Special: California Recall Stateline.org--a site for journalists, policy makers and engaged citizens--has produced a special issue page for the latest developments on the Oct. 7 recall election of California Gov. Gray Davis. The issue page contains links to updated news stories, candidate profiles, political cartoons and Web blogs. California's Oct. 7 gubernatorial recall election is likely to dominate political and entertainment news prior to the voting because of its mixture of political intrigue and Hollywood celebrity. On the first Tuesday in October, California voters will be asked whether or not they want to oust Gov. Gray Davis from office, and if so, who his successor should be. Altogether, 247 Californians submitted the required $3,500 and 65 signatures to qualify for the recall ballot, and 135 were certified as candidates by the secretary of state's office. Davis was elected to a second term in November 2002. His unpopularity stems, among other things, from the state's $38 billion deficit as well as its energy problems. Davis' campaign to stay in office was jolted by the surprise decision of movie super-star and political novice Arnold Schwarzenegger to enter the race. Now, with several prominent Republicans running against him, and Democratic Lt. Gov. Cruz Bustamante�s name also on the ballot, Davis faces the political battle of his career. To stay in office, Davis must get more than 50 percent of the vote. If Davis is recalled, the candidate with the most votes will replace him. (Kavan Peterson, 8/14/03) http://www.stateline.org/issue.do?issueId=320354

Who's Minding Your Data? Thus far, the government appears unconcerned about regulating its sources of personal data. The FBI's use of commercial databases has grown 9,600 percent over the last decade, according to EPIC. The bureau uses credit records, property records, professional licenses, driver's licenses and other data purchased from companies such as ChoicePoint Inc., of Alpharetta, Ga., and LexisNexis, of Dayton, Ohio, as well as credit reporting agencies such as Atlanta-based Equifax Inc., Experian Information Solutions Inc., of Costa Mesa, Calif., and Trans Union LLC, of Chicago. But none of these companies is held accountable for the truth or accuracy of the information it sells. http://www.eweek.com/article2/0,3959,1219661,00.asp

U.S. May Fine Some Who Shielded Iraq Sites yan Clancy arrived in Iraq in February in a double-decker bus filled with opponents of the war, after a rocky journey in it all the way from Milan. He had used frequent flier miles to get to Italy from Wisconsin. "There weren't a lot of Milwaukee-Baghdad flights," he explained. Mr. Clancy is 26 and owns a record store. He went to Iraq, he said, to observe, to learn and "to protect the civilian infrastructure." He spent weeks as a human shield at a grain silo that he feared would be the target of American bombing. The government is not happy with Mr. Clancy and several others like him. Not long after they returned home this spring, they received letters from the Treasury Department seeking information about their activities in Iraq and noting that spending money there was a crime that could lead to 12 years in prison and civil penalties of up to $275,000. Mr. Clancy and other opponents of the war say the inquiries are part of an effort to suppress dissent, but the government says they are a routine enforcement of regulations. And a Treasury spokesman bristled at the notion that the inquiries were politically motivated. "Of course not," the spokesman, Taylor Griffin, said. "Unlike in Iraq under Saddam Hussein � where dissent was met with imprisonment or worse � the freedom to protest and disagree with the government is a cornerstone of American democracy. However, the right to free speech is not a license to violate U.S. or international sanctions. While free expression is a right enjoyed by all Americans, choosing which laws to abide by and which to ignore is not a privilege that is granted to anyone." Several hundred people calling themselves human shields camped at oil refineries, water treatment plants, electricity generating stations and similar sites during the war. Many were from Europe; about 20 were American. Several people involved in the effort said that none of the sites were attacked while human shields were present. "That tells me we were successful," said Judith Karpova, a 58-year-old writer in Hoboken, N.J., who placed herself at an oil refinery near Baghdad. "We went there to protect innocent civilians, and I went there to protect my own country against further crimes against humanity and war crimes." The government seeks to punish Ms. Karpova and others not for hurting the war effort but for financial transactions in Iraq. The transactions were not large. Mr. Clancy said he took $1,500 with him, gave much of it away and spent the rest on necessities. Ms. Karpova said her expenses were paid by her hosts. She did admit, in a recent letter to the Treasury Department, to importing "eight sets of coloring books and eight sets of color markers, which I left at the children's hospital in Baghdad." Faith Fippinger, a 62-year-old retired schoolteacher in Sarasota, Fla., wrote to the government that she bought rice, eggs and dates in Iraq. "I purchased an occasional glass of delicious, sweet Iraqi tea at tea stalls and tasty kebobs or chicken at food stalls," Ms. Fippinger added. "I have no receipts." Others said the travel restrictions had been misused in the past. "The main problem has been selective prosecution," said Harold Hongju Koh, a law professor at Yale and a State Department official in the Clinton administration. "Presumably others went to Iraq who did not disapprove of the war, and that gets into tricky constitutional ground." Mr. Griffin, the Treasury spokesman, rejected the premise of Professor Koh's comment. "We're going to enforce U.S. law without regard to the person's motivation for breaking it," he said. Mr. Clancy said the main point was a simple one. "I'm being prosecuted for dissenting and for going to meet the people we were supposedly going to liberate," he said. In July, the government sued Voices in the Wilderness, a Chicago group that has delivered medicine to Iraq since 1996 in violation of the regulations, which allow humanitarian aid but only by those granted a license. The suit was filed in federal court in the District of Columbia. The government seeks to collect $20,000 in fines, which were imposed last year for conduct in 1998. "The timing of it is very questionable," said the group's lawyer, William P. Quigley, a law professor at Loyola University in New Orleans. "If it's not just bureaucratic, it's a very serious effort by the government to punish people for following their convictions." I'll believe the government position when they fine reporters for spending money on hotels in Baghdad. A.I. http://www.nytimes.com/2003/08/14/politics/14SHIE.html

"There has been a dissipation of the huge budget surplus," he said, "and all we have to show for that is the city of Baghdad."

The pattern is as depressing as it is familiar: the savings run out, the rent doesn't get paid, the eviction notice arrives.

No Work, No Homes President Bush and his clueless team of economic advisers held a summit at the president's ranch in Crawford, Tex., yesterday. This is the ferociously irresponsible crowd that has turned its back on simple arithmetic and thinks the answer to every economic question is a gigantic tax cut for the rich. Their voodoo fantasies were safe in Crawford. There was no one at the ranch to chastise them for bequeathing backbreaking budget deficits to generations yet unborn. And no one was there to confront them with evidence of the intense suffering that so many poor, working-class and middle-class families are experiencing right now because of job losses on Mr. Bush's watch. After the meeting, Mr. Bush said, "This administration is optimistic about job creation." It's too bad George Akerlof wasn't at the meeting. Mr. Akerlof, a 2001 Nobel laureate in economics, bluntly declared on Tuesday that "the Bush fiscal policy is the worst policy in the last 200 years." Speaking at a press conference arranged by the Economic Policy Institute, Mr. Akerlof, a professor at the University of California at Berkeley, said, "Within 10 years, we're going to pay a serious price for such irresponsibility." Also participating in the institute's press conference was Robert Solow, an economist and professor emeritus at M.I.T. who is also a Nobel laureate. He assailed the Bush tax cuts as "redistributive in intent and redistributive in effect." "There has been a dissipation of the huge budget surplus," he said, "and all we have to show for that is the city of Baghdad." The president and his advisers could have learned something about the real world if, instead of hanging out at the ranch, they had visited a city like Los Angeles (or almost any other hard-hit American venue) and spent time talking to folks who have been thrown out of work and, in some cases, out of their homes in this treacherous Bush economy. The job market in California worsened in July. More than a million people are out of work statewide, and there are few signs of the optimism that Mr. Bush is feeling. Officials at homeless shelters in Los Angeles, as in other large American cities, are seeing big increases in the number of families seeking shelter because of extended periods of joblessness. The pattern is as depressing as it is familiar: the savings run out, the rent doesn't get paid, the eviction notice arrives. http://www.nytimes.com/2003/08/14/opinion/14HERB.html

U.S. Soldier Killed in Iraq and Occupation Is Defended An American soldier was killed today and one was wounded, compounding one of the worst weeks of the four-month-long occupation of Iraq and after an impassioned defense of the occupation by the top American administrator here, L. Paul Bremer III. In his remarks on Tuesday, however, Mr. Bremer acknowledged that "mistakes" had led to the deaths of innocent civilians and that finding the money to repair Iraq's crumbling infrastructure was a "substantial problem."� Paradoxically, one of the biggest challenges facing the American-led civilian authority is proving to be providing fuel for citizens of a country that boasts the world's second-largest oil reserves. Two days of riots in Basra, spurred by miles-long gasoline lines and electricity failures, were quelled Monday after British troops distributed gasoline from their own reserves. But fuel shortages may prove common, according to estimates by United Nations officials. They say the country is almost certain to endure shortages this winter of kerosene, a critical fuel for heating homes in northern Iraq, and liquefied petroleum gas, a common cooking fuel that has already seen a sixteen-fold price spike in some regions. In addition to the killings over the weekend of the two Iraqi policemen, Baghdad residents have been angered by recent American attacks that killed members of two families riding in their cars. "Look, it's a regrettable thing anytime there is the loss of innocent life," Mr. Bremer said in response to a question about civilian deaths. "There are, in combat operations, always going to be mistakes." http://www.nytimes.com/2003/08/13/international/worldspecial/13CND-IRAQ.html

How Ben-Gurion Did It: Is Everyone Listening? The official offered his prisoners a deal: he might let them go if they agreed to halt their "terrorist activities" and to use only political means to pursue their dream of statehood. It was a proposal similar to the one Mahmoud Abbas, the Palestinian prime minister, is making now to Hamas and other Palestinian factions that advocate terrorism. But this particular offer was made by a British officer to a group of Jews, at the time that the British uneasily governed Palestine, before the creation of the state of Israel in 1948. Among those who heard the proposal out, and rejected it, was a young extremist who went by a nom de guerre, Michael. Michael later escaped and returned to the underground, to a campaign of assassination, bombing and arms smuggling, with bank robbery thrown in to finance the effort. "Nothing would be permitted to stand in the way of Jewish independence in the Land of Israel," Michael wrote 50 years later in his autobiography. "Nothing and No One." By then, Michael was himself testimony to Israel's success at integrating militants into mainstream society. His violent life in the pre-state period had become the stuff of romantic national narrative and broad political appeal, and under a different name, Yitzhak Shamir, he had been one of Israel's longest-serving prime ministers, one who cracked down on Jewish terrorism in the West Bank. In the view of many historians, it was in no small part the leadership of one man, David Ben-Gurion, that transformed Zionist militants into Israeli politicians and even peacemakers. "Ben-Gurion was a state-builder," said Shmuel Sandler, the Lainer Professsor of Democracy and Civility at Bar Ilan University. "State-building means that at one point you understand there can't be any more violence or illegal operations in your camp." Times, terrorist tactics and international realities change; historical comparisons between the Zionist and Palestinian national movements can be easily strained. Yet there are echoes in Mr. Abbas's oratory now of the message of Ben-Gurion, Israel's first prime minister. "On this land and for this people, there is only one authority, one law, and one democratic and national decision that applies to us all," Mr. Abbas said on assuming his post this spring. His meaning was that Hamas and other groups could no longer, in effect, conduct their own wars with Israel. In 1944, a representative of Ben-Gurion delivered a similar message to a militant leader: "There must be one Jewish military force in Eretz Israel," that is, in the land of Israel. The militant leader, Menachem Begin, recalled the episode in his account of those years, "The Revolt." Unlike Mr. Abbas, Hamas, which took responsibility for a suicide bombing in the West Bank today, officially rejects any two-state solution with Israel. Unlike the pragmatic Ben-Gurion, Begin in those days rejected any partition. His printed declaration in 1944 of "war to the end" against the British appeared under a map of Palestine that extended to the border of Iraq, enclosing the image of a rifle by the words "Only Thus." Eventually, of course, Prime Minister Begin would give up the Sinai Peninsula. Although Mr. Abbas has said Hamas must give up its illegal weapons, he has also repeatedly said he will not risk civil conflict to enforce his national vision, and the governing Palestinian Authority has yet to take action against terrorists. http://www.nytimes.com/2003/08/13/international/middleeast/13LETT.html

If you're into political video see On Lisa Rein's Radar http://onlisareinsradar.com/

Signs Grow of Innocent People Being Executed, Judge Says A federal judge in Boston said yesterday that there was mounting evidence innocent people were being executed. But he declined to rule the death penalty unconstitutional. "In the past decade, substantial evidence has emerged to demonstrate that innocent individuals are sentenced to death, and undoubtedly executed, much more often than previously understood," the judge, Mark L. Wolf of Federal District Court in Boston, wrote in a decision allowing a capital case to proceed to trial. He cited the exonerations of more than 100 people on death row based on DNA and other evidence. "The day may come," the judge said, "when a court properly can and should declare the ultimate sanction to be unconstitutional in all cases. However, that day has not yet come." Judge Wolf wrote that the crucial question for courts was "how large a fraction of the executed must be innocent to offend contemporary standards of decency." http://www.nytimes.com/2003/08/12/national/12DEAT.html

The Art of the False Impression In the superamplified media din created by the likes of Arnold and Kobe and Ben and Jen, it's very difficult for the former vice president, a certified square, to break into the national conversation. That says a lot about us and the direction we're headed in as a nation. You can agree with Mr. Gore's politics or not, but some of the points he's raising, especially with regard to President Bush's credibility on such crucial issues as war and terror and the troubled economy, deserve much closer attention. "Millions of Americans now share a feeling that something pretty basic has gone wrong in our country, and that some important American values are being placed at risk," said Mr. Gore. Keeping his language polite, the former vice president asserted that the Bush administration had allowed "false impressions" to somehow make their way into the public's mind. Enormous numbers of Americans thus came to believe that Saddam Hussein was involved in the Sept. 11 attacks and was actively supporting Al Qaeda; that Saddam's weapons of mass destruction were an imminent threat, and Iraq was on the verge of building nuclear weapons; that U.S. troops would be welcomed with open arms, and there was little danger of continued casualties in a prolonged guerrilla war. The essence of Mr. Gore's speech was that these corrosive false impressions were part of a strategic pattern of distortion that the Bush administration used to create support not just for the war, but for an entire ideologically driven agenda that overwhelmingly favors the president's wealthy supporters and is driving the federal government toward a long-term fiscal catastrophe. What if Mr. Gore is right? There's something at least a little crazy about an environment in which people are literally stumbling over one another to hear what Arnold Schwarzenegger has to say about the budget crisis in California (short answer: nothing), while ignoring what a thoughtful former vice president has to say about the budget and the economy of the U.S. http://www.nytimes.com/2003/08/11/opinion/11HERB.html

Bush Misuses Science Data, Report Says The Bush administration persistently manipulates scientific data to serve its ideology and protect the interests of its political supporters, a report by the minority staff of the House Committee on Government Reform says. The 40-page report, which was prepared for Representative Henry A. Waxman, the committee's ranking Democrat, accused the administration of compromising the scientific integrity of federal institutions that monitor food and medicine, conduct health research, control disease and protect the environment. On many topics, including global warming and sex education, the administration "has manipulated the scientific process and distorted or suppressed scientific findings," the report said. "The administration's political interference with science has led to misleading statements by the president, inaccurate responses to Congress, altered Web sites, suppressed agency reports, erroneous international communications and the gagging of scientists," the report added. Some of the examples from the report's 21 subject areas have already been reported in the media. They include the Environmental Protection Agency's decision last year to delete a section on global warming in its comprehensive report on the state of the environment and President Bush's overstatement of the number of stem cell lines available for research under controls imposed by the administration. The report's authors say federal agencies have jeopardized scientific integrity in many ways, including stacking scientific advisory committees with unqualified officials or industry representatives, blocking publication of findings that could harm corporate interests and defending controversial decisions with misleading information. With respect to sex education, the report said, the Bush administration has advanced what the report described as an unproven "abstinence only" agenda and abolished an initiative at the Centers for Disease Control and Prevention that listed scientifically validated safe-sex techniques that included using condoms. On agricultural pollution, the Agriculture Department has issued tight controls on government scientists seeking to publish information that could have an adverse impact on industry, the report said. It cited the case of a microbiologist, James Zahn, who was denied permission to publish findings on the dangers of antibiotic-resistant bacteria near hog farms in the Midwest. On the Arctic National Wildlife Refuge, the report said that Interior Secretary Gale A. Norton, a firm advocate of drilling for oil in the region, misrepresented to Congress her agency's scientific opinion on how drilling would affect the region's caribou population. She told lawmakers most of the caribou calving occurred outside the refuge; her scientists said the opposite was true. http://www.nytimes.com/2003/08/08/politics/08REPO.html

Justice Dept. to Monitor Judges for Sentences Shorter Than Guidelines Suggest The Justice Department told a federal court administrator today that it would begin compiling data on judges who give lighter sentences than federal guidelines prescribe, a move that critics see as an effort to limit judicial independence by creating a "blacklist" of judges. The new policy will require prosecutors to notify Justice Department officials in Washington whenever a federal judge issues a sentence that falls below sentencing guidelines. The notification will set in motion a review of whether an appeal of the judge's sentence should be filed. The policy, first reported on Wednesday in The Wall Street Journal, is part of a bill signed into law by President Bush in April that seeks to make it tougher for federal judges to depart from sentencing guidelines. The Justice Department, in a letter today to the head of the administrative office of the United States Courts, said it developed the policy as part of the new law's requirements rather than accept a more "onerous" option allowed by Congress. That option would have required the Justice Department to go to Congress with a detailed report each time a judge broke from the sentencing guidelines. In 2001, federal judges handed out sentences below guidelines in 35 percent of the 54,851 cases examined, the United States Sentencing Commission found. But more than half the departures resulted from plea agreements, and prosecutors appealed the sentences in only a tiny fraction of cases, officials said. Mary Beth Buchanan, the United States attorney for the Pittsburgh area and the leader of a Justice Department advisory committee that helped develop the policy, said in an interview that there would probably be some increase in appeals by the Justice Department over sentences as a result of the new policy. But she added: "I don't think it will be a dramatic increase. Unless we get a tremendous increase in our resources, we wouldn't have the capability to do a lot more." Some lawmakers, judges and legal observers, however, said they were deeply troubled by the shift. Senator Edward M. Kennedy, Democrat of Massachusetts, accused Mr. Ashcroft of requiring prosecutors "to participate in the establishment of a blacklist of judges." He called the policy "the latest salvo in the Ashcroft Justice Department's ongoing attack on judicial independence and fairness" in sentencing. John S. Martin, a federal district judge in Manhattan who announced in June that he would retire in part because he saw the judiciary's independence as threatened, said the Justice Department policy was "based on the erroneous premise that a lot of judges around the county are just going off the reservation." He added: "The problem is that a bunch of bureaucrats in Washington looking at the statistics won't know the facts of these cases. They're taking a very mechanistic approach to the whole process." Nicholas M. Gess, a senior Justice Department official in the Clinton administration, said the policy fit a pattern in the Ashcroft Justice Department of centralizing decision-making in Washington, a trend also seen in death penalty cases. http://www.nytimes.com/2003/08/08/politics/08JUDG.html

President puts himself in rare company--Hoover's July 29, 2003 BY JESSE JACKSON In upcoming weeks, President Bush and his Cabinet members will fan out across the country to tout the administration's economic plan. Republican legislators will make the economy the centerpiece of their ''message'' in the August recess. They want credit for the tax rebate checks that people will start receiving in the mail, will point to the uptick in the stock market, and predict that a ''robust recovery'' is just around the corner. And in chorus, they'll praise President Bush's tax cuts for turning the economy around. Great song and dance, but where are the jobs? This administration is the first since Herbert Hoover and the Great Depression to lose jobs rather than create them. Since Bush came to office, the economy has shed more than 3 million private-sector jobs. And even with the added employment that came from huge increases in military and homeland security spending, the country has still lost more than 2.5 million jobs since Bush took office.� http://www.suntimes.com/output/jesse/cst-edt-jesse29.html

After the war, American soldiers referred to Iraqi looters as "Ali Babas." Now, the name is more commonly used by Iraqis to describe the soldiers. Iraqis Struggle to Retrieve Goods From G.I.'s After the war, American soldiers referred to Iraqi looters as "Ali Babas." Now, the name is more commonly used by Iraqis to describe the soldiers. This notion is flickering through the capital, propelled by word of mouth and amplified by anti-Western elements ready to exploit any hint of American misbehavior. Many Iraqis are convinced that the soldiers are here to rob them of money, jewelry and cars. American military officials refused to discuss specific charges of theft by soldiers and disciplinary actions, but said that in most instances property believed stolen was more likely to have been confiscated during raids or at checkpoints. That distinction matters little to Iraqis trying to recover their property. Sgt. Thad Farlow, a civil affairs officer whose unit runs a civilian assistance center, said the complaints he heard stemmed from a mixture of negligence and actual misconduct. "It's kind of hard to win the hearts and minds when soldiers are taking $650 Thuraya phones," he said, referring to a type of satellite telephone. Iraqi community leaders warn that the perception is poisoning Iraqi attitudes, buttressing a sense of powerlessness and creating opposition to the American-led occupation, even among Iraqis who welcomed the ouster of Saddam Hussein. But the American forces have done little to refute the rumors of theft. Nor is there a centralized system to help Iraqis recover their property or to answer Iraqi complaints. On any given day, Iraqis can be found pleading at the gates of military bases or in civil affairs offices: an old woman who laments that her savings were taken from her son on the road to Baghdad; a young man who says he gave a Thuraya phone to a soldier for a call and did not get it back; a cigarette merchant who says he returned to a checkpoint to recover his car the day after it was confiscated, only to find that both car and checkpoint had vanished. "I always used to have the radio by my ear just waiting for when the Americans come here," said Ruslia Rumdhan Niima, who was on her fifth trip to Baghdad from the countryside to search for the 7 million dinars she claims Americans took from her son. "Now that they came, this is what happens." Part of the problem is a cultural misunderstanding. In Iraq's cash-based society, it is not unusual for people to carry stacks of dinars and a gun to protect them. But soldiers who discovered piles of cash (a million dinars equals only $700) and an AK-47 often assumed the owner was up to no good. Even now, some soldiers seem not to realize that many Iraqis are carrying on their business � buying houses, selling cars and livestock � often in cash. "Where would an Iraqi get $3,000?" one sergeant asked when the question of confiscation was raised. "I can't even get $3,000." Assad Ibrahim Mehdi, a vegetable seller, is one of the few complainants who can muster a witness. That person, a military translator, has signed an affidavit attesting that during a raid in April, soldiers took the family's savings � about $2,000 in dinars � and an old tin chocolate box containing the deed to his family's house, their citizenship papers and their ration card. The soldiers left no receipt, and Mr. Mehdi considers his property stolen. "What else would you call it?" he said on a recent day, after waiting three hours in the sun to see a soldier about his complaint. "I don't know what they'll do to the people who've been looted who haven't got witnesses," said Elizabeth Hodgkin, a representative of Amnesty International who is helping Mr. Mehdi. "I've heard many people say, `They took $30,000, but I don't think I'll ever see it again.' " http://www.nytimes.com/2003/08/03/international/worldspecial/03THEF.html

Betting on Terror: What Markets Can Reveal Anyone looking for a good bet last week was offered one by an online futures exchange: Would John M. Poindexter, who heads the Defense Advanced Research Projects Agency, a research arm of the Pentagon known as Darpa, be able to keep his job after the furor over the aborted plan to start a market that would trade terrorism futures? Within days, the answer appeared to be that he would not, as Defense Department officials said Mr. Poindexter would resign within a few weeks. Assuming he does leave by the end of August, some lucky traders stand to make more than 10 times their investment. If that bet was not to your taste, there were plenty of others available. Would weapons of mass destruction be found in Iraq by the end of September? Would Saddam Hussein be captured? How about Osama bin Laden? Would the terrorism alert level in the United States be raised or lowered? Will Kobe Bryant be convicted? The existence of such contracts raises perhaps the most overlooked question of the debate on the proposed Defense Department project, the Policy Analysis Market, which would have allowed people to speculate on such issues as whether there would be an increase in terrorism or a collapse of the Jordanian economy. Why was the government needed to get this market going? The answer is that Uncle Sam had been picked to play the role of designated loser in the gambling. The existing place to make such bets, www.tradesports.com, is an Irish market that can be traded by anyone with a credit card and an Internet connection. There are no market makers, just traders online around the world. Tradesports dreams up contracts based on what it thinks might be interesting, and puts them up for trading. But it does not guarantee that you can find someone to take the other side of your bet. The Policy Analyst Market was going to do just that. The market maker was to be a computer, financed by the government, that was willing to offer a price for any wager on a subject within its bailiwick. If bettors wanted to wager a lot of money on something, the computer would steadily raise the price. One possible wager that was mentioned by Charles Polk, the president of NetExchange, a San Diego company that proposed the idea to the government, was on whether Hamas would join the Palestinian Authority government, a move that he took for granted would indicate it had renounced terrorism. The market-making computer was supposed to be willing not only to take bets on that, but on such related topics as whether the Jordanian economy would boom if that happened. One risk to the market maker would be insider trading. Somebody within Hamas could make some money by placing bets before the decision was made public. That would be all to the good, as Mr. Polk saw it. "We welcome insider trading," he said last week, since it would move prices and send a signal to the Defense Department, and anyone else watching the market, that conditions were changing. By being willing to lose money on the market maker, the Defense Department would be able to get information. One reason some people thought the whole idea stupid was that betting on an increase in terrorism might be a losing bet even if it turned out to be a winner. "Isn't that going to guarantee a knock on the door by the Feds?" asked James Chanos of Kynikos Associates, a money manager who specializes in selling stocks short � that is, betting that a stock price will decline. He recalled the search for evidence � ultimately unsuccessful � that terrorists might have shorted stocks before the Sept. 11 attacks. The people who designed that market thought of that possibility, and proposed that the names of traders be kept secret from the Defense Department. Want to bet whether that secrecy would have been maintained if there was a new terrorist attack? And anyway, said Robin Hanson, the assistant professor of economics at George Mason University who dreamed up this idea and persuaded NetExchange to propose it to the Defense Department, there were plenty of bets that would not offend the government. "The F.B.I. would not knock on my door," he said, "if I bet that if we invade Iraq there will be more terrorist deaths in the United States." For now, the idea is dead, with the Defense Department having abandoned it quickly once the public ridicule began. But Professor Hanson has not lost hope. "I think sometime in the next 10 years, this technology will be applied somewhere," he said. It would not, he said, have to be a public market. Perhaps, Professor Hanson mused, it could be open only to employees of the Central Intelligence Agency, who would place their bets and, in the process, let the government know what consensus there was among intelligence professionals. That, he said, could sometimes be different from what the top of the agency was saying. For example, it would be interesting to see how likely the lower-level intelligence analysts think it is that biological, chemical or nuclear weapons will be found in Iraq anytime soon. http://www.nytimes.com/2003/08/03/weekinreview/03NORR.html

Bush's Tax Cuts Have Been the Best Job Program China and India Have Ever Had Job Losses in July Add to Mixed Economic Signs The economy shed 44,000 jobs in July, the Labor Department reported yesterday, though the overall unemployment rate edged down. The rate fell, to 6.2 percent from 6.4 percent in June, only because the number of people looking for jobs declined faster than the number of people holding them. People have been withdrawing from the labor market in greater numbers because of their poor prospects. The latest data on job losses, which came a day after the Commerce Department's mildly encouraging report on economic growth last quarter, left economists wondering what to believe.� The lack of improvement in the labor market despite some economic progress has added fuel to the battle fires in Washington and has frustrated job seekers across the country. Since the most recent recession ended in November 2001, the nation's payrolls have shrunk by more than a million workers. In a telephone interview yesterday, Elaine L. Chao, the secretary of labor, called the latest figures "confusing" and attributed the dwindling of the labor force to unusual seasonal factors. She said the tax credit checks recently mailed to families with children would help to stimulate demand; she also said she hoped Congress would approve $3,000 grants to help the long-term unemployed with training and relocation. Democrats in Washington charged that the three waves of tax cuts advocated by the White House had done little to ensure that new jobs accompanied the economic recovery. "This is the almost predictable consequence of a policy of tax cuts that have not strengthened the country but weakened it," said Senator Jack Reed of Rhode Island. "We sent checks out, but we neglected millions who have family and are struggling. If we're serious about getting the economy going, we've got to start targeting tax relief to middle- and low-income families who will go out and create demand." The labor force thinned by 556,000 people last month, with the number of employed workers dipping by 260,000. These declines followed gains of comparable size in June. The unemployment rate dropped for almost every demographic group except whites for the second month in a row. Among whites, the rate remained at 5.5 percent, its highest level since April 1994. Payrolls contracted for the sixth straight month. Along with the July decline, the Labor Department revised its June report to reflect a decrease of 72,000 jobs rather than 30,000. Jobs in the manufacturing of long-lasting goods like motorcycles and microwave ovens slipped by 54,000, according to the survey of payrolls, which provides more reliable estimates of employment month to month. Wholesale and retail trade combined lost about 29,000 positions. http://www.nytimes.com/2003/08/02/business/02ECON.html

Congressional Republicans call it their "winning ugly" strategy. Even when controlling both chambers, Republican leaders have discovered that advancing their social and economic agenda is much easier when they punt contentious legislation into House and Senate negotiations, where Republicans are firmly in command. The latest example came this week when Senate Republicans, flummoxed in their push to pass an energy bill before leaving town, resorted to resurrecting and passing last year's Democratic energy proposal just to get into talks with their House brethren. That same path has been followed all year on difficult bills: get a budget, tax cut or Medicare bill off the floor and out of the line of fire � even if it has flaws that make lawmakers cringe � and force it into conference for a thorough massaging. "An obvious advantage to being in the majority, even if it is a tiny majority like ours, is that you control the conference," Senator Mitch McConnell of Kentucky, the No. 2 Republican in the Senate, said today as the Senate adjourned until Sept. 2. "It is elementary that if you can get a bill to conference, you have a wide latitude to produce a bill the majority is comfortable with and the president is comfortable with." It may be elementary, but it is not exactly the textbook version of how a bill becomes law. http://www.nytimes.com/2003/08/02/politics/02CONG.html

Suit Challenges Constitutionality of Powers in Antiterrorism Law The American Civil Liberties Union and six Muslim groups today brought the first constitutional challenge to the sweeping antiterrorism legislation passed after the Sept. 11 attacks, arguing that the law gives federal agents virtually unchecked authority to spy on Americans. The lawsuit, filed in federal court in Michigan, seeks to have a major section of the law, the U.S.A. Patriot Act, declared unconstitutional on the grounds that it violates the privacy, due process and free speech rights of Americans. "We think the Constitution is really on our side," Ann Beeson, the civil liberties union's chief lawyer in the suit, said in an interview. "There are basically no limits to the amount of information the F.B.I. can get now � library book records, medical records, hotel records, charitable contributions � the list goes on and on, and it's the secrecy of the whole operation that is really troublesome." http://www.nytimes.com/2003/07/31/national/31PATR.html

Mideast Peace Process Hits More Bumps In a move that drew fierce Palestinian opposition and ran counter to the language of the ``road map,'' Israel issued a tender on Thursday to expand a Gaza Strip settlement. The tender, by the Israel Lands Authority, offers the rights to build 22 new housing units in the Neve Dekalim settlement, the largest in Gaza. Israel says that a certain amount of building is necessary to accommodate natural growth within the settlements. Palestinians, however, see the settlements as illegal occupation of their land and have long pushed for their dismantlement, and the road map specifically precludes expansion for ``natural growth.'' ``This is a very dangerous step taken by the Israeli government,'' said Nabil Abu Rdeneh, an aide to Palestinian leader Yasser Arafat. Early Thursday, overnight negotiations between Israeli Defense Minister Shaul Mofaz and Mohammed Dahlan, the Palestinian minister in charge of security, ended with no agreement on a promised Israeli withdrawal from two Palestinian towns. Israeli officials, speaking on condition of anonymity, said Mofaz offered to turn over Qalqiliya and another West Bank town, Jericho, to Palestinian security control. Israeli forces have already withdrawn from parts of Gaza and the West Bank town of Bethlehem. The Palestinian side, however, insisted at the talks that any withdrawal from the Palestinian cities also be accompanied by steps to allow Palestinians to move around the West Bank more freely. ``We wanted the withdrawal to be a genuine one that would allow the Palestinian cities to connect with each other and would give people free ways to move,'' Dahlan said Thursday. http://www.nytimes.com/aponline/international/AP-Israel-Palestinians.html

All Bets Are Off The so-called terrorism futures market sounded like a hoax: investors would have been able to make money from attacks and strife. Now that the red-faced Pentagon has closed down the project, it's appropriate to ask, "What were they thinking?" The Department of Defense argued that markets "are extremely efficient, effective and timely aggregators of dispersed and even hidden information . . . often better than expert opinions." That's true. The University of Iowa has a neat system allowing bettors to establish the odds for candidates in races in America and overseas. The Iowa markets have generally done a better job than pollsters at predicting the outcomes of elections. Markets also do a great job at more traditional tasks, like matching buyers and sellers and setting prices for everything from chickens to semiconductor chips. Still, the Pentagon's concept is flawed. Markets are not very good at setting prices for rare events. Those who trade in the Iowa political exchange have the benefit of historical election results and daily polls; property insurance companies know full well when the Florida hurricane season starts. But could markets have given us a price for the odds of a shooting in the balcony of City Hall in New York? Sure, markets learn from experience. It's been a long time, though, since Aaron Burr shot Alexander Hamilton � and that was across the river in New Jersey. Before Saddam Hussein invaded Kuwait in 1990, I directed a White House study on the Strategic Petroleum Reserve. Should we add to the reserve? What were the chances of a war in the gulf or an OPEC boycott like the one in 1973? These events take place intermittently and are hard to predict. But we had to make some estimates. Likewise, in order to allocate our domestic defense resources, we have to estimate the odds of terrorist events on the ground, in the sky or at sea. Here again, markets work better when they are deep and liquid � that is, with many participants and lots of transactions. This raises reliability and reduces the risk of manipulation. How deep and liquid could the market for terrorism futures be? This was the problem faced by the Pentagon. To attract "investors," the Pentagon needed to offer a significant payoff. But with big payoffs, the incentive for market manipulation rises. And in the case of terrorism futures, market manipulation can show up not as a forged buy order but as a bullet. http://www.nytimes.com/2003/07/31/opinion/31BUCH.html

Privacy pendulum swings back In the immediate aftermath of Sept. 11, 2001, the worry in Washington, D.C., was more about national security than about individual privacy. A couple days after the terror attacks, the U.S. Senate voted to grant the Federal Bureau of Investigation sweeping Internet surveillance powers that, in some cases, would not require a judge's approval. Huge portions of that bill, self-importantly titled the Combating Terrorism Act, eventually became part of the even more grandly named law called the USA Patriot Act. Soon after the law's enactment, Attorney General John Ashcroft began likening criticism of such dubious legislation to the treasonous offense of "aiding terrorists." Noted civil libertarians such as Alan Dershowitz began to suggest that entrepreneurial judges could issue "torture warrants" against suspected terrorists, while automated face recognition cameras began popping up in airports and politicians began scheming about how to ban encryption products without backdoors for government snoops. Suffice it to say that privacy was not exactly paramount on everyone's mind. But as the two-year anniversary of Sept. 11 approaches, there are signs that Congress realizes it went too far in allowing electronic surveillance and other invasions of personal privacy. Consider some recent evidence: � By a 309 to 118 vote last Tuesday, the U.S. House of Representatives approved legislation that would essentially block part of the USA Patriot Act that permitted police to seek a court order that let them surreptitiously enter a home or business. The amendment to the Commerce, Justice and State spending bill would not repeal the "secret search" law but instead would deny federal agencies any funds that could be used in order to take advantage of it. � During the floor debate, Rep. C.L. "Butch" Otter, R-Idaho, the amendment's sponsor, offered this impassioned defense of liberty: "Sneak-and-peek searches give the government the power to repeatedly search a private residence without informing the residents that he or she is the target of an investigation. Not only does this provision allow the seizure of personal property and business records without notification, but it also opens the door to nationwide search warrants and allows the CIA and the NSA to operate domestically." � Also last week, some House members tried to nix the part of the USA Patriot Act that handed the FBI broad powers to search library or bookstore records without the usual need for search warrants or judicial oversight. Offered by Rep. Bernard Sanders, I-Vt., the amendment was ruled to be out of order--but it enjoys the support of 129 members of Congress and advocacy groups like the American Booksellers Foundation for Free Expression. � On July 17, the U.S. Senate yanked funding for the Pentagon's creepy Total Information Awareness plan (TIA), which aims to weave together strands of data from various sources--such as travel, credit card, bank, electronic toll and driver's license databases--with the stated purpose of identifying terrorists before they strike. (Earlier, the Pentagon had responded to public outcry by changing the project's name to Terrorist Information Awareness.) � Last Tuesday, at a meeting of a U.S. Department of Defense advisory committee, top intelligence officers said TIA wasn't really all that spectacular an idea, anyway. "They need to work on the underlying business model before it is implemented," said Maureen Baginski, the FBI's executive assistant director for intelligence, according to Federal Computer Week. Alan Wade, chief information officer at the CIA, warned that "the scope may be too big." Ouch. And this is from the cadre of spooks who supposedly wanted TIA in the first place? Ashcroft and his aides at the U.S. Department of Justice are hardly delighted by this privacy backlash-backlash. Not only are they intent on keeping the USA Patriot Act intact, but they're not happy at finding themselves suddenly on the defensive. Secret searches Last week, while touring Alaska, Ashcroft employed a venerable Washingtonian tactic: Blame the press. It was understandable that Americans are worried about privacy invasions, Ashcroft informed reporters, "but when the so-called invasion is one that's falsely reported and nonexistent, and they don't hear about the fact that it's falsely reported and nonexistent, it's not helpful." On Friday, Ashcroft's deputy, Assistant Attorney General William Moschella, went even further. Moschella sent a letter to the speaker of the House warning that the "secret search" amendment would have a "devastating effect on the United States' ongoing efforts to detect and prevent terrorism, as well as to combat other serious crimes...The terrorist would likely destroy computer equipment containing information about which targets he plans to strike." The letter, which urged the House to reconsider its decision, cited procedural irregularities, complaining that the House's vote was a "hasty" one. But you never saw the Justice Department demanding a careful, reasoned process when the USA Patriot Act was being rushed into law in October 2001. Rep. Barney Frank, D-Mass., said after that memorable vote: "What we have today is an outrageous procedure. A bill, drafted by a handful of people in secret, comes to us without a committee review and immune to amendment." What the Justice Department also didn't mention last week is that it had been lobbying for the power to conduct "secret searches" for at least four years, long before the Sept. 11 attacks took place and terrorism became a convenient justification for it. As far back as 1999, the FBI had used a secret search warrant when installing a keystroke logger in the office computer of alleged mobster Nicodemo Scarfo. He had used Pretty Good Privacy (PGP) encryption software to encode confidential business data--but with the keystroke logger, the FBI was able to glean his pass phrase. http://zdnet.com.com/2100-1107_2-5055885.html