Saturday, December 20th, 2008


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Making videos for YouTube — for three years a pastime for millions of Web surfers — is now a way to make a living.
One year after YouTube, the online video powerhouse, invited members to become “partners” and added advertising to their videos, the most successful users are earning six-figure incomes from the Web site. For some, like Michael Buckley, the self-taught host of a celebrity chatter show, filming funny videos is now a full-time job.

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Mr. Buckley quit his day job in September after his online profits had greatly surpassed his salary as an administrative assistant for a music promotion company. His thrice-a-week online show “is silly,” he said, but it has helped him escape his credit-card debt.

Mr. Buckley, 33, was the part-time host of a weekly show on a Connecticut public access channel in the summer of 2006 when his cousin started posting snippets of the show on YouTube. The comical rants about celebrities attracted online viewers, and before long Mr. Buckley was tailoring his segments, called “What the Buck?” for the Web. Mr. Buckley knew that the show was “only going to go so far on public access.”
“But on YouTube,” he said, “I’ve had 100 million views. It’s crazy.”
All he needed was a $2,000 Canon camera, a $6 piece of fabric for a backdrop and a pair of work lights from Home Depot. Mr. Buckley is an example of the Internet’s democratizing effect on publishing. Sites like YouTube allow anyone with a high-speed connection to find a fan following, simply by posting material and promoting it online.
Granted, building an audience online takes time. “I was spending 40 hours a week on YouTube for over a year before I made a dime,” Mr. Buckley said — but, at least in some cases, it is paying off.

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Mr. Buckley is one of the original members of YouTube’s partner program, which now includes thousands of participants, from basement video makers to big media companies. YouTube, a subsidiary of Google, places advertisements within and around the partner videos and splits the revenues with the creators. “We wanted to turn these hobbies into businesses,” said Hunter Walk, a director of product management for the site, who called popular users like Mr. Buckley “unintentional media companies.”
YouTube declined to comment on how much money partners earned on average, partly because advertiser demand varies for different kinds of videos. But a spokesman, Aaron Zamost, said “hundreds of YouTube partners are making thousands of dollars a month.” At least a few are making a full-time living: Mr. Buckley said he was earning over $100,000 from YouTube advertisements.
The program is a partial solution to a nagging problem for YouTube. The site records 10 times the video views as any other video-sharing Web site in the United States, yet it has proven to be hard for Google to profit from, because a vast majority of the videos are posted by anonymous users who may or may not own the copyrights to the content they upload. While YouTube has halted much of the illegal video sharing on the site, it remains wary of placing advertisements against content without explicit permission from the owners. As a result, only about 3 percent of the videos on the site are supported by advertising.
But the company has high hopes for the partner program. Executives liken it to Google AdSense, the technology that revolutionized advertising and made it possible for publishers to place text advertisements next to their content.
“Some of these people are making videos in their spare time,” said Chad Hurley, a co-founder of YouTube. “We felt that if we were able to provide them a true revenue source, they’d be able to hone their skills and create better content.”
In a time of media industry layoffs, the revenue source — and the prospect of a one-person media company — may be especially appealing to users. But video producers like Lisa Donovan, who posts sketch comedy onto YouTube and attracted attention in the fall for parodies of Gov. Sarah Palin of Alaska, do not make it sound easy. “For new users, it’s a lot of work,” Ms. Donovan said. “Everybody’s fighting to be seen online; you have to strategize and market yourself.”
Mr. Buckley, who majored in psychology in college and lives with his husband and four dogs in Connecticut, films his show from home. Each episode of “What the Buck?” is viewed an average of 200,000 times, and the more popular ones have reached up to three million people. He said that writing and recording five minutes’ worth of jokes about Britney Spears’s comeback tour and Miley Cyrus’s dancing abilities is not as easy as it looks. “I’ve really worked hard on honing my presentation and writing skills,” he said.
As his traffic and revenues grew, Mr. Buckley had “so many opportunities online that I couldn’t work anymore.” He quit his job at Live Nation, the music promoter, to focus full-time on the Web show.
There is a symmetry to Mr. Buckley’s story. Some so-called Internet celebrities view YouTube as a stepping stone to television. But Mr. Buckley started on TV and found fame on YouTube. Three months ago, he signed a development deal with HBO, an opportunity that many media aspirants dream about. Still, “I feel YouTube is my home,” he said. “I think the biggest mistake that any of us Internet personalities can make is establish ourselves on the Internet and then abandon it.”
Cory Williams, 27, a YouTube producer in California, agrees. Mr. Williams, known as smpfilms on YouTube, has been dreaming up online videos since 2005, and he said his big break came in September 2007 with a music video parody called “The Mean Kitty Song.” The video, which introduces Mr. Williams’ evil feline companion, has been viewed more than 15 million times. On a recent day, the video included an advertisement from Coca-Cola.
Mr. Williams, who counts about 180,000 subscribers to his videos, said he was earning $17,000 to $20,000 a month via YouTube. Half of the profits come from YouTube’s advertisements, and the other half come from sponsorships and product placements within his videos, a model that he has borrowed from traditional media.
On YouTube, it is evident that established media entities and the up-and-coming users are learning from each other. The amateur users are creating narrative arcs and once-a-week videos, enticing viewers to visit regularly. Some, like Mr. Williams, are also adding product-placement spots to their videos. Meanwhile, brand-name companies are embedding their videos on other sites, taking cues from users about online promotion. Mr. Walk calls it a subtle “cross-pollination” of ideas.
Some of the partners are major media companies; the ones with the most video views include Universal Music Group, Sony BMG, CBS and Warner Brothers. But individual users are now able to compete alongside them. Mr. Buckley, who did not even have high-speed Internet access two years ago, said his YouTube hobby had changed his financial life.
“I didn’t start it to make money,” he said, “but what a lovely surprise.”

* By BRIAN STELTER, December 11, 2008

We have seen a lot of political hubris, scratch-my-back politics and sheer stupidity over the years. But nothing could prepare us for the charges brought Tuesday against Gov. Rod R. Blagojevich of Illinois.

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The governor’s administration was already under a well-publicized investigation into whether it has been selling appointments to state boards and commissions and awarding contracts and jobs in exchange for financial benefits and campaign contributions.
So what does the F.B.I. claim Mr. Blagojevich was up to while the feds were watching him? According to an F.B.I. affidavit, in recent weeks the governor plotted to sell off the United States Senate seat just vacated by President-elect Barack Obama to the highest bidder.
In exchange for his pick, authorities said Mr. Blagojevich was looking for a substantial salary for himself at a foundation or an organization affiliated with labor unions, a highly paid position for his wife on corporate boards, a cabinet post or ambassadorship for himself or promises of future campaign funds.
The affidavit also claims that the governor weighed the option of appointing himself should no financially lucrative offer materialize. All this was recorded on court-authorized wiretaps that any target of an investigation would have to assume were in place.

The United States attorney, Patrick Fitzgerald, was clear that the complaint makes no allegations against Mr. Obama. Indeed, it quotes Mr. Blagojevich cursing the president-elect and his team “because they’re not willing to give me anything except appreciation.”
Mr. Blagojevich also appears to be uncommonly sensitive to criticism for someone so apparently comfortable with bare-knuckle, and worse, politics. He was recorded telling aides to inform the Tribune Company, which filed for bankruptcy protection this week, that it would get no state assistance in selling off Wrigley Field unless it fired members of The Chicago Tribune’s editorial board who had called for his impeachment.
Mr. Blagojevich, a Democrat, was elected in 2002 after pledging to restore honor to the Illinois governor’s office. His predecessor, Republican George Ryan, was convicted on federal fraud and racketeering charges and is now in prison. Mr. Blagojevich has urged President Bush to reduce Mr. Ryan’s sentence to time served as an act of compassion. It makes one wonder if the governor sensed that, somewhere down the line, he might need some of that compassion himself.
Mr. Blagojevich must be deemed innocent until proved guilty. But surely the recorded conversations, full of expletive-laced schemes, render him unfit to appoint anyone, least of all himself, to the vacant Senate seat.
If he refuses to step aside, the Illinois Legislature should move to bypass him by removing his appointment power, impeaching him or scheduling a special election. Certainly no self-respecting candidate should accept an appointment by Mr. Blagojevich.

* EDITORIAL NYT, December 10, 2008

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Michael became hooked on headphones in his early teens. He walked the streets of Brooklyn day after day with his favorite music blasting directly into his ears. By his early 20s, the sensory hair cells in his inner ears had been permanently damaged and Michael had lost much of his upper-range hearing.

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The Children’s Hearing Institute reports that hearing loss among children and young adults is rising in the United States, and that one-third of the damage is caused by noise.
According to the American Academy of Audiology, about one child in eight has noise-induced hearing loss. That means some five million children have an entirely preventable disability that will stay with them for life.
The academy has begun a “turn it to the left” (the volume dial, that is) awareness campaign in hopes of protecting current and future generations of youngsters from unwittingly damaging their hearing. Often, the problem is not detected until children develop persistent ringing in the ears or begin to have learning or behavior problems in school because of trouble understanding speech.
Although newborns are now routinely screened for hearing loss, there is no federal mandate for screening the hearing of school-age children. What testing is done often fails to check hearing at high enough pitches, a federal research team pointed out in the journal Pediatrics.
Surrounded by Noise
We live in a noisy world. Young and old alike are beset by sounds over which we may have little or no control: power mowers, leaf blowers, snow blowers, car and house alarms, sirens, motorcycles, Jet Skis, loudspeakers, even movie previews.
We attend rock concerts, weddings, parties and sports events at which the music is so loud you can hardly hear the person sitting next to you. At home, televisions, stereos and computer games are often turned up so loud that listeners cannot hear a doorbell or a telephone.
Many “modern” restaurants have opted for noise enhancement instead of abatement. And try having a conversation in a school cafeteria at lunchtime.
Any time you need to shout to be heard by someone near you, your hearing is most likely to be in a decibel danger zone.
As if environmental noise were not enough, now we besiege children with noisy toys and personal listening devices that can permanently damage their hearing. Toys that meet the safety standards of the American Society for Testing and Materials can produce sound up to 138 decibels, as loud as a jet taking off. Yet workplace rules require hearing protection for those exposed to noise above 85 decibels.
A series of studies conducted in 2002 among 116 infants by researchers at Johns Hopkins indicated that even moderate background noise can interfere with how they learn language. The effect on babies’ hearing in a noisy house is similar to what an older person with age-related hearing loss may encounter at a crowded cocktail party.
A landmark study in 1975 found that children in classrooms on the noisy side of a school had lower reading scores than those whose classes were on the quiet side.
Noise-induced hearing loss can come about in two ways: from a brief exposure to a very loud noise or from consistent exposure to moderate-level noise. Thus, there is much concern about the lasting effects of MP3 players that are turned up loud enough to block out surrounding sound, like street noise. An MP3 player at maximum volume produces about 105 decibels — 100 times as intense as 85 decibels, where hearing damage begins. (For every 10 decibels, sound intensity increases tenfold.)
The National Institute for Occupational Safety and Health says 110 decibels can produce hearing damage after just 1 minute, 29 seconds of exposure. The League for the Hard of Hearing cautions that “noise levels above 85 decibels will harm hearing over time” and that levels above 140 decibels — the pain threshold — can damage hearing after just one exposure.
New bone-conduction headphones that hook over the ears and pass sound through the skull to the inner ear may not solve the problem. While they allow listeners to hear an oncoming car or a person speaking, users may turn up the volume to overcome ambient noise, damaging the 15,000 tiny hair cells in the inner ear that transfer sound energy to the brain.
Once damaged, hair cells can neither be repaired nor replaced. The damage makes it difficult to hear high-pitched sounds, including certain speech sounds and the voices of women and children. Tinnitus, a continuous ringing, roaring or clicking in the ears, can also result.
Protecting Young Ears
Before buying noisemaking toys, parents would do well to listen to how loud they are. If the item comes with a volume control, monitor its use to make sure it is kept near the lowest level. Consider returning gifts that make loud noises, or disable the noise-making function. Or restrict the use of noisy toys to outside play areas.
Children who play computer games and stereo equipment should be warned to keep the volume down. Time spent in video arcades, where the noise level can exceed 110 decibels, should be strictly limited. Most iPods have a control that allows parents to set a maximum volume.
Avoid taking children to loud action movies. If you do go and the sound seems deafening, ask the management to turn down the volume or insist on your money back. Children who play in bands and teenagers who use power tools, gardening equipment or guns should be made to wear hearing protection, available at pharmacies and hardware and sporting goods stores.
The League for the Hard of Hearing urges parents to encourage participation in quiet activities, like reading, watching family-oriented films, doing puzzles, making things with construction toys, playing educational computer games, drawing and painting, and visiting libraries and museums.

By JANE E. BRODY (NYT), December 9, 2008

Paul Nawrocki worked in toy industry for 36 years before February layoff. After unsuccessful initial job hunt, Nawrocki started wearing sign in New York

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Sign says: “Almost homeless. Looking for employment”

Nawrocki is running out of money; partially disabled wife on 15 medications

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NEW YORK (CNN) — Paul Nawrocki says he’s beyond the point where he cares about humiliation.

Paul Nawrocki, jobless since February, stands on New York corners with a sign announcing his job search.

1 of 3 That’s why he weekly takes a 90-minute train ride to New York, where he walks the streets wearing a sandwich board that advertises his plight: The former toy-industry executive needs a job.

“Almost homeless,” reads the sign. “Looking for employment. Very experienced operations and administration manager.”

Wearing a suit and tie under the sign, Nawrocki — who was in the toy industry 36 years before being laid off in February — stands on Manhattan corners for hours, hoping to pass resumes to interested passers-by.

“When you’re out of work and you face having nothing — I mean, having no income — pride doesn’t mean anything,” Nawrocki said. “You need to find work. I have to take care of my family.” iReport.com: Have you lost your job? Tell us your story.

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People look but don’t often stop. A woman in the jewelry business paused as Nawrocki stood with his sign outside Grand Central Station recently.

“I feel sorry for him. I wish I could help him,” she said. “I’ll pray for him. I’ll give him a prayer card.”

Nawrocki will take the prayers. His wife is partially disabled and on 15 medications, his daughter has student loans, and he’s running out of money, he says.

He tried more traditional approaches at looking for work, but nothing came through. His daughter eventually suggested handing out résumés on the street.

“We started talking, and she actually came up with the suggestion of putting on the sign board. I thought, ‘That’s not a bad idea.’ So, here I am,” he said. Watch Nawrocki explain why he’s using the sign »

Getting the right person’s attention is tough. Competing with him for the eyes of passers-by are charity groups and homeless people seeking donations.

But there was one hopeful moment as CNN was interviewing him. A man identifying himself as the head of a New York executive recruiting firm took one of Nawrocki’s résumés.

The man, Steve Warren, was asked whether employers are looking for people with Nawrocki’s expertise.

“It’s very difficult,” Warren said. “The operations pieces are all exported to overseas, and the problem that we face is, guys like Mr. Nawrocki have a problem finding work here.”

Warren was asked whether someone could find a job using Nawrocki’s walking-the-streets tactic.

“Well, I found his résumé here, so I’m going to try to find him [something],” he said.

Nawrocki has plenty of competition. The U.S. government said 533,000 jobs in the country were lost in November, and more than 1.9 million jobs have been lost in 2008.

But he retains hope that he and his sign will attract the right opportunity.

* CNN

Parents of newborn children sometimes notice an unusual phenomenon. Normal babies rarely close their eyes, except of course when sleeping.

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Considering the world of visual stimuli to which infants are suddenly exposed, and the range of primitive reflexes they typically display — forcibly sucking on objects put in their mouths, grasping things put in their hands, and throwing out their arms when startled — frequent blinking may seem natural for an infant. But studies show that they blink spontaneously at a rate far below that of adults.
One study, published in The Annals of Neurology, measured spontaneous blinking in 269 children and 179 adults. They found that infants blink on average less than twice a minute, a rate that steadily increases up to the age of 14 or 15. Adults, on average, blink about 10 to 15 times a minute.
One theory is that infants, whose ability to see is incomplete, work hard to soak in visual information.


Blinking serves primarily to coat the eyes with tears and remove any dirt or debris from the surface of the cornea. So another theory is that infants, perhaps because their eyes are better protected by smaller openings or because they sleep so much, may require less eye lubrication.

By ANAHAD O’CONNOR (NYT), December 9, 2008

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The headline numbers in the employment report for November were worse than dreadful — and they did not reflect the true extent of the weak and worsening outlook for American jobs.

Employers axed 533,000 jobs last month, the worst monthly loss since December 1974, bringing the number of lost jobs in the last year to 1.9 million. Worse, two-thirds of the losses were in the past three months, a sign of an intensifying downturn and of more job cuts ahead.
The unemployment rate for November — which rose to 6.7 percent, or 10.3 million people — also understates the weakness in the job market.
Job loss in a recession is related to the number of jobs created while the economy was expanding. Job creation during the Bush-era business cycle was the weakest since the end of World War II, so there are simply not as many workers to lay off as in past downturns. Instead, workers’ hours have been cut, sharply increasing the number of people working part time who want full-time jobs. Involuntary part-timers and out-of-work people who are discouraged from job hunting because their prospects are dim are measured in the underemployment rate, which at 12.5 percent is now the highest since the government started keeping track in 1994.
Joblessness and the threat of joblessness will depress already dismal consumer spending, which in turn will depress business investment, leading to higher unemployment. Rising unemployment will also fuel more foreclosures, which will further destabilize the financial system and reinforce economic weakness.
One in 10 borrowers in America were either delinquent or in foreclosure in the third quarter, according to the Mortgage Bankers Association, a stunning tally that does not even reflect the drag of rising unemployment in October and November. Unemployment among 25- to 34-year-olds, which includes most first-time homebuyers, is rising fast. Yet, rather than attack foreclosures directly, the Bush administration’s latest economic rescue proposal is to try to spur home buying by reducing mortgage rates. Good luck.


The political reality is that any serious response to unemployment and foreclosures will probably not occur until the Obama administration takes over. Members of Congress should be working now on another round of economic stimulus, consisting of bolstered unemployment compensation and food stamps and aid to states and localities, including money for creating jobs by rebuilding the nation’s infrastructure. An anti-foreclosure plan to rework troubled mortgages en masse is long overdue and should also be passed, either as part of the stimulus or as a stand-alone measure.


Beyond stimulus, President-elect Barack Obama will need a larger recovery plan that puts employment, rising wages and savings at the center of the agenda. The selection of a strong labor secretary, whose input will be as valued as that of Mr. Obama’s Wall-Street-oriented economic advisers, is crucial. The work force needs a champion who has the president’s full attention.

* EDITORIAL NYT, December 7, 2008

KABUL, Afghanistan — United States forces killed six Afghan police officers and one civilian on Wednesday during an assault on the hide-out of a suspected Taliban commander, the authorities said, in what an American military spokesman called a “tragic case of mistaken identity.”

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Thirteen Afghan officers were also wounded in the episode.
A statement issued jointly by the American and the Afghan military commands said a contingent of police officers fired on United States forces after the Americans had successfully overrun the hide-out, killing the suspected Taliban commander and detaining another man.

The statement said the Americans had already entered the hide-out, a building in Qalat, the capital of the southern province of Zabul, when they came under attack by small-arms fire and rocket-propelled grenades from “a compound nearby.”
“Multiple attempts to deter the engagement were unsuccessful,” the statement said.
The Americans, concerned about women and children hiding in the building they had taken, returned fire using small arms and aircraft, the statement said.
After the firefight, the Americans discovered they had been shooting at Afghan police officers, the statement said.
But the deputy police chief of Qalat said the police officers had been in a police station when they came under American fire, which destroyed the station.
The official, Jailoni Khan Farahi, also said that the volley of bullets and grenades against the Americans had not originated from the police station but from a building nearby. He said he did not know who was occupying that building at the time.
While cases of Afghan security forces firing on coalition troops are rare, they have raised concerns in the American-led international force that insurgents may have infiltrated the Afghan Army and police force.
Zabul’s governor, Delbar Jan Arman, said a joint Afghan and American delegation of military and civilian officials was heading to the scene to investigate.
“Coalition forces deeply regret the incident of mistaken fire,” said Col. Jerry O’Hara, an American spokesman. “Initial reports indicate this was a tragic case of mistaken identity on both parts.”


Friendly-fire incidents between coalition soldiers and Afghan security forces have occasionally resulted in casualties, most often among Afghan police officers, who are not as well trained or equipped as the Afghan Army. But rarely have so many Afghan security personnel died in one episode.

In October, an airstrike in Khost Province by coalition forces killed nine Afghan soldiers and may have resulted from mistaken identity, American and Afghan officials said.
In June 2007, American forces called in air support when Afghan police officers opened fire on them during a hunt for Taliban militants. Seven Afghan policemen were killed.

 

 

By KIRK SEMPLE, December 11, 2008

BEREZNIKI, Russia — In late October, one of Vladimir V. Putin’s top lieutenants abruptly summoned a billionaire mining oligarch to a private meeting. The official, Igor I. Sechin, had taken a sudden interest in a two-year-old accident at the oligarch’s highly lucrative mining operations here in Russia’s industrial heartland.

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Mr. Sechin, who is a leader of a shadowy Kremlin faction tied to the state security services, said he was ordering a new inquiry into the mishap, according to minutes of the meeting. With a deputy interior minister who investigates financial crime at his side, Mr. Sechin threatened crippling fines against the company, Uralkali.
Startled, the oligarch, Dmitri E. Rybolovlev, pointed out that the government had already examined the incident thoroughly and had cleared the company of responsibility.
He further sought to fend off the inquiry by saying he would pay for some of the damage to infrastructure from the accident, a mine collapse that injured no one but left a gaping sinkhole.
His offer was rebuffed, and it seemed clear why: the Kremlin was maneuvering to seize Uralkali outright.
Mr. Putin, the former president and current prime minister, has long maintained that Russia made a colossal error in the 1990s by allowing its enormous reserves of oil, gas and other natural resources to fall into private hands.
He has acted uncompromisingly — most notably in the case of the Yukos Oil Company in 2003 — to get them back.
Now, the Kremlin seems to be capitalizing on the economic crisis, exploiting the opportunity to establish more control over financially weakened industries that it has long coveted, particularly those in natural resources.
Last month, for example, the government assumed greater influence over Norilsk Nickel, the world’s biggest nickel producer, whose large shareholders, two billionaire oligarchs, have ailing finances. And Mr. Putin said Thursday that he was considering other such interventions.
Yet the Uralkali affair stands out for illustrating with rare clarity the willingness of the authorities to use whatever means necessary to obtain these assets, including subjecting companies to questionable investigations that they have little chance of resisting, financial analysts here say.
At the forefront of these efforts is Mr. Sechin, 48, a deputy prime minister who has been a Putin confidant since the two served in the St. Petersburg city government in the early 1990s. Mr. Sechin almost never gives interviews or speaks publicly, but he is believed to spearhead the use of the secret services and other government arms to capture companies.
“He is the state’s main raider,” said Olga Kryshtanovskaya, a prominent Kremlin expert at the Center for the Study of Elites in Moscow. “He organizes these raider seizures, sometimes to the benefit of the state, or sometimes to the benefit of companies that are friendly to him.”
Mr. Sechin’s role in the Uralkali inquiry immediately caused analysts and investors to presume that the company was in peril. Uralkali’s stock, once highly prized by fund managers, has plunged more than 60 percent since the inquiry began, far more than the broader Russian stock market.
That has caused steep losses for Mr. Rybolovlev, 42, a former medical student who is known as Russia’s fertilizer king because of his dominance of the business of mining potash, a principal fertilizer component. Last June, when Uralkali was soaring, the otherwise low-key Mr. Rybolovlev attracted attention by buying Donald J. Trump’s mansion in Palm Beach, Fla., for $95 million.
The Kremlin has not said when there will be a decision on Uralkali, and the company is hoping to negotiate a settlement that would include a fine of a few hundred million dollars. Analysts emphasized that there was still a chance that Mr. Sechin might pull back after seeing the stock market react so hostilely to the inquiry.

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Developments in the overall economy might also give the Kremlin pause. A growing recognition of its outsize influence over business appears to have helped sour the investment climate here, and suggests in part why the Russian stock market has been among the worst performers in the world this year.
Widespread corruption has deepened this mistrust. So it is perhaps not surprising that the Uralkali affair has been marked by what appears to be insider trading.
Around the time of the meeting called by Mr. Sechin on Oct. 29 in Moscow, there was a sharp spike in short selling in Uralkali’s stock on the London Stock Exchange — that is, bets that the stock would fall, according to Data Explorers, an analytical firm that studied the securities data at the request of The New York Times. The meeting itself was not made public until Nov. 7, at which point the stock plummeted.
Mr. Sechin would not comment on the investigation, but a spokesman, Dmitri S. Peskov, said Mr. Sechin’s reputation was not warranted. “The press sometimes has a tendency to demonize people,” Mr. Peskov said.
Last month, a first deputy prime minister, Igor I. Shuvalov, dismissed concerns about the government’s intent.
“No one is going to destroy the company — we need strong business units,” Mr. Shuvalov said. “If after payments the company goes bankrupt, that won’t stop the government. A new owner will be found for Uralkali.”
With the financial crisis jolting economies around the world, Russia is hardly alone in taking ownership stakes in corporations these days. But many governments seem to view this as an uncomfortable role that has been thrust upon them. Russia’s rulers, however, appear to perceive the crisis as a chance to further expand their control over the economy, concentrating ever more power and wealth in the Kremlin.
“We will put capital directly into major companies, in cases when it would be beneficial to the state and eventually to the taxpayer, and in those enterprises that are the basis of the economy of the Russian Federation,” Mr. Putin said in a television appearance on Thursday. “We do not exclude that these tools may be used in a large-scale way.”
What seems to have drawn the Russian leadership’s attention to Uralkali was its impressive balance sheet, which expanded robustly over the last year as the prices of food and commodities shot up. Its revenues swelled to $1.1 billion in the first half of 2008, double the level in the same period the year before. Its profits more than tripled to $550 million.
With that kind of cash flow, the company was better able to ward off any fines and penalties the Kremlin could reasonably levy. But as its revenues have dropped because of the downturn, Uralkali has become more vulnerable.
Russians undoubtedly have ambivalent feelings about oligarchs like Mr. Rybolovlev. They tend to resent the oligarchs’ wealth, believing that it was accumulated through underhanded means in the 1990s. (Mr. Rybolovlev himself was accused of orchestrating the killing of a rival back then, though he was cleared of the charges.)
But they also worry that government officials want to seize these assets for their own venal purposes, and that they will end up mismanaging them, just as in Soviet times.
Here in Berezniki, 750 miles northeast of Moscow in the Ural Mountains, the new investigation has stirred anxiety among some miners, who said in interviews that they would fear lower salaries if the government took the company.
Federal officials have already aroused resentment here among residents who had to move after the 2006 mine accident into new, government-built homes that they said were shoddy.
Vladimir Smirnoff, 48, who drives a transporter in the mine, said workers did not understand the need for the inquiry, given that the earlier one had absolved the company.
The first government inquiry concluded that the mine collapse, which happened with enough warning that all the miners escaped, was caused by “a previously unknown geological anomaly.”
“It seems to us that the authorities simply want to take the company away from Rybolovlev,” Mr. Smirnoff said. “The authorities just can’t watch all that money pass them by.”
Mr. Rybolovlev and other Uralkali executives declined to be interviewed for this article.
The company said last month that “there are no legal or moral grounds” for blaming it for the accident. It said that if the new inquiry found Uralkali responsible, “it will suffer an enormous financial burden. The company’s future and plans would be in doubt.”
Uralkali fears that officials will seek compensation equal to future taxes and fees that the company would have paid to the government if the section of the mine that collapsed had continued operating, a penalty that could amount to well over $1 billion.
The new investigation carries echoes of the case that has come to define Mr. Putin’s tenure — the government’s forcible takeover of Yukos, once the country’s biggest oil company. Mr. Sechin is said to have led that case, and now also serves as chairman of Rosneft, the government-controlled oil company that swallowed up many of Yukos’s assets.
“The Uralkali case says that the government feels it has the power to interfere in any way in these industries,” said Marina Alexeenkova, a vice president at Renaissance Capital, an investment bank in Moscow. “It looks really aggressive and really risky. In general, this has been considered the most serious attack on a company since Yukos.”
The government imprisoned Yukos’s owner — the billionaire oligarch Mikhail B. Khodorkovsky, who had angered Mr. Putin by engaging in politics — on tax charges. It does not appear that Mr. Rybolovlev will suffer a similar punishment.
Like many oligarchs who have heeded Mr. Khodorkovsky’s example, Mr. Rybolovlev has backed the Kremlin, and has spurned pleas for financial support from opposition politicians here in the Perm region.
As the inquiry continued last week, the government sent conflicting signals about its course. It said Wednesday that investigators would need at least two more weeks before forwarding their report to Mr. Sechin, dimming Uralkali’s quest for a settlement. The next day, the natural resources minister, Yuri P. Trutnev, a close friend of Mr. Rybolovlev’s, publicly supported the company. He is not directly involved in the new inquiry, though, and analysts discounted the importance of his statement.
Investigators are now said to be examining whether Uralkali should pay for rerouting 30 miles of railroad track around the sinkhole, as well as for reimbursing the government for resettling people and other costs. But their primary objective is to scrutinize the accident itself and decide whether the company was at fault, which could expose it to heavy penalties.
Here in Berezniki, though, people seem confused about how the investigators are going to do that. It turns out that the part of the mine that collapsed is now completely filled with water, preventing anyone from getting anywhere close to it.

By CLIFFORD J. LEVY, December 8, 2008

Bank of America said on Thursday that it planned to cut 30,000 to 35,000 positions — among the largest layoffs ever — over the next three years as it digests its acquisition of Merrill Lynch. That could amount to more than 11 percent of the combined firms’ global work force of 308,000.
Combining two firms as large as Bank of America and Merrill often involves eliminating duplicate jobs. Both have significant overlap in areas like research and investment banking.
But Bank of America, based in Charlotte, N.C., acknowledged that this round also reflected the dismal economy. The firm said the layoffs would cut across all of its businesses, and that a final number would be determined early next year.
Many of the jobs will be lost through attrition, Bank of America said, though a spokesman declined to comment on specifics of the plan, like which offices will be affected and which businesses will see job reductions.
Wall Street’s pain is unlikely to stop there. After years of rapid growth, built largely on the trading of risky securities like subprime mortgages, the financial services industry is in the throes of its sharpest contraction in modern times. As of last week, banks have cut 186,439 jobs since the onset of the financial crisis in July 2007, according to data from Bloomberg News. Bank of America has already laid off 11,150 employees, while Merrill has cut 5,720.
Bank of America, whose stock has fallen 64 percent this year, sealed its shotgun marriage to Merrill last week, creating a colossus of both corporate and consumer finance. But the firm, like its peers, has taken billions of dollars from the government to confront a recession that poses serious threats to many of its businesses.
Banks are already reeling from losses tied to credit card debt, auto loans and commercial real estate mortgages, and analysts worry that more consumers will struggle to stay current on the debts they incurred in more profitable times.
Jamie Dimon, the chief executive of JPMorgan Chase, said in an interview with CNBC that the global economy would be lucky if the current recession, which began last December, lasted just two more quarters.
He added that housing prices could fall another 20 percent, a situation that would force banks like JPMorgan and Bank of America to take even further write-downs on the mortgage assets they still hold on their books.
Shares in Bank of America fell 10.67 percent on Thursday, to $14.91, before the job cuts were announced. Shares in JPMorgan, which Mr. Dimon said experienced a “terrible” November and December, also fell more than 10 percent, leading financial stocks lower across the board.
Citigroup, the embattled financial giant, said last month that it was laying off 52,000 employees, the largest single wave of job cuts in nearly two decades. Even Goldman Sachs, which had dodged the worst of the pitfalls of the credit crisis, has begun laying off employees ahead of what many expect will be its first quarterly loss as a public company.
All the job cuts will be felt perhaps the most in the New York area, whose economy draws much of its city and state tax revenue from Wall Street.
New York City officials are bracing for thousands of additional layoffs. Earlier in the day, the New York City comptroller, William C. Thompson Jr., raised his estimates of Wall Street job losses over the next two years to 170,000. Together with an expected 50 percent drop in bonuses, to their lowest levels since 2002, the city’s tax revenue could fall by 4.3 percent in the 2009 fiscal year.
Last year, Wall Street paid out $33.2 billion in bonuses, a drop of 4.7 percent from the previous year.
“The toll taken by the financial industry makes this one of the grimmest economic periods for the city in many years,” Mr. Thompson said in a statement.

 

By MICHAEL J. de la MERCED, December 12, 2008

It was the middle of the night, and Laura Silverthorn, a nurse at a hospital in Washington, knew her patient was in danger.
The boy had a shunt in his brain to drain fluid, but he was vomiting and had an extreme headache, two signs that the shunt was blocked and fluid was building up. When she paged the on-call resident, who was asleep in the hospital, he told her not to worry.

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After a second page, Ms. Silverthorn said, “he became arrogant and said, ‘You don’t know what to look for — you’re not a doctor.’ ”
He ignored her third page, and after another harrowing hour she called the attending physician at home. The child was rushed into surgery.
“He could have died or had serious brain injury,” Ms. Silverthorn said, “but I was treated like a pest for calling in the middle of the night.”
Her experience is borne out by surveys of hospital staff members, who blame badly behaved doctors for low morale, stress and high turnover. (Ms. Silverthorn said she had been brought to tears so many times that she was trying to start her own business and leave nursing.)
Recent studies suggest that such behavior contributes to medical mistakes, preventable complications and even death.
“It is the health care equivalent of road rage,” said Dr. Peter B. Angood, chief patient safety officer at the Joint Commission, the nation’s leading independent hospital accreditation agency.
A survey of health care workers at 102 nonprofit hospitals from 2004 to 2007 found that 67 percent of respondents said they thought there was a link between disruptive behavior and medical mistakes, and 18 percent said they knew of a mistake that occurred because of an obnoxious doctor. (The author was Dr. Alan Rosenstein, medical director for the West Coast region of VHA Inc., an alliance of nonprofit hospitals.)
Another survey by the Institute for Safe Medication Practices, a nonprofit organization, found that 40 percent of hospital staff members reported having been so intimidated by a doctor that they did not share their concerns about orders for medication that appeared to be incorrect. As a result, 7 percent said they contributed to a medication error.
There are signs, however, that such abusive behavior is less likely to be tolerated. Physicians and nurses say they have seen less of it in the past 5 or 10 years, though it is still a major problem, and the Joint Commission is requiring hospitals to have a written code of conduct and a process for enforcing it.
Still, every nurse has a story about obnoxious doctors. A few say they have ducked scalpels thrown across the operating room by angry surgeons. More frequently, though, they are belittled, insulted or yelled at — often in front of patients and other staff members — and made to feel like the bottom of the food chain. A third of the nurses in Dr. Rosenstein’s study were aware of a nurse who had left a hospital because of a disruptive physician.
“The job is tough enough without having to prepare yourself psychologically for a call that you know could very well become abusive,” said Diana J. Mason, editor in chief of The American Journal of Nursing.
Laura Sweet, deputy chief of enforcement at the Medical Board of California, described the case of a resident at a University of California hospital who noticed a problem with a fetal monitoring strip on a woman in labor, but didn’t call anyone.
“He was afraid to contact the attending physician, who was notorious for yelling and ridiculing the residents,” Ms. Sweet said. The baby died.
Of course, most doctors do not spew insults or intimidate nurses. “Most people are trying to do the best job they can under a high-pressure situation,” said Dr. Joseph M. Heyman, chairman of the trustees of the American Medical Association.
Dr. William A. Norcross, director of a program at the University of California, San Diego, that offers anger management for physicians, agreed. But he added, “About 3 to 4 percent of doctors are disruptive, but that’s a big number, and they really gum up the works.” Experts say the leading offenders are specialists in high-pressure fields like neurosurgery, orthopedics and cardiology.
In one instance witnessed by Dr. Angood of the Joint Commission, a nurse called a surgeon to come and verify his next surgical patient and to mark the spot where the operation would be done. The harried surgeon yelled at the nurse to get the patient ready herself. When he showed up late to the operating room, he did not realize the surgery site was mismarked and operated on the wrong part.
“The surgeon then berated the entire team for their error and continued to denigrate them to others, when the error was the surgeon’s because he failed to cooperate in the process,” Dr. Angood said.
A hostile environment erodes cooperation and a sense of commitment to high-quality care, Dr. Angood said, and that increases the risk of medical errors.
“When the wrong surgery is done on patients,” he said, “often there is somebody in that operating room who knew the event was going to occur who did not feel empowered enough to speak up about it.”
Dr. Norcross blamed “the brutal training surgeons get, the long hours, being belittled and ‘pimped’ ” — a term for being bombarded with questions to the point of looking stupid. “That whole structure teaches a disruptive behavior,” he said.
Dr. Norcross and other experts said staff members’ understandable reluctance to challenge a physician, especially a popular surgeon who attracts patients to the hospital, created an atmosphere of tolerance for the bad behavior and indifference. So did a tendency among doctors to form “old boy” networks and protect one another from criticism.
But things have begun to change. Today, good communication and leadership are two of the six core skills taught in medical schools and residency programs. More nurses are challenging doctors on their inappropriate behavior, and fewer hospitals are tolerating disruptive doctors. “Today they’re getting rid of that doctor or sending them to anger management,” said Dr. Thomas R. Russell, executive director of the American College of Surgeons.
Hospitals have also developed more formal and consistent ways of addressing disruptive behavior, Dr. Rosenstein said. They are also trying to improve relations and mutual respect between doctors and nurses.
At John Muir Health, a nonprofit group of two hospitals in Walnut Creek and Concord, Calif., a committee of physicians, nurses and other staff members was formed to focus on collaboration and communication between disciplines.
“When complaints are submitted, we try to be proactive early to let them know there is not going to be any tolerance for that,” said Dr. Roy Kaplan, John Muir’s medical director for quality.
Some physicians worry that hospital administrators will abuse the stricter codes of conduct by using them to get rid of doctors who speak out against hospital policies. And the Joint Commission rulings have spawned a cottage industry of anger management centers and law firms defending hospitals or physicians.
Professionals like Ms. Silverthorn, the nurse in Washington, said the change was overdue.
“We go to school, we have a very important job, but there’s no respect,” she said.
She recalled a particularly humiliating moment on Dec. 25, 2006. Working in the pediatric emergency room, she called a drug by its generic name rather than its brand name.
“I was quickly shouted out of the trauma room and humiliated in front of everyone,” she said. But while “everyone knew the doctor was actually the one who didn’t know what he was doing,” she continued, no one said a word.

By LAURIE TARKAN December 2, 2008

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“THE world is a strange place right now,” a salesman on the main floor at Bergdorf Goodman said as shoppers pawed through handbags piled on counters like discount merchandise at Century 21. “It’s off its axis.”

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The handbags, like a lot else at the Fifth Avenue retailer, had been marked down 40 percent and are likely to go lower as seasonal sale days wear on. “Sixty percent off is the new black,” as Patricia Marx wryly noted in the Dec. 8 issue of The New Yorker. Yet the discounts at Bergdorf are far from the deepest among luxury retailers around the city.

In a move that caused consternation among its high-toned competitors along Fifth Avenue, Saks slashed the bulk of its fall fashion and accessories up to 70 percent over Thanksgiving weekend — to what some termed limbo lows.
There is nothing new about retailers cutting prices at holiday time, and the discounts have been especially deep in this recessionary year.

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But few in the luxury goods trade can recall a time when the price-slashing started so soon or was so severe. By cutting prices radically, Saks’s chief merchant, Ron Frasch, turned his chain’s flagship emporium into a swank Fifth Avenue version of a discount outlet, moving merchandise in volume and spooking the competition as it struggled to hold on to a traditional mark-down sequence, and even to continue selling certain brands at full price.

Mr. Frasch declined to comment on his corporate game plan. “It’s not a conversation I want to get into,” he said.
Even seasoned bargain hunters were startled to see Saks’s wood-paneled main sales floor mobbed with consumers nosing like truffle hounds through shelves of marked-down cashmere sweaters and racks of designer clothes with prices seemingly too good to be true.
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Could those columnar Valentino evening dresses in signature red really be 70 percent below the original price of $2,950?
Was one reading the $329 tag right on a cashmere men’s blazer from the elite Italian woolen house Loro Piana, a jacket that typically costs $2,000 or more? What about the $129 price for a black satin skirt from Comme des Garçons? Was the tagged price a misprint? It was not.
“What I hear at every level of retail is that no one has ever experienced anything like this in their careers,” said Ken Downing, the fashion director of Neiman Marcus. And, while Mr. Downing suggested that the 40 Neiman stores would not soon tumble to discount fever, much of their merchandise had already been marked down by 40 percent, a sure sign that the line on price reduction cannot be held by any single player in luxury goods.

Privately, most retailers admit to being frightened by the severity of the economic downturn and are looking not merely to save the current season but their commercial lives.

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While it is true that early numbers suggest retailers across the country got a boost from Black Friday’s bargain-hunting frenzy, the margins on optimism remain slim. A report released on Tuesday by MasterCard Advisors showed that sales of luxury goods fell 24.4 percent in November compared with the same month a year ago. When individual stores disclose their own figures for November sales on Thursday, they are expected to show the deep declines of early fall continuing.

On Wednesday, customers of Barneys New York received an e-mail message promoting a “designer freak-out sale.” The savings of up to 50 percent encompassed goods like Christian Louboutin suede booties (marked down to $720 from $1,195) and coveted Marc Jacobs totes (reduced to $629 from $1,250). It should probably be noted that handbags and shoes are where luxury retailers turn to hear the music of cash registers going ka-ching, and so the event was a clear indication that somebody at Barneys must be freaking out.

“It’s painful,” Linda Fargo, the women’s fashion director at Bergdorf Goodman, said referring to a landscape in which carriage-trade stores are struggling not only to hold on to their profits but also their ineffable luster.

What seems inevitable is that the pain will worsen as the price reductions provoke questions among consumers of how stratospheric profits must have been when the economy was riding high. How great, really, was the surcharge to consumers for participating in fashion fantasy?

“I was in Saks last week, and there were these staggering discounts and it’s not even Jan. 1,” Tim Gunn, the “Project Runway” host and chief creative officer of Liz Claiborne, said Tuesday, before a discussion on “Redefining the Rules of Fashion in Today’s Economy,” sponsored by the textile manufacturer Dow XLA. “I was told by easily half a dozen sales associates that if I opened a Saks credit card, I’d get another 15 percent off. What I wonder is, “What are the real margins?’ ”

That question gives rise to another: once consumers become acquainted with slash-and-burn prices, how can designer fashion regain its mystique? Will shoppers ever again want to buy luxury goods at full price?

The depth of the challenge was suggested by the incongruity this week of seeing Prada wallets, usually kept under glass at Saks, dumped into display stands that at Wal-Mart are known as “end-caps”; lizard handbags at Bergdorf Goodman jumbled on counters as if that Fifth Avenue landmark were an outlet of Loehmann’s; and Ralph Lauren dress shirts at Lord & Taylor thrown together and offered at prices roughly equivalent to the cost of two McDonald’s Happy Meals.

The Saks strategy may be the first sign of a radical reconfiguration of the luxury goods landscape, said Beth Buccini, an owner of Kirna Zabête, the SoHo specialty store. “The intense and early discounting will negate the power of runway shows to drive fashion in both creative and commercial terms,” Ms. Buccini said.

“All anyone can afford to do anymore is to sell pre-collections,” she added, referring to the commercial collections designers offer during transitional periods between their statement-making, twice yearly runway shows.

“Runway clothes next year will arrive in the store in April, and we will have three weeks to sell them at full price before the department stores have put them on sale,” she said. “What I’m worried about is the creativity. Everybody is paralyzed wondering what people want, what they’re willing to spend, what’s going to dazzle us into not being able to live without certain items.” It could be, as Zac Posen remarked on Tuesday, that we are headed into a period when designers and retailers are “either stimulated and excited and challenged,” or else follow thousands of other failed American businesses into oblivion.

“It’s all going to be very Darwinian,” Ms. Buccini said.

 

 

* By GUY TREBAY , December 4, 2008

AS an open, diverse and at times chaotic democracy, India has long been a target for terrorism. From the assassination of Mohandas Gandhi in 1948 to the recent attacks in Mumbai, it has faced attempts to change its national character by force. None has yet succeeded. Despite its manifest social failings, India remains the developing world’s most successful experiment in free, plural, large-scale political collaboration.
The Mumbai attacks were transformative, because in them, unlike previous outrages in India, the rich were caught: not only Western visitors in the nation’s magnificent financial capital but also Indian bankers, business owners and socialites. This had symbolic power, as the terrorists knew it would.
However, I recently saw a televised forum in which members of the public vented their fury against India’s politicians for their failure to act, and it soon became apparent the victims were poor as well as rich. One survivor, Shameem Khan — instantly identifiable by his name and his embroidered cap as a Muslim — told how six members of his extended family had been shot dead. Still in shock, he said: “A calamity has fallen on my house. What shall I do?” His neighbors had helped pay for the funeral. Like most of India’s 150 million Muslims, Mr. Khan is staunchly patriotic. The city’s Muslim Council refused to let the terrorists be buried in its graveyards.
When these well-planned attacks unfolded, it was clear to anyone with experience of India that they were not homegrown, and almost certainly originated from Pakistan. Yet the reaction of the world’s news media was to rely on the outmoded idea of Pakistan-India hyphenation — as if a thriving and prosperous democracy of over a billion people must be compared only to an imploded state that is having to be bailed out by the I.M.F. Was Pakistan to blame, asked many pundits, or was India at fault because of its treatment of minority groups?
The terrorists themselves offered little explanation, and made no clear demands. Yet even as the siege continued, commentators were making chilling deductions on their behalf: their actions were because of American foreign policy, or Afghanistan, or the harassment of Indian Muslims. Personal moral responsibility was removed from the players in the atrocity. When officials said that the killers came from the Pakistani terrorist group Lashkar-e-Taiba, it was taken as proof that India’s misdeeds in the Kashmir Valley were the cause.
These misdeeds are real, as are India’s other social and political failings (I recently met a Kashmiri man whose father and sister had died at the hands of the Indian security forces). But there is no sane reason to think Lashkar-e-Taiba would shut down if the situation in Kashmir improved. Its literature is much concerned with establishing a caliphate in Central Asia, and murdering those who insult the Prophet. Its leader, Hafiz Saeed, who lives on a large estate outside Lahore bought with Saudi Money, goes about his business with minimal interference from the Pakistani government.
Lashkar-e-Taiba is part of the International Islamic Front for Jihad Against Jews and Crusaders (the Qaeda franchise). Mr. Saeed’s hatreds are catholic — his bugbears include Hindus, Shiites and women who wear bikinis. He regards democracy as “a Jewish and Christian import from Europe,” and considers suicide attacks to be in accordance with Islam. He has a wider strategy: “At this time our contest is Kashmir. Let’s see when the time comes. Our struggle with the Jews is always there.” As he told his followers in Karachi at a rally in 2000: “There can’t be any peace while India remains intact. Cut them, cut them — cut them so much that they kneel before you and ask for mercy.” In short, he has an explicit political desire to create a state of war between the religious communities in India and beyond, and bring on the endgame.
Like other exponents of Islamist extremism, he has a view of the world that does not tolerate doubt or ambiguity: his opponents are guilty, and must be killed. I have met other radicals like Mr. Saeed, men who live in a dimension of absolute certainty and have contempt for the moral relativism of those who seek to excuse them. To achieve their ends, it is necessary to indoctrinate boys in the hatred of Hindus, Americans and Jews, and dispatch them on suicide missions. It is unlikely that any of the militants who were sent from Karachi to Mumbai — young men from poor rural backgrounds whose families were paid for their sacrifice — had ever met a Jew before they tortured and killed Rabbi Gavriel Holtzberg and his wife, Rivka, who was several months pregnant, at the Mumbai Jewish center.
America’s so-called war on terror has been, in many respects, a catastrophe. In Pakistan, it has been chronically mishandled, leading to the radicalization of areas in the north that were previously peaceful. Yet links between the military, the intelligence services and the jihadis have remained intact: Lashkar-e-Taiba is merely one of a number of extremist organizations that continues to function.
The prime solution to the present crisis is to force the closing of terrorist training outfits in Pakistan, and apply the law to those who organize and finance operations like the Mumbai massacres. Hafiz Saeed and other suspects should be sent to India to stand trial. The remark by Pakistan’s president, Asif Ali Zardari (a man whose history of shady business dealing makes him demonstrably unfit for high, or even low, office), that he did not think the terrorists came from Pakistan would be funny if it were not tragic.
The United States gives around $1 billion a year in military aid to Islamabad; that is leverage. It does the people of Pakistan no favors for Washington to allow their leaders to continue with the strategy of perpetual diversion, asking India to be patient while denying the true nature of the immediate terrorist threat. I received this e-mail message recently from a friend in Karachi: “Nowhere can get more depressing than Pakistan these days — barring some African failed states and Afghanistan.”

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By PATRICK FRENCH
London December 8, 2008
OP-ED CONTRIBUTOR
Patrick French is the author, most recently, of “The World Is What It Is: The Authorized Biography of V. S. Naipaul.”

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