Sunday, February 28, 2010

Range of services at risk due to city, state budgets

Range of services at risk due to city, state budgets
MAXED OUT | A wide range of services are at risk because the city and state -- and to a lesser extent Cook County -- are in deep financial trouble and headed for worse
Copyright by The Chicago Sun-Times
February 28, 2010,CST-NWS-maxed28.article

It's a gray winter morning in Chicago 2012. You're a single mom, waiting in the snow for a bus.

You lost your job last year as a teaching assistant in the public schools. You'd go back to college to learn new skills, but tuition's high, and financial aid programs are gone.


A SUN-TIMES SERIES Facing up to our local and state budget crisis Today, you're heading downtown to fill out job applications. The bus ride costs $3.50 -- and service is half what it was.

You hope you get back in time to get the kids -- after-school programs are gone, and the streets are scary. Maybe you can take them to the library later -- no, wait, the library's closed on Mondays.

This could be the future -- if the state, city and county budgets continue on their current path. Life for all of us could be poorer, harder, more dangerous, more polluted.

"If these trends continue, what you'll see is the speeding-up of the deterioration of the state," said Ralph Martire, executive director of the Center for Tax and Budget Accountability, a Chicago think tank.

Like a frog in a gradually warming pot of water, not everyone notices the trouble brewing. But budget problems have already hurt the Chicago area's way of life -- public transit is shrinking, library hours have been cut, and public schools are laying off employees by the hundreds. And it looks like things can only get worse.

The city shrinks

Take Chicago. In better days, Mayor Daley enjoyed a booming housing market that saw real estate sales taxes growing by double digits every year.

The mayor indulged his beautification fix by putting up median planters and wrought-iron fences. He built the $475 million Millennium Park.

Then the revenue balloon burst. Daley ended up balancing his 2009 budget by laying off 929 city workers and slowing police hiring to a crawl.

To get some cash, the mayor pressured the City Council to approve a 75-year, $1.15 billion deal to privatize Chicago parking meters tied to a steep schedule of rate hikes. To erase a $520 million 2010 budget shortfall without raising taxes, he had to use nearly all of the reserves from the parking-meter deal -- money he once called untouchable. An attempt to squeeze money out of a privatization of Midway Airport fell through.

With some exceptions, city employees were forced to take 24 unpaid furlough days. Library hours were cut by 20 percent. The city's popular Venetian Night celebration and the Grant Park July 3 fireworks extravaganza are gone, and another day will be shaved off the already-reduced Chicago Jazz Fest. The citywide switch to blue-cart recycling is stalled. The Chicago Police Department is more than 2,000 officers a day short of its authorized strength, and Supt. Jody Weis fears this will get worse because as many as 1,000 more officers are expected to retire in 2011.

The worst problem is the city's pension burden. And if pension funds run out of money, Chicago taxpayers will get stuck with the tab.

Mass transit dwindles

While the city struggles with staff and program cuts, the CTA, which carries Chicagoans to jobs and entertainment, has had to shrink. The state borrowed money to avoid fare increases until 2012, but the transit agency still cut bus service by 18 percent and L service by 9 percent, while laying off 1,057 workers. Pace, the suburban bus service, cut back its routes.

And the cuts might not be over. The CTA, Metra and Pace are owed $250 million in state funds and might have to cut service this summer if they don't get the money. The CTA also needs $7 billion in capital money to bring the system into a state of good repair -- or it will get more expensive to run.

"If the state falls further behind, and I expect it will if there is no solution, we're going to be stealing from our capital program, and we're probably going to be looking into service cuts and two years from now a fare increase," said RTA executive director Stephen Schlickman.

"The magnitude of it -- I can't fathom."

The state disaster
As bad as things are for mass transit, the amount that transit agencies are owed by the state is trifling compared with what's due the public schools and health-care systems. Universities alone are owed $735 million. The state's deficit has ballooned to $12.8 billion. That includes unpaid bills, pension-repayment costs and a reduction in federal stimulus dollars.

Dealing with it has ignited partisan warfare in Springfield, where Republicans generally favor cutting their way out of the budget mess, while Democrats are pushing for a mix of cuts and raising revenues.

A tax increase seems unlikely this spring, if only because of election-year fears, though most expect Gov. Quinn to again propose boosting the state's 3 percent income tax. Anti-incumbency fervor among voters had emboldened Statehouse Republicans pushing a no-new-taxes platform.

"Last year would have been a better opportunity to pass it than this year," House Speaker Michael Madigan said.

Madigan blames Republicans, whom he has taken to calling "non-participating dropouts," for failing to put partisanship aside and find more funding for vital state services.

Sen. Bill Brady (R-Bloomington), the likely Republican nominee for governor, has vowed not to raise taxes if elected -- and promises $1 billion in tax cuts. Brady said Democrats have run up record deficits, pushing private investment out of the state and costing jobs.

"We'll stand lockstep against tax increases because that's not the solution," Brady said.

Martire warns that, without new revenue, programs for the developmentally disabled, homebound seniors and those with mental-health issues will be scrapped, and public school students will lose programs. He also worries about fewer safety inspectors for bridges, food, railway crossings and water systems.

"I could see a significant rail accident happening -- the train wreck everyone talks about," Martire said.

County tax backlash

For all the calls for new taxes, one need look no further than Cook County to see how unpopular, and problematic, a tax hike can be.

In 2007, Cook County cut 1,700 jobs -- including nurses and prosecutors. A year later, Cook County Board President Todd Stroger pushed the overall sales tax to 10.25 percent, the highest in the country. He was voted out of office largely over that.

While Stroger said the tax hike kept the hospital system healthy, others argued that it merely dodged the hard job of cutting patronage and bloat, while sending shoppers across the county line. Barrington Hills, just inside Cook County's border, saw a 34.3 percent drop in sales tax receipts in the second quarter of 2009, according to a DePaul University study.

"This just allowed us to fill our coffers with $350 million to $400 million in revenues when all we had to do is make the necessary cuts to remove the waste," said Cook County Commissioner Tim Schneider, a northwest suburban Republican.

Laurence Msall of the Civic Federation, a tax watchdog group, said that while Cook County does not face the same immediate crisis as Illinois, it has long-term problems because of wasteful spending. Though Msall favors an Illinois personal income-tax hike, he said he thinks the last half penny of the county increase should be repealed. "That was never tied to a justified plan for how the money would be spent," Msall said.

It doesn't seem like there's an easy way out for the City of Chicago, or Cook County or the State of Illinois. Every choice looks painful, whether it's raising taxes, cutting programs or a mix of both. Neither new federal stimulus money nor an uptick in the economy alone can save us, said Joseph Schwieterman, director of DePaul University's Chaddick Institute for Metropolitan Development.

"If we can't make some really hard choices now, we're clearly incapable of fixing the problem," said Schwieterman. "I've never felt such a gloomy time."

New York Times Editorial: The Second Amendment’s Reach/Gun case presents quandary for Supreme Court justices

New York Times Editorial: The Second Amendment’s Reach
Copyright by the New York Times
March 1, 2010

Two years ago, the Supreme Court struck down parts of the District of Columbia’s gun-control law. On Tuesday, the court will consider whether that decision should apply everywhere in the country, not just in the federal territory of the nation’s capital.

We disagreed strongly with the 2008 decision, which took an expansive and aggressive view of the right to bear arms. But there is an even broader issue at stake in the new case: The Supreme Court’s muddled history in applying the Constitution to states and cities. It should make clear that all of the protections of the Bill of Rights apply everywhere.

McDonald v. Chicago is a challenge to a law that makes it extremely difficult to own a handgun within Chicago’s city limits. The challengers rely on the court’s 5-to-4 ruling in 2008, which recognized an individual right under the Second Amendment to carry guns for self-defense. But that decision left open an important question. The Bill of Rights once was largely thought to be a set of limitations on the federal government. Does the right to bear arms apply against city and state governments as well?

Since states and localities do far more gun regulation than the federal government, the court’s answer will have a powerful impact. The United States Court of Appeals for the Seventh Circuit, in Chicago, relying on 19th-century precedents, ruled that the Second Amendment does not apply to states and cities.

Under the doctrine of “selective incorporation,” the Supreme Court has ruled on a case-by-case basis that most, but so far not quite all, of the Bill of Rights applies to states and cities. The court should dispense with the selectivity and make clear that states and cities must respect the Bill of Rights.

To justify incorporation, the court has relied on the 14th Amendment, which was enacted after the Civil War to ensure equality for newly freed slaves. The amendment has two relevant clauses: the due process clause that requires government to act with proper respect for the law, and the privileges or immunities clause, which is more focused on protecting substantive individual rights.

The logical part of the amendment to base incorporation on is the privileges or immunities clause, but a terrible 1873 Supreme Court ruling blocked that path and the court has relied since then on the due process clause.

A group of respected constitutional scholars and advocates is asking the court to switch to the privileges or immunities clause as the basis for applying the Bill of Rights to states and cities. That would be truer to the intent of the founders, and it could open the door to a more robust constitutional jurisprudence that would be more protective of individual rights.

It is unlikely that the court will delve directly into the gun issues. If it decides to apply the Second Amendment to cities, it would probably send the case back to a lower court to evaluate the Chicago law. If that happens, the justices should guide the court in a way that makes clear that reasonable gun restrictions will still be upheld.

The Supreme Court’s conservative majority has made clear that it is very concerned about the right to bear arms. There is another right, however, that should not get lost: the right of people, through their elected representatives, to adopt carefully drawn laws that protect them against other people’s guns.

Gun case presents quandary for Supreme Court justices
By Robert Barnes
Copyright by The Washington Post
Monday, March 1, 2010

As a member of the Junior ROTC, teenager Antonin Scalia toted his rifle on the subway ride back and forth to Queens. As a hunter, he speaks lyrically of stalking wild turkeys. And as a justice, he may have reached the pinnacle of his more than two decades on the Supreme Court when he wrote the majority opinion that said the Second Amendment protects an individual's right to own a firearm.

But when the justices on Tuesday confront the question of whether the amendment applies to state and local governments -- not just the federal government and its enclaves, such as the District of Columbia -- the court's most prominent gun enthusiast faces something of a constitutional quandary.

The most likely path to recognizing gun ownership as a fundamental right is one that has been heavily criticized by Scalia and other conservative scholars, and it seems inconsistent with his belief that the Constitution should be interpreted in terms of its framers' "original meaning."

The alternative, one embraced by an unlikely coalition of libertarian, liberal and some conservative scholars and activists, would apply the Bill of Rights to the states in a way they say is more grounded in the Constitution. But it is also a route that could open what is invariably described as a Pandora's box of additional rights of citizenship -- health care, for instance, or housing.

The debate comes in McDonald v. Chicago, a case with great significance just on the gun-control front. A decision that states and cities may not infringe upon the right to own a firearm for self-defense could eventually call into question all manner of restrictions on gun ownership and registration, limits on who is eligible to own a gun and whether the carrying of weapons can be regulated.

On the surface, the issue would seem "easy as pie," as Scalia sometimes breezily dismisses constitutional decisions that cause other justices deep consternation. It is a challenge of handgun bans in Chicago and the suburb of Oak Park, Ill., that are nearly identical to Washington's restrictions struck by the court in 2008 in the landmark ruling District of Columbia v. Heller.

Most lawyers and scholars who follow the court think the cities have a losing hand; they say it is unlikely the five justices who made up the majority in Heller will decide that the right to own a firearm for self-protection exists only in a federal enclave. But the question of whether the Second Amendment applies to the states was specifically left unanswered in that case.

To most, it might seem illogical that the Bill of Rights would apply only to actions of the federal government, but that was its intent. Over the years, the court has said most of it applies -- or in the court's language is "incorporated" -- through the 14th Amendment.

That post-Civil War amendment was meant to protect rights and outlaw discrimination. It forbade states to pass laws that abridged "the privileges or immunities of citizens of the United States." It said states may not "deprive any person of life, liberty, or property, without due process of law" and guaranteed "equal protection of the laws."

Mostly, the justices have used the "due process" clause to incorporate the majority of the Bill of Rights. The National Rifle Association and others have urged the court to continue to use it to incorporate the Second Amendment.

Reviving another clause

But others, notably scholars from the liberal Constitutional Accountability Center and the libertarian Cato Institute, have urged the court to revive another clause from the 14th Amendment, the one that protects the "privileges or immunities of citizens of the United States" -- 19th-century-speak for "rights." An 1873 Supreme Court decision has buried the "privileges or immunities clause" by saying it covered only a narrow range of national rights, such as traveling to the capital.

The justices said in taking the McDonald case they would decide whether either clause incorporated the Second Amendment. And the exercise will provide interesting revelations.

The liberal dissenters in Heller will decide whether to continue their protest that the Second Amendment does not convey an individual right, or endorse Chicago's position that federalism requires gun control decisions to be left to the states.

Justice Clarence Thomas, Scalia's fellow originalist and another opponent of substantive due process, has signaled he is open to revisiting the privileges or immunities clause. And Justice Sonia Sotomayor, deemed by gun rights organizations as an enemy during her confirmation hearings despite a scant record on the subject, will be casting the first of what could be many votes on gun restrictions.

But Scalia's situation is particularly interesting.

He is unquestionably the court's most outspoken proponent of gun rights. He has lamented in speeches that gun ownership is too often linked with criminal behavior and his hunting trip with then-Vice President Cheney caused a national controversy. His love of the sport goes back to childhood, and he recently waxed about the challenge and allure of turkey hunting to journalist Joan Biskupic for her Scalia biography, "American Original."

"Turkeys are very wily creatures. They have superb eyesight and they're very cautious," Scalia said. "You get one shot. If you miss, the whole day's ruined."

Scalia has been equally lethal on the subject of the due-process clause, which the court has invoked to protect substantive liberties, such as abortion rights and private relations between homosexuals. He protested as recently as last spring, when the court ruled that large campaign contributions to a judge could violate the due process rights of someone who had a case before that court.

"Divinely inspired text may contain the answers to all earthly questions," Scalia wrote in dissent, "but the due process clause most assuredly does not."

Such statements give heart to Doug Kendall of the Constitutional Accountability Center. "Justice Scalia has made a career out of promoting originalism and attacking substantive due process," Kendall said. "How can he possibly embrace the due-process clause when originalism points so overwhelmingly to the privileges-or-immunities clause?"

Kendall's group has submitted a brief that brings together constitutional theorists across the board, such as liberal Jack Balkin of Yale Law School and conservative Steven Calabresi of Northwestern, one of the founders of the Federalist Society. Alan Gura, the Alexandria lawyer who won the Heller case and represents the city residents and gun rights challengers in the current case, stresses the privileges or immunities clause as the proper place to locate Second Amendment rights.

'Rooted in history'

But even Calabresi notes that Scalia can justify recognizing the right under the due-process clause as one "deeply rooted in history and tradition." Scalia has described himself at times as a "faint-hearted originalist," and has said even mistaken doctrines of the court should be left in place when they are widely accepted and relied upon.

The NRA's brief notes that relying on the due process clause in this case would allow the court to avoid overruling several previous decisions. And it references Scalia's dissent from 1993 that says he is "willing to accept the proposition that the Due Process Clause of the Fourteenth Amendment, despite its textual limitation to procedure, incorporates certain substantive guarantees specified in the Bill of Rights."

In a speech to Yale law students in 1996, Scalia was apparently more colorful, but no more conclusive. The idea of substantive due process was "babble," Scalia said, according to one report. On the other hand, the privileges-or-immunities clause was "flotsam," he said.

Officials puzzle over billions of dollars (CASH) leaving Afghanistan by plane for Dubai

Officials puzzle over billions of dollars (CASH) leaving Afghanistan by plane for Dubai
By Andrew Higgins
copyright by The Washington Post
Thursday, February 25, 2010; A10

KABUL -- A blizzard of bank notes is flying out of Afghanistan -- often in full view of customs officers at the Kabul airport -- as part of a cash exodus that is confounding U.S. officials and raising concerns about the money's origin.

The cash, estimated to total well over $1 billion a year, flows mostly to the Persian Gulf emirate of Dubai, where many wealthy Afghans now park their families and funds, according to U.S. and Afghan officials. So long as departing cash is declared at the airport here, its transfer is legal.

But at a time when the United States and its allies are spending billions of dollars to prop up the fragile government of President Hamid Karzai, the volume of the outflow has stirred concerns that funds have been diverted from aid. The U.S. Drug Enforcement Administration, for its part, is trying to figure out whether some of the money comes from Afghanistan's thriving opium trade. And officials in neighboring Pakistan think that at least some of the cash leaving Kabul has been smuggled overland from Pakistan.

"All this money magically appears from nowhere," said a U.S. official who monitors Afghanistan's growing role as a hub for cash transfers to Dubai, which has six flights a day to and from Kabul.

Meanwhile, the United States is stepping up efforts to stop money flow in the other direction -- into Afghanistan and Pakistan in support of al-Qaeda and the Taliban. Senior Treasury Department officials visited Kabul this month to discuss the cash flows and other issues relating to this country's infant, often chaotic financial sector.

Tracking Afghan exchanges has long been made difficult by the widespread use of traditional money-moving outfits, known as "hawalas," which keep few records. The Afghan central bank, supported by U.S. Treasury advisers, is trying to get a grip on them by licensing their operations.

In the meantime, the money continues to flow. Cash declaration forms filed at Kabul International Airport and reviewed by The Washington Post show that Afghan passengers took more than $180 million to Dubai during a two-month period starting in July. If that rate held for the entire year, the amount of cash that left Afghanistan in 2009 would have far exceeded the country's annual tax and other domestic revenue of about $875 million.

The declaration forms highlight the prominent and often opaque role played by hawalas. Asked to identify the "source of funds" in forms issued by the Afghan central bank, cash couriers frequently put down the name of the same Kabul hawala, an outfit called New Ansari Exchange.

Early last month, Afghan police and intelligence officers raided New Ansari's office in Kabul's bazaar district, carting away documents and computers, said Afghan bankers familiar with the operation. U.S. officials declined to comment on what prompted the raid. New Ansari Exchange, which is affiliated with a licensed Afghan bank, closed for a day or so but was soon up and running again.

The total volume of departing cash is almost certainly much higher than the declared amount. A Chinese man, for instance, was arrested recently at the Kabul airport carrying 800,000 undeclared euros (about $1.1 million).

Cash also can be moved easily through a VIP section at the airport, from which Afghan officials generally leave without being searched. American officials said that they have repeatedly raised the issue of special treatment for VIPs at the Kabul airport with the Afghan government but that they have made no headway.

One U.S. official said he had been told by a senior Dubai police officer that an Afghan diplomat flew into the emirate's airport last year with more than $2 million worth of euros in undeclared cash. The Afghan consul general in Dubai, Haji Rashoudin Mohammadi, said in a telephone interview that he was not aware of any such incident.

The high volume of cash passing through Kabul's airport first came to light last summer when British company Global Strategies Group, which has an airport security contract, started filing reports on the money transfers at the request of Afghanistan's National Directorate of Security, the domestic intelligence agency. The country's notoriously corrupt police force, however, complained about this arrangement, and Global stopped its reporting in September, according to someone familiar with the matter.

Afghan bankers interviewed in Kabul said that much of the money that does get declared belongs to traders who want to buy goods in Dubai but want to avoid the fees, delays and paperwork that result from conventional wire transfers.

The cash flown out of Kabul includes a wide range of foreign currencies. Most is in U.S. dollars, euros and -- to the bafflement of officials -- Saudi Arabian riyals, a currency not widely used in Afghanistan.

Last month, a well-dressed Afghan man en route to Dubai was found carrying three briefcases stuffed with $3 million in U.S. currency and $2 million in Saudi currency, according to an American official who was present when the notes were counted. A few days later, the same man was back at the Kabul airport, en route to Dubai again, with about $5 million in U.S. and Saudi bank notes.

One theory is that some of the Arab nation's cash might come from Saudi donations that were supposed to go to mosques and other projects in Afghanistan and Pakistan. But, the American official said, "we don't really know what is going on."

Efforts to figure out just how much money is leaving Afghanistan and why have been hampered by a lack of cooperation from Dubai, complained Afghan and U.S. officials, who spoke on the condition of anonymity. Dubai's financial problems, said a U.S. official, had left the emirate eager for foreign cash, and "they don't seem to care where it comes from." Dubai authorities declined to comment.

New and improved in France for 2010

New and improved in France for 2010
France is spiffing up its sights and museums from the Rhine to the Pyrenees. Of course, the biggest news is in Paris, where 2010 brings important changes.
By Rick Steves
Copyright © 2010, Chicago Tribune
February 28, 2010,0,6323447.story

Many Parisian museums are renovating and tweaking offerings. Paris' wonderful Picasso Museum has closed for a 30-month (some think longer) expansion. The Musee d'Orsay also is doing major renovations. At the Louvre, construction is under way on an Islamic Art wing, due to open in 2011. The pre-Classical Greek section is closed, and the Classical Greek pieces likely will be reorganized. The Army Museum's recently renovated Arms and Uniforms section covers French military history from Louis XIV to Napoleon III. And for those who enjoy city vistas, you can now get a cheap escalator-only ticket at the Pompidou Center, skip the higher-priced museum, and ride the escalator directly to the top for the view.

Long lines are the norm at the Catacombs, where millions of skeletons unearthed from former Paris cemeteries have been neatly and eerily stacked, filling miles of tunnels from a medieval plaster of Paris quarry. Waits of 60 to 90 minutes are common. If you arrive later than 2:30 p.m., you may not get in. The Catacombs recently reopened after a spate of vandalism caused it to shut down. Security has been improved, and the loose skulls have been wired into place.

Versailles is wrapping up its multiyear renovation project, and all parts should be open. Though Europe's greatest palace is the big draw, the vast royal park with the Domaine de Marie-Antoinette (the queen's frilly rural escape) is attracting crowds too. Most of the palace is covered by the Paris Museum Pass (, which for most travelers is a better deal than the LePasseport sold at the chateau and online (

Also outside Paris, Chartres' cathedral is undergoing routine restoration. So, while the interior still will be divinely lit, mostly it will be scaffolding that is illuminated. At Giverny, Monet's famous gardens now are open seven days a week April through October. Adjacent to his studio, what was the Museum of American Art has become the Museum of the Impressionists, showing temporary exhibits. Appropriately, the featured artist in 2010 is Monet.

The abbey island of Mont St. Michel has been a huge pilgrim attraction for centuries. A modern causeway made it easier to reach the island but also changed the flow of the tidal waters, causing the bay to slowly become marshland.

These days, plans to restore the abbey's island status are moving ahead. Scheduled for completion in early 2010, the Couesnon River dam at the start of the causeway retains water upriver during high tide and releases it at low tide, in effect flushing the bay and keeping its famed mudflats muddy. In the future, the causeway will be realigned to meet a sleek foot bridge, and visitors will be shuttled from mainland parking lots to the bridge to walk the remaining 300 yards (over the water at high tide) to the island. The entire project is to be completed by 2014.

In the Loire, taking a bus or minivan excursion to see the valley's beaucoup chateaux can save time (in line) and money (on admissions) when you buy your chateau ticket at a discounted group rate from the driver. Amboise's tourist office now sells "le Pass," which is tickets bundled in groups of three to save on entry fees. (Most Loire area tourist information offices offer some sort of pass promoting their sights.)

To avoid the lines at the popular Chateau de Chenonceau, purchase advance tickets at local tourist offices or from ticket machines. In the great castle town of Chinon, a free panoramic elevator now zips visitors up to the newly renovated fortress that crowns the city.

Along Provence's Cotes du Rhone wine road, a trendy new winery called Domaine de Mourchon has become the buzz of the region, blending state-of-the-art technology and traditional winemaking methods — a dazzling ring of stainless-steel vats holds wines grown on land plowed by horses. The wines are winning international praise, and the owners are Scottish, eliminating the language barrier.

All these improvements to an already exciting tourist destination are a reminder that, more than ever, France is enthusiastic about sharing its heritage and welcoming visitors.

Rick Steves ( writes European travel guidebooks and hosts travel shows on public television and public radio. E-mail him at, or write to Box 2009, Edmonds, WA 98020.

Americans top medal performance in any Winter Games? Vancouver

Americans top medal performance in any Winter Games? Vancouver
By Philip Hersh
Copyright © 2010, Chicago Tribune
8:11 p.m. CST, February 27, 2010,0,7543466.story

VANCOUVER — When speedskaters Brian Hansen, Jonathan Kuck and Chad Hedrick finished the team pursuit final early Saturday afternoon, they could pat themselves on the back for winning a silver medal and officially start the U.S. chest-thumping for making history.

Theirs was the 35th medal for Team USA in the 2010 Winter Olympics, one more than the U.S. record 34 at Salt Lake City in 2002. Steve Holcomb's four-man bobsled team added another later Saturday, first U.S. gold in the sport since 1948.

"As an athlete, with everyone focusing on the medal count, you obviously pay attention," said Apolo Anton Ohno, the four-time Olympian whose three short-track speedskating medals here gave him a career eight, most for a U.S. winter athlete. "To know this is the biggest medal haul ever is pretty amazing."

The United States will top the medal count for the first time since 1932, and it will finish with 37 medals, breaking the single-country record of 36 set by Germany in 2002. Canada also has made history, leading the gold-medal count for the first time.

Even the International Olympic Committee is celebrating the U.S. success, which also is amazing given the fractious IOC relations with the United States in the past decade.

"If the U.S. comes first by whatever count, they will claim a victory, and that would be good for them and the Olympic movement," IOC president Jacques Rogge said.

As noteworthy as the U.S. achievement is in its simplest mathematical terms, it is even more impressive when a number of other factors are added to this Olympic differential equation.

And the results prove how far the United States has come since its dismal showing, with just six medals, the last time the Winter Games took place in Canada, thanks to what became a two-phase plan to improve U.S. performance.

Phase one was the equivalent of putting a brace on a badly injured knee. Phase two was reconstructive surgery and rehabilitation.

From winning a worst-ever 4.3 percent of the available medals at the 1988 Calgary Olympics, the U.S. has won 14.2 percent of the Vancouver medals with just five remaining for Sunday's competition.

That defuses any argument that the U.S. medal total is inflated by the number of new events since 1988. So does this: 17 U.S. medals have come in events also on the Calgary program. And only one medal has come in an event added since 2002.

"Thus says our athletes were well-prepared, and we had a fantastic games," said Scott Blackmun, the U.S. Olympic Committee's chief chief executive.

That preparation began even before the U.S. team had left Calgary with merely two gold, one bronze and three silver medals, all in figure skating and speedskating.

The 1988 Winter Games still had five days to run when New York Yankees' owner George Steinbrenner, then a USOC board member, blustered into town to head up a commission that changed the USOC's previously vague mission into one that made medals the bottom line.

The 1989 Steinbrenner Commission report would start phase one of an athlete performance plan that began with short-term support and long-term ideas: more money in the year before an Olympics and health insurance, part-time jobs and tuition grants that would allow athletes to compete longer.

Within four years, the U.S. had upped its medal-winning percentage by 150 percent, then improved a bit more at the 1994 Lillehammer, Norway, Olympics before backsliding slightly at Nagano, Japan, in 1998.

Billy Demong competed at his first of four Olympics in Nagano, finishing 34th in the Nordic combined individual event. Last week, he became the first U.S. gold medalist in the sport.

"In Nagano, we felt like a small country." Demong said. "As a whole team, we felt like one of the outsiders. And now we're here to win."

Olympic kayak champion Norm Bellingham, the USOC's chief operating officer, has been involved in the development programs since 1988. He said a desire to have a "respectable medal total" at the Salt Lake City Games led to a change in philosophy that is a major factor in the Vancouver results.

"I don't think anyone ever perceived one-year programs would be sufficient," Bellingham said. "They needed to be 7- or 10-year programs, because the time it takes for an athlete identified as podium potential to reach the podium typically is 8-to-10 years."

Demong, who will carry the U.S. flag in the Closing Ceremony, and his sport are the prime examples, benefitting from increased USOC funding and the long-term plan the U.S. Ski & Snowboard Association was asked to develop in the mid-90s for Nordic combined.

"The way we got to where we are is by taking it every step of the way," Demong said. "We kind of earned it before we got here."

The USOC gave $40 million in winter athlete support over the four years leading to Salt Lake City, including $18 million designated just to help win 2002 medals. The support was $55 million in the four years leading to Vancouver.

That will be a challenge for the USOC after 2012, given the recession and questions over how much money it will get from as-yet undetermined U.S. television rights for 2014 and 2016.

"The USOC has a saying: ‘It's not every four years, it's every day,' " Ohno said. "I'd like to think that future generations, Sochi (host of 2014 Winter Olympics in Russia) and beyond, will receive whatever they need to be their absolute best at the games."

The bar for absolute best now is very high.

Washington Post Editorial; Fighting foreclosure

Washington Post Editorial; Fighting foreclosure
Copyright by The Washington Post
Sunday, February 28, 2010

THE OPTIMUM policy for the home foreclosure crisis is to modify the loans of as many distressed homeowners as possible. Making mortgage terms more affordable by mutual agreement enables families to stay in their houses, props up neighborhood home values and saves banks the huge costs of seizing and selling property at a loss. Turns out there is just one problem. It's not feasible to modify nearly enough loans to keep pace with foreclosures.

The Obama administration launched its Home Affordable Modification Program (HAMP) about a year ago. Funded with up to $75 billion from the Troubled Asset Relief Program (TARP), HAMP was aimed at cutting monthly mortgage payments to no more than 31 percent of eligible homeowners' income. To address the twin threats of lender resistance and borrower incapacity, the program offered cash to participating mortgage lenders but targeted only "families who have played by the rules and acted responsibly," in President Obama's words.

Yet after its first 11 months, HAMP is lagging. Of 1.7 million cases thought to be eligible in the first year, only 116,000 have received permanent loan modifications through January -- well below half what the administration had anticipated. The modifications are far outstripped by foreclosure starts, which totaled 316,000 in January alone, according to RealtyTrac. Lender resistance or incapacity explains only part of the shortfall; many borrowers failed to supply required documentation because it might show they had overstated their income to get a loan -- i.e., that they had not, indeed, "played by the rules."

Meanwhile, because of stubbornly high unemployment, the rate of redefault on modified loans is likely to be high -- 70 percent based on recent experience, according to a recent report by Standard & Poor's. The upshot is the buildup of a huge "shadow inventory" of perhaps 1.75 million properties that HAMP and other modification efforts spared from foreclosure for the last year or so but which are about to foreclose and come on the market, further depressing prices. Loan modifications "may simply have delayed the inevitable," the S&P report observes.

HAMP's problems have prompted calls for even more drastic modifications, including mandatory write-downs of loan principal. Bad idea. Slashing principal, presumably at taxpayer expense, might help some borrowers but comes with no guarantee that they won't end up defaulting anyway. What it would guarantee is moral hazard -- other homeowners would demand the same break -- and a stampede of private capital out of mortgage finance.

The silver lining is that HAMP and other loan modification efforts at least prevented a cascade of foreclosures at the height of the recession. Things are more stable now, so the economy can probably handle the "shadow inventory" better than it would have a year ago. To be sure, this relatively benign outcome depends on two big ifs: continued moderate interest rates and stable or declining unemployment rates.

HAMP has saved fewer homeowners than hoped, but to the extent it helped the housing market make a soft landing, it might even go down in history as a net plus. You could almost call it a successful failure.

March elections are another step toward normality in Iraq

March elections are another step toward normality in Iraq
By Ad Melkert
Copyright by The Washington Post
Sunday, February 28, 2010


This city with many faces jostling to define its future is my new home. From my desk at the head of the U.N. Assistance Mission in Iraq, it is striking how unreservedly foreign politicians, diplomats, think tanks and journalists offer their opinions or prescriptions on the future of this country. Yet Iraqis have a vivid sense of international interference over their long history. I am acutely aware that despite all the talk on how to "normalize" Iraq, our international prescriptions of "normalization" might not be what Iraqis are seeking.

The U.N. presence in Iraq represents a paradox. One the one hand, we reflect the global community's direct interest in Iraq's future. Yet to break with the past, we must transform international involvement from interference into engagement. Our engagement should facilitate and support Iraq to return to the community of nations on its own terms. This effort could be accelerated in three ways in particular.

-- First, by recognizing the political process. The efforts leading to parliamentary elections on March 7 deserve more credit. A big majority of Iraqi citizens and lawmakers has shown serious commitment to organize elections with an outcome acceptable to the people and the constitution. Hurdles have been overcome, including voting in Kirkuk, and Iraqis abroad having gotten their say. The constitutional requirement that allegiance to the Baath spirit precludes holding public office has been a more difficult hurdle. Yes, this stipulation could be used to settle political scores, but foreign observers should be cautious about trying to understand the new balance of forces in strictly black-and-white terms. The bottom line is that about 6,000 candidates and a considerable number of serious alternative coalitions and parties are likely to compete for the votes of the people -- people who until five years ago were unable to decide their governance.

-- Second, by figuring out to share oil revenue to ensure stability. This cannot and should not be driven by foreign agendas, no matter the lure of oil. Since 1922, exactly that temptation is what has shaped Iraq, to the detriment of stable coexistence arrangements among Iraqis that will last only if they are not externally imposed. International engagement should take the form of facilitating common agendas and agreements, including supporting security arrangements. It is important to make this happen in conjunction with the withdrawal of U.S. forces without seeing that drawdown as the only yardstick of progress. It is vital for Arabs and Kurds to agree on the future of their relations within the federal state of Iraq, including the sharing of oil revenue and the delineation of territorial and administrative responsibilities. The objective of international engagement should be to back up Iraqi actions, not prescribe outcomes on this front.

-- Third, by garnering international commitment to support Iraq's return to normal business. Various Security Council resolutions dating to the Persian Gulf War keep Iraq under U.N. supervision, and there are diplomatic obstacles to be overcome. Understandably, Iraqis do not consider this fair or relevant. It is also understandable that neighboring Kuwait seeks reaffirmation by Baghdad of the existing borders. But economic agreements betweeen the two are critical, and acceleration of international engagement is possible.

Will this be the year of normalization for Iraq? After three decades of wars, sanctions and dictatorship, the shape of a new era is visible from where I sit. With ups and downs, pluralism is becoming embedded in daily political life. Serious efforts are underway in Baghdad and Irbil to improve governance. Oil production contracts provide solid potential for revenue management and state building. Iraqi forces, despite disturbing lapses, are making progress in taking control of domestic security. Political debate is vibrant, the media landscape quite diverse, and an election law was agreed upon after a process that, while protracted, provided evidence of the ability to bridge differences.

Security threats are real, including the targeting of political candidates and election organizers. But it is unlikely that such risks could derail the process. The back and forth on the exclusion of candidates with ties to Saddam Hussein or the Baathists is of concern but also inevitable in this nation's transition from dictatorship to a new politics -- not unlike that of post-communist Eastern Europe. And despite setbacks, a sense of normalization is in the air.

Formidable obstacles, including social disparities and the reconciliation "gap," remain sources of instability. But these cannot be good reasons to continue to perceive Iraq as if it would still need some form of "supervision." Letting the people of Iraq make their own decisions requires a change of mind and habit of many regional and international stakeholders. All stand to gain if we take the right course.

The writer is the special representative of the U.N. secretary general to Iraq and head of the U.N. mission in Baghdad.

There's a new Red Scare. But is China really so scary?

There's a new Red Scare. But is China really so scary?
By Steven Mufson and John Pomfret
Copyright by The Washington Post
Sunday, February 28, 2010

With the American economy struggling and the political system in gridlock, there is one thing everyone in Washington seems to agree on: The Chinese do it better.

Cyberspace? China has an army of hackers ready to read your most intimate e-mails and spy on corporations and super-secret government agencies. (Just ask Google.) Education? China is churning out engineers almost as fast as it's making toys. Military prowess? China is catching up, so quickly that it is about to deploy an anti-ship ballistic missile that could make life on a U.S. aircraft carrier a perilous affair. The economy? China has gone from cheap-clothing-maker to America's banker. Governance? At least they can build a high-speed train. And energy? Look out, Red China is going green!

This new Red Scare says a lot about America's collective psyche at this moment. A nation with a per capita income of $6,546 -- ensconced above Ukraine and below Namibia, according to the International Monetary Fund -- is putting the fear of God, or Mao, into our hearts.

Here's our commander in chief, President Obama, talking about clean energy this month: "Countries like China are moving even faster. . . . I'm not going to settle for a situation where the United States comes in second place or third place or fourth place in what will be the most important economic engine in the future."

And the nation's pundit in chief, Thomas Friedman of the New York Times, even sees some virtue in the Chinese Communist Party's monopoly on political power: "One-party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages."

In the past, when Washington worried about China, it was mainly in terms of a military threat: Would we go to war? Would China replace the Soviet Union as our rival in a post-Cold War world? Or we fretted about it as a global workshop: China would suck manufacturing jobs out of our economy with a cheap currency and cheaper labor. But today, the threat China poses -- real or imagined -- has flooded into every arena in which our two nations can possibly compete.

And it's not just in Washington. Asked in a Washington Post-ABC News poll this month whether this century would be more of an "American century" or more of a "Chinese century," many Americans across the country chose China. Respondents divided evenly between the United States and China on who would dominate the global economy and tilted toward Beijing on who would most influence world affairs overall.

"We have completely lost perspective on what constitutes reality in China today," said Elizabeth Economy, the director for Asia studies at the Council on Foreign Relations. "There is a lot that is incredible about China's economic story, but there is as much that is not working well on both the political and economic fronts. We need to understand the nuances of this story -- on China's innovation, renewables, economic growth, etc. -- to ensure that all the hype from Beijing, and from our own media and politicians, doesn't lead us to skew our own policy."

Having lived in China during the past two decades, we have witnessed and chronicled its remarkable economic and social transformation. But the notion that China poses an imminent threat to all aspects of American life reveals more about us than it does about China and its capabilities. The enthusiasm with which our politicians and pundits manufacture Chinese straw men points more to unease at home than to success inside the Great Wall.

This is not to say that China isn't doing many things right or that we couldn't learn a thing or two from our Chinese friends. But in large part, politicians, activists and commentators push the new Red Scare to advance particular agendas in Washington. If you want to promote clean energy and get the government to invest in this sector, what better way to frame the issue than as a contest against the Chinese and call it the "new Sputnik"? Want to resuscitate the F-22 fighter jet? No better country than China to invoke as the menace of the future.

Take green technology. China does make huge numbers of solar devices, but the most common are low-tech rooftop water-heaters or cheap, low-efficiency photovoltaic panels. For its new showcase of high-tech renewable energy in the western town of Ordos, China is planning to import photovoltaic panels made by U.S.-based First Solar and is hoping the company will set up manufacturing in China. Even if government subsidies allow China to more than triple its photovoltaic installations this year, it will still trail Germany, Italy, the United States and Japan, according to iSuppli, a market research firm.

China does have dozens of wind-turbine manufacturers, but their quality lags far behind that of General Electric, not to mention Europe's Vestas and Siemens. And although a Chinese power company has some technology that might be useful for carbon capture and storage, which many companies see as the key to cutting greenhouse gas emissions from coal plants, it has built only a tiny version to capture carbon dioxide for making soda, rather than exploring needed innovations in storage.

If not for our economic distress, we might be applauding China's clean-energy advances; after all, one first-place position we have ceded to China is in greenhouse gas emissions. Limiting those emissions is a job big enough for both of our economies to tackle.

But domestic anxieties have morphed into anxiety about China. "Every day we wait in this nation, China is going to eat our lunch," Sen. Lindsey Graham (R-S.C.) said this month. Arguing for nuclear power, as well as renewable energy sources and cleaner ways to use coal, Graham said: "The Chinese don't need 60 votes. I guess they just need one guy's vote over there -- and that guy's voted. . . . And we're stuck in neutral here."

Like others, Graham emphasizes the China threat to propel his fellow lawmakers into action. "Six months ago, my biggest worry was that an emissions deal would make American business less competitive compared to China," he said on a different day. "Now my concern is that every day that we delay trying to find a price for carbon is a day that China uses to dominate the green economy."

In other areas, politicians and pundits also have a tendency to overestimate China's strengths -- in ways that leave China looking more ominous than it really is. Recent reports about how China is threatening to take the lead in scientific research seem to ignore the serious problems it is facing with plagiarism and faked results. Projections of China's economic growth seem to shortchange the country's looming demographic crisis: It is going to be the first nation in the world to grow old before it gets rich. By the middle of this century the percentage of its population above age 60 will be higher than in the United States, and more than 100 million Chinese will be older than 80. China also faces serious water shortages that could hurt enterprises from wheat farms to power plants to microchip manufacturers.

And about all those engineers? In 2006, the New York Times reported that China graduates 600,000 a year compared with 70,000 in the United States. The Times report was quoted on the House floor. Just one problem: China's statisticians count car mechanics and refrigerator repairmen as "engineers."

We've seen this movie before, and it didn't end in disaster for the United States. Some decades ago, Americans were obsessed with another emerging Asian giant: Japan. People were so overwrought about the "threat" that autoworkers smashed imported Japanese cars. On June 19, 1982, a Chrysler supervisor and his stepson, who had been laid off from a Michigan auto plant, killed a Chinese American man they apparently thought was Japanese. Author Michael Crichton's 1992 potboiler "Rising Sun" summed up the nation's fears. In 1991, 60 percent of Americans in an ABC News/NHK poll said they viewed Japan's economic strength as a threat to the United States.

But then something happened. Japan's economy lost its game. The 1990s became a "lost decade," so much so that during the toughest days of the recent financial crisis, Japan was invoked as a cautionary tale, lest we not do enough to jump-start our economy.

Now, some experts, such as Kenneth Lieberthal, a former senior director for Asia at the National Security Council and a man who has taught us a lot about China, say using China's green-tech rise as an excuse to whip America into shape isn't such a bad idea, because the result -- a cleaner environment or a more high-tech workforce -- makes a lot of sense. And certainly it's better to compete on that than on the size of our respective militaries.

But there is a certain irony to the new Red Scare. When we reported from China in the 1990s, some Chinese neoconservatives achieved rock-star popularity there for promoting the notion that the United States was conspiring to contain China, militarily and economically. They argued that global economic growth was a zero-sum game and that China's gain would be America's loss; as a result, Beijing had to be more assertive in its dealings with the United States.

Legions of U.S. diplomats and business leaders said no, no, no. They assured China that the two nations could grow together. Americans tried to teach Chinese the meaning of the expression "win-win."

And that is the way introductory economics courses teach it. As N. Gregory Mankiw, a former chairman of President George W. Bush's Council of Economic Advisers, writes in his popular textbook: Trade "is not like a sports contest, where one side wins and the other side loses. In fact, the opposite is true. Trade between two countries can make each country better off."

And yet a sports contest -- or worse -- is exactly what the U.S.-Chinese relationship sounds like these days. In discussing energy at the Feb. 3 meeting with governors, Obama warned: "We can't afford to spin our wheels while the rest of the world speeds ahead."

Speeding ahead is a worthy goal, but the United States does not need a bogeyman on its tail to get moving. What may seem like a throwaway line here could damage U.S. relations there, and there are enough reasons for tension with China without manufacturing new ones. As the Chinese strategist Sun Tzu said: "If ignorant both of your enemy and yourself, you are certain to be in peril."

China is no enemy, but inflating the challenge from China could be just as dangerous as underestimating it.

Steven Mufson and John Pomfret are reporters on the national staff of The Washington Post and former Post Beijing bureau chiefs. They will be online to chat with readers on Monday, March 1, at 12 p.m. Submit your questions and comments before or during the discussion.

IOC failing in its responsibility to the Olympics

IOC failing in its responsibility to the Olympics
By Sally Jenkins
Copyright by The Washington Post
Sunday, February 28, 2010

As the Vancouver Games come to a close, International Olympic Committee President Jacques Rogge will call them a success. But it's the IOC -- so incubated in blue blazers, five-star accommodations, and shellfish buffets -- that requires real assessment. Exactly what should the purpose of the IOC be? Rogge seems hard-pressed to define his job -- what exactly are the duties of royalty?

It's been almost a decade since Rogge took over the IOC, and the hope that he would provide some integrity and leadership to the organization is gone. Instead, the primary achievements of his millennial Olympic movement are unwieldy growth, a breathtaking collaboration with regimes that commit human rights abuses, and a shucking of responsibility for Olympic-sized ills. The IOC, confronted in Vancouver with a couple of lethal issues and fresh human rights concerns at the next Winter Games in Sochi, Russia, instead reserved some of its toughest words for this late-breaking scandal: the drinking of champagne by women in public.

The IOC's treatment of the Canadian women's hockey team as scandalous for being photographed swilling from bottles of bubbly after winning a gold medal was typical of the organization's recent fecklessness. Gilbert Felli, the IOC's executive director for the Olympic Games, a man apparently devoid of humor except for the jokes he perpetrates unwittingly, said, it was "not what we want to see." He intoned, presumably between bites of scallops, "I don't think it's a good promotion of sport values," and promised, "We will investigate what happened."

It was another bold stroke in the emerging portrait of IOC leadership. The pattern is clear. We can count on the IOC to firmly tackle superficial issues. As for accountability on the meaningful ones, such as the death of Georgian luger Nodar Kumaritashvili, killed on a training run on an unsafe track at nearly 90 mph, the IOC did not have "a responsibility in judicial terms," Rogge said, ever so carefully. Asked who was ultimately responsible for the fatal crash, Rogge said: "Everyone is responsible."

No. No, we're not. You are. Kumaritashvili's death requires a serious investigation, and it should include deep internal soul-searching by the IOC about its leadership. Are the Winter Games pushing athletes too far? How did the track get 20 mph faster between its design and construction? It was designed by the International Luge Federation and built to specifications by Vancouver organizers, neither of which has incentive to investigate itself, or to admit that athletes voiced serious fears and complaints about the course for a year. Oversight is surely the role of the IOC, especially when something goes wrong.

"The question is, at what point is it the responsibility of the IOC to check the work of the sports federations?" Olympic historian David Wallechinsky said. "I guess it's like any corporation that has subsidiaries. You trust them to do their job, but if they screw up, you're also responsible."

Clearly, the role of the IOC is increasingly complicated, given the enormous commercial growth of the Olympic movement. Since the last Olympics on Canadian soil at Calgary in 1988, the Winter Olympics have grown from 46 events to 86 -- and the IOC's obvious emphasis in the new events is on speed, and peril, in order to woo a younger audience that focus group surveys showed they were losing. Should they be icing alpine courses?

Troubling questions also plague the Summer Games, which have exploded to some 300 events involving 200 countries. With this growth come perils ranging from bribery to terrorism, some of them seemingly intractable. How to reconcile the musty old Olympic charter, with its emphasis on amateurism and so-called purity, with modern reality that hosting the Games can help break the bank of Greece? These aren't easy questions, and no one could blame Rogge and his colleagues if they have difficulty grappling with them.

But they don't even try. They abdicate, and that abdication has been a huge moral failure. It's a cold hard fact that the Olympics have become vehicles for evil, partly thanks to their scale. In 2007 and 2008, Human Rights Watch documented scores of human rights abuses directly linked to the Beijing Games. From forced evictions to the arrest of dissidents, the Olympics led to "an overall deterioration of human rights in China." The Olympics are leaving huge debts -- of all sorts -- in their wake. In some cases, they left men and women broken and in jail. For the moment, this is the IOC's real legacy.

A familiar refrain from Rogge and other IOC officials is that they cannot affect larger problems. This is dissembling. The IOC has shown that when it wants to, it can be proactive. For better or worse, it has been in the vanguard on sports doping, banning shot putters when Mark McGwire was still on the front of Wheaties boxes. It's surely not beyond the scope of the IOC to adopt, as Human Rights Watch suggests, a mechanism integrating human rights into the Olympic process. It would seem especially important to do so with problems likely to arise in preparation for the 2014 Sochi Games in the Caucasus, where journalists have been killed, and the Summer Games in Rio.

It shouldn't be to much for the IOC to demand that host countries sign contracts guaranteeing they won't perpetrate naked evils in the name of the Olympics, the charter of which insists on "human dignity."

If the Olympics aren't ruined yet, it's only because they are indestructible. Each quadrennial, the athletes deliver competitive masterpieces, spectacles so dazzling that we forget the problems that went into making them. In the end, that's what the Olympics are really about, and why "we can still feel good about them," observes Wallechinsky. But the danger is that under this IOC, they are turning into the ultimate political cover.

Buffett’s Bargain Shopping Spree

Buffett’s Bargain Shopping Spree
Copyright by The New York Times
Published: February 27, 2010

America’s most famous investor, Warren E. Buffett, struck a confident note in his annual letter to the shareholders of his holding company on Saturday, as he described in characteristically colorful terms how his businesses had largely ridden out the calamity of the financial crisis.

The tone of the letter contrasted sharply with Mr. Buffett’s report last year, in which he took himself to task for the company’s decline in book value, only the second such decline since he took control in 1965. This time he described how he had used the last 18 months to scoop up a string of assets — a buying spree that culminated at the end of last year with the agreement to buy the Burlington Northern Santa Fe Railway, his biggest bet yet.

Mr. Buffett wrote that his company, Berkshire Hathaway, had net income of $8.1 billion last year, or about $5,200 a share, 61 percent higher than in 2008. The company also reported a 19.8 percent rise in book value.

The crisis of 2007-8 led to the company’s first operating loss in the first quarter of last year, raising questions about Mr. Buffett’s exposure to consumer spending and the housing market. The company recovered strongly later in the year, however, helped by the rebound in the stock market, which strengthened his derivatives holdings.

In his letter, which accompanied the company’s annual report, Mr. Buffett laid out in detail how many of his holdings still depended on the vagaries of housing demand and consumer spending. But shares of the company, which peaked late in 2007 around $148,220 and fell to lows of around $73,195, have since rallied to close at $119,800 on Friday.

“We’ve put a lot of money to work during the chaos of the last two years,” he wrote. “It’s been an ideal period for investors: A climate of fear is their best friend.”

Mr. Buffett used his letter to crack jokes and issue more of his trademark aphorisms. The so-called Sage of Omaha, he is America’s most listened-to investor, and his annual letter is watched closely by investors for his assessment of his businesses and of the economy.

It has, however, taken on somewhat less importance in recent years as Mr. Buffett, 79, has raised his profile with more public speaking and interviews.

In characteristically blunt terms, he had harsh words for unnamed chief executives and directors who oversaw disasters at their companies during the crisis but “still live in a grand style.”

He said, “They should pay a heavy price,” and that there must be a reform of the way executives are rewarded for their performance. “C.E.O.’s, and in many cases, directors, have long benefited from oversized financial carrots; some meaningful sticks now need to be part of their employment picture as well.”

He also admitted mistakes of his own, saying he had closed a troubled credit card business, which had been his idea, and had given too much time to turn around the NetJets business, long a burden.

But he dwelt also on the lucrative positions he took in a string of companies over the last year and a half, pouring $15.5 billion into shares of companies like Goldman Sachs, General Electric and Wm. Wrigley Jr. Wishing he had taken greater advantage of the opportunities offered, he said, “When it’s raining gold, reach for a bucket, not a thimble.”

Burlington Northern Santa Fe was Mr. Buffett’s biggest purchase to date. Addressing that company’s 65,000 shareholders, he offered them a primer in his investment rules. But he warned all shareholders that the bigger size of Berkshire Hathaway would probably mean slower growth in the future.

“Huge sums forge their own anchor and our future advantage, if any, will be a small fraction of our historical edge,” he said.

Justin Fuller, the author of a blog about Mr. Buffett and a principal at Midway Capital Research in Chicago, said this company size was an important theme of the letter: “There was a lot of talk about size and maintaining a business and how size and bureaucracy can really hurt a business over time.”

Mr. Fuller said Mr. Buffett had also given insights into his investing strategy — many of his businesses are now in monopoly or near-monopoly industries like railroads and utilities.

Mr. Buffett told a long story about the wisdom of using a company’s own shares to buy another company — which was a veiled criticism of Kraft’s takeover of Cadbury, Mr. Fuller said, but also a justification of Mr. Buffett’s decision to issue shares to buy Burlington Northern Santa Fe. Mr. Buffett is a major investor in Kraft but has opposed its pending acquisition of Cadbury.

Mr. Buffett’s letter is watched closely for hints about when he may retire, but this year’s offered none. Talking of a time when he would be long gone, he said he was still tap-dancing to work at the end of his eighth decade.

He said he had sold shares in ConocoPhillips, Moody’s, Procter & Gamble and Johnson & Johnson, mainly to finance his railroad purchase. The shares of these companies were still likely to trade higher, he said.

Closing the letter, Mr. Buffett, ever the cheeky salesman, invited shareholders to his company’s annual meeting on May 1 in Omaha — promising to play table tennis for spectators and urging them to buy goods and services from his companies, and ending, “P.S. Come by rail.”

Caring for Pets Left Behind by the Rapture - For a fee, this service will place your dog or cat in the home of a caring atheist on Judgment Day

Caring for Pets Left Behind by the Rapture - For a fee, this service will place your dog or cat in the home of a caring atheist on Judgment Day
By Mike Di Paola
copyright by Business Week Magazine
February 22, 2010

Many people in the U.S.—perhaps 20 million to 40 million—believe there will be a Second Coming in their lifetimes, followed by the Rapture . In this event, they say, the righteous will be spirited away to a better place while the godless remain on Earth. But what will become of all the pets?

Bart Centre, 61, a retired retail executive in New Hampshire, says many people are troubled by this question, and he wants to help. He started a service called Eternal Earth-Bound Pets that promises to rescue and care for animals left behind by the saved.

Promoted on the Web as "the next best thing to pet salvation in a Post Rapture World," the service has attracted more than 100 clients, who pay $110 for a 10-year contract ($15 for each additional pet.) If the Rapture happens in that time, the pets left behind will have homes—with atheists. Centre has set up a national network of godless humans to carry out the mission. "If you love your pets, I can't understand how you could not consider this," he says.

Centre came up with the idea while working on his book, The Atheist Camel Chronicles, written under the pseudonym Dromedary Hump. In it, he says many unkind things about the devout and confesses that "I'm trying to figure out how to cash in on this hysteria to supplement my income."

Whatever motivates Centre, he has tapped into a source of genuine unease. Todd Strandberg, who founded a biblical prophecy Web site called that draws 250,000 unique visitors a month, agrees that Fido and Mittens are doomed. "Pets don't have souls, so they'll remain on Earth. I don't see how they can be taken with you," he says. "A lot of persons are concerned about their pets, but I don't know if they should necessarily trust atheists to take care of them."

This paradox poses a challenge for Centre. He must reassure the Rapture crowd that his pet rescuers are wicked enough to be left behind but good enough to take proper care of the abandoned pets. Rescuers must sign an affidavit to affirm their disbelief in God—and they must also clear a criminal background check. "We want people who have pets and are animal lovers," Centre says. They also must have the means to rescue and transport the animals in their charge. His network consists of 26 rescuers covering 22 states. "They take this very seriously," Centre says.

One of Centre's atheist recruits is Laura, a woman in her 30s who lives near the buckle of the Bible Belt in Oklahoma, and who prefers not to give her last name. She has two dogs of her own and has made a commitment to rescue four dogs and two cats when—if—the time comes. "If it happens, my first thought will be, 'I've got work to do,'" Laura says. "The first thing I'll do is find out where I need to go exactly."

The rescuers won't know the precise location of the animals until the Rapture arrives, at which time they will contact Centre for instructions. "I've got to get to [the pets] within a maximum of 18 to 24 hours. We really don't want them to wait more than a day." A day she believes will never come.

Centre doesn't think he will ever have to follow through on the service he offers. But he believes in virtuous acts. His Web site directs about $200 a month in proceeds from Google ads to food banks in Minnesota and New Hampshire. And to pet owners, he has already delivered something of great value: peace of mind, for just 92 cents a month. "If we thought the Rapture was really going to happen," Centre says, "obviously our rate structure would be much higher."

Di Paola is a reporter for Bloomberg News .

Saturday, February 27, 2010

Pawlenty: Let ER's turn away patients to cut costs

Pawlenty: Let ER's turn away patients to cut costs
By Eric Zimmermann
© 2010 Capitol Hill Publishing Corp., subsisiary of News Communications, Inc.
02/23/10 10:57 AM ET

Emergency rooms should be able to turn patients away to cut costs, Minnesota Gov. Tim Pawlenty (R-Minn.) said last night

Appearing on Fox News's "On the Record with Greta Van Sustren" last night, Pawlenty said the federal law that mandates ER treatment should be repealed.

"Well, for one thing you could do is change the federal law so that not every ER is required to treat everybody who comes in the door, even if they have a minor condition," Pawlenty said. "They should be -- if you have a minor condition, instead of being at the really expensive ER, you should be at the primary care clinic."

Supporters of the federal law would content that many people go to ERs precisely because they do not have the insurance to pay for a primary care physician.

Van Susteren was also skeptical about Pawlenty's proposal, pointing out that it's difficult to tell what's a minor condition without treating it.

VAN SUSTEREN: OK. OK. But you come in with chest pains, and like, you get horrible chest pains. Now, it could be indigestion, which is minor, or it could be heart, which isn't minor. So then...

PAWLENTY: You have to do a little triage. That's for sure.

VAN SUSTEREN: Right. I mean, so the problem is, it's got -- I mean, there really is sort of -- it's not that easy.

Comments (23)

Grump Knock off your silly a$$ fear mongering tactics.. It didn't work BEFORE a black man named Barak Obama was elected president (and cleared with the fec).. why would it work NOW? Typical republican.. nothing new to add to ta conversation but lobbyist talking points and fear mongering. That's part of the problem with america. Not enough leading.. on both sides of the isle!

BY Lloyd C on 02/23/2010 at 12:53

It's actually not a terrible idea. It may sound heartless but the reality is that if the ER is owned or operated by a private company or organization then the Government should not have any right to force them to treat people.An no I don't have a gold plated health plan, so don't start with the "Oh sure you but what about your care"In fact I have no health insurance at all. By my own choice. There are time where I could seek treatment for a minor ailment and decide not to due to costs. But I could just as easily abuse the system and stroll into any ER and demand treatment for anything on your dime. Then when the bills start pouring in I could simply ignore them.The point is you do not have a right to care. You do not have a right to be healthy. And most importantly you have no right to make me pay for it.If we could get people back to taking care of themselves and paying their own damned bills then the costs of health care would drop a lot. I wonder how many poor people return home from the ER to watch their 52" TV's with cable?
BY Malagent on 02/23/2010 at 12:55

This is what happens when you ask Republicans for a healthcare idea. These right wing freaks are as stupid as they come…
BY Michmike on 02/23/2010 at 12:55

@Gloria Hanefeld: News flash Gloria, this is an irrelevant post. ER wait times and clinic times are more than 15 minutes in America. The people who went to the ER with a runny nose in 2010 would be turned away and told to go to a clinic. Who cares if they have a job or not? as long as they have the ca$h in America, the clinic will see them and you know that! Your shot at the unemployed was also irrelevant. Please come up with a new post and "DIE QUICKLY" thanks.
BY Lloyd C on 02/23/2010 at 12:57

MALAGENT, I'm sure you'll love it when the ER refuses to treat you after you just were injured in a horrific car accident because you failed a credit check.But yeah, sure, it's obviously your fault because you decided to get in a car and drive safely, only to be mowed down by that drunk driver. There never, EVER is a such thing as an innocent victim.
BY Compassionate on 02/24/2010 at 21:12

Wow, ignorance is bliss. The law requires that all ER's open to the public must accept all comers and treat those with emergent conditions. Let's suppose that Grump or Malagent get mugged and beaten up in the process. In their world, they have no ID or Insurance Card. They would be turned away from the ER because they cannot show ability to pay even though they can. That's why the law exists.
BY Texas Ken on 02/24/2010 at 21:19

There's a reason we now call him "Governor Gutshot". It's because he intends to leave the state of Minnesota just like he left the deer he shot in the woods, bleeding from a gut wound and in dire straits:
BY Phoenix Woman on 02/24/2010 at 22:15

Compassionate is right on the money. If the law was repealed, what's to stop emergency personnel from refusing to treat you because they don't like who you are or what you do for a living? I'm sure Malegent wouldn't like it if a "liberal" doctor had the right to refuse treatment to the overweight teabagger Limbaugh when he has another heart attack after the three Big Macs he eats for breakfast.
BY Amazed on 02/25/2010 at 00:38

@MALAGENT: Glad to hear a teabagger with the courage of your convictions. Statistically, if you are a male over 30, you are likely to have a life threatening episode in the next 10 years. I hope you are able to take this courageous stand when you get refused treatment.
BY Gopherit on 02/25/2010 at 14:54

Would Grump please share the results of his scientifically-accurate research regarding the political persuasion and voting habits of "the folks who go to th ER every time they have a runny nose"? Funny thing - I work for county government, in an extremely red county. We were having issues with our insurance providers because too many employees were overusing emergency rooms. Probably for a lot of runny noses. Republican noses.
BY Gertrude on 02/25/2010 at 19:57

"American citizens should at least be triaged (BTW go look up triage - you won't like it) by licensed physicians. if I'm going to be turned out in the cold to find alternative care, I don't want to be turned out by some high school drop-out, I want to be turned out by a licensed MD."Wouldn't that require the MD to examine you first?
BY Jeff on 02/26/2010 at 16:44

Yeah I can see it now. You have chest pain? Where's your insurance card? You forgot it? I think you have a cold, here's some aspirin go home and rest.
BY NONSENSE on 02/26/2010 at 21:17

Study: Removing healthy breast affects cancer odds

Study: Removing healthy breast affects cancer odds - A new study shows that only a small group of women who are diagnosed with breast cancer in one breast benefit from elective surgery to have the other, healthy breast removed.
Copyright by The Chicago Sun-Times
February 27, 2010,CST-NWS-breast27.article

A growing number of women with cancer in one breast choose to have their other, healthy breast removed in hopes it will prevent a second cancer. But new research finds that elective surgery improved survival in only a small group of women -- those who are under 50 and are in the early stages of a type of breast cancer known as estrogen receptor-negative cancer.

That group accounts for about 6 percent of women with breast cancer.

Based on these findings, the majority of breast cancer patients should "feel more assured that they are not hurting their odds of survival from breast cancer by keeping the opposite breast," wrote the study's lead author, Dr. Isabelle Bedrosian, of the University of Texas M.D. Anderson Cancer Center.

But, Bedrosian added, the decision to have elective surgery is still one that needs to be individualized for each patient.

Using a National Cancer Institute database, researchers identified 107,000 women with breast cancer who'd undergone a mastectomy between 1998 and 2003. Of those, 8,900 women also had their healthy breast removed.

Nearly 89 percent of the women with ER-negative cancer in its early stages were alive after five years if they underwent a preventive double mastectomy, compared with 84 percent of women who did not, the M.D. Anderson researchers report in this week's Journal of the National Cancer Institute.

No other group had such a clear survival benefit.

That could be because older women with late-stage cancers are more likely to die before they develop a second cancer, diminishing the potential benefit of preventive surgery, Bedrosian said

Chicago-area home sales post year-over-year gain - But sales are lower than December, and prices have dropped

Chicago-area home sales post year-over-year gain - But sales are lower than December, and prices have dropped
By Mary Ellen Podmolik
Copyright © 2010, Chicago Tribune
12:04 a.m. CST, February 27, 2010,0,3115805,full.story

Chicago-area sales of existing homes posted a seventh consecutive month of year-over-year gains in January, but fell far short of December's sales pace.

While there were 3,922 sales of area single-family homes and condominiums last month, a 29.2 percent increase from January 2009, the sales volume dropped 32.1 percent from December. Within the city of Chicago, January sales were up 31.1 percent from a year ago but down 32 percent from December, and the median sales price dropped 7.1 percent in a month's time, the Illinois Association of Realtors said Friday.

That same pattern, sales better than a year ago but worse since last month, is occurring elsewhere in the nation and is raising concerns over whether a housing recovery — one subsidized by the federal government — is taking hold. Many economists worry that buyers rushed to take advantage of tax credits, bargain prices and low interest rates late last year, in effect borrowing from future demand.

"The latest monthly sales decline is not encouraging, and raises concern about the strength of a recovery," said Lawrence Yun, chief economist at the National Association of Realtors.

Compared with a year ago, the local housing market is much-improved. Sales are up, the number of homes on the market is down and real estate agents say consumers remain interested in taking advantage of federal homebuyer tax incentives. In order to receive tax credits of up to $6,500 for repeat buyers and $8,000 for first-time buyers, eligible consumers must have a sales contract signed by April 30 and the purchase closed by June 30.

"You're seeing year-over-year [sales] gains in many markets at the expense of pricing," said Mike Larson, an economist at Weiss Research. "That's the dynamic you're going to see for the rest of 2010."

Compared with a year ago, local prices are declining but at a slower rate. The median price of a single-family home or condo in the Chicago area fell 5.4 percent between January 2009 and January 2010, to $175,000, while the median price within the city fell 4.9 percent to $195,000. The median price means half the homes were sold for more and half for less.

In January 2009, median prices for the Chicago area and for the city itself had fallen 22.8 percent and 28.9 percent, respectively, from January 2008 levels.

Industry watchers worry that incentives used to spark consumer demand are losing their appeal and momentum is fading. "I'm getting a lot of showings," said Genie Birch, president of the Chicago Association of Realtors. "I still have people on the fence. People are still taking their time."

Since January 2009, the Federal Reserve has purchased mortgage-backed securities but has said it will end its $1.25 trillion of purchases March 31. That has prompted fears that without the government's financial support of the mortgage market, interest rates will rise sharply.

Freddie Mac reported Thursday that the rate for a 30-year, fixed-rate mortgage averaged 5.05 percent with 0.7 points for the week ended Thursday, up from 4.93 percent last week.

"At the end of last year, interest rates weren't even a factor," said Jim Merrion, regional director of Re/Max Northern Illinois. "Now what we're seeing is more questions about interest rates."

Earlier this month, Fannie Mae and Freddie Mac said they would boost their purchase of delinquent home mortgages by acquiring loans that are behind at least 120 days. As a result, economists expect the rate on a 30-year, fixed-rate mortgage to remain under 6 percent.

"Rates may bump a bit but not enough to disturb many buyers' plans," said Keith Gumbinger, vice president of HSH Associates, a publisher of consumer loan data. "I don't think we're going to make 6 percent in the next few months."

In recent weeks, there have been increasing calls to extend the credit once again to carry it through the traditional home-buying season. Experts say if the home-buying marketplace remains fragile, that may happen, particularly given that it's an election year.

US consumers lag behind economy

US consumers lag behind economy
By Alan Rappeport in Washington
Copyright The Financial Times Limited 2010
Published: February 26 2010 14:20 | Last updated: February 26 2010 17:21

US economic output grew at a faster rate than previously thought at the end of last year, as a resurgence in business investment fuelled the economy’s strongest quarter since 2003, but consumers and the housing market remain points of concern.

However, other data on Friday showed the US housing market was still shaky. The National Association of Realtors said that home resales fell by 7.2 per cent from December to January but they are still higher than the depressed levels of a year ago.

The upgrade of GDP revealed slower inventory liquidation, stronger exports and greater non-residential fixed investment than previously. The downshift in the pace of de-stocking accounted for 4 percentage points of the rise in GDP, but “real final sales” increased more slowly than thought.

Businesses cut inventories by $16.9bn (£11bn, €12.5bn) in the fourth quarter after slashing them by $139.2bn in the prior three months. Investment by businesses was also up, jumping by 6.2 per cent after falling 1.3 per cent in the third quarter.

Economists have welcomed the surge in fourth-quarter growth but say that a rise in output led by inventories is not sustainable because it is a cyclical phenomenon that occurs after a deep downturn. To date, the recovery has been led by a rebound in the manufacturing sector, while consumer spending and confidence remain shaky.

“About two-thirds of fourth-quarter real GDP growth was due to a slowing in the pace of inventory liquidation, and we expect the growth rate of GDP to slow substantially in the first quarter,” said John Ryding and Conrad DeQuadros, economists at RDQ Economics. Most analysts predict a growth rate of 2.2 per cent in the first quarter of this year.

Consumer spending rose by 1.7 per cent in the fourth quarter and was weaker than previously assumed. A separate report on Friday from Thomson Reuters and the University of Michigan revealed that consumers had begun to feel gloomier in February on fears about incomes and job prospects.

Richard Curtin, chief economist of the sentiment survey, said that with the labour market so uncertain consumers are now most focused on building savings and reducing debt. He predicted consumer spending, which accounts for about 70 per cent of economic output in the US, would rise by 1.8 per cent this year.

Despite the recent upturn in growth, the US economy continues to face headwinds and policymakers are debating the best way to unwind government support.

On Thursday Ben Bernanke, chairman of the Federal Reserve, reminded senators in his semiannual testimony that the economy was still “very weak” and that persistent slack in the labour market poses long- term risks. The Fed has also been working to unwind its support of the housing market without destabilising that sector.

The housing market showed promising signs of recovery last year, but more recent data show that residential real estate remains fragile and dependent on stimulus. Distressed and foreclosure sales are weighing on prices, which sit at 2002 levels, and analysts say the market has a “hangover” from the first-time homebuyer tax credit.

Germans consider bank rescue for Greece

Germans consider bank rescue for Greece
By James Wilson in Frankfurt and Dimitris Kontogiannis in Athens
Copyright The Financial Times Limited 2010
Published: February 26 2010 19:57 | Last updated: February 26 2010 19:57

Germany’s biggest banks are looking at a rescue plan for Greece under which they would buy Greek debt backed by financial guarantees from Berlin, the Financial Times has learnt.

As Josef Ackermann, chief executive of Deutsche Bank, held talks in Athens on Friday with George Papandreou, Greek prime minister, the structure of a possible eurozone bail-out should the country’s debt crisis worsen began to emerge.

Several such banks, including Hypo Real Estate, Eurohypo and Deutsche Postbank, which hold billions of euros of Greek debt, all said they would not increase their holdings. However, guarantees from Berlin for what could be high-yielding debt might soften their stance.

The official said: “This could be one of the outcomes but it would not be a purely private solution – there has to be government involvement. If it were something on a eurozone level, I don’t think my bank would say: ‘We would not take part.’”

At the end of a week in which a general strike brought much of the country to a standstill, Mr Papandreou prepared the way for more radical measures to cut the spiralling deficit. He urged the rest of Europe to show “solidarity”. “We must do whatever we can now to address the im­mediate dangers today. Tomorrow it will be too late, and the consequences will be much more dire,” he told parliament.

Mr Papandreou said Greece did not want other countries to pay its public debt but he expected a strong show of support from its European Union partners. Angela Merkel, Germany’s chancellor, is due to meet him next week.

The price of Greek bonds gyrated amid uncertainty over whether Athens would be able to borrow from the capital markets next week. Yields on government bonds rose sharply but slipped back on rising hopes for a deal to help Athens issue a five-year bond next week.

Berlin and German banks would be keen to involve other eurozone countries in such a plan, but officials in Berlin have said each country could find its own way to contribute.

Additional reporting by Gerrit Wiesmann in Frankfurt, Joshua Chaffin in Brussels and David Oakley in London

Turkish Leader Defends Inquiry Into Possible Plot

Turkish Leader Defends Inquiry Into Possible Plot
Copyright by The New York Times
Published: February 26, 2010

ISTANBUL — Prime Minister Recep Tayyip Erdogan weighed in on Turkey’s worsening political crisis on Friday, declaring that an investigation into alleged coup preparations was “for the benefit of the people,” while the Turkish police detained 18 more current and retired military officers and arrested two others.

Lt. Gen. Cetin Dogan of the Turkish Land Forces and retired Gen. Engin Alan, former head of special forces, according to Turkey’s Anatolian news agency — were among the highest ranking ever to have been arrested in Turkey.

The latest actions capped a week of high political drama in Turkey, where the Islamic-inspired political party that runs the government is locked in a power struggle with the country’s secular establishment, led by the military.

The detentions and arrests came just one day after three former high-ranking generals were released in a move that some hoped would ease the situation.

A majority of the officers taken into custody on Friday are active duty, the Anatolian news agency reported. They bring the number of detentions of military officers this week to more than 60.

Mr. Erdogan, speaking to lawmakers in Ankara, the capital, used strong language to defend the investigation, which is tied to a broader legal case that critics say has become a witch hunt against Mr. Erdogan’s enemies.

“Those who plot to crush people’s will behind closed doors should realize that from now on they will face the law,” Mr. Erdogan said. “The process under way is painstaking, but it is for the benefit of the people. Today’s developments are setting free the consciousness of the people.”

The detentions are part of an investigation into what prosecutors say was a 2003 plot by the military to foment civil unrest, like attacks in mosques, to provide a pretext for a coup to unseat the elected government. The military, for its part, has vigorously denied the allegations. It has not responded to the detentions.

Turkey’s military has long been immensely powerful, and has carried out four coups against elected governments in Turkey’s short history. With separate, military courts, it has long been considered untouchable, far above civilian control.

But its image has been badly dented in the struggle with Mr. Erdogan, with allegations of military misdeeds leaked to the news media, a development that would have been unheard of a decade ago.

The three generals who were released Thursday were the most senior military officers ever to be called for questioning in a civilian court. It remains unclear if the men, who had been detained for three days, will still be charged despite their release.

About 200 people are already in detention in a related case, known as Ergenekon, which also centers on coup plot allegations.

Toyota Accused of Withholding Data

Toyota Accused of Withholding Data
Copyright by The Associated Press
Published: February 26, 2010

DETROIT — The chairman of a House committee that questioned Toyota executives this week about the carmaker’s recall accused the company on Friday of withholding documents while fighting lawsuits filed by crash victims.

Representative Edolphus Towns, Democrat of New York, said that Toyota’s actions amounted to “a systematic disregard for the law and routine violation of court discovery orders,” based on files obtained by the Committee on Oversight and Government Reform from a former Toyota lawyer. Mr. Towns asked the chief of Toyota’s United States operations, Yoshimi Inaba, who testified before the panel, to explain why the documents had not been released to plaintiffs’ lawyers.

“People injured in crashes involving Toyota vehicles may have been injured a second time when Toyota failed to produce relevant evidence in court,” Mr. Towns wrote in a letter to Mr. Inaba.

“Moreover, this also raises very serious questions as to whether Toyota has also withheld substantial, relevant information from N.H.T.S.A,” Mr. Towns wrote, referring to the National Highway Traffic Safety Administration.

The safety agency is investigating whether Toyota acted quickly enough in recalling about 8.5 million vehicles — six million in the United States — after discovering problems with the accelerator pedals.

The committee said documents that it subpoenaed from Dimitrios Biller, who was Toyota’s national general counsel in the United States from 2003 to 2007, indicated that Toyota kept electronic files known as the books of knowledge, which contained testing data and information on design problems. The documents noted that the records had never been made public and that the carmaker entered into multimillion-dollar settlements on several occasions to keep them secret, the committee said.

Mr. Towns cited a 2006 e-mail message in which Mr. Biller explained that he agreed to a $1.5 million settlement with a woman who was paralyzed in a rollover accident largely to avoid disclosing the database.

A Toyota spokeswoman, Cindy Knight, said the company would respond to Mr. Towns’s questions.

“We are confident that we have acted appropriately with respect to product liability litigation and our discovery practices,” Ms. Knight said in a statement. “It is not uncommon, however, for companies to object to certain demands for documents made in litigation. Consistent with that philosophy, we take appropriate steps to maintain the confidentiality of competitive business information and trade secrets.”

Toyota has previously called Mr. Biller’s claims “inaccurate and misleading,” noting that he was suing for wrongful termination and emotional distress.

Meanwhile, the federal safety agency said that it had bought and planned to conduct tests on the Lexus ES350 sedan that was formerly owned by a woman who testified at another House committee hearing this week. The woman, Rhonda Smith, described the car speeding out of control at 100 miles an hour in October 2006 as she frantically tried to bring it to a halt. She eventually succeeded, after six miles, but a Toyota dealership told Mrs. Smith that it could not find any problems.

Also on Friday, Toyota said it was expanding nationwide a program to ease the repair process for owners of recalled vehicles. Dealers can offer free services like a rental car or taxi fare reimbursement during the time in which a customer “is unable or unwilling to use his or her car,” Toyota said in a statement.