By Pamela J. Podger
Monday, October 27, 2008
MISSOULA, Montana: Chilled by an autumn wind, Enrique Márquez watched from horseback as the sheep gamboled down the mountain. A border collie nipped the heels of wayward ewes.
All summer and into the fall, the flock grazed on noxious weeds infesting 1,000 acres, or 400 hectares, of public lands above the Missoula Valley as part of this city's effort to restore its native prairie grasses.
Throughout the United States, sheep grazing is gaining popularity as a low-cost, nontoxic tool in the battle to control leafy spurge, knapweed, Dalmatian toadflax and other invasive weed species. The approach is catching on in places like the Massachusetts island Nantucket, Civil War battlefields in Virginia, ski slopes in Vermont and vineyards in California.
Tom McDonnell, a staff consultant with the American Sheep Industry Institute, called this kind of grazing a "growth industry." McDonnell cited a study by the College of Agriculture and Life Sciences at Cornell University that indicated nonnative weeds had invaded 40 to 50 percent of U.S. croplands, pasture and public lands and were spreading at a rate of 1.75 million acres per year.
Sheep grazing is a long-term solution best used in conjunction with other methods, like beneficial insects, controlled burns, herbicides and hand pulling, officials said.
Jeff Mosley, an extension range management specialist at Montana State University, said sheep were a natural "low fossil fuel" way of controlling invasive plants, with the added benefit of providing meat and wool.
"It's environmentally friendly," he said. "Grazing has an aesthetic appeal and a bucolic aspect. It's a natural form, and people appreciate that as well."
In the mountains ringing the Missoula Valley, about 600 acres of city lands are 75 to 100 percent invaded by noxious weeds, said Missoula's conservation lands manager, Morgan Valliant.
"We're using the sheep to slowly turn back the clock and decrease the density of the weeds and get some seeds" of native grasses and wildflowers sown, Valliant said, adding, "Each year, we're learning more and more."
Still, some local residents are skeptical.
Giles Thelen, a plant ecologist at the University of Montana in Missoula, said that results of the sheep-grazing program were anecdotal and that plots should be used to measure how effective the sheep were.
Thelen also worries about the sheep worsening the problem by picking up invasive seeds in their wool and dropping them in new areas, as well as causing erosion with their hooves.
"There's no data to show if the sheep are making the situation worse or better," he said.
Some herbicides may be more effective, he said, "but people don't like poison on their public lands."
Each year, the city contracts with John Stahl, a fourth-generation rancher who drives his flock to the infested hills from his Missoula County ranch nine miles, or 14 kilometers, away.
The city pays Stahl about $1,300 a month, including a modest stipend for Márquez. The rancher provides Márquez's food, equipment, camp wagon and bus fare from his home in Chihuahua, Mexico.
Stahl said access to the forage on public lands allowed him to continue raising sheep and other livestock instead of selling the ranch to developers.
"I couldn't make a living on the sheep without access to the city land," Stahl said. "And Enrique really knows the sheep and all the places they can hide. He has an instinct for animals."
Before coming to Montana, Márquez, 57, a soft-spoken man with hazel eyes, worked with cattle in New Mexico for a decade, but he had never handled sheep. He said the money he earned each season helped him fix up his small cattle ranch in Mexico.
Márquez pointed out the telltale orange patches of leafy spurge in the dun-colored hills where his flock had not grazed. He said the sheep were effective and better than spraying.
"The chemicals kill the bad plants as well as the good ones," he said in Spanish. "In Mexico, we have a little spurge, but nothing like this. I've learned a lot about bad plants and sheep here."
On a recent Sunday morning, the flock departed the mountains before the first snowfall. The sheep moved through Missoula's streets, their bells clanging and hooves clattering on the pavement as they headed back to the ranch.
The herders included Stahl on an all-terrain vehicle, volunteers on bicycles and Márquez on horseback. The woolly procession rolled past subdivisions and apartments, where children ran alongside it.
A tractor-trailer slowed to a halt as it was engulfed by the flock.
The sheep ran through an interstate-highway underpass, then across railroad tracks and a busy four-lane state highway.
When the sheep arrived at the ranch after an hour and a half trip down from the mountains, they fanned out in the waist-high grasses.
Stahl said the roundup went faster each year.
"They make their way home from memory," he said.
By John Vinocur
Monday, October 27, 2008
PARIS: If Barack Obama is elected president of the United States next week, he'll bring into office with him the advantage of not being pre-cast as a villain in Europe.
As pluses go, it may be an impermanent one.
The realities of American interests, American responsibilities and the American presidency mean that all the soft power instincts and readiness for multilateral mosh-pit politicking attributed to Obama by Europeans can quickly look imaginary.
Exhibit A: On Saturday a news report said that France no longer expected that the president-elect, presumably Obama, would attend an international financial crisis summit meeting of 20 countries that Nicolas Sarkozy organized with George W. Bush's backing for Nov. 15 in Washington.
Sarkozy keenly wanted the legitimacy of the newly elected leader's participation. By way of a response, Obama said, in effect, that the United States had one president at a time.
This was a direct peek into the real future.
It meant America had its own crisis to deal with first, Obama was not going to muddle his priorities, and that a more specific international response could be coordinated once his own plan for national and global financial reform was on its feet.
This is the Obama who says, like John McCain, that his goal is to keep America the most powerful country on Earth.
Obama is not Michael Moore transmogrified. He will fulfill no one's dreams of a capitulating, apologetic United States.
If you hold up some of the basics making up Obama's view of America in the world - the necessity on occasion for a role as global sheriff ("This will not change, nor should it," he says); and no United Nations veto over specific unilateral military action by the United States - then his statement that "we're no longer about bluster and unilateralism and ideology" could be one largely promising greater patience in diplomacy, more finesse and better salesmanship.
Clearly, Europeans like and believe Obama when he says that he cares about what others think and that America must listen to them.
But just as clearly there are reservations. America is a political and economic culture unto itself, and the CSA polling organization, which found 93 percent of the French would vote for Obama if they had the chance, also reported that the enthusiasm for him "doesn't reoccur when it comes to the United States."
Only 2 in 10 of Obama's supporters, it said, want Europe and France to move closer to American positions.
Do these respondents understand or support Obama's will to keep America, as he says, the most powerful country in the world?
In fact, Josselin de Rohan, the Gaullist chairman of the foreign affairs committee of the French Senate, has suggested that there are many here who just don't get it when it comes to recognizing Obama's bottom line.
The question of Europe really hearing all that Obama says goes to other issues. I haven't found any research that would support the theory, but my guess is also that Europeans have only the faintest idea that Obama accepts the death penalty and won't fight for gun control, two eternal American sins as seen from abroad.
Soft power? Europe loves the notion (which rationalizes its low defense budgets) and tends to assign a virtue it sees in itself to Obama. Yet here's how the Democrat came out, in his last debate with McCain, on a centrally soft concern - education:
"It probably has more to do with our economic future than anything and that means it has a national security implication because there never has been a nation on Earth that saw its economy decline and continued to maintain its primacy as a military power. So we've got to get our education system right."
On Iran, there is little indication that European public opinion is listening closely either when Obama says, "We'll never take the military option off the table." Or on Georgia and Ukraine, when Obama insists that they must be given plans for NATO membership "immediately." Or on Afghanistan when he complains that some NATO countries, like Germany, are present there but not sharing the missions with the most murderous risks.
This also goes in part for Iraq. It would be Obama's America alone that has to make the decisions. When asked four years ago about French and German criticism of the Iraq war, Joe Biden, Obama's running mate, caricatured European leaders telling him they would have done things better:
"Blah blah blah, international cooperation," he mocked. "Give me a break, huh."
Things are not entirely different in terms of economic and financial reform. Obviously, there is wide international agreement on the need for better regulation of irresponsible, nonproductive activities. But from the standpoint of American business culture and its dynamism, there would be limits to the new rules.
David Sturtevant Ruder, a former chief of the Securities and Exchange Commission, America's market regulator, who has endorsed Obama, sees American capitalism eventually coming out of this "horrible situation" with a better version that's "a little tamer" and "a little more regulated."
He added: "But this country is built on an appetite for risk. We don't want to be France."
Almost surely, a newly elected President Obama would be too slick to tell the truth that way.
He would be following Bill Clinton, once described by Denis MacShane, then minister for Europe in Tony Blair's cabinet, as "a Social Democrat who put Europe on Valium, who could schmooze Europe, talk European."
In spite of those skills, Obama may take note of this shard from the history of American interests during Clinton's last years in office:
When the United States agreed to choose bombing targets by consensus with its European allies during the conflict with Serbia, the arguments and indecision were such that Clinton, in despair and in clear American, was heard saying: Never, never again.
By Steven Erlanger
Monday, October 27, 2008
BOURCEFRANC-LE-CHAPUS, France: For Thierry and Véronique Gillardeau, the oyster has become their world.
A member of the fourth generation of a family of oyster farmers, Thierry, 37, has brought an economics education to what has become the most famous name in oysters: Gillardeau.
The family's small private company, founded 110 years ago here by the sea near La Rochelle and the Île d'Oléron in western France, produces only "spéciales," oysters that are fleshier and, consequently, more expensive than the standard. The Gillardeau name has become associated with fine oysters, rather like Hermès for neckties.
Thierry's father, Gérard Gillardeau, 61, took over the business from his father, Jean, who ran it after his father, Henri, who began as an illiterate farmhand before turning his hand to oysters. Oyster farming then dominated the economy of the region, where the Charente and Seudre Rivers add their fresh water to the salt flats and estuaries.
Henri did well enough to build a large house opposite City Hall in this village of 3,500 people, a house he called "Ça m'suffit," or "That'll do." Thierry and Véronique live there today with their two children.
"My grandfather couldn't read, but he knew how to count," Gérard said. "Now, oyster farmers know how to read but not how to count."
Many of his neighbors still farm oysters "the way they did in the Middle Ages," he said, by taking the seedlings to full growth in small oyster basins next to the sea, farming them in small, flat-bottomed boats and doing much of the work by hand. "They could be more profitable," he said. "But the past is so important to them that they don't want to change."
That attitude makes the Gillardeau family something of an anomaly in a nation famously resistant to change, especially in how it produces food and wine.
In 1978, Gérard sought to expand beyond his village and found a partner in the huge wholesale market in Rungis, just outside of Paris, a step that helped the Gillardeau company make a name for itself. For the past 15 years, sales have increased roughly 20 percent a year, Thierry said at a conference in May. As a private company, it does not reveal its accounts.
"In some business schools, they are studying our case like a case of marketing," he said. "But you have to know that there is no marketing behind Gillardeau, only quality." In fact, he said, marketing is by word of mouth. "Because our oysters are good people want to eat them again and again," he said. "They will go to a restaurant and say, 'Why don't you serve Gillardeau?'"
The number of local oyster farmers here in western France has dropped from more than 3,000 two decades ago to 700 now. Gillardeau no longer farms its oysters here. It now produces roughly half its oysters in Normandy, near Utah Beach, and half in County Cork, in Ireland, where the waters are cleaner and the sites easier to farm with tractors, and where there are fewer parasites and less agricultural runoff.
It employs some 100 people in all, but still sorts, finishes and packs its oysters here, producing about 2,000 tons a year of an annual French production of some 130,000 tons.
Unlike many other companies, Gillardeau buys seedling oysters that are one to two years old. That way it avoided most of the impact of the widespread death of younger French seedling oysters this year, believed to have been caused by a warm winter, heavy spring rains and possibly excess runoff of fertilizer and pesticides from local vegetable farms.
To protect the future, Thierry bought 20 million seedlings unaffected by the blight at a premium in Ireland, where the company will raise them itself.
Gillardeau normally farms the two-year-old oysters it buys for the next two years, coaxing them into a shape like a lemon and maximizing the quantity of the flesh by carefully adjusting the depth and salinity of the water. The company tries to keep its oysters from clumping together, putting 135 to 150 oysters in each of the thick plastic-screening sacks that can hold 1,000.
Workers with tractors turn the sacks every two weeks or so, to break the small shells that the oysters produce, to "stress" the oyster to eat more and to grow in the desired form. "You shape an oyster a little like a piece of furniture," Thierry said.
Oysters are then trucked here to be finished and packed. They spend several weeks in oyster ponds, with water changed regularly and salinity measured carefully, before being washed and sorted by size.
Before a batch is packed, one Gillardeau or another makes sure to taste a few oysters. Theirs are less briny than many others' nuttier, fleshier and almost sweet.
The family firm is a tradition in France, but one extending four or five generations is rare. "I didn't want to work with my father," Thierry admitted. He went to a university and studied economics, starting his first company at 19, renting surfboards and selling drinks on the beach. After his military service, he cast around in import-export.
"But my father was in difficulties with his partner in Rungis," Thierry said. "He asked me to look into it." Since the age of 17, Thierry had worked every Christmas, high oyster season, at the huge Paris market, and he always fought with the partner, he said, smiling. "So I got rid of him" and invested in another Rungis company, he said.
"It was Rungis that gave me a love of oysters," he said. It was also in Paris, at a New Year's Eve party, that he met Véronique, a Belgian who was working at the fashionable Escada store. They married, and he brought her here 10 years ago.
"She worked for Escada, and now she can wear rubber boots and a hat pulled down to here," Thierry said, slightly ruefully.
Véronique is good-natured and proud of the company. "Of course there is jealousy," she said, when asked about competitors. "It's a small village, and everyone does the same thing." Gérard said neighbors had sneaked some oysters out of Gillardeau ponds, just to taste them.
Michael Moreau, an oyster farmer here, said the active oystering life that he remembered from when he was a boy had changed. "I could hear everyone laugh and drink and yell at each other, but that doesn't exist any more," he said. "Now it's abandoned. It's over. It's been industrialized."
Of course there is jealousy of the Gillardeau firm, Moreau said. "But he could have gone to Normandy, and instead he stayed here."
Bernard Jaulin, 57, gave up oyster farming nine years ago with great regret, in part because his two daughters had no interest in the business. He is now remodeling a bar-restaurant he bought in nearby Fouras. "Now it's different," he said. "It's bigger, more modern, more technological." The local oyster beds, he said, "don't give any more."
Asked about Gillardeau, his eyes lighted up. "Have you tasted them? The taste is exquisite. They have that extra body," he said, crunching his jaws.
By Mark Mazzetti and Eric Schmitt
Monday, October 27, 2008
WASHINGTON: The White House has backed away from using U.S. commandos for further ground raids into Pakistan after furious complaints from its government, relying instead on an intensifying campaign of airstrikes by the Central Intelligence Agency against militants in the Pakistani mountains.
According to U.S. and Pakistani officials, attacks by remotely piloted Predator aircraft have increased sharply in frequency and scope in the past three months. Through Sunday, there were at least 19 Predator strikes since the beginning of August, some deep inside Pakistan's tribal areas, compared with five strikes during the first seven months of 2008.
At the same time, however, officials said that relying on airstrikes alone would not enable the United States to weaken Al Qaeda's grip in the tribal areas permanently. Within the government, advocates of the ground raids have argued that only by sending Special Operations forces into Pakistan can the United States successfully capture operatives and interrogate them for information about top Qaeda leaders.
The decision to focus on an intensified Predator campaign using Hellfire missiles appears to reflect dwindling options on the part of the White House for striking a blow against Al Qaeda in the Bush administration's waning days.
After months of debate within the administration and mounting frustration over Pakistan's failure to carry out more aggressive counterterrorism operations, President George W. Bush finally gave his approval in July for ground missions inside Pakistan. But the only U.S. ground mission known to have taken place was a Special Operations raid on Sept. 3, in which the roughly two dozen people were killed, included some civilians. U.S. officials say there has not been another commando operation since.
U.S. officials acknowledge that following the Sept. 3 raid they were surprised by the intensity of the Pakistani response, which included an unannounced visit to Washington, three weeks after the incursion, by the country's national security adviser, Mahmud Ali Durrani. He registered his anger in person with top White House officials, including Stephen Hadley, Bush's national security adviser.
A senior administration official said Sunday that no tacit agreement had been reached between the sides to allow increased Predator strikes in exchange for a backing off from additional U.S. ground raids, an option the officials said remained on the table. But Pakistani officials have made clear in public statements that they regard the Predator attacks as a less objectionable violation of Pakistani sovereignty.
"There's always a balance between respecting full Pakistani sovereignty, even in places where they're not capable of exercising that sovereignty, and the need for our force protection," said the administration official, who spoke on condition of anonymity.
Top U.S. officials have sought to justify the Sept. 3 ground raid as a self-defense response against militants who use havens in Pakistan to carry out attacks against U.S. and allied forces in Afghanistan. Those attacks have increased about 30 percent this year from a year ago, according to military officials.
As part of the intensified attacks in recent months, the CIA has expanded its list of targets inside Pakistan and has gained approval from the government in Islamabad to bolster eavesdropping operations in the border region, according to U.S. officials.
Once largely reserved for missions to kill senior Arab Qaeda operatives, the Predator is increasingly being used to strike Pakistani militants and even trucks carrying rockets to resupply fighters in Afghanistan. Many of the Predator strikes are taking place as deep as 40 kilometers, or 25 miles, into Pakistani territory, not just along the border.
Spokesmen for the White House and the CIA declined to comment for this article. The information about the U.S. operations inside Pakistan was described in interviews by a dozen military and civilian officials from the United States and Pakistan, who insisted on anonymity because of diplomatic concerns and because details about the Predator strikes and commando raids remained classified.
While Pakistan is now headed by a new civilian government, under President Asif Ali Zardari, the tense discussions between the countries over counterterrorism operations appear to reflect at least some of the uneasiness and codependence that long characterized the partnership between Bush and Pervez Musharraf, the former president, who was defeated in parliamentary elections in February.
Senior military and counterterrorism officials say the increased Predator strikes have disrupted planning, pushed some insurgents deeper into Pakistani territory, prompted some militant commanders to post additional sentries, and forced the militants to use their cellphones and satellite phones, which U.S. eavesdropping operations can monitor.
"It's fair to say that it has caused key Al Qaeda figures to focus even more on their safety and security," said a Western counterterrorism official. "It has caused them to be more suspicious of people they don't know well, and it also has caused frictions between Al Qaeda and tribal elements."
But the official acknowledged that the intensified operations had failed to shake Al Qaeda's hold on the tribal areas. "Things haven't gotten to the point that they would even consider another option," he said.
Pakistan and the United States are also taking steps to repair the relationship between their intelligence services, which reached a nadir this summer after evidence emerged that Pakistan's Inter-Services Intelligence Directorate had a hand in the July bombing of the Indian Embassy in Kabul.
General Ashfaq Parvez Kayani, Pakistan's top military official, recently replaced not only the ISI's commander but also four midlevel generals who are believed to have had advance knowledge of the embassy bombing.
The CIA has also put a new station chief in Islamabad, replacing one whose tour of duty had ended and whose relationship with the ISI had become contentious.
Lieutenant General Ahmed Shuja Pasha, the new head of the ISI, is in Washington this week and is scheduled to meet with the CIA director, Michael Hayden.
Pentagon officials have publicly praised the Pakistani Army's aggressive campaign against militants in the Bajaur tribal agency. But privately, some U.S. officials are wincing at a full-scale military operation that is taking a heavy toll on civilians as well as insurgents and has not diminished the cross-border attacks.
"They don't have a concept of counterinsurgency operations," one senior U.S. officer said of the Pakistanis. "It's generally a heavy punch, and then they leave."
More than 200,000 people have now fled the attack helicopters, warplanes, artillery and mortar fire of the Pakistani Army.
By Jane Perlez, Pir Zubair Shah and Ismail Khan
Monday, October 27, 2008
PESHAWAR, Pakistan: A missile strike by a remotely piloted U.S. aircraft hit a militant compound in South Waziristan on Sunday night, killing 20 people, including two Taliban commanders known for their attacks against American soldiers in Afghanistan, a senior government official and a local resident said.
One of the dead commanders, Eida Khan, was wanted by the Americans for his cross-border attacks from bases in Waziristan, the government official said.
The other, Wahweed Ullah, worked with Arabs who were part of Al Qaeda, the local resident said. Ullah, in his late 20s, was known as an ideologically committed fighter specializing in attacks against Americans in Afghanistan, the official said.
The missile hit a compound in the village of Manduta, near Wana, the capital of South Waziristan, about 32 kilometers, or 20 miles, from the Afghan border.
Khan and Ullah, as well as two brothers of Khan, were affiliated with the militant network of Jalaluddin Haqqani, a senior Taliban figure with close connections to Al Qaeda, said the official and the local resident, who spoke on condition of anonymity because of the sensitivity of the matter.
The latest strike was part of an escalating campaign by the Bush administration to hit the Taliban and their Al Qaeda backers at their bases in the tribal belt.
Ullah, who was usually in North Waziristan, is believed to have been visiting the compound in Manduta to pay respects to the families of those killed Friday in a U.S. drone strike on a madrassa in North Waziristan run by Haqqani.
The people killed in the North Waziristan strike came from the area around Manduta in South Waziristan, the official and the local resident said.
Khan was well known to the Pakistani authorities. He was arrested in 2004 and jailed until last year when he was released in a prisoner exchange, the official said.
While U.S. drone attacks appear to be more acceptable to the Pakistani authorities than ground incursions, government officials have complained of the intensity of the strikes and the Americans' choice of targets.
The Americans have been concentrating on Taliban and Qaeda forces that have attacked American and coalition troops in Afghanistan but ignoring militants targeting Pakistan, a senior Pakistani official in the administration that oversees the tribal region said Monday.
"The Americans are not interested in our bad guys," the official said. He was referring in particular to Baitullah Mehsud, a Pakistani Taliban leader, who the Pakistani authorities say is responsible for many of the suicide bombings of the past 18 months.
The Pakistani Army is fighting the Pakistani Taliban in Bajaur, another part of the tribal region to the east of Waziristan, and that conflict appeared to be on the verge of spreading Monday after a suicide bomber rammed his car into a checkpoint manned by paramilitary forces in the Mohmand region.
The attack was the first in Mohmand, an area adjacent to Bajaur. It nine members of the Frontier Corps and the Chasadars, the government said.
The Pakistani Army has said it planned to wage a campaign against the Taliban in Mohmand once it has completed its mission in Bajaur.
The tribal region was discussed Monday at a government-sponsored gathering of tribal leaders from Pakistan and Afghanistan in Islamabad. The meeting is part of a dialogue process initiated last year by President Hamid Karzai of Afghanistan.
The focus of the meeting was on talks between those Taliban willing to renounce violence and the Pakistani and Afghan governments. The fact that the meeting took place was seen as a sign that the new Pakistani government is willing to participate in a process that the former president, Pervez Musharraf, had largely ignored.
Pir Zubair Shah reported from Islamabad.
By Abdul Waheed Wafa and Carlotta Gall
Monday, October 27, 2008
KABUL: A suicide attacker in a police uniform blew himself up Monday inside a police station in the northern province of Baghlan, killing two American soldiers and wounding another, Afghan officials said.
An eight-year-old boy was also killed in the blast and five Afghan policemen were wounded.
A Taliban spokesman, Zabiullah Mujahed, quickly claimed responsibility for the attack, naming the suicide bomber as Abdul Ahad. He said that the bombing caused far higher casualties than those reported by Afghan and U.S. officials.
An American military spokesman, Major John Redfield, confirmed that two coalition soldiers were killed and three wounded in the suicide bombing. He did not give the nationality of the other wounded soldiers, nor did he say what they were doing at the police station.
U.S. personnel are involved in police training and mentoring in many provinces in Afghanistan.
Afghan officials said the attack occurred as American police trainers were inside the building talking with Afghan police officials and their guards were in the yard where the bomber detonated the explosives on his body.
"Two American soldiers and a child were killed and one American and five Afghan soldiers were wounded," said Abdul Rahman Sayedkhili, the police chief of Baghlan. He said the attacker managed to infiltrate the compound during a large meeting of district chiefs.
Baghlan is generally a peaceful province, but was the scene of one of the bloodiest suicide attacks last year in which up to 72 people were killed, including five legislators and more than 50 schoolchildren.
Separately, a U.S. helicopter came under fire from Taliban insurgents in Wardak Province southwest of Kabul, and "due to the insurgents' fire made a hard landing," said Colonel Gregory Julian, a spokesman for U.S. forces in Afghanistan. No one was wounded, he said. He indicated that the helicopter could have been forced down.
Mujahed, the Taliban spokesman, said insurgents had opened fire and downed it while it was attempting to land troops at a compound where coalition forces were looking for militants.
Taimoor Shah contributed reporting from Kabul.
Monday, October 27, 2008
KABUL, Afghanistan: U.S. forces in Afghanistan said on Monday they had launched an air strike that killed a number of private Afghan security guards only after coming under fire from that position.
Afghan provincial authorities said on Sunday they were investigating reports that 20 private security guards had been killed in a U.S.-led coalition air strike southwest of Kabul.
A provincial government source said U.S.-led forces called in the strike to fend off an attack by Taliban insurgents on several posts of the local security company that guards a road construction project in the Giro district of Ghazni.
But a spokesman for U.S. forces said coalition troops called in air support after they were ambushed from multiple positions, including that occupied by the private security guards.
"Early yesterday, a coalition unit was on their way to their objective when they came under fire from multiple locations," said U.S. forces spokesman Colonel Gregory Julian.
"They tried to withdraw but could not and they had no alternative but to call in close air support," he said.
"Afterwards they discovered there were casualties with contract security uniforms and therefore an investigation was launched to determine what happened."
Afghanistan has suffered a marked escalation of violence this year, the bloodiest period since U.S.-led and Afghan forces toppled the Taliban in late 2001 for refusing to give up al Qaeda leaders behind the September 11 attacks on the United States.
Hundreds of civilians have been killed by foreign troops in operations against Taliban militants in Afghanistan this year, according to Afghan officials and aid groups.
While Taliban insurgents have killed more ordinary Afghans in their attacks, the issue of civilian casualties caused by international troops has led to a rift between the Afghan government and its Western backers.
The hardline Islamist Taliban have extended both the size and the scope of their insurgency in the last two years with scores of suicide and roadside bombs backing a campaign of guerrilla warfare and intimidation.
(Reporting by Jon Hemming; editing by Roger Crabb)
By James Glanz
Monday, October 27, 2008
A huge American-financed wastewater treatment plant in the desert city of Falluja, which U.S. troops assaulted twice to root out insurgents in 2004, was supposed to be the centerpiece of an effort to rebuild Iraq, a country smashed by war and neglect, and to bring Western standards of sanitation.
Instead, the project, which has tripled in cost from original plans to $100 million and has fallen about three years behind schedule, has become an example of the failed and often oversold program to rebuild Iraqi infrastructure with U.S. dollars and skill.
The project was so poorly conceived that there is no reliable electricity to run pumps and purification tanks, and no money left to connect homes to the main sewer lines, which now run uselessly beneath Falluja's streets, according to a report by U.S. investigators released Monday.
The report by the Special Inspector General for Iraq Reconstruction, an independent federal office led by Stuart Bowen Jr., stops short of saying that officials with the U.S. Army Corps of Engineers, which has primary responsibility for the project, or the U.S. Embassy's own reconstruction bureau, the Iraq Transition Assistance Office, deliberately withheld information on the problems.
But Bowen's investigators determined that senior officials at the embassy and the Army Corps knew of the problems for years without taking them to the U.S. ambassador, Ryan Crocker, or including them in any substantial way in the State Department's so-called 2207 reports, which are supposed to inform Congress of the status of taxpayer-financed projects in Iraq.
In fact, when Crocker learned about the problems in July, he asked the investigators to determine why he had never been informed, the report says.
The investigators found that there were systemic barriers to reporting reconstruction failures up the chain of command, possibly helping to explain why senior embassy and military officials often praise projects that later turn out to be flawed or nonfunctional.
And, as if to remove any doubt that the carefully devised public image of the project bears only a passing resemblance to what the investigators observed, the Army Corps has repeatedly promoted the Falluja project as a remarkable success in its constant stream of news releases on Iraq reconstruction.
In April, for example, an Army Corps release said the project had been started in May 2007 and would eventually serve all the homes in Falluja. In fact, investigators found, the project was begun in June 2004 and was originally supposed to have been finished 18 months later.
At the earliest, the project will be partly operational by April 2009, the investigators found. And although the original plan called for the plant to cover the entire city, it has since been downsized to serve at most one-third of the population, or about 9,300 homes.
That means the project would end up costing more than $10,000 per home. But even at that price the plant may never operate.
When investigators arrived in autumn, they found that the manholes and control valves had been padlocked on a principal sewer line by an irate contractor who had not been paid for a small part of the work that was supposed to have been financed by the Iraqi government. Some of the bills were two years past due, the investigators found. "Ultimately, if this problem is not addressed, wastewater will back up into residents' houses, causing damage and odor," the report says.
A spokeswoman for the Army Corps of Engineers in Baghdad, DeDe Cordell, pointed out that alongside its criticisms, the inspector general report also praised corps officials for ultimately finding the problems. Cordell said the project, which was begun under the Coalition Provisional Authority, the transitional government after the invasion, did not pass to the Army Corps until May 2006.
The discrepancy with the corps news release must have been the result of a typographical error, Cordell said.
She said that plans for the wastewater plant had changed again and again, sometimes at the request of the Iraqi government in ways the Army Corps had objected to.
"We are not doing these projects 'in a vacuum,"' Cordell wrote in an e-mail message. "This is a partnership with the government of Iraq."
She said that the backbone of the sewer system would be capable of serving the entire city of Falluja but that the Iraqi government would be responsible for connecting much of that system to individual homes.
"This has been unbelievably challenging and indescribably dangerous, both from a security and a construction safety standpoint. People have died in an effort to bring the city its first wastewater treatment system, a fundamental service, with health and environmental benefits most Americans take for granted."
Still, the inspector general report says that the Iraqi government has not been inclined to pay for the connections to individual homes and, in a bizarre bit of city planning, has proposed that individual homeowners connect their lines. At least one Iraqi, a 16-year-old boy, died of asphyxiation when he was overcome by sewer fumes after his family sent him down to work on the connection.
By Neil A. Lewis
Monday, October 27, 2008
WASHINGTON: Senator Ted Stevens, Alaska's dominant political figure for more than four decades, was found guilty on Monday by a jury of violating federal ethics laws for failing to report tens of thousands of dollars in gifts and services he had received from friends.
The jury of District of Columbia residents convicted Stevens, 84, on all seven felony counts he faced in connection with charges that he knowingly failed to list on Senate disclosure forms the receipt of some $250,000 in gifts and services used to renovate his home in Girdwood, Alaska.
Stevens, a consistently grim-faced figure, frowned more deeply as the verdict was delivered by the jury foreman, a worker at a drug counseling center. Stevens's wife and one of his daughters sat glumly behind him in the courtroom.
In a statement issued after he had left the courthouse, Stevens was defiant, urging Alaskans to re-elect him to a seventh full term next week.
He blamed what he called repeated misconduct by U.S. prosecutors for the verdict. "I will fight this unjust verdict with every ounce of energy I have," he said.
"I am innocent. This verdict is the result of the unconscionable manner in which the Justice Department lawyers conducted this trial," he said. "I ask that Alaskans and my Senate colleagues stand with me as I pursue my rights. I remain a candidate for the United States Senate."
Nonetheless, the verdict is widely expected to write an end to Stevens's long political career, which has moved in tandem with his state's rough-and-tumble journey from a remote territory to an economic powerhouse.
Stevens was instrumental in promoting statehood for Alaska when he was a young Interior Department official in the Eisenhower administration and then went on to represent the state in the Senate for 40 years. Over that time, he used his steadily accumulated influence over federal spending, notably using his membership on the Appropriations Committee, to steer millions, perhaps billions, of dollars in federal money to his home state.
The verdict comes a week before a second jury of sorts, the voters of Alaska, will decide whether to return him to the Senate or elect his Democratic opponent, Mayor Mark Begich of Anchorage. After Stevens's indictment in July, he asked for a quick trial so he might clear his name before Election Day.
If Stevens loses his seat, the trial's implications could be felt on a broad political scale, helping Democrats in their drive to win enough seats in the Senate to give them a filibuster-proof majority of at least 60 votes. Within an hour of the verdict's becoming public, Democrats in Senate races around the country immediately sought to make the conviction an issue for their opponents, demanding that those who had received money from Stevens, who was generous with contributions to his colleagues, return it.
If Stevens wins and insists on keeping his seat, his fate will be in the hands of his Senate colleagues. A senator can be expelled only by a two-thirds vote of the entire Senate, so a conviction does not automatically cost a lawmaker his seat. Since 1789, only 15 senators have been expelled, most for supporting the Confederacy during the Civil War, the Senate Web site states.
In 1982, the Senate Ethics Committee recommended that Senator Harrison Williams, Democrat of New Jersey, be expelled because of his conviction on bribery, conspiracy and conflict of interest charges in the Abscam scandal, and in 1995 the committee recommended the expulsion of Senator Robert Packwood, Republican of Oregon, for sexual misconduct. Both men resigned before the full Senate could vote.
Should Stevens be expelled or resign on his own, the Alaska governor, Sarah Palin, would most likely have to call a special election to fill the vacancy, according to state legal officials.
Palin, the Republican nominee for vice president, issued a statement late Monday, saying she was "confident that Senator Stevens will do what's right for the people of Alaska."
Governor Palin did not specify what that was. She did ask that the verdict be respected, saying that it "shines a light on the corrupting influence of the big oil service company that was allowed to control too much of our state. It was part of the culture of corruption I was elected to fight. And that fight must always move forward regardless of party or seniority or even past service."
The Senate majority leader, Harry Reid, said: "This verdict is a personal tragedy for our colleague Ted Stevens, but it is an important reminder that no man is above the law. Senator Stevens must now respect the outcome of the judicial process and the dignity of the United States Senate."
The Republican leader, Senator Mitch McConnell, issued this statement after the verdict: "Senator Stevens was found guilty by a jury of his peers, and now must face the consequences of those actions. As a result of his conviction, Senator Stevens will be held accountable so the public trust can be restored."
Judge Emmet Sullivan of Federal District Court delayed setting a date for sentencing until after a Feb. 25 hearing on motions from Stevens's lawyers.
Under complicated guidelines that are no longer mandatory, Judge Sullivan has wide discretion in setting a sentence, although lawyers familiar with the subject said it was difficult to conceive of a situation in which Stevens would not be required to spend time in jail.
In addition to his expected appeal, his supporters are also likely to explore the possibility of obtaining a pardon, or some form of executive clemency like a commutation of any sentence, from President George W. Bush, a fellow Republican, before he leaves office.
The verdict came after more than three weeks of testimony, the highlight of which was Stevens's taking the calculated risk of testifying in his own defense.
Government prosecutors used evidence and testimony to paint a picture of Alaska in which several of Stevens's wealthy friends, keenly aware of his political status, were eager to shower him with gifts. The indictment charged that he had received some $250,000 in gifts and services from a longtime friend, Bill Allen, the owner of a huge oil services construction company, and gifts from other friends like a sled dog and an expensive massage chair.
Allen, who was convicted for his role in a scheme to bribe Alaska state lawmakers to help his oil exploration projects, agreed to cooperate with the government and have his telephone conversations with Stevens recorded.
At one time, the two men were friends, thrown together by politics and oil money. Allen, who was the prosecution's chief witness, testified that Stevens knew he was receiving the goods and services free and even sent an emissary to ask that no bills be sent.
Stevens's defense was largely built on the notion that he had not asked for, and had no use for, many of the goods and services he received. In the case of the massage chair, he said it had not been a gift from Bob Persons, a friend and restaurant owner who had bought it from a Brookstone store and sent it to the Stevenses' Washington home. It was a loan, Stevens testified, even though it had remained in his Washington home for more than seven years and he once wrote to Persons that he enjoyed using it and even fell asleep in it.
Moreover, Stevens asserted that his wife of 28 years, Catherine, was assigned to oversee the remaking of the Alaska home from a simple A-frame cabin to a grander, two-story residence fitted with two decks, a new garage and amenities like a whirlpool, a steam room and an expensive gas grill.
The verdict came relatively swiftly. The jury began deliberating last week. But it was obliged to start all over Monday morning when a juror was replaced by an alternate because of the death of a family member. In midafternoon, jurors sent a note saying they had finished their work.
By Stephen Castle
Monday, October 27, 2008
BRUSSELS: When Bulgaria joined the European Union last year, this was supposed to mark the start of an ambitious drive to modernize the former Soviet bloc country and bring it finally into the European political mainstream.
Twenty-two months later, the Bulgarian government has only a few weeks to avert the loss of millions of euros in European subsidies - and an unprecedented sanction from Brussels.
At stake for Bulgaria is almost half a billion euros of aid that was frozen in July after a scathing report from the European Commission concluded that the money was vulnerable to fraud and mismanagement. European officials are due in Sofia this week to conduct an audit and, if this goes badly, Bulgaria will lose €220 million, or $277 million, of the frozen aid because of a deadline that expires next month.
Sluggish Bulgarian progress on combating irregularities and its lack of convictions in cases involving high-level corruption have become a stark reminder of the difficulties of integrating fragile, ex-Communist nations.
With relations poor between the EU and Russia after Moscow's military action in Georgia, Europe wants to improve ties with countries on its eastern flank. Offering them a path to membership might be an obvious strategy.
But EU countries have pulled back from making such promises. At a summit with Ukraine last month, for example, the EU pledged closer ties, but avoided any commitment to offering Kiev a clear path toward membership in the bloc.
Bulgarian and Romanian accession illustrates why officials are erring on the side of caution.
One of the unstated reasons for admitting Bulgaria and Romania in 2007 was to keep them out of Moscow's growing sphere of influence. But that has come at a price.
Some €11 billion in subsidies are due to be paid between 2007-13, and officials are alarmed that much of it might be siphoned off by criminals.
Since July, the Bulgarian government has sought to give the impression that it is campaigning hard to redress weaknesses, identifying 101 new cases of suspected irregularities in agriculture funding.
Earlier this month, a Bulgarian businessman, Mario Nikolov, was one of a group of people who went on trial, accused of fraudulently obtaining EU agriculture subsidies. Nikolov's business empire was described in a leaked report from the EU fraud investigation unit, Olaf, as a "criminal company network."
Critics in the opposition, like Nickolay Mladenov, a center-right Bulgarian member of the European Parliament foreign affairs committee, remain unconvinced than the government has made proper reforms.
"People need to be convinced," Mladenov said, "not just in Brussels but in Bulgaria, that procedures have been put in place so that this does not happen again and that those responsible are arrested and put on trial. The problem is that this whole situation affects negatively projects that are not corrupt - initiatives that the country needs."
The spokesman for Olaf, Alessandro Buttice, appeared to agree Monday. "The performance of the judiciary is still questionable," Buttice said in a statement. "The dismissal of cases in court without convincing explanations is still frequent."
Commission officials are also concerned about Romania. Earlier this month, the European Commission president, José Manuel Barroso, urged the Romanian government "to treat the fight against high-level corruption as an issue of national importance."
Bulgarian and Romanian ministers argue that their countries face tougher scrutiny than nations that joined the EU in 2004 because the climate of public opinion has hardened against enlargement.
That idea was rejected by Mark Gray, a spokesman for the European Commission, who said that, while weaknesses had been identified in other nations, "these were the two countries where the EU felt that a specific mechanism was required" to deal with problems.
"Specific commitments were made by Bulgaria and Romania at the time of accession," Gray said, "and the EU is determined that these commitments must be honored."
Nicu Popescu, research fellow at the European Council on Foreign Relations, said that the problems in Romania and Bulgaria have given opponents of EU enlargement a new argument. "No one in the EU talks about Moldova or Ukraine joining the bloc in the near future," he added.
The case of Bulgaria and Romania - both given an accession date before they had made essential reforms - has already prompted the European Commission to take a sterner look at potential new members, including Croatia.
And the Croatians are facing their own challenges, as illustrated last week by the slaying of a prominent journalist, Ivo Pukanic, killed by a hidden explosive device. The EU is pressing Croatia to combat corruption and organized crime.
"What has happened in Romania and Bulgaria has changed the rules of the game," said Mladenov, the Bulgarian member of the European Parliament.
By Michael M. Grynbaum
Monday, October 27, 2008
Ten minutes before the close of trading on Monday, the Dow Jones industrial average was nearly flat for the day, an encouraging end to a volatile session and, perhaps, a sign that relief had started to come to Wall Street.Ten minutes later, the Dow was down 203.18 points. The Standard & Poor's 500-stock index had dropped 3 percent. Stocks that had soared earlier were flashing red. And investors who dared to hope that a corner had been turned were left to ponder the remains of another lost day.
"That was a little weird," Sam Stovall, chief investment strategist at S&P, said, moments after the market skidded at a rate of 20 points a minute. "Usually you get a sense of it in the last hour or half-hour, not the last 5 or 10 minutes."
At this point, he added, stocks may be in a permanent state of "anything goes."
"In some ways you can say, 'Are you really surprised?' " Stovall said. "It's been engaging in this kind of slithering pattern for awhile."
The Dow spent the day swinging across a 450-point range, plunging at the open after sell-offs in Europe and Asia, then recovering slightly after an encouraging report on sales of new homes, which rose more than expected. Floating around the market were the usual fears about recession and corporate earnings. But as the sun began to set on Lower Manhattan, it had seemed as if investors would eke out a flat close.
Instead, shares of regional banks, bolstered by news of new capital injections from the Treasury Department, fell back. Energy shares dropped after oil fell by nearly $1 to $63.22 a barrel, the lowest price in 18 months.
For a while, shares pushed into positive territory after an encouraging report on sales of new homes, which rose more than expected. But they dropped again as investors could not keep their grip on the gains.
The Dow Jones industrial average fell 203.18 points, or 2.4 percent, after trading in a nearly 400-point range, to close at 8,175.77. The sell-off extended declines in Europe and Asia, including a 6.4 percent drop in the Nikkei, sending the Japanese index to its lowest level since 1982.
The Standard & Poor's 500-stock index declined 3.2 percent, or 27.85 points, to finish at 848.92, and the Nasdaq composite index declined nearly 3 percent, or 46.13 points, to close at 1,505.90.
It was not immediately clear what had caused the late-day sell-off. But many investors may be bracing for an important week of news on the financial front. Federal Reserve policy makers convene on Tuesday for a two-day meeting that will culminate in an interest rate decision on Wednesday afternoon. The government will release on Thursday its first estimate for economic growth from July to September, a number that many expect will be negative.
And Tuesday brings the Case-Shiller home price index, a closely watched report on the state of the housing market, the health of which is considered key to the ultimate revival of the American economy.
The home sales report was the second sign in a week that buyers had begun to move back into the beleaguered housing market. Sales of newly constructed homes rose 2.7 percent in September, rising to an annual rate of 464,000. All the gains came in southern and western states.
"The supply of homes for sale is declining rapidly due to the combination of aggressive construction cutbacks and a pickup in sales prompted by price reductions," Mike Larson, a real estate analyst at Weiss Research, wrote in a note. But he warned that the credit problems stemming from the financial crisis could have a chilling effect on the market in the near future.
The supply of new homes on the market fell from August, but economists warned that prices would have to drop further before inventories could be significantly improved.
On Monday, stock investors were awaiting the opening of the Federal Reserve's new program to purchase commercial paper, one of the central bank's efforts to unlock the flow of credit. The central bank will charge relatively low rates to buy what amounts to short-term i.o.u.'s used by businesses and banks. The actions will provide a market — and a major financial guarantor — in a market that had moved toward illiquidity in the last few weeks.
Borrowing rates among banks fell over the weekend, and investors hope that credit markets will ease further this week.
But stock investors did not appear swayed by the improvements in sell-off. Fears about corporate earnings and a bleak economic outlook continue to roil the world's stock markets, which have erased more than 51 percent of the value of global stock markets this year.
On Monday, currency market traders were keeping nervous watch for central bank intervention, after Group of 7 finance and monetary officials expressed concern about the recent excessive volatility in the yen's exchange rates.
"We are concerned about the recent excessive volatility in the exchange rate of the yen and its possible adverse implications for economic and financial stability," the G-7 statement said. "We continue to monitor markets closely and cooperate as appropriate."
If intervention were carried out, central bankers would probably sell yen for other currencies, driving down the yen and providing support to others.
With evidence mounting that Europe was lurching into a recession, the head of the European Central Bank, Jean-Claude Trichet, said that was "possible" that the bank would lower interest rates for a second time in as many months, after making its first move alongside other major central banks on Oct. 8.
Most of the markets in Europe finished lower Monday, but pared early losses. The Dow Jones Euro Stoxx 50 index, a barometer of euro-zone blue chips, finished 1.7 percent lower after being down almost 6 percent, while the FTSE 100 index in London lost 0.79 percent. The CAC 40 in Paris was down almost 4 percent percent, but the DAX in Frankfurt rose 0.91 percent.
In Tokyo, the benchmark Nikkei 225 stock average fell 6.4 percent, or 486.18 points, to 7,162.90, to reach its lowest closing level since October 1982.
The rise of the yen, which reduces profits earned overseas when they are converted into yen, and the slowing of key export markets, has severely depressed the outlook for the Japanese economy.
In Hong Kong, the Hang Seng index fell 12.7 percent to the lowest level since at least mid-2004. "We're seeing a lot of panic selling," Peter Lai, an investment manager at DBS Vickers in Hong Kong, told The Associated Press. "People are just liquidating," he said. "Nobody can predict where the bottom is."
In Sydney, the Reserve Bank of Australia, the central bank, said it had stepped into the foreign exchange market Friday to support its plummeting currency. The S&P/ASX 200 stock market index fell 1.6 percent Monday.
In Seoul, South Korea, the Kospi index bucked the trend, managing a gain of 0.8 percent after the Bank of Korea slashed its key interest rate by a record three-quarters of a percentage point to 4.25 percent, illustrating the depth of concern over the state of the country's economy.
Like their Japanese rivals, South Korea's manufacturers are heavily dependent on exports, and fears that consumers in export markets like the United States will cut spending as the economy slows have hit stocks hard.
In Japan, the global turmoil and recession fears prompted expectations for added government measures to prop up the stock market and weaken the yen.
Shoichi Nakagawa, the finance minister, said he was watching the currency market with great interest. His comments were read in the market as a warning of possible intervention in the currency markets. The yen's appreciation to alarming heights against other key currencies, to the detriment of exporters, who are seeing their international competitiveness eroded as a result.
Taro Aso, the Japanese prime minister, said on Monday that the government would strengthen regulation on short-selling of Japanese shares and would expand a government program to recapitalize banks using public funds.
Even Japanese banks that have avoided the worst of the losses that are weighing on their Western counterparts are now struggling as the value of their stock portfolios is hammered. Mitsubishi UFJ Financial Group, one of Japan's largest lenders, said Monday that it would seek to replenish its capital, raising billions of dollars by selling new shares.
The dollar was mixed against other major currencies. The euro slid to $1.2420 from $1.2624 late Friday in New York, while the British pound dropped $1.5428 from $1.5897. The dollar rose to 1.1683 Swiss francs from 1.1672 francs. The dollar fell to ¥92.71 from ¥94.32
Crude oil was down 92 cents at $63.23 in New York trading.
By Nicholas Kulish
Monday, October 27, 2008
WARSAW: Poles were jolted last week by the sudden discovery that they were not immune to the financial crisis contagion rippling across the globe. The plunging stock market here and the drastic weakening of the Polish currency proved, as in so many corners of the fast-growing developing world, how wrong they had been.
The go-go atmosphere in Poland has abruptly stilled to a cautious wait-and-see. Developers across the country have halted building projects for thousands of apartments as banks have grown stingy with lending. The boomtown energy here has been replaced by nervous eyeing of the once powerful zloty, as it retreats in value against the dollar and the euro. The daily newspaper Dziennik summed up the mood on Friday with a front-page headline: "Welcome to the Tough Times," over a one-zloty coin slashed into two jagged pieces. In a country that seemed to be on the fast track to full membership in the Western club, the question on everyone's lips is, "Why us?"
Emerging markets that seemed healthy, even thriving, barely a month ago, are beginning to find themselves caught in the worldwide panic. This sharp turn has caught even the local financial guardians and experts by surprise, as they cling to their indicators of fundamental economic soundness, while forgetting that capital stampedes rarely tarry for fine distinctions.
From the former Communist bloc in Europe to South America, fear and disbelief mingled with an equal measure of frustration that a breakdown in the mortgage market in the United States - one that most investors and institutions in emerging markets had avoided - was beginning to lead once again to their punishment at the indiscriminate hands of the capital markets.
"Everything is going down," said Lukasz Tync, 28, an information-technology consultant in Warsaw, who said he owned shares in 10 companies and several mutual funds and had been hit hard by five consecutive days of falling stocks at the Warsaw Stock Exchange, leaving the country's leading index down 12.6 percent for the week and more than 50 percent for the year. "The thing is that there is no fundamental basis for such moves. It's just panic."
Adding to the pain, the zloty has fallen about 17 percent against the dollar over the past week, and more than 10 percent against the euro. The currency has fallen about 30 percent against the dollar in October. Economic experts are cutting growth forecasts.
Poland is still considered relatively healthy compared with Hungary and Ukraine, which have been among the hardest hit. On Sunday both reached tentative agreements with the International Monetary Fund for loans and other assistance aimed at preventing their financial systems from collapsing. Ukraine will get a loan of at least $16.5 billion, while the value of Hungary's rescue package has not been specified.
Still, alarm about Hungary and Ukraine has infected Poland. "A week ago, people would have told you that this is an oasis of calm and stability," said Marek Matraszek, founding partner and managing director at CEC Government Relations in Warsaw, a political consultant for foreign investors. "They didn't expect that the lack of confidence in Central Europe would bleed over from Hungary and Ukraine," he said.
The bleeding has extended much farther. In South Africa, the price of platinum, a major earner of foreign exchange, has fallen from more than $2,000 an ounce in June to less than $800 now, contributing to a sharp depreciation in that country's currency, the rand. Brazil's currency, the real, has fallen by more than 40 percent against the dollar since August. With a stomach-churning lurch, the Turkish lira has fallen by more than 30 percent against the dollar in recent weeks and almost 20 percent against the euro.
Fuat Karatas, 41, a dental technician in Istanbul, says he buys imported teeth-cleaning and cavity-repair materials priced in euros, but he cannot pass the rising price to his customers, who pay in liras.
"Now with the euro going crazy, I have no idea how things are going to work out for me," he said. "I just want to be able to keep my lab open, nothing more."
During more prosperous times the risks in emerging market countries were strongly underestimated, according to Marek Dabrowski, president of the Center for Social and Economic Research in Warsaw. "Naturally, the global credit crunch and economic slowdown caused overshooting in the opposite direction," he said.
Emerging-market countries are hardly a homogenous group, but they face a similar set of challenges. The outflows of investor capital driving down their stock markets and pressuring their currencies have occurred just as the demand abroad for their products, whether commodities like oil or manufactured goods like automobiles, has begun to weaken.
But the crisis has not hit the street right away, which has buttressed the confidence of many in countries that the problems are temporary and can be weathered. Some argue that the declining value of local currencies is even a plus, because it will help these countries sell more goods abroad by making them more affordable. "When the zloty was so strong, my import was profitable. Just now, I hope my exports will be improving," said Krzysztof Izydorczyk, 52, owner of Comexpol, a Katowice-based importer and exporter of stainless steel products with three employees.
In South Africa, Finance Minister Trevor Manuel gave a budget speech to Parliament last week, saying, "The storm has arrived. It is fiercer than anyone could have imagined and its course cannot be predicted. But, Madam Speaker, we saw the signs early, and we took appropriate action. We can say to our people: Liduduma lidlule! The thunder will pass."
But South Africa is not just facing unpredictable economic pressures. It is also at a perilous political moment, with a likely split in the governing African National Congress and a strong possibility that the unemployment rate, already high, will worsen. The economy had been weakening before the global crisis, according to Pieter Laubscher, chief economist at the Bureau for Economic Research at Stellenbosch University.
The commodities boom had drawn investment into the country and had helped drive economic growth, Laubscher said, but that boom had now fallen victim to the worldwide slowdown.
In Brazil, leaders took pains to save wisely during the commodity boom, reform the country's banking sector after a financial crisis in the late 1990s and diversify its trading partners. "This country has never been so prepared to face up to adversity as it is now, economically, politically and I'd say, ideologically," Luiz Inácio Lula da Silva, the Brazilian president, said last week.
But last Wednesday the government gave state-controlled banks the power to buy stakes in private financial institutions facing problems.
Although officials denied that any private banks were in danger, the announcement fueled jitters that some could fail, helping send down the Brazilian stock market more than 10 percent that day.
Poles had good reason to believe that they had evaded the stigma that causes investors in emerging markets to charge for the door at the first hint of financial panic. Poland, a close ally of the United States, had joined the European Union and the NATO alliance, and it had been growing robustly and enjoying swiftly rising living standards unimaginable under communism.
Experts say there was a consensus locally that Poland would not be affected by the crisis, and that membership in the European Union would buffer it from the worst of the shocks.
That consensus has begun to break down.
When the Central Bank of Hungary surprised markets last week by raising interest rates three percentage points to defend its weakening currency, the vulnerability of Central and Eastern Europe came under even harsher scrutiny.
Poland illustrates the illogic but also the relentless pressure this crisis has exerted, because in many ways it was in good shape.
Compared with Hungary, Poland has higher growth, lower inflation, lower interest rates, less public debt compared with the size of its economy and a smaller share of foreign loans.
The largest of the former Communist states in the EU, Poland has stronger domestic demand than Hungary to prop up the economy as consumers among their large trading partners in the West cut back on their spending.
But Poland, particularly under the previous government of Prime Minister Jaroslaw Kaczynski, nurtured its close ties to the United States. It has not adopted the euro currency, which might have helped to insulate it somewhat. Now Poland's prime minister, Donald Tusk, has said that the country hopes to join the euro currency system by 2012 and that steps in that direction could calm the markets.
Government officials in Warsaw, including the prime minister, the central banker and the finance minister, have been saying that the Polish economy remains strong and that they expect markets to stabilize.
At Miedzy Nami, a restaurant with photographic portraits projected onto one of its walls in downtown Warsaw, the owner, Ewa Moisan, said she had not seen any slowdown in business. Yet some customers said they were already beginning to feel the pinch.
The monthly payment for the apartment mortgage of one customer, Jarek Wiewiorski, has gone up by a fifth, to 1,800 zlotys, about $600.
"It's not catastrophic, but it's painful," said Wiewiorski, 40, who works in advertising. "One minute it's America, the next it's Hungary, and then suddenly, it's here."
Reporting was contributed by Sabrina Tavernise and Sebnem Arsu in Istanbul, Celia W. Dugger in Johannesburg, Alexei Barrionuevo in Rio de Janeiro, Andrew Downie in São Paulo and Michal Piotrowski in Warsaw.
Monday, October 27, 2008
PRINCETON, New Jersey: Economic data rarely inspire poetic thoughts. But as I was contemplating the latest set of numbers, I realized that I had William Butler Yeats running through my head: "Turning and turning in the widening gyre / The falcon cannot hear the falconer; / Things fall apart; the center cannot hold."
The widening gyre, in this case, would be the feedback loops (so much for poetry) causing the financial crisis to spin ever further out of control. The hapless falconer would, I guess, be Henry Paulson, the Treasury secretary.
And the gyre continues to widen in new and scary ways. Even as Paulson and his counterparts in other countries moved to rescue the banks, fresh disasters mounted on other fronts.
Some of these disasters were more or less anticipated. Economists have wondered for some time why hedge funds weren't suffering more amid the financial carnage. They need wonder no longer: Investors are pulling their money out of these funds, forcing fund managers to raise cash with fire sales of stocks and other assets.
The really shocking thing, however, is the way the crisis is spreading to emerging markets - countries like Russia, South Korea and Brazil.
These countries were at the core of the last global financial crisis, in the late 1990s (which seemed like a big deal at the time, but was a day at the beach compared with what we're going through now). They responded to that experience by building up huge war chests of dollars and euros, which were supposed to protect them in the event of any future emergency. And not long ago everyone was talking about "decoupling," the supposed ability of emerging market economies to keep growing even if the United States fell into recession.
"Decoupling is no myth," The Economist assured its readers back in March. "Indeed, it may yet save the world economy."
That was then. Now the emerging markets are in big trouble. In fact, says Stephen Jen, the chief currency economist at Morgan Stanley, the "hard landing" in emerging markets may become the "second epicenter" of the global crisis. (U.S. financial markets were the first.)
What happened? In the 1990s, emerging market governments were vulnerable because they had made a habit of borrowing abroad; when the inflow of dollars dried up, they were pushed to the brink. Since then they have been careful to borrow mainly in domestic markets, while building up lots of dollar reserves. But all their caution was undone by the private sector's obliviousness to risk.
In Russia, for example, banks and corporations rushed to borrow abroad, because dollar interest rates were lower than ruble rates. So while the Russian government was accumulating an impressive hoard of foreign exchange, Russian corporations and banks were running up equally impressive foreign debts. Now their credit lines have been cut off, and they're in desperate straits.
Needless to say, the existing troubles in the banking system, plus the new troubles at hedge funds and in emerging markets, are all mutually reinforcing. Bad news begets bad news, and the circle of pain just keeps getting wider.
Meanwhile, U.S. policy makers are still balking when it comes to doing what's necessary to contain the crisis.
It was good news when Paulson finally agreed to funnel capital into the banking system in return for partial ownership. But last week Joe Nocera of The New York Times pointed out a key weakness in the U.S. Treasury's bank rescue plan: It contains no safeguards against the possibility that banks will simply sit on the money. "Unlike the British government, which is mandating lending requirements in return for capital injections, our government seems afraid to do anything except plead." And sure enough, the banks seem to be hoarding the cash.
There's also bizarre stuff going on with regard to the mortgage market. I thought that the whole point of the federal takeover of Fannie Mae and Freddie Mac, the lending agencies, was to remove fears about their solvency and thereby lower mortgage rates. But top officials have made a point of denying that Fannie and Freddie debt is backed by the "full faith and credit" of the U.S. government - and as a result, markets are still treating the agencies' debt as a risky asset, driving mortgage rates up at a time when they should be going down.
What's happening, I suspect, is that the Bush administration's anti-government ideology still stands in the way of effective action.
Events have forced Paulson into a partial nationalization of the financial system - but he refuses to use the power that comes with ownership.
Whatever the reasons for the continuing weakness of policy, the situation is manifestly not coming under control. Things continue to fall apart.
By Michael M. Grynbaum
Monday, October 27, 2008
Could the Dow reach 7,000? 700? Seven?
Financial forecasters are in a race to call the bottom to the bear market. And just as on the way up, when analysts competed for attention with their forecasts of bigger and bigger gains, the financial pundit class now seems compelled to out-gloom the next guy.
"To make a crazy forecast today is not crazy," said Owen Lamont, a former professor at Yale who has studied economic forecasting. "It's not crazy to predict the Dow is going to 2,000. That's in the realm of possibility."
Indeed, in an era of 1,000-point daily swings in the Dow and 30 percent losses in the stock market, prescience is at a premium — and the dividends of a high-profile correct call can be immense.
In 1987, a little-known strategist named Elaine Garzarelli found herself a newly minted celebrity after predicting the market would crash just days before Black Monday. This time around, longtime doomsayers like Nouriel Roubini of New York University have become media staples since many of their most apocalyptic predictions started coming true.
Even in normal times, forecasters have a strong incentive to make extreme predictions, which is why those "Dow 1,000!" reports persist. "It's eye-popping. It's relevant. It seems exciting," Lamont said. Such predictions attract publicity, name recognition and a bigger client base in a business where investors pay thousands, if not millions, for stock advice and investment guidance.
And even if a forecast is off-base, there are few repercussions because they are almost always quickly forgotten. "The reason that people do these games is because no one's really tracking accuracy," said Lamont, who now works at DKR Capital, a hedge fund in Greenwich, Connecticut. "No one is carefully, prudently giving more business to the guy who is 2 percent more accurate than the next guy."
Some say this is a system that propagates ignorance and poor advice.
"Anyone that invests 10 cents on the basis of someone's forecast of the Dow is desirous of losing a good portion of their 10 cents," said William Fleckenstein, president of Fleckenstein Capital, a money management firm in Issaquah, Washington State. "It is almost the height of arrogance to say this is where the Dow is going to trade."
"These types of forecasts are wildly off-base," Fleckenstein said. "What they're always about is extrapolation. People are always extrapolating recent trends. And you don't know how far the trend is going to really run."
But when markets are as jittery as they are now and 10-word headlines on a Bloomberg terminal can move indexes up or down hundreds of points, investors may not pause long enough to consider the details.
More than a few eyebrows were raised last week when news flew across trading desks that Peter Boockvar, who tracks equities at Miller Tabak, was predicting the Dow would crater to 5,000 by next year, a 40 percent decline from the current level.
Among the shocked: Boockvar himself. "It was mischaracterized!" he said in a telephone interview on Friday, adding that he had no idea if the Dow would sink to 5,000.
"Based on my calculations, I said we can go from 5,000 to 7,000," he said. "No one's smart enough to answer the question as to where we'll be a year from now. I think it's silly to pick a number, that's why I picked a wide range."
It had been an exasperating 24 hours for Boockvar. "I had to deal with it half my day yesterday," he said.
Some financial pundits, however, are all too happy to broadcast their predictions to the public, no matter how apocalyptic.
Peter Schiff, the president of Euro Pacific Capital in Darien, Connecticut, and a prominent financial Cassandra, has seen some of his most dire forecasts confirmed amid this year's turmoil. On Friday, he predicted plenty more pain to come.
"We could decline about 90 percent from where we are today," he said.
Schiff unreels his depressing outlook with a confidence appropriate for a man whose book, "Crash Proof: How to Profit From the Coming Economic Collapse," was published in February 2007.
"Our economy is a complete disaster. I think the recession — better to call it a depression — we are going to experience is going to collapse corporate earnings," he said. "The end is a long way off."
He declined to predict a specific end of the bear market, saying only that he expected the level of the Dow would eventually match the price of an ounce of gold.
"I don't think the Dow would go all the way to 1,000. Could it be 4,000? That might be," he said.
Still, forecasters who get too far ahead of themselves would do well to remember an instance of notoriously poor prognostication. One of the few times that a financial strategist has been widely taken to task came in 1999, when Kevin Hassett and James Glassman published "Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market."
The book, which arrived just months before the technology bubble burst and stocks plummeted to earth, was actually an argument that bonds and stocks should be considered as equally risky investments. But the title — cartoonish in hindsight and, in its authors' defense, proposed by the publisher — has since become a popular punch line for jokes about irrational exuberance in turn-of-the-century Wall Street. (The Dow closed on Friday at 8,378.95).
Still, while the reputation of its authors may have taken a hit, "Dow 36,000" has not seemed to hurt their careers. Hassett, who did not respond to a reporter's inquiry, works at the American Enterprise Institute, a conservative research group in Washington, and serves as the senior economic adviser to the presidential campaign of Senator John McCain.
According to his spokesman, Glassman prefers not to comment on the financial markets now that he has started in his new position: under secretary of state for public diplomacy in the Bush administration. Apparently, there is life after Dow 36,000. The jury is still out on life after Dow 8,378.
By Stephanie Clifford
Monday, October 27, 2008
On Oct. 10, Forbes magazine employees anxiously arrived at work. The previous afternoon, a Thursday, the Dow Jones industrial average had closed below 9,000 points for the first time in five years, a drop of almost 700 points.
The staff was called into an emergency meeting, where editors decided to rip up their next issue. The economy was in trouble and so, potentially, was Forbes, a free-market proponent that had proudly marketed itself as "The Capitalist Tool."
Instead of their planned cover, they wanted something that would address the upheaval. Their solution? Their own boss, Steve Forbes, the company's chairman and an economic adviser to John McCain.
On the cover, which arrived on newsstands Friday, Forbes, wearing a suit and tie and smiling optimistically, appears under the line "How Capitalism Will Save Us." Inside, Forbes assures readers "if sensible rescue efforts continue — and they will — the immediate crisis will quickly pass" and advises against "regulations that stifle innovation."
It was a much more upbeat assessment than Forbes had given during a CNBC appearance on Sept. 29, when he said the economy was "in cardiac arrest."
The issue marks the first time in a long time that a Forbes has appeared on the magazine's cover. Malcolm Forbes was featured on the cover after he died in 1990, and the founder B. C. Forbes was on the cover in 1952, for the publication's 35th anniversary.
"Steve Forbes, our editor in chief, is internationally known for his economic expertise and analysis," said Monie Begley, a Forbes spokeswoman, in an e-mail message. "Who better to lead the discussion? The decision to put him on the cover was easy, and not his."
She said Forbes was "very cautious" about his cover appearance, and declined to state who had the idea to put Forbes on the cover, saying that it had been a "group decision" and that Forbes had not attended that editorial meeting. Ben Baker, a photographer who has taken portraits of Rudolph Giuliani, Barack Obama and Mahmoud Ahmadinejad, took the photo.
The Forbes staff scrambled to get articles for the rest of the issue ready, including contributions from authors like the Nobel Prize winner Edmund Phelps and David Malpass, the economist. It was "a monumental project," Begley said.
The Associated Press
Monday, October 27, 2008
UNITED NATIONS, New York: Amid worsening violence in eastern Congo, the commander of the UN peacekeeping force in the country resigned after just seven weeks in the job, the United Nations said Monday.
The announcement came as peacekeepers used helicopter gunships to attack rebels trying to take a Congolese village, Kibumba. The rebels are in control of several major towns and the headquarters of a national park where endangered mountain gorillas live in the middle of a shrinking ring of safety.
A UN spokeswoman, Michele Montas, said Monday that Lieutenant General Vicente Diaz de Villegas of Spain, commander of the UN peacekeepers in Congo, "has indicated that for personal reasons he will not be able to continue with his assignment as planned." His appointment was announced Sept. 9.
Jaya Murthy, a spokesman for Unicef in the eastern Congo city of Goma, said heavy fighting was raging in several areas between government troops and rebel forces under the command of Laurent Nkunda, a renegade general who says he is protecting ethnic Tutsis.
Murthy said the conflict was spawning a vast wave of internally displaced people, with tens of thousands fleeing battle zones, often for the second or third time in recent months. As many as 250,000 people have been driven from their homes since the fighting between the rebels and government forces intensified in August.
Nkunda has rejected several cease-fires brokered by the United Nations. He has threatened to take his war all the way to Kinshasa, the capital of Congo, on the other side of the country.
His forces are much better trained and equipped than the government troops, who are notorious for turning their rusty guns on civilians but fleeing when facing a real threat. On Sunday, Nkunda's forces seized a government army base, for the second time in recent weeks.
"We're on alert," Murthy said. "We're not sure what's in store for the future, but whatever it is, it's not good."
Protesters showed their frustration Monday that peacekeepers had not halted the rebel advance that is sweeping the countryside, with hundreds hurling rocks at a United Nations compound in eastern Congo.
According to UN officials, the protest started Monday around 9 a.m. after Congolese activists called together a large crowd to march on the UN headquarters in Goma.
The protest quickly degenerated into violence, with demonstrators pelting the compound and nearby UN cars with large stones. There were mixed reports about casualties, with some Congolese officials reporting that the UN peacekeepers had killed two protesters in an attempt to quell the crowd. A spokesman for the UN peacekeepers could not immediately be reached.
The violence in eastern Congo has continued unabated for several years despite the presence of the United Nations' largest peacekeeping force, with more than 17,000 troops.
"The population is not happy with the UN," Murthy said. "They feel they are not protected. They are getting extremely angry."
Several Western aid workers who spoke by phone from Goma on Monday described a panicky atmosphere, with the rebels gobbling up territory in the hills above Goma and Westerners hunkering down in their compounds, fearful of stepping outside.
By Christine Harper and Serena SaittoBloomberg News
Monday, October 27, 2008
NEW YORK: Five straight quarters of losses and a 70 percent slide in its stock this year have not stopped Merrill Lynch from allocating about $6.7 billion to pay bonuses.
Goldman Sachs and Morgan Stanley, both still on track for profitable years, have set aside about $13 billion for bonuses after three quarters, down 28 percent from a year ago. Even some employees at Lehman Brothers, which declared the biggest bankruptcy in U.S. history last month, will get the same bonus they received a year ago.
The worst U.S. financial crisis since the Great Depression, a $700 billion bailout, public outcry over excessive pay and the demise of three of the biggest securities firms will not deter Wall Street from offering year-end rewards to employees, compensation experts say.
"Critical producers and critical managers will be retained with the same bonus they had last year," said Robert Sloan, head of U.S. financial-services recruiting at Egon Zehnder International, an executive-search firm in New York. "The others will see sharp cuts."
Goldman, the most profitable Wall Street firm until it opted to become a bank holding company last month, has set aside about $6.85 billion for bonuses, or an average of $210,300 for each employee, down 32 percent from $339,400 a year ago. Morgan Stanley, which was the second-biggest securities firm until it also converted to a bank, has $6.44 billion for bonuses, or $138,700 per person, down 20 percent from last year. Both firms accrue a fixed percentage of their revenue for compensation, so the decline in bonus pools matches the drop in revenue.
The money Merrill has set aside for bonuses equates to an average $110,000 for each of its 60,900 people, up from $108,000 a year ago because more than 3,000 jobs have been cut.
The bonus figures are based on estimates that about 60 percent of the compensation and benefits expenses reported by the companies will be paid in year-end bonuses, as occurred in past years. Average bonuses are not an indication of how much any employee will receive, because payments range widely from assistants to top traders. Bonuses are not paid until the end of the fiscal year, so firms could choose to reallocate the funds.
"We are in the process of determining appropriate levels of year-end compensation, and no decisions have been made," said Mark Lake, a spokesman at Morgan Stanley. Ed Canaday, a spokesman for Goldman in New York, declined to comment.
A spokeswoman for Merrill, Jessica Oppenheim, said the firm's accrued bonuses were not down as much as those at Goldman and Morgan Stanley because Merrill cut expenses last year, when it also had a loss. Compensation costs are down 18 percent this year, compared with the first nine months of 2006, Merrill's last profitable year.
A worldwide economic slowdown, caused in part by the financial industry's losses, and a U.S. Treasury plan to spend $250 billion of taxpayer money buying stakes in banks, have made pay a political issue this year.
"There should be a moratorium on bonuses," said Barney Frank, chairman of the U.S. House of Representatives' Financial Services Committee. "If nobody gave them, there wouldn't be a competitive aspect."
In Zurich, protesters blocked UBS's private-banking branch on the Paradeplatz last week to seek curbs on executive pay after Switzerland's largest bank was forced to ask for government aid.
"I'm just flabbergasted that the financial community has failed to show any sense of leadership on this issue and doesn't seem to understand how angry people are at them," said Nell Minow of Corporate Library, a corporate-governance research company. "They are just a bonus away from having the villagers come after them with torches."
Goldman, Morgan Stanley, Merrill, Lehman and Bear Stearns awarded their employees a cumulative $145 billion in bonuses from 2003 through 2007, according to estimates based on company reports. Last year the firms paid out a record $39 billion.
At the end of this year, companies could decide against paying the money accrued for bonuses and instead use part of it to cover severance costs, said Rose Marie Orens, a partner based in New York for Mercer, the human resources consulting unit of Marsh & McLennan, who specializes in executive compensation for financial-service companies. Goldman and Morgan Stanley end their fiscal year in November, and Merrill's ends in December.
"Whether what you see is what they're going to pay, you can't tell yet," she said. "It's highly unlikely they'll add to those numbers and more likely they'll bring them down."
Lehman filed for bankruptcy on Sept. 15. Merrill Lynch and Bear Stearns were rescued in emergency sales to Bank of America, based in Charlotte, North Carolina, and JPMorgan Chase in New York. Goldman and Morgan Stanley are each receiving $10 billion of capital from the government.
Bank of America is offering Merrill's U.S. brokers bonuses of as much as 100 percent of the revenue they generate to keep them after the deal is complete, people briefed on the plan have said.
Employees at Lehman Brothers in Europe have been promised by their new owner, Nomura Holdings, that they will receive the same bonus as last year, according to two people familiar with the situation.
Share prices and profits have dropped more than bonuses so far. Goldman's profit has fallen 47 percent this year, and the stock is down 53 percent. Morgan Stanley's earnings have tumbled 41 percent, and the shares have shed 69 percent of their value.
Still, "smart companies are going to reward those people who performed well," said Daniel Moynihan of Compensation Resources in Upper Saddle River, New Jersey.
Even without bonuses, Wall Street's traders and bankers typically receive salaries that range from $80,000 to $600,000 a year.
Monday, October 27, 2008
FRANKFURT: Protesters entered the Frankfurt Stock Exchange on Monday, shouting slogans and waving banners denouncing financial markets.
The protesters from the anti-establishment Attac movement, who hung a banner over the stock exchange's big board displaying a graph of Germany's benchmark DAX index, were inside for a few minutes, a Reuters photographer on the scene said.
He said there were about 15 protesters and that three security guards escorted them from the building in the heart of Frankfurt's banking district.
Stock exchange operator Deutsche Boerse said nobody had been injured and that trading had not been halted.
The group had registered as visitors and launched the action from the visitors' gallery, Deutsche Boerse said in a statement, adding that security measures for visitors would be tightened.
"Disarm the financial markets," read one Attac banner. "Put people and the environment above shareholder value."
A trader on the stock exchange floor said the protesters had time to throw around "thousands" of leaflets.
"The financial crisis is a symptom of a deeper rooted sickness: of an economic system that even when it is performing correctly subordinates all social goals to shareholder value and the profits of investors at the expense of jobs, social equality and environmental protection. It has to end. The casino should be closed," Attac said in a statement about the protest in which it said 25 activists had taken part.
Attac recently staged a protest outside the Frankfurt stock exchange demanding an end to "casino" capitalism.
(Additional reporting by Tyler Sitte and Peter Starck)
(Reporting by Kai Pfaffenbach; writing by Peter Starck)
Monday, October 27, 2008
BERLIN: One of Germany's most prominent economists apologised on Monday for comparing the criticism bankers are facing over the global financial crisis to anti-Semitism in 1930s Germany.
Hans-Werner Sinn, president of the Munich-based Ifo economic research institute, sparked outrage especially within the Jewish community with his comments which were published on Sunday.
"I apologise to the Jewish community and withdraw the comparison," Sinn wrote in a letter to the President of the Central Council of Jews in Germany, Charlotte Knobloch.
More than 60 years after World War Two, comments seen as qualifying the horror of the Holocaust, in which the Nazis killed 6 million Jews, are still unacceptable in Germany.
"Even in the global economic crisis of 1929, no one wanted to believe in an anonymous system failure. Then it hit Jews in Germany, today it is managers," Sinn had told Tagesspiegel daily.
The Council of Jews had swiftly demanded an apology and described the comparison as "outrageous, absurd and misplaced."
(Writing by Madeline Chambers; Editing by Dominic Evans)
Monday, October 27, 2008
The following is the text as prepared for delivery of John McCain's speech in Dayton, Ohio, as provided by the McCain campaign.
It's great to be back in Ohio. We need to win Ohio on November 4th, and with your help we're going to win here, and bring real change to Washington, DC.
It's been a long campaign and we've heard a lot of words, and great campaign trail eloquence. The amazing thing is that we've learned more about Senator Obama's real goals for our country over the last two weeks than we learned over the past two years. It is amazing that even at this late hour, we are still learning more about Senator Obama and his agenda. He told Joe the plumber right here in Ohio he wants to quote "spread the wealth around." It's always more interesting to hear what people have to say in these unscripted moments, and today we heard another moment like this from Senator Obama.
In a radio interview revealed today, he said that one of the quote -- "tragedies" of the civil rights movement is that it didn't bring about a redistribution of wealth in our society. He said, and I quote, "One of the tragedies of the Civil Rights movement was because the Civil Rights movement became so court-focused I think that there was a tendency to lose track of the political and community organizing and activities on the ground that are able to put together the actual coalitions of power through which you bring about redistributive change."
That is what change means for Barack the Redistributor: It means taking your money and giving it to someone else. He believes in redistributing wealth, not in policies that grow our economy and create jobs. He is more interested in controlling wealth than in creating it, in redistributing money instead of spreading opportunity. I am going to create wealth for all Americans, by creating opportunity for all Americans.
We've all heard his campaign trail promise: he says he only wants to tax the rich. But these unscripted moments and his record tell a different story. He supported the Democratic budget plan passed just this year that called for raising taxes on people making just 42,000 dollars per year. And Senator Obama has voted 94 times for tax increases or against tax cuts.
Senator Obama may say he's trying to soak the rich, but it's the middle class who are going to get put through the wringer, because even the tax increase he admits to misses the target. To pay for nearly a trillion dollars in new government spending, his tax increase would impact 50 percent of small business income in this country, and the jobs of 16 million middle class Americans who work for those small businesses.
Whether it's Joe the Plumber here in Ohio or the working men and women across this country, we shouldn't be taxing our small businesses more as Senator Obama wants to do, we need to be helping them expand their businesses and create jobs. America didn't become the greatest nation on earth by giving our money to the government to "redistribute." In this country, we believe in spreading opportunity, for those who need jobs and those who create them. And that is exactly what I intend to do as President of the United States.
My opponent's massive new tax increase is exactly the wrong approach in an economic slowdown. The answer to a slowing economy is not higher taxes, but that is exactly what is going to happen when the Democrats have total control of Washington. We can't let that happen. We need pro-growth and pro-jobs economic policies, not pro-government spending programs paid for with higher taxes.
This is the fundamental difference between Senator Obama and me. We both disagree with President Bush on economic policy. The difference is that he thinks taxes have been too low, and I think that spending has been too high. Senator Obama's priority is not to get spending under control, it is to spend more, and if he has to tax you to do it, he's shown in the past that he doesn't have a problem with that.
We cannot spend the next four years as we have spent much of the last eight: spending ourselves into a ditch and hoping that the consequences don't come. We need to get our government under control, and we need to get our economy moving again. We have to act. We need a new direction, and we have to fight for it.
I've been fighting for this country since I was seventeen years old, and I have the scars to prove it. If I'm elected President, I will fight to shake up Washington and take America in a new direction from my first day in office until my last. I'm not afraid of the fight, I'm ready for it.
I'm not going to spend $750 billion dollars of your money just bailing out the Wall Street bankers and brokers who got us into this mess. I'm going to make sure we take care of the working people who were devastated by the excesses of Wall Street and Washington.
I have a plan to hold the line on taxes and cut them to make America more competitive and create jobs here at home. We're going to double the child deduction for working families. We will cut the capital gains tax. And we will cut business taxes to help create jobs, and keep American businesses in America. Raising taxes makes a bad economy much worse. Keeping taxes low creates jobs, keeps money in your hands and strengthens our economy.
If I'm elected President, I won't spend nearly a trillion dollars more of your money. Senator Obama will. And he can't do that without raising your taxes or digging us further into debt. I'm going to make government live on a budget just like you do.
I will freeze government spending on all but the most important programs like defense, veterans care, Social Security and health care until we scrub every single government program and get rid of the ones that aren't working for the American people. And I will veto every single pork barrel bill Congresses passes.
If I'm elected President, we're going to stop spending $700 billion to buy oil from countries that don't like us very much. Senator Obama will argue to delay drilling for more oil and gas and against building new nuclear power plants in America. If I am president, we will start new drilling now. We will invest in all energy alternatives -- nuclear, wind, solar, and tide. We will encourage the manufacture of hybrid, flex fuel and electric automobiles. We will invest in clean coal technology. We will lower the cost of energy within months, and we will create millions of new jobs.
Let me give you the state of the race today. There's eight days to go. We're a few points down. The pundits have written us off, just like they've done before. My opponent is working out the details with Speaker Pelosi and Senator Reid of their plans to raise your taxes, increase spending, and concede defeat in Iraq. He's measuring the drapes, and he's planned his first address to the nation for before the election. I guess I'm old fashioned about these things I prefer to let the voters weigh in before presuming the outcome.
What America needs now is someone who will finish the race before the starting the victory lap ... someone who will fight to the end, and not for himself but for his country.
I have fought for you most of my life, and in places where defeat meant more than returning to the Senate. There are other ways to love this country, but I've never been the kind to back down when the stakes are high.
I know you're worried. America is a great country, but we are at a moment of national crisis that will determine our future.
Will we continue to lead the world's economies or will we be overtaken? Will the world become safer or more dangerous? Will our military remain the strongest in the world? Will our children and grandchildren's future be brighter than ours?
My answer to you is yes. Yes, we will lead. Yes, we will prosper. Yes, we will be safer. Yes, we will pass on to our children a stronger, better country. But we must be prepared to act swiftly, boldly, with courage and wisdom.
I'm an American. And I choose to fight. Don't give up hope. Be strong. Have courage. And fight.
Fight for a new direction for our country. Fight for what's right for America.
Fight to clean up the mess of corruption, infighting and selfishness in Washington.
Fight to get our economy out of the ditch and back in the lead.
Fight for the ideals and character of a free people.
Fight for our children's future.
Fight for justice and opportunity for all.
Stand up to defend our country from its enemies.
Stand up, stand up, stand up and fight. America is worth fighting for. Nothing is inevitable here. We never give up. We never quit. We never hide from history. We make history.
Now, let's go win this election and get this country moving again.
Monday, October 27, 2008
By Deborah Charles
Two white supremacist skinheads were arrested in Tennessee over plans to go on a killing spree and eventually shoot Democratic presidential candidate Barack Obama, court documents showed on Monday.
Daniel Cowart and Paul Schlesselman were charged in a criminal complaint with making threats against a presidential candidate, illegal possession of a sawed-off shotgun and conspiracy to rob a gun dealer.
The plot did not appear to be very advanced or sophisticated, the court documents showed.
"We're unsure of their ability or if they have the wherewithal to carry out any of their threats," said a source close to the investigation.
Obama would be the first black president in U.S. history if he defeats Republican John McCain in the November 4 election. Concerns about Obama's safety led the Secret Service to provide round-the-clock protection from early in his campaign.
The suspects met over the Internet about a month ago, said an affidavit filed by Brian Weaks, a special agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives.
"The individuals began discussing going on a 'killing spree' that included killing 88 people and beheading 14 African Americans," Weaks said in the affidavit.
The men stole guns from family members and also had a sawed-off shotgun. They planned to target a predominately black school, going state to state while robbing individuals and continuing to kill people, Weaks said in the affidavit.
"They further stated that their final act of violence would be to attempt to kill/assassinate presidential candidate Barack Obama," he said.
The men planned to wear white tuxedos and top hats during the assassination attempt, which would have involved driving as fast as they could towards Obama and shooting him from the windows of the car.
They planned their first house robbery for October 22 but ended up leaving without breaking in. Instead they bought ski masks, food and rope to use in their robbery attempts.
They were arrested later that day and officials unsealed the court docket on Monday.
They wrote racially motivated words and symbols on the exterior of Cowart's vehicle, including a Swastika and the numbers "14" and "88" on the hood of the car.
ATF special agent in charge James Cavanaugh said "H" is the eighth letter of the alphabet and 88 stood for "Heil Hitler."
"The U.S. Secret Service takes all threats against presidential candidates seriously and is actively investigating the allegations," said Richard Harlow, special agent in charge of the Secret Service-Memphis Field Office. "The Secret Service does not comment on this type of investigation."
(Editing by John O'Callaghan)
Monday, October 27, 2008
The following is the text as prepared for delivery of Barack Obama's speech in Canton, Ohio, as provided by the Obama campaign.
After decades of broken politics in Washington, eight years of failed policies from George Bush, and twenty-one months of a campaign that has taken us from the rocky coast of Maine to the sunshine of California, we are one week away from change in America.
In one week, you can turn the page on policies that have put the greed and irresponsibility of Wall Street before the hard work and sacrifice of folks on Main Street.
In one week, you can choose policies that invest in our middle-class, create new jobs, and grow this economy from the bottom-up so that everyone has a chance to succeed; from the CEO to the secretary and the janitor; from the factory owner to the men and women who work on its floor.
In one week, you can put an end to the politics that would divide a nation just to win an election; that tries to pit region against region, city against town, Republican against Democrat; that asks us to fear at a time when we need hope.
In one week, at this defining moment in history, you can give this country the change we need.
We began this journey in the depths of winter nearly two years ago, on the steps of the Old State Capitol in Springfield, Illinois. Back then, we didn't have much money or many endorsements. We weren't given much of a chance by the polls or the pundits, and we knew how steep our climb would be.
But I also knew this. I knew that the size of our challenges had outgrown the smallness of our politics. I believed that Democrats and Republicans and Americans of every political stripe were hungry for new ideas, new leadership, and a new kind of politics one that favors common sense over ideology; one that focuses on those values and ideals we hold in common as Americans.
Most of all, I believed in your ability to make change happen. I knew that the American people were a decent, generous people who are willing to work hard and sacrifice for future generations. And I was convinced that when we come together, our voices are more powerful than the most entrenched lobbyists, or the most vicious political attacks, or the full force of a status quo in Washington that wants to keep things just the way they are.
Twenty-one months later, my faith in the American people has been vindicated. That's how we've come so far and so close because of you. That's how we'll change this country with your help. And that's why we can't afford to slow down, sit back, or let up for one day, one minute, or one second in this last week. Not now. Not when so much is at stake.
We are in the middle of the worst economic crisis since the Great Depression. 760,000 workers have lost their jobs this year. Businesses and families can't get credit. Home values are falling. Pensions are disappearing. Wages are lower than they've been in a decade, at a time when the cost of health care and college have never been higher. It's getting harder and harder to make the mortgage, or fill up your gas tank, or even keep the electricity on at the end of the month.
At a moment like this, the last thing we can afford is four more years of the tired, old theory that says we should give more to billionaires and big corporations and hope that prosperity trickles down to everyone else. The last thing we can afford is four more years where no one in Washington is watching anyone on Wall Street because politicians and lobbyists killed common-sense regulations. Those are the theories that got us into this mess. They haven't worked, and it's time for change. That's why I'm running for President of the United States.
Now, Senator McCain has served this country honorably. And he can point to a few moments over the past eight years where he has broken from George Bush on torture, for example. He deserves credit for that. But when it comes to the economy when it comes to the central issue of this election the plain truth is that John McCain has stood with this President every step of the way. Voting for the Bush tax cuts for the wealthy that he once opposed. Voting for the Bush budgets that spent us into debt. Calling for less regulation twenty-one times just this year. Those are the facts.
And now, after twenty-one months and three debates, Senator McCain still has not been able to tell the American people a single major thing he'd do differently from George Bush when it comes to the economy. Senator McCain says that we can't spend the next four years waiting for our luck to change, but you understand that the biggest gamble we can take is embracing the same old Bush-McCain policies that have failed us for the last eight years.
It's not change when John McCain wants to give a $700,000 tax cut to the average Fortune 500 CEO. It's not change when he wants to give $200 billion to the biggest corporations or $4 billion to the oil companies or $300 billion to the same Wall Street banks that got us into this mess. It's not change when he comes up with a tax plan that doesn't give a penny of relief to more than 100 million middle-class Americans. That's not change.
Look we've tried it John McCain's way. We've tried it George Bush's way. Deep down, Senator McCain knows that, which is why his campaign said that "if we keep talking about the economy, we're going to lose." That's why he's spending these last weeks calling me every name in the book. Because that's how you play the game in Washington. If you can't beat your opponent's ideas, you distort those ideas and maybe make some up. If you don't have a record to run on, then you paint your opponent as someone people should run away from. You make a big election about small things.
Ohio, we are here to say "Not this time. Not this year. Not when so much is at stake." Senator McCain might be worried about losing an election, but I'm worried about Americans who are losing their homes, and their jobs, and their life savings. I can take one more week of John McCain's attacks, but this country can't take four more years of the same old politics and the same failed policies. It's time for something new.
The question in this election is not "Are you better off than you were four years ago?" We know the answer to that. The real question is, "Will this country be better off four years from now?"
I know these are difficult times for America. But I also know that we have faced difficult times before. The American story has never been about things coming easy it's been about rising to the moment when the moment was hard. It's about seeing the highest mountaintop from the deepest of valleys. It's about rejecting fear and division for unity of purpose. That's how we've overcome war and depression. That's how we've won great struggles for civil rights and women's rights and worker's rights. And that's how we'll emerge from this crisis stronger and more prosperous than we were before as one nation; as one people.
Remember, we still have the most talented, most productive workers of any country on Earth. We're still home to innovation and technology, colleges and universities that are the envy of the world. Some of the biggest ideas in history have come from our small businesses and our research facilities. So there's no reason we can't make this century another American century. We just need a new direction. We need a new politics.
Now, I don't believe that government can or should try to solve all our problems. I know you don't either. But I do believe that government should do that which we cannot do for ourselves protect us from harm and provide a decent education for our children; invest in new roads and new science and technology. It should reward drive and innovation and growth in the free market, but it should also make sure businesses live up to their responsibility to create American jobs, and look out for American workers, and play by the rules of the road. It should ensure a shot at success not only for those with money and power and influence, but for every single American who's willing to work. That's how we create not just more millionaires, but more middle-class families. That's how we make sure businesses have customers that can afford their products and services. That's how we've always grown the American economy from the bottom-up. John McCain calls this socialism. I call it opportunity, and there is nothing more American than that.
Understand, if we want get through this crisis, we need to get beyond the old ideological debates and divides between left and right. We don't need bigger government or smaller government. We need a better government a more competent government a government that upholds the values we hold in common as Americans.
We don't have to choose between allowing our financial system to collapse and spending billions of taxpayer dollars to bail out Wall Street banks. As President, I will ensure that the financial rescue plan helps stop foreclosures and protects your money instead of enriching CEOs. And I will put in place the common-sense regulations I've been calling for throughout this campaign so that Wall Street can never cause a crisis like this again. That's the change we need.
The choice in this election isn't between tax cuts and no tax cuts. It's about whether you believe we should only reward wealth, or whether we should also reward the work and workers who create it. I will give a tax break to 95% of Americans who work every day and get taxes taken out of their paychecks every week. I'll eliminate income taxes for seniors making under $50,000 and give homeowners and working parents more of a break. And I'll help pay for this by asking the folks who are making more than $250,000 a year to go back to the tax rate they were paying in the 1990s. No matter what Senator McCain may claim, here are the facts if you make under $250,000, you will not see your taxes increase by a single dime not your income taxes, not your payroll taxes, not your capital gains taxes. Nothing. Because the last thing we should do in this economy is raise taxes on the middle-class.
When it comes to jobs, the choice in this election is not between putting up a wall around America or allowing every job to disappear overseas. The truth is, we won't be able to bring back every job that we've lost, but that doesn't mean we should follow John McCain's plan to keep giving tax breaks to corporations that send American jobs overseas. I will end those breaks as President, and I will give American businesses a $3,000 tax credit for every job they create right here in the United States of America. I'll eliminate capital gains taxes for small businesses and start-up companies that are the engine of job creation in this country. We'll create two million new jobs by rebuilding our crumbling roads, and bridges, and schools, and by laying broadband lines to reach every corner of the country. And I will invest $15 billion a year in renewable sources of energy to create five million new energy jobs over the next decade jobs that pay well and can't be outsourced; jobs building solar panels and wind turbines and a new electricity grid; jobs building the fuel-efficient cars of tomorrow, not in Japan or South Korea but here in the United States of America; jobs that will help us eliminate the oil we import from the Middle East in ten years and help save the planet in the bargain. That's how America can lead again.
When it comes to health care, we don't have to choose between a government-run health care system and the unaffordable one we have now. If you already have health insurance, the only thing that will change under my plan is that we will lower premiums. If you don't have health insurance, you'll be able to get the same kind of health insurance that Members of Congress get for themselves. We'll invest in preventative care and new technology to finally lower the cost of health care for families, businesses, and the entire economy. And as someone who watched his own mother spend the final months of her life arguing with insurance companies because they claimed her cancer was a pre-existing condition and didn't want to pay for treatment, I will stop insurance companies from discriminating against those who are sick and need care most.
When it comes to giving every child a world-class education so they can compete in this global economy for the jobs of the 21st century, the choice is not between more money and more reform because our schools need both. As President, I will invest in early childhood education, recruit an army of new teachers, pay them more, and give them more support. But I will also demand higher standards and more accountability from our teachers and our schools. And I will make a deal with every American who has the drive and the will but not the money to go to college: if you commit to serving your community or your country, we will make sure you can afford your tuition. You invest in America, America will invest in you, and together, we will move this country forward.
And when it comes to keeping this country safe, we don't have to choose between retreating from the world and fighting a war without end in Iraq. It's time to stop spending $10 billion a month in Iraq while the Iraqi government sits on a huge surplus. As President, I will end this war by asking the Iraqi government to step up, and finally finish the fight against bin Laden and the al Qaeda terrorists who attacked us on 9/11. I will never hesitate to defend this nation, but I will only send our troops into harm's way with a clear mission and a sacred commitment to give them the equipment they need in battle and the care and benefits they deserve when they come home. I will build new partnerships to defeat the threats of the 21st century, and I will restore our moral standing, so that America is once again that last, best hope for all who are called to the cause of freedom, who long for lives of peace, and who yearn for a better future.
I won't stand here and pretend that any of this will be easy especially now. The cost of this economic crisis, and the cost of the war in Iraq, means that Washington will have to tighten its belt and put off spending on things we can afford to do without. On this, there is no other choice. As President, I will go through the federal budget, line-by-line, ending programs that we don't need and making the ones we do need work better and cost less.
But as I've said from the day we began this journey all those months ago, the change we need isn't just about new programs and policies. It's about a new politics a politics that calls on our better angels instead of encouraging our worst instincts; one that reminds us of the obligations we have to ourselves and one another.
Part of the reason this economic crisis occurred is because we have been living through an era of profound irresponsibility. On Wall Street, easy money and an ethic of "what's good for me is good enough" blinded greedy executives to the danger in the decisions they were making. On Main Street, lenders tricked people into buying homes they couldn't afford. Some folks knew they couldn't afford those houses and bought them anyway. In Washington, politicians spent money they didn't have and allowed lobbyists to set the agenda. They scored political points instead of solving our problems, and even after the greatest attack on American soil since Pearl Harbor, all we were asked to do by our President was to go out and shop.
That is why what we have lost in these last eight years cannot be measured by lost wages or bigger trade deficits alone. What has also been lost is the idea that in this American story, each of us has a role to play. Each of us has a responsibility to work hard and look after ourselves and our families, and each of us has a responsibility to our fellow citizens. That's what's been lost these last eight years our sense of common purpose; of higher purpose. And that's what we need to restore right now.
Yes, government must lead the way on energy independence, but each of us must do our part to make our homes and our businesses more efficient. Yes, we must provide more ladders to success for young men who fall into lives of crime and despair. But all of us must do our part as parents to turn off the television and read to our children and take responsibility for providing the love and guidance they need. Yes, we can argue and debate our positions passionately, but at this defining moment, all of us must summon the strength and grace to bridge our differences and unite in common effort black, white, Latino, Asian, Native American; Democrat and Republican, young and old, rich and poor, gay and straight, disabled or not.
In this election, we cannot afford the same political games and tactics that are being used to pit us against one another and make us afraid of one another. The stakes are too high to divide us by class and region and background; by who we are or what we believe.
Because despite what our opponents may claim, there are no real or fake parts of this country. There is no city or town that is more pro-America than anywhere else we are one nation, all of us proud, all of us patriots. There are patriots who supported this war in Iraq and patriots who opposed it; patriots who believe in Democratic policies and those who believe in Republican policies. The men and women who serve in our battlefields may be Democrats and Republicans and Independents, but they have fought together and bled together and some died together under the same proud flag. They have not served a Red America or a Blue America they have served the United States of America.
It won't be easy, Ohio. It won't be quick. But you and I know that it is time to come together and change this country. Some of you may be cynical and fed up with politics. A lot of you may be disappointed and even angry with your leaders. You have every right to be. But despite all of this, I ask of you what has been asked of Americans throughout our history.
I ask you to believe not just in my ability to bring about change, but in yours.
I know this change is possible. Because I have seen it over the last twenty-one months. Because in this campaign, I have had the privilege to witness what is best in America.
I've seen it in lines of voters that stretched around schools and churches; in the young people who cast their ballot for the first time, and those not so young folks who got involved again after a very long time. I've seen it in the workers who would rather cut back their hours than see their friends lose their jobs; in the neighbors who take a stranger in when the floodwaters rise; in the soldiers who re-enlist after losing a limb. I've seen it in the faces of the men and women I've met at countless rallies and town halls across the country, men and women who speak of their struggles but also of their hopes and dreams.
I still remember the email that a woman named Robyn sent me after I met her in Ft. Lauderdale. Sometime after our event, her son nearly went into cardiac arrest, and was diagnosed with a heart condition that could only be treated with a procedure that cost tens of thousands of dollars. Her insurance company refused to pay, and their family just didn't have that kind of money.
In her email, Robyn wrote, "I ask only this of you on the days where you feel so tired you can't think of uttering another word to the people, think of us. When those who oppose you have you down, reach deep and fight back harder."
Ohio, that's what hope is that thing inside us that insists, despite all evidence to the contrary, that something better is waiting around the bend; that insists there are better days ahead. If we're willing to work for it. If we're willing to shed our fears and our doubts. If we're willing to reach deep down inside ourselves when we're tired and come back fighting harder.
Hope! That's what kept some of our parents and grandparents going when times were tough. What led them to say, "Maybe I can't go to college, but if I save a little bit each week my child can; maybe I can't have my own business but if I work really hard my child can open one of her own." It's what led immigrants from distant lands to come to these shores against great odds and carve a new life for their families in America; what led those who couldn't vote to march and organize and stand for freedom; that led them to cry out, "It may look dark tonight, but if I hold on to hope, tomorrow will be brighter."
That's what this election is about. That is the choice we face right now.
Don't believe for a second this election is over. Don't think for a minute that power concedes. We have to work like our future depends on it in this last week, because it does.
In one week, we can choose an economy that rewards work and creates new jobs and fuels prosperity from the bottom-up.
In one week, we can choose to invest in health care for our families, and education for our kids, and renewable energy for our future.
In one week, we can choose hope over fear, unity over division, the promise of change over the power of the status quo.
In one week, we can come together as one nation, and one people, and once more choose our better history.
That's what's at stake. That's what we're fighting for. And if in this last week, you will knock on some doors for me, and make some calls for me, and talk to your neighbors, and convince your friends; if you will stand with me, and fight with me, and give me your vote, then I promise you this we will not just win Ohio, we will not just win this election, but together, we will change this country and we will change the world. Thank you, God bless you, and may God bless America.
By Michael Powell
Monday, October 27, 2008
ALIQUIPPA, Pennsylvania: Voting for the black man does not come easy to Nick Piroli; he is the first to admit that.
This retired steelworker wrestles with this election and his choice. A couple of friends, he says, will not vote for Barack Obama.
"I'm no racist, but I'm not crazy about him either," he says. "I don't know, maybe 'cause he's black."
Piroli, 77, winces at himself. "We was raised and worked with the black, the Serb," he said. "It was a regular league of nations. And the economy now, it's terrible."
"I've got to vote for him," he says finally.
Him? "The Democrat, Obama," Piroli replies. "I can't be stupid."
Obama's Republican rival, John McCain, has placed a sizable electoral bet that he can sweep predominantly white, working-class Beaver County, and a dozen more Pennsylvania counties like it. Last week, McCain spoke before thousands in Moon Township; two days later, his running mate, Sarah Palin, drew more than 2,000 fans to a chilly evening rally in Beaver.
But to walk the back streets of the Beaver River mill cities - the biggest mills were long ago shuttered - is to hear more than a few Democrats saying they intend, however reluctantly, to support their party's standard bearer, particularly as the world economy cracks and heaves. Many Democrats, and a few independents, wonder if McCain is too old and Palin too unsophisticated to take his place.
Such sentiments could bode ill for McCain, who hopes for a surprise victory in Pennsylvania to rescue his presidential bid. And they dovetail with poll findings showing a gravitation of white voters, female and male, toward Obama's camp. To try to stanch that flow and tap into doubts about Obama, McCain was to return to the state on Monday for the second time in a week, and then appear Tuesday with Palin as they try to sway voters like Piroli.
McCain may have an opening: 35 interviews over three days also offer up a conversation about race and presidential choices, and that is where the greatest uncertainty lies for Obama. Sometimes race talk runs like a subterranean river; sometimes it floats on the surface.
In Ambridge, a Beaver River factory town named after the company that gave it fame - American Bridge - Olga Permon, a 71-year-old steelworker's widow and a lifelong Democrat, climbs the stoop of her yellow-brick home. She considers the field: McCain? A grouchy old man. Palin? Please. No way. What about Obama?
Permon's pause goes on and on. "He scares me," she says. "The coloreds are excited, but my friends and I plan to write in Hillary's name."
These are not gentle lands for Obama. A visit here in August found even deeper suspicions of him in the county, where Hillary Rodham Clinton beat him by 40 percentage points in the Democratic primary. Democrats outnumber Republicans, but voters here tilt either way in presidential elections.
Still, a worsening economy has worked to the Democrats' advantage.
Obama and his running mate, Joseph Biden Jr., drew 8,000 to a rally in Beaver a month ago; John Sweeney, the AFL-CIO president, stumped on Saturday in Beaver; and dozens of union members go door to door each weekend, rummaging up votes. They remind their fellow workers that McCain had supported privatization of Social Security, a move they say could have left worker retirement accounts trapped in a plummeting stock market.
"This is McCain's Hail Mary; they looked at the huge margin here for Hillary Clinton in the primary and figured, 'Hmm, we have a shot,"' said Professor G. Terry Madonna, director of the Center for Politics and Public Affairs at Franklin & Marshall College. "But it's going to be very difficult here for him to get the margins needed to offset the cities and the eastern suburbs."
In Ambridge, Vince Pisano, 47, a union plumber, reflects that challenge. As he sits on his porch, he considers collapses - of the economy and of his retirement account. He is firm for Obama, but he is in a small club.
"Close friends, real close, tell me they can't get past his race," said Pisano, flashing a give-me-a-break look. "If Obama were white, this would be a landslide around here."
By Julie Bosman
Monday, October 27, 2008
TAMPA: An exasperated Governor Sarah Palin veered off script on Sunday to confront, as she called it, "the whole clothes thing."
"You know, I tried to just ignore it," Palin said, speaking to a crowd of thousands at a rally here. "Because it's so ridiculous."
It has been five days since financial disclosure forms from the Republican National Committee revealed that the organization had spent $150,000 on clothing, makeup and accessories for Palin and her family.
Throughout that time, Palin has mostly kept quiet, even as Republicans have called the purchases embarrassing and excessive. But opening her remarks in Tampa, Palin tossed the blame back to the RNC, reviving what has been an unpleasant topic for the McCain campaign.
"Those clothes, they are not my property," Palin said. "Just like the lighting and the staging and everything else that the RNC purchased. I'm not taking them with me. I'm back to wearing my own clothes from my favorite consignment shop in Anchorage, Alaska."
In an interview on Thursday with Fox News, Palin named her favorite consignment shop as Out of the Closet in Anchorage, which, according to its Web site, offers "affordable high-end designer labels and brands not otherwise available in Anchorage," like Prada, Armani and Gucci. Palin wore a pale pink jacket on Sunday, a departure from the designer suits she has worn on the campaign trail since she was chosen as the Republican vice-presidential nominee.
Perhaps to emphasize her frugal tastes, Palin added that she was wearing beaded earrings handmade by her mother-in-law; a $35 wedding ring from Hawaii that she had bought herself; and a flag pin, which she wears in honor of her son Track, who is stationed in Iraq.
Senator John McCain, in an appearance Sunday on "Meet the Press" on NBC, was asked about the episode, which Tom Brokaw, the host, suggested was "a colossal mistake."
"Look, she lives a frugal life," McCain said. "She and her family are not wealthy. She and her family were thrust into this, and there was some and some third of that money is given back. The rest will be donated to charity."
Tracey Schmitt, a spokeswoman for Palin, said Sunday that a third of the clothes were returned right after the convention.
Palin may have been spurred on by a fiery introduction from the talk-show host Elisabeth Hasselbeck, who accompanied her on the campaign trail in Florida.
"Instead of the issues, they are focused, fixated on her wardrobe," Hasselbeck said of the news media, drawing loud cheers from the crowd. "Now, with everything going on in the world, seems a bit odd. But let me tell you, this is deliberately sexist. I know you know that."
After taking the microphone, Palin hinted that she agreed with Hasselbeck.
"The double standard here," she said. "Gosh, we don't even want to waste our time."
By Steve Barnes and Anahad O'connor
Monday, October 27, 2008
LITTLE ROCK, Arkansas: Two people were killed and another wounded in a shooting on Sunday night outside a dormitory on the campus of the University of Central Arkansas, in Conway, school officials said.
The shooting at the university, a liberal arts institution about 30 miles west of Little Rock, occurred shortly after 9 p.m. and prompted police to lock down the entire campus. Monday's classes were canceled.
University officials said the two fatally wounded were students, one an 18-year-old male who died at a local hospital and a second who died at the scene. Officials said their names would not be released until their families were notified.
The third victim, a 19-year-old male who is not a student, was treated at Conway Regional Medical Center for a gunshot wound to his leg and released late Sunday night.
One person was taken into custody, but was not arrested. The motivation for the shooting was unclear, officials said.
The police and witnesses said the gunfire erupted about 9:19 p.m. near Arkansas Hall, a dormitory, sending students scattering. Two university police officers who were posted nearby arrived seconds later, followed about ten minutes later by an ambulance. The university said that through an automated alert system put in place after the deadly shootings at Virginia Tech last year, officials were instructed to secure every building and emergency e-mail messages were sent to students and faculty.
One student, Sam Hausen, a freshman, told CNN he was about 50 feet away when the shooting started. He said he saw one wounded student hit the ground, another stumble into a dormitory, and at least two cars speed off.
"I heard about five or 10 shots and, at first, I thought it was just firecrackers, because everybody always clowns around out there," he said. "But I just realized that it wasn't firecrackers." More Articles in US »
The Associated Press
Monday, October 27, 2008
LONDON: The British pint has become the latest victim of the global credit crunch, with total beer sales dropping around 7 percent in the third quarter of this year, according to a survey released Monday.
The British Beer and Pub Association that 161 million fewer pints were sold from July to September compared with a year earlier, or decline of 1.8 million pints a day.
Beer sales in pubs had already been in steady decline in recent years, leading to the closing of thousands of hostelries around Britain.
But The Quarterly Beer Barometer, an association report, shows that the trend has accelerated and that the downturn has broadened to supermarket sales, which were previously steady as grocers attracted consumers with packs of beers at lower cost.
Supermarket and liquor store sales fell 6 percent over the quarter, slightly behind the 8.1 percent drop recorded for pubs, bars and restaurants.
"The accelerating decline in beer sales is a clear sign of a worsening economy, worried households and weakening spending," said Rob Hayward, the association's chief executive.
The association, whose members brew 98 percent of British beers and include nearly two-thirds of the pubs in the country, said the problem was being worsened by increases in the government's alcohol tax, which brings in around $180 million a year.
"This sales trend is symptomatic of the problems infecting the broader economy," Hayward said. "But any prudent diagnosis would also identify the specific impact of the budget's nine per cent beer tax increase and the constant stream of costly regulatory burdens flowing from the government's alcohol strategy. These policies are making a bad situation worse."
The government pulls in around £5.8 billion, or $9 billion, in duties and taxes on beer sales each year.
But the association warned that the falling sales would leave the Treasury facing a £1.2 billion tax shortfall, in real terms, over the next three years, compared with their forecasts.
More than 1,400 pubs made their final "last calls" last year as a nationwide smoking ban and rising costs took their toll on beer sales, according to the Campaign for Real Ale, a consumer group promoting traditional pubs.
To take up the slack, pubs have stepped up their food sales.
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