October 2008

Half of all American doctors responding to a nationwide survey say they regularly prescribe placebos to patients. The results trouble medical ethicists, who say more research is needed to determine whether doctors must deceive patients in order for placebos to work.

The study involved 679 internists and rheumatologists chosen randomly from a national list of such doctors. In response to three questions included as part of the larger survey, about half reported recommending placebos regularly. Surveys in Denmark, Israel, Britain, Sweden and New Zealand have found similar results.

The most common placebos the American doctors reported using were headache pills and vitamins, but a significant number also reported prescribing antibiotics and sedatives. Although these drugs, contrary to the usual definition of placebos, are not inert, doctors reported using them for their effect on patients’ psyches, not their bodies.

In most cases, doctors who recommended placebos described them to patients as “a medicine not typically used for your condition but might benefit you,” the survey found. Only 5 percent described the treatment to patients as “a placebo.”

The study is being published in BMJ, formerly The British Medical Journal. One of the authors, Franklin G. Miller, was among the medical ethicists who said they were troubled by the results.

“This is the doctor-patient relationship, and our expectations about being truthful about what’s going on and about getting informed consent should give us pause about deception,” said Dr. Miller, director of the research ethics program in the department of bioethics at the National Institutes of Health.

Dr. William Schreiber, an internist in Louisville, Ky., at first said in an interview that he did not believe the survey’s results, because, he said, few doctors he knows routinely prescribe placebos.

But when asked how he treated fibromyalgia or other conditions that many doctors suspect are largely psychosomatic, Dr. Schreiber changed his mind. “The problem is that most of those people are very difficult patients, and it’s a whole lot easier to give them something like a big dose of Aleve,” he said. “Is that a placebo treatment? Depending on how you define it, I guess it is.”

But antibiotics and sedatives are not placebos, he said.

The American Medical Association discourages the use of placebos by doctors when represented as helpful.

“In the clinical setting, the use of a placebo without the patient’s knowledge may undermine trust, compromise the patient-physician relationship and result in medical harm to the patient,” the group’s policy states.

Controlled clinical trials have hinted that placebos may have powerful effects. Some 30 percent to 40 percent of depressed patients who are given placebos get better, a treatment effect that antidepressants barely top. Placebos have also proved effective against hypertension and pain.

But despite much attention given to the power of placebos, basic questions about them remain unanswered: Are they any better than no treatment at all? Must people be deceived into believing that a treatment is active for a placebo to work?

Some studies have hinted at answers, but experts say far more work is needed.

Dr. Howard Brody, director of the Institute for the Medical Humanities at the University of Texas Medical Branch, in Galveston, said the popularity of alternative medical treatments had led many doctors to embrace placebos as a potentially useful tool. But, Dr. Brody said, doctors should resist using placebos, because they reinforce the deleterious notion that “when something is the matter with you, you will not get better unless you swallow pills.”

Earlier this year, a Maryland mother announced that she would start selling dextrose tablets as a children’s placebo called Obecalp, for “placebo” spelled backward.

Dr. Ezekiel J. Emanuel, one of the study’s authors, said doctors should not prescribe antibiotics or sedatives as placebos, given those drugs’ risks. Use of less active placebos is understandable, he said, since risks are low.

“Everyone comes out happy: the doctor is happy, the patient is happy,” said Dr. Emanuel, chairman of the bioethics department at the health institutes. “But ethical challenges remain.”

* By GARDINER HARRIS (NYT;October 24, 2008)

For all the support that the presidential candidates are expressing for renewable energy, alternative energies like wind and solar are facing big new challenges because of the credit freeze and the plunge in oil and natural gas prices.

Shares of alternative energy companies have fallen even more sharply than the rest of the stock market in recent months. The struggles of financial institutions are raising fears that investment capital for big renewable energy projects is likely to get tighter.

Advocates are concerned that if the prices for oil and gas keep falling, the incentive for utilities and consumers to buy expensive renewable energy will shrink. That is what happened in the 1980s when a decade of advances for alternative energy collapsed amid falling prices for conventional fuels.

“Everyone is in shock about what the new world is going to be,” said V. John White, executive director of the Center for Energy Efficiency and Renewable Technology, a California advocacy group. “Surely, renewable energy projects and new technologies are at risk because of their capital intensity.”

Senator Barack Obama and Senator John McCain both promise ambitious programs to develop various kinds of alternative energy to combat global warming and achieve energy independence.

Mr. Obama talks of creating five million new jobs in renewable energy and nearly tripling the percentage of the nation’s electricity supplied by renewables by 2025. Mr. McCain has run television advertisements showing wind turbines and has pledged to make the United States the “leader in a new international green economy.”

But after years of rapid growth, the sudden headwinds facing renewables point to slowing momentum and greater dependence on government subsidies, mandates and research financing, at a time when Washington is overloaded with economic problems.

John Woolard, chief executive officer of BrightSource Energy, a solar company, said he believed the long-term future for renewables remained promising, though “right now we are looking at tumultuous and unpredictable capital markets.”

Venture capital financing for some advanced solar projects and for experimental biofuels, like ethanol made from plant wastes, is drying up, according to analysts who track investment flows.

At least two wind energy companies have had to delay projects in recent days because of trouble raising capital. Several corn ethanol projects have been delayed for lack of financing in Iowa and Oklahoma since last month, and one plant operator in Ohio filed for bankruptcy protection last week.

Tesla Motors, the maker of battery-powered cars, recently announced it had been forced to delay production of its all-electric Model S sedan, close two offices and lay off workers.

Investment analysts say initial and secondary stock offerings by clean energy companies across global markets have slowed to a crawl since the spring, and for the full year could total less than half of the record $25.4 billion for 2007.

Worldwide project financings for new construction of wind, solar, biofuels and other alternative energy projects this year fell to $17.8 billion in the third quarter, from $23.2 billion in the second quarter, according to New Energy Finance, a research firm in London. The slide is expected to be sharper in the fourth quarter and next year.

In the United States, financing for new projects and venture capital and private equity investments in renewable energy this year might still top last year’s results because so much money was in the pipeline at the beginning of the year, but the pace has slowed sharply in the last month.

The next presidential administration, to make good on campaign rhetoric and continue supporting renewables, will have to choose alternative energy over other programs at a time of ballooning deficits. Analysts say that is no sure thing.

“Government funding for renewables is now going to have to compete with levels of government funding in other areas that were unimaginable six months ago,” Mark Flannery, an energy analyst for Credit Suisse, said.

The central questions facing renewables now, experts say, are how long credit will be tight and how low oil and natural gas prices will fall. Oil and gas are still relatively expensive by historical standards, but the prices have fallen by half since July. Some economists expect further declines as the economy weakens.

Wall Street analysts say most utilities and other builders can profitably choose big wind projects over gas-fired plants only when gas prices are $8 per thousand cubic feet or higher. Natural gas settled Monday at about $6.79 per thousand cubic feet, down from about $13.58 on July 3.

“Natural gas at $6 makes wind look like a questionable idea and solar power unfathomably expensive,” said Kevin Book, a senior vice president at FBR Capital Markets.

Government mandates already on the books, including state rules requiring renewable power generation and federal requirements for production of ethanol, ensure that to some degree, alternative energy markets will continue to exist no matter how low oil and gas prices go. But the credit crisis means some companies that would like to build facilities to meet that demand are going to have problems. “If you can’t borrow money, you can’t develop renewables,” Mr. Book said.

Renewable energy now meets 7 percent of the nation’s energy needs, and public subsidies have promoted a leap for several alternative energy sources in recent years.

Ethanol is sold nationwide as a gasoline additive, and federal legislation aims to replace a major share of the oil now imported into the United States with domestically produced biofuels in the next 15 years. Enough new wind power was installed in the United States to serve the equivalent of 4.5 million households in 2007, the third year in a row the country led all nations in new wind power.

Renewable energy has become a big business worldwide, with total investment increasing to $148.4 billion last year, from $33.4 billion in 2004, according to Ethan Zindler, head of North American research at New Energy Finance. Mr. Zindler said the upward momentum had halted, and that total investment this year was likely to be lower than last.

In the 1970s, just as in recent years, high prices for fossil fuels led to rising interest in renewables. But when oil prices collapsed in the 1980s, the nascent market for renewable energy fell apart, too. Congress eliminated tax credits for solar energy, ethanol could not compete with cheap gasoline and a wind farm boomlet in California failed to catch on in the rest of the country.

The epicenter of investment and development moved to Europe, with its strong government support for renewables, and began shifting back only when heating oil and natural gas prices shot up again in recent years.

There are some differences this time. Coal, another major competitor of renewables, remains expensive and is facing increasing scrutiny over environmental concerns.

Most important, renewable energy entrepreneurs and experts say, is the growing government and public backing for renewable energy in the United States.

“What is driving the market this time is that we’re at war and this is a security issue,” said Arnold R. Klann, chief executive of BlueFire Ethanol, a California company that is planning to make ethanol out of garbage with the help of $40 million in financing from the Energy Department.

In its recent financial rescue package, Congress provided $17 billion in tax credits to promote various forms of clean power, for everything from plug-in electric vehicles to projects that will capture and store carbon dioxide from coal-burning power plants. Production and investment tax credits were extended for wind energy for one year, geothermal energy for two years and for solar energy for a full eight years.

Meanwhile more than 30 states have enacted standards demanding that utilities generate a minimum proportion — typically 10 to 20 percent — of their power from renewable sources in the next 5 to 10 years.

But some analysts say the government supports may not be enough to propel continued growth for renewables, noting that several states have already relaxed their goals.

“When they can’t meet their targets,” Mr. Book said, “they change them.”

* By CLIFFORD KRAUSS (NYT;October 21, 2008)

SAN FRANCISCO — Yahoo was hurting long before the financial crisis got everyone worried about a global recession. Now its pain has become more acute.

Yahoo said Tuesday that it would lay off at least 10 percent of its 15,000 workers as it tries to bring down its expenses. It said reduced marketing budgets had taken a bite out of its online advertising business, sending its net income for the third quarter tumbling by 64 percent.

The company also lowered its revenue projections for the remainder of the year and said it was too early to make forecasts for 2009.

The results come as strategic moves that Yahoo has been considering, including a search advertising partnership with its rival Google and a merger with Time Warner’s AOL unit, have gotten bogged down, leaving the company with few options but to cut expenses, analysts said.

“They just have to batten down the hatches, lighten the load and ride this thing out,” said Jeffrey Lindsay, an analyst with Sanford C. Bernstein & Company.

“Hopefully,” he added, “they will make it to the other side with their cash intact, presumably as a smaller and more efficient organization.”

Yahoo executives said events like the Beijing Olympics, the presidential campaign and the financial crisis delivered a surge of viewers to the company’s popular Web sites during the quarter.

However, Yahoo was not able to turn those extra visitors into dollars at the rate it had hoped, they said. The company said it had been especially hurt by a retrenchment among marketers who buy high-priced display ads, one of the mainstays of Yahoo’s business.

In an interview, Jerry Yang, a Yahoo co-founder and its chief executive, said the layoffs were a necessary step that would allow Yahoo to operate more efficiently and weather a downturn.

“Going through layoffs is a very tough thing, but I also think we are doing the right thing by keeping flexibility for the company,” Mr. Yang said.

While the cuts will affect all parts of the company, they will not be uniform, and Yahoo will continue to invest in some important projects, like a new advertising system and a new home page, he said. Yahoo might cut some of its services altogether, he said, but declined to name which projects may be headed for the chopping block.

The goal was to reduce annual expenses by more than $400 million before the end of the year, he said.

Yahoo said revenue rose a sluggish 1 percent to $1.79 billion, from $1.77 billion a year ago. Net revenue, which excludes commissions paid to advertising partners, was $1.32 billion, compared with $1.28 billion a year ago, a 3 percent increase. Analysts expected net revenue to be $1.37 billion.

Net income for the quarter fell to $54 million, or 4 cents a share, from $151 million, or 11 cents a share, a year earlier. Excluding the cost of stock options and other items, income was $123 million, or 9 cents a share, compared with 11 cents a share a year ago, in line with analysts’ forecasts.

Some analysts said that under Mr. Yang, who became chief executive in June 2007, Yahoo has been lurching from crisis to crisis and has been unable to outline a credible turnaround plan. The layoffs are not likely to address some of the problems plaguing Yahoo, which include a loss of market share to Google in Web search and to others in display advertising, they said.

“In our mind, it isn’t solely about cost cutting,” said Derek Brown, an analyst with Cantor Fitzgerald. “Unless the layoffs can lead to more rapid, more creative product introductions or more competitive wins, they won’t move the needle.”

Yahoo cut roughly 1,000 jobs this year, but new hires and small acquisitions since then have left the company with more than 15,000 employees, slightly more than at the beginning of the year.

Many investors say that Mr. Yang’s — and Yahoo’s — most significant mistake was to rebuff a $33-a-share buyout bid from Microsoft in May. Microsoft withdrew its offer after Mr. Yang said it was too low.

Since then, Yahoo signed a search advertising partnership with Google, which was expected to be in place by early October and to bring $250 million to $450 million in additional operating cash flow to Yahoo in the first year. But the deal has been held up by antitrust regulators, who are considering the damage it could do to competition in search advertising, a market that Google dominates.

The time allotted for the review was recently extended. A person briefed on the matter, who agreed to talk on condition of anonymity because of the confidentiality surrounding the inquiry, said lawyers from the companies and the Justice Department were discussing possible limits on the scope of the deal, like a cap on the number of ads that Google could place on Yahoo’s pages.

And Yahoo’s merger talks with AOL have failed to bear fruit.

“We think it is not happening because there is a huge gap on the price,” Mr. Lindsay said. A merger with AOL, which is also struggling, would not necessarily solve Yahoo’s problems, he said, and would require deep cuts at the combined company.

Yahoo’s protracted troubles have disappointed investors who have continued to sell its shares. They closed on Tuesday at $12.07, down nearly 50 percent since the beginning of the year. But shares rose in after-hours trading, following the earnings announcement.

* By MIGUEL HELFT (NYT;October 22, 2008)

BEIJING — For three decades, China has fueled its remarkable economic rise by becoming the world’s workshop and unleashing a flood of low-priced exports. But faced with a possible global recession and weakening demand for Chinese exports, the question now is whether the ruling Communist Party can prevent the financial crisis from derailing the country’s economic miracle.

This question is pressing not just for China but also for the rest of the world. American officials and many economists say continued Chinese growth is vital to the global economy as the United States and Europe face severe downturns.

Yet to navigate the crisis, many analysts say, China will need to recalibrate its economic model, stoke domestic investment with heavy government spending and promote policies to increase consumer demand in a nation known for high savings rates.

The global crisis is also arising at a politically resonant moment for China. This month is the 30th anniversary of the reform policies that first ignited its market-oriented growth, a milestone that has raised inevitable questions about the next steps China must take to become a fully modern economic and political power.

At the geopolitical level, China would seem well positioned to expand its influence. It sits on $1.9 trillion in foreign exchange reserves, accumulated from giant trade surpluses and heavy foreign investment in China, and it could acquire discounted stakes in Western banks and industrial companies.

But for now, most analysts say China’s top priority is protecting its own economy. Chinese leaders say the domestic financial system is largely insulated from the global crisis — China’s banks remain domestically focused and have relatively small exposure to toxic securities sold by American and European banks. But economic growth has fallen to the lowest level in five years, unemployment is a growing concern, and scores of factories are closing in the country’s export region. Domestic stock exchanges have lost 65 percent of their value, and real estate sales have plummeted.

China still seems likely to avoid an outright recession, but a significantly slower growth would pose a political challenge for the Communist Party, which derives much of its legitimacy from delivering jobs and increasing wealth. Conventional wisdom holds that China’s output must grow at a minimum of 8 percent for the economy to produce enough jobs to absorb increases in the working-age population, and many economists expect growth to drop below that level next year.

Just last week, thousands of unemployed workers protested outside closed toy factories in Guangdong Province, the country’s export hub. Slightly more than half the country’s toy exporters shut down in the first seven months of this year, mostly small companies that struggled to cope with new safety standards as well as weakening Western demand, according to China’s customs agency.

If the growth rate “goes below 8 percent in 2009, I think they will be quite concerned,” said Kenneth Lieberthal, a China specialist currently at the Brookings Institution in Washington. “They are always concerned about job creation.”

Already, Chinese leaders are preparing a response that could resemble the government spending spree from 1998 to 2000 that is credited with helping China avoid the worst of the Asian financial crisis that broke out in 1997. Former Prime Minister Zhu Rongji poured billions of dollars into flood control, road building and new airport projects to stimulate economic output. Much of that infrastructure is now considered essential to China’s competitive advantage as a manufacturing exporter.

Today, improvements are needed in railroads and the electrical power grid. But China’s most conspicuous needs are the softer side of a modern economy — a health care network, lower tuition and fees for schools and universities and improvement in the rudimentary social safety net, economists say.

Such steps are seen as crucial if China is to give consumers — especially working-class urban residents and the 800 million people still classified as peasants — the confidence to spend rather than increase their savings.

“China’s infrastructure is excellent — compare it to India,” said Xu Xiaonian, an economics professor at the China Europe International Business School in Shanghai. “It’s getting harder for the government to find ways to spend money productively. It’s stimulus for the sake of stimulus.”

David H. McCormick, the under secretary for international affairs at the Treasury Department, said in a telephone interview that Chinese officials understood that the sheer size of their economy, combined with weakening demand overseas, meant that increasing demand for goods and services within China would be in China’s own interest. “They can’t count on exports being such a driver of their economy going forward,” he said.

To date, the most significant new measure is the land reform announced last Sunday. Full details of the program are still unclear, but the plan allows farmers for the first time to lease or transfer their land-use rights, a landmark step in what is still nominally a socialist country. Economists say they believe that the measure will improve the rural economy, though few predict sudden benefits. To raise rural incomes more rapidly, the top Chinese economic planning agency on Monday raised the minimum purchase price of wheat by up to 15 percent beginning next year.

Transforming the countryside and creating a nation of consumers is likely to prove at least as arduous as turning China into a manufacturing giant. In recent years, President Hu Jintao and Prime Minister Wen Jiabao have eliminated the ancient agricultural tax and increased spending on rural initiatives. Yet the rural-urban income gap has continued to worsen. Today, China still has more than 500 million people living on less than $2 a day; nationwide per capita income is only about $2,000. The social safety net remains so inadequate that most peasants save their spare earnings to protect against a medical crisis or as a thin cushion for old age.

Andy Rothman, a longtime analyst at CLSA Asia-Pacific Markets, an investment bank, said that the government had been promoting domestic consumption for years but that by necessity it was a gradual process and not one that could provide a quick fix to a global slowdown.

“This isn’t something you want to move ahead at light speed,” Mr. Rothman said. “China trying to step into the breach by handing out credit cards to 800 million peasants would be a disaster just a few years down the road.”

From a geopolitical standpoint, China would seem to have an opportunity to fill a void created by an ailing West, especially given the country’s huge foreign exchange holdings. President Asif Ali Zardari of Pakistan visited Beijing this month in search of a financial edge to help his country stave off bankruptcy — an overture that could become more common as China is perceived as sitting on a money pot.

More pertinent to the United States is whether China will re-examine its strategy of financing American debt. Chinese experts say that the American and Chinese economies are so intertwined that Chinese leaders will not make any abrupt changes in their policy of directing the bulk of China’s foreign currency reserves to dollar-denominated assets. The United States Treasury secretary, Henry M. Paulson Jr., and other senior American officials have been in almost daily contact with their Chinese counterparts.

“China, with the responsibility of a big country, will not make trouble for international financial markets,” said Hu Angang, a Chinese economist who is the director of the Center for China Studies at Tsinghua University. “The Chinese government is very rational and flexible, and very clearly recognizes any policy does not just influence domestic markets but also global markets.”

Some Chinese experts are suggesting that China could use more of its foreign reserves to purchase stocks in Western companies and even as leverage to gain positions on corporate boards. Doing so, these experts say, would allow China to develop expertise and gain more experience in global business.

But others say that China was stung when a state-owned Chinese petrochemical company tried and failed to purchase Unocal, an American oil company, and that it would be cautious in making any moves deemed politically risky. Domestic pressures also exist; public criticism has erupted after some investments by the country’s sovereign wealth fund lost money.

No one is yet certain when the global financial system will stabilize, but the crisis has convinced many economic analysts that the system itself will be re-examined. The financial crisis is “a ground-shaking event, but people are going to stick to the same system,” said Wang Tao, chief of the China economic research unit for UBS Securities. “But they are going to think about how to reform the system, and China will probably have a stronger voice than before.”

In recent years, some Chinese experts have written analyses about the inevitability of an American decline and how China must prepare to manage it. But in the face of the current crisis, most Chinese analysts say China is nowhere near ready yet to stand as a superpower.

“China doesn’t want to be viewed as a replacement for the States,” said one Chinese scholar who requested anonymity so that he could discuss the mind-set of government officials. “We are still a developing country. We have more foreign reserves than other countries, but we also have more problems.”

By JIM YARDLEY and KEITH BRADSHER (NYT;October 23, 2008)

Sarah Palin’s wardrobe joined the ranks of symbolic political excess on Wednesday, alongside John McCain’s multiple houses and John Edwards’s $400 haircut, as Republicans expressed fear that weeks of tailoring Ms. Palin as an average “hockey mom” would fray amid revelations that the Republican Party outfitted her with expensive clothing from high-end stores.

Cable television, talk radio and even shows like “Access Hollywood” seemed gripped with sartorial fever after campaign finance reports confirmed that the Republican National Committee spent $75,062 at Neiman Marcus and $49,425 at Saks Fifth Avenue in September for Ms. Palin and her family.

Advisers to Ms. Palin said on Wednesday that the purchases — which totaled about $150,000 and were classified as “campaign accessories” — were made on the fly after Ms. Palin, the governor of Alaska, was chosen as the Republican vice-presidential candidate on Aug. 29 and needed new clothes to match climates across the 50 states. They emphasized, too, that Ms. Palin did not spend time on the shopping, and that other people made the decision to buy such an array of clothes.

Yet Republicans expressed consternation publicly and privately that the shopping sprees on her behalf, which were first reported by Politico, would compromise Ms. Palin’s standing as Senator McCain’s chief emissary to working-class voters whose salvos at the so-called cultural elite often delight audiences at Republican rallies.

That possibility was brought to life, for instance, on “The View” on ABC, as Joy Behar, a co-host, noted the McCain campaign’s outreach to blue-collar workers — like an Ohio plumber who recently chided Senator Barack Obama over taxes — after another co-host, Elisabeth Hasselbeck, defended the expenditures.

“I don’t think Joe the Plumber wears Manolo Blahniks,” Ms. Behar said.

Advisers to Mr. Obama — as well as those of his rival in the Democratic primaries, Senator Hillary Rodham Clinton — said that campaign money was never spent on personal clothing but that potentially embarrassing purchases could be blended into advertising budgets.

Mr. Edwards, the former North Carolina senator, however, listed two $400 haircuts as a campaign expense, and after they were detected he struggled to shake an elitist image in his failed Democratic presidential bid.

Such an image is unhelpful at this late stage of the general election, Republicans said, especially when many families are experiencing economic pain, and when the image applies to a candidate, like Ms. Palin, who has run for office in part on her appeal as an outdoors enthusiast and former small-town mayor who scorns pretensions.

“It looks like nobody with a political antenna was working on this,” said Ed Rollins, a Republican political consultant who ran President Ronald Reagan’s re-election campaign in 1984. “It just undercuts Palin’s whole image as a hockey mom, a ‘one-of-us’ kind of candidate.”

Mr. Obama and his wife, Michelle, have been described as elitist by both Republicans and Democrats at times, and so much was made when she appeared on “The View” in June in a black-and-white patterned dress. Turns out it sold for $148 at an off-the-rack store.

Few Republican operatives or politicians, even those critical of the McCain-Palin campaign, were publicly criticizing the ticket on Wednesday over the clothing purchases. Some said privately that doing so would be akin to kicking a campaign while it was down.

Others said the issue was tainted with sexism, given that male politicians often spend thousands of dollars on suits.

“She had a legitimate need to purchase clothing to get her through three months of grueling campaigning in the constant spotlight of television cameras,” said William F. B. O’Reilly, a Republican consultant in New York. “No one would blink if this was a male candidate buying Brooks Brothers suits.”

Other Republicans said the focus on Ms. Palin’s clothing did not fairly reflect the challenge she faced: Neither she nor her Republican allies expected that she would be tapped as Mr. McCain’s running mate until the last minute, when she was elevated from her comfort zone in Alaska and presented to the nation as the first female Republican vice-presidential nominee.

“If they hadn’t done this, ‘Saturday Night Live’ would be doing jokes where Governor Palin would be dressed in elk skin,” said Rich Galen, a Republican consultant not associated with the McCain campaign.

Party officials, who said they had discussed the matter with McCain and Palin advisers, said all concerned wanted Ms. Palin to present herself as a fashionable-but-sensible on-the-go working mother — a multilayered sartorial strategy, in other words, that has yielded an array of well-cut jackets and skirts, suitable for the different seasons and state climates.

More than $130,000 of the charges used to outfit Ms. Palin and her family were initially footed by Jeff Larson, a prominent Republican consultant in St. Paul whose firm has been tied to the onslaught of negative robocalls about Mr. Obama from Mr. McCain’s campaign. Mr. Larson was also the chief executive of the local host committee for the Republican National Convention, in Minneapolis-St. Paul.

Federal Election Commission records showed Mr. Larson was reimbursed by the Republican National Committee for charges at Saks Fifth Avenue, Neiman Marcus, Macy’s, Barneys New York and Atelier New York, a men’s clothing store.

Other purchases by the R.N.C. included $98 from Pacifier, a children’s boutique in Minneapolis.

Hours before Ms. Palin was to speak at the convention on Sept. 3, a woman burst into the store, said Jon Witthuhn, an owner. After she said she needed something for a 6-month-old boy and was doing shopping related to the convention, it began to dawn on him that he might be outfitting Trig Palin, Ms. Palin’s youngest.

The woman paid for a blue striped convertible romper, a matching monkey-ear hat and socks. Trig Palin appeared on television that night wearing the outfit — without the hat.

Republican officials said all the clothes would be given to charity after the campaign is over. If Ms. Palin kept the clothes, the $150,000 would have to be taxed as income, tax experts said.

Had the purchases been made by the McCain campaign, it would be a conversion of campaign money into personal use, which is prohibited. The same rule does not apply to money from party committees.

“The R.N.C. cleverly used the party committee’s money to avoid the liability that would have occurred if campaigns funds were used,” said Kenneth Gross, a lawyer who is an expert in campaign finance.

Under disclosure requirements of the Alaska Public Offices Commission, Ms. Palin would need to report any gifts valued at over $250 from a single giver.

* By PATRICK HEALY and MICHAEL LUO (NYT;October 23, 2008)

Hyperbole is the currency of presidential campaigns, but this year the nation’s future truly hangs in the balance. The United States is battered and drifting after eight years of President Bush’s failed leadership. He is saddling his successor with two wars, a scarred global image and a government systematically stripped of its ability to protect and help its citizens — whether they are fleeing a hurricane’s floodwaters, searching for affordable health care or struggling to hold on to their homes, jobs, savings and pensions in the midst of a financial crisis that was foretold and preventable.
As tough as the times are, the selection of a new president is easy.

After nearly two years of a grueling and ugly campaign, Senator Barack Obama of Illinois has proved that he is the right choice to be the 44th president of the United States.

Mr. Obama has met challenge after challenge, growing as a leader and putting real flesh on his early promises of hope and change. He has shown a cool head and sound judgment. We believe he has the will and the ability to forge the broad political consensus that is essential to finding solutions to this nation’s problems.

In the same time, Senator John McCain of Arizona has retreated farther and farther to the fringe of American politics, running a campaign on partisan division, class warfare and even hints of racism. His policies and worldview are mired in the past. His choice of a running mate so evidently unfit for the office was a final act of opportunism and bad judgment that eclipsed the accomplishments of 26 years in Congress.

Given the particularly ugly nature of Mr. McCain’s campaign, the urge to choose on the basis of raw emotion is strong. But there is a greater value in looking closely at the facts of life in America today and at the prescriptions the candidates offer. The differences are profound.
Mr. McCain offers more of the Republican every-man-for-himself ideology, now lying in shards on Wall Street and in Americans’ bank accounts. Mr. Obama has another vision of government’s role and responsibilities.

In his convention speech in Denver, Mr. Obama said, “Government cannot solve all our problems, but what it should do is that which we cannot do for ourselves: protect us from harm and provide every child a decent education; keep our water clean and our toys safe; invest in new schools and new roads and new science and technology.”
Since the financial crisis, he has correctly identified the abject failure of government regulation that has brought the markets to the brink of collapse.

The Economy
The American financial system is the victim of decades of Republican deregulatory and anti-tax policies. Those ideas have been proved wrong at an unfathomable price, but Mr. McCain — a self-proclaimed “foot soldier in the Reagan revolution” — is still a believer.

Mr. Obama sees that far-reaching reforms will be needed to protect Americans and American business.
Mr. McCain talks about reform a lot, but his vision is pinched. His answer to any economic question is to eliminate pork-barrel spending — about $18 billion in a $3 trillion budget — cut taxes and wait for unfettered markets to solve the problem.

Mr. Obama is clear that the nation’s tax structure must be changed to make it fairer. That means the well-off Americans who have benefited disproportionately from Mr. Bush’s tax cuts will have to pay some more. Working Americans, who have seen their standard of living fall and their children’s options narrow, will benefit.

Mr. Obama wants to raise the minimum wage and tie it to inflation, restore a climate in which workers are able to organize unions if they wish and expand educational opportunities.
Mr. McCain, who once opposed President Bush’s tax cuts for the wealthy as fiscally irresponsible, now wants to make them permanent. And while he talks about keeping taxes low for everyone, his proposed cuts would overwhelmingly benefit the top 1 percent of Americans while digging the country into a deeper fiscal hole.

National Security
The American military — its people and equipment — is dangerously overstretched. Mr. Bush has neglected the necessary war in Afghanistan, which now threatens to spiral into defeat. The unnecessary and staggeringly costly war in Iraq must be ended as quickly and responsibly as possible.

While Iraq’s leaders insist on a swift drawdown of American troops and a deadline for the end of the occupation, Mr. McCain is still talking about some ill-defined “victory.” As a result, he has offered no real plan for extracting American troops and limiting any further damage to Iraq and its neighbors.
Mr. Obama was an early and thoughtful opponent of the war in Iraq, and he has presented a military and diplomatic plan for withdrawing American forces. Mr. Obama also has correctly warned that until the Pentagon starts pulling troops out of Iraq, there will not be enough troops to defeat the Taliban and Al Qaeda in Afghanistan.

Mr. McCain, like Mr. Bush, has only belatedly focused on Afghanistan’s dangerous unraveling and the threat that neighboring Pakistan may quickly follow.
Mr. Obama would have a learning curve on foreign affairs, but he has already showed sounder judgment than his opponent on these critical issues. His choice of Senator Joseph Biden — who has deep foreign-policy expertise — as his running mate is another sign of that sound judgment. Mr. McCain’s long interest in foreign policy and the many dangers this country now faces make his choice of Gov. Sarah Palin of Alaska more irresponsible.
Both presidential candidates talk about strengthening alliances in Europe and Asia, including NATO, and strongly support Israel. Both candidates talk about repairing America’s image in the world. But it seems clear to us that Mr. Obama is far more likely to do that — and not just because the first black president would present a new American face to the world.
Mr. Obama wants to reform the United Nations, while Mr. McCain wants to create a new entity, the League of Democracies — a move that would incite even fiercer anti-American furies around the world.

Unfortunately, Mr. McCain, like Mr. Bush, sees the world as divided into friends (like Georgia) and adversaries (like Russia). He proposed kicking Russia out of the Group of 8 industrialized nations even before the invasion of Georgia. We have no sympathy for Moscow’s bullying, but we also have no desire to replay the cold war. The United States must find a way to constrain the Russians’ worst impulses, while preserving the ability to work with them on arms control and other vital initiatives.

Both candidates talk tough on terrorism, and neither has ruled out military action to end Iran’s nuclear weapons program. But Mr. Obama has called for a serious effort to try to wean Tehran from its nuclear ambitions with more credible diplomatic overtures and tougher sanctions. Mr. McCain’s willingness to joke about bombing Iran was frightening.

The Constitution and the Rule of Law
Under Mr. Bush and Vice President Dick Cheney, the Constitution, the Bill of Rights, the justice system and the separation of powers have come under relentless attack. Mr. Bush chose to exploit the tragedy of Sept. 11, 2001, the moment in which he looked like the president of a unified nation, to try to place himself above the law.

Mr. Bush has arrogated the power to imprison men without charges and browbeat Congress into granting an unfettered authority to spy on Americans. He has created untold numbers of “black” programs, including secret prisons and outsourced torture. The president has issued hundreds, if not thousands, of secret orders. We fear it will take years of forensic research to discover how many basic rights have been violated.

Both candidates have renounced torture and are committed to closing the prison camp in Guantánamo Bay, Cuba.
But Mr. Obama has gone beyond that, promising to identify and correct Mr. Bush’s attacks on the democratic system. Mr. McCain has been silent on the subject.

Mr. McCain improved protections for detainees. But then he helped the White House push through the appalling Military Commissions Act of 2006, which denied detainees the right to a hearing in a real court and put Washington in conflict with the Geneva Conventions, greatly increasing the risk to American troops.

The next president will have the chance to appoint one or more justices to a Supreme Court that is on the brink of being dominated by a radical right wing. Mr. Obama may appoint less liberal judges than some of his followers might like, but Mr. McCain is certain to pick rigid ideologues. He has said he would never appoint a judge who believes in women’s reproductive rights.

The Candidates
It will be an enormous challenge just to get the nation back to where it was before Mr. Bush, to begin to mend its image in the world and to restore its self-confidence and its self-respect. Doing all of that, and leading America forward, will require strength of will, character and intellect, sober judgment and a cool, steady hand.
Mr. Obama has those qualities in abundance. Watching him being tested in the campaign has long since erased the reservations that led us to endorse Senator Hillary Rodham Clinton in the Democratic primaries. He has drawn in legions of new voters with powerful messages of hope and possibility and calls for shared sacrifice and social responsibility.

Mr. McCain, whom we chose as the best Republican nominee in the primaries, has spent the last coins of his reputation for principle and sound judgment to placate the limitless demands and narrow vision of the far-right wing. His righteous fury at being driven out of the 2000 primaries on a racist tide aimed at his adopted daughter has been replaced by a zealous embrace of those same win-at-all-costs tactics and tacticians.
He surrendered his standing as an independent thinker in his rush to embrace Mr. Bush’s misbegotten tax policies and to abandon his leadership position on climate change and immigration reform.

Mr. McCain could have seized the high ground on energy and the environment. Earlier in his career, he offered the first plausible bill to control America’s emissions of greenhouse gases. Now his positions are a caricature of that record: think Ms. Palin leading chants of “drill, baby, drill.”
Mr. Obama has endorsed some offshore drilling, but as part of a comprehensive strategy including big investments in new, clean technologies.

Mr. Obama has withstood some of the toughest campaign attacks ever mounted against a candidate. He’s been called un-American and accused of hiding a secret Islamic faith. The Republicans have linked him to domestic terrorists and questioned his wife’s love of her country. Ms. Palin has also questioned millions of Americans’ patriotism, calling Republican-leaning states “pro-America.”
This politics of fear, division and character assassination helped Mr. Bush drive Mr. McCain from the 2000 Republican primaries and defeat Senator John Kerry in 2004. It has been the dominant theme of his failed presidency.
The nation’s problems are simply too grave to be reduced to slashing “robo-calls” and negative ads. This country needs sensible leadership, compassionate leadership, honest leadership and strong leadership. Barack Obama has shown that he has all of those qualities.


* EDITORIAL New York Times ; October 24, 2008

Now is the October of our discontent.

First of all, George W. Bush showed up on TV Friday morning to reassure the nation. What could possibly be worse?

Everybody knows that anything our president says is very likely wrong, and certainly won’t happen. If he announced: “I’m sending government agents to Spokane to arrest the looters,” we would expect that the officials would get lost, nobody would be arrested, and the looters probably never existed in the first place.

So hearts sunk throughout the nation when Bush appeared at a Chamber of Commerce gathering to say that the economy would recover.

“America is the most attractive destination for investors around the globe. America is the home of the most talented and enterprising and creative workers in the world,” said the president, who also insisted that “democratic capitalism remains the greatest system ever devised.”

Which translates into: all the money is going to Asia, nobody will ever get a job again and Karl Marx was right after all.


Americans are also in a very low state about the presidential elections. Once again we’ve hit that magic moment when both sides are sure they’re going to lose.

The Republicans are deeply depressed. Only Sarah Palin is chipper, perhaps because, as she told her supporters, the staff won’t let her watch the news.

The Democrats are terrified. They’re convinced something terrible is going to happen because something terrible always happens. Look at 2000! Look at 2004! All the exit polls said it was going to be Kerry and then he lost. How could that happen? Because God hates Democrats, that’s why.

It’s like the curse of the Bambino. The Democrats fear they’re under a jinx because they committed some sin, the political equivalent of trading away Babe Ruth. If so, it probably started with nominating Joe Lieberman for vice president.

The only people who seem to have faith that Barack Obama can pull this off are the Republicans. They thought McCain did well in the final debate and were crushed when viewers only saw his rolling eyes and glares.

Maybe McCain’s problem is not his temperament but his positions. It’s hard to be cheerful and self-satisfied when you’re peddling an unpopular product.

This week, when McCain made appearances at the Al Smith dinner and “The Late Show With David Letterman,” he was funny and self-deprecating. Suddenly you remembered — this guy used to be likeable. Back before he was trying to argue that what a country in economic collapse needs most is tax cuts for the rich and an end to Senate earmarks.

With less than three weeks to go, saddled with an unpopular ideology and an unattractive candidate, the McCain campaign’s deep thinkers decided the only possible hope was …

Joe the Plumber! Joe is, of course, the conservative guy from northwestern Ohio who told Obama: “Your new tax plan is going to tax me more” because he planned to buy a business that he hoped would reel in more than $250,000 a year in profits.

The proper answer, as Obama should have known, was: “No, it won’t.”

Instead, he engaged JtheP in conversation, remarking that it might be helpful in this time of crisis to “spread the wealth around” a little. Since this was before George W. Bush put the nail into the coffin of capitalism at the Chamber of Commerce speech, Joe was appalled.

The Republican presidential campaign is now all Joe, all the time. Obama’s plan to give tax breaks to people making less than $200,000 a year is being described on a McCain Internet ad as “welfare government handouts.” In Miami, Lieberman told a rally that McCain would “fight for José el plomero!”

Meanwhile, Joe was happily standing in his front yard, holding forth to the assembled national news media on his theories about everything from Social Security (bad) to the war in Iraq (good). And do not condemn him, people, unless you imagine that if all the cable television reporters in the world were in your driveway, begging for your opinion on the state of the nation, you would say: “No, I leave that to the experts.”

You should, however, understand that once the interview is over, the reporters will go down the street and ask the sanitation man whether you’ve ever failed to recycle.

Joe the Plumber, it turns out, is actually named Samuel and is not a licensed plumber. He has a lien on his house for unpaid taxes. While his professional life is still a little hazy, there is not much evidence he’s ever going to become a small business owner. And he would be a beneficiary of the Barack Obama tax plan.

I think the lessons here are very clear:

1) Do not organize your presidential campaign around a guy you’ve only seen on YouTube.

2) Before you become a media sensation, examine your conscience and start separating the bottles and newspapers.

3) Never let George W. Bush mention you at a Chamber of Commerce speech.

* By GAIL COLLINS (NYT; October 18, 2008)

WASHINGTON — Former Secretary of State Colin L. Powell’s endorsement of Senator Barack Obama on Sunday represented his own transformative moment in a lifelong journey through war and politics.

It was not only an embrace of a presidential candidate from the other party, but also an effort to reshape a legacy that he himself considers tainted by his service under President Bush.

The endorsement, which came after months of conversations between Mr. Powell and Mr. Obama on a wide range of foreign and domestic policy issues, made clear Mr. Powell’s dismay at the Republican Party. He said he felt that the party had become too conservative under Mr. Bush, and that Senator John McCain’s campaign was not good for the country or its reputation around the world.

In that sense, his remarks further stirred the brewing debate about the nature of the post-Bush Republican Party.

“I have some concerns about the direction that the party has taken in recent years,” Mr. Powell told Tom Brokaw on “Meet the Press” on NBC as he made his endorsement of Mr. Obama. “It has moved more to the right than I would like to see it.” In recent weeks, Mr. Powell added, “the approach of the Republican Party and Mr. McCain has become narrower and narrower.”

It will be up to the next president, Mr. Powell said, “to fix the reputation that we’ve left with the rest of the world.”

People in both parties debated the impact of Mr. Powell’s endorsement, but on a Sunday morning in Washington the conclusion was that the action revealed less about Mr. Obama and Mr. McCain than about Mr. Powell, who 13 years ago was himself thinking of trying to become president.

In saying he would vote for Mr. Obama over Mr. McCain, Mr. Powell aligned himself squarely against Mr. Bush, who has been counting on a Republican victory next month to see through his strategy of avoiding a rigid timetable for withdrawals in Iraq — the issue, more than any other, on which the president’s legacy will rest.

Mr. Powell’s role in selling the invasion, despite his frequent clashes with other members of Mr. Bush’s team about how to proceed, has also come to dominate his own place in history. In siding with Mr. Obama, who from the start was an opponent of Iraq, he seemed to be making a clear break with the more hawkish elements of the Republican Party and signaling an effort to reshape how he is judged on the war.

One major factor in Mr. Powell’s decision appeared to be Mr. Obama’s careful wooing of the former secretary of state. In recent months the two have had one face-to-face meeting and some half-dozen telephone conversations, all initiated by Mr. Obama.

A friend of Mr. Powell’s said Mr. Obama sought the advice of Mr. Powell before Mr. Obama’s trip in July to Europe and the Middle East, and has also had long discussions with him on Iraq, Iran and North Korea as well as education and health care policy. The two last spoke some two weeks ago about the worldwide economic crisis, the friend said.

In contrast, Mr. McCain met with Mr. Powell, a friend of two decades, in June, and has not spoken to him since, the friend said.

Like Mr. Obama, Mr. Powell has long represented to millions of people around the world the possibilities of the American dream. The son of immigrants from Jamaica who was born in Harlem and reared in the South Bronx, Mr. Powell earned a degree from the City University of New York and then embarked on a rapid rise through the military, perhaps the most integrated institution in American life.

He became a military assistant to Secretary of Defense Caspar W. Weinberger in 1983, national security adviser under President Ronald Reagan in 1986 and chairman of the Joint Chiefs of Staff under the first President Bush during the 1991 Gulf War.

By 1995 he was flirting with the idea of running for president, and a friend said he briefly considered leaving the Republican Party to run as an independent. But his wife, Alma, said she would worry about his safety. Mr. Powell finally announced he would not run in 1996 because it was “a calling that I do not yet hear.”

Mr. Powell had a tumultuous tenure as President Bush’s first-term secretary of state, when he was frequently undercut by Vice President Dick Cheney and Donald H. Rumsfeld, the secretary of defense, in the period before the Iraq war. Although Mr. Powell had major misgivings about the war and what he considered the inadequate number of troops, he not only agreed to the invasion but also made the administration’s case for war in a presentation to the United Nations Security Council in February 2003.

Much of what he said is now known to be based on false information provided by the Central Intelligence Agency. Mr. Powell has been widely criticized for the appearance, including by Mr. Obama, a fact that Mr. Brokaw brought up on Sunday.

Mr. Brokaw read aloud a passage from Bob Woodward’s most recent book, “The War Within,” that quoted former Secretary of State James A. Baker III, a Republican, as saying that Mr. Powell was “the one guy who could have perhaps prevented” the war from happening.

Mr. Powell, who friends say remains angry about his time in the Bush administration, briskly responded that “it was not a correct assessment by anybody that my statements or my leaving the administration would have stopped it.”

The fissures within the Bush administration and the fractious Republican foreign policy establishment have in the meantime played out in the 2008 presidential campaign. In many ways, Mr. Powell’s endorsement reflected the rift between the so-called pragmatists, many of whom have come to view the Iraq war or its execution as a mistake, and the neoconservatives, a competing camp whose thinking played a pivotal role in building the case for war.

Mr. Powell, who is of the pragmatist camp and has been critical of the Bush administration’s conduct of the war, was said by friends in recent months to be disturbed by some of the neoconservatives who have surrounded Mr. McCain as foreign policy advisers in his presidential campaign.

The McCain campaign’s top foreign policy aide is Randy Scheunemann, who was a foreign policy adviser to former Senators Trent Lott and Bob Dole and who has longtime ties to neoconservatives. In 2002, Mr. Scheunemann was a founder of the hawkish Committee for the Liberation of Iraq and was an enthusiastic supporter of Ahmad Chalabi, the Iraqi exile and Pentagon favorite, who was viewed with suspicion and distaste at the State Department during Mr. Powell’s tenure.

Although Mr. Powell had some warm words for Mr. McCain on Sunday — he said that he admired him and that he would make a good president — friends say that Mr. Powell has felt cut out by Mr. McCain’s campaign foreign policy circle and concerned that Mr. McCain speaks too off the cuff about national security and has not taken the time to do the deeper homework required of a presidential candidate.

In addition, a friend said that when Mr. Powell met with Mr. McCain at Mr. McCain’s Arlington, Va., apartment in June, Mr. McCain spoke almost exclusively to him about the war in Iraq and the increase in troop strength, or surge, that Mr. McCain had strongly supported. Mr. Obama, who met with Mr. Powell at Mr. Powell’s Alexandria, Va., office, discussed a broader range of issues and actively solicited Mr. Powell’s expertise, the friend said.

Mr. Powell’s endorsement was such a powerful break from his past that Mr. Brokaw asked if he anticipated a role in an Obama administration, perhaps as an ambassador at large to Africa or in some role in Middle East peace negotiations.

Mr. Powell, in the practiced language of an old Washington hand, replied, “I served 40 years in government, and I’m not looking forward to a position or an assignment. Of course, I have always said if a president asks you to do something, you have to consider it.”

* By ELISABETH BUMILLER (NYT, October 20, 2008)

Most people are worried about the health of the economy. But does the economy also affect your health?

It does, but not always in ways you might expect. The data on how an economic downturn influences an individual’s health are surprisingly mixed.

It’s clear that long-term economic gains lead to improvements in a population’s overall health, in developing and industrialized societies alike.

But whether the current economic slump will take a toll on your own health depends, in part, on your health habits when times are good. And economic studies suggest that people tend not to take care of themselves in boom times — drinking too much (especially before driving), dining on fat-laden restaurant meals and skipping exercise and doctors’ appointments because of work-related time commitments.

“The value of time is higher during good economic times,” said Grant Miller, an assistant professor of medicine at Stanford. “So people work more and do less of the things that are good for them, like cooking at home and exercising; and people experience more stress due to the rigors of hard work during booms.”

Similar patterns have been seen in some developing nations. Dr. Miller, who is studying the effects of fluctuating coffee prices on health in Colombia, says that even though falling prices are bad for the economy, they appear to improve health and mortality rates. When prices are low, laborers have more time to care for their children.

“When coffee prices suddenly rise, people work harder on their coffee plots and spend less time doing things around the home, including things that are good for their children,” he said. “Because the things that matter most for infant and child health in rural Colombia aren’t expensive, but require a substantial amount of time — such as breast-feeding, bringing clean water from far away, taking your child to a distant health clinic for free vaccinations — infant and child mortality rates rise.”

In this country, a similar effect appeared in the Dust Bowl during the Great Depression, according to a 2007 paper by Dr. Miller and colleagues in The Proceedings of the National Academy of Sciences.

The data seem to contradict research in the 1970s suggesting that in hard times there are more deaths from heart disease, cirrhosis, suicide and homicide, as well as more admissions to mental hospitals. But those findings have not been replicated, and several economists have pointed out flaws in the research.

In May 2000, the Quarterly Journal of Economics published a surprising paper called “Are Recessions Good for Your Health?” by Christopher J. Ruhm, professor of economics at the University of North Carolina, Greensboro, based on an analysis measuring death rates and health behavior against economic shifts and jobless rates from 1972 to 1991.

Dr. Ruhm found that death rates declined sharply in the 1974 and 1982 recessions, and increased in the economic recovery of the 1980s. An increase of one percentage point in state unemployment rates correlated with a 0.5 percentage point decline in the death rate — or about 5 fewer deaths per 100,000 people. Over all, the death rate fell by more than 8 percent in the 20-year period of mostly economic decline, led by drops in heart disease and car crashes.

The economic downturn did appear to take a toll on factors having less to do with prevention and more to do with mental well-being and access to health care. For instance, cancer deaths rose 23 percent, and deaths from flu and pneumonia increased slightly. Suicides rose 2 percent, homicides 12 percent.

The issue that may matter most in an economic crisis is not related to jobs or income, but whether the slump widens the gap between rich and poor, and whether there is an adequate health safety net available to those who have lost their jobs and insurance.

During a decade of economic recession in Japan that began in the 1990s, people who were unemployed were twice as likely to be in poor health than those with secure jobs. During Peru’s severe economic crisis in the 1980s, infant mortality jumped 2.5 percentage points — about 17,000 more children who died as public health spending and social programs collapsed.

In August, researchers from the Free University of Amsterdam looked at health studies of twins in Denmark. They found that individuals born in a recession were at higher risk for heart problems later in life and lived, on average, 15 months less than those born under better conditions.

Gerard J. van den Berg, an economics professor who was a co-author of the study, said babies in poor households suffered the most in a recession, because their families lacked access to good health care. Poor economic conditions can also cause stress that may interfere with parent bonding and childhood development, he said.

He noted that other studies had found that recessions can benefit babies by giving their parents more time at home.

“This scenario may be relevant for well-to-do families where one of the parents loses a job and the other still brings in enough money,” he said. “But in a crisis where the family may have to incur huge housing-cost losses and the household income is insufficient for adequate nutrition and health care, the adverse effects of being born in a recession seem much more relevant.”

In this country, there are already signs of the economy’s effect on health. In May, the market research firm Information Resources reported that 53 percent of consumers said they were cooking from scratch more than they did just six months before — in part, no doubt, because of the rising cost of prepared foods.

At the same time, health insurance costs are rising. With premiums and co-payments, the average employee with insurance pays nearly one-third of medical costs — about twice as much as four years ago, according to Paul H. Keckley, executive director of the Deloitte Center for Health Solutions.

In the United States, which unlike other industrialized nations lacks a national health plan, the looming recession may take a greater toll. About 46 million Americans lack health insurance, Dr. Keckley says, and even among the 179 million who have it, an estimated 1 in 7 would be bankrupted by a single health crisis.

The economic downturn “is not good news for the health care industry,” he said. “There may be slivers of positive, but I view this as sobering.”

* By TARA PARKER-POPE (NYT, Oct. 7, 2008)

I did what John McCain has suggested he might not be prepared to do. I sat down with the Spanish prime minister, José Luis Rodríguez Zapatero, and talked to him for an hour.

I’m pleased to report that I and several New York Times colleagues survived. National security between the United States and our NATO ally was not, to my knowledge, compromised.

Zapatero’s a wry, polished, suave politician — a socialist with that European socialist habit of being amused by almost everything and committed to almost nothing. It’s fair to say that his view of the United States is cool, colored by a relationship with President Bush that started badly and never got better.

One of the first things Zapatero, 48, did upon his election in 2004 was announce the withdrawal of Spanish troops from Iraq. His conversation with Bush about this decision was, he said, “unforgettable.”

When he told Bush that Spanish forces in Iraq were history, the president replied: “I’m very disappointed in you.”

Zapatero deadpanned: “I understood this really well because he had no reason to be enthusiastic about me.”

I told you the Spanish leader was a wry guy.

Undeterred, Zapatero tried to explain that he was the leader of a democratic country, and his campaign promise had been getting the troops out. Bush, as the leader of another democratic country, should understand this.

“But Bush was very cold. He said, ‘O.K., all right, goodbye.’ ”

Hasta la vista, baby.

That was about it for Spanish-American relations in the last half-decade. Yep, you’re with us or against us.

Zapatero said that, nonetheless, he had a “certain consideration” for Bush, because “I recognize that my electoral success has been influenced by his governing style.” In other words, Bush was so unpopular in Spain that he helped Zapatero win in 2004 and 2008.


I relate all this because the unhappy saga of U.S.-Spanish relations reflects bungled American foreign policy. It’s one thing to have a disagreement between friends, another to have discord fester through spite. Bush’s vengeful streak is worthy of the schoolyard.

The United States is weakened when it’s feuding with its allies. The so-called coalition in Iraq has emptied that word of meaning.

Barack Obama gets this. A weakened United States, militarily stretched and economically snared, cannot be cavalier about its alliances. McCain, to judge by his refusal to say he would meet Zapatero, is still in muscle-flexing mode. That’s the last thing we need.

My second reason for relating this is that Zapatero is the kind of guy who reminds me of the need for smart American leadership. In fact, he reminds me of why, raised in Europe, I chose to become an American.

Despite Spain’s dictatorial past under Franco, Zapatero seemed to me mealy-mouthed about totalitarianism and tyranny. Moral relativism oozed from his lawyerly repartee. He illustrates why Orwell felt compelled to say: it’s not enough to be antifascist; you must also be in principle anti-totalitarian. The European left has often had a hard time with this notion.

Asked about Russia and Georgia, Zapatero came back with rhetorical questions. “What was the purpose of the creation of NATO?” he asked. “To defend ourselves against Russia or Communism? The expansion of NATO, and NATO today, what is it defending?” As for the Georgians, Zapatero mused, “were they enslaved by Russia or Communism?”

Who cares?

The Georgians were enslaved by a Soviet totalitarian system. So were the Poles, Czechs, Ukrainians, Estonians and countless others. That nightmare is vivid for them, as is America’s fight for their freedom. They do not want to risk falling back. They want the “normality” they feel NATO — and the European Union — guarantees them. It’s a psychological thing. Spain should get that.

But Zapatero’s more concerned about “certain gestures that may provoke Russian nationalism.” He seems to buy into Vladimir Putin’s nonsense about the “encirclement” of Russia, which spans from Eastern Europe to Northern Asia, by the likes of Lilliputian Georgia, if it were allowed into NATO.

“To think that Georgia will be more secure if it’s in NATO, that won’t be the case,” he said. “All we’ll achieve is a greater divide between Moscow and the rest of the world.”

Wrong. NATO locks in liberal democracy. It brings stability and prosperity, not threats, to Russia’s environs.

Zapatero is also wrong about the United States. He said it was a “diverse, creative, dynamic” country, but “it does not need to have a mission.”

But America was born as an idea and cannot be itself unless it carries that idea forward. That’s the tragedy of the Bush years: the undermining of American ideals. The United States is inseparable from the hope given Emma Lazarus’s “huddled masses yearning to be free;” it is bound to the struggle to ensure that, as Lincoln put it, “government of the people, by the people, for the people, shall not perish from the earth.”

Obama, if he wins, should get Zapatero to the White House pronto. These are ideas worth discussing between friends.

* Text By ROGER COHEN (NYT, 8 Oct.2008)

“BEWARE of geeks bearing formulas.” So saith Warren Buffett, the Wizard of Omaha. Words to bear in mind as we bail out banks and buy up mortgages and tweak interest rates and nothing, nothing seems to make any difference on Wall Street or Main Street. Years ago, Mr. Buffett called derivatives “weapons of financial mass destruction” — an apt metaphor considering that the Manhattan Project’s math and physics geeks bearing formulas brought us the original weapon of mass destruction, at Trinity in New Mexico on July 16, 1945.

In a 1981 documentary called “The Day After Trinity,” Freeman Dyson, a reigning gray eminence of math and theoretical physics, as well as an ardent proponent of nuclear disarmament, described the seductive power that brought us the ability to create atomic energy out of nothing.

“I have felt it myself,” he warned. “The glitter of nuclear weapons. It is irresistible if you come to them as a scientist. To feel it’s there in your hands, to release this energy that fuels the stars, to let it do your bidding. To perform these miracles, to lift a million tons of rock into the sky. It is something that gives people an illusion of illimitable power, and it is, in some ways, responsible for all our troubles — this, what you might call technical arrogance, that overcomes people when they see what they can do with their minds.”

The Wall Street geeks, the quantitative analysts (“quants”) and masters of “algo trading” probably felt the same irresistible lure of “illimitable power” when they discovered “evolutionary algorithms” that allowed them to create vast empires of wealth by deriving the dependence structures of portfolio credit derivatives.

What does that mean? You’ll never know. Over and over again, financial experts and wonkish talking heads endeavor to explain these mysterious, “toxic” financial instruments to us lay folk. Over and over, they ignobly fail, because we all know that no one understands credit default obligations and derivatives, except perhaps Mr. Buffett and the computers who created them.

Somehow the genius quants — the best and brightest geeks Wall Street firms could buy — fed $1 trillion in subprime mortgage debt into their supercomputers, added some derivatives, massaged the arrangements with computer algorithms and — poof! — created $62 trillion in imaginary wealth. It’s not much of a stretch to imagine that all of that imaginary wealth is locked up somewhere inside the computers, and that we humans, led by the silverback males of the financial world, Ben Bernanke and Henry Paulson, are frantically beseeching the monolith for answers. Or maybe we are lost in space, with Dave the astronaut pleading, “Open the bank vault doors, Hal.”

As the current financial crisis spreads (like a computer virus) on the earth’s nervous system (the Internet), it’s worth asking if we have somehow managed to colossally outsmart ourselves using computers. After all, the Wall Street titans loved swaps and derivatives because they were totally unregulated by humans. That left nobody but the machines in charge.

How fitting then, that almost 30 years after Freeman Dyson described the almost unspeakable urges of the nuclear geeks creating illimitable energy out of equations, his son, George Dyson, has written an essay (published at Edge.org) warning about a different strain of technical arrogance that has brought the entire planet to the brink of financial destruction. George Dyson is an historian of technology and the author of “Darwin Among the Machines,” a book that warned us a decade ago that it was only a matter of time before technology out-evolves us and takes over.

His new essay — “Economic Dis-Equilibrium: Can You Have Your House and Spend It Too?” — begins with a history of “stock,” originally a stick of hazel, willow or alder wood, inscribed with notches indicating monetary amounts and dates. When funds were transferred, the stick was split into identical halves — with one side going to the depositor and the other to the party safeguarding the money — and represented proof positive that gold had been deposited somewhere to back it up. That was good enough for 600 years, until we decided that we needed more speed and efficiency.

Making money, it seems, is all about the velocity of moving it around, so that it can exist in Hong Kong one moment and Wall Street a split second later. “The unlimited replication of information is generally a public good,” George Dyson writes. “The problem starts, as the current crisis demonstrates, when unregulated replication is applied to money itself. Highly complex computer-generated financial instruments (known as derivatives) are being produced, not from natural factors of production or other goods, but purely from other financial instruments.”

It was easy enough for us humans to understand a stick or a dollar bill when it was backed by something tangible somewhere, but only computers can understand and derive a correlation structure from observed collateralized debt obligation tranche spreads. Which leads us to the next question: Just how much of the world’s financial stability now lies in the “hands” of computerized trading algorithms?

Here’s a frightening party trick that I learned from the futurist Ray Kurzweil. Read this excerpt and then I’ll tell you who wrote it:

But we are suggesting neither that the human race would voluntarily turn power over to the machines nor that the machines would willfully seize power. What we do suggest is that the human race might easily permit itself to drift into a position of such dependence on the machines that it would have no practical choice but to accept all of the machines’ decisions. … Eventually a stage may be reached at which the decisions necessary to keep the system running will be so complex that human beings will be incapable of making them intelligently. At that stage the machines will be in effective control. People won’t be able to just turn the machines off, because they will be so dependent on them that turning them off would amount to suicide.

Brace yourself. It comes from the Unabomber’s manifesto.

Yes, Theodore Kaczinski was a homicidal psychopath and a paranoid kook, but he was also a bloodhound when it came to scenting all of the horrors technology holds in store for us. Hence his mission to kill technologists before machines commenced what he believed would be their inevitable reign of terror.

We are living, we have long been told, in the Information Age. Yet now we are faced with the sickening suspicion that technology has run ahead of us. Man is a fire-stealing animal, and we can’t help building machines and machine intelligences, even if, from time to time, we use them not only to outsmart ourselves but to bring us right up to the doorstep of Doom.

We are still fearful, superstitious and all-too-human creatures. At times, we forget the magnitude of the havoc we can wreak by off-loading our minds onto super-intelligent machines, that is, until they run away from us, like mad sorcerers’ apprentices, and drag us up to the precipice for a look down into the abyss.

As the financial experts all over the world use machines to unwind Gordian knots of financial arrangements so complex that only machines can make — “derive” — and trade them, we have to wonder: Are we living in a bad sci-fi movie? Is the Matrix made of credit default swaps?

When Treasury Secretary Paulson (looking very much like a frightened primate) came to Congress seeking an emergency loan, Senator Jon Tester of Montana, a Democrat still living on his family homestead, asked him: “I’m a dirt farmer. Why do we have one week to determine that $700 billion has to be appropriated or this country’s financial system goes down the pipes?”

“Well, sir,” Mr. Paulson could well have responded, “the computers have demanded it.”

* By RICHARD DOOLING (NYT, October 12, 2008)
Richard Dooling is the author of “Rapture for the Geeks: When A.I. Outsmarts I.Q.”

Choi Jin-sil, a movie star, was the closest thing South Korea had to a national sweetheart.

So when Ms. Choi, 39, was found dead in her apartment on Oct. 2 in what the police concluded was a suicide, her grief-stricken homeland sought an answer to why the actress had chosen to end her life.

The police, the media and members of Parliament immediately pointed fingers at the Internet. Malicious online rumors led to Ms. Choi’s suicide, the police said, after studying memos found at her home and interviewing friends and relatives.

Those online accusations claimed that Ms. Choi, who once won a government medal for her savings habits, was a loan shark. They asserted that a fellow actor, Ahn Jae-hwan, was driven to suicide because Ms. Choi had relentlessly pressed him to repay a $2 million debt.

Public outrage over Ms. Choi’s suicide gave ammunition to the government of President Lee Myung-bak, which has long sought to regulate cyberspace, a major avenue for antigovernment protests in South Korea.

Earlier this year, the Lee government was reeling after weeks of protests against beef imports from the United States. Vicious antigovernment postings and online rumors on the dangers of lifting the ban on American beef fueled the political upheaval, which forced the entire cabinet to resign.

In a monthlong crackdown on online defamation, 900 agents from the government’s Cyber Terror Response Center are scouring blogs and online discussion boards to identify and arrest those who “habitually post slander and instigate cyber bullying.”

Hong Joon-pyo, floor leader of the governing Grand National Party, commented, “Internet space in our country has become the wall of a public toilet.”

In the National Assembly, Ms. Choi’s suicide set the country’s rival parties on a collision course over how to regulate the Web. The governing party is promoting a law to punish online insults; the opposition parties accuse the government of trying to “rule cyberspace with martial law.”

The opposition says that cyberspace violence is already dealt with under existing laws against slander and public insults. But the government says that a tougher, separate law is necessary to punish online abuse, which inflicts quicker and wider damage on victims.

To battle online harassment, the government’s Communications Commission last year ordered Web portals with more than 300,000 visitors a day to require its users to submit their names and matching Social Security numbers before posting comments.

The police reported 10,028 cases of online libel last year, up from 3,667 reported in 2004.

Harassment in cyberspace has been blamed for a string of highly publicized suicides. Ms. Choi made headlines when she married a baseball player, Cho Sung Min, in 2000. But tabloids and Web bloggers were relentless in criticizing her when the marriage soured and she fought for custody of her two children.

TV producers and commercial sponsors dropped her. The general sentiment was that her career was over.

But in 2005, she made a comeback with a hugely popular soap opera called “My Rosy Life.” In it, she dropped her cute-girl image and played a jilted wife who throws a kick at her errant husband, but reconciles with him when she learns she has terminal cancer.

This year, she broke another taboo by successfully petitioning a court to change the surname of her two children to her own.

But in an interview with MBC-TV in July, which was broadcast after her death, she said she “dreaded” the Internet, where posters had insulted her for being a single, divorced mother. The police said she had been taking antidepressants since her divorce.

In South Korea, volunteer counselors troll the Internet to discourage people from using the Web to trade tips on how to commit suicide and, in some cases, how to form suicide pacts.

“We have seen a sudden rise in copycat suicides following a celebrity death,” said Jeon Jun-hee, an official at the Seoul Metropolitan Mental Health Center, which runs a suicide prevention hot line. Mr. Jeon said the hot line had received 60 calls a day, or twice the usual number, since Ms. Choi’s suicide.

* By CHOE SANG-HUN (NYT,Seoul,October 13, 2008)


Next Page »