American Politics Newsletter 5/4

The Early Word: Regulatory Rounds
By JANIE LORBER

The Senate will hunker down at 2 p.m. today to reshape legislation designed to overhaul the financial regulatory system, a process that could take at least two weeks.
The changes, proposed by members on both sides of the aisle, may draw some Republican support for what had largely been a Democrat-backed bill. Expect to see amendments proposing to forbid the use of taxpayer money to prop up a company and to stop banks from becoming “too big to fail” in the first place. The Times’s Carl Hulse elaborates.
Democrats may have won a small victory in getting their bill to the floor, but the debate has moved into precarious territory for both parties, explains The Times’s John Harwood.
The main Republican argument that the legislation would not prevent future bailouts fell flat. Going forward, the conversation will revolve around issues with far greater consequences for Wall Street, but far less political appeal: The consumer protection agency; the Volcker rule, which would bar large institutions from certain “proprietary trading” activities; and Senator Blanche Lincoln’s plan to force banks to spin off profitable operations for buying and selling financial “derivatives.”
The debate has swung so far toward regulation that it threatens to outstrip the intentions of the legislation’s principal authors, and complicate the Obama administration’s ability to reel it back in.
Still, several prominent experts argue the bill would do little to avoid the next financial crisis, report The Times’s Binyamin Appelbaum and Sewell Chan.
They say legislation does not address key issues like the instability of capital markets that provide money for lenders or the futures of Fannie Mae and Freddie Mac. Others believe we still don’t understand the disaster well enough to craft legislation to prevent another one.
Politico’s Martin Kady has posted this list of obstacles facing Senator Christopher J. Dodd, Democrat of Connecticut, the chairman of the Banking Committee.
In light of the looming battle, Mr. Dodd canceled plans to attend a fund-raiser Monday for Senator Kirsten Gillibrand, Democrat of New York, with financial donors, Politico reports.
Nonproliferation Conference: The 189 signatories to the Nuclear Nonproliferation Treaty gather today in Washington for a monthlong conference aimed at strengthening the agreement and, in particular, pursuing an effort to persuade Iran to suspend its uranium enrichment program.
American officials hope to pre-empt a Mideast arms race by persuading oil-rich countries neighboring Iran to give up the right to make atomic fuel that could be turned into bombs if they are allowed to develop nuclear power.
American Nukes: The Pentagon today will release long-classified statistics about the total size of America’s nuclear arsenal, The Times’s David E. Sanger reports.
Immigration Debate: Many Republican Hispanics are reconsidering their party affiliation after Arizona’s Republican governor signed the country’s toughest illegal immigration legislation, The Wall Street Journal reports.
Health Beat: As many as 20 states will not run federally funded high-risk insurance pools set up by the new health care law for those who are too sick to qualify for insurance between now and 2014 when companies are required to cover them, The Los Angeles Times reported. The group, led largely by Republican officials, are afraid their states will end up sharing the operating costs.
Kaiser Health News summarizes responses around the country.
Daily President: Mr. Obama is back in Washington today after a busy weekend that included an emergency trip to the Gulf Coast, where crude oil continues to gush from an oil well leak 5,000 feet below the water’s surface.
At 4 p.m. today, Mr. Obama will deliver remarks at the Commander in Chief Trophy Presentation with the Naval Academy in the Rose Garden. Then, at 6:45 p.m., he will host a dinner for the Business Council in the State Dining Room.
Out West: California’s Republican gubernatorial candidates faced off in a debate Sunday night. The contest echoes other Republican primaries around the country, revolving around one argument: Which candidate — Meg Whitman, the front-runner and former chief executive of eBay, or Steve Poizner, the state insurance commissioner — is the true conservative.
Midterm News: In Pennsylvania, a slew of challenges to congressional incumbents across the state has made this year’s cycle exceptionally competitive, according to The Pittsburgh Post-Gazette.
Pelosi Profile: The Washington Post’s Paul Kane examines the role played by Speaker Nancy Pelosi at this point in the midterm election campaigns, when she’s vilified by Republicans and traveling to raise funds to maintain a Democratic majority.
Should Senator Ensign Resign? Senator Tom Harkin, Democrat of Iowa, thinks so, Politico reports.
Gates Speaks: Defense Secretary Robert M. Gates will discuss the challenges of paying for national defense during time of economic difficulties at 12:45 p.m. at the Gaylord National Resort and Convention Center in Maryland.
Iraqis Play Ball: The State Department is sponsoring a baseball camp for Iraqis. The department’s cultural affairs office has brought a group of young baseball players from Iraq to Washington for a weeklong baseball clinic.
Science Bowl: Today is the final day of the Department of Energy’s 20th annual Science Bowl, a competition between 105 regional high school and middle school championship teams from 42 states. The final round begins at 9:15 a.m. at the National Building Museum in Washington with Michelle Obama asking bonus questions at 11:15 a.m




Greenspan Wanted Housing-Bubble Dissent Kept Secret

As top Federal Reserve officials debated whether there was a housing bubble and what to do about it, then-Chairman Alan Greenspan argued that the dissent should be kept secret so that the Fed wouldn't lose control of the debate to people less well-informed than themselves.
"We run the risk, by laying out the pros and cons of a particular argument, of inducing people to join in on the debate, and in this regard it is possible to lose control of a process that only we fully understand," Greenspan said, according to the transcripts of a March 2004 meeting.
At the same meeting, a Federal Reserve bank president from Atlanta, Jack Guynn, warned that "a number of folks are expressing growing concern about potential overbuilding and worrisome speculation in the real estate markets, especially in Florida. Entire condo projects and upscale residential lots are being pre-sold before any construction, with buyers freely admitting that they have no intention of occupying the units or building on the land but rather are counting on 'flipping' the properties--selling them quickly at higher prices."
Had Guynn's warning been heeded and the housing market cooled, the financial collapse of 2008 could have been avoided. But his comment was kept secret until Friday, when the central bank released the transcripts of Federal Open Market Committee meetings for 2004 and CalculatedRisk spotted it. The transcripts for 2005 to the present are still secret.
"The substantial run-up in house prices, which we have followed in Florida and also see in the populous Northeast and West Coast of the United States, may be at least partially attributable to unusually low mortgage rates influenced by our very accommodative policy," Guynn warned.
But when the Fed released contemporaneous minutes of the meeting, the bank downplayed Guynn's concerns.
"Reports from some contacts suggested that speculative forces might be boosting housing demand in some parts of the country, with concomitant effects on prices, suggesting the possibility that house prices might be moving into the high end of the range that could be consistent with fundamentals," reads the minutes, which were released to the public several weeks after the meeting.
Note the qualifiers "might be," "suggesting the possibility," "might be," "could be." In the real world that Guynn described there is nothing whatsoever "consistent with fundamentals" that could explain "buyers freely admitting that they have no intention of occupying the units or building on the land but rather are counting on 'flipping' the properties."
The release of the transcripts comes at a bad time politically for the Federal Reserve, as it works to prevent Congress from authorizing the Government Accountability Office to audit the central bank.
The audit language has already passed the House, despite White House and Fed opposition, and a Senate amendment by Bernie Sanders (I-Vt.) is gaining momentum, cosponsored as of Monday morning by ten Republicans and five Democrats.
But the Fed also benefits from the timing. "Transcripts of meetings for an entire year are released to the public with a five-year lag," according the Fed's own policy. Had the transcripts been released on time, they could have influenced the confirmation of Ben Bernanke for a second term as chairman. Meanwhile, the Fed policy of releasing a full year at once deprives the public of transcripts from the first four months of 2005, which are now five years old. A Fed spokeswoman tells HuffPost those transcripts will be available at roughly this time next year.
At the same March meeting, Bernanke said that he had reviewed the transparency policies of foreign central banks and found that other banks were more forthcoming. "It seems to me that we might want to consider the possibility of providing the public with some type of regular financial stability report, perhaps as part of the Monetary Policy Report to the Congress or in some other existing venue or perhaps as a stand-alone document," Bernanke suggested. More than five years later, with Bernanke now chairman, that report has yet to be made public, though the Fed did create an inter-divisional internal working group on financial stability.
Other than the passing mention of speculation, the March minutes imply that the meeting participants had a rosy outlook on the housing bubble. "Activity in the housing market moderated in January and February from its elevated pace in the fourth quarter. Single-family housing starts and permits stepped down, although both measures remained above their average levels of the first three quarters of 2003," the minutes read. "Overall, expenditures were supported by sizable gains in real disposable personal income and increases in household wealth owing to rising home and equity prices. ... Committee members noted that activity in the housing sector, while still quite elevated, had fallen back from its extraordinary pace of late last year."
But there were indications from others that housing prices were getting out of hand. "A second concern is that policy accommodation -- and the expectation that it will persist -- is distorting asset prices. Most of this distortion is deliberate and a desirable effect of the stance of policy," said Federal Reserve Board Vice Chairman Don Kohn, meaning that low interest rates were artificially propping up housing prices. "But as members of the Committee have been pointing out, it's hard to escape the suspicion that at least around the margin some prices and price relationships have gone beyond an economically justified response to easy policy. House prices fall into this category."
The suspicion that Kohn says is hard to escape doesn't appear in the minutes; rather, it only appears in the transcripts that were released on Friday. While the House debated a measure to authorize an audit of the Fed, Kohn personally lobbied against it. He has since announced his resignation.
The president of the Federal Reserve Bank of Boston, Cathy Minehan, also voiced concerns. "New England's rate of inflation, as measured by the Boston CPI, is rising much faster than the nation's, largely because of a 6.3 percent increase in shelter costs versus a year ago. The high price of housing worries many in the region who find that hiring the skilled workers they need in health care, for example, is made even more difficult by high housing costs," she said. While conceding that raising interest rates could come with its own risks, she argued: "I think the costs to us in terms of credibility would be greater if the situation got out of hand on the upside."
Even Tim Geithner, then a vice chairman of the Fed, raised concerns. "[T]he issue has been raised by Vice Chairman Geithner and others that our current policy stance may contribute to potential financial imbalances down the road," then-Vice Chairman Ben Bernanke said, according to the transcript, before dismissing such concerns. ("Imbalance," of course, is a gentle term to describe what the housing crash ultimately wrought.)
Three months later, participants at the June meeting were still concerned. Stephen Oliner, the Fed's associate research director, showed the committee a chart of the growing disparity between home and rent prices, the most obvious indication of a housing bubble. Roger Ferguson, a Fed vice chairman, asked about a footnote in the chart that said the graph had been adjusted to reflect biases in the trends, according to the transcript. Oliner described the adjustments as "technical."
"Had we not adjusted for them, the rent-to-price ratio would have been much lower at the end point. So it would have looked more alarming," he said. Oliner also flipped the housing line upside down so that it's not shooting off into the sky and is instead descending. "I don't want to leave the impression that we think there's a huge housing bubble. We believe a lot of the rise in house prices is rooted in fundamentals. But even after you account for the fundamentals, there's a part of the increase that is hard to explain," said Oliner.
Jeff Lacker, president of the Richmond Federal Reserve Bank, was also curious about the chart. "Just to follow up on what Roger was asking about the panel in chart three on housing valuations. In that panel the relative movement of the two measures is somewhat key to at least the intuitive persuasiveness of the argument that housing might be overvalued," said Lacker. A laugh was then had by Greenspan and the other committee members about the confusing chart.
"You can't trust them to do it right!" Greenspan cracked, according to the transcript. No reference to the chart appears in the June minutes.
Instead, the minutes reflect Greenspan and Bernanke's position that the rise in housing prices was nothing to worry about. Here's what the Fed's minutes told the public: "In housing markets, activity had remained at generally high levels, with only a few signs that rising mortgage rates were beginning to hold down sales and construction. There was evidence in some areas that inventories of unsold homes had risen. Members noted that persisting overall strength in housing might to some extent be a response to expectations of further increases in mortgage rates, implying that a slowdown might be likely later in the year."





Foreign Policy:

At nuclear conference, U.N. scolds Ahmadinejad for defying resolutions
By Colum Lynch, Mary Beth Sheridan and William Branigin

UNITED NATIONS -- The United Nations' top leadership used a high-level nuclear conference Monday to publicly scold Iranian President Mahmoud Ahmadinejad for his country's defiance of U.N. resolutions, while the United States and its European allies staged a walkout to protest Tehran's nuclear stance.
U.N. Secretary General Ban Ki-moon and the chief U.N. nuclear arms watchdog, Yukiya Amano, blamed Ahmadinejad, who listened from the audience, for provoking the diplomatic standoff over Tehran's nuclear program.
The remarks by Ban constituted an extraordinary rebuke of a world leader in the U.N. General Assembly chamber and reflected mounting concern that Tehran's nuclear policy threatens to undermine the review conference of the nuclear Non-Proliferation Treaty.
"I call on Iran to comply fully with Security Council resolutions and cooperate fully with the International Atomic Energy Agency," Ban said at the opening of the nearly month-long conference. "Let us be clear: The onus is on Iran to clarify the doubts and concerns about its program."
Ban urged the Iranian leader to "engage constructively" in international talks aimed at resolving Iran's nuclear standoff with the U.N. Security Council. He said Tehran should accept a proposal by the IAEA to ship Iran's nuclear fuel abroad in exchange for a more purified form of uranium to power the country's medical research reactor. The plan is backed by the United States, Russia, China and other key powers.
In a rare breach in protocol, Ban left the General Assembly hall for another meeting shortly before Ahmadinejad -- the only head of state to address the nuclear conference -- delivered his speech. When Ahmadinejad took to the podium, he responded directly to Ban.
"The secretary general said that Iran must accept the fuel exchange and that the ball is now in Iran's court," Ahmadinejad said. "Well, I'd like to tell you and inform him as well that we'd accepted that from the start, and I'd like to announce once again that [it is] an accepted deal. Therefore, we have now thrown the ball in the court of those who should accept our proposal and embark on cooperation with us."
Iran has repeatedly said it is willing to discuss the fuel swap, only to reverse course. It has recently engaged in preliminary discussions with Turkey and Brazil on a plan to revive talks on the deal. But the United States and its European partners have expressed skepticism, saying that Iran's latest interest in talks is aimed at stalling a U.S.-backed initiative to impose a fourth round of U.N. sanctions on Tehran. Russia and China have cited Iran's refusal to accept such a deal in justifying their decision to pursue sanctions.
The Iranian leader used his speech to deliver a fiery attack on the United States, saying it introduced nuclear weapons to the world and is fueling the global nuclear arms race. He accused the United States and other nuclear states of manipulating the international arms control system, including the International Atomic Energy Agency, to preserve its nuclear privileges while pressuring non-nuclear states to give up their rights to produce their own nuclear fuel for energy purposes.
"Those who committed the first atomic bombardment are considered to be among the most hated individuals in human history," he said. "Regrettably, the government of the United States has not only used nuclear weapons, but it also continues to threaten to use such weapons against other countries, including Iran."
The IAEA's director general, Amano, made it clear that he is not satisfied with Iran's efforts to resolve the issue. In his address to the General Assembly, Amano echoed Ban's tough approach, criticizing what he described as Iran's lack of cooperation with the agency.
Even before the opening speeches, the conference was shaping up as a showdown between Iran and the United States, with each side jockeying for allies in the escalating dispute over the Islamic Republic's nuclear program.
The New York conference is held every five years to review the Non-Proliferation Treaty (NPT), the 40-year-old pact aimed at stopping the spread of nuclear weapons. Technically, Iran is not on the agenda.
But the Obama administration sees the conference as a crucial opportunity to advance ideas to strengthen the fraying treaty, such as punishing nuclear cheaters and further regulating the supply of nuclear fuel.
Iran is expected to block such steps. Any decision by the conference must be reached by consensus.
"This meeting is all about Iran," said a White House official, speaking on the condition of anonymity because of diplomatic sensitivity. "Because Iran poses the biggest threat to the survival of the treaty."
The fireworks began with Ahmadinejad's midday speech and were expected to continue with an afternoon address by Secretary of State Hillary Rodham Clinton.
Clinton said Sunday that Ahmadinejad would try to divert attention from his nuclear program at a moment when an American-led drive to impose new economic sanctions is picking up steam.
Iran denies that it is building a bomb. But the IAEA censured Iran last year for secretly constructing a nuclear facility and defying U.N. resolutions on uranium enrichment.
Addressing the conference Monday, Amano said the agency remains unable to confirm that all of Iran's nuclear material is being used for peaceful purposes "because Iran has not provided the necessary cooperation." He called on Iran to obey U.N. Security Council resolutions "and clarify activities with a possible military dimension."
Ahmadinejad laughed as he listened to a translation of Amano's remarks.
He later told the gathering, "The sole purpose of nuclear weapons is to annihilate all living beings and to destroy the environment. The nuclear bomb is a fire against humanity rather than a weapon for defense. . . . The possession of nuclear bombs is not a source of pride; their possession is disgusting and harmful."
He added that Iran is not a nation "that needs nuclear bombs for its development and does not regard them as a source of its honor and dignity."
Ahmadinejad also described the issue of nuclear terrorism as "misleading" and "phony," charging that the Obama administration was using it to divert the world's attention from U.S. "noncompliance" with disarmament obligations. He claimed that "major terrorist networks" are supported by "U.S. intelligence agencies" and Israel, but he provided no details or evidence.
Ahmadinejad dismissed the Obama administration's "Nuclear Posture Review" issued last month, heaping scorn on U.S. pledges not to develop new nuclear weapons and not to use existing nuclear arms to attack non-nuclear states that comply with the Non-Proliferation Treaty.
"The United States has never respected any of its commitments," Ahmadinejad charged. "What guarantees are there that it would live up to its commitments?"
In his 35-minute speech, Ahmadinejad called for the suspension of the United States from the IAEA Board of Governors on grounds that it dropped atomic bombs on Japan in World War II and used depleted-uranium shells in the Iraq war. In addition, he demanded "reform" of the 15-member U.N. Security Council, saying its structure was "extremely unfair and inefficient and mainly serves the interests of the nuclear weapons states."
Interviewed Sunday on NBC's "Meet the Press," Clinton said, "We're not going to permit Iran to try to change the story from their failure to comply" with Security Council resolutions demanding suspension of Iran's uranium-enrichment activities.
Many analysts see the month-long New York meeting as a major test of Obama's nuclear strategy, which seeks to establish U.S. leadership on arms control to press others to live up to their obligations. Obama recently signed a new arms-reduction treaty with Russia and held a summit on nuclear terrorism.




U.S. envoy arrives for Israeli-Palestinian talks
By Jeffrey Heller

JERUSALEM (Reuters) - U.S. President Barak Obama's Middle East peace envoy arrived in Tel Aviv Monday for expected indirect Israeli-Palestinian talks but Israel voiced doubt about any breakthrough without direct negotiations.
Hours before envoy George Mitchell flew into Israel, Prime Minister Benjamin Netanyahu and Egyptian President Hosni Mubarak conferred in Egypt's Red Sea resort of Sharm el-Sheikh about the upcoming U.S.-mediated negotiations. Obama's peace efforts received a boost Saturday when Arab states approved four months of "proximity talks," whose expected start in March was delayed by Israel's announcement of a settlement project on occupied land near Jerusalem.
Israeli Defense Ministry strategist Amos Gilad said on Israel Radio the indirect negotiations would begin Wednesday.
It was not immediately clear when the envoy would hold talks with the Palestinian side. The executive committee of Palestinian President Mahmoud Abbas was scheduled to meet only Saturday to give the formal nod to start the negotiations.
Israeli Deputy Prime Minister Dan Meridor described indirect talks as "a strange affair" after face-to-face peace negotiations stretching back 16 years.
There have been no direct talks for the past 18 months, a period that has included Israel's Gaza war, election of a right-wing Israeli government and entrenched rule in the Gaza Strip by Hamas Islamists opposed to the U.S. peace efforts.
"REAL TALKS"
"I think it is clear to everyone that real talks are direct talks, and I don't think there is a chance of a significant breakthrough until the direct talks begin," Meridor said.
"The talks will be held. The envoy, Mitchell, will talk to us, to them. But the more we hasten to arrive at direct talks, the more we will be able to address the heart of the matter."
Nabil Abu Rdainah, a spokesman for Abbas, said the negotiations would show whether the Israeli government was serious about peace and "test the sincerity" of the Obama administration in pursuing Palestinian statehood.
"The truth is we are not in need of negotiations. We are in need of decisions by the Israeli government. This is the time for decisions more than it is the time for negotiations," Abu Rdainah said.
In an interview published Sunday in the Palestinian newspaper al-Ayyam, Abbas said Obama had given a commitment he would not allow "any provocative measures" by either side.
Abbas has long insisted Israel freeze Jewish settlement building before any negotiations resume, and he had rejected a temporary construction moratorium that Netanyahu ordered in the occupied West Bank last November as insufficient.
Netanyahu, who heads a pro-settler government, has pledged not to curb Israeli home construction in East Jerusalem.
But after angering Washington by announcing a 1,600-home project -- during a visit in March by Vice President Joe Biden -- Israel has not approved new homes for Jews in East Jerusalem, in what some Israeli politicians called a de facto freeze.
Israel captured East Jerusalem along with the West Bank and Gaza Strip in a 1967 war, and considers all of Jerusalem its capital, a claim that is not recognized internationally.
Palestinians want East Jerusalem as the capital of the state they intend to establish in the West Bank and Gaza Strip.




U.S. Releasing Nuclear Data on Its Arsenal
By DAVID E. SANGER

WASHINGTON — The Pentagon on Monday will release long-classified statistics about the total size of America’s nuclear arsenal, part of an effort to make the case that the country is honoring its treaty commitments to shrink its inventory of weapons significantly, senior administration officials said Sunday.
The American initiative will be cast by the White House as a small but significant step toward allowing the world to measure whether President Obama makes good on his promise of reducing American reliance on nuclear defenses. The commitment to make the figures public will be included in a speech that Secretary of State Hillary Rodham Clinton will deliver at the opening of a United Nations conference reviewing progress on the Nuclear Nonproliferation Treaty. Mrs. Clinton will also announce new funds for the International Atomic Energy Agency.
For years, American intelligence officials have objected to publishing quantitative descriptions of the American nuclear arsenal, concerned that the figures might help terrorist groups calculate the minimum nuclear fuel needed for a weapon. But administration officials said reputable Web sites that track such issues have long noted that American weapons designers need an average of around 4 kilograms of plutonium, or 8.8 pounds.
“It became clear there was a way to get the transparency without revealing any state secrets,” a senior administration official said, declining to speak on the record because the numbers had not yet been declassified.
The numbers will combine three categories of weapons: deployed, in “active reserve” and in inactive storage. They exclude weapons designated for decommissioning. The United States and Russia have already revealed the number of deployed strategic weapons they possess. Britain and France have recently revealed details of their stockpiles. China has said little. India, Pakistan and Israel — which have all refused to sign the treaty — have not revealed numbers.




Opinion Pieces:

Terror in Times Square

That was a close one.
Police and federal agents were still searching last night for suspects in Saturday night's attempted car bombing in the heart of Times Square -- averted when an alert street vendor notified police.
But whether the culprit was an agent of Islamist terrorism or domestic nihilism -- or a deranged lone wolf -- the events on West 45th Street were a frightening reminder that New York City remains smack in the crosshairs of a whole lot of people nursing murderous grudges.
And it was an equally frightening reminder of what officials have long said: Those fighting terrorism need to be lucky every time; terrorists need be lucky but once.
As they very nearly were Saturday.
Said Mayor Bloomberg, "We avoided what could have been a very deadly event." Even a crude, amateurish device like the one in that Nissan Pathfinder -- containing propane tanks, gasoline, fertilizer and firecrackers -- could have caused untold destruction in crowded Times Square on a glorious Saturday night.
Fortunately, the terrorist (terrorists?) -- whatever the motive -- misfired.
Though the fuses had been set, they did not work. Instead, they ignited part of the car's interior, causing a small fire -- which, thankfully, was seen by street vendor Lance Orton.
Orton quickly called it to the attention of mounted Police Officer Wayne Rhatigan, who distinguished himself in his own right: He and two other officers immediately began cordoning off the area as he called for backup.
In the end, several square blocks of Times Square were shut for up to 10 hours -- a difficult and costly decision, but clearly the right one.
Everything proceeded swiftly and calmly. There was no panic, no loss of control. The public cooperated, and cops got to do their jobs.
That's a tribute to New Yorkers -- as well as a likely testament to the fact that such terror scares are becoming a matter of routine in this city.
Still, it's yet another reminder of the need for constant vigilance -- because the terrorist threat, whatever the source, remains ongoing.
Seems New York will be Target No. 1 for the foreseeable future.
Alas.




Geithner and GM tell a whopper UPDATED!
Examiner Editorial


Here's a multiple-choice test that should be of particular interest to taxpayers, professors of business ethics and the fraudulent advertising complaints department at the Federal Trade Commission: Which of the following statements is true?
A. If frogs had wings, they could fly.
B. I did not have sex with that woman, Miss Lewinsky.
C. We have repaid our government loans in full, with interest, five years ahead of schedule.
D. There's gold in them thar hills.
Implausible, perhaps, but yes, if frogs had wings, then it is conceivable they could fly. And if one accepts Mr. Clinton's novel understanding of what the meaning of "is" is, then his familiar statement of denial about his relationship with a White House intern is true. And there is no doubt that somewhere on God's green Earth there are still hills in which there is gold to be found.
Statement C is being repeated daily in a national advertising campaign featuring General Motors Chairman Ed Whitacre. (He is referring to $49.5 billion the Treasury Department gave GM in last year's bailout. In return, Treasury got a 60.8 percent common equity stake in GM, $2.1 billion in preferred stock and $7.1 billion in GM debt.)
Whitacre sounds convincing in a down-home sort of way in the TV spot, but the reality is that this statement is a blatant misrepresentation. And Whitacre knows it. He's probably not worried about that fact, however, because it was endorsed by none other than Secretary of the Treasury Timothy Geithner, who issued a supportive statement saying, "We are encouraged that GM has repaid its debt well ahead of schedule and confident that the company is on a strong path to viability."
Here are the facts, according to Neil Barofsky, inspector general for the Troubled Assets Relief Program. His most recent quarterly report explained that, "the source of funds for these quarterly [debt] payments will be other TARP funds currently held in an escrow account."
In other words, as Reps. Darrell Issa, R-Calif., and Jim Jordan, R-Ohio, said in a letter to Whitacre, the GM chairman's words come "dangerously close to committing fraud. ... Your false statements may expose GM to millions of dollars in damages, further reducing the value of the taxpayer-owned company. The American people, as the majority shareholders of GM, have a right to know the truth behind the cost of the GM bailout and GM's genuine financial condition." Issa and Jordan are minority members of the House Oversight and Government Reform Committee, chaired by Rep. Edolphus Towns, D-N.Y. The Towns panel should put Whitacre and Geithner under oath and demand to know the facts behind this misrepresentation.




Rethinking oil: An unfolding disaster raises long-term issues
Pittsburgh Post-Gazette

As the catastrophe of the BP Deepwater Horizon oil spill becomes clearer, the weakness of U.S. energy policy also comes into sharper focus.
Crude oil from the accident, which began with an explosion at a drilling rig off Louisiana April 20, is now pouring into the Gulf of Mexico at an estimated 5,000 barrels a day. The original estimate was 1,000 barrels, which begins to suggest the lack of precise information surrounding the event. Unless some means is found to turn off the flow at the source, one mile down, it is estimated that it could take three months to drill another well to draw off the spurting oil.
Do the math. If the spill goes 100 days, that's a possible 500,000 barrels, or 20 million gallons, of oil in the Gulf, spread on the shores of Louisiana, Alabama, Florida, Mississippi and Texas. In some ways this mess will risk making the 1989 Exxon Valdez accident -- from which the cleanup is still not complete -- look minor.
President Barack Obama got a firsthand briefing Sunday in Louisiana on the spill. The White House's decision last week to put on hold an expansion of offshore drilling until this accident has been studied, isn't good enough. It's apparent from this disaster that, with the state of today's technology, drilling companies know how to turn the oil on underwater, but not how to turn it off. Does America want that risk stretched along its East Coast, too?
The argument that more U.S.-based production is necessary to reduce America's dependence on foreign oil from potentially dodgy sources for strategic reasons may still be valid, but the cost of that approach through offshore drilling just went up exponentially.
Some Americans' opposition to alternative energy sources such as wind power is still alive. See, for example, the eight years of resistance to the $2 billion Cape Cod wind project, the country's first offshore wind farm, which received its final federal approval ironically only last week. Assuming that any battle to reduce America's overall energy consumption is doomed to failure, the Deepwater Horizon disaster has made the choices clearer: a shift to cleaner and sustainable energy is a "must."




Polls:

New Poll: Economic Uplift
By MARJORIE CONNELLY

A growing number of Americans think the economy is improving and three-quarters of them approve of President Obama’s handling of the country’s economy, according to the latest New York Times/CBS News poll.
Forty-one percent said the economy is getting better, up from 33 percent about a month ago, while 15 percent described the economy as deteriorating. Another 43 percent said the economy was staying about the same; but while 7 percent of that segment believe it’s in good shape, the other 35 percent say it’s in bad condition.
Younger and better educated Americans are more likely to describe the economy as on the mend. Sixty-one percent of Democrats said the economy is getting better, but only 16 percent of Republicans and 38 percent of independents agreed.
Overall, the public is evenly divided on their assessment of Mr. Obama’s management of the economy: 48 percent approve and 47 percent disapprove.
And again, there are strong partisan differences. Democrats overwhelmingly approve of the president’s handling of the economy – 77 percent to 19 percent. Republicans, on the other hand, disapprove – 86 percent, while just 11 percent approve.
Independents are divided: Forty-three percent approve and 49 percent disapprove.
The nationwide telephone poll was conducted April 28 to May 2 with 1,079 adults and has a margin of sampling error of plus or minus three percentage points. More results from this survey will be available after 6:30 p.m.