

One of them was Nart Villeneuve, 34, a graduate student and self-taught “white hat” hacker with dazzling technical skills. Last year, Mr. Villeneuve linked the Chinese version of the Skype communications service to a Chinese government operation that was systematically eavesdropping on users’ instant-messaging sessions.

Early this month, Mr. Villeneuve noticed an odd string of 22 characters embedded in files created by the malicious software and searched for it with Google. It led him to a group of computers on Hainan Island, off China, and to a Web site that would prove to be critically important.

In a puzzling security lapse, the Web page that Mr. Villeneuve found was not protected by a password, while much of the rest of the system uses encryption.

Mr. Villeneuve and his colleagues figured out how the operation worked by commanding it to infect a system in their computer lab in Toronto. On March 12, the spies took their own bait. Mr. Villeneuve watched a brief series of commands flicker on his computer screen as someone — presumably in China — rummaged through the files. Finding nothing of interest, the intruder soon disappeared.

Through trial and error, the researchers learned to use the system’s Chinese-language “dashboard” — a control panel reachable with a standard Web browser — by which one could manipulate the more than 1,200 computers worldwide that had by then been infected.

Infection happens two ways. In one method, a user’s clicking on a document attached to an e-mail message lets the system covertly install software deep in the target operating system. Alternatively, a user clicks on a Web link in an e-mail message and is taken directly to a “poisoned” Web site.

The researchers said they avoided breaking any laws during three weeks of monitoring and extensively experimenting with the system’s unprotected software control panel. They provided, among other information, a log of compromised computers dating to May 22, 2007.

They found that three of the four control servers were in different provinces in China — Hainan, Guangdong and Sichuan — while the fourth was discovered to be at a Web-hosting company based in Southern California.

Beyond that, said Rafal A. Rohozinski, one of the investigators, “attribution is difficult because there is no agreed upon international legal framework for being able to pursue investigations down to their logical conclusion, which is highly local.”

Financial Policy Despair

By PAUL KRUGMAN

Over the weekend The Times and other newspapers reported leaked details about the Obama administration’s bank rescue plan, which is to be officially released this week. If the reports are correct, Tim Geithner, the Treasury secretary, has persuaded President Obama to recycle Bush administration policy — specifically, the “cash for trash” plan proposed, then abandoned, six months ago by then-Treasury Secretary Henry Paulson.

This is more than disappointing. In fact, it fills me with a sense of despair.

After all, we’ve just been through the firestorm over the A.I.G. bonuses, during which administration officials claimed that they knew nothing, couldn’t do anything, and anyway it was someone else’s fault. Meanwhile, the administration has failed to quell the public’s doubts about what banks are doing with taxpayer money.

And now Mr. Obama has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing.

It’s as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street. And by the time Mr. Obama realizes that he needs to change course, his political capital may be gone.

Let’s talk for a moment about the economics of the situation.

Right now, our economy is being dragged down by our dysfunctional financial system, which has been crippled by huge losses on mortgage-backed securities and other assets.

As economic historians can tell you, this is an old story, not that different from dozens of similar crises over the centuries. And there’s a time-honored procedure for dealing with the aftermath of widespread financial failure. It goes like this: the government secures confidence in the system by guaranteeing many (though not necessarily all) bank debts. At the same time, it takes temporary control of truly insolvent banks, in order to clean up their books.

That’s what Sweden did in the early 1990s. It’s also what we ourselves did after the savings and loan debacle of the Reagan years. And there’s no reason we can’t do the same thing now.

But the Obama administration, like the Bush administration, apparently wants an easier way out. The common element to the Paulson and Geithner plans is the insistence that the bad assets on banks’ books are really worth much, much more than anyone is currently willing to pay for them. In fact, their true value is so high that if they were properly priced, banks wouldn’t be in trouble.

And so the plan is to use taxpayer funds to drive the prices of bad assets up to “fair” levels. Mr. Paulson proposed having the government buy the assets directly. Mr. Geithner instead proposes a complicated scheme in which the government lends money to private investors, who then use the money to buy the stuff. The idea, says Mr. Obama’s top economic adviser, is to use “the expertise of the market” to set the value of toxic assets.

But the Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt. So this isn’t really about letting markets work. It’s just an indirect, disguised way to subsidize purchases of bad assets.

The likely cost to taxpayers aside, there’s something strange going on here. By my count, this is the third time Obama administration officials have floated a scheme that is essentially a rehash of the Paulson plan, each time adding a new set of bells and whistles and claiming that they’re doing something completely different. This is starting to look obsessive.

But the real problem with this plan is that it won’t work. Yes, troubled assets may be somewhat undervalued. But the fact is that financial executives literally bet their banks on the belief that there was no housing bubble, and the related belief that unprecedented levels of household debt were no problem. They lost that bet. And no amount of financial hocus-pocus — for that is what the Geithner plan amounts to — will change that fact.

You might say, why not try the plan and see what happens? One answer is that time is wasting: every month that we fail to come to grips with the economic crisis another 600,000 jobs are lost.

Even more important, however, is the way Mr. Obama is squandering his credibility. If this plan fails — as it almost surely will — it’s unlikely that he’ll be able to persuade Congress to come up with more funds to do what he should have done in the first place.

All is not lost: the public wants Mr. Obama to succeed, which means that he can still rescue his bank rescue plan. But time is running out.

Cramer v. Stewart, in person

Alex Koppleman, Salon.com, March 13, 2009

In the day leading up to Thursday night's face-to-face meeting between feuding cable hosts Jim Cramer and Jon Stewart, both men seemed to be trying to defuse tensions and downplay their very public spat. Stewart even told his audience on Wednesday that the interview, when it happened, was, "by all measure, bound to disappoint anyone that's been following."

He was wrong. What "Daily Show" viewers saw on Thursday night wasn't a boring love-in; it was a smackdown, or perhaps an homage to the human sacrifice scene from "Indiana Jones and the Temple of Doom" -- the one where they rip the victim's heart out and show it to him. At the very least, it was a riveting half-hour, something almost completely unlike anything else ever seen on television.

The clue that the interview wouldn't be rainbows and hugs came early on, when Stewart told his guest, "Look, we're both snake oil salesmen to a certain extent." Cramer, still eager to please, jumped in to say, "I'm not disagreei--" before being cut off by Stewart, who said, "But we do label the show as snake oil here." At this, the CNBC host visibly grimaced.

At points like that during the interview -- and there were many of them -- you almost had to feel sorry for Cramer. It was clear he'd come to the interview prepared to make nice, even desperate to. His voice was plaintive and cracking, his eyes were watery, he seemed willing and eager to agree with any and all of Stewart's criticisms in a futile effort to make the pain stop. Besides, just Wednesday night, the "Daily Show" host had been playing down the feud, and now here he was rolling numerous clips from a 2006 interview that shows Cramer discussing some unsavory practices from his hedge fund days, the kinds of things that could get the Securities and Exchange Commission involved.

And then, on the other hand, so much of the beating Stewart delivered felt deserved, especially when, towards the end, he started getting mad.

"I understand you want to make finance entertaining. But it's not a fucking game," he told Cramer. Then, referring to that video, he continued:

And I -- when I watch that, I get, I can't tell you how angry that makes me. Because what it says to me is that you all know. You all know what's going on. You can draw a straight line from those shenanigans to the stuff that was being pulled at Bear and at AIG and all this derivative market stuff that is this weird Wall Street side bet... Listen, you knew what the banks were doing and yet were touting it for months and months. The entire network was. And so now to pretend this was some crazy once-in-a-lifetime tsunami that no one could have seen coming is disingenuous at best and criminal at worst.

Stewart made clear, on more than one occasion, that it was really CNBC and financial journalism he was angry with, not just Cramer, but that the "Mad Money" host had become the symbol for his anger. And he took out after financial journalism generally.

"Look, nobody's asking for them to be a regulatory agency. But can't -- whose side are they on?" Stewart asked Cramer at one point. "It feels like they have to reconcile: Is their audience the Wall Street traders... These guys at these companies were on a Sherman's March through their companies financed by our 401Ks... And they burned the fucking house down with our money and walked away rich as hell and you guys knew that that was going on."

It's hard to knock Stewart for this kind of thing, as he's absolutely right about what financial journalists should have been doing and about their failure to report a realistic picture of the big banks rather than the rosy one painted by their executives. But he did come across a little naïve, especially for someone who works in television. CNBC's audience is absolutely the traders -- they're the lifeblood of the network. Lay people don't watch business news 24 hours a day, but people in the field do, and so CNBC and plenty of other financial journalism is made by them and for them. Doing the kind of hard-hitting reporting Stewart is calling for would screw up the business model.

Still, it's a nice dream to have, and Stewart at least got his opponent to agree to try it his way.

"Maybe we could remove the financial expert and the 'In Cramer We Trust' and start getting back to fundamentals on the reporting as well and I can go back to making fart noises and funny faces," he said at the close of the interview.

"I think we make that deal, right here," Cramer responded, and the two men shook hands.

― Alex Koppelman

Carcieri Plans to Cut Taxes: Uses Obama's Stimulus Bill to Bridge Shortfall

I read in the Newport Daily News and Providence Journal that Governor Carcieri, who criticized Obama's stimulus bill, intends to use the "Bush policy" of cutting all taxes to corporations, the wealthy, while facing an $866 million deficit.

Carcieri's plan is to follow Bush's "trickle down" policy, which seems to have gotten us into the trouble we're in with the entire country. Caricieri would

• Cut the corporate tax rate to drop, from 9 percent to 7.5 percent, increasingly each year, until it is eliminated completely


• The top personal tax rate will drop by nearly 1/2 from 9.9 percent to 5.5 percent.


• Reduce the inheritance tax by Increasing the amount to be deducted from inheritances to $1 million before facing a tax

How will Carcieri make up the shortfall with an already $866 million deficit and nearly no taxes available in the future? Initially he will:

• Cut $55 million in funding to cities and towns


• Refuse to repay money to the rainy day fund


• Tap , temporarily, to replace (for 2 years) $31 million to cities and towns, from the Obama stimulus fund, that Carcieri criticized heavily (But this will still leave a funding deficit to cities and towns of $24 million per year, and it will only last 2 years, causing further problems, stated below)

This will cause cities and towns to lose money for their operating expenses and for schools. Carcieri belives his "black box" ideology will magically create jobs.

Even so, the cities and towns, without funding, would almost have to increase taxes, institute a city income tax, or increase already high property taxes significantly. They could not do any of these things, but there would be no money then for police, refuse pickup, fire departments, and other city services, as well as no money for schools. All of these would, of course deteriorate quickly.

City services and school quality would decline OR real estate taxes would increase dramatically. Even IF corporations settled here.. and at 0 percent, I am sure they would... it is unlikely anyone could afford to LIVE here. Living over the border in Connecticut or Massachusetts would be desireable at that point, while working on any "black box" jobs created for corporate tax havens.

So perhaps our tiny state of Rhode Island COULD be the Republican "stimulus package" (read no, stimulus - eliminate taxes to coroporations and the wealthy, cut off funding to cities and towns and social services, and "hope for the best").

With no funding to cities and towns, as stated, and no funds to the state, I simply wonder how the state would decrease their already $866 million deficit. Creating jobs in the state with the 2nd highest unemployment rate in the country is desireable, but if everyone has to move to Massachusetts for city services, schools that are funded and any quality of life needs that any human being would want, what is Rhode Island?

It will be a haven for Corporations, the wealthy, and those who have made deals with them, and it will not house anyone under a $300,000 income, or more.

Carcieri's hypocrisy in using the Obama funds he criticized to make his plan "look presentable" for 2 years until it is too late, is quite sad.

Now.. expand this to the U.S. Where will everyone with under $300,000 salaries live? Mexico?

I look forward to the "Republican black box plan" taking effect in such a small state as ours. If it succeeds, certainly, the Republicans can "show everyone the way". But if it fails... while we here in Rhode Island will suffer (or become Massachusetts residents)...the country will have had its second test of the "Bush economic doctrine". The past 8 years were the first test. But if it takes us to remind you all of why we're in this trouble, it's the least we can do.

But if we DO suffer in order to test it once more for the rest of you... will you please use your stimulus package to help out a neighbor?

Greetings From Pennsylvania is Now Greetings From Rhode Island

With a move to Rhode Island, Greetings feels it can't properly rep the PA citizens. (Although we're glad for the Steelers Superbowl win, still. Sorry, New England.. you'll hook us eventually.)



So "Greetings From Pennsylvania! Out of the Blue... state"



is now "Greetings From Rhode Island! Out of the Blue... state"



We can still discuss national politics, arts and technology, along with our new state of Rhode Island, which we dearly love.

Divvying Up the Pork

Republican Leaders Who Target Pork Are Some of the Worst Culprits. So... let's work together.

Washington Post, Thursday, March 12, 2009; A04

Earmarking is a bipartisan practice on Capitol Hill. But the $410 billion spending measure passed with overwhelming Democratic support while most Republicans opposed it. Several Republicans who were wholeheartedly against the bill, however, still got some big-ticket items for their states. Here are some highlights of leading Republicans who received earmarks, despite opposing final passage:

Senate Minority Leader Mitch McConnell (Ky.)

-- Total earmarks co-sponsored: $75.6 million

-- Example: $2.6 million to rehabilitate the Cox building in Maysville, Ky.

Senate Minority Whip Jon Kyl (Ariz.)

-- $25.8 million

-- $500,000 for water-treatment improvements in Surprise, Ariz.

Senate Republican Conference Chairman Lamar Alexander (Tenn.)

-- $32 million

-- $700,000 for sensors to help crop security in Tennessee

Rep. Jerry Lewis (Calif.), ranking GOP member of House Appropriations Committee

-- $18.8 million

-- $77,000 for after-school program in San Jacinto, Calif.

Rep. John M. McHugh (N.Y.), ranking GOP member of House Armed Services Committee

-- $5.4 million

-- $95,000 for new exhibits at the Adirondack Museum in Blue Mountain Lake, N.Y.

Sen. Thad Cochran (Miss.), ranking GOP member of Senate Appropriations Committee

-- $470.9 million*

-- $3.5 million for phase of construction of National Center for Natural Products Research in Oxford, Miss.

Sen. Charles E. Grassley (Iowa), ranking GOP member of Senate Finance Committee

-- $199.1 million

-- $298,000 for seed testing at the Tallgrass Prairie Center in Cedar Falls, Iowa.

Sen. John Cornyn (Tex.), chairman of National Republican Senatorial Committee

-- $86 million

-- $475,000 for ferryboat expansion in Port Aransas, Tex.

Rep. David Dreier (Calif.), ranking GOP member of House Rules Committee

-- $17.2 million

-- $712,500 for new highway interchange in Rancho Cucamonga, Calif.

Rep. Lamar Smith (Tex.), ranking GOP member of House Judiciary Committee

-- $24.6 million

-- $285,000 for curriculum development at Trinity University in San Antonio

* Cochran's total is the largest dollar amount of earmarks for any member of Congress. Of the lawmakers listed above, Cochran, Alexander and McHugh are the only ones who voted in favor of the legislation.

SOURCES: Taxpayers for Common Sense, congressional voting databases

Smothering the American dream

By BOB HERBERT
SYNDICATED COLUMNIST

Working families were in deep trouble long before this mega-recession hit. But too many of the public officials who should have been looking out for the middle class and the poor were part of the reckless and shockingly shortsighted alliance of conservatives and corporate leaders that rigged the economy in favor of the rich and ultimately brought it down completely.

As Jared Bernstein, now the chief economic adviser to Vice President Joe Biden, wrote in the preface to his book, "Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries)":

"Economics has been hijacked by the rich and powerful, and it has been forged into a tool that is being used against the rest of us."

Working people were not just abandoned by big business and their ideological henchmen in government, they were exploited and humiliated. They were denied the productivity gains that should have rightfully accrued to them. They were treated ruthlessly whenever they tried to organize. They were never reasonably protected against the savage dislocations caused by revolutions in technology and global trade.

Working people were told that all of this was good for them, and whether out of ignorance or fear or prejudice or, as my grandfather might have said, damned foolishness, many bought into it.

They signed onto tax policies that worked like a three-card monte game. And they were sold a snake oil concoction called "trickle down" that so addled their brains that they thought it was a wonderful idea to hand over their share of the nation's wealth to those who were already fabulously rich.

America used to be better than this.

The seeds of today's disaster were sown some 30 years ago. Looking at income patterns during that period, my former colleague at The New York Times, David Cay Johnston, noted that from 1980 (the year Ronald Reagan was elected) to 2005, the national economy, adjusted for inflation, more than doubled. (Because of population growth, the actual increase per capita was about 66 percent.)

But the average income for the vast majority of Americans actually declined during those years. The standard of living for the average family improved not because incomes grew but because women entered the workplace in droves.

As hard as it may be to believe, the peak income year for the bottom 90 percent of Americans was way back in 1973, when the average income per taxpayer, adjusted for inflation, was $33,000. That was nearly $4,000 higher, Johnston pointed out, than in 2005.

Men have done particularly poorly. Men who are now in their 30s -- the prime age for raising families -- earn less money than members of their fathers' generation did at the same age.

It may seem like ancient history, but in the first few decades following World War II, the United States, despite many serious flaws, established the model of a highly productive society that shared its prosperity widely and made investments that were geared toward a more prosperous, more fulfilling future.

The American dream was alive and well and seemingly unassailable. But somehow, following the oil shocks, the hyperinflation and other traumas of the 1970s, Americans allowed the right-wingers to get a toehold -- and they began the serious work of smothering the dream.

Ronald Reagan saw Medicare as a giant step on the road to socialism. Newt Gingrich, apparently referring to the original fee-for-service version of Medicare, which was cherished by the elderly, cracked, "We don't get rid of it in Round One because we don't think it's politically smart."

The right-wingers were crafty: You smother the dream by crippling the programs that support it, by starving the government of money to pay for them, by funneling the government's revenues to the rich through tax cuts and other benefits, by looting the government the way gangsters loot legitimate businesses and then pleading poverty when it comes time to fund the services required by the people.

The anti-tax fanatic Grover Norquist summed the matter up nicely when he famously said, "Our goal is to shrink the government to the size where you can drown it in a bathtub." Only they didn't shrink the government, they enlarged it and turned its bounty over to the rich.

Now, with the economy in free fall and likely to get worse, Americans -- despite their suffering -- have an opportunity to reshape the society, and then to move it in a fairer, smarter and ultimately more productive direction.

That is the only way to revive the dream, but it will take a long time and require great courage and sacrifice.

The right-wingers do not want that to happen, which is why they are rooting so hard for President Barack Obama's initiatives to fail. They like the direction that the country took over the past 30 years. They'd love to do it all again.

Bob Herbert is a columnist with The New York Times. Copyright 2009 New York Times News Service.

Miracles Take Time

By BOB HERBERT

Barack Obama has only been president for six weeks, but there is a surprising amount of ire, anger, even outrage that he hasn’t yet solved the problems of the U.S. economy, that he hasn’t saved us from the increasingly tragic devastation wrought by the clownish ideas of right-wing conservatives and the many long years of radical Republican misrule.

This intense, impatient, often self-righteous, frequently wrongheaded and at times willfully destructive criticism has come in waves, and not just from the right. Mr. Obama is as legitimate a target for criticism as any president. But there is a weird hysterical quality to some of the recent attacks that suggests an underlying fear or barely suppressed rage. It’s a quality that seems not just unhelpful but unhealthy.

Mr. Obama is being hammered — depending on the point of view of the critics — for the continuing collapse of the stock market, for not moving fast enough to revive the suicidal financial industry, for trying to stem the flood tide of home foreclosures, for trying to bring health insurance coverage to some of the millions of Americans who don’t have any, for running up huge budget deficits as he tries to fend off the worst economic emergency since World War II and for not taking time out from all of the above to deal with — get this — earmarks.

Earmarks.

More than 4.4 million jobs have been lost since this monster recession officially got under way in December 2007, and we’ve got people wigging out over earmarks. Folks, get a grip. Some earmarks are good, some are not, but collectively they account for a tiny, tiny portion of the national budget — less than 1 percent.

Freaking out over earmarks is like watching a neighborhood that is being consumed by flames and complaining that there is crabgrass on some of the lawns.

In the midst of the craziness, conservatives are busy trying to blame this epic economic catastrophe — a conflagration of their own making — on the new president. Forget Ronald Reagan and George Herbert Walker Bush and George Herbert Hoover Bush and the Heritage Foundation and the Club for Growth and Phil Gramm and Newt Gingrich and all the rest. The right-wingers would have you believe this is Obama’s downturn.

The bear market would no doubt have magically turned around by now, and those failing geniuses at the helm of our flat-lined megacorporations would no doubt be busy manufacturing new profits and putting people back to work — if only Mr. Obama had solved the banking crisis, had lowered taxes on the rich, had refused to consider running up those giant deficits (a difficult thing to do at the same time that you are saving banks and lowering taxes), and had abandoned any inclination that he might have had to reform health care and make it a little easier for ordinary American kids to get a better education.

As the columnist Charles Krauthammer was kind enough to inform us: “The markets’ recent precipitous decline is a reaction not just to the absence of any plausible bank rescue plan, but also to the suspicion that Obama sees the continuing financial crisis as usefully creating the psychological conditions — the sense of crisis bordering on fear-itself panic — for enacting his ‘big-bang’ agenda to federalize and/or socialize health care, education and energy, the commanding heights of post-industrial society.”

That’s a more genteel version of the sentiment expressed a couple of weeks ago by the perpetually hysterical Alan Keyes, a Republican who was beaten by Mr. Obama in the Illinois Senate race in 2004. “Obama is a radical communist,” said Mr. Keyes, “and I think it is becoming clear. That is what I told people in Illinois, and now everybody realizes it’s true.”

I don’t know whether President Obama’s ultimate rescue plan for the financial industry will work. He is a thoughtful man running a thoughtful administration and the plan, a staggeringly complex and difficult work in progress, hasn’t been revealed yet.

What I know is that the renegade clowns who ruined this economy, the Republican right in alliance with big business and a fair number of feckless Democrats — all working in opposition to the interests of working families — have no credible basis for waging war against serious efforts to get us out of their mess.

Maybe the markets are down because demand has dried up, because many of the nation’s biggest firms have imploded and because Americans are losing their jobs and their homes by the millions. Maybe a dose of reality is in order, as opposed to the childish desire for yet another stock market bubble.

Maybe the nuns in grammar school were right when they counseled that patience is a virtue. The man has been president for six weeks.