THE BURNED OVER DISTRICT

FBI agents are conducting interviews about the relationship between Virginia Gov. Robert F. McDonnell, his wife, Maureen, and a major campaign donor who paid for the food at the wedding of the governor’s daughter, according to four people familiar with the questioning.

The agents have been asking associates of the McDonnells about gifts provided to the family by Star Scientific chief executive Jonnie R. Williams Sr. and actions the Republican governor and his wife have taken that may have boosted the company, the people said.

Among the topics being explored, they said, is the $15,000 catering bill that Williams paid for the 2011 wedding of McDonnell’s daughter at Virginia’s historic Executive Mansion. But questions have extended to other, previously undisclosed gifts from Williams to Maureen McDonnell as well, they said.

The interviews, at which Virginia State Police investigators were present, began in recent months as an outgrowth of a federal investigation of securities transactions involving Star Scientific, which produces a dietary supplement called Anatabloc. The company disclosed that probe in a regulatory filing last month, saying it had received subpoenas from the U.S. attorney’s office for the Eastern District of Virginia.

Now, federal officials are trying to determine whether to expand that investigation into a broader look at whether McDonnell or his administration took any action to benefit Star Scientific in exchange for monetary or other benefits, according to the four people familiar with the interviews. It is unclear whether the probe will be broadened.

// posted by montag @ 1:26 PM 0 Comments

Sheik Mansour bin Zayed al-Nahyan is a smart-looking fellow, whether clad in Burberry blue or desert white.

And he is apparently a falcon-eyed businessman, as this Abu Dhabi sheik seems about to persuade New York City officials to part with 13 precious acres of parkland for the not-so-princely sum of $1 per year, according to Crain’s New York. In exchange, he will pay for a $340 million stadium for his soon-to-be-acquired Major League Soccer team.

In this way, the city chips away at one of its workaday gems, Flushing Meadows-Corona Park.

A sylvan strand between parkways and highways, the busiest of Queens’s parks already bears the weight of several stadiums and parking lots.

Javier Valdes is a director of Make the Road New York, a nonprofit group that works to empower the hundreds of thousands of working-class and poor residents of Queens. The group expects to fight for paid sick days and better wages. It does not expect to battle to preserve the little green space available to the densely packed neighborhoods.

“We call this park the ‘pulmones’ of Queens, the lungs of the city,” he says. “Why are we giving our land away to an oil tycoon?”

Mayor Michael R. Bloomberg, as is his wont, wrinkles his nose at such talk. He is all but tripping over himself in his dash for a mayoral legacy. This corner of Flushing Meadows Park, he said recently, “isn’t very much and isn’t in good shape.” Where to start?

// posted by montag @ 1:11 PM 0 Comments

As “medical reinforcements” of nearly 40 Navy nurses, corpsmen and specialists arrived at the Guantánamo Bay prison amid a mass hunger strike by inmates being held without trial, President Obama on Tuesday recommitted to his years-old vow to close the facility.

“It’s not sustainable,” Mr. Obama said at a White House news conference. “The notion that we’re going to keep 100 individuals in no man’s land in perpetuity,” he added, made no sense. “All of us should reflect on why exactly are we doing this? Why are we doing this?”...

Yet at another point in the news conference, Mr. Obama appeared to question the policy of indefinite wartime detention at a time when the war in Iraq has ended, the one in Afghanistan is winding down and the original makeup of Al Qaeda has been decimated. “The idea that we would still maintain forever a group of individuals who have not been tried,” he said, “that is contrary to who we are, contrary to our interests, and it needs to stop.”

But in the short term, Mr. Obama indicated his support for the force-feeding of detainees who refused to eat.

“I don’t want these individuals to die,” he said.

As of Tuesday morning, 100 of the 166 prisoners at Guantánamo were officially deemed by the military to be participating in the hunger strike, with 21 “approved” to be fed the nutritional supplement Ensure through tubes inserted through their noses.

// posted by montag @ 12:52 PM 1 Comments

Mr. López played a leading role in what is widely considered the biggest drug-trafficking case in Mexican history. The episode — which inspired the 2000 movie “Traffic” — pitted the Mexican military against the United States Drug Enforcement Administration. Throughout the 1990s, Mr. López worked closely with them both. He served as a senior adviser to the powerful general who was appointed Mexico’s drug czar. And he was an informant for the D.E.A.

His two worlds collided spectacularly in 1997, when Mexico arrested the general, Jesús Gutiérrez Rebollo, on charges of collaborating with drug traffickers. As Washington tried to make sense of the charges, both governments went looking for Mr. López. Mexico considered him a suspect in the case; the D.E.A. saw him as a potential gold mine of information.

The United States found him first. The D.E.A. secretly helped Mr. López and his family escape across the border in exchange for his cooperation with its investigation.

Dozens of hours of testimony from Mr. López about links between the military and drug cartels proved to be explosive, setting off a dizzying chain reaction in which Mexico asked the United States for help capturing Mr. López, Washington denied any knowledge of his whereabouts and the D.E.A. abruptly severed its ties with him.

The reserved, unpretentious husband and father of three has been a fugitive ever since, on the run from his native country and abandoned by his adopted home. For more than a decade, he has carried information about the inner workings of the drug war that both governments carefully kept secret.

The United States continues to feign ignorance about his whereabouts when pressed by Mexican officials, who still ask for assistance to find him, a federal law enforcement official said.

// posted by montag @ 1:16 PM 0 Comments

Legislation that would force Internet retailers to collect sales taxes from their customers has put antitax and small-government activists like Grover Norquist’s Americans for Tax Reform and the Heritage Foundation in an unusual position: they’re losing.

For years, conservative Republican lawmakers have been influenced heavily by the antitax activists in Washington, who have dictated outcomes and become the arbiters of what is and is not a tax increase. But on the question of Internet taxation, their voices have begun to be drowned out by the pleas of struggling retailers back home who complain that their online competitors enjoy an unfair price advantage.

Representative Scott Rigell, Republican of Virginia, calls them “the hardworking men and women who have mortgaged their homes to buy or to rent a little brick-and-mortar shop.”

And each time Mr. Norquist and others in the antitax lobby take a loss, they start to seem more vulnerable, Republican lawmakers acknowledge, with ramifications for the continuing fights on the deficit and the shape of the tax code.

“I have a lot of constituents saying to me, ‘Grover Norquist did not elect you,’ ” said Representative Steve Womack, Republican of Arkansas and the author of the Internet tax bill in the House. “Members that come to Washington and kowtow to special interests end up contributing to this very polarized government. These are tough decisions we have to make up here.”

The legislation cleared its final procedural hurdle Thursday evening on a bipartisan Senate vote, 63 to 30. Final Senate passage is scheduled for May 6, and that tally is likely to be even more strongly in favor. Earlier test votes won as many as 75 yeses. And House action, once seemingly unthinkable, may be unstoppable.

// posted by montag @ 12:56 PM 0 Comments

For more than a decade, wads of American dollars packed into suitcases, backpacks and, on occasion, plastic shopping bags have been dropped off every month or so at the offices of Afghanistan’s president — courtesy of the Central Intelligence Agency.

All told, tens of millions of dollars have flowed from the C.I.A. to the office of President Hamid Karzai, according to current and former advisers to the Afghan leader.

“We called it ‘ghost money,’ ” said Khalil Roman, who served as Mr. Karzai’s chief of staff from 2002 until 2005. “It came in secret, and it left in secret.”

The C.I.A., which declined to comment for this article, has long been known to support some relatives and close aides of Mr. Karzai. But the new accounts of off-the-books cash delivered directly to his office show payments on a vaster scale, and with a far greater impact on everyday governing.

Moreover, there is little evidence that the payments bought the influence the C.I.A. sought. Instead, some American officials said, the cash has fueled corruption and empowered warlords, undermining Washington’s exit strategy from Afghanistan.

“The biggest source of corruption in Afghanistan,” one American official said, “was the United States.”

// posted by montag @ 10:55 PM 0 Comments

The legislation, called the Terminating Bailouts for Taxpayer Fairness Act, emerged last Wednesday; its co-sponsors are Sherrod Brown, an Ohio Democrat, and David Vitter, a Louisiana Republican. It is a smart, simple and tough piece of work that would protect taxpayers from costly rescues in the future.

This means that the bill will come under fierce attack from the big banks that almost wrecked our economy and stand to lose the most if it becomes law.

For starters, the bill would create an entirely new, transparent and ungameable set of capital rules for the nation’s banks — in other words, a meaningful rainy-day fund. Enormous institutions, like JPMorgan Chase and Citibank, would have to hold common stockholder equity of at least 15 percent of their consolidated assets to protect against large losses. That’s almost double the 8 percent of risk-weighted assets required under the capital rules established by Basel III, the latest version of the byzantine international system created by regulators and central bankers.

This change, by itself, would eliminate a raft of problems posed by the risk-weighted Basel approach. Under those rules, banks must hold lesser or greater amounts of capital against assets, depending on the supposed risks they pose. For example, holdings of United States government securities are considered low-risk and require no capital to be held against them. Securities or loans that are riskier require more of a buffer against loss.

There are many problems with this arrangement. First, the risk assessments on various types of assets rely heavily on ratings agency grades. In the housing boom, toxic mortgage securities carrying triple-A ratings were considered low-risk, too. As such, they didn’t require hefty capital set-asides.

We all know how disastrous that was. So chalk up this plus for Brown-Vitter: Eliminating risk-weights as part of a capital assessment means less reliance on unreliable ratings.

// posted by montag @ 1:24 PM 0 Comments

To retirees, the offers can sound like the answer to every money worry: convert tomorrow’s pension checks into today’s hard cash.

But these offers, known as pension advances, are having devastating financial consequences for a growing number of older Americans, threatening their retirement savings and plunging them further into debt. The advances, federal and state authorities say, are not advances at all, but carefully disguised loans that require borrowers to sign over all or part of their monthly pension checks. They carry interest rates that are often many times higher than those on credit cards.

In lean economic times, people with public pensions — military veterans, teachers, firefighters, police officers and others — are being courted particularly aggressively by pension-advance companies, which operate largely outside of state and federal banking regulations, but are now drawing scrutiny from Congress and the Consumer Financial Protection Bureau.

The pitches come mostly via the Web or ads in local circulars.

“Convert your pension into CASH,” LumpSum Pension Advance, of Irvine, Calif., says on its Web site. “Banks are hiding,” says Pension Funding L.L.C., of Huntington Beach, Calif., on its Web site, signaling the paucity of credit. “But you do have your pension benefits.”

Another ad on that Web site is directed at military veterans: “You’ve put your life on the line for Americans to protect our way of life. You deserve to do something important for yourself.”

A review by The New York Times of more than two dozen contracts for pension-based loans found that after factoring in various fees, the effective interest rates ranged from 27 percent to 106 percent — information not disclosed in the ads or in the contracts themselves. Furthermore, to qualify for one of the loans, borrowers are sometimes required to take out a life insurance policy that names the lender as the sole beneficiary.

LumpSum Pension Advance and Pension Funding did not return calls and e-mails for comment.

// posted by montag @ 12:54 PM 0 Comments

Conservatives spend inordinate amounts of time trying to neuter the government from its role as a regulatory body with the power to rein in corporate depravity. For them, unfettered capitalism is a religion, because the “invisible hand” of the market place is supposed to somehow overcome the malevolent tendencies of the profit-motive and churn out a healthy society. The rash of employee deaths on the job across a number of industries has received inadequate responses from the Occupational Safety and Health Administration (OSHA) for several decades now as conservatives have undermined them. There is one additional guarantee for employers across the country; no matter how egregious their worker safety violations become, they know they will never have to face real criminal consequences.

Outside the Corn Belt, few people realize that corn bins are actually quite dangerous. In 2010, 26 people died by becoming entrapped in corn. They effectively drowned in it as it takes on the qualities of quicksand. There are worker precautions that can limit the risk of this type of accident occurring. However, many businesses have factored in the cost of doing business without safety precautions, and they have decided to risk the lives of their employees. They know that the consequences for allowing one of their workers to die are minimal. Since 1984, fines for grain entrapment deaths have fallen by almost 60%. In fact, according to Jim Morris, a report by the Center for Public Integrity and National Public Radio found, “analysis of OSHA data shows that 179 people died in grain entrapments at commercial facilities — bins, rail cars, etc. — from 1984 through 2012. The fines initially proposed in these cases totaled $9.2 million but were cut to $3.8 million, a reduction of 59 percent.” Penalties like jail time are incredibly limited.

OHSA isn’t doing any better at protecting the oil & gas workforce, steel mill workers, trench diggers, or as we all keenly aware following the West, Texas explosion, chemical plant workers. During a 4-month period in 2010, 58 workers were killed in the oil and gas industry, and one union health and safety inspector notes, “They are basically self-regulated.” It isn’t surprising, because the penalties that OSHA is allowed to assess are among the lowest of any regulatory agency. By law, they haven’t been able to increase penalties with inflation since 1990. They are not even allowed to force an employer to fix a safety hazard after they issue a citation, often settling for a “pledge” from the company to behave. For example, a worker death at Crucible Steel Industries came after OHSA had cited the company for 70 safety violations and issued it $250,000 in fines. These figures stand out, because “serious” violations defined by OSHA as “most likely result in death or serious physical harm” carry a maximum penalty of $7,000 and “willful” violations receive a maximum fine of $36,720.

// posted by montag @ 12:50 PM 0 Comments

U.S. lawmakers are weighing how far they can go in altering one of the most politically sensitive provisions in the tax code: the deduction for home mortgage interest.

While pledging a “careful, thoughtful review,” House Ways and Means Chairman Dave Camp asked witnesses at a hearing yesterday for ideas on how to transition to a new, still- unspecified system. That’s a signal he’s considering changes that could be disruptive to real estate markets and looking for ways to soften those effects.

Camp’s scrutiny of the mortgage interest deduction is part of his plan to rewrite the U.S. tax code, curtailing breaks and lowering tax rates in a way that doesn’t increase the federal government’s total collections. He wants his committee to approve a bill this year.

Changing the mortgage interest deduction could affect real estate agents and home builders, along with the appliance and furniture industries.

In 2012, 34 million households, or 22 percent of tax filers, claimed the home mortgage deduction. That cost the federal government $68 billion in forgone revenue, according to estimates from the congressional Joint Committee on Taxation.

The deduction is available only to the one-third of taxpayers who itemize their deductions and tend to have higher incomes. More than three-quarters of the benefit in 2012 went to households with annual incomes exceeding $100,000.

Still, the tax benefit is less skewed toward the nation’s highest earners than some other breaks, such as lower rates on long-term capital gains.

// posted by montag @ 2:00 PM 0 Comments

Police in Bangladesh took five people into custody in connection with the collapse of a shoddily-constructed building that killed at least 348 people, as rescue workers admitted Saturday that voices of survivors are getting weaker after four days of being pinned under the increasingly unstable rubble.

Still, in a boost for the rescuers, 29 survivors were pulled out Saturday, said army spokesman Shahinul Islam.

Most of the victims were crushed by massive blocks of concrete and mortar falling on them when the 8-story structure came down on Wednesday morning -- a time many of the garment factories in the building were packed with workers. It was the worst tragedy to hit Bangladesh’s massive garment industry, and focused attention on the poor working conditions of the employees who toil for $38 a month to produce clothing for top international brands.

Among those arrested Saturday were two owners of a garment factory, who a Dhaka court ruled can be questioned by police for 12 days without charges being filed. Also detained are two government engineers and the wife of the building owner, who is on the run, in an attempt to force him to surrender. Violent public protests continued sporadically in Dhaka and spread to the southeastern city of Chittagong where several vehicles were set on fire.

Working round-the-clock since Wednesday through heat and a thunderstorm, rescuers on Saturday finally reached the ground floor from the top of the mountainous rubble through 25 narrow holes they have drilled, said Brig. Gen. Ali Ahmed Khan, the head of the fire services.

“We are still getting response from survivors though they are becoming weaker slowly,” he said, adding that rescue workers were now able to see cars that were parked at the ground level.

“The building is very vulnerable. Any time the floors could collapse. We are performing an impossible task, but we are glad that we are able to rescue so many survivors.” He said the operations will continue overnight as chances fade of people surviving for a fifth day with possibly grievous injuries and the heat.

The building site was a hive of frenzied activity all day with soldiers, police and medical workers in lab coats working non-stop. Rescuers passed bottles of water and small cylinders of oxygen up a ladder leaning against the side of the building to be given to possible survivors inside.

They used bare hands and shovels, passing chunks of brick and concrete down a human chain away from the collapsed structure. On the ground, mixed in the debris were several pairs of pink cotton pants, a mud-covered navy blue sock and a pile of green uncut fabric.

Nearby, Abul Basar wept as he awaited news of his wife, who worked in one of the garment factories. “My son says that his mother will come back some day. She must return! “ he cried.

Every once in a while a badly decomposed body would be brought out, covered in cloth and plastic, to a spot where ambulances were parked. Workers furiously sprayed air-fresheners on the bodies to cover the stench, leaving the air thick with the smell of death and cheap perfume.

// posted by montag @ 1:42 PM 0 Comments

After years of insisting that the primary cure for Europe’s malaise is to slash spending, the champions of austerity, most notably Chancellor Angela Merkel of Germany, find themselves under intensified pressure to back off unpopular remedies and find some way to restore faltering growth to the world’s largest economic bloc.

On Friday, Prime Minister Mariano Rajoy of Spain, who once promoted aggressive budget cuts, became the latest leader to reject European Union targets for reducing deficits.

That is one of several developments — a recent court ruling against job cuts in Portugal; a new, austerity-averse prime-minister-in-waiting in Italy; and mounting doubts among ordinary Europeans and even the International Monetary Fund — that have forced senior officials in Brussels to acknowledge that a move away from what critics see as a fixation on debt and deficits toward more growth-friendly policies is necessary.

“There has been a clear shift in thinking,” said Guntram Wolff, a German economist who has worked at the European Commission, the union’s policy-making arm, and is now acting director of Bruegel, a Brussels research group.

The flurry of activity comes after an influential academic paper embraced by austerity advocates as evidence that even recessionary economies should cut spending to avoid high debt levels, written by the Harvard scholars Carmen M. Reinhart and Kenneth S. Rogoff, has come under attack for errors that opponents of austerity say helped lead European policy makers astray.

Europe is not about to throw open the spending spigots in the 27 nations of the European Union, even as the bloc teeters on the edge of a new regionwide recession. But officials are clearly shifting toward what Leonardo Domenici, an Italian member of the European Parliament, described as “austerity with a human face.”

Even Ms. Merkel has tried of late to soften her image as the unbending deficit scold of Europe. Asked at a forum in Berlin this week whether the “screw of austerity” had been turned too tight, she complained that what used to be “called saving or consolidation or balanced budgets” is “now called austerity,” adding that this “really sounds like something completely evil.”

// posted by montag @ 1:25 PM 0 Comments

The House gave quick and overwhelming approval Friday to legislation to give the secretary of transportation enough financial flexibility to bring the nation’s air traffic control system back up to full strength and end the mounting flight delays that had become a political headache for Congress. The vote came despite objections from some lawmakers that the nation’s air travel was being given special treatment.

The 361-to-41 vote came less than 24 hours after the Senate reached accord on the measure, which effectively undoes one of the thorniest results of “sequestration,” $85 billion in across-the-board spending cuts that took effect March 1. That is remarkable speed for an issue that has been brewing for more than a year, with ample warning of the consequences...

Democrats fumed that Congress had effectively come to the rescue of an affluent and elite slice of the public affected by the cuts, including lawmakers themselves, while leaving the poor to continue to fend for themselves

“We’re leaving the homeless behind,” said Representative Peter Welch, Democrat of Vermont. “We’re leaving a lot of National Guard folks behind. We’re leaving seniors who depend on Meals On Wheels in the dust. Children who rely on Head Start can teach themselves to read. That’s basically what’s happening.”

// posted by montag @ 1:27 PM 0 Comments

Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world's largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world's largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps.

Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It's about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget.

It should surprise no one that among the players implicated in this scheme to fix the prices of interest-rate swaps are the same megabanks – including Barclays, UBS, Bank of America, JPMorgan Chase and the Royal Bank of Scotland – that serve on the Libor panel that sets global interest rates. In fact, in recent years many of these banks have already paid multimillion-dollar settlements for anti-competitive manipulation of one form or another (in addition to Libor, some were caught up in an anti-competitive scheme, detailed in Rolling Stone last year, to rig municipal-debt service auctions). Though the jumble of financial acronyms sounds like gibberish to the layperson, the fact that there may now be price-fixing scandals involving both Libor and ISDAfix suggests a single, giant mushrooming conspiracy of collusion and price-fixing hovering under the ostensibly competitive veneer of Wall Street culture.

Why? Because Libor already affects the prices of interest-rate swaps, making this a manipulation-on-manipulation situation. If the allegations prove to be right, that will mean that swap customers have been paying for two different layers of price-fixing corruption. If you can imagine paying 20 bucks for a crappy PB&J because some evil cabal of agribusiness companies colluded to fix the prices of both peanuts and peanut butter, you come close to grasping the lunacy of financial markets where both interest rates and interest-rate swaps are being manipulated at the same time, often by the same banks.

"It's a double conspiracy," says an amazed Michael Greenberger, a former director of the trading and markets division at the Commodity Futures Trading Commission and now a professor at the University of Maryland. "It's the height of criminality."

The bad news didn't stop with swaps and interest rates. In March, it also came out that two regulators – the CFTC here in the U.S. and the Madrid-based International Organization of Securities Commissions – were spurred by the Libor revelations to investigate the possibility of collusive manipulation of gold and silver prices. "Given the clubby manipulation efforts we saw in Libor benchmarks, I assume other benchmarks – many other benchmarks – are legit areas of inquiry," CFTC Commissioner Bart Chilton said.

But the biggest shock came out of a federal courtroom at the end of March – though if you follow these matters closely, it may not have been so shocking at all – when a landmark class-action civil lawsuit against the banks for Libor-related offenses was dismissed. In that case, a federal judge accepted the banker-defendants' incredible argument: If cities and towns and other investors lost money because of Libor manipulation, that was their own fault for ever thinking the banks were competing in the first place.

"A farce," was one antitrust lawyer's response to the eyebrow-raising dismissal.

"Incredible," says Sylvia Sokol, an attorney for Constantine Cannon, a firm that specializes in antitrust cases.

All of these stories collectively pointed to the same thing: These banks, which already possess enormous power just by virtue of their financial holdings – in the United States, the top six banks, many of them the same names you see on the Libor and ISDAfix panels, own assets equivalent to 60 percent of the nation's GDP – are beginning to realize the awesome possibilities for increased profit and political might that would come with colluding instead of competing. Moreover, it's increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them, even when they do get caught working together to game the system.

If true, that would leave us living in an era of undisguised, real-world conspiracy, in which the prices of currencies, commodities like gold and silver, even interest rates and the value of money itself, can be and may already have been dictated from above. And those who are doing it can get away with it. Forget the Illuminati – this is the real thing, and it's no secret. You can stare right at it, anytime you want.

// posted by montag @ 12:43 PM 0 Comments

The former top commander in Afghanistan said he initially recommended that 13,600 U.S. troops remain in the country when the American combat role there ends after 2014, but believes the mission could still be accomplished with less.

"I always believed that was the number that I should recommend," retired Marine Gen. John Allen said of the 13,600 recommendation. A lower number would accomplish the job, but require more assistance from allies, he said.

The issue of what size residual force to leave in Afghanistan has been the subject of debate as the United States grapples with winding down a war that has lasted more than 10 years.

"The question is if you get a number less than that can you still accomplish the mission," Allen said. "I believe there was a number less than that that could still accomplish the mission with acceptable risk." Allen declined to specify the lesser number.

However, the German defense minister said after a NATO meeting in February that then-Defense Secretary Leon Panetta said he envisioned between 8,000 and 12,000 troops in Afghanistan after 2014.

The White House has not reached a decision on numbers.

// posted by montag @ 7:34 PM 1 Comments

The department is now poised to allow a further increase in line speeds, boosting the maximum speed by about 25 percent. This change is part of new regulations that officials say would make poultry production more efficient and transfer more responsibility for inspections to industry.

Under the new rules, which could be finalized as soon as this summer, the number of chemical treatments used on birds is also likely to further increase, according to agency documents and USDA inspectors who have worked in plants where line speeds have already accelerated.

To keep speeds up, the new regulations would allow visibly contaminated birds to remain on the lines — rather than being discarded or removed for off-line cleaning, as is now common practice. The proposed rules say “all carcasses” on the line would be treated with antimicrobial chemicals “whether they are contaminated or not.”

The heightened use of chemicals would follow a pattern that’s already emerged in poultry plants. In a private report to the House Appropriations Committee, the USDA said where plants have already accelerated line speeds, workers have been exposed to larger amounts of cleaning agents. “The use of powerful antimicrobial chemicals has increased in order to decrease microbial loads on carcasses,” according to the 2010 report, recently obtained by The Washington Post.

In interviews, more than two dozen USDA inspectors and poultry industry employees described a range of ailments they attributed to chemical exposure, including asthma and other severe respiratory problems, burns, rashes, irritated eyes and sinus ulcers and other sinus problems.

Amanda Hitt, director of the Food Integrity Campaign with the Government Accountability Project, said her group has been collecting statements for the past two years from inspectors reporting illnesses and injuries due to chemical exposure in poultry plants where slaughter line speeds have already increased.

// posted by montag @ 2:05 PM 0 Comments

With the cost of some lifesaving cancer drugs exceeding $100,000 a year, more than 100 influential cancer specialists from around the world have taken the unusual step of banding together in hopes of persuading some leading pharmaceutical companies to bring prices down.

The doctors and researchers, who specialize in the potentially deadly blood cancer known as chronic myeloid leukemia, contend in a commentary published online by a medical journal Thursday that the prices of drugs used to treat that disease are astronomical, unsustainable and perhaps even immoral.

They suggested that charging high prices for a medicine needed to keep someone alive is profiteering, akin to jacking up the prices of essential goods after a natural disaster.

“Advocating for lower drug prices is a necessity to save the lives of patients” who cannot afford the medicines, they wrote in Blood, the journal of the American Society of Hematology.

While noting that the cost of drugs for many other cancers were just as high, the doctors focused on what they know best — the medicines for chronic myeloid leukemia, like Gleevec, which is enormously profitable for Novartis. Among the critics is Dr. Brian Druker, who was the main academic developer of Gleevec and had to prod Novartis to bring it to market.

Novartis argues that few patients actually pay the full cost of the drug and that prices reflect the high cost of research and the value of a drug to patients.

Gleevec entered the market in 2001 at a price of about $30,000 a year in the United States, the doctors wrote. Since then, the price has tripled, it said, even as Gleevec has faced competition from five newer drugs. And those drugs are even more expensive.

The prices have been the subject of intense debate elsewhere as well. The Supreme Court in India ruled recently that the drug could not be patented, clearing the way for use of far less expensive generic alternatives.

// posted by montag @ 1:41 PM 0 Comments

A University of Arizona student known for his fiery, on-campus Christian sermons disrupted a campus sexual assault awareness event Tuesday by holding up a sign that read “You deserve rape” and preaching that “if you dress like a whore, act like a whore, you’re probably going to get raped.”

“I think that girls that dress and act like it, they should realize that they do have partial responsibility, because I believe that they’re pretty much asking for it,” said Dean Saxton, a junior at the university who preaches under the name Brother Dean Samuel, to the Arizona Daily Wildcat.

Saxton was protesting ahead of a Take Back the Night observance, a march and rally to protest violence against women.

Several students complained to university authorities, who declined to take action against Saxton or his sign.

Kendal Washington White, interim dean of students, said of Saxton’s message, “We find it to be vulgar and vile. However, it is protected speech. He has yet to, at this point, violate the student code of conduct.”

// posted by montag @ 1:16 PM 3 Comments

A loose coalition of Democratic elected officials, shareholder activists and pension funds has flooded the Securities and Exchange Commission with calls to require publicly traded corporations to disclose to shareholders all of their political donations, a move that could transform the growing world of secret campaign spending.

S.E.C. officials have indicated that they could propose a new disclosure rule by the end of April, setting up a major battle with business groups that oppose the proposal and are preparing for a fierce counterattack if the agency’s staff moves ahead. Two S.E.C. commissioners have taken the unusual step of weighing in already, with Daniel Gallagher, a Republican, saying in a speech that the commission had been “led astray” by “politically charged issues.”

A petition to the S.E.C. asking it to issue the rule has already garnered close to half a million comments, far more than any petition or rule in the agency’s history, with the vast majority in favor of it. While relatively few petitions result in action by the S.E.C., the commission staff filed a notice late last year indicating that it was considering recommending a rule.

In response to the growing pressure, House Republicans introduced legislation last Thursday that would make it illegal for the commission to issue any political disclosure regulations applying to companies under its jurisdiction. Earlier this month, the leaders of three of Washington’s most powerful trade associations — the U.S. Chamber of Commerce, the National Association of Manufacturers and the Business Roundtable — issued a rare joint letter to the chief executives of Fortune 200 companies, encouraging them to stand against proxy resolutions and other proposals from shareholder activists demanding more disclosure of political spending.

// posted by montag @ 5:30 PM 0 Comments

In what appeared to be a new phase in an intensifying conflict that has raised fears of greater bloodshed and a wider sectarian war, Iraqi soldiers opened fire from helicopters on Sunni gunmen hiding in a northern village on Wednesday, officials said.

The air attacks were among clashes throughout the country between forces of the Shiite-dominated Iraqi government and Sunni gunmen that left at least 27 people dead and dozens wounded. The Sunni tribesmen were continuing a fight that began on Tuesday after the Iraqi Army stormed a Sunni protest encampment in the village of Hawija, leaving dozens dead and injured.

Several others were killed on Wednesday in explosions, including the detonation of a car bomb at a public market in the evening in a Shiite neighborhood north of Baghdad, and a roadside bomb attack on an army patrol in Tikrit, also in the north.

The deadliest battles occurred near Hawija and Sulaiman Pek, northern towns near Kirkuk, and battles were still raging in the early evening. In Hawija, the army shut off electricity, and troops shouted through loudspeakers, urging civilians to evacuate, witnesses said. Government helicopters also fired at Sunni gunmen on the ground in Sulaiman Pek.

The Sunni uprising, having now turned violent, represents a significant challenge to the rule of Prime Minister Nuri Kamal al-Maliki, whose consolidation of power over the security forces and the judiciary, and his targeting of high-level Sunni leaders for arrest, has raised alarms among world powers. Mr. Maliki has presided over an unwieldy power-sharing government, which nominally gives prominent roles to Sunnis but in reality has resulted in political stasis, and he has signaled in recent months that he would prefer to move to a majority government, dominated almost solely by Shiites. On Tuesday, two Sunni ministers quit to protest the raid in Hawija, and the largest bloc of Sunni lawmakers suspended participation in Parliament.

// posted by montag @ 5:05 PM 0 Comments

The Pentagon allowed a private firm providing food and water to U.S. troops in Afghanistan to overbill taxpayers $757 million and awarded the company no-bid contract extensions worth more than $4 billion over three years, according to the Pentagon’s chief internal watchdog and congressional investigators.

The deal represented one of the largest U.S. military contracts in Afghanistan. But the Defense Logistics Agency, which was overseeing the contract, failed repeatedly to verify that the contractor’s invoices were accurate, an official in the Defense Department inspector general’s office said. "This has to be one of the prime poster childs for a government contract spun out of control," Rep. John Mica, R-Fla., said last week.

Mica and other members of the House Oversight and Governmental Reform Subcommittee on National Security expressed outrage at a hearing last week about the Pentagon’s handling of the deal, especially two contract extensions awarded amid a dispute between the government and the company over as much as $1 billion.

The criticism was bipartisan, and it also targeted the Swiss-based private contractor, Supreme Foodservice GmbH, which had previously supplied British troops in Afghanistan, Iraq and other hot spots.

The panel’s hearing, the first focused solely on the food contract, was convened to hear from agency and company officials about how a straightforward deal in 2005 to supply food and water to troops ballooned into a still-unresolved dispute with so much money at stake.

The company has denied wrongdoing. But several lawmakers at the hearing also accused it of trying to bill taxpayers improperly for a $58 million warehouse and charging $12 million to deliver food from that warehouse across the street to Camp Leatherneck in Helmand province.

// posted by montag @ 4:21 PM 0 Comments

Iraqi security forces stormed a Sunni protest encampment in a village near the northern city of Kirkuk on Tuesday, prompting clashes between government forces and gunmen that left dozens dead and wounded and sharply raised the stakes in Iraq’s sectarian troubles.

As of midday, according to security officials in Kirkuk, at least 33 civilians were dead, and nearly 100 people wounded. The Ministry of Defense said that 20 people it described as gunmen were killed, and 75 others arrested. The ministry said three soldiers were killed and nine others wounded.

The fighting, in a town called Hawija, represented the deadliest turn yet in a Sunni-led protest movement against the Shiite-dominated central government led by Prime Minister Nuri Kamal al-Maliki that began in December. The clashes sent shock waves through Sunni communities across the land.

In the seething Sunni populations of Anbar and Salahuddin Provinces, tribesman were mobilizing Tuesday after the fighting, declaring jihad, or holy war, and vowing to take the fight to the government. Near Hawija, reports emerged that claimed some armed Sunni tribesman had taken control of government checkpoints.

“The peaceful demonstrations are over due to what happened today,” said Saddoun al-Obaidi, a tribal leader in Hawija who was a leader of the protest movement. “Now we are going to carry weapons. We have all the weapons we need, and we are getting support from other provinces. This will not pass easily. Something bad will happen soon.”

// posted by montag @ 12:18 PM 2 Comments

Missouri state senators on on Monday voted to eliminate all funding for the Department of Revenue’s driver’s license bureau because they were angry about the way the agency was keeping concealed carry gun records.

Senate Appropriations Committee Chairman Kurt Schaefer (R) said that he had created that draconian cuts to send a message to Democratic Gov. Jay Nixon’s administration.

“They will not be able to issue any driver’s licenses,” Schaefer admitted on Monday.

In addition to $3.5 million of funding for the driver’s license offices, Schaefer is also targeting the Department of Public Safety and computer operations at the state Office of Administration because they had a role in sharing concealed carry records.

Republican lawmakers in Missouri became alarmed at a recent hearing at a Senate Appropriations Committee hearing when Revenue Department Director Brian Long refused to agree to stop scanning and retaining concealed carry data. Long said that the records helped to prevent fraud.

Long resigned from his post as director earlier this month.

The 2005 federal Real ID Act requires states to retain a database of scanned documents for verifying identity. Missouri appeared to be the only state where the license bureau was charged with printing concealed carry permits, either on driver’s licenses or as a separate document. Lawmakers gave the licensing bureau control over concealed carry permits in 2003 to help law enforcement identify people who were weapons.

// posted by montag @ 12:05 PM 0 Comments

“Tonight, the thanks of a grateful nation go out to every single federal, state, and local law enforcement official who went above and beyond to apprehend the Boston bombing suspect. It was a job well done under trying circumstances, to say the least. We are also proud of the people of Boston and Watertown for showing great resolve and assisting authorities throughout the ordeal. This has been a long day and a long week, but along the way we have gained many examples of courage and character. Humbled and inspired, let us now turn all our thoughts and prayers to the victims and their families. God bless America.”

If you want to know how Republicans feel about law enforcement and first responders, don’t listen to their words. All you have to do is read their budgets to understand where the Republican Party’s true priorities are. If House Republicans are grateful for the jobs that law enforcement officers and first responders do, they could show their appreciation by not trying to slash their budgets.

// posted by montag @ 11:44 AM 0 Comments

In business, the idea that a new product would catch on and proliferate throughout the population is a company’s dream because it means for a time period, there would be a rapid growth in demand and sales for what could be the newest fad. However, a fad product’s popularity is usually driven by mass media programming, emotional excitement, peer pressure, or desire to not be left out of a group, but typically, demand generally falls off after the product’s novelty wears off. Despite America’s fascination with firearms, and an overabundance of guns in the population, there has been a resurgent proliferation of firearms driven by the emotional excitement, media programming, and peer pressure from the National Rifle Association that gun ownership is a necessity to be a patriotic American. As far as the NRA is concerned, there will never be enough firearms in the population, and recent events revealed that according to the NRA, there are no Americans who should be restricted from owning guns and no reason for any American to destroy the guns they have.

It is unclear, and without logic, why the NRA and their gun fanatic supporters object to the idea of conducting a background check on prospective gun purchasers except that they believe that criminals, terrorists, and mentally unstable Americans should have unrestricted access to as many firearms as they can afford. According to gun zealots and the NRA, conducting background checks is a direct assault on Americans’ constitutional rights, and yet most Americans are subjected to background checks throughout their entire lives but they never complain they are an attack on the Constitution. Any American who buys a home, car, or appliance on credit goes through a background check, and students applying for admittance to a college or university must submit to some form of background check. It is a common practice for prospective employees to be asked to submit a department of motor vehicles background check before being considered for employment, and obviously few unemployed people go running to courts complaining their Constitutional rights are under assault when they apply for a job. However, guns are different because groups like the NRA are duty-bound to push gun purchases to enrich the firearm and ammunition industry regardless if prospective purchasers have a criminal record or are mentally unstable.

// posted by montag @ 11:33 AM 0 Comments

Another Monday, another terror plot: Who woulda thunk this Monday would yield a thwarted attack in Canada to bomb a Niagra Falls railway passage from Toronto to New York, links to Al Qaeda and all?

The Royal Canadian Mounted Police held a press conference Monday afternoon announcing the arrest of 30-year-old Chiheb Esseghaier of Montreal and 35-year-old Raed Jaser of Toronto, the two men accused so far of attempting to carry out the attack. They're being charged with "conspiracy to carry out a terrorist attack and 'conspiring to murder persons unknown for the benefit of, at the direction of, or in association with a terrorist group,'" the Canadian Broadcasting Corporation reports.

The CBC broke the news of the busted bombing plan shortly after lunch Monday afternoon. Canadian law enforcement officials worked with the FBI and the Department of Homeland Security to break up a planned attack. Reuters filled in some more details: the target was a railroad connecting Toronto and New York City. The Toronto Sun pushed that forward, reporting that the men were specifically looking to target the Whirlpool Rapids Bridge at Niagara Falls that connects the border between the two countries.

// posted by montag @ 5:02 PM 0 Comments

Changing from a standard corporation to a real estate investment trust, or REIT — a designation signed into law by President Dwight D. Eisenhower — has suddenly become a hot corporate trend. One Wall Street analyst has characterized the label as a “golden ticket” for corporations.

“I’ve been in this business for 30 years, and I’ve never seen the interest in REIT conversions as high as it is today,” said Robert O’Brien, the head of the real estate practice at Deloitte & Touche, the big accounting firm.

At a time when deficits and taxes loom large in Washington, some question whether the new real estate investment trusts deserve their privileged position.

When they were created in 1960, they were meant to be passive investment vehicles, like mutual funds, that buy up a broad portfolio of real estate — whether shopping malls, warehouses, hospitals or even timberland — and derive almost all of their income from those holdings.

One of the bedrock principles — and the reason for the tax exemption — was that the trusts do not do any business other than owning real estate.

But bit by bit, especially in recent years, that has changed as the I.R.S., in a number of low-profile decisions, has broadened the definition of real estate, and allowed companies to split off parts of their business that are unrelated to real estate.

For example, prison companies like the Corrections Corporation and the Geo Group successfully argued that the money they collect from governments for holding prisoners is essentially rent. Companies that operate cellphone towers have said that the towers themselves are real estate.

// posted by montag @ 1:46 PM 0 Comments

According to Department of Homeland Security rules, fertilizer plants and storage depots are required to report when they hold 400 pounds of ammonium nitrate because it can be used in bomb making, but filings with the Texas Department of State Health Services were not shared with DHS showing that West Fertilizer had 270 tons of ammonium nitrate last year, or 1350 times (540,000 lbs) more than the amount the company was required to report to DHS. According to pentagon explosives experts, a 270-ton ammonium nitrate blast would dwarf any non-nuclear weapon in the US arsenal, and was more than 100 times the weight of the ammonium nitrate used in the deadly 1995 Oklahoma City bombing which killed 168 and injured over 800. West Fertilizer previously convinced Texas regulators that any accident at the facility would not be large enough to cause an explosion, and a self-filed risk management plan in 2011 failed to mention the presence of ammonium nitrate at the site.

By not informing the DHS of potentially explosive fertilizer as required, the principal regulator (DHS) of a bomb making ingredient (ammonium nitrate) was unaware of any danger there. According to the ranking member of the House Committee on Homeland Security, Rep. Bennie Thompson (D-MS), “This manufacturer was willfully off the grid. This facility was known to have chemicals well above the threshold amount to be regulated under the Chemical Facility Anti-Terrorism Standards Act (CFATS), yet we understand that DHS did not even know the plant existed until it blew up.” Republicans claim regulations are unnecessary because businesses self-regulate, inspect, and report something like ammonium nitrate and other volatile chemicals to regulatory agencies and departments such as DHS, but West Fertilizer rejected DHS regulations that would have allowed Homeland Security to measure risks, and devise security and safety plans based on “self-reporting.” West Fertilizer was not regulated, or monitored, by the DHS under CFAT standards designed to prevent terrorists from sabotaging sites and to prevent explosive chemicals from falling into terrorist’s hands, but the agency never received any so-called “top-screen” report.

DHS spokesman Peter Boogaard said his agency focuses “specifically on enhancing security to reduce the risk of terrorism at certain high-risk chemical facilities, but because they failed to report the explosive chemicals, West Fertilizer facility is not regulated under the CFATS program and it shows that the enforcement routine has to be more robust, on local, state and federal levels.” Another expert, Sam Mannan, director of process safety center at Texas A&M University said “If information is not shared with agencies, which appears to have happened here, then the regulations won’t work” and it informs that Republican’s favorite policy of self-reporting and regulating does not work, and is another example that the GOP’s deregulation efforts created another devastating tragedy. For the record, the owners of West TX Fertilizer, a privately owned company, donated to Rick Perry’s campaign for governor and Perry has been a staunch advocate for deregulation to “get government out of the way” and regularly boasts Texas’ “business friendly” environment that led to the deaths of 14 and injuries to over 200 Texans.

// posted by montag @ 12:35 PM 0 Comments

Rep. Peter King (R-NY) says that Boston Marathon bombing suspect Dzokhar Tsarnaev should be treated as an enemy combatant and does not deserve to be informed of his Miranda rights to remain silent because the “battlefield is now in the United States.”...

But King disagreed, saying that Tsarnaev “should be treated as a enemy combatant for the purpose of interrogation.”

“The reason for it is there are so many questions unanswered, there are so many potential links to terrorism here,” he continued. “Also, the battlefield is now in the United States. So, I believe he is an enemy combatant.”

The New York Republican added that the suspect would be tried in a civilian court and the statements taken during interrogations could not be used against him in the trial.

“But right now he is one of the only links we have in any Chechen involvement in the al Qaeda movement, in the overall Islamist movement. And we don’t know, are there other conspirators out there? Are there other explosives out there? Where did they get their radicalization? Are there mosques, imams that we should be looking at? Who did his brother meet with when he was in Russia, in Chechnya? These are only questions that I believe can be obtained if he does not get is Miranda rights.”

// posted by montag @ 1:00 PM 0 Comments

Sens. Graham and McCain already jumped the gun Saturday, calling the terrorist an enemy combatant and suggesting in that WMD way that he was connected to terrorist cells.

In a statement, Republican Senators John McCain (R-AZ) and Lindsey Graham (R-SC) (joined by Kelly Ayotte (R-NH) and Congressman Peter King (R-NY)) called for the Boston suspect to be declared an enemy combatant. Their statement, in part, reads:

“The suspect, based upon his actions, clearly is a good candidate for enemy combatant status. We do not want this suspect to remain silent.

“We are encouraged our High value detainee interrogation team (HIG) is now involved and working to gather intelligence about how these terrible acts were committed and possibility of future attacks.

“A decision to not read Miranda rights to the suspect was sound and in our national security interests.

“However, we have concerns that limiting this investigation to 48 hours and exclusively relying on the public safety exception to Miranda, could very well be a national security mistake. It could severely limit our ability to gather critical information about future attacks from this suspect.

“We should be focused on gathering intelligence from this suspect right now that can help our nation understand how this attack occurred and what may follow in the future. That should be our focus, not a future domestic criminal trial that may take years to complete.

// posted by montag @ 12:41 PM 0 Comments

Three days after the West Chemical and Fertilizer Company plant erupted in an explosion that destroyed part of this small town north of Waco, the search of dozens of buildings surrounding the plant was complete on Saturday, but the magnitude of the blast’s human toll had barely started to settle in. Officials said at least 14 people were killed in the explosion, which occurred shortly before 8 p.m. on Wednesday after a fire broke out at the plant for reasons that are still unclear and that remain under investigation by local, state and federal authorities.

The majority of the dead were firefighters from five fire departments and one ambulance service who had rushed to the scene to battle the blaze and started to evacuate people when the plant exploded. Eleven firefighters in all were killed, the worst disaster for Texas firefighters in more than 60 years. On April 16, 1947, fires and explosions aboard ships docked in Texas City killed hundreds of people — including 26 firefighters — in the worst industrial accident in American history, according to the Texas State Historical Association. The blast in West happened the day after the 66th anniversary of the Texas City disaster.

In the days after the explosion, it was not that disaster that many people here talked about as they tried to comprehend the scale of the loss, but another, more recent one. What Sept. 11, 2001, means to firefighters in New York City is a measure, albeit on a smaller scale, of what April 17, 2013, means to firefighters in central Texas. The ceremonies at the rubble in West, the stories of the people who hurried toward the flames as others hurried away, the stunned disbelief and raw emotion that have settled over volunteer fire stations for miles — all of it has evoked to many the imagery of 9/11...

The department had five engines and trucks; now, it has two. On Friday night, trucks and firefighters from Waxahachie and other towns were in the fire station, covering their day-to-day duties so that members of the West department could recuperate and grieve among themselves and their loved ones.

“They lost one-fifth of their organization,” Mr. Ondrasek said. “Many of the officers within the organization either died or are in the hospital. It all brings home how dangerous the job is that you don’t get paid to do. You’re serving your community because this is what you want to do and feel like you need to do. And you can pay with your life.”

// posted by montag @ 1:44 PM 0 Comments

Jeff Bauman, Jr., who helped authorities in their search for the suspects connected to Monday’s bombing at the Boston Marathon, has taken to social media to enlist help in paying his medical bills.

Think Progress reported on Friday that a donation page has been set up to pay the $300,000 in medical bills for Jeff Bauman, Jr., who was photographed being taken away from the explosion site by wheelchair after losing his legs in the bombing, an image that was widely circulated online.

“As most of you know, Jeff was severely affected by the tragedy that had taken place at the Patriots Day Boston Marathon this year,” said Brooke Gibbs, who created the page on Tuesday. “Throughout this difficult time we want to help in every which way we possibly can to get Bauman back on track as soon as possible.”

Bauman is among 1.8 percent of Massachusetts residents who is not enrolled in the state’s health care exchange.

// posted by montag @ 1:19 PM 1 Comments

St. Patrick’s Day, though an Irish holiday rooted in history and tradition, is regarded by many Americans (perhaps on college campuses, in particular) as an opportunity to get wasted. Meanwhile, today, April 20, is known as the marijuana user’s holiday, 4/20. Across the country, stoners are gathering to defy the law and get high.

Both holidays, to some extent, celebrate mind-altering substances, but they couldn't be seen as more different by the law. You wouldn’t speak with your boss about your 4/20 plans or come to the office in weed-themed garb. That’s because while alcohol is legal, m arijuana is grouped alongside drugs like heroin in the most restrictive category of the Controlled Substances Act, Schedule I. This is despite the fact that marijuana is by far the safer substance of the two. A scene full of stoners is far more peaceful (and safer) than a bar or city full of people who are trashed. But while weed is the subject of a decades-old onslaught of government propaganda decrying its supposed harm, our society glamorizes alcohol.

Unlike alcohol, marijuana use is not linked to increase in injury or reckless behavior, nor is it linked to violence or sexual assault. Alcohol, however, is.

// posted by montag @ 12:30 PM 0 Comments

I wonder how many Boston liberals spent the night cowering in their homes wishing they had an AR-15 with a hi-capacity magazine?

I would like to apologize to the people of Boston & Massachusetts for the poor timing of my tweet earlier this... fb.me/21tgLuP0j
— Nate Bell (@NateBell4AR) April 19, 2013

// posted by montag @ 1:45 PM 0 Comments

Ms. Reinhart and Mr. Rogoff had credibility thanks to a widely admired earlier book on the history of financial crises, and their timing was impeccable. The paper came out just after Greece went into crisis and played right into the desire of many officials to “pivot” from stimulus to austerity. As a result, the paper instantly became famous; it was, and is, surely the most influential economic analysis of recent years.

In fact, Reinhart-Rogoff quickly achieved almost sacred status among self-proclaimed guardians of fiscal responsibility; their tipping-point claim was treated not as a disputed hypothesis but as unquestioned fact. For example, a Washington Post editorial earlier this year warned against any relaxation on the deficit front, because we are “dangerously near the 90 percent mark that economists regard as a threat to sustainable economic growth.” Notice the phrasing: “economists,” not “some economists,” let alone “some economists, vigorously disputed by other economists with equally good credentials,” which was the reality.

For the truth is that Reinhart-Rogoff faced substantial criticism from the start, and the controversy grew over time. As soon as the paper was released, many economists pointed out that a negative correlation between debt and economic performance need not mean that high debt causes low growth. It could just as easily be the other way around, with poor economic performance leading to high debt. Indeed, that’s obviously the case for Japan, which went deep into debt only after its growth collapsed in the early 1990s.

Over time, another problem emerged: Other researchers, using seemingly comparable data on debt and growth, couldn’t replicate the Reinhart-Rogoff results. They typically found some correlation between high debt and slow growth — but nothing that looked like a tipping point at 90 percent or, indeed, any particular level of debt.

Finally, Ms. Reinhart and Mr. Rogoff allowed researchers at the University of Massachusetts to look at their original spreadsheet — and the mystery of the irreproducible results was solved. First, they omitted some data; second, they used unusual and highly questionable statistical procedures; and finally, yes, they made an Excel coding error. Correct these oddities and errors, and you get what other researchers have found: some correlation between high debt and slow growth, with no indication of which is causing which, but no sign at all of that 90 percent “threshold.”

// posted by montag @ 1:31 PM 0 Comments