Thursday, May 31, 2007

International Herald Tribune Editorial - The coal trap

International Herald Tribune Editorial - The coal trap
Copyright by The International Herald Tribune
Published: May 30, 2007

There is a rule for judging solutions to the twin problems of energy dependence and global warming: A policy designed to solve one problem should not make the other worse. But that is a likely outcome of the many "energy independence" bills circulating in Congress that aim to build a whole new generation of coal-to-liquid plants to convert coal into automotive fuel.

These bills have already acquired an enthusiastic constituency and will be offered as amendments to what is now a relatively simple and sound energy bill designed to increase the fuel efficiency of cars and light trucks, encourage the production of biofuels and provide research and development money for the capture and storage of carbon dioxide emissions from power plants.

There are, of course, ways to make this bill better. Senator Jeff Bingaman, Democrat of New Mexico, will offer a useful amendment to require utilities to generate a percentage of their electricity from renewable sources like wind. But there are also ways to make the bill a lot worse. One of them is to require the expenditure of billions of dollars in loans, tax incentives and price guarantees to lock in a technology that could end up doing more harm than good.

Coal is far and away America's most abundant fuel. There is no doubt that it could substitute for foreign oil, although how much and at what price is not clear. In addition, the technology to convert coal into liquid fuels is well established. But it is also true that between the production process and burning it in cars, coal-to-liquid fuel produces more than twice the greenhouse gas emissions as gasoline and nearly twice the emissions of ordinary diesel. These are terrible ratios.

According to the Environmental Protection Agency, coal-based automobile fuel would still be marginally dirtier than ordinary gasoline and only marginally cleaner than conventional diesel.

What this means is that the United States would be investing billions to produce fuels that, from a global warming perspective, leave us at best treading water. That is unacceptable at a time when mainstream scientists are warning that greenhouse gases must be cut by 60 percent or better over the next half-century to avert the worst consequences of global warming.

Researchers at M.I.T. estimate that it will cost $70 billion to build enough coal-to-liquid plants to replace 10 percent of U.S. gasoline consumption. A similar investment in biofuels like cellulosic or sugar-based ethanol - which could yield substantial reductions in greenhouse gases - would seem a lot smarter.

Given the dimensions of our energy problems, new ideas must be explored. But it makes little sense to shackle the country now to a coal-based technology of such uncertain promise.

International Herald Tribune Editorial - Politics trumps ethics

International Herald Tribune Editorial - Politics trumps ethics
Copyright by The International Herald Tribune
Published: May 30, 2007

The Bush administration's push to turn federal agencies into favor-filled partisan clubhouses has just been confirmed in red-handed detail at the General Services Administration, the government's main housekeeping agency. Investigators found that Lurita Doan, the Bush appointee running the agency, violated the Hatch Act, which forbids federal workers from politicking on the job.

Last January, Doan summoned her assistants to a campaign strategy session run by Karl Rove's White House political operation. Tax-paid employees were treated to a PowerPoint briefing and slide show identifying Democrats marked as "2008 House Targets: Top 20." Witnesses recalled Doan asking the gathering how they could "help our candidates" with GSA favors.

Like so many Bush appointees lately summoned to account by Congress, Doan repeatedly said she could not recall details of the meeting. But her credibility is in tatters. She should be dismissed for violating one of the most hallowed laws of fairness in government service. As for Rove, this is only the latest abuse for which he needs to be brought to account.

Bush: Double AIDS funds - Some say global program won't keep pace with disease

Bush: Double AIDS funds - Some say global program won't keep pace with disease
By James Gerstenzang
Copyright © 2007, Chicago Tribune and Los Angeles Times
Published May 31, 2007

WASHINGTON -- President Bush said Wednesday that he would ask Congress to increase U.S. support for global HIV/AIDS programs to $30 billion over five years from the current commitment of $15 billion.

The White House estimates the increased spending would treat 2.5 million people, prevent 12 million infections and provide additional care for 12 million people, among them 5 million orphans and other children.

In the program's first three years, through March, it helped pay for treatment of 1.1 million people in 15 countries, nearly all of them in Africa.

"This level of assistance is unprecedented, and the largest commitment by any nation to combat a single disease," Bush said of the initial five-year program. "This investment has yielded the best possible return -- saved lives."

In a speech in the White House Rose Garden, Bush said, "It's important that we continue the work we have begun."

The program, which is up for renewal in 2008, is one of the rare Bush initiatives that has won praise from a wide swath of the political spectrum.

Rep. Barbara Lee (D-Calif.), a frequent critic of Bush policies and one of the original sponsors of the plan in 2003, applauded the president for seeking expanded funding but said he needed to go further.

She said the government should also boost spending on malaria and tuberculosis, and on related efforts that are not part of the program but could bolster the fight against HIV/AIDS, including education, nutrition, water, food security and health-care workers.

In a statement, she also took issue with the Bush program's emphasis on premarriage sexual abstinence. A report by the Institute of Medicine said such restrictions have "greatly limited" the work of specialists trying to carry out prevention programs among those at greatest risk.

Under the Bush program, 20 percent of the funding is dedicated to AIDS prevention, and one-third of that goes to programs that promote abstinence until marriage.

Mark Dybul, the U.S. global AIDS coordinator, said in a conference call with reporters that the five-year program had also provided 1.3 billion condoms and that it had taken a "balanced approach."

He also said the proposal would double spending on HIV/AIDS to $30 billion over five years, even though the White House has requested only $5 billion for the next fiscal year, which begins in October.

Asia Russell, director of international policy at Health GAP, an advocacy group funded by private donations and foundations that is fighting AIDS in developing countries, argued that the Bush request amounted to funding at the current level and would not keep pace with the AIDS epidemic.

She said Bush promised when he began the program that by 2008 it would treat 2 million people with AIDS, roughly one-third of those in urgent need, and had supported international promises for universal access to HIV treatment and prevention. Her organization estimates that such a course would need a $50 billion U.S. commitment over the next five years.

The president, who wore an HIV/AIDS ribbon in the lapel of his suit, also said that First Lady Laura Bush would visit with leaders and participants in HIV/AIDS programs at the end of June in Zambia, Senegal, Mali and Mozambique.

He was joined on the podium by Kunene Tantoh, who he said is HIV-positive and runs a mentoring program supported with American assistance for other mothers with HIV in Cape Town, South Africa.

As he finished speaking, Bush was also joined by her 4-year-old son, Baron, whom he scooped up as the boy ran toward him.

The U.S.-funded program operates in Botswana, Ethiopia, Guyana, Haiti, Ivory Coast, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Vietnam and Zambia.

Want to buy pot? Let's see some ID - Dutch coffee shops get whiff of new code

Want to buy pot? Let's see some ID - Dutch coffee shops get whiff of new code
By Toby Sterling
Copyright © 2007, Chicago Tribune and The Associated Press
Published May 31, 2007

AMSTERDAM -- Coffee shops licensed to sell marijuana in the southern Dutch city of Maastricht will begin fingerprinting customers and scanning their IDs this summer to help prove they're following rules governing such sales.

In particular, the measures are expected to help stores show they are not selling to underage customers and that they haven't sold more than the maximum permitted to a customer on a given day.

"This is not something that we are doing willingly but with pain in our hearts," Marc Josemans, chairman of the Union of Maastricht's Coffee Shops, said Wednesday. Shops in Rotterdam and several Dutch border cities may follow suit, he said.

"We're very afraid we're going to lose customers over this, and to be honest we're even a little ashamed we're doing it, but the city of Maastricht has such harsh punishments that we don't feel we have any choice," Josemans said.

Marijuana is technically illegal in the Netherlands, but cities may license shops to sell no more than 5 grams per customer per day. The shops may not sell to anyone under 18 nor permit drugs other than marijuana or hashish on the premises.

Since Maastricht Mayor Gerd Leers took office in 2002, police have enforced the rules, and shops found in violation are closed for a minimum of three months for a single infraction, six months for a second offense and permanently for a third. As a result, 11 of Maastricht's 26 licensed shops have been closed.

Under the new plan, fingerprints would be coupled with a digital photograph and a scan of a customer's ID cards -- removing all personal information except birth date -- and stored on a computer system at the shop.

Josemans said the electronic system would be tested at his store Aug. 1 and used by all licensed stores by September.

Because of Maastricht's location near the border with Belgium and Germany and not far from France, the city of 120,000 residents gets 4.5 million "drugs tourists" a year who come to buy marijuana and drive home.

Oral dissents give justice new voice - Ginsburg's gloves come off in new Supreme Court

Oral dissents give justice new voice - Ginsburg's gloves come off in new Supreme Court
By Linda Greenhouse
Copyright © 2007, Chicago Tribune
Published May 31, 2007

WASHINGTON -- Whatever else may be said about the Supreme Court's current term, which ends in about a month, it will be remembered as the time when Justice Ruth Bader Ginsburg found her voice, and used it.

Both in the abortion case the court decided last month and the discrimination ruling it issued on Tuesday, Ginsburg read forceful dissents from the bench. In each case, she spoke not only for herself but also for three other dissenting colleagues, Justices John Paul Stevens, David Souter and Stephen Breyer.

But the words were clearly her own, and they were both passionate and pointed. In the abortion case, in which the court upheld the federal Partial-Birth Abortion Ban Act seven years after having struck down a similar state law, she noted that the court was now "differently composed than it was when we last considered a restrictive abortion regulation." In the pay discrimination case, she summoned Congress to overturn what she called the majority's "parsimonious reading" of the federal law against discrimination in the workplace.

To read a dissent aloud is an act of theater that justices use to convey their view that the majority is not only mistaken, but profoundly wrong. It happens just a handful of times a year. Justice Antonin Scalia has used the technique to powerful effect, as has Stevens, in a decidedly more low-key manner.

The oral dissent has not been, until now, Ginsburg's style. She has gone years without delivering one, and never before in her 15 years on the court has she delivered two in one term. In her past dissents, both oral and written, she has been reluctant to breach the court's collegial norms. "What she is saying is that this is not law, it's politics," Pamela Karlan, a Stanford law professor, said of Ginsburg's comment linking the outcome in the abortion case to the fact of the court's changed membership. "She is accusing the other side of making political claims, not legal claims."

Justice 'sounding an alarm'

The justice's acquaintances have watched with great interest what some depict as a late-career transformation. "Her style has always been very ameliorative, very conscious of etiquette," said Cynthia Fuchs Epstein, a sociologist and a longtime friend. "She has always been regarded as sort of a white-glove person, and she's achieved a lot that way. Now she is seeing that basic issues she's fought so hard for are in jeopardy, and she is less bound by what have been the conventions of the court."

Some might say that her dissents are an expression of sour grapes over being in the minority more often than not. But there may be strategic judgment, as well as frustration, behind Ginsburg's new style. She may have concluded that quiet collegiality has proved futile and that her new colleagues, Chief Justice John Roberts and Justice Samuel Alito, are not open to persuasion on the issues that matter most to her.

Alito, of course, took the place of Justice Sandra Day O'Connor, with whom Ginsburg formed a deep emotional bond, although they differed on a variety of issues. And Roberts replaced Chief Justice William Rehnquist, with whom Ginsburg often disagreed but maintained a relationship that was at times surprisingly productive.

For example, in 1996, over Scalia's vigorous dissent, the chief justice gave Ginsburg his vote in a decision holding that the Virginia Military Institute's men-only admissions policy was unconstitutional. In 2003, they made common cause in a case that strengthened the Family and Medical Leave Act. When Ginsburg criticized a Rehnquist opinion, she did so gently; today's adversary could be tomorrow's ally.

If there has been any such meeting of the minds between Ginsburg and her new colleagues, it has not been evident. She may have concluded that her side's interests are better served by appealing not to the court's majority but to the public. "She's sounding an alarm and wants people to take notice," said Debra Ness, president of the National Partnership for Women & Families, an advocacy group that focuses on the workplace.

More will be listening

Goodwin Liu, a law professor at the University of California-Berkeley, was one of Ginsburg's law clerks when the court decided the 2000 election case, the bitterly divided Bush vs. Gore decision, from which she dissented. Even during that freighted period, Liu said, "I was struck by how much of an institutional citizen she was, how attuned to the wishes of her colleagues and to not giving offense."

Liu said that when he read the dissent on Tuesday, it occurred to him that in recounting the workplace travails of the plaintiff, Lilly Ledbetter, Ginsburg was also telling a version of her own story. "Here she is, the one woman of a nine-member body, describing the get-along imperative and the desire not to make waves felt by the one woman among 16 men," Liu said. "It's as if after 15 years on the court, she's finally voicing some complaints of her own."

Another of the justice's friends, Professor Judith Resnik of Yale Law School, noted that throughout her legal career, Ginsburg has been deeply concerned about questions of access to the courts and the remedial powers of federal judges, themes she has explored in both majority and dissenting opinions.

"Those of us reading not just the grand-slam cases but the quieter ones have heard her voice," Resnik said. She added, "Now that the stakes are going up, more people will be listening."

Apple iTunes starts to sell unrestricted music

Apple iTunes starts to sell unrestricted music
By Matthew Garrahan in Los Angeles
Copyright The Financial Times Limited 2007
Published: May 31 2007 03:00 | Last updated: May 31 2007 03:00

Apple on Wednesday launched an online music service that allows consumers to download and play EMI tracks free of digital rights management restrictions, by artists including Paul McCartney, Pink Floyd, Coldplay and Gorillaz.

EMI is the first large record label to join the new iTunes Plus service, which charges more for each track but offers better sound quality than normal iTunes music downloads.

Consumers buying the EMI music will also be able to play tracks on multiple devices, rather than just on their iPods, because the music will be free of DRM.

Apple and EMI on Wednesday said the improvement in sound quality would be an important factor in the growth of the new service. "The difference in quality is like night and day," said Barney Wragg, EMI's global head of digital music.

EMI had found that many music fans had shied away from buying downloaded music because of concerns about competing formats, he added. "They didn't want to buy the wrong format."

But the launch of a DRM-free service addressed those concerns and was "a really significant step forward for consumers".

Apple, meanwhile, said DRM-free music was in effect an "insurance policy".

"Our customers aren't telling us that they want to use a bunch of devices," said Eddy Cue, Apple's vice-president for iTunes. Instead, he said, DRM-free music on iTunes Plus means "your music will work in the future on any device".

Steve Jobs, Apple's chief executive, added he expected more than half of the songs on iTunes will be offered in iTunes Plus versions by the end of the 2007.

To date, EMI is the only leading label to go DRM-free. Other labels are expected to follow, however, while several independent labels have also come on board.

The announcement came as EMI made Paul McCartney's solo back catalogue available for download on iTunes and iTunes Plus. Apple and EMI are hopeful they will eventually also be able to make the Beatles back catalogue available, although legal wranglings have held up the move.

■ Separately, Sony/ATV Music publishing, the joint venture owned by Sony Corp and Michael Jackson, has acquired Viacom's Famous Music for $370m in the company's first deal since hiring a new chief executive this year, writes Aline van Duyn from New York.

Martin Bandier, who built EMI's music publishing business into the industry's largest but left to run Sony/ATV in April, struck a deal with Viacom for its music publishing business, which includes 125,000 songs and themes from films such as The Godfather, Mission Impossible and Flashdance.

"This is a perfect fit that sits with the strategic goals I set out for Sony/ATV," said Mr Bandier, chairman and chief executive of Sony/ATV. "All of this music is known around the world and now we have to let the world know it is available."

The companies have not disclosed terms but people familiar with the deal said Sony/ATV paid $370m.

Cash and the candidacy

Cash and the candidacy
By Edward Luce
Published: May 30 2007 18:14 | Last updated: May 30 2007 18:14

At a recent fortnightly gathering of some of Washington’s most experienced foreign policy experts, Zbigniew Brzezinski, the former national security adviser and chairman of the group, persuaded the 19 attendees to participate in a secret ballot.

They were asked which among the large field of Republican and Democratic presidential aspirants would be most likely to restore America’s reputation in the world. Nine of the seasoned veterans voted for Barack Obama, the 45-year-old freshman senator from Illinois. Hillary Clinton, the most experienced Democratic candidate, received zero votes. Rudy Giuliani, the former mayor of New York, polled highest among the Republicans with just two.

By no means could Mr Brzezinski’s impromptu sounding be described as representative of public opinion. But it did capture something about what is already the most expensive and competitive presidential race in modern US history – its even higher than usual importance for America and the world, and its sheer unpredictability.

“It is no exaggeration to say that this will be the most momentous presidential campaign in recent memory,” says Jim Thurber, a veteran political scientist at American University in Washington. “And it is no accident that it is already the most expensive.”

American politics is experiencing hyperinflation. Whether it is the bitterly controversial legacy of President George W. Bush, the war in Iraq, the “global war on terror”, the threat of climate change, a deteriorating US healthcare system or the fear of a further loss of jobs to outsourcing, rarely has so much been invested in the outcome of one presidential election.

Candidates from both parties together raised more than $150m (£76m, €112m) in the first quarter of 2007, six times as much as the equivalent period in 2003 and eight times as high as 1999. By the end of this year – more than 10 months before polling day – the leading candidates will have raised at least $100m apiece.

“The final two nominees will probably spend $1bn between them – we are going to have America’s first billion-dollar president,” says Michael Toner, who stepped down as head of the Federal Election Commission in March. “There is nothing to compare to this level of spending. We are off the charts.”

What is driving America’s record campaign spending? And what does the gargantuan cost of the 2008 election say about the state of American democracy? There are two clear propellants driving runaway costs. The first is the fact that it is the most open presidential race since 1952, which was the last time that the outgoing White House did not have a candidate in the race (either a president seeking a second term or a vice-president seeking the ultimate job).

Both parties are thus running open contests. Both are also beginning their campaigns much earlier. There are already 18 candidates in play and the prospect of several more to come. Potential candidates who have yet to take the plunge include Newt Gingrich, the Republican former House speaker, Fred Thompson, a Republican former senator and star of the television series Law & Order, and possibly even Al Gore, the losing 2000 Democratic nominee turned environmentalist hero.

The crowded field and the fact that there is everything to play for mean candidates have to make an impression quickly or risk being drowned out by their spendthrift rivals.

Mitt Romney, the former governor of Massachusetts, who is running third in the Republican polls but first in fundraising in the first quarter with $23m, has been running television spots in Iowa (site of the first presidential caucus next January) to exhibit his conservative credentials. The leading candidates have also hired state campaign managers in several states, which is unprecedented at this early stage.

“If you look at the infrastructure the candidates have set up and the number of field operatives they have hired already, then you appreciate that you need a lot of money to fund these large overheads,” says Jack Quinn, a leading Democratic lobbyist and former chief of staff to Mr Gore. “If anything you would expect the candidates to raise even more money in the second quarter than in the first.”

The second factor driving costs is the fact that so many of America’s states, including Texas, California, New York and Illinois, have brought their primary elections forward to the same day – February 5. That day, which will choose 62 per cent of the national delegates for the nominating conventions later in the year, has been dubbed “tsunami Tuesday”, since there are so many more states involved this time round than on what was known as “super Tuesday” in previous electoral cycles.

Although the 20 “tsunami” states brought their dates forward to increase their influence in the selection of the candidates, the effect is likely to be the opposite. Since candidates will be unable to lavish the same kind of intimate attention on so many large states as they do on voters in the early primary states of New Hampshire, South Carolina and Iowa, they will have no choice but to reach voters through broadcast media – a much costlier option.

In the past, candidates who won in Iowa or New Hampshire could train their financial resources on the next state to sustain their momentum. This time they will have to focus resources on the most expensive and populous markets in the US – simultaneously.

“The change in the calendar has had the effect of elongating the money element of the election and compressing the time that candidates spend with voters,” says Sheila Krumholz, executive director of the Centre for Responsive Politics, a non- partisan group that monitors campaign finance. “Campaign donors are even more important relative to the voters than they were before.”

Yet on some measures there are more Americans participating in the 2008 election than ever before. Last month Mr Obama captured the headlines when he announced he had raised $25m in the first quarter, just behind Mrs Clinton’s $26m, although the former first lady had been considered to have an overwhelming fundraising advantage.

But Mr Obama’s most impressive achievement was to have raised money from 100,000 donors – twice as many as Mrs Clinton. Moreover, half of his donations were made over the internet. Four years ago Howard Dean, the governor of Vermont, made a splash by signing up 160,000 internet supporters more than six months before the primaries.

Mr Obama is already comfortably heading towards 1m – several hundred thousand more than Mrs Clinton – many of whom have appeared out of nowhere from websites such as MySpace or Facebook. Meanwhile, Mrs Clinton is frequently broadcasting online “Hillcasts” as a way of maintaining her “conversation with America”. No longer new-fangled, the internet looks like having a critical impact on the 2008 election.

“The internet is making it much easier for people to participate in politics and much easier for them to donate money,” says Simon Rosenberg, president of NDN, a Democratic advocacy group. “In the past, elections were about 30-second television ads and press conferences on the airport tarmac. Now it is about 10m people going to work every day and interacting with their favourite candidates on social networking sites.”

Whether Mr Obama can translate this mostly youthful enthusiasm into hard votes – as well as hard cash – is another matter. Measured, however, by the proportion of Americans who are donating serious money to candidates, the 2008 election looks more like a Sheraton ballroom gathering of the country’s economic elite than a cyber-meeting of its idealistic youth.

According to Ms Krumholz, whose centre has meticulously broken down the source of all presidential donations, fewer than 0.1 per cent of Americans donated the maximum $2,000 to candidates in the entire 2004 cycle. This time only a fraction of the $150m given so far comes from donations of $200 or less.

Among the leading candidates, Mr Obama has attracted the highest proportion of small donors, who account for 21 per cent of the money he raised. That is good news for his fundraising prospects since he can return to his database to tap the same people until they have hit their legal ceiling of $2,300 for the 2008 primary contests. In contrast, a large proportion of Mrs Clinton’s donors are thought to have “maxed out” already.

More significantly, the fact that candidates are devoting so much time to raising money means they have less time to interact with voters – and thus less exposure to the concerns of ordinary Americans and less time to prepare credible and coherent policy platforms.

Given their gruelling fundraising schedules, it is unsurprising that many of the candidates come across as repetitive or unimaginative when questioned about policy. At a Democratic debate in Nevada a few weeks ago, Mr Obama was forced to admit he had not yet had time to develop a health care plan [he finally came up with one on Tuesday].

Among the Republicans the lack of original thinking is even more glaring. At a recent debate, most candidates’ talking points seemed to stretch no further than “praise Ronald Reagan, don’t praise George Bush”. “The truth is that many of the candidates are seriously overstretched and looking dangerously thin on policy,” says Bill Galston, who was campaign manager to Walter Mondale in 1984 and later an adviser to Bill Clinton. “The potential to get caught out and exposed is very real.”

Add in the ubiquitous presence of cameras and the power of YouTube and other wildfire technological novelties to destroy a candidacy overnight – after his $400 haircuts were publicised, Mr Edwards in particular should avoid being filmed anywhere near a pair of scissors – and the 2008 race also starts to look uniquely volatile.

Underlying and driving America’s extraordinarily intense, unpredictable and momentous presidential election, however, is the dominance of money. “Every day there is a conference call with all the finance people – and the candidate is often in on the call,” says a senior policy adviser on one the leading campaigns. “If we’re lucky we talk about policy in the scraps of time in between fundraisers. It doesn’t happen very often.”

New tycoons are taking a not entirely altruistic interest

By Alex Barker

As America’s presidential campaigns seek fresh sources of finance, an industry that long shunned the limelight is finding its political voice.

Young, flush with cash and anxious to fend off legislation that might cut into their considerable profits, hedge fund and private equity executives have become the political fundraisers’ new best friends.

People working at private investment companies donated about $2.5m (£1.3m, €1.9m) to presidential candidates in the first quarter of this year, according to the Center for Responsive Politics. That represents a ninefold increase on the first quarter of 2003, the last comparable election period.

This is a small part of the some $150m raised by presidential candidates this year. Even so, the unusually sharp rise in donations is a telling sign of bigger changes afoot. In the middle of an extraordinary period of business success – and attracting unusual scrutiny from Washington – many executives have chosen to shed their political inhibitions.

Motivated by a mix of naked self-interest and appeals to civic duty, investment companies are building their presence in Washington to better reflect their growing economic power. “It is long overdue,” says one industry executive.

Many prominent private investment executives have been backing politicians for some time, not least George Soros, the billionaire investor, Steven Rattner of Quadrangle Group or James Simmons of Renaissance Technologies. By contrast, the new generation have fewer established ties to candidates. Fundraisers say this makes their role in this race all the more significant.

What has inspired this new-found generosity? First, growing prosperity and an exciting contest. “People simply have a lot more money now,” says James Rubin, a partner at One Equity who worked in the capital before moving into private equity. “They can get deeply involved with things they care about outside work. For some people it’s art or music, for others it’s politics.” Mr Rubin – the son of Robert Rubin, former treasury secretary – has thrown his own support behind Barack Obama.

Second, a number of candidates have either represented constituencies where many such companies are based or have worked in the industry themselves. Both Hillary Clinton and Rudy Giuliani, for instance, have built support in New York, their political home turf.

Mr Giuliani recently signed up Paul Singer, New York-based founder of Elliot Associates, a hedge fund, to be the finance chairman for his campaign. Staff at Elliot this year gave more than $150,000 to the former New York mayor who chairs Leeds Equity, a private equity group. Republican Mitt Romney received almost $100,000 from staff at Bain Capital, the private equity group that the former governor of Massachusetts founded.

Private investment companies account for almost 10 per cent of the money Christopher Dodd, chair of the Senate banking committee, raised in the first quarter. Staff at SAC Capital, the hedge fund run by Steven Cohen, contributed more than $209,400 to Mr Dodd’s campaign. This represents by far the biggest political donation given by this renowned but publicity-shy group, which accounts for some 3 per cent of daily trading on the New York Stock Exchange.

It is perhaps no coincidence that it was made to a local Connecticut senator who has opposed significantly tighter regulation of hedge funds.

Such support of candidates sympathetic to the sector hints at a third factor behind the enthusiasm of donors: concern about a political backlash. Executives have watched with unease the heated debates about the industry in Europe, where they have been denounced as “locusts” in Germany and “predators” by French President Nicolas Sarkozy in his own recent election campaign.

Popular discontent in the US is far less evident. But moves by private equity groups into more politically sensitive and regulated areas – such as student loans, carmakers and big utility groups – are raising the stakes. At the same time, Congress has begun to ask pointed questions about how the industry operates and pays tax.

Fears are growing that the sector is “going to get skewered by the pols”, in the words of one leading private equity executive. “We are too convenient a target,” he says. “It is great politics for both parties.”

Senators have been gently encouraging executives to raise their game in Washington. In response, leading buy-out groups recently came together to form the Private Equity Council to lobby on behalf of the industry in Washington. “We have to have a story to tell,” says Douglas Lowenstein, president of the PEC. “We have to back it up with good data and it has to be intellectually honest.”

Any industry establishing a presence in Washington cannot ignore the money side, he adds, but without a strong story you “may as well put the money under a mattress”.

Some of the seeming contradictions among donations, business interests and personal politics can be seen in recent donations to John Edwards. The Democratic former senator earned $479,512 advising Fortress Investment Group on a part-time basis and, with his wife, has investments valued at up to $25m in funds managed by the hedge fund and private equity group. Yet Fortress uses offshore structures to reduce the tax paid by its partners and some investors – a practice Mr Edwards has strongly criticised.

In addition, the family of private equity funds in which Mr Edwards has a stake recently bought a sub-prime mortgage lender – an industry Mr Edwards has scolded for predatory lending. These stances did not deter people working at Fortress from donating $182,250 to Mr Edwards, the biggest donation to his campaign by any single company.

Mr Edwards insists that, if elected, he would do “absolutely everything” in his power to eliminate offshore tax shelters, because they are not “the kind of things ordinary Americans can take advantage of”.

ACLU sues Boeing arm over CIA renditions

ACLU sues Boeing arm over CIA renditions
By Demetri Sevastopulo in Washington
Copyright The Financial Times Limited 2007
Published: May 30 2007 21:04 | Last updated: May 30 2007 21:04

The American Civil Liberties Union sued a Boeing subsidiary on Wednesday for allegedly helping the Central Intelligence Agency transport prisoners under its extraordinary renditions programme.

The ACLU lawsuit alleges that the subsidiary, California-based Jeppesen Data plan, provided the CIA with services for flights that were used to send three prisoners to secret detention facilities where they claim they were tortured.

According to the ACLU complaint, Binyam Moh amed, an Ethiopian, Ahmed Agiza, an Egyptian, and Abou Elkassim Britel, an Italian citizen, were all subject to the CIA renditions programme, in which prisoners are captured in one country and sent to CIA overseas secret detention sites, or to other countries’ intelligence services, for interrogation.

“We are filing this lawsuit on behalf of three individuals who have been repeatedly tortured, terrified, humiliated and deprived of their basic human rights,” said Anthony Romero, the executive director of the ACLU. “American companies should not be profiting from a CIA rendition programme that is unlawful and contrary to core American values.”

President George W. Bush conceded the existence of the secret detention sites last year.

The ACLU says Mr Agiza is imprisoned in Egypt, while Mr Britel is being held in Morocco. An Italian judge has dismissed all charges of suspected terrorism against Mr Britel. Dozens of members of the Italian parliament have petitioned Morocco over his release.

As part of its case, the ACLU cites comments by a senior Jeppesen Dataplan executive in a New Yorker magazine article, in which he says the company “do all of the extraordinary rendition flights – you know, the torture flights”.

The CIA and Boeing both declined to comment on the lawsuit.

In a related case, the ACLU also petitioned the Supreme Court on Wednesday over the case of Khaled al-Masri, a Lebanese-born German who was captured in Macedonia in December 2003 and allegedly held until May 2004 by the CIA in a secret prison in Afghanistan.

A federal court dismissed a previous lawsuit that accused George Tenet, the former CIA director, of violating human rights laws by authorising CIA operatives to capture Mr Masri. The court agreed to dismiss the case on the grounds that it could compromise state secrets.

A former intelligence official told the FT that Mr Tenet’s office had agreed to apprehend Mr Masri despite warnings from senior intelligence operatives that he had no connection with the “war on terror” and that his name “al-Masri”, which translates as “the Egyptian,” was a common name in the Middle East.

The ACLU alleges that Jeppesen provided logistics services, such as flight planning, catering and hotel accommodation for crew, for more than 70 rendition flights involving two aircraft over a four-year period. The lawsuit also accuses Jeppesen of providing services for the flight used to transport Mr Masri.

Rising tensions overshadow US-Russian talks

Rising tensions overshadow US-Russian talks
By Andrew Ward and Demetri Sevastopulo in Washington and Neil Buckley in Moscow
Copyright The Financial Times Limited 2007
Published: May 30 2007 19:58 | Last updated: May 30 2007 19:58

President Vladimir Putin is to visit the US for talks with President George W. Bush, amid arguably the most serious strain in relations between Washington and Moscow since the Soviet era.

The pair will meet at the summer home of Mr Bush’s father, George H.W. Bush, in Kennebunkport, Maine, on July 1 and 2.

The summit follows months of rising tensions over Washington’s plan to install part of its ballistic missile defence system in central Europe – a move Mr Putin this week said would turn the region into a “powder keg”.

The former cold war rivals are also at odds over the future of Kosovo, the Nato-protected Serbian province that the US is backing to become independent.

Tony Snow, White House press secretary, said the agenda would include Iran, civil nuclear co-operation and the missile defence system. “It’s an opportunity for him and President Putin to continue what is always, for the two of them, candid and very honest conversations about things that matter.”

“Co-operation between the US and Russia is important in solving regional conflicts, stopping the spread of weapons of mass destruction and combating terrorism and extremism.”

The talks will mark the second face-to-face encounter between the leaders in a month, following their meeting at the annual G8 summit of industrialised nations in Germany next week.

Relations between Washington and Moscow have continued to deteriorate since Mr Putin lambasted US foreign policy in a February speech to an elite group of security experts, including Robert Gates, the new US defence secretary, in Munich.

US officials argue that its missile defence shield – consisting of 10 missile interceptors in Poland and a radar in the Czech Republic – would defend Europe and the US from Iranian missiles.

Moscow believes the US is overstating the future potential threat from Iran. It is also concerned the missile defence installation would require stationing US troops in Poland. Senior Russian generals have raised tensions over the issue by warning Poland that any missile interceptor site could be targeted by Russian missiles.

Mr Gates met Mr Putin in Moscow in April in an attempt to mollify Russian concerns about the system. But following the meetings, Russian officials renewed opposition to the plans.

Russia this week tested new strategic and tactical rockets, which it said could respectively evade and destroy the US anti-missile system. Moscow has expressed increasing concern in recent months over what it calls US unilateralism in foreign affairs, and raised questions over Russia’s future membership of two arms control treaties from the cold war era.

Dmitry Peskov, Mr Putin’s spokesman, said the Kremlin welcomed the US invitation. “The agenda is so extensive there is more than enough for two meetings,” he said. “Every new meeting of the two presidents is an opportunity to eliminate misunderstandings and create an atmosphere of mutual confidence,” he said.

Mr Putin was the first head of state to visit Mr Bush’s ranch in Texas after he became US president in 2001 – a meeting that prompted Mr Bush’s famous remark that he had “looked the man in the eye” and got “a sense of his soul”.

Fed sees housing correction dragging on

Fed sees housing correction dragging on
By Krishna Guha in Washington
Copyright The Financial Times Limited 2007
Published: May 30 2007 21:17 | Last updated: May 31 2007 00:00

The correction in the US housing market will “probably persist longer than previously anticipated”, Federal Reserve policymakers judged at their last meeting, according to minutes released on Wednesday.

The minutes show that Fed officials meeting on May 9 were concerned by the decline in new home sales and the rise in the inventory of unsold homes relative to the rate of turnover.

Most of the members of the Federal Open Market Committee felt that weak residential investment would “continue to weigh heavily on economic activity through most of this year” – longer than expected.

Fed officials had earlier suggested the drag from residential construction would begin to ease from the second quarter onwards.

Since May 9, new home sales have ticked sharply up. However, with median new home prices sharply lower and existing home sales weak, the Fed may still think housing adjustment is likely to be more drawn out than it originally thought.

Fed officials said they expected that a flattening out of house prices nationwide would produce a “gradual increase” in the savings rate over the medium term.

But they “remained concerned the housing market correction could have a more pronounced impact on consumer spending” – especially if house prices were to decline “significantly”.

Fed officials expressed optimism the manufacturing inventory correction was largely over, and business investment would “most likely move higher in coming quarters”. They felt weak firts-quarter growth “exaggerated the weakness of underlying demand” and believed the rate of economic growth would “pick up in the coming quarters”.

Overall risks to growth “were judged to have diminished slightly” since the last meeting in March.

Nearly all Fed policymakers, meanwhile, still saw inflation as “uncomfortably high”.

Although the March core inflation reading was “more favourable” this followed several months of elevated data and “price pressures were not yet viewed as convincingly on a downward trend”.

The minutes offered no hint that any members of the committee felt the risks to growth were equal to or more important than the risks of inflation.

Policymakers agreed “the risk that inflation would fail to moderate as desired remained the committee’s predominant concern”.

With unemployment still low, Fed officials viewed the “apparent tightness of the labour market” as a “significant source of upside risk to inflation”.

Google moves to take on Microsoft

Google moves to take on Microsoft
By Chris Nuttall in San Francisco
Copyright The Financial Times Limited 2007
Published: May 31 2007 00:11 | Last updated: May 31 2007 00:11

Google will announce an initiative on Thursday that will take its applications beyond the web and challenge Microsoft on its home turf of the computer hard-drive.

The internet company is launching Google Gears, an open-source technology for creating offline web applications.

A key differentiator of Microsoft applications is that they can be used without an internet connection. They are launched from the computer’s hard drive and files created can be stored and accessed on that drive.

Google Gears will enable its own applications to have the same capabilities. Google Reader, a news reader, will be offline-enabled from today and other applications would be expected to follow.

“With Google Gears, we’re tackling a key limitation of the browser in order to make it a stronger platform for deploying all types of applications,” said Eric Schmidt, Google chief executive.

Google says Gears will work with all main browsers on all main platforms – Windows, Mac and Linux. But while it says the Firefox and Opera browsers welcome Gears, it made no mention of Microsoft or its Internet Explorer web browser.

Of additional concern to Microsoft will be Google’s decision to “open source” its technology. Google hopes Gears will move the industry towards a single standard for offline capabilities, potentially enabling thousands of applications to compete with Microsoft software.

“Microsoft is either going to have to support this or do something like it,” says David Mitchell Smith, analyst with the Gartner research firm.

Wednesday, May 30, 2007

Mary Cheney Delivers a Son

Mary Cheney Delivers a Son
by Bob Roehr
Copyright by The Windy City Times

Mary Cheney, 38, gave birth to 8 lbs., 6 oz. Samuel David Cheney, at 9:46 on the morning of May 23. It is the first child for Cheney and Heather Poe, her partner of 15 years. They have declared the pregnancy and birth a private matter and have declined to answer questions about it.

It is the sixth grandchild for Vice President Dick Cheney and his wife Lynn, and the first to carry the Cheney surname. The White House released an official photo of Dick and Lynn with the infant, but none of the two parents. It was the same photo approach and caption information that was used when the veep became a grandpa in 2004 and 2006.

Much has been made of the fact that Mary and Heather reside in Great Falls, Va., a bucolic Washington suburb up the Potomac River, where lesbians have no legal protection for their families.

The birth did not occur in several nearby Virginia hospitals, but rather at Sibley Hospital in D.C.

Mary has played a prominent role in her father’s political life, from campaigning as a child through managing his reelection effort in 2004. She also made a controversial name for herself in marketing Coors beer to the gay community, and currently works as a marketing executive for America Online.

“We join the community of American families headed by lesbian, gay, bisexual and transgender parents in congratulating Mary Cheney and Heather Poe on the birth of their son, Samuel David Cheney,” said Jennifer Chrisler, executive director of Family Pride. “Vice President Cheney’s newborn grandson and his two mothers put yet another face on our families for the American public. We wish the family the best and will continue our efforts to advocate for full equality for all American families.”

The anti-gay right was markedly restrained in commenting on the birth.

However, conservative Peter LaBarbera noted a “touch of sadness” in the event. “While we celebrate life, we cannot celebrate homosexual parenting—which involves intentionally denying a child either a mom or a dad.” The president of Americans for Truth said that Samuel needs a man in his life.

“The pro-‘gay’ media have an odd way of reporting stories like this, as if both Mary Cheney and Heather Poe were involved in the baby's conception. ... And yet, the truth remains: two homosexuals cannot create a baby. Heterosexuality—the people that radicals in the early days of "gay liberation" derided as "breeders"—must be involved.”

California Governor to Veto Bill Authorizing Same-Sex Marriage

California Governor to Veto Bill Authorizing Same-Sex Marriage
By John Pomfret
Copyright by The Washington Post
Thursday, September 8, 2005; Page A04

LOS ANGELES, Sept. 7 -- Gov. Arnold Schwarzenegger (R) announced Wednesday night that he will veto landmark legislation that would have allowed same-sex couples to marry.

In a statement, Schwarzenegger's press secretary, Margita Thompson, said the governor opposes the legislation, passed Tuesday night by the California Assembly and last week by the state Senate, because he thinks the matter should be decided by California's courts or its voters.

Schwarzenegger's decision ends the prospects for the Religious Freedom and Civil Marriage Protection Act, which passed along strict party lines after an impassioned debate in the California Assembly. The measure would have recast the state's legal definition of marriage as a union between two people rather than a union between a man and a woman.

The vote marked the first time that a state legislature had approved a bill authorizing same-sex marriage without a court order. Massachusetts has passed regulations allowing gay marriage, but only after state courts ordered it to do so.

Gay rights advocates had hailed the Assembly's vote as a victory for civil rights and as a sign that California was again setting a trend for the nation to follow. Conservative activists said the law underscored the lax morality of modern society, and they predicted it would weaken families.

Critics accused Schwarzenegger of dodging an important issue and playing to his Republican conservative base. The onetime movie star's popularity has sagged to its lowest point since he rolled to power on the back of a recall vote in 2003.

"The guy has decided he'd rather shore his relationship with a minority right-wing base than to behave in a way that's more centrist," said Assemblywoman Jackie Goldberg (D-Los Angeles), one of six openly gay members of the state legislature. "But no right-wing base has ever elected a governor."

Schwarzenegger's spokeswoman defended the governor's position, saying he continues to back gay rights, including domestic partnership programs that grant same-sex couples most of the rights enjoyed by married couples. She noted that in 2000 California's voters expressed their views on the marriage issue, passing by more than 60 percent Proposition 22, which defined marriage as being between a man and a woman.

Schwarzenegger's move does not end California's fight over the bedroom -- it simply moves it back to the courthouse and potentially the ballot box.

Early last year, San Francisco officials declared that Proposition 22 violated the state's constitution and unilaterally issued marriage licenses to more than 4,000 gay couples. The state Supreme Court nullified those unions, citing the law. In March, a San Francisco judge hearing lawsuits from activists and city officials declared the law unconstitutional, setting the scene for a battle that will return to the state's highest court.

In addition, conservative activists are planning a proposition for a June 2006 election that would ban gay marriage. Another measure would severely curtail domestic partnership benefits.

A Field Poll released last week showed Californians to be split on the issue, with 46 percent opposing and 46 percent approving of same-sex marriages.

Special correspondent Joe Dignan in San Francisco contributed to this report.

International Herald Tribune Editorial - Fighting to improve a bad immigration bill

International Herald Tribune Editorial - Fighting to improve a bad immigration bill
Copyright by The International Herald Tribune
Published: May 29, 2007

The great immigration struggle of 2007 has moved from the Senate chamber in Washington to the continent at large. With Congress taking the week off, it's time for constituents to weigh in. You can be sure of this much: The debate will get louder before it gets better.

The problems with the restrictionist provisions of the Senate immigration bill are serious and many. It includes a path to citizenship for 12 million illegal immigrants, which is a rare triumph for common sense, but that path is strewn with cruel conditions, including a fine - $5,000 - that's too steep and hurdles that are needlessly high, including a "touchback" requirement for immigrants to make pilgrimages to their home countries to cleanse themselves of illegality.

The bill imposes an untested merit-point system that narrows the channels through which family members can immigrate.

And it calls for hundreds of thousands of guest workers to toil here temporarily in an absurd employment hokey-pokey - you put your two years in, then one year out, then repeat that twice and go home forever. It would be massive indentured servitude - colonial times all over again, but without any hope of citizenship for those taking our most difficult and despised jobs.

Those who want this bill to be better are horribly conflicted by it. Their emotions still seem vastly overmatched by the ferocity of the opposition from the restrictionist right, with talk radio lighting up over "amnesty," callers spitting out the words with all the hate they can pour into it.

It is encouraging that the bill survived several attempts by that camp to blow it apart, including an amendment that would have stricken the legalization section outright.

The center held last week. But it will take a real effort to make the Senate bill much better, given that a core group of senators are bound to the ungainly architecture of their "grand bargain" and that any progress in significantly altering or improving it could unravel the deal.

The Senate bill is repellent in many ways. Its fragrant blossoms are grafted to poisonous roots. But it is also bipartisan, and there lies the kernel of possibility that may ultimately redeem it.

A good bill may yet emerge if enough lawmakers, with encouragement from the White House and Americans at large - whose moderate views on immigration were reflected in a New York Times/CBS News poll published on Friday - realize that striking hard-line poses matters less than drafting legislation marrying reality, justice and decency.

Advocates of comprehensive immigration reform - which this bill is not - should not give up the fight.

Americans, meanwhile, should look closely at what they have been offered, and to imagine what a strange country the United States would be if the bill passed as is, if it morphs into a harsher one, or if it is shot down and we are left with the dismal status quo.

We would rattle around in our fortified chunk of North America, bristling at our southern border - nothing is stopping that process - as we check our turnstiles carefully for those bright enough to merit entry, bask in the labor of a churning class of serfs, check people's IDs, raid workplaces and fill our detention centers. The anti-amnesty fringe will be pleased with itself, but it won't be an America the rest of us will want to brag about.

Drug-resistant TB case prompts international alert

Drug-resistant TB case prompts international alert
By Brian Knowlton
Copyright by Bloomberg News
Published: May 29, 2007

WASHINGTON: Public health officials on Tuesday urged the passengers and crew of two recent trans-Atlantic flights to get checked for tuberculosis, after learning that a man with an exceptionally drug-resistant form of the disease had flown on the planes.

The man, an American who was not identified, flew on May 12 from Atlanta to Paris aboard Air France Flight 385, then traveled on May 24 from Prague to Montreal aboard Czech Air Flight 410 before driving back to the United States, the Centers for Disease Control and Prevention announced. He is currently hospitalized in an isolation ward.

Dr. Julie Gerberding, director of the CDC, announced the matter.

While tuberculosis is not highly transmissible, the deadliness of this strain - and the ease of modern transportation - underscored the need for rapid response, as with the SARS epidemic.

A federal quarantine order was issued - the first since 1963 - and the CDC is working with state and local health departments, airline officials, international health ministries and the World Health Organization, Gerberding said, according to Bloomberg News.

Russia tests missile to penetrate U.S. shield

Russia tests missile to penetrate U.S. shield
Copyright by Reuters and The Associated Press
Published: May 29, 2007

MOSCOW: Russia on Tuesday tested a new intercontinental ballistic missile that it said could break through any antimissile defense system, and President Vladimir Putin stepped up his attacks on the proposed U.S. shield in Poland and the Czech Republic, saying its deployment in Europe would turn the Continent into "a powder keg."

The United States says the system is aimed at blocking possible attacks by countries such as North Korea and Iran, and that Russia could easily overwhelm such a shield with its huge missile force, but Moscow says the system would destroy the strategic balance of forces in Europe.

"We consider it harmful and dangerous to turn Europe into a powder keg and to stuff it with new weapons," Putin said at a press conference with Prime Minister José Sócrates of Portugal, which assumes the European Union's rotating presidency on July 1. "It creates new and unnecessary risks for the whole system of international and European relations."

Russian military experts said the new missile was part of the "highly effective response" promised earlier this year by Putin to the shield.

"It can overcome any potential entire missile defense systems developed by foreign countries," Colonel General Viktor Yesin told the official Russian Today television channel.

A government spokesman said the RS-24 missile was fired Tuesday morning from a mobile launcher from the Plesetsk Cosmodrome, about 800 kilometers, or 500 miles, north of Moscow.

Less than an hour later, Russia's Strategic Missile Forces command said the missile had hit its targets at the Kura test site on the sparsely inhabited far eastern peninsula of Kamchatka to the north of Japan.

"The RS-24 intercontinental ballistic missile will strengthen the military potential of Russia's strategic rocket forces to overcome antimissile defense systems and thereby strengthen the potential nuclear deterrent of Russia's strategic nuclear forces," the Strategic Missile Forces command said in a statement.

Putin issued his latest broadside against the shield after meeting with Sócrates at the Kremlin on Tuesday. Putin also said he hoped relations with the European Union would improve when its rotating presidency moves from Germany to Portugal, and accused the West of double standards on human rights and used colorful language to make a point about a dispute that has blocked talks on a new partnership deal with the European Union.

His remarks echoed a prickly exchange at the Russia-EU summit meeting earlier this month in the Volga River city of Samara, where EU leaders, including Chancellor Angela Merkel of Germany, questioned Russia's treatment of opponents and Putin said such criticism was a two-way street.

"The death penalty in certain Western countries, secret prisons and torture in Europe, problems with the media in certain European countries, immigration laws in certain European states that don't correspond with the norms of international law - are those also common values?" Putin asked.

"So we won't say we are dealing with white and fuzzy creatures on one side and with monsters who have just come out of the forest and have hooves on the other," he said.

Putin said that Russia's relations with Portugal were "developing very successfully" and suggested that Portugal's EU presidency, which begins July 1, could bring progress in strained ties between Moscow and the EU.

"We are hoping that when Portugal chairs the EU, a new impulse will be given to Russia's relations with its European partners," Putin said during a Kremlin meeting that included members of a large Portuguese delegation.

First Deputy Prime Minister Sergei Ivanov, speaking separately from Putin, said the deployment of medium- and short-range missiles by Russia's neighbours to the east and south now posed a "real threat." He said Russia had also successfully tested a tactical cruise missile.

The U.S.-Soviet treaty on intermediate nuclear forces is not effective, Ivanov told a military-industrial commission in the southern city of Znamensk, because since its signing "scores of countries have appeared that have such missiles while Russia and the United States are not allowed to have them."

"In these conditions, it is necessary to provide our troops with modern, high-precision weapons."

Ivanov, a former defense minister and leading hawk, is widely seen as a front-runner to succeed Putin in the presidential election next March, although he has not said whether he will run.

The new missile is seen as eventually replacing the aging RS-18s and RS-20s that are the backbone of the country's missile forces, the statement said. Those missiles are known in the West as the SS-19 Stiletto and the SS-18 Satan.

Ivanov said the missile was a new version of the Topol-M, first known as the SS-27 in the West, modified to carry multiple-independent warheads, Itar-Tass reported.

The first Topol-Ms were commissioned in 1997, but deployment has proceeded slower than planned because of a shortage of funds. Existing Topol-M missiles are capable of hitting targets more than 10,000 kilometers away.

Missiles carrying multiple independently targeted warheads are more difficult to intercept and destroy completely once they have been fired, making them much harder to defend against.

The new missile would likely be more capable of penetrating missile defense systems than previous models, said Alexander Pikayev, an arms control expert at the Moscow-based Institute for World Economy and International Relations.

He said Russia had been working on a version of the Topol-M that could carry multiple warheads, and that its development was probably "inevitable" after the U.S. withdrew from the Soviet-era Anti-Ballistic Missile treaty in 2002, preventing the Start II treaty from coming into force.

Pikayev concurred with the Russian position that the RS-24 conforms with terms laid down in the Start I treaty, which is in force, and the 2002 Moscow Treaty, which calls for reductions in each country's nuclear arsenal to 1,700-2,000 warheads.

The right way to respond to China's exploding surpluses

The right way to respond to China's exploding surpluses
By Martin Wolf
Copyright The Financial Times Limited 2007
Published: May 30 2007 03:00 | Last updated: May 30 2007 03:00

What is the most important high-level dialogue in international economics? The answer is not the discussion among the finance ministers of the Group of Seven high-income countries. It is the "strategic dialogue" between China and the US. This is not because the latter will produce answers, but because it asks the right question. The biggest challenge in international economic policymaking is the incorporation of China. This, to his credit, Hank Paulson, the US Treasury secretary, has recognised. But his bilateral approach will fail. The G7 should, instead, be replaced by a multilateral body that can address such issues more effectively.

To understand the challenge, we must appreciate what makes China's impact special. Experts often describe today's globalisation as the "second globalisation", to distinguish it from the "first globalisation" between 1870 and 1914. In the earlier era the rising economic power was the US and the UK was by far the world's most important exporter of capital. But China is now emerging as both the world's most dynamic economy and its largest source of capital. This helps explain a signal feature of our era: the combination of rapid growth with low real interest rates.

China's current account surplus has exploded in recent years from a modest $46bn in 2003 to $250bn (£126bn) last year. This puts Japan's $170bn surplus of 2006 in the shade. China's current account surplus last year was 9.5 per cent of gross domestic product, more than double the highest ratio Japan has ever achieved, 4.3 per cent of GDP in 1986. If one adds the balance on flows of long-term capital (net foreign direct investment), the surplus in China's "basic balance of payments" reached 12 per cent of GDP last year.

To put this in historical context, UK net foreign investment was 8 per cent of gross national product between 1905 and 1914. What makes China's position even more extraordinary is that gross domestic investment itself appears to be more than 40 per cent of GDP. Thus China both is the world's largest exporter of capital and has the world's highest ratio of domestic investment to GDP. This is capital accumulation on a grand scale.

Yet the tale does not end there. In China's case the government has been the direct source of the capital outflow. This has been a by-product of its interventions in the currency market aimed at keeping the renminbi down against the US dollar. Thus, between 2003 and 2006 the country had a cumulative current account surplus of $525bn, together with a $228bn net inflow of FDI. These were almost perfectly offset by its $777bn accumulation of official foreign exchange reserves. By March of this year, the reserves had reached $1,202bn, the biggest in the world and more than two-fifths of China's GDP.

The reserve accumulations are not, it should be stressed, in response to inflows of speculative "hot money". They reflect a policy of shipping out the foreign exchange received from huge trade surpluses and inflows of long-term investment, to keep the exchange rate down (see charts).

Is this behaviour desirable and, if not, what should be done about it?

A good argument can be made for the proposition that this pattern of behaviour is indeed desirable. It is desirable for the rest of the world because it lowers real interest rates, allowing more spending. It is desirable for China, some economists also argue,because rapid export growth is the best way to generate sustainable economic expansion and higher employment.

The arguments against the pattern, however, are also strong, in my view stronger. So long as the counterpart trade deficits are concentrated in the US, there is a risk of protectionist action, particularly as the latter's economy slows down. More important, it is hard to believe that vast accumulations of low-yielding foreign assets, so vulnerable to the almost inevitable appreciation of the renminbi against the dollar, make sense for the Chinese themselves. Indeed, the Chinese leadership itself has repeatedly declared its intention to rebalance growth, which has depended unduly in recent years on the growth of investment and the external surplus. Over the past two years, the expansion in net exports generated close to a quarter of the growth of GDP. This cannot continue much longer. At some point rather soon, demand has to grow at least as fast as GDP, if not rather faster.

In a thought-provoking recent paper*, Nicholas Lardy of the Peterson Institute for International Economics in Washington argues that the present development path has many evident disadvantages for China itself: household consumption is too low, at a mere 38 per cent of GDP in 2005; growth is too dominated by the coastal regions; employment growth ran at only 1 per cent a year between 1993 and 2004; energy consumption is too high; and the low domestic interest rates that result, in part, from foreign currency interventions distort the financial system and encourage wasteful investment.

So what is to be done? The answer seems simple: save less and let the nominal exchange rate appreciate faster, to eliminate possible inflationary consequences of such a policy shift. The Chinese government can easily afford to spend more on health and education. It can also usefully set up a modest pension system for those now alive. Moreover, the bulk of Chinese savings are not by households but by the government and corporations, many of which are owned by the government itself (see chart). Savings then are a policy choice, not a given. At 50 per cent of GDP, they also look far too high.

How then, if at all, can the outside world cajole China in a direction that seems to make such sense for the Chinese themselves? Mr Paulson is quite right to approach this question as a discussion of mutual interests. But it is almost inconceivable that the Chinese will grant what will appear to be one-sided concessions to demands from the "sole superpower". That would be far too humiliating.

The Chinese will need, instead, to participate as equals in a wider global dialogue among the leading economic players. The obvious move is to replace the G7 with a group of four - the US, eurozone, Japan and China. In time, no doubt, India will join, but its time has not yet come. Such a grouping, moreover, should not focus on China alone. It must consider the range of policies adopted in these four dominant economies. Mr Paulson is indeed addressing many of the right questions, but in too narrow a forum. It is time to broaden the dialogue.

*China: Rebalancing Economic Growth,

Microsoft hails the coffee table computer

Microsoft hails the coffee table computer
By Chris Nuttall in San Francisco
Copyright The Financial Times Limited 2007
Published: May 30 2007 05:19 | Last updated: May 30 2007 05:19

Microsoft will on Wednesday introduce a coffee table-shaped device that it says will pioneer a multibillion-dollar category of computing.

The “surface computer” features a 30-inch horizontal monitor embedded in the table, where users can move screen objects around with their fingers. Objects placed on it will be automatically identified.

Unusually for Microsoft, the software company will make the computer’s hardware through contract manufacturers, and sell it to commercial customers before tackling the consumer market.

The coffee table computer is the result of five years’ research and is being launched by Microsoft’s Entertainment and Devices division, home of the Xbox console and Zune portable media player.

In a demonstration for the Financial Times, Microsoft showed how several people around the table could take advantage of the computer’s multi-touch software to grab and expand digital information, such as photos and music files, or play games together.

Commercial applications in clude menu-ordering on a restaurant version of the table and maps and reward card points delivered to tables in hotel lobbies and casinos.

The surface computer’s first customers are hotels and telecommunications group T-Mobile. In T-Mobile stores, any phone can be placed on the computer’s surface and be instantly recognised.

Customers would be presented with a display of its features, various calling plans and the option to install ringtones or wallpapers with a few dabs of their fingers.

While the multi-touch, object-recognition software is innovative, the hardware relies on existing technology including a camera, scanner, rear-projection television and computer.

At $5,000 to $10,000, it is currently too expensive for the consumer market.

Steve Ballmer, Microsoft chief executive, is launching the surface computer at the Wall Street Journal’s “D: All Things Digital” conference, currently being held in California.

Microsoft is likely to license the software eventually so that original equipment manufacturers such as Dell and HP can make their own versions.

“This is a big breakthrough for Microsoft in terms of evolving the notion of what a personal computer is, as well as the type of experiences you can get from one,” said Michael Gartenberg, Jupiter Research analyst.

High court backs limit on equal-pay suits

High court backs limit on equal-pay suits
By Patti Waldmeir in Washington
Copyright The Financial Times Limited 2007
Published: May 29 2007 22:08 | Last updated: May 29 2007 22:08

The Supreme Court on Tuesday handed employers a victory by limiting some kinds of employment lawsuits involving pay discrimination.

The court ruled 5-4 that workers who want to sue over pay discrimination have to do so very quickly – and that they cannot wait until a big wage gap opens up because of a series of incremental, discriminatory wage decisions over a period of years.

The case involved the rules for applying a 180-day deadline for bringing pay discrimination claims under Title VII, the federal job bias law. The majority ruled that the deadline should be imposed strictly, because employers would otherwise find it too hard to defend against claims “arising from employment decisions that are long past”.

But in an angry dissent, Justice Ruth Bader Ginsburg, the court’s only woman and a strong supporter of women’s rights, said the ruling shows that “the Court does not comprehend, or is indifferent to, the insidious way in which women may be victims of pay discrimination”. Many workers do not know how much their colleagues are paid, so they may not realise until years later that they have been discriminated against, she said.

“If you sue only when the pay disparity becomes steady and large enough to enable you to mount a winnable case, you will be cut off at the court’s threshold for suing too late,” she said in an unusual statement from the bench.

The case involved a woman who sued Goodyear Tire & Rubber, claiming that she earned less than the lowest-paid man doing the same work after 19 years at an Alabama plant.

A federal jury in Alabama awarded her more than $200,000 in back pay, plus $3.3m in punitive damages. But a federal appeals court threw out the award, saying jurors should have looked only at the most recent pay decisions.

Justice Samuel Alito, who wrote for the majority, said the short deadline for such claims “reflects Congress’s strong preference for the prompt resolution of employment discrimination allegations through voluntary conciliation and co-operation”.

A spokeswoman for the US Chamber of Commerce said the business community was “very pleased with the ruling”. “We think the court struck the right balance,” said Robin Conrad of the National Chamber Litigation Center.

“There was concern in the business community about being able to defend claims that went so far back in time that evidence couldn’t be preserved,” she said.

US death toll in Iraq at two-year high

US death toll in Iraq at two-year high
By Steve Negus, Iraq Correspondent and Demetri Sevastopulo in Washington
Copyright The Financial Times Limited 2007
Published: May 29 2007 20:23 | Last updated: May 29 2007 20:23

A series of fatalities announced on Tuesday in Iraq saw the US military’s death toll rise to its highest monthly level in more than two years.

The US army reported that eight troops died in roadside bombings and a helicopter crash, bringing total fatalities so far for May to 112, a level not seen since the insurgency took hold in November 2004. The spike in violence follows another bloody month in April, when 104 US troops were killed.

The deaths, which came as Americans celebrated the Memorial Day military remembrance holiday, were announced amid a surge of violence in the capital, where 40 Iraqis were killed in two car bombings. In another sign of the deteriorating security situation, the UK government confirmed that five Britons had been kidnapped in Baghdad by gunmen who raided a finance ministry building.

President George W. Bush recently warned that the US death toll would rise as American troops stepped up patrols in Iraq as part of the military “surge”. In a Memorial Day speech on Monday, Mr Bush said Americans had a duty to ensure that the “outcome [of the wars in Iraq and Afghanistan] justifies the sacrifices made by those who fought and died in it”.

But Mr Bush is facing growing opposition from politicians, including an increasingly nervous Republican caucus, and the public.

The latest CBS/New York Times poll found that 72 per cent disapproved of the way Mr Bush was handling the war in Iraq. Fifty per cent believed the surge was having no impact, while 26 per cent thought it was making the situation worse. Sixty-three per cent said the US should set a timetable to withdraw troops some time next year.

According to the Pentagon, the number of US military fatalities in Iraq is approaching 3,500, while more than 25,000 troops have been wounded.

Michael O’Hanlon, a defence expert at the Brookings Institution, said the higher troop fatalities were only partly owing to the increased patrols US soldiers were undertaking. He said another significant cause of the violence was retaliation by Shia militias against US and Iraqi forces. He added that a key test would be whether the crackdown on militias produced a security pay-off or helped the extremist groups recruit more members.

Multiple deaths of US military personnel had been relatively rare, but have become increasingly common in the strife-torn mixed Sunni-Shia province of Diyala. Over the past year, Iraqi insurgents appear to have learnt how to launch more effective attacks on US vehicles, using ever-larger quantities of explosives that can kill or injure even if the armour is not penetrated.

The car bombs that killed some 40 Iraqis took place outside a Shia mosque in a central square of the capital. This month had seen a downturn in car bomb attacks on civilian targets, most of which were believed to be the work of Sunni radical groups, and which US officials say fuel a cycle of sectarian violence.

The Canadian-based security firm GardaWorld confirmed that the four British security guards kidnapped in Baghdad were its employees, Reuters news agency reported.

“GardaWorld confirms that a client and four of its security professionals working in Baghdad were forcibly taken from a worksite this morning,” the company said in a statement.

The statement said the four security personnel were British citizens. The names of the captives were being withheld while their families were being informed

Tuesday, May 29, 2007

I Lost My Son to a War I Oppose. We Were Both Doing Our Duty.

I Lost My Son to a War I Oppose. We Were Both Doing Our Duty.
By Andrew J. Bacevich
Copyright by The Washington Post
Sunday 27 May 2007

Parents who lose children, whether through accident or illness, inevitably wonder what they could have done to prevent their loss. When my son was killed in Iraq earlier this month at age 27, I found myself pondering my responsibility for his death.

Among the hundreds of messages that my wife and I have received, two bore directly on this question. Both held me personally culpable, insisting that my public opposition to the war had provided aid and comfort to the enemy. Each said that my son's death came as a direct result of my antiwar writings.

This may seem a vile accusation to lay against a grieving father. But in fact, it has become a staple of American political discourse, repeated endlessly by those keen to allow President Bush a free hand in waging his war. By encouraging "the terrorists," opponents of the Iraq conflict increase the risk to U.S. troops. Although the First Amendment protects antiwar critics from being tried for treason, it provides no protection for the hardly less serious charge of failing to support the troops - today's civic equivalent of dereliction of duty.

What exactly is a father's duty when his son is sent into harm's way?

Among the many ways to answer that question, mine was this one: As my son was doing his utmost to be a good soldier, I strove to be a good citizen.

As a citizen, I have tried since Sept. 11, 2001, to promote a critical understanding of U.S. foreign policy. I know that even now, people of good will find much to admire in Bush's response to that awful day. They applaud his doctrine of preventive war. They endorse his crusade to spread democracy across the Muslim world and to eliminate tyranny from the face of the Earth. They insist not only that his decision to invade Iraq in 2003 was correct but that the war there can still be won. Some - the members of the "the-surge-is-already-working" school of thought - even profess to see victory just over the horizon.

I believe that such notions are dead wrong and doomed to fail. In books, articles and op-ed pieces, in talks to audiences large and small, I have said as much. "The long war is an unwinnable one," I wrote in this section of The Washington Post in August 2005. "The United States needs to liquidate its presence in Iraq, placing the onus on Iraqis to decide their fate and creating the space for other regional powers to assist in brokering a political settlement. We've done all that we can do."

Not for a second did I expect my own efforts to make a difference. But I did nurse the hope that my voice might combine with those of others - teachers, writers, activists and ordinary folks - to educate the public about the folly of the course on which the nation has embarked. I hoped that those efforts might produce a political climate conducive to change. I genuinely believed that if the people spoke, our leaders in Washington would listen and respond.

This, I can now see, was an illusion.

The people have spoken, and nothing of substance has changed. The November 2006 midterm elections signified an unambiguous repudiation of the policies that landed us in our present predicament. But half a year later, the war continues, with no end in sight. Indeed, by sending more troops to Iraq (and by extending the tours of those, like my son, who were already there), Bush has signaled his complete disregard for what was once quaintly referred to as "the will of the people."

To be fair, responsibility for the war's continuation now rests no less with the Democrats who control Congress than with the president and his party. After my son's death, my state's senators, Edward M. Kennedy and John F. Kerry, telephoned to express their condolences. Stephen F. Lynch, our congressman, attended my son's wake. Kerry was present for the funeral Mass. My family and I greatly appreciated such gestures. But when I suggested to each of them the necessity of ending the war, I got the brushoff. More accurately, after ever so briefly pretending to listen, each treated me to a convoluted explanation that said in essence: Don't blame me.

To whom do Kennedy, Kerry and Lynch listen? We know the answer: to the same people who have the ear of George W. Bush and Karl Rove - namely, wealthy individuals and institutions.

Money buys access and influence. Money greases the process that will yield us a new president in 2008. When it comes to Iraq, money ensures that the concerns of big business, big oil, bellicose evangelicals and Middle East allies gain a hearing. By comparison, the lives of U.S. soldiers figure as an afterthought.

Memorial Day orators will say that a G.I.'s life is priceless. Don't believe it. I know what value the U.S. government assigns to a soldier's life: I've been handed the check. It's roughly what the Yankees will pay Roger Clemens per inning once he starts pitching next month.

Money maintains the Republican/Democratic duopoly of trivialized politics. It confines the debate over U.S. policy to well-hewn channels. It preserves intact the cliches of 1933-45 about isolationism, appeasement and the nation's call to "global leadership." It inhibits any serious accounting of exactly how much our misadventure in Iraq is costing. It ignores completely the question of who actually pays. It negates democracy, rendering free speech little more than a means of recording dissent.

This is not some great conspiracy. It's the way our system works.

In joining the Army, my son was following in his father's footsteps: Before he was born, I had served in Vietnam. As military officers, we shared an ironic kinship of sorts, each of us demonstrating a peculiar knack for picking the wrong war at the wrong time. Yet he was the better soldier - brave and steadfast and irrepressible.

I know that my son did his best to serve our country. Through my own opposition to a profoundly misguided war, I thought I was doing the same. In fact, while he was giving his all, I was doing nothing. In this way, I failed him.

Andrew J. Bacevich teaches history and international relations at Boston University. His son died May 13 after a suicide bomb explosion in Salah al-Din province.

Pakistan jails 'same-sex' couple - Pair lied about one partner's gender in taboo-bending case

Pakistan jails 'same-sex' couple - Pair lied about one partner's gender in taboo-bending case
By Asif Shahzad
Copyright © 2007, Chicago Tribune and The Associated Press
Published May 29, 2007

LAHORE, Pakistan -- A couple who sought legal protection from harassment were separated and sentenced to 3 years in prison Monday for lying to a Pakistani judge that surgery had turned one partner into a man.

The case of Shumail Raj, who was born female but had breast- and uterus-removal operations 16 years ago, and Shahzina Tariq has raised issues of homosexuality and transsexuality largely taboo in this conservative Muslim society.

The couple, who married last year, had approached the Lahore High Court for protection against harassment by Tariq's relatives. They said they wed to protect Tariq from being sold into marriage to pay off her uncle's gambling debts.

Court-appointed doctors who examined Raj ruled the earlier operations were not complete and that Raj was still a woman. The couple admitted they had lied about 31-year-old Raj's gender because they were in love and wanted to live together. Raj, who has a close-cropped beard, has expressed a desire to go abroad for surgery to become male.

"There are certainly laws to deal with perjury, so they deserve due punishment," said Hina Jillani, head of the Legal Aid Center of the non-government Human Rights Commission of Pakistan. "But what I believe is that they should have been given some more leniency.

"Since our society sees such relationships as immoral and illegal, the couple certainly has this pressure on them. That is why they lied to the court."

Presiding Judge Kahawaja Mohammed Sharif, announcing their conviction for perjury, said he was issuing a "lenient" sentence, below the seven-year maximum, because they had apologized.

The judge also fined them $165 -- two months' salary for an average Pakistani -- and dropped a charge of committing an act of unnatural lust, which can be punished by life in prison.

Raj and Tariq, 26, appeared shocked by the verdict. Their eyes widened as Sharif announced their punishment, and they briefly clasped each other's arms before police led them away.

Defense attorney Zahid Hussain Bokhari said the couple would appeal.

Raj, wearing a short-sleeved white shirt and jeans, urged President Pervez Musharraf to step in.

"Musharraf is talking about moderation and enlightenment. We hope he will do something for us," Raj said outside court.

Asked about the prospect of three years in separate jails for women, Raj said: "No matter, no matter. We love each other."

Raj gave Tariq, wearing a dark veil and a shawl over her head, a hug from behind before the two got into a waiting police van and were driven away to different jails.

The court will resume hearings on June 22 on whether to annul the couple's marriage, which Tariq's family says contravenes Islam and Pakistani laws against same-sex unions.

The vast majority of Pakistan's 165 million people are Muslim, many of them with conservative values.

The judge on Monday ordered police to begin a criminal investigation of the surgeons who operated on Raj and report their findings at the June hearing.

Dr. Ejaz Bhatti, head of the state-run Services Hospital in Lahore who led the court-appointed panel of doctors that examined Raj, said sexual reassignment surgery was illegal in Pakistan other than in cases where a person was born with a hormonal disorder.

He alleged that Raj had intentionally received male hormone injections -- the first such case he said he had encountered during his 25-year medical career.

Obama outlines universal healthcare plan

Obama outlines universal healthcare plan
By Edward Luce in Washington
Copyright The Financial Times Limited 2007
Published: May 29 2007 19:26 | Last updated: May 29 2007 19:26

Barack Obama joined his Democratic presidential rivals Hillary Clinton and John Edwards on Tuesday in offering a plan to provide all Americans with “affordable, universal healthcare”.

Speaking in Iowa, which holds the first presidential caucus next January, Mr Obama laid out a five-point plan that he said would lower average family health-insurance costs by $2,500 (€1,859, £1,263) and would bring the 45m uninsured Americans into full coverage.

Mr Obama, a first-term senator from Illinois who was criticised at a Democratic debate in March for being the only presidential contender without a healthcare plan, had strong words for the pharmaceutical and health-insurance companies. He said the two sectors had spent $1bn in the past decade lobbying Congress to ensure that America’s expensive and inefficient system of healthcare remained intact. Premiums had risen by 90 per cent in the past six years – four times the rate at which wages have risen. Over half of all American personal bankruptcies are caused by medical crises, he added.

“In the richest nation on earth it is simply not right that the skyrocketing profits of the drug and insurance industries are paid for by the skyrocketing premiums that come from the pockets of the American people,” he said.

“The cost crisis is trapping us in a vicious cycle. As prem iums rise, more employers drop coverage and more Amer icans become uninsured.”

Like Mrs Clinton and Mr Edwards, Mr Obama would help pay for his plan by allowing George W. Bush’s principal tax cuts to expire in 2010, a proposal attacked by Republicans as a tax increase. Mr Obama would also save on healthcare costs by fully computerising medical records, inc reasing competition between insurance companies and offering the uninsured the same coverage as federal employees.

Mr Obama’s plan was criticized for failing to sever the link between employers and healthcare and also for omitting to specify whether tax breaks would continue to be available to the very wealthy – one of the highest costs associated with US healthcare.

“The Obama plan relies heavily on the current employer-based system, which leaves workers at risk of losing their healthcare if they lose or change their jobs,” said Ron Wyden, a Democratic senator for Oregon. “It also puts US companies and workers at a disadvantage in the long term when they have to compete in a global economy against overseas companies whose workers get their healthcare paid by their government.”

All the Democratic candidates are likely to face strong criticism from Republicans for proposing to roll back Mr Bush’s tax cuts and for increasing public subsidies for healthcare. According to opinion polls, the cost of healthcare will be one of the three issues of most concern in the 2008 election.

On Tuesday Mrs Clinton outlined her plans for addressing rising income inequality in a speech in New Hampshire. “I believe that one of the most crucial jobs of the next president is to define a new vision of economic fairness and prosperity for the 21st century,” she said.

'It's Up to You Now': Sheehan Quits

'It's Up to You Now': Sheehan Quits
Copyright © 2007, The Associated Press
Published May 29, 2007, 10:21 AM CDT

FORT WORTH, Texas -- Cindy Sheehan, the soldier's mother who galvanized an anti-war movement with her monthlong protest outside President Bush's ranch, said Tuesday she's done being the public face of the movement.

"I've been wondering why I'm killing myself and wondering why the Democrats caved in to George Bush," Sheehan told The Associated Press while driving from her property in Crawford to the airport, where she planned to return to her native California.

"I'm going home for awhile to try and be normal," she said.

In what she described as a "resignation letter," Sheehan wrote in her online diary on the Daily Kos blog: "Good-bye America ... you are not the country that I love and I finally realized no matter how much I sacrifice, I can't make you be that country unless you want it.

"It's up to you now."

Sheehan began a grass roots peace movement in August 2005 when she camped outside Bush's Crawford ranch for 26 days, demanding to talk with the president about her son's death. Army Spc. Casey Sheehan was 24 when he was killed in an ambush in Baghdad in 2004.

Cindy Sheehan's protest started small but swelled to thousands and quickly drew national attention. Over the next two years, she drew huge crowds as she spoke at protest events. But she also drew criticism for some actions, such as meeting with Hugo Chavez, Venezuela's leftist president.

"I have endured a lot of smear and hatred since Casey was killed and especially since I became the so-called "Face" of the American anti-war movement," Sheehan wrote in the diary.

Kristinn Taylor, spokesman for, which has held pro-troop rallies and counter-protests of anti-war demonstrations, said dwindling crowds at Sheehan's Crawford protests since her initial vigil may have led to her decision. But he also said he hopes she will now be able to heal.

"Her politics have hurt a lot of people, including the troops and their families, but most of us who support the war on terror understand she is hurt very deeply," Taylor said Tuesday. "Those she got involved with in the anti-war movement realize it was to their benefit to keep her in that stage of anger."

When Sheehan first took on Bush, she was a darling of the liberal left. "However, when I started to hold the Democratic Party to the same standards that I held the Republican Party, support for my cause started to erode and the 'left' started labeling me with the same slurs that the right used," she wrote in the diary.

She said she sacrificed a 29-year marriage and endured threats to put all her energy into stopping the war. What she found, she wrote, was a movement "that often puts personal egos above peace and human life."

She said the most devastating conclusion she had reached "was that Casey did indeed die for nothing ... killed by his own country which is beholden to and run by a war machine that even controls what we think."

Sheehan told the AP that she had considered leaving the peace movement since last summer while recovering from surgery.

She decided on Memorial Day to step down and spend more time with her three other children. She said she was returning to California on Tuesday because it was Casey's birthday. He would have been 28.

"We've accomplished as much here as we're going to," Sheehan said, saying she was leaving to change course. "When we come back, it definitely won't be with the peace movement with marches, with rallies and with protests. It will be more humanitarian efforts."

Last year, with $52,500 in insurance money she received after her son's death, Sheehan bought 5 acres near downtown Crawford as a permanent site for protests.

"Camp Casey has served its purpose," she wrote in the diary. "It's for sale. Anyone want to buy five beautiful acres in Crawford, Texas?"

International Herald Tribune Editorial - A say on executive pay

International Herald Tribune Editorial - A say on executive pay
Copyright by The International Herald Tribune
Published: May 28, 2007

Executives have always been at the top of the corporate pay scale, but as the gap with average workers widens, more people have been asking how much is too much.

Shareholders of Verizon Communications recently passed a measure that would give them an advisory vote on compensation packages for top executives. The House of Representatives, meanwhile, has passed a bill that would give nonbinding votes on pay to all shareholders, like those that Britain and Australia already have.

The board of directors at Verizon could ignore the vote if it chose to; shareholders elect board members to make policy, after all. But they would be wise to listen. Ignoring this message would likely give impetus to the legislation in Congress, which is not the place to set salaries, or prompt shareholders to return with a binding proposal.

The real value of say-on-pay is not to slash executive salaries as a matter of principle, but to force corporate boards and their compensation committees to better explain their decisions.