Time Magazine March 9 2009 Holding On For Dear Life The Economy and You: A Special Report (U2's Overly Ambitious New Album, Going Nuts over Nuts)

March 9, 2009 Vol. 173 No. 9

Holding On for Dear Life

PHOTO-ILLUSTRATION FOR TIME BY ARTHUR HOCHSTEIN. HANDS: WHITE PACKERT/GETTY; ROPE: ISTOCKPHOTO. INSETS, FROM LEFT: ISTOCKPHOTO, DEIRDRE O'CALLAGHAN.

COVER

House of Cards: The Faces Behind Foreclosures By David Von Drehle Friday, Feb. 27, 2009

Zachery, a firefighter, was injured in an on-duty accident in 2007. Disabled and battling a weak economy, he had to liquidate his fledgling demolition business. Bills from the failed business deepened his debts. Livia Corona for TIME

Jeff Wagoner is a bankruptcy attorney in Kansas City, Mo., with the brush-cut hair and clear eyes of a former Navy aviator. From his office in a tower on a hill, he can see miles of prairie and a world of hurt. Wagoner's clients (and he has plenty these days) range from folks who had no business ever buying a house to folks freshly fired from executive suites. Based on his survey of the economic wreckage, Wagoner's conclusion is that even the slightest miscalculation or change in

circumstances could send another customer through his door: "There are not a lot of second chances out there right now." We have entered the one-strike-and-you're-out era. One lost job. One medical emergency. One bad risk or misjudgment of the heart. "I've seen more people lose their houses in the past year than in the previous nine years put together," Wagoner said one recent afternoon, as gray skies hung low over the vast horizon. "It sounds crazy," he continued, "but I'd say unless you're making over $350,000 a year, the more you're paid, the more vulnerable you are. If you lose a job, you're going to have a hard time finding another that pays as much. Or maybe you need to move to find that new job, but you're stuck with a house you can't sell. Or maybe your marriage breaks up, and you have to liquidate your assets at today's prices." In the one-strike economy, it's not just the subprime suckers going down. Trouble stretches beyond the province of liar loans, condo-flipping and the collateralized debt obligations that no one fully understands. A hard rain now falls on the just as well as the unjust. Consumers have stopped spending, factories have stopped operating, employers have stopped hiring — and home values continue to fall. For millions of people, the margin between getting by and getting buried is becoming as thin and as bloody as a razor blade. The number of homeowners headed toward foreclosure is rising so quickly that "you need somebody to project what the projections will be — because they're just changing so fast," said Lindley Higgins, the applied-research manager at NeighborWorks America, an urban revitalization project created by Congress. A decade ago, Higgins said, 400,000 foreclosures nationwide was a busy year. America may see 2.5 million in 2009. "The other day," Wagoner says, "I had a visit from a corporate executive who moved to town and bought a house." Which should be fine; a big wheel need not fear a big mortgage. But this guy's one strike was moving from Florida, where the real estate market is so screwed up that judges in one county are hearing nearly 1,000 foreclosure cases a day. Mr. Exec was stuck with his old house too, and that one was

dragging him down, down — until there was nothing left to do but pay a visit to the bankruptcy attorney. " I would bet a majority of people are only a few paychecks away from being in this office," says Brent Westbrook, a partner in Wagoner's firm. President Barack Obama described this stark reality in his recent speech rolling out an expensive plan to keep the housing market from sinking further. Picture "a young family," he suggested. "They save up. They search. They choose a home that feels like the perfect place to start a life. They secure a fixed-rate mortgage at a reasonable rate, make a down payment, and make their mortgage payments each month. They are as responsible as anyone could ask them to be." Then one thing goes wrong. "Perhaps someone loses a job in the latest round of layoffs, one of more than 3.5 million jobs lost since this recession began," Obama said. "Or maybe a child gets sick, or a spouse has his or her hours cut. In the past, if you found yourself in a situation like this, you could have sold your home and bought a smaller one with more affordable payments. Or you could have refinanced your home at a lower rate. But today home values have fallen so sharply that even if you make a large down payment, the current value of your mortgage may still be higher than the current value of your house. So no bank will return your calls, and no sale will return your investment. You can't afford to leave, and you can't afford to stay." This is a harrowing experience, tightrope walking over the financial abyss. American Dreamers are optimistic, but few can tread that wire now without looking down in panic. We're geared to believe that risk begets reward and our tomorrows are brighter than our todays. One-strike-and-you're-out is a neck-snapping reversal for a culture accustomed to assuming that fate is a welcome friend. Stay Well, or Lose It All What's an American dream story without a lucky break? Joseph Zachery's took the form of a mysterious stranger who pulled to the side of the road one day in 1986. An older white guy, slowing his car to ask a strapping black teenager why he was running down the street. Zachery, who was 19 at the time, could think of no benign reason why this man might be interested in him, but instead of ignoring the driver

and running on, he gasped out an answer. His car wouldn't start, and he was due downtown to take a test for a job with the fire department. If he was late, he'd be locked out, and 50 blocks was a long way to run, so he was almost certainly going to be late — but he had to try. Climb in, said the man. Zachery swallowed his misgivings, and away they went. They arrived at the test site with moments to spare. As Zachery bolted from the car, the man called out, with eerie conviction, "The job is yours." How did he know? Zachery still wonders, as he reflects on the upward path his life followed from that chance encounter. His was the textbook tale: a foot in the door, some hard work and enterprise, and another American gets ahead. Twenty-two years after his lucky break, Zachery was a veteran firefighter earning north of $60,000. Like most firefighters, he always had a second job — delivering pizzas, driving a street sweeper, installing meters for the power company. Eventually he started his own business, demolishing houses condemned by the city. He supported an aging mother, a son in college, a new wife and a stately old house on a large lot with big trees in the center of Kansas City. The home cost him about $100,000. It needed renovation, which Zachery planned to do himself, one room at a time. As home values rose, he used his equity to buy the heavy machinery required for his business. He was pursuing the ideal of the self-made entrepreneur, but his ambition left him dangerously exposed when the housing market soured, because he owed nearly twice the original purchase price. Then chance paid another visit. It was July 13, 2007, Zachery's 41st birthday. He was working in the hazardousmaterials unit, and a call came in from a local hospital: chemical spill. Normally, Zachery would have been behind the wheel of the truck, but on that day, he was acting captain, so he rode in the passenger seat. Siren blaring, lights flashing, horn honking — none of it registered with the driver of a city trash truck, who turned into the path of the speeding haz-mat unit. The crash folded the front of Zachery's vehicle, and his head spiderwebbed the windshield.

The aftermath played out in slow motion — and is playing out still. Zachery suffers from pain in his back and neck. There are unexplained memory lapses, lost initiative, mood swings and depression — symptoms that eventually led doctors to a diagnosis of postconcussion syndrome. In time, the fire department placed Zachery on full disability, but not before a doctor assigned to his case by the city prescribed a course of electroshock treatments that left him unable to remember his own neighborhood. His finances began to fall apart. As he shuttled from one doctor to the next, his demolition business went into the tank. He was in no condition to rip old houses apart, and even if he had been, the soft economy was suffocating. Having pledged his home equity as collateral, now he was forced to sell his demolition equipment at a loss. He fell behind on his mortgage payments of $1,647 per month. His son had to leave college in Virginia to attend a school near home. His mother passed away. Zachery showed up for a recent interview at one of Kansas City's barbecue temples carrying a large box full of medical records. But no amount of documentation could resolve his bewilderment over what was happening to him. "You play by the rules, then when you need them, the rules change," he said. "I had an occupation. I was at the top of the food chain, keeping my head above water. Then I happened to show up for work on my birthday — and everything since then has just spiraled." The math looks like this, he said: his pension pays him a little more than $50,000 before taxes, out of which he pays about $800 a month for medical insurance. That leaves some $2,400 a month, he said, for his mortgage and other expenses. He has about $15,000 in unpaid medical bills and a similar amount in missed house payments. He has no significant assets; his home equity is gone. Houses comparable to his in more desirable neighborhoods are selling for less than the amount he owes to the Bank of New York Mellon. As the saying goes, Zachery is under water. It was this math that led him to Wagoner's bankruptcy office. Late last year, Zachery told me, he received an invitation from the company that services his mortgage to apply for a loan modification. He has a 30-year, fixed-rate mortgage at 8.99% interest, at a time when the Federal Reserve is trying to push

rates below 5%. But after faxing his paperwork and waiting for several weeks, Zachery received the same invitation again. Evidently his application had been lost. Zachery's documents had vanished in a flood of urgent requests for mortgage relief. So he sent his materials a second time, but instead of an answer from the service company, he received a letter from lawyers for the bank. This, too, is typical, said Wagoner. Modifications and foreclosures often proceed simultaneously along separate bureaucratic paths, so that the bank's customer-service face is encouraging even as the legal arm is threatening. In any event, the nub of the message from the lawyers was that Zachery must pay up or get out: "Should you wish to retain the property," the letter declared in boldface type, "demand is hereby made upon you for immediate payment of $188,101.57 plus interest." Zachery immediately called the modification number, only to be told once again that his application was missing. The woman was polite but unyielding as she informed Zachery that his home was scheduled for sale on March 20 on the steps of the Jackson County Courthouse. "And then," he says, "she asked me in a nice voice, 'Is there anything else I can help you with today?'" Since the accident, Zachery's renovations have stalled. He has fallen behind on the yard work and hasn't gotten around to hanging his father's portrait — a striking shot of a muscular man in dark briefs. Jerome Zachery wrestled professionally in the 1950s before settling into family life. The champ used to tell his sons, "As long as you have a place to keep the dew off your head, you're O.K." Facing foreclosure, Joseph Zachery worries about pride more than shelter, though. He has rented a storage unit so that his belongings will never be dragged to the curb. "If I have to leave," he said, "I want to leave with some dignity." Hard Work Is Not Enough A couple of facts stand out when you meet Paula Stevens for the first time. No. 1: she is not afraid of work. She has done everything from catering sandwiches for rock bands to light landscaping for rich old ladies. Her résumé starts at age 9 and runs to 56 without significant interruption. Stevens has stories from inside the health-care industry, the hospitality industry, the computer industry, the casino industry. She

knows the day shift, and she knows the night shift. Also, she could make conversation with a statue. That's Fact No. 2. Her break in life — the twist that put her on the path to a snug house in the suburbs with a vaulted living-room ceiling — was the product of these two qualities, the work ethic and the gift of gab. As a free-spirited young woman, Stevens liked working in hip restaurants and bars where musicians would hang out when their tours passed through Kansas City. Bonnie Raitt, the Doobie Brothers. "Those boys from Lynyrd Skynyrd," as she now calls them, arrived after closing time at a joint where she worked and smashed some things when she refused to serve them — then came back the next day to apologize. Fun times. But life goes on, and the free spirit grew into a divorced mom of two daughters. Stevens decided she should find a job with better hours and benefits. There was just one problem: no college degree. A friend told her about a job processing medical claims. Stevens talked her way into the interview and just kept talking as the boss looked at her quizzically. Suddenly something clicked in his head, and he said, "Aren't you that girl from the deli?" He had met her years earlier, maybe with a sandwich in her hands, and he hadn't forgotten. It wasn't a Wall Street bonus or a corner office, but Stevens' lucky break gave her enough to raise her kids and put a roof over the head of any friend or relative who happened to hit a rough patch. She left that job after eight years for the Kansas City office of Gateway computers, which was then a booming enterprise with a Midwestern flavor. There, Stevens rose through the ranks from customer service into sales. In her best year, she racked up so much overtime that she outearned her supervisor, grossing some $42,000 — not far from the middle of the pack of U.S. incomes. And if she sometimes spent too freely on clothes and gear for her girls, she was able to balance the books by drawing on her equity in the home she bought in 1995. "I always managed to make ends meet," Stevens said over breakfast at a burnedtoast diner near her home in Independence, Mo. "I was working day and night, but

that's what happens in this country if you're not educated. Anyway, I'm not afraid of hard work." Along came the curveball. Gateway's personal computers, marketed in cow-spotted boxes, lost their appeal. Sales tumbled; stores closed. The company's stock price plummeted. Fewer customers meant less customer support. When the Kansas City operation finally closed in 2006, Stevens was among the last employees let go. Now, for the first time in her life, she's finding it difficult to talk her way into a new job. "It's a hard time to be 56, going on 57, and looking for work," she said matter-offactly. "They're not allowed to say it, but you see it in their eyes: Why hire an older person who might have some medical issue when there are young people behind you in a line that goes clear out the door? I really can't blame them. Businesses are struggling, and insurance is a big problem." That's when she can manage a face-toface encounter at all. Many employers take only online applications nowadays, a fact that discounts her charm while highlighting her lack of education. "You can't go in and sell yourself anymore," she lamented. "You just send your résumé into cyberspace and hope that it works." In the roughly 14 years that she has owned her home, Stevens refinanced three times — nothing crazy — but the bad news for her was that the third time was very near the peak of the real estate bubble. At that time, in 2005, her 3,000-sq.-ft. house was appraised at $185,000; she now owes about $159,000 on it. Real estate agents have advised her that she could not sell it for more than $145,000. Her debt is actually two loans, the larger of which was recently modified from an adjustable rate to a fixed-rate note at 9% interest. The second loan charges over 10%, and the two payments combined are slightly more than $1,400 per month. With only a part-time job — she visits office-supply stores and makes sure that the floor-model printers have enough paper and ink for demonstrations — Stevens found she could pay for food and utilities, or she could pay the mortgage. Not both. After she fell four months behind on her payments, the bank moved to foreclose. Stevens briefly considered letting the bank have the house, but her oldest daughter, Maggie,

28, has a new baby and is enrolled in nursing school. "I just have to get her through that," Stevens explained. So after several sleepless nights, she decided to go see Wagoner and file for bankruptcy, which stalled the foreclosure process. Now Stevens is hoping that Obama's new program will persuade the mortgage company to reduce her debt to the current value of the house. And her job search continues. "It takes $14 per hour for me to meet my bills," she said. "That's what I was making at Gateway when I was laid off. But no one wants to pay that much, so I will be starting lower and hoping for a raise. That's how it works. You just keep starting over." A few months back, Stevens had a lead on a customer service job with a large, venerable company. The pay wasn't great; the commute was long; gas prices were high — yet Stevens had just about concluded it was the best she could do. The company was called Citigroup; they're not hiring anymore. The Brutal Game There are about 75 million homeowners in America, according to the U.S. census. The latest gloomy estimates suggest that upwards of 6.4 million homes are at risk of sinking into foreclosure by the end of 2012. That number has no precedent, and its impact is only beginning to register. Populist pundits have struck a nerve with angry denunciations of Obama's plan. "See if we really want to subsidize the losers' mortgages," CNBC's Rick Santelli demanded — and the gut level reaction of millions of taxpayers across the country was, unquestionably, no. Not if we have a choice. It's a brutal game, though, in which a single strike makes you a loser. And that brutality explains another strain of anger beginning to bubble up from the newly bankrupted. People like Paula Stevens and Joseph Zachery weren't flipping houses or lying on their loan applications. They didn't pile up mountains of credit-card debt. They worked hard for what they had and shared their modest portions with others. Each readily admits to making occasional mistakes with money, but even Warren Buffett has made occasional mistakes with money. Their bitterness stems from a feeling that they've held up their end of the social contract, but now the terms of the deal have been rewritten by malign forces. "It's a different world and a different time," Stevens said ruefully. "Even if you work hard you get laid off." Zachery put it

this way: "It's not the United States anymore. Those at the top have sold out the bottom for money." Both the rant and the laments are too broad. Not everyone who has fallen behind on a mortgage is a loser complicit in the housing collapse. And not every solvent American has broken faith with those who are struggling. Obama, in presenting his mortgage plan, promised to distinguish between the sinners and those unlucky bystanders dragged down by the economy's undertow. His lifeline, he insisted, will not "rescue the unscrupulous or irresponsible." Delivering on that promise is vital to Obama's future, because hope is a tough sell to people who believe that only the wicked prosper. And though it's not easy preaching cooperation when the public is feeling tapped out and TARPed to death, Obama may not get a second chance. — With reporting by Maya Curry

NATION

The Inside Story on the Breakdown at the SEC By Adam Zagorin and Michael Weisskopf

Thursday, Feb. 26, 2009

Illustration by Sean McCabe for TIME; Getty (4); AP; Reuters

Historians looking for an early sign that the worst financial crisis since the Great Depression might be deeper than expected could do worse than listen in on a predawn teleconference one Friday last spring. Top Treasury and Federal Reserve Bank officials hunched over their phones in a last-ditch bid to bail out the giant investment bank Bear Stearns Cos. But a crucial voice was missing from the emergency conference call: Christopher Cox, chairman of the Securities and Exchange Commission. And it was not the only time the nation's chief securities regulator was absent during that critical weekend. On Saturday, as bailout talks continued, Cox dropped out to

give a speech at the birthday party of a securities-industry overseer. On Sunday, Cox was a no-show once again, this time for a key conference call dealing with the multibillion-dollar sale of Bear Stearns' remaining assets to JPMorgan Chase. Less than a week later, the SEC chairman slipped away for a long-planned Caribbean holiday. The man who should have played a major role in sounding the alarm about--and perhaps preventing--America's financial meltdown now stands accused by critics of being asleep on the job. While Cox did participate in some of that weekend's deliberations, federal officials involved in the process say he was a bit player, and Cox himself notes that he was skeptical about the bailout. Though he left the SEC on Jan. 20, he has emerged as a symbol of much of what went wrong at the small but crucial federal agency, from ignoring evidence of a massive Ponzi scheme set up by investment guru Bernard Madoff to the passive supervision of giant investment banks that went under on his watch. Partly as a result of this lax supervision, the future of the 75-year-old agency is in jeopardy. Long an evangelist for deregulation, the affable 56-year-old conservative former California Congressman took a custodial approach to a job that called for muscular leadership. The mismatch between Cox and the world he was meant to police became such an embarrassment to the Republican Party that GOP candidate John McCain publicly called for the firing of the SEC boss in the heat of last fall's presidential campaign. Indeed, longtime observers say, Cox allowed complacency and drift at an agency that was created to issue warnings and limit the potential for wider damage from financial malfeasance at publicly traded companies. "The fact that business as usual continued under chairman Cox might have been because he didn't try hard enough to change things, because he didn't really seek reform," says Senator Charles Grassley, the senior Republican on the Senate Finance Committee. "But once the wrong culture takes hold of an agency, it takes a real crusade to change it." Cox was not that crusader. A prominent SEC historian is more pointed: The Cox years represent "one of the most significant periods of dysfunction in the history of the commission," says Joel Seligman, president of the University of Rochester.

An Agency on Autopilot Franklin Roosevelt created the SEC during the Great Depression to clean up financial scandals and rebuild investor confidence. For three-quarters of a century, the agency waged high-profile wars against insider trading, corporate bribery and fraud in cases ranging from junk-bond king Michael Milken to Enron. Cox took charge in August 2005 after 17 years of representing Orange County, California. A Harvard-trained lawyer, he was a key leader of Newt Gingrich's Republican revolution, helping enact a provision of the GOP's Contract with America that restricted investor lawsuits against companies accused of securities fraud. At the SEC, Cox initially sought consensus by soliciting the opinions of two Democrats on the five-member body. But his desire for harmony played into the hands of the most conservative Republican commissioner, Paul Atkins, who opposed aggressive enforcement. Not that the Democratic commissioners offered much resistance: one stepped down in 2007, the other in early 2008. President Bush didn't fill either of the vacant seats until last summer, giving the Republicans more latitude. Meanwhile, the world the SEC regulated was turning upside down. In 2007, Cox pushed through a rule requiring SEC staff to get authorization from commissioners for financial penalties before settling a case. Cox says the rule was an experiment designed to streamline the process. In fact, it quickly created delays and obstacles, so much so that SEC officials often stopped seeking penalties. "It wasn't worth it," a former commissioner says. "All they got was abuse every time they went before the commission and asked for penalties." Some investigations didn't get even that far. Gary Aguirre, a senior SEC lawyer, sought to question the chairman of Morgan Stanley in a fraud investigation but was denied permission before Cox arrived. He later told Congress that his superiors, fearing the banker's "very powerful political connections" in Washington, had delayed the probe, dooming any chance of making a case--allegations that a Republican Senate report later found credible.

Eventually, enforcers at the SEC grew demoralized. One by one, key officials left the agency; Aguirre was fired under Cox. Sensitive cases seemed to lag. Cox has admitted that his staff brushed off "credible and specific" reports of fraud committed by Madoff over the past 10 years and did not seek subpoena power or bring tips to the attention of commissioners. Although 2008 saw the second highest number of enforcement actions in the agency's history, many involved smaller cases, as the value of penalties dropped. Critics say the SEC wanted to avoid upsetting the powerful securities industry. A Voluntary Approach But the SEC was missing the much bigger and more important game. Those lost penalties--which can reach hundreds of millions of dollars--amounted to peanuts compared with the multibillion-dollar stakes in play at investment banks like Bear Stearns and Lehman Brothers. While their brokerage businesses remained under SEC control, their parent corporations--huge holding companies with far-flung interests in hedge funds and other financial services--answered to no one but shareholders. It is a measure of the industry's comfort level with the SEC that investment banks, when faced with the demand that they open their books, lobbied for the commission to conduct the oversight. In 2002, the European Union threatened to impose its own rules on Europe-based affiliates of the big U.S. investment houses. The U.S. firms pleaded for the opportunity to find a regulator at home. To avoid prying European eyes, five banks--Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch and Morgan Stanley--offered to subject their parent companies to SEC oversight. Under Cox's predecessor, William Donaldson, the SEC agreed to create a voluntary supervisory program that didn't extend to the holding companies the debt limits that the commission had once imposed on brokerages owned by the banks. The program had no teeth, but it did permit some government oversight of an otherwise unregulated industry--that is, if SEC supervisors properly performed it. In theory, it was only a matter of time before hyperleveraging came unraveled. A pair of hedge funds managed by Bear Stearns collapsed in June 2007 as a result of huge losses in subprime mortgages. Despite more bad news--a federal investigation

into the hedge-fund collapse, two consecutive quarters of declining profits and a dropping stock price--Bear Stearns' chief executive, James Cayne, announced on Oct. 4 of that year, "Most of our businesses are beginning to rebound." Investors who wanted to reconcile the numbers with the company's conflicting explanation got no help from the SEC. Its voluntary program had given the agency a window into the secretive industry, revealing Bear Stearns' rising concentration of subprime mortgages, its questionable risk management and its yawning ratio of debt to capital, according to a later inspector general's report. But the SEC failed to warn the public and didn't urge the bank to improve most of its practices, the inspector general reported. Cox insists that he too was in the dark, adding he was never informed of the problems at Bear Stearns and was surprised by the bank's fall. He certainly sounded lost at the time: five days before Bear Stearns collapsed, Cox told reporters, "We have a good deal of comfort about the capital cushions at these firms." Critics say Cox either never really understood his job and its powers or simply wasn't interested in flexing the agency's muscles. With investment banks and Wall Street in trouble, he should have sought regular reports from his staff and demanded changes, says former SEC commissioner Harvey Goldschmid, whose term preceded Cox's. The chairman, Goldschmid says, should have "gone in and pounded on the table and said, 'Look, there are all these red flags. Why are you still leveraged? We want you to have more capital.' There's never been a time when those firms were not going to respond to demands by the SEC chairman." Cox, Goldschmid adds, "was the primary regulator. He should've been there earlier to try to avoid these things from happening." But Cox kept his distance from the investment banks. He says the SEC chairman "typically does not" jawbone CEOs of those firms. Other observers say Cox simply checked out. "They never heard from him. They never saw him," says another excommissioner. "He was never a factor. Even when things got bad, it took a long time before he got on the phone to find out from these firms what their exposures were and what they were doing about it."

A New Leader Some experts argue that the origins of America's financial crisis are far larger than Christopher Cox. "If you want to cast blame, there are many regulators, agencies and Congress that are as much, or more, at fault than Cox or SEC," says Joseph Grundfest, who was an SEC commissioner in the 1980s. But the SEC's failure under Cox now has some members of Congress working to shrink the commission's authority and hand some of its most important duties to the Federal Reserve and other agencies. It will fall to 53-year-old Mary Schapiro--a former SEC commissioner and a former head of the Financial Industry Regulatory Authority, whom Barack Obama named to replace Cox--to prevent that from happening. Since taking over on Jan. 27, Schapiro has launched an aggressive campaign to beef up enforcement and reverse a number of Cox-era practices. She has already canned the rule requiring staff to obtain approval from the SEC's commissioners before resolving cases against violators. She is studying new technology to cope with the estimated 700,000 tips the SEC gets from informants annually--like those it received but ignored in the Madoff case. And she has quickly filled senior SEC jobs, selecting a variety of candidates who have been prominent Cox critics. For immediate impact, Schapiro has unleashed a spectacular new case, charging R. Allen Stanford and three of his companies with an $8 billion investment fraud. But Schapiro's steps are overdue and may not be enough to save the SEC. Grassley recently demanded to know what Schapiro will do about 4,000 e-mails and other documents that suggest there was insider trading at Lehman Brothers, the investment giant whose 2008 bankruptcy marked a turning point in the financial crisis. The whistle-blower in that case, a Lehman Brothers employee, was fired and last spring spent many hours with senior SEC staffers. Cox told TIME that he was uninformed about the case. The former chairman, who isn't sure about his next career move, believes that much of the criticism leveled at him is uninformed or tendentious. "I take full responsibility for the actions of the SEC during my

chairmanship," he said in an interview. "And I have tremendous pride in the extraordinary, around-the-clock efforts of the SEC staff in attempting to avert the crisis." That is not a view, as they say about securities, that is widely held.

ESSAY

Obama's Speech: A Tonal Masterpiece By Joe Klein Wednesday, Feb. 25, 2009

President Barack Obama, after delivering his first address to a joint session of Congress on Feb. 24 MIKE THEILER / EPA

Let it be recorded that Barack Obama came into full possession of the U.S. presidency toward the end of his February 24 budget speech to a joint session of Congress. He had just read a letter from a South Carolina schoolgirl, pleading for help with her dilapidated school. "We are not quitters," the girl had written. The President's eyes brightened as he repeated that phrase, and he seemed barely able to control his joy and confidence as he attacked his peroration: that even in the toughest times, "there is a generosity, a resilience, a decency and a determination that perseveres." This was the chord that had been missing in the first dour month of Obama's presidency — not so much optimism as confidence, the sense that he was not only steering the presidency, but loving the challenge of it. It was the quality that distinguished Franklin Roosevelt's public persona, guided by the motto that F.D.R. had in his office: "Let unconquerable gladness dwell." The modern presidency is a vast electronic synthesizer, capable of exhilarating musical effects or rank cacophony. The President needs to be able to throw his voice in a variety of ways — now sober, now soaring, now educating, now soothing. George W. Bush's presidency was straitjacketed by his inability to command any style

but clenched orotundity. The two great television-era communicators in the office were yin and yang: Bill Clinton was a master of the conversational, not so good at set-piece speeches; Ronald Reagan just the opposite. Barack Obama has now demonstrated an ability to synthesize those two. On the day before his budget speech, the President was positively Clintonesque, interacting easily with a gang of high-powered political and business leaders at his entitlement summit, alternately ribbing Eric Cantor, the House Republican, about GOP intransigence, then wonking out on defense procurement policy with Senators Susan Collins and John McCain. If the entitlement summit was a conversational concerto, the budget speech was a full-blown symphony featuring a percussive series of simple declarative sentences that conveyed a sense of command, especially in the emotional heart of the speech, the section on banking reform. On corporate extravagance: "Those days are over." On the public anger over the bailouts: "I promise you — I get it." These were marshaled in the service of public education: Obama explained why, despite the despicable behavior of the bankers, the system had to be salvaged. If houses and cars were to be bought, if businesses were to make payrolls, loans had to be made. "[I]n a time of crisis, we cannot afford to govern out of anger, or yield to the politics of the moment," he said, aiming a dagger at his detractors. Obama's month in office has not been kind to Republicans. In a New York Times/CBS News poll released the day before the budget speech, 79% said that the GOP should put more effort into cooperating with the President and only 17% said Republicans should stick by their principles. Indeed, a brace of polls indicated great faith in Obama, somewhat less faith in his proposed solutions, and a crushing consensus that the Republican Party seemed more interested in playing politics at a time of crisis than in behaving constructively. Louisiana Governor Bobby Jindal, a smart fellow if not yet a wise one, gave the Republican response to Obama's speech and quickly became the poster boy for his party's vacuity and cynicism. He had announced noisily that he was rejecting a portion of the stimulus money coming to his state — but it turned out to be a minuscule portion, little more than 2%. In other words, when the rubber met the road, he supported 98% of the Obama plan.

All is not joy for Obama, of course. He has to govern. He has to manage situations — the banks at home, the deterioration of Pakistan overseas — that might prove unmanageable. For all the spiritual success of his budget speech, there were precious few details about his policy priorities. No one really knows what to do about the American auto industry. No one really knows if, or how quickly, alternative energy sources can revive the economy and salve the planet. There seems to be some confusion about how to proceed on health care. In his speech, the President promised a national health plan within the year. But in a prespeech briefing, a senior Administration official was less sanguine: "Health care will move forward based on our ability to get consensus. It's not as easy as getting 61 votes on the stimulus bill. It's too big and too complicated to move quickly." There are, then, strong indications that the big decisions on a range of crucial issues have yet to be made. But after the budget speech, there is a clearer sense that we have a President who will attack those decisions, then lead the way forward with the unconquerable gladness of a man invigorated by the tasks before him.

Gold Diggers of 2009 By James Poniewozik Thursday, Feb. 26, 2009

Illustration by Francisco Caceres

If there is a new austerity in America, no one appears to have told Countess LuAnn de Lesseps. In Episode 2 of Season 2 of Bravo's The Real Housewives of New York City, she gathers family and friends at a parlor in the Hamptons for a champagne birthday party. For her dog. The tagline De Lesseps speaks in the opening credits of RHNYC is, appropriately, "I never feel guilty about being privileged." That could be the motto of Bravo, a cable powerhouse whose reality shows follow the pampered class and their various stylists, party planners and other modern-day valets. You might think that this kind of entertainment would have died with Lehman Brothers. But as the U.S. economy sank this winter, Bravo's series scored their highest ratings ever. As the parade of CEO hearings--slash--public shamings on

Capitol Hill has shown, and Bravo underscores, the wealthy may not be universally loved, but they're America's favorite spectacle. Aren't we through with the rich by now? Not even close. When big news happens, pop culture tends to react in an opposite way to what media executives and pundits predict. After 9/11, people predicted the end of irony, trash TV and screen violence; we got Stephen Colbert, The Bachelor and 24. The opulent soap Dynasty became a hit amid the massive early-'80s recession; in the Great Depression, movies like Gold Diggers of 1933 packed theaters. So even as networks are casting working-class sitcoms for fall, Bravo is cashing in on the rich. Bravo began life as a cable arts channel, but like artists of old, it discovered the utility of wealthy patrons. From Project Runway to the Real Housewives franchise (about well-off couples in New York City; Orange County, California; Atlanta; and soon New Jersey), it remade itself with reality TV about upscale consumerism. There's plenty of consumption porn on Bravo--Rolexes, cars, vacation homes. But at the heart of it is a specific 21st century definition of luxury: middle-class people buy stuff; rich people buy services. When talismans of indulgence become widespread-lattes, iPhones, etc.--what distinguishes the truly well-to-do is their ability to pay others to do things. So Bravo chronicled the high maintenance and the people who highly maintain them. No area of pampering was too obscure: luxe hotels (Welcome to the Parker), fashion (The Rachel Zoe Project), hairdressing (Blow Out), real estate (Million Dollar Listing), upscale gyms (Work Out), home décor (Top Design), even exclusive-travel-booking (First Class All the Way). Whether you snark at the housewives or cheer for Top Chef's hopeful restaurateurs, there's always a window-shopping appeal: the aspirational lure of those spa treatments and seared foie gras. You could, in retrospect, see the makings of the bust in all this. The shows depicted an economy that no longer made stuff but devised services. They also sold a credithooked country the idea of "masstige," or mass luxury. If you couldn't afford couture, you could at least splurge on trendy clothes at H&M.

But if you want a perfect metaphor for a society selling out to the dollar, look at The Millionaire Matchmaker. Patti Stanger sells wealthy men a dating service--for fees of up to $150,000 a year--mixing retro courtship rules with a mercenary take on romance. However, Stanger tells us (and herself), she has standards. She'll take only classy rich guys as clients, like the one who shows off a painting he did of Britney Spears tongue-kissing Madonna. "We're not an escort service!" she insists. Of course not. Those are much cheaper. Bravo executive vice president Frances Berwick promises more schadenfreude to come. RHNYC taped from summer through fall 2008--meaning we'll see its stars' charmed lives against the backdrop of the autumn meltdown. But don't expect them to start clipping coupons. "We're certainly sensitive to the feeling that spending excesses are a little taboo," Berwick says, "but people still want to see it so they can judge other people." Truth be told, the appeal of Bravo is not just about seeing the rich get theirs. It also helps us deal with the aftermath of getting ours. After all, its subjects' shameless indulgence is just a pricier version of America's credit binge. Maybe we overmortgaged, overbought and undersaved. But hey, at least we weren't throwing dog parties at Hamptons Hound! Some people weather bad times by thinking of people who have less. Bravo lets us vent at those who have more--while consuming vicariously through them. This is what makes this kind of escapism so sturdily recession-proof. Laughing at the housewives, we see a comforting moral rebuke to the last national spending spree. And admiring their beach houses and bling, we quietly nurture the seeds of the next one.

I Bought an Expensive House. My Bad, Not Yours By Joel Stein Wednesday, Feb. 25, 2009

Illustration by John Ueland for TIME

I don't like populists. First of all, they seem a lot more popular than I am. Second, they derive their popularity from exploiting our base fears — Joe McCarthy's fear of communist takeover, George Wallace's fear of black people, Lou Dobbs' fear of other cultures, Joe the Plumber's fear of working. Whereas I derive my popularity from ending paragraphs with middling jokes. But CNBC reporter Rick Santelli's now famous rant against President Barack Obama's Homeowner Affordability and Stability Plan from the floor of the Chicago Board of Trade only seemed like populism. Sure, he was screaming, and his theme was every man for himself, and the mass of white men behind him assembled into an angry mob, and — like all the great populists — he is oddly unhandsome. But Santelli

wasn't pitting the majority against a minority. He was angry at Obama for offering aid to a middle class that neither deserves nor needs it. A lot of optimistic people bought houses near the historic height of the market, say November 2005, for absurdly high prices, say $1.12 million, in places like the eastern Hollywood Hills section of Los Angeles. These people are very, very sad. Trust me on this. But the sudden drop in housing prices hasn't made it any harder for these people to pay their loans. That's because your home's value is utterly irrelevant until you want to sell it — the same as your baseball cards, Hummel figurines or casual encounters. The only people affected by plummeting real estate prices are the ones who bought a house that cost more than they could afford, hoping for a spike in value so they could sell at a profit or take out a new loan based on an increased value. Their home wasn't just a place to live; it was an investment they thought they could liquefy at will. If we're saving these poor souls from the 26.7% drop in their investment, we should give twice as much aid to everyone who has lost approximately 50% in the stock market since its peak. Especially those in Vanguard's Tax-Managed Capital Appreciation Fund. Meanwhile, mortgages held by the responsible people Obama says he is trying to help only go into foreclosure when the owners lose their jobs. But the best way to help them is through increased unemployment benefits and job creation. In fact, James Lockhart, who regulates Fannie Mae and Freddie Mac, says he hopes this backward plan keeps at best 40% of the people it dishes out money to from redefaulting on their mortgage. The only plan worth pursuing that works at best 40% of the time is hitting a baseball. I would love to yell that in front of the traders at the Chicago Board of Trade. I would also like to yell at them to get computers like everyone else so they can stop executing trades by waving their hands like idiots. If we reimbursed people who lost cash on risky investments — or, as Santelli put it, "subsidize the losers' mortgages" — we'd create a moral hazard, telling everyone there's no risk to gambling. It's why parents fight their instinct to save their kids from

the consequences of their mistakes. Unless they're famous kids, in which case you should encourage mistakes, since it will land them a reality show. Sure, some of those 5%-down speculators were poor people fooled by adjustablerate mortgages — which, it turns out, are too complicated for people to understand. The best way to fix that is by making them illegal, just like those sweet microprint Publishers Clearing House Sweepstakes contracts that trick people into subscribing to your finer newsweeklies. Meanwhile, the people we really should be worrying about in an economic downturn, the poor, don't own homes — they rent. Much as it pains me, housing prices need to come down a lot more for the sake of the country. It's not that the housing market has suddenly gotten sick and needs medicine. It was sick, and it's getting better. Just like $4 gas, Pets.com and Jim Carrey's career, we are undergoing a needed correction. So I want in on the Chicago tea party that Santelli, in his rant, promised to organize, only I'm hoping it isn't in Chicago and is more of a cocktail/wine thing or maybe just a Facebook group. But I'm with him on standing back and letting the housing market lose some of its vaulted ceilings, guarded gates and Argentine Balmoral granite tops. It's not going to be a pretty few years. So let's save our government money for things we need. Like high-definition television converters.

WORLD: Postcard from Baghdad

Iraq's Ancient Treasures Lost and Found By Mark Kukis / Baghdad Thursday, Feb. 19, 2009

Ancient artifacts, some of which were looted from the Baghdad Museum in the aftermath of the U.S. led invasion, are put on display in Iraq. Essam Al-Sudani / AFP / Getty

Nobody at the Iraqi National Museum in Baghdad knows exactly how the three stolen Sumerian tablets got all the way to Lima, Peru. All authorities in Lima told Iraqi museum officials was that the three tablets, more than 2,000 years old and each small enough to hold in the palm of one's hand, were found roughly a year ago in the luggage of an American traveling in the country and seized at the airport. "I'm not involved in the other details," says Dr. Amira Edan, who heads of the museum's efforts to reclaim lost artifacts and flew to Peru to retrieve the tablets. "What was important for me was to take the items back." Edan finally brought the tablets from Peru to the Baghdad museum about three weeks ago, adding them to more than 4,000 Iraqi artifacts the museum has recovered since the chaos that followed the fall of Saddam Hussein in 2003. Peru appears to be the farthest that purloined Iraqi treasures have traveled. Most other recovered items have come from neighboring countries. More than 2,500 artifacts

have returned to Iraq from Jordan, along with more than 760 from Syria. Many stolen items have made it to further west. Thirteen pieces were found in Italy; and at least another dozen have surfaced in the United States, including a large statue of a Sumerian king. Not all of the artifacts now being recovered were stolen from the Baghdad museum after its infamous looting in 2003. The tablets found in Peru, for example, were taken from an open archeological site in southern Iraq, one of eight such areas museum officials say remain vulnerable to looters even now. Edan estimates that Iraqi authorities have managed to retrieve as many as 17,000 artifacts lifted from the open sites, in addition to roughly 4,700 pieces taken from the museum when it was sacked in 2003. Museum officials say securing the archeological sites is increasingly a concern as the Baghdad collection gradually comes back. For the first time in Iraq, efforts are underway to form a special police task force dedicated to protecting archeological sites. Museum officials expect to see the first police from the force on duty in the coming weeks. About 400 officers are to guard various archeological sites around Baghdad initially, and the force is supposed to number as many as 10,000 officers across Iraq eventually. For now, however, Iraqi officials acknowledge that priceless artifacts are likely leaving the country in large numbers even as efforts to recover them go forward with increasing success. "I don't think we can stop it completely," says Qais Hussen Rashied, the director of investigation and excavation at the Iraqi ministry of antiquities. "But we can limit it at least." Baghdad museum officials are not sure exactly what the tablets found in Peru say. They eventually hope to have Sumerian language experts decipher the writing, which is etched in great detail over the faces of smoothed stones. But the items will be on display when the Baghdad museum reopens Monday with a special exhibition featuring items that have left Iraq but found their way home.

The Pain of Tibet By Simon Elegant Thursday, Feb. 26, 2009

The Dalai Lama is tiring of fruitless effors at negotiating with Beijing. Daniel Rosenthal / Laif / Redux

I first met Dorje in front of the gates of the Longwu Monastery in Tongren, a town in China's far-western Qinghai province. Like the majority there, he was an ethnic Tibetan, a nomadic yak breeder in town on a pilgrimage. While friendly toward foreigners, Dorje nodded at the video cameras mounted above the road and said we'd better speak somewhere private. It's a grim commentary on the iron grip China maintains on Tibetan areas of the country that even a yak herdsman knows to be wary of video surveillance. In a sheltered corner of the monastery's walls, Dorje enumerated the wrongs visited on ordinary Tibetans by the Chinese authorities: beatings, arbitrary arrests and lengthy jail sentences, extortion, forced attendance at public vilifications of exiled Tibetan spiritual leader the Dalai Lama. The list went on, culminating in attempts to make Tibetans celebrate the Lunar New Year, something

Dorje and others told me they had refused to do out of respect for Tibetans killed in Lhasa last March when anti-Chinese protests turned violent. Beijing says 19 people, mostly innocent Chinese shopkeepers, were killed in the unrest, but it's still by no means clear exactly what happened or how many died. The truth may be irrelevant compared with what Tibetans believe took place. During my trip through Qinghai, it became clear that ordinary Tibetans believe hundreds, possibly thousands of their compatriots were gunned down. When I asked Dorje if last year's protests could eventually be forgotten, he shook his head. "Even my son's sons and their sons will remember. We will never forget," he said. The hardening attitudes on both sides mean there is no relief ahead for the Tibetan people. "I think violence is inevitable," says Lobsang Sangay, a senior fellow at Harvard Law's East Asian Legal Studies program who focuses on human rights in Tibet. So it's imperative for both sides to do their utmost to clear the logjam that has blocked progress since the Dalai Lama was forced to flee Lhasa nearly 50 years ago. On the Chinese side, there's little doubt that some officials realize their strategy of oppression at home and stonewalling overseas will one day backfire. But as Tibet scholar Robert Barnett of Columbia University says, their chance of influencing Beijing's policy before it is too late is vanishingly small: "Eventually, the hard-liners are going to be thrown out for having bungled their tasks. But by the time that happens, the chance of negotiating with the Dalai Lama might well have passed, and China will be stuck with an internal quagmire of its own making." That leaves the Tibetan side, whose exile community has shown increasing signs of fracturing as younger Tibetans push for an approach different from the Dalai Lama's "middle way," which stresses patient negotiation. But short of launching an intifadeh that would condemn the Tibetan people to even greater suffering, there appears to be no realistic alternative that could increase pressure on Beijing. The problem is, the middle way has hit a brick wall. Even the Dalai Lama recently said he had "given up" on negotiating with the Chinese and hinted he might step down, fearing that his position "is only becoming an obstruction instead of helping

find a solution to the Tibet issue." Yet as an international celebrity and a deity to his people, he is the only person who can shift the equation. And the issue is pressing; he turns 74 in July. That is why it may be time for the Dalai Lama to acknowledge that he has failed. For all his success in keeping the issue of Tibet on the world stage, this has not made and will not make one iota of difference to Beijing. His government-in-exile has always insisted on discussions about such matters as self-rule. Now it is time for one final, bold stroke: an announcement that the Dalai Lama is willing to return without any preconditions. Though Beijing has said it would accept him back on those terms, it is possible that the Chinese leadership--mindful of the return of exiles like the Ayatullah Khomeini to Iran--will try to block his path or refuse to live up to its promise to allow the Dalai Lama to go back to Tibet. But such a result would only broaden support and sympathy for the Tibetan cause. And there are more optimistic scenarios. The Dalai Lama's presence in China might allow for improvement in the way Tibetans are treated. Whatever the possible outcomes, this last, desperate gesture is one that has to be made. The only alternative is for Dorje's son's sons and their sons to continue to live in a long, anguished twilight as communist cadres, Coca-Cola and Chinese immigrants slowly snuff out Tibet's unique heritage.

Rebuilding Basra By Catherine Mayer / Basra Thursday, Feb. 19, 2009

THE FRUITS OF PEACE: Downtown Basra has gained some of its bustle and buzz and stays open into the evening, as fears of violence recede ABBIE TRAYLER-SMITH / PANOS FOR TIME

A picture of a genial Tom Cruise hangs above the door to the King beauty parlor in downtown Basra. For more than a decade, Sameer Abdalhadi has been snipping and shaving in the cramped salon with its display case of Dr. James Freckle and Acne Soap and Muscular Man perfume. On this February afternoon, he gives street vendor Mustafa Abdalsada a modish haircut and shaves his beard, leaving just a hint of designer stubble. Local men cultivate beards or luxuriant mustaches of the kind that make even despots look avuncular, but Abdalhadi encourages his clients to try something new. The barber, driven like many other Basrawis to erase reminders of a painful past, is giving his battle-scarred city a makeover, one man at a time. Remaking Basra is no small task. Caught in the cross fire of the Iran-Iraq war and Iraq's occupation and retreat from Kuwait, brutally punished for uprisings against Saddam Hussein only to see his tyranny give way to the mob rule of Shi'ite militias, both the city and the province of Basra have sustained deep wounds over three decades. British forces and government agencies based in Basra after the 2003 U.S.led invasion expected to be received as liberators. But they failed to convince locals that they could deliver on their promises of reconstruction and development, leaving young Basrawis prey to the blandishments of the militias, says Hilary Synnott, the

British diplomat who presided over southern Iraq from July 2003 to January 2004. "In the early days, the Western narrative was that the people shooting at us were alQaeda and former regime loyalists," Synnott says. "That narrative continued long after the development of an insurgency [led by] disaffected youth who didn't want us in their country." The British lost the battle to stabilize Basra and spent four years dealing with an increasingly chaotic province. Things changed for the better only after March 2008, when local units of the Iraqi army — trained by the Brits and in control of the region from September 2007 — launched an operation to disperse the militias. Now violence has been replaced by an uneasy calm, and with Britain preparing to withdraw all but a small rump of its 4,100 troops by May 31, Basra is daring to dream of peace. "I'm probably being wildly over the top, but I do find this an incredibly encouraging place to be right now," says Nigel Haywood, Britain's consul general in the city. The transformation from battleground to bustling municipality has been so rapid that it's natural to question whether a return to violence might not be as swift. Major General Andy Salmon, the Briton who commands the multinational forces in the region, believes that a tipping point has been reached. "I am confident Basra is not going to go back to the previous darkness," he says. Talking About the Future Barber Abdalhadi works late and without a bodyguard. When the militias held sway, he employed security and had to close up shop at 4 p.m. "If I had stayed later, they would have come to kill me," he says. The militias declared that shaving was unMuslim. Gangs took advantage of the pervasive fear to run protection rackets. In 2007, Abdalhadi's friend and colleague Shareef was murdered with a drill, but Abdalhadi continued to ply his trade. "I'm the breadwinner," he says. The militias also targeted women they deemed guilty of loose behavior, so sisters-inlaw Yusra Mahmoud and Saleema Abdalhussein used to hurry home before dark. Now on a balmy February evening, they linger in the amusement park overlooking the Shatt al-Arab waterway and discuss their children. Mahmoud has five, ages 7 to

19; Abdalhussein has just one, a son born in 1981 — not long before her husband, a conscript, was killed fighting Iran. "We're always talking about the future of the children and what it holds for them," says Mahmoud. "We've been through many wars as a generation. We hope our children will have happier lives." When Mahmoud voted in the regional elections in January, she opted for candidates she felt could offer "sustained security, jobs for young people and a better Iraq." Voting went off without violence in Basra (the only incident came when an overenthusiastic Iraqi policeman fired a gun into the air to encourage voters into a polling station). The bloc affiliated with Iraq's Prime Minister, Nouri al-Maliki, benefited from his action against the militias. In Basra, messages of national unity played better than did religious or sectarian appeals. "We have a new breed of politicians who can take Basra into a new phase," says Emad al-Battat, representative to Basra of Iraq's most senior Shi'ite cleric, Sayyed Ali al-Sistani. "The fact that Iraqis chose secular politicians over religious ones does not mean Iraq has become any less religious. But the top priority of the Iraqi people is national unity." He adds, "The politicians made promises. Now they have to walk the walk." That walk is strewed with trash; the streets of Basra are full of stinking tangles of plastic and organic matter. Indeed, since last fall, private polling undertaken by the British government has seen the poor state of public services and infrastructure leapfrog security as a popular concern. Phone-in programs on the local radio station are dominated by discussions of sewage and the electrical brownouts that hit the city several times a day. Tackling these problems is essential if the economy is to keep growing. Unemployment currently stands at 17% and reaches 30% among younger Basrawis. The provision of jobs and services is key to stability, says Salmon. "The only people who listened [to local complaints] were [the militias]. That's why Hizballah did well elsewhere. They promise to tend to the needs of the people." Improved security has enabled Britain's aid ministry to push ahead with infrastructure improvements and plans to woo foreign investors. Michael Wareing,

head of the Basra Development Commission, reports that "about $9 billion" of proposed foreign investment is on the table, with just half of that interested in Basra's oil and gas industry. "There really is a significant spread, and it's increasing as the security improves," Wareing says. Eventually, those deals will translate into new opportunities for Basrawis. For now, their city faces years of struggle to rebuild and heal. One essential resource, says Salmon, is optimism — among Basrawis as well as their soon-to-depart overlords — that the corner has been turned. "My mission has been to protect that optimism, shape it and build it," he says. Salmon can find some of it among Basra's children. At a multifaith school run by the Chaldean church, 4-year-olds wrestle with the universal question "What do you want to be when you grow up?" Several want to be doctors. Allawi plans a career in business. Muqtada wants to be a soldier. It doesn't seem unrealistic to hope that he won't be needed to keep the peace in his own city.

ARTS & ENTERTAINMENT

U2's Unsatisfied — and Unsatisfying — New Album By Josh Tyrangiel Thursday, Feb. 26, 2009

Deidre O'Callaghan

Shortly after the release of 2004's How to Dismantle an Atomic Bomb, I asked Bono about U2's place in contemporary music. "We're a wedding band now," he said decisively. Before I could inquire about availability and if the Edge knew the chord progressions on "Hava Nagila," he elaborated: "Our biggest accomplishment is that we've made a few songs people want to play during important moments in their lives. That's a very humbling thing ... If we're remembered as a great wedding band, I'll take it." Dismiss it as a flourish of modesty or a side effect of middle age, but U2 has steadily softened its ambition during its 30-year existence, and that's not such a bad thing.

Early on, Bono sang with a moral force that suggested Cotton Mather with a mullet; not satisfied to rock you on "Sunday Bloody Sunday," he needed to convert you. In the towering period that spanned The Joshua Tree to Zooropa, U2 made stadiumsize art rock with huge melodies that allowed Bono to throw his arms around the world while bending its ear about social justice. After 1997's Pop — a disastrous mix of disco and hubris that provided a harrowing glimpse of career death — the band decided to banish the lead singer's politics to venues like the U.N. and focus on writing songs whose chief ambition was to charm rather than to persuade. This lateversion U2 has produced a run of hits ("Beautiful Day," "Wild Honey," "City of Blinding Lights") united by a lightness of theme and an ease of sound. Unburdened by the need to make big statements, U2 proved that no one else is better at making universal small ones. It's a fine place to close the curtain, with the band flourishing in its contented third act as the one group people of all ages can agree on. Except that U2 isn't quite content. After an almost five-year absence, during which Bono was named one of TIME's Persons of the Year for his work on global poverty and the group was inducted into the Rock and Roll Hall of Fame, the band returns on March 3 with an album called No Line on the Horizon. It offers up a few new hits for the wedding playlist, but No Line on the Horizon is mostly restless, tentative and confused. It's not terrible, but it feels like the work of musicians torn between the comfort of the present and the lure of one last run into the adventurous past.

No Line on the Horizon starts well. "I know a girl," Bono screams on the title track, thrusting us into the familiar cosmos of a U2 hit. There's the martial beat, the fickle female object of desire, the soaring inarticulateness — "Ohhhhhh/ Oh, oh, oh, oh, oh, oh, oh, oh, oh" — followed by the Edge chugga-chugga-chugging away on his guitar, chasing Bono up the scale note for note and yawp for yawp. It makes you giggle in amazement that the same old tricks keep generating new thrills. Having set the bar high, U2 gradually limbos underneath it. The trouble begins with "Magnificent," another catchy, thunderous love song out of the recent U2 playbook. At least it seems that way until the arrival of the portentous line "I was born to sing

for you/ I didn't have a choice but to lift you up/ And sing whatever song you wanted me to." Delivered with an ambivalent growl by one of the most famous men in the world — one who got that way by being a singer of songs and lifter of souls — it suddenly sounds less like a love song and more like a grievance. Each time Bono slips out of the Everyman first person ("I know a girl") and into the specific ("I was born to sing for you"), the effect is jarring enough to raise the question, Is he trying to speak for us or to us? On U2's best albums (The Joshua Tree; Achtung Baby), the answer is both. But convergence rarely happens here. Some songs — like "Stand Up Comedy," a goofball attempt at funk — are explicitly told through Bono's rose-colored specs. ("Stand up to rock stars, Napoleon is in high heels/ Josephine, be careful of small men with big ideas.") But on the otherwise breezy power pop of "I'll Go Crazy if I Don't Go Crazy Tonight," the rock star can't resist intruding with a lyric that first appeared as a pull quote in several of his magazine profiles ("The right to appear ridiculous is something I hold dear"). After a few albums of disciplined universality and lyrics everyone can relate to, the man has earned the right to sing his life, and plenty of people are interested in the thoughts of the philanthropic and famous. But the pleasures these moments provide are at best voyeuristic; they create distance between U2 and the average listener, while great pop — the kind this band used to produce consistently — strives to erase distance. To his credit, Bono never stops noodling with ways to make a connection. He slips into characters (a soldier in "White as Snow," a journalist in "Cedars of Lebanon"), scats like a young Beat poet and, in a moment he will probably regret, impersonates your office IT guy ("Restart and reboot yourself") on a ham-fisted attempt at lifecoaching. Multiple times he asks, "Let me in the sound," as if looking for a place to hide. But the sound doesn't provide much refuge. Work on No Line on the Horizon began in 2007, when the band decamped to Morocco with Brian Eno and Danny Lanois, the men who oversaw U2's 1980s transformation from anthem singers to makers of textured, daring rock. As a hedge, the band also paid visits to Dublin and London to

check in with Steve Lillywhite, who helped U2 crank out some of its muscular early and recent hits. (Most bands would have to take out a second mortgage to cover the per diem for just one of these producers.) Not surprisingly, the album lacks a unified feel. On a few tracks, the Edge, drummer Larry Mullen Jr. and bassist Adam Clayton sound at home rumbling through the verses and blowing out the choruses in the old familiar way. But as No Line trudges on, it slumps under the weight of its own need to surprise. Eno invented the bleeps and whirs that are mixed into the background of so many rock albums, and used as seasoning, his effects still have the power to create mystery. (On the title track, it sounds as if Bono is duetting with a quasar — very cool.) The problem is that too often Eno's tricks are the steak. Melody — the most surprising effect of all — dodges in and out but rarely makes itself at home, and all we're left with is an increasingly dull series of tricks killing time where the tunes should be. The one song that seems to work on all the levels U2 intended is "Moment of Surrender." Clocking in at more than seven minutes and moving with the deliberate shuffle of a man wandering empty streets, it gives Bono a shot to channel Sinatra at his loneliest. You can hear an organ and a cello and a lot of other sounds that are hard to pinpoint, but they gradually converge into a heartbreaking melody as Bono stares into the reflection of an ATM and discovers he can no longer recognize his own face. As the tune fades out, he lets loose another of his famous "Oh-oh-ohs," and it's hard not to hear an echo of his closing blast on "With or Without You" but in a minor key. U2 has clearly found itself stuck in a very strange moment of selfreckoning. And a great band's horizon has never looked so close.

Eric Kraft's 'Flying' By Radhika Jones Thursday, Feb. 26, 2009

Back when starry-eyed inventors dreamed up airborne contraptions, not online social networks, a teenage visionary named Peter Leroy built an aerocycle in his parents' garage and flew it solo across the country. At least that's what the proud residents of his hometown of Babbington, N.Y., think Peter did. Turns out he did cross the country, but strictly speaking, he never quite got off the ground. More than 40 years later, conscience-stricken by the effect his legend has had on the town, Peter goes about writing a memoir to set the record straight. This is the story of Eric Kraft's novel Flying (Picador; 581 pages). And of course, Peter's "full and frank disclosure" is much more a Proustian exercise in creative recollection than a marshaling of the facts. After all, Peter is an imaginative soul, and

he knows it--that's what got him into this mess in the first place. "When you are a seat-of-the-pants memoirist," he writes, "you don't write about your life; you live your memoirs. You begin to feel that you and your account of yourself are one, like a mythical beast." The beast gets a little heavy-handed when Peter and his wife Albertine re-create his childhood journey, this time by car. The strict alternation of chapters between the '50s and the present feels mechanical, and you start to wish the memoir as frame would temporarily recede. But for the most part, Flying is a reminder of how entertaining a novel can be when it slips the surly bonds of realism. Kraft's characters don't talk like people actually talk. They're more witty, more astute, and they express themselves with infinitely more pizazz. This is true even of Peter's winged steed, the charmingly anthropomorphized Spirit of Babbington, which may not be an ace at lifting off but proves a surprisingly excellent road buddy. The effect is like a happy-go-lucky Nabokov, with all the road-tripping wordplay and none of the incest. It's a joy to watch Kraft resuscitate stale idioms with a simple twist, as when Peter describes the verbally dexterous Albertine not as having a way with words but as having her way with them. Having his way with words is Kraft's project too. The source of the plans for Peter's aerocycle is a do-it-yourself magazine called Impractical Craftsman--an inspired title for the age of armchair American ingenuity and, not incidentally, a nifty description of a fiction writer. On paper, a novel about hope, nostalgia, love, disillusionment, pataphysics and the science of lift might seem like a hopelessly overdetermined bucket of bolts, an aerodynamic impossibility. But Kraft's affectionately satirical, buoyant language makes Flying soar.

The Master of Us All By Richard Lacayo Thursday, Feb. 26, 2009

Museum of Fine Arts, Boston; Estate of Pablo Picasso 2008 / ARS

It's one of the ironies of art history that Paul Cézanne used to warn young painters, "Beware of the influential master." Could there have been a more influential master than he? "The master of us all" is what Henri Matisse once called him, by which he surely meant himself, Pablo Picasso, Georges Braque, Piet Mondrian and any of the other pioneers of modernism. Fernand Léger once told an interviewer about his "battle to quit Cézanne," as though he were a narcotic. "Then one bright day," Léger insisted, "I said, 'Zut!'" But shaking Cézanne is not so easily done. His discoveries were too fundamental to the course that painting would take. By the time of his death, in 1906, it was plain he was the hinge on which the art of the new century was turning. And his influence didn't end with the first cohort of modernists. His grip on the imagination continues

well into the present. As proof, there's "Cézanne and Beyond," an ingenious new exhibition at the Philadelphia Museum of Art that combines a choice selection of Cézannes with the work of 18 artists whose practices owe something to his. Organized by Joseph Rishel, the museum's chief curator of European painting before 1900, and adjunct curator Katherine Sachs, the show is dedicated to Rishel's late wife Anne d'Harnoncourt. For years the Philadelphia Museum's smart and spirited director, d'Harnoncourt died, much too soon, last year. Had she lived to see this fascinating mix and match, which runs through May 19, she would have loved it. What was it that Cézanne did that was so important to the future? Many things, but chief among them is that he shattered the picture plane. By constructing each painting as a series of plainly separate, insistent strokes, he confounds the viewer's natural impulse to treat the canvas as a window onto a scene. He compels your attention instead to the fact that it's a field of marks on a flat surface. In a mature Cézanne, every brushstroke leads a double life, as part of a painterly illusion and as a thing in itself, a patch of pigment on a canvas. This opened the way to everything from Cubism to abstraction. And as the Philadelphia show makes clear, it was a discovery that continues to reverberate more than a century later in the work of living artists like Ellsworth Kelly, Jasper Johns and Brice Marden. Cézanne took the immediacy of the Impressionists--their flickering surfaces--and joined it to an ambition to create an art that was more stable and solid. Almost any human figure painted by him possesses the weight and mass of an Egyptian tomb carving. (This may help explain why the later versions of his naked bathers, loadbearing diagonals in an arching composition, are as sexless as shopping-mall escalators.) But it's the paradox of Cézanne that his multitude of discrete strokes can destabilize forms even as he builds them up, dissolving them into a force field of shimmering hatch marks. Look at his 1877 portrait of his wife Hortense. Cézanne conferred on her a monumental stability that's constructed somehow out of a field of pulsing strokes. More than a half-century later, Picasso painted his young mistress Marie-Thérèse in The Dream with the same weighty decorum, hands in lap just like Madame Cézanne. With her lavender flesh and gentle contours, Marie-Thérèse is a more yielding figure. But Picasso also lends a pulsating charge to her image--the

pulse of sex. Given the phallic upper half of her head, an indicator of what's on her dreaming mind, you wonder just what that girl's hands are up to. Almost everybody learned from Cézanne. Braque pored over the great still lifes--all those apples and bunched tablecloths--and took from them ideas about distorted forms and tilted planes that he and Picasso would carry into the profound thickets of Cubism. The serene heft of Cézanne's many views of Mont Sainte-Victoire inform the muscular Maine landscapes of the American painter Marsden Hartley. The enduring reach of Cézanne can even be felt in Ellsworth Kelly's Lake II, a color-field wall panel from 2002 that distills and abstracts the visual experience of water, just as the old Frenchman distilled the forms of nature. Cézanne zut? Finished? Gone? Not a chance.

BUSINESS

One Bad Bond By Stephen Gandel Thursday, Feb. 26, 2009

David J. Phillip / AP

Mortgage bonds used to be the stars of finance. Home loans, after all, have a lot going for them: the vast majority of people, even today, make their mortgage payments on time. What's more, mortgage bonds are made up of thousands of home loans, giving them safety through diversity. So how did these bonds become so toxic that they've poisoned banks and threatened the entire economy? Look under the hood of a bond called Jupiter High-Grade CDO V, and you can understand why we're in trouble. Bankers from the 1970s, when mortgage bonds first took off, would hardly recognize Jupiter. Unlike a traditional bond, Jupiter's underwriter does not buy people's mortgages, collect the payments and pass them on to its investors. Instead, Jupiter holds other mortgage bonds--and not just any.

Jupiter's investments are made up of the riskiest portions of other bonds, some of which are themselves a collection of other poorly rated mortgage bonds. In a rising real estate market, such risks were deemed acceptable. When it was issued in March 2007, 93% of the Jupiter deal was rated AAA. But when things unwind--and have they ever--any default gets compounded by the chain of linked bonds. The multiplier effect works like this: while 4.4% of the typical loans tied to Jupiter's bonds are in default, nearly 59% of Jupiter's investments are now worthless. Hello, toxic asset. The valuation of a mortgage bond like Jupiter is a white-hot argument. Most Wall Streeters agree that a large number of such bonds--amounting to hundreds of billions of dollars, perhaps trillions--are worth far less than their stated, or par, value. How much less is central to resolving the financial crisis. In early February, Treasury Secretary Timothy Geithner said he wanted to start a public-private partnership to buy up toxic assets. Banks hold tens of billions of dollars in mortgage bonds, and as the bonds fell in value or were wiped out completely, they erased precious capital the banks need to survive. Geithner and others believe that rescuing banks from these bonds will save them. To do that, the bonds have to be priced to sell. A look at Jupiter shows how hard that can be. Jupiter owns 223 other mortgage bonds. One of those bonds is Mantoloking, which in turn owns 126 other bonds. Not done yet. Mantoloking's mortgage bonds own hundreds of other mortgage bonds. Those mortgage bonds are then all made up of thousands of actual loans, some of which may be current, while others may have expired. Go figure. "It's an informational nightmare," says Andrew Lo, director of MIT's Laboratory for Financial Engineering. "It's very hard to collect all the information you need to figure out what these things are worth." A recent Goldman Sachs report estimates that most investment banks believe bonds like Jupiter are worth 40% less than what was paid for them, or 60¢ for every dollar invested. But given how many of Jupiter's bonds have gone bad, you could just as easily guess that it is worth 41¢ on the dollar. And that might be generous. A top bond trader who looked at Jupiter for TIME said that on the basis of where loan

defaults are headed and the loans Jupiter holds, even the best part of the bond could be worth as little as 5¢. A near total loss. "Banks thought they could buy these bonds and lock them in their closet," says Rohan Douglas, chief executive of Quantifi, which helps investors and banks evaluate the riskiness of their portfolios. "Now those doors are being pried open, and what we are finding is one big mess."

Thursday, Feb. 26, 2009

Nationalizing Banks: What's All the Fuss? By Justin Fox

Some say bank nationalization began in 1984 when regulators decided that Continental Illinois, then the nation's seventh largest bank, was too big to fail and put the Federal Deposit Insurance Corporation (FDIC) in charge of it. Lee Balterman / Time Life Pictures / Getty

Our country's banking system was effectively nationalized in October when then Treasury Secretary Hank Paulson called the heads of the nine biggest banks into his office and told them they couldn't leave before agreeing to take billions of dollars of government money and hand over ownership stakes in return. At least, that's one way of looking at it. You could also say bank nationalization began in 1984 when regulators decided that Continental Illinois, then the nation's seventh largest bank, was too big to fail and put the Federal Deposit Insurance Corporation (FDIC) in charge of it. Or maybe the crucial moment came in 1933 when Congress decreed that small depositors should be protected from bank failures by the FDIC. Or in 1913 when Congress created the Federal Reserve System to halt banking panics and regulate the money supply.

You could, if you really wanted to stretch it, go back to the 1864 advent of the national banking system and the first federal bank regulator, the Comptroller of the Currency. Or even the chartering in 1791 of the partly government-owned Bank of the United States--Alexander Hamilton's baby, which died in 1811, seven years after he did. The point is that the current breathless talk about bank nationalization is more than a little historically obtuse. At least since the founding of the Fed, our banking system has been a public-private partnership. Apart from a few on the libertarian right who think we'd be better off with no government involvement in banking and an even smaller group on the socialist left who would like to see complete government control of the financial system, almost everyone seems to be in favor of continuing that partnership. What confronts us at the moment is not so much a philosophical debate over nationalization as a practical discussion about how best to put the banking system back on its feet. We're talking tactics, judgments--guesswork. The Paulson approach was to throw money at good banks and bad alike, so there would be no stigmatized bad ones--in return for preferred shares that promised income for taxpayers but no direct federal control. In the context of the imminent collapse of the financial system that Paulson and Fed Chairman Ben Bernanke feared, this was understandable. Now it's time for a different approach. Successful bank cleanups in the past have involved triage, in which government differentiated good banks from bad. That's been combined with a mechanism to take bad loans and other unwanted assets, like real estate, off banks' books. Beyond that, there's no precise recipe. The government response in Sweden in the early 1990s, now cited as a blueprint, involved the takeover of precisely two banks. The rest of the country's banks remained in private hands, even though the government guaranteed their assets. The FDIC has taken over--nationalized, if you will--14 smallish banks so far this year. The tough questions have to do with the banking giants. Regulators deem them too

big to be sold off or shut down according to standard FDIC procedures without risking another market breakdown like the one that followed the collapse of Lehman Brothers. The Obama Administration has already said it will buy shares in banks that need more help, and is negotiating a deal that would give it a big minority stake in Citigroup. But it has so far dismissed suggestions that it should take full control of Citi and other big banks. The argument for a takeover is that it makes executives answerable to taxpayers rather than shareholders. The argument against it is that execs solely answerable to taxpayers won't take the entrepreneurial risks needed to return their banks to health. The toughest question of all may come down to which banks actually stand a chance of returning to health. Bank regulators have embarked on "stress tests" of the 19 largest banks to determine that. But it's not clear how exacting the tests will be, and to be honest, nobody knows for sure how exacting they should be. Judged by liquidation value--what they could get for selling their assets on the open market today--most major banks in the U.S. are probably insolvent and due for a total government takeover. But that isn't the standard banks are judged by. In a panic, markets for certain assets simply stop functioning, and relying on the market to determine the health of banks means succumbing to panic. Then again, relying on bank execs to price their assets is no good either. Treasury Secretary Tim Geithner hopes to get around this by jump-starting a market for troubled mortgage securities, but he hasn't outlined how he's going to do that. So for the moment, we're stuck with more judgment calls. And guesses.

SOCIETY

Why We're Going Nuts Over Nut Allergies By Alice Park

Thursday, Feb. 26, 2009

Michael Duva / Getty

Susan Fradin has nightmares about Cheerios. Specifically, the Honey Nut variety. Her son Noah is allergic to peanuts and almonds, and her nighttime torment began during his first trip to sleepaway camp, when he was 9. Fradin, a former publicist in Los Angeles, worried that her son would eat cereal he shouldn't and go into anaphylactic shock. "I woke up in the middle of the night thinking, What if he eats Honey Nut Cheerios thinking they are regular Cheerios?" she says. Yes, Fradin is one of those incredibly anxious parents who would prefer that her son never so much as lay eyes on a Mr. Peanut logo ever again. Noah's allergist at UCLA, Dr. Gary Rachelefsky, who has treated him since babyhood, describes her as initially "one of the most fearful mothers I ever came into contact with." She's calmer these days, but her concerns are not unfounded. A few months before Noah went off to camp, she woke up one night to find him covered in hives, coughing and gasping, and she had to jam a syringe full of epinephrine into his thigh to help him breathe. "It was horrendous," says Fradin. Noah is now 16 and a surprisingly well-adjusted member of what might be called the Allergy Generation. In addition to peanuts, he is allergic to lentils, beans, peas, tree nuts, sesame and shellfish. The Fradins and the 3 million other families in the U.S.

with food-allergic children have to navigate not only the complexities of the grocery aisle but also the growing skepticism among those who wonder if the sudden rise in food allergies is due more to hysteria than to histamines. A waiter, for example, may not grasp the seriousness behind Noah's endless questions about the menu. "I just need to spend a little more time ordering and talk about how I could die," he says. As more and more schools set up peanut-free zones and as food manufacturers add warning labels that their products might contain particles of peanuts, soy or other allergens, the abundance of caution is starting to trigger a backlash. Given all the attention paid in recent years to food allergies, the number of people in the U.S. who die from them — 15 to 20 a year — is relatively small. More people die each year from bee stings. "But we don't remove flowers from schools or playgrounds," Dr. Nicholas Christakis, a professor of medical sociology at Harvard Medical School, commented recently in the British Medical Journal. When asked about his editorial, which he wrote after his son's school bus had to be evacuated because someone spotted a peanut on board, he said, "We should be having a sober-minded, publichealth debate, and instead the overresponse to food allergies is preposterous." Christakis notes that peanut and other food allergies are a real problem; it's the community reaction to them that is getting out of hand. According to the Centers for Disease Control and Prevention (CDC), the percentage of U.S. children under 18 with a reported food allergy jumped 18% from 1997 to 2007, and the number of children hospitalized for food allergies has nearly quadrupled in recent years. So forget pet dander and pollen. "In this day and age, allergy in pediatrics is all about food, food, food," says Dr. Allen Lapey, a pediatrician at Massachusetts General Hospital. Each year, 30,000 people in the U.S. are rushed to the emergency room suffering from an allergic reaction to food. And while these allergies are rising among all major racial and ethnic groups, they are climbing fastest among Hispanic children, according to new data from the CDC. The trend is not an entirely American phenomenon. European nations have posted increases similar to the one in the U.S., and in a study of the relatively confined residents of Britain's Isle of Wight, rates of peanut allergies among toddlers doubled

from 1989 to 1994. While prevalence in Asian countries, where peanuts are a popular dietary add-in, remains low, experts warn that could simply be the result of spottier awareness, diagnosis and reporting of allergic reactions in those nations. What's behind the rise in food allergies? Has a generation of kids, or their moms, been exposed to things in the environment or in their diets that could make them more sensitive to certain food proteins? Perhaps. Allergies are the direct result of too much IgE, an immune-system component that serves as the body's supersonar for detecting any foreign and potentially harmful proteins. To signal the need to annihilate these invaders, IgE attaches like antennae to the surface of cells that release histamines and other inflammatory agents. In mild cases, the result is a rash and hives. In others, blood pressure drops and fluid builds up in tissues, leading to swelling. Airways can constrict, triggering coughing and eventually respiratory distress and even death. Once a massive IgE cascade is activated, only a shot of the hormone epinephrine, a.k.a. adrenaline, can stop a hypersensitive immune system from killing the body it set out to protect. So why are children making so much IgE these days? Part of the fault may lie in modern medical practices: with antibiotics and immunizations to protect against micro-organisms and parasites, children's immune systems may be getting weaker and even bored, with little or nothing to fight. This theory was first posited 20 years ago by a British epidemiologist who noticed that children with more siblings had less hay fever than kids in smaller (and presumably less snot- and germ-laden) families. It could explain the climbing incidence of all allergies — not just those to foods — as well as asthma. Sanitation can't demystify the entire trend, but the so-called hygiene hypothesis remains the leading answer to baffled parents' questions. For families like the Fradins, however, knowing the why of food allergies is less important than knowing whether their children will be affected — and how. (Noah has a brother who has no food allergies.) Because allergic reactions to food can vary, even within the same person, allergists often shrug when it comes to advising parents about forecasting anything about their child's next reaction. "We really have no test that can tell us who is apt to have a severe, life-threatening reaction and who

is more like the vast majority who will never have that kind of reaction," says Dr. Hugh Sampson, director of the Jaffe Food Allergy Institute at the Mount Sinai School of Medicine in New York City. Even the act of diagnosing allergies has become a source of confusion. Increasing reliance in recent years on a blood-based test instead of the classic skin-prick screening means that not just allergists but also pediatricians can find out if children are carrying IgE antibodies for certain foods. But some positive tests may be false alarms that lead families to spend a lot of energy avoiding common foods that their kids can actually tolerate. Given the uncertainty in the medical world, it's easy to understand the frenzy outside the doctor's office. Too often parents of newly diagnosed children aren't given enough information about when and even how to inject the lifesaving epinephrine. "Our allergist said, 'Here you go. Here's a prescription and see you in a year,' " says Dena Friedel, an Ohio mom whose daughter was diagnosed with a peanut allergy when she was 2. When her daughter had a reaction several months later, Friedel didn't know when to use the syringe and called 911 instead. The EMT told her she had made the right decision, but when they reached the hospital, "the doctor yelled at me and said I should have used the EpiPen," she says. "I was so confused and overwhelmed." Reports in 2005 of a peanut-allergic girl who died from anaphylactic shock after kissing her boyfriend, who had eaten some peanut butter hours beforehand, raised alarms that the slightest exposure could prove fatal. It turned out that the girl also had asthma, a dangerous combination, since the lungs of asthmatics are more prone to swelling and shutting down when aggravated. Contact — in kissing, for example — through mucous membranes can also heighten the chances of an attack. For the most part, touching a food allergen is not a problem unless you then rub your eyes or stick your fingers into your mouth — both of which young children are fond of doing. Even so, parents' worries about the mere possibility of inhaling peanut dust prompted airlines to stop serving the popular flight snack. There has been no such treatment for passengers with milk or egg allergies, which are more common but

also more likely to be outgrown. Moreover, smaller amounts of peanut protein can trigger allergic reactions in those who are sensitive, and peanuts are also more likely to result in fatalities than are other food allergens. Still, very few people with a peanut allergy die from it. In fact, a 2003 study led by Dr. Scott Sicherer, a Mount Sinai pediatrician, showed that 90% of peanut-allergic children who got peanut butter on their skin developed nothing more than a red rash; none developed a systemic reaction in which their airways swelled up. The same went for smelling peanuts. Thirty peanut-allergic children were asked to sniff peanut butter and a placebo paste for 10 minutes each, and none developed a reaction to the peanut butter. Only one child had difficulty breathing — and that was after sniffing the fake peanut butter. Such studies are starting to suggest a more nuanced way of handling the peanut problem in schools and other places. "You are probably better off teaching the faculty how to manage food allergies than making the classroom or school a peanutfree zone," says Dr. Sean McGhee, a pediatrician at Mattel Children's Hospital at UCLA. "To my knowledge, there aren't any studies where peanut-free zones decrease the incidence of anaphylaxis." In some instances, peanut-free zones seem downright silly. Upon request, Delta and Northwest airlines will set up a peanut-free buffer zone spanning three rows in front of and behind an allergic passenger. (Why three rows instead of four or five?) Foodmakers have also gone a little overboard. In 2006 a federal law started requiring companies to use plain language to note the presence in their products of any of eight major allergens: milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat and soybeans. But concern about liability claims led manufacturers to voluntarily supplement these labels with alerts on products that were made in the same facility or on the same machinery as food containing any of the eight allergens. The result is ubiquitous warnings about possible cross-contamination, which have made the labels essentially useless.

"You find yourself having to take a chance," says Noah, who continues to eat his favorite brand of pretzels even though it now carries the warning "Produced in a facility that handles peanut butter." And he's not alone. A study by Sicherer in 2007 found that 75% of food-allergic people ignored these labels when shopping, unsure exactly how great the danger of cross-contamination was. The same study also found that 1 in 10 products tested actually contained the allergen noted in the warning on the packaging. In an effort to make food labels more useful, the Food and Drug Administration is considering a new standard that would give consumers a better sense of how much cross-contamination may have actually occurred. After holding hearings on these advisory labels last fall, the agency is now studying systems like Australia's VITAL program, in which companies voluntarily rank the risk of cross-contamination on a scale of low to moderate to high. Meanwhile, Massachusetts last year became the first state to pass legislation requiring training for restaurant staff in safe food-allergy practices to avoid cross-contamination in the kitchen. But until more rigorous standards are in place, eating continues to be a game of Russian roulette for the food-allergic. Which is why some researchers are trying to find a better way to treat allergies than simply advising their patients to avoid certain foods. In a new strategy called oral immunotherapy, doctors try to retrain the immune system by hitting it with the offending protein enough times, in increasing doses, that the body's defenses eventually relent and accept the protein as friend rather than foe. "It's the first generation of treatment that would make people less or even no longer allergic," says Dr. Wesley Burks, chief of pediatric allergy and immunology at Duke University Medical Center. On average, children treated this way for a year are able to tolerate the protein equivalent of 15 peanuts, while the untreated group developed allergic reactions after 1 ½ peanuts. For parents, allowing their kids to participate in the study was a leap of faith. "Doing this was the lesser of two evils," says Kimberly Carter, a Virginia resident whose daughter Hannah, 5, received a peanut-allergy diagnosis at a year old. "I was sure that at some point in her life, she was going to ingest peanuts, and there was a good chance she was going to die." Hannah recently had no adverse reaction after she

downed chocolate pudding mixed with 5,000 mg of peanut protein — the equivalent of a dozen peanuts. Hannah is now on a one-month reprieve from her daily pudding treatments; in four weeks, she will be challenged again with the same 5,000-mg dose of peanut flour. If she does not have a reaction, Burks will deem her "peanut tolerant" and allergy-free. If that happens, she will be among the first generation to conquer a food allergy. And perhaps it will be this scientific success that will provide the ultimate antidote to the hype and hyperbole. "We want people to understand what they have to do in case of an allergic reaction, but we don't want them to be so scared that they totally shelter allergic children, because that is not realistic," says Sampson. "It's a hard line to walk." How Food Allergies Can Affect The Body When a hypersensitive immune system attacts proteins in peanuts or other foods that are harmless to most people, allergic reactions vary from a mild rash to anaphylactic shock, which can be fatal 1 Peanuts are first introduced to the immune system 2 The body reacts to peanut proteins by generating IgE antibodies 3 During the next encounter with peanuts, the antibodies attach to mast cells 4 IgE signals these cells to flood the body with histamines and other chemicals Allergic reactions can include: COUGHING/WATERY EYES Histamines cause eyes and nose to run HIVES The activated immune system triggers eczema and hives VASODILATION Blood vessels become leaky, lowering blood pressure

AIRWAY CONSTRICTION Inflammation in the lungs can lead to difficulty breathing Food allergies are becoming more common ... Average hospital discharges per year of children with any diagnosis related to food allergies 1998-2000 2,615 '01-'03 4,135 '04-'06 9,537 ... but cause fewer deaths than other hazards Food allergies 18 Lightning strikes 48 Stings (hornets, wasps or bees) 82 Malnutrition 3,003 Accidental drowning 3,976 Accidental poisoning 23,618 Flu and pneumonia 63,001 Sources: National Center for Health Statistics; Centers for Disease Control and Prevention

Family Tech

Pocket-Size Personal Trainers By Josh Quittner

Thursday, Feb. 26, 2009

Here's my idea for a dream exercise machine: I input my weight, the number of calories I want to burn and how much time I have. Then I power up the gleaming, multigeared thing--and it goes to work by itself while I return to my favorite chair, play online poker and eat maple-glazed doughnuts. Sadly, that Utopian scenario will arrive around the same time as the flying car. Meanwhile, my waistline is expanding in proportion to the national debt. A recent checkup confirmed my worst suspicions: I'm borderline everything, from diabetes to elephantiasis. Luckily, there's a raft of new gadgets on the market that use high-tech sensors to help me get a handle on my love handles. During the past month, I've focused on two gizmos that promise to pound the Quittner bod back into its more kittenish shape. One, the cigarette-lighter-size (and awkwardly named) Smheart

Link, works with an iPhone to monitor my heartbeat during customized daily workouts. The other, the Bodybugg, measures my caloric expenditure. I recommend each. The Smheart Link ($155 at Amazon.com wirelessly tethers an iPhone to a heart-ratemonitor belt. (I got a $42 garden-variety Garmin belt.) Smheart Link uses several free apps to manage fitness routines pegged to your heart rate. I, of course, chose the crème de la crème app: iNew Leaf. To get started, I went to BreakAway Performance in San Francisco, one of some 400 gyms in the U.S. that can perform a $250 "metabolic assessment." This test is part of the New Leaf's structured fitness system. Joel Ramirez, BreakAway's founder, put me on a stationary bike and placed an oxygen mask over my face. The mask was connected to a computer that measured my oxygen consumption and carbon dioxide output during a 20-min. stress test. With those data, plus my weight, height, age and gender, the computer created a report on my current health--including the ideal fat-burning and carbohydrate-burning heart-rate zones for me. Then the New Leaf system generated an eight-week daily fitness plan and uploaded it to New Leaf's website. (Additional assessments are $150 per eight weeks--still cheaper than a real, live personal trainer.) Once that's done, just fill in your New Leaf user name and password, and the iPhone grabs your daily workouts from the server. The beauty of the system is that it's portable; I can use it with any exercise machine. Mainly, though, I use it while on an exercise bike. Some days I'm assigned repetitions--2 min. in Zone 1, 2 min. in Zone 2, 1 min. in Zone 3, repeated 20 times-and on others, I do "recovery" workouts, say, 50 min. in Zone 2. The iPhone tracks my heart rate and tells me which zone I'm in and which zone is coming up. It's tricky, like walking a tightrope with my heart, but it's effective. After each workout, I wirelessly upload the results to the New Leaf site and get a grade based on how well I stayed within the zones. (As usual, I'm a C student.) I'm amazed how efficient it is to burn calories when everything is based on your

individual metabolism. One day I burned 1,000 "TruCalories" in 70 min. That's nearly two mai tais. My low-tech bike had estimated I burned only 550 calories. But even these super-tailored workouts may not be enough. As it turns out, while the Smheart Link plays digital drill sergeant in my new life, the Bodybugg ($249 for the device, plus a recurring monthly fee) acts as the CIA, surreptitiously monitoring my caloric burn. The Bodybugg is a collection of sensors that measure such things as motion, body heat and sweat 32 times per second, then run the data through an algorithm. The company says the calorie estimate is better than 90% accurate. I also recommend getting the optional digital display wristband ($100), which syncs to the Bodybugg and gives you a read on calories burned so far, how many steps you've taken and other real-time data. The hardest part for me has been estimating how many calories I consume at each meal. A database on Bodybugg's website of foods and their calorie counts helps, and I can manually add my own favorites. Then I periodically connect the Bodybugg to my laptop via a USB cable, and the device uploads to the site how many calories I burned. Pretty color graphs then compare intake with burn rate; the user interface is excellent here. The idea is to figure out how much you usually consume vs. how much you typically burn. An online questionnaire helps you understand what you eat and sets daily goals. (To lose, say, a pound a week, the average human needs to consume 500 fewer calories per day than he burns.) Given my penchant for booze and fatty foods, my daily burn target was 3,150 calories--an output that requires me to take a daily two- to three-mile walk and do an hour on the bike. Or I can just eat less. Ha, ha, ha. Still, it's been working for me. "Feedback is great," says Dr. Gerald Neuberg, a cardiologist in New York City and an old friend, whom I called for a second opinion. "It's engaging and motivating. If I had a calorie meter reading everything I put in my mouth, I would surely slow down my eating." In fact, that would perfect the system: a nose-mounted camera that measures caloric intake. Perhaps someday.

Dentists: Smiling in the Face of Recession By Sean Gregory Thursday, Feb. 19, 2009

Chris Meier / Corbis

The one guy is 63, just lost his job at a health insurer, and is afraid he'll never find another one. The other has three kids, one in college, and lost his construction job. The stress caused them to grind their canines and molars. So they each wound up in the office of Dr. Woody Oakes, a dentist from New Albany, Ind., with a fractured tooth. "You do see that — someone lost their job, and they come in with their jaws clenched," says Oakes, who is also editor of the Profitable Dentist magazine. "You can fracture your teeth when you do that." There's at least one profession for which the recession might not bite: dentistry. According to Sageworks, a firm that tracks private-company financial performance, dentists' offices had higher profit margins than any other industry in 2008. With average profit margins at 17%, dentistry outpaced accounting, tax preparation, bookkeeping and payroll services, legal services and mining support services among the top five performing professions in '08. Dental margins rose about 1.5% from 2007, according to Sageworks.

What could be keeping dentistry strong during this recession? Sure, tooth-grinding and nervous eating habits — I'm going to chomp on chocolate as an escape — may be driving traffic to the drill. But economic forces are more likely to be responsible. Dentists note that patients who receive limited or no insurance tend to skip cleanings and other dental maintenance during tough times as they look to save a few bucks. But dentists pick up even more revenue later on. Patients who've skipped checkups now have achy teeth and have no choice but to undergo a more expensive procedure. "It's human nature to say, 'I can't afford that right now, and if it doesn't hurt, I don't have a problem,'" says Dr. Lawrence Spindel, a dentist in New York City. "Then all of a sudden you need a root canal." At the same time, insured patients want to hit the chair while they're still lucky enough to have the insurance. "We're seeing that a lot of folks are fearful of losing their jobs," says Rick Willeford, founder and president of the Academy of Dental CPAs, whose members provide accounting and tax-prep work for some 7,000 dentists across the country. "So they want to use their benefits. That has helped keep revenues strong." Spindel, who had his best year ever in 2008, says last spring he saw a "miniboomlet" in these types of cases. "People know that if they're going to lose their job, they damn well better use their dental insurance," Spindel says. "They say, 'Do as much as you can do, and you need to do it within 30 days!' " You would think cosmetic dentistry would completely collapse during a recession. Who wants to part with thousands of dollars just to look good? But some evidence suggests that this business is still healthy. For example, sales of Snap-on Smile, a cosmetic device that snaps over your teeth, rose 22.2% in the fourth quarter of '08 compared with the third quarter. December sales were 62% higher than those in October. The device costs between $2,500 and $4,000 for a full-mouth restoration, a much cheaper alternative than restorative veneers, which can cost $30,000 to $50,000. Snap-on Smile CEO Adam Cotumaccio has heard feedback that some patients buy the product for very practical purposes. "In this job market, you want to feel good, you want to look good going into an interview," says Cotumaccio. Plus, people are still spending money on big-ticket dentistry. Dr. Cary Ganz, a dentist from Garden City, N.Y., has done several $50,000-to-$60,000 procedures this year. "It has

amazed me," says Ganz, who also reports having his best year ever. "Regardless of the economy, people still have the need to take care of themselves." Dentistry is not pain-free. Willeford reports an overall fourth-quarter slowdown among the Academy of Dental CPAs' clients. These dentists serve patients across a broad socioeconomic spectrum. "We're seeing a lot more open appointment books through March," says Willeford. "If people keep losing jobs, we're going to edge off a cliff." Dr. Roger Levin, CEO of the Levin Group, a dental-management consultancy, is also very cautious. "Traditionally, it takes six to 12 months for economic trends to affect dental practice," he says. "The full impact of the downturn may be yet to come." Dentists should still stay warily optimistic, however. "People think, Rather than lose all this money in the market," says Ganz, "I might as well put it my mouth."

PEOPLE

10 Questions for Van Morrison By Van Morrison Thursday, Feb. 26, 2009

Van Morrison Listen to the Lion Films Inc.

People have been waiting a lifetime to hear you perform Astral Weeks live. Why did you pick this moment to finally do it? Laurie Miller, SAN DIEGO This is the first time I've been able to do it with a full orchestra. It kept coming up over the years, and at the time, I didn't have the resources to do the full thing live. It seems like the songs are fresh now because they weren't performed very much, whereas most of my other records were done live a lot. And I don't own the original record; that's one reason. There are many, many more.

What do you like best and hate most about performing live? Rudi Obermair SCHWANENSTADT, AUSTRIA My favorite type of audience can follow me when I start stretching out. That's the interesting thing about this live recording. You can hear it, actually, where the audience is following me. So I can open it up more rather than play songs that they know from the radio, which is something I usually do when I want to get offstage very fast. Did you ever think songs like "Moondance" and "Brown Eyed Girl" would still be on the radio 40 years after you wrote them? Brett Tidwell, ST. LOUIS, MO. No. "Brown Eyed Girl" I didn't perform for a long time because for me it was like a throwaway song. I've got about 300 other songs I think are better than that. Do melodies come to you spontaneously, or do you work them out on an instrument? Philip Miller DOUBLE OAK, TEXAS Sometimes you get the melody first. "Moondance" started out as a jazz instrumental that I'd written for saxophone. Some songs start with lyrics first and then the melody; some of them, you get both at once. "Astral Weeks" was written more spontaneously, where both sort of worked at the same time. When will we see your out-of-print albums back in stores? Sean Nolan, ATHENS, GA. There are no plans right now. We don't know where the record business is going, and the record companies say, "We don't know what's happening, and it's a really bad time." So if it's really bad, why would you want to do business with a record company? Are albums/CDs still relevant? Gerald Whelan WESTMINSTER, COLO. They're still relevant to me because I'm not a download artist. Downloads are a very small percentage of my product. But it seems the record companies all want to be

the agents for downloads. And I'm not going there, so that's another reason I don't need them. You have worked with many famous musicians. Is there anyone left you would like to do a project with? Matt Godin, BOSTON Not really. I was doing those kinds of things more out of boredom. I'm not bored anymore, so I don't really need to do that. I'm just getting back into doing what I want to do, with handpicked musicians that I want to work with. Are there any musicians or groups today that excite you? Terry Yarbrough BIRMINGHAM, ALA. No. Absolutely not. It's all been done, you know? More than any other artist, you make me think about our connection to God. Do you think of yourself as more religious or more spiritual? Kristine Bybee-Finley HURRICANE, W.VA. Religion is a kind of word game. It's whatever it means to those individuals who are following that belief system. If you say something has got spirit or "I feel the spirit," to me, that would be more appropriate--spirit in the Aristotelian sense, that the mind and body and spirit are one thing. Which is different from religion. How different are you today as a musician than you were 40 years ago? Tim McLemore, ATLANTA Well, that's up to the listeners. I probably got more experienced, and I'm probably better at it than when I started. If I'd known what I know now, I wouldn't have become famous, for one thing. I didn't really have any choices, and I got put in situations where I got ripped off. I had to become something I didn't want to be just to make a living.

SPECIAL SECTION

A Better Deal on Malaria By Kathleen Kingsbury Thursday, Feb. 26, 2009

A child suffering from malaria gets a dose of Coartem at a hospital in Tanzania. FREDERIC COURBET/WPN FOR TIME

For the past nine years, the drug company Novartis has been selling Coartem, one of the most effective antimalarials on the market, to public-health officials in the developing world at a loss totaling more than $253 million — not counting the millions spent on R&D. That's added up, the firm reports, to more than 550,000 lives saved. In late January, the company unveiled the first pediatric dose of Coartem — less bitter and easier to swallow than the adult version — which is expected to help in the battle against a disease that kills more than 700,000 children under 5 each year. Novartis' foray into fighting malaria is emblematic of the ongoing debate in health care about where good public relations gives way to real corporate responsibility. True, the $42 billion firm has actively sought applause on the world stage. On the other hand, Coartem is a drug that has virtually no commercial value in the highmargin markets of the global North. "Novartis could be making a lot more money making hypertension or diabetes medications that the people in the U.S. and Europe would buy," says Awa Coll-Seck, executive director of Roll Back Malaria, a global partnership founded with the goal of halving the world's malaria cases by 2010. "Instead, it's investing real funds in finding medicines that will never be profitable."

A prepares a dose of Coartem for her child suffering from malaria at a hospital in Tanzania. FREDERIC COURBET/WPN FOR TIME Though malaria is both preventable and curable, many of those in the developing world struggle to get affordable treatment, particularly in sub-Saharan Africa, where the mosquito-borne disease is most prevalent. Blame for that lack of access has been laid largely at the feet of Big Pharma, long vilified for pricing medicine beyond the poor's reach and ignoring diseases that are endemic in poverty-stricken areas. In the past, drugmakers have tried to justify high prices by the amount it takes to make major discoveries. "The critics just got louder and said, 'That's', but we've got people dying here,'" says Bradley Googins, executive director of the Boston College Center for Corporate Citizenship. "Companies have realized they can't just simply be bystanders anymore." For its part, Novartis now spends more than $1 billion a year on ensuring better access to medicines. The firm has built two research labs dedicated to preventing and curing neglected diseases such as dengue fever and tuberculosis and has pledged to eradicate leprosy. But at the core of these programs is Coartem. Developed in 1994, the pill combines artemisinin, a compound derived from a wormwood plant, with lumefantrine, designed by Chinese scientists, which does not kill parasites as quickly but lingers in the blood longer to help prevent resistance. That Coartem was even discovered is remarkable, says Chris Hentschel, CEO of one of Novartis' partners, the Geneva-

based nonprofit Medicines for Malaria Venture. "Historically, all the malaria drugs developed were for prevention — that is, drugs for wealthy people going on vacation," Hentschel says. "A cure is for the common good."

A packet of Coartem Disposable. FREDERIC COURBET/WPN FOR TIME Almost from the get-go, however, Coartem's high $2.40-a-dose price tag was criticized by public-health officials and activists. Dr. Daniel Vasella, CEO of Novartis, says the company realized it was pointless to try to sell a medication to people who couldn't afford it. So in 2001 the company signed an agreement with the World Health Organization to bring the price down to $1 per dose, or just about the cost of making it. Then the drugmaker went one step further, slashing that price again, to 80 cents — in other words, taking a 20% loss. Meanwhile, it ramped up production, subsidizing plant cultivation in China and Kenya in order to be able to provide 100 million doses of Coartem a year throughout Africa and Asia. "We had the drug and the knowledge to help," Vasella says. "It was our responsibility to be engaged."

A mother comforts her child that is suffering from malaria at a hospital in Tanzania. FREDERIC COURBET/WPN FOR TIME Making the product cheaply available isn't the whole answer. Distribution — which is largely the job of health officials and NGOs — has proved particularly difficult. The problem lies in how to successfully monitor the supply chain while still minimizing costs, and so far, no good solution has been found. Vasella recalls visiting a Catholic mission in a Tanzanian village recently and finding that the nuns there were still paying $1 per dose. "We have all the intermediaries marking up the price dramatically," he says. "We've heard reports of some charging as high as $8 a dose to get Coartem to remote areas." There is also the issue of drug resistance, which makes finding the next new breakthrough antimalarial all the more vital. Until that happens, Novartis hopes its new pediatric dose — which the company spent the past four years developing — is the next step toward the eventual eradication of a childhood killer.

Global Business > France

Much Greater Paris By Bruce Crumley / Paris Thursday, Feb. 26, 2009

La Grande Arche de la Defense is one of the most recognizable structures for tourists to visit in the suburb of Paris. Emmanuel Fradin for TIME

Like most of the world's favored travel destinations, tourism-dependent Paris is looking for ways to ride out what promises to be a dismal, recession-plagued 2009. There are bargains to be had, and the welcome mat will be out, defying Parisians' reputation for a certain aloofness when it comes to receiving visitors. Yet it's not a lack of tourists that has Paris' city fathers concerned about the future. There will always be recessions, and tourists will always visit Paris, as long as there's a Louvre and an Eiffel Tower and that wondrous food. They have gone there for centuries, and tourism is the single most important industry in the metropolis of over 10 million. It generates more than $10 billion annually and accounts for nearly 150,000 jobs--or 12% of the city's employment. Paris is most frequently credited as the world's tourism capital, with nearly 35 million visitors in 2008 (compared with more than 15 million for No. 2 London, and 12 million for Hong Kong). Unlike many capitals, though, Paris has a unique balance of vacationers and business travelers. The latter have helped Paris maintain its lead over Singapore as the largest convention venue on earth.

Getting to Paris is already becoming easier. While London's maxed-out Heathrow Airport struggles to win approval to build a third runway, Paris' Charles de Gaulle-which has increased capacity 20% since 2006--already operates four, and CDG has even more space set aside for considerable expansion. That will be vital to keep pace with what some forecast to be a 75% to 100% increase in Paris-bound tourism in the next 20 years. Handling that influx is what concerns the planners most at l'hôtel de ville, the city hall. Paris got a dose of overload when Japanese visitors, armed with the supercharged yen, arrived by the 747-load in the 1980s. Now think about Chinese and Indians arriving in similar numbers. So how will the city of romance avoid being loved to death? The answer to that is something few might have expected. Increasing Paris' appeal to tourists, experts say, will involve throwing the city's arms open to its surrounding suburbs--including some associated more with blighted housing projects and periodic rioting than with culturefilled summer vacations. "Whether you call it Paris métropole or a Greater Paris, structuring the city within the framework of an enlarged, better-organized region is a major key to both the future of Paris and its tourism industry," says Jean-Bernard Bros, deputy mayor of Paris in charge of tourism. In tourism terms, that's already happening, with people traveling to or staying near attractions such as Versailles and its famed château to the west or the Marne-la-Vallée home of Disneyland Paris to the east. But the plan is to now go farther in other directions and to all the suburbs. Officials say that effort involves reintegrating suburbs and populations victimized by racial and economic disadvantage into more affluent French society--a remedial move the rest of the country must also make. But that challenge carries with it a considerable opportunity for Paris-area authorities figuring out how to keep up with an expected boom in tourism over the next two decades. The city has no place to go but out. Real estate--cramped central Paris is a mere 41 sq. mi. (105 sq km). That may not compare badly with Manhattan's 24 sq. mi. (62 sq

km), but it's dwarfed by New York City's total 305-sq.-mi. (790 sq km) reach and the 610 sq. mi. (1,580 sq km) of Greater London. Meanwhile, London and New York City can accommodate residents, businesses and tourists somewhere Paris can't: high in the air, in skyscrapers. One of the elements that make Paris so appealing in the first place is the well-preserved state of the city's elegant buildings and neighborhoods (a product of Baron Georges-Eugène Haussmann's ambitious redevelopment of the city in the mid-1800s). These places have long been protected by strict zoning laws prohibiting high-rises and imposing harmony on new buildings through regulation. That safeguarding of the city's authentic Old World look and feel has prevented any Paris version of London's Gherkin from casting a shadow over the Louvre, or a Trump Tower from giving the Palais Garnier a size complex. It similarly required architect Jean Nouvel to design the new Quai Branly Museum to achieve virtual invisibility to protect the grandeur of the neighboring Eiffel Tower. But it has limited the city's hotels to their current, relatively small structures--a handicap to both hoteliers and guests. The unloved suburbs offer fewer impediments to growth. "The historical decision to preserve the buildings of intra muros Paris means that we're now pushing those walls into the surrounding suburbs in numerous ways," notes Paul Roll, director general of Paris' Office of Tourism and Conventions. As an example, he cites the skyscrapers built in the western enclave of La Défense for companies looking for headquarters, offices and big hotels that couldn't be constructed in town. "In that way, Paris remains protected, while the region benefits from innovative construction similar to London's," he says. But building towers and big hotels in outlying suburbs, says Roll, "won't get people flocking to them unless there's also business activity, cultural events and attractions and bustling life out there too." Henriette Zoughebi says there's all that in places Parisians and tourists rarely think of looking. First among them is the northern suburb of St.-Denis--known to much of France as the home of some of the most disaffected and explosive of the nation's

unemployment-racked housing projects. Zoughebi, an elected official on the regional council, points out that St.-Denis also hosts the Basilica of St.-Denis--the burial place of French royalty since Clovis I--which French and foreign visitors flock to in spite of the area's less noble reputation. "What many visitors don't discover until they get to that final resting place of France's ancient rulers is that right outside--in open markets, shops, cultural centers-there are also some of France's most vibrant and creative newer populations," says Zoughebi, who also presides over the Paris--Ile-de-France Regional Tourism Committee. "Once people get out there, they're surprised at what they find and are curious about what else there might be. The answer is 'a lot'--and the same is true of most suburbs. We just have to connect people to them." To some degree, that's already happening. In addition to visiting St.-Denis's basilica and Versailles's château, tourists are also inspecting Paris' peripheries. Trips to the National Dance Center in northeastern Pantin, the MAC/Val museum of contemporary art in the southeastern suburb of Vitry-sur-Seine and the City of Science and Industry on Paris' northern border with Aubervilliers are on the rise. St.-Denis, meanwhile, boasts popular tours of the architecturally stunning sports stadium Stade de France, which was built to host the 1998 World Cup but has wound up becoming a magnet for the area since then. Defying some predictions, offices and shops have been built in the Stade de France area since the Cup, and businesses have moved in. Says Zoughebi, "Tourism will also issue from that trend, as people learn they can find new, modern, comfortable, more affordable accommodations and interesting cultural activities a short Métro ride away from central Paris," she says. Transport is the last and possibly most vital remaining element in improving Paris and its region's future--and not just for tourists. Though Paris' commuter- and subway-rail network is among the most efficient and dense in the world, its rolling stock is in need of significant modernization. Ways need to be found to unclog saturated Parisian lines--particularly the No. 13, serving St.-Denis to the north; the

No. 1 main line that all tourists use, which runs east-west from the Etoile to the Bastille; and the parallel RER commuter line. Three different plans that would cost tens of billions of dollars are being studied to renovate and extend existing Métro and commuter lines and build a circular rail link around the city, connecting its first row of suburbs and two airports. "You can relieve a lot of traffic pressure within Paris itself by allowing suburban commuters to get to work in other suburbs without passing through Paris--which also saves them time and offers visitors a new opportunity of getting around and seeing things too," Roll says. Certainly, improving tourists' stays is the best way for Paris to hang on to the largest slice of a global tourism pie valued at nearly $900 billion. To that end, Paris is rolling out a campaign introducing new quality standards for businesses serving tourists, the goal being to get Parisians to act with greater hospitality out of economic selfinterest (since go-out-of-your-way kindness to strangers is not, shall we say, a particular Parisian strength). Tourism boards have set up information and hospitality offices at airports and throughout metro Paris. To address the looming shortfall of hotel rooms, the municipality plans to add 7,500 rooms to the existing stable of 75,000 over the next few years. To help tourists choose, officials have introduced a fifth star for hotels, a rating many nations already have. And as part of the transport revamp, a direct rail link from central Paris to Charles de Gaulle is expected to go into service in 2013. Yet even as the effort to reconnect Paris to its suburbs seeks to cater better to tourists, it will also be designed to make the area a more pleasant place for residents. "The real attraction Paris offers visitors is the peerless lifestyle and experience of being a Parisian during their stay," says Bros. "The key to making Paris an even better place to visit is making it a better place to live--for Parisians as well as their neighbors." It's Parisians' town too; the rest of the world just likes to drop in from time to time.

NOTEBOOK

The Moment By Kate Betts Thursday, Feb. 26, 2009

Perhaps you've heard: The very rich are not like you and me. Oh, they're feeling the impact of the financial crisis and watching their portfolios, if not their pennies. Just not so much that they're willing to bypass a rare opportunity to pay $37.7 million for a Brancusi statue or $46.4 million for a Matisse. The Sale of the Century, as it was called, was held at Paris' Grand Palais, and it was not a sale at all but an auction of the art collected by the late iconic French designer Yves Saint Laurent and his business and former life partner, Pierre Bergé. It's understandable if you want to dismiss the hundreds of millions spent on someone else's stuff as just another example of clueless extravagance in an age of thrift. But for those with means, there was something else for sale, as valuable and just as likely to drive a person to irrational spending as a masterpiece: taste. During his 45-year career, Saint Laurent changed everything about the way women exist in public life. He introduced them to a universe of color and dared them to adopt a male silhouette, revolutionizing the way men see women and women see themselves. To own a piece of art or an object collected by Saint Laurent, who helped define an aesthetic for the 20th century, gives new meaning to provenance. Taste is a disappearing commodity. Today a Russian oligarch or a Park Avenue hedge-fund manager might still have the bucks to buy Saint Laurent's Matisse, but the real investment is in something far scarcer: Saint Laurent's eye, his love of beauty and mannerisms and the exotic dream world within which he lived. As Christie's Giovanna Bertazzoni said of the viewing, which was open to the public, "it gives ordinary people the experience of what it might be like to actually own works of this quality." Perhaps the greatest and last gesture of good taste came from Bergé, who announced that proceeds from the three-day sale--$484 million total-would be donated to charity.

The World By Harriet Barovick Thursday, Feb. 26, 2009

1 | Washington Easy on the Stimulus, Please Some of the Republican Party's highestprofile governors say they may reject a small percentage of the Federal Government's $787 billion stimulus funding in the name of fiscal conservatism. They say taking federal funds to expand unemployment insurance, for example, would create a future burden on their states and lead to tax increases. Haley Barbour, Mississippi The former GOP chairman believes the stimulus plan is "filled with social policy and costs too much." Bobby Jindal, Louisiana The rumored 2012 presidential candidate deems it "irresponsible" to expand unemployment insurance. Mark Sanford, South Carolina He says the stimulus package represents a "fundamental misdiagnosis of the problem." 2 | Iran Another Step Toward Nuclear Capabilities Iran successfully tested its first nuclear reactor in the southwestern port city of Bushehr on Feb. 25, amid increasing international concern over its suspected pursuit of nuclear weapons. A recent International Atomic Energy Agency report said Iran has enough uranium--albeit not weapons grade--to eventually make a bomb. The Bushehr test, which did not use fissile material, was overseen by Russian officials. Moscow will supply the Russianbuilt plant with nuclear fuel under a U.N. arrangement meant to avoid its potential misuse. The plant should be operational by the end of the year. 3 | Washington Outearning the Boss Critics have blasted colleges for doling out lavish pay packages to their presidents, but chief executives at private colleges reaped just 11 of the top 88 salaries awarded during the 2006-07 fiscal year, according to a compensation analysis. Even those educators may feel the pinch soon: a separate survey warned that fundraising totals at major schools are dipping amid the recent economic swoon.

Highest-paid private-college employees OVERALL 1 PETE CARROLL University of Southern California head football coach $4.4 million 2 DAVID SILVERS Columbia University professor of dermatology $4.3 million 3 MICHAEL JOHNS Emory University executive vice president of health affairs $3.8 million PRESIDENT 15 E. Gordon Gee* Vanderbilt University $2.1 million *LEFT VANDERBILT IN 2007 (SOURCES: CHRONICLE OF HIGHER EDUCATION; COUNCIL FOR AID TO EDUCATION; IRS FORM 990) 4 | Boston A New Way to Fight the Flu Researchers have developed an antibodybased therapy for the flu virus that may help combat seasonal illnesses as well as more dangerous strains like the infamous H5N1 bird flu. The antibodies attach to a part of the virus that is less mutation-prone than the section targeted by current vaccines (which must be redeveloped every year to counter the virus' changes). Tests on mice produced promising results, although clinical trials with humans won't occur for a few years. 5 | London FREE AT LAST A former resident of Britain who claims that the U.S. government had him tortured prior to his transfer to Guantánamo Bay was released and returned to the U.K. on Feb. 23. Ethiopian-born Binyam Mohamed (above) was arrested in Pakistan in 2002. He says he was then sent to Morocco and Afghanistan and tortured before ending up at Gitmo. The British government had been lobbying for Mohamed's release since 2007, and American authorities--who claimed he was planning a dirty-bomb attack on U.S. soil--dropped all charges in October 2008. 6 | Kyrgyzstan BYE-BYE, BASE Kyrgyzstan's parliament voted to unilaterally terminate a U.S. lease on Manas Air Base (above), the only such facility left in central Asia,

depriving Washington of a crucial staging point for troops, munitions and cargo destined for Afghanistan. Moscow, which has opposed America's presence in the region, pledged over $2 billion in loans to bolster Kyrgyzstan's faltering economy shortly before the decision was made, though both parties insist that the aid was not contingent on the base's closure. U.S. negotiators hope Manas will be reopened in the future, pending further financial discussions. 7 | Washington Commerce, Part Three Forget third time's a charm: President Barack Obama is probably just hoping there won't be a fourth. After his first two picks for Commerce Secretary--New Mexico Governor Bill Richardson and New Hampshire Senator Judd Gregg--withdrew their nominations, Obama has selected former Washington governor Gary Locke. The nation's first Chinese-American governor, Locke--should he decide to keep the job--is expected to focus on trade issues with Beijing. 8 | Pakistan A Return to Turmoil Pakistan's Supreme Court barred opposition leader Nawaz Sharif and his brother Shahbaz from holding elected office--a move that sparked nationwide protests among supporters. The ruling, which Sharif claims was ordered by President Asif Ali Zardari, revives a poisonous rivalry between Pakistan's main parties. Sharif supporters have campaigned to reinstate members of the Supreme Court dismissed by ousted former President Pervez Musharraf in 2007. 9 | Argentina A Bishop Gets Booted A formerly excommunicated Roman Catholic bishop has been expelled from Argentina after publicly questioning accepted facts of the Holocaust and declining to recant without "proof" that the Nazis executed millions of Jews in gas chambers. Bishop Richard Williamson, a member of an ultraconservative sect, returned to his native Britain, but not before scuffling with a reporter at a Buenos Aires airport. He still faces investigation in Germany, where Holocaust denial is a crime. 10 | Israel Netanyahu: The New Boss Right-wing Likud party leader Benjamin Netanyahu has been tapped to form Israel's next government, even though Tzipi Livni's centrist Kadima party won one more seat in Israel's Feb. 10 parliamentary

election. According to President Shimon Peres, who under Israeli law is allowed to select the party leader best equipped to assemble a coalition, Netanyahu's support among far-right parties gave him the advantage over Livni, who has clashed with Likud on its hard-line stance regarding Palestinian peace talks. Netanyahu must forge his coalition within six weeks in order to be confirmed as Prime Minister. Results of Israel's parliamentary election KADIMA T. Livni LIKUD B. Netanyahu YISRAEL BEITENU A. Lieberman LABOR E. Barak SHAS E. Yishai OTHER (SOURCE: MALAM TEAM GROUP) RECESSION WATCH With mobile devices and Internet video affording a wider menu of viewing options and the dismal economy forcing people to hunker down at home, Americans are watching more television than ever before. According to a Nielsen report, the average citizen tuned in to 151 hours of TV per month during the fourth quarter of 2008, up from 145 the previous year.

Verbatim By DEPARTMENT Thursday, Feb. 26, 2009

'If we give the money to the widows, they will spend it unwisely because they are uneducated.' MAZIN AL-SHIHAN, director of Baghdad's Displacement Committee, on his plan to pay men to marry Iraqi war widows and take control of their finances 'I believe strongly that his spirit was never released.' HARLYN GERONIMO, greatgrandson of the famous Apache warrior, who is suing Yale University's élite secret society Skull and Bones, charging that its members robbed his great-grandfather's grave in 1918 'I will not tolerate this embarrassment.' NIKOS DENDIAS, Greek Justice Minister, after two of the nation's most infamous criminals orchestrated a brazen prison break via helicopter for the second time in three years 'You can do it, and you can get away with it.' TATYANA LOKSHINA, deputy director of Human Rights Watch in Moscow, lamenting the acquittal of three suspects in the murder of investigative journalist Anna Politkovskaya 'My short game has gotten a little bit better.' TIGER WOODS, the world's No. 1 golfer, on his return to the sport after an eight-month absence following major knee surgery 'I apologize if my comments offended Justice Ginsberg.' JIM BUNNING, U.S. Senator, misspelling Supreme Court Justice Ruth Bader Ginsburg's name in a written apology, after implying that Ginsburg, who recently underwent surgery for pancreatic cancer, had less than nine months to live 'You commie, homo-loving sons of guns.' SEAN PENN, accepting the Best Actor Oscar for his role as gay-rights pioneer Harvey Milk Back & Forth:

Budget 'Your helicopter is now going to cost as much as Air Force One.' JOHN MCCAIN, confronting President Barack Obama over the military's procurement process, pointing specifically to an order by the Bush Administration for a fleet of 28 new presidential helicopters 'The helicopter I have now seems perfectly adequate to me. Of course, I've never had a helicopter before.' OBAMA, saying he had asked Defense Secretary Robert Gates to review the project, whose cost has ballooned to $11.2 billion, from $6.1 billion Media 'It is not a reach to wonder whether the Post cartoonist was inferring that a monkey wrote it.' Civil rights leader AL SHARPTON, slamming the New York Post for an editorial cartoon that depicted the police shooting of a chimpanzee with the caption "They'll have to find someone else to write the next stimulus bill" 'I can assure you--without a doubt--that the only intent of that cartoon was to mock a badly written piece of legislation.' Media mogul RUPERT MURDOCH, chairman of the New York Post, apologizing in a written statement for the cartoon LEXICON Moral hazard n.-- The idea that people may take more risks when they know there's a safety net in place USAGE: "Administration officials say it is impossible to help large groups of borrowers without introducing some degree of what has come to be known as moral hazard." -Wall Street Journal, Feb. 21, 2009 For daily sound bites, visit time.com/quotes Sources: New York Times (2); CNN; New York Times; Reuters; MSNBC; Washington Post

Swiss Banks By Kate Pickert

Thursday, Feb. 26, 2009

Swiss banks' anonymity and confidentiality have attracted streams of illicit cash from around the world. Erich Hartmann / Magnum

Along with Chocolate and Cheese, Switzerland is synonymous with secrecy: it's long been known as a place to put your money if you don't like taxes or you commit crimes for a living. Not an entirely fair characterization, to be sure, but it's a safe bet that the decision by Swiss bank UBS to turn over the names of some accused tax evaders has a few of the world's richest criminals a bit nervous. Switzerland's tradition of financial discretion goes back at least to the 17th century. In the wake of World War I, as many European currencies became unstable, the consistent (not to mention neutral) Swiss franc attracted depositors. After France, incensed by the loss of revenue, raided a Swiss bank's office in Paris and revealed the names on its accounts, the Swiss passed a law in 1934 making such disclosures

criminal. Years later, Swiss banks both sheltered the assets of German Jews and accepted looted Nazi gold (and later set up a $1.25 billion compensation fund for Holocaust victims). Corrupt leaders ranging from the Philippines' Ferdinand Marcos to Nigeria's Sani Abacha have used Swiss banks to hide ill-gotten gains. Faced with criticism from foreign governments, Switzerland has changed some of its ways. It added laws to combat money-laundering and cracked down on numbered accounts in the 1990s. But that doesn't mean the banks open their vaults for just anyone. When the U.S., which loses an estimated $100 billion in tax revenues every year on assets stashed overseas, demanded that UBS release information on an additional 52,000 accounts, the bank refused, saying the move would violate Swiss law. Of course, with some 27,000 UBS employees working in U.S. offices, Switzerland might not be the jurisdiction it should worry about.

The Skimmer By Andrea Sachs

Thursday, Feb. 26, 2009

Peaks and Valleys: Making Good and Bad Times Work for You--At Work and in Life By Spencer Johnson, M.D. Atria Books; 103 pages You can hardly blame a publisher for wanting to play it safe in these economically treacherous, print-endangered times. But was it really necessary to ape Johnson's motivational manual Who Moved My Cheese? in every way, from its distinctive cover to its format (inspirational parable) to its length (fleeting)? Granted, the author's previous book was a No. 1 blockbuster that sold more than 20 million copies worldwide, but the difference is that his original was far superior: a deceptively simple but ultimately smart lesson on coping with the inevitability of change. Here, the pensées are punier. A confused young Everyman journeys to the top of a mountain, where he is instructed by a wise old man given to restating the obvious

("Find and use the good that is hidden in the bad time"). The peaks and valleys of the title are the ups and downs of life that we all must master in our own way. Got it? Next time out, one hopes that the author--who has a genuine talent for motivating readers--will find the courage to look for some fresher cheese.

Pop Chart By DEPARTMENT Thursday, Feb. 26, 2009

SHOCKING Pushing the "celebrity"-memoir threshold even further, KATHY GRIFFIN sells hers for a rumored $2 million NICKY HILTON makes a citizen's arrest--at an IHOP. The recession has hit us all BEYONCE'S Oscar performance of "At Last" threatens to reignite feud with ETTA JAMES Third lowest ever rated Oscars declared success TOM HANKS to switch on Hadron Collider. We always knew Forrest Gump was smarter than he looked ANDY RICHTER to reunite with CONAN as Tonight Show announcer Old, sucky BATTLESTAR GALACTICA might beat new, awesome Battlestar Galactica to big screen TRACY MORGAN in fish-tank-fire incident. 30 Rock writes itself PREDICTABLE The late TAMMY FAYE and PAMELA ANDERSON: Separated at birth? THE LOVE GURU wins worst-picture-of-the-year prize. M. Night Shyamalan loses last chance to win award of any kind Change has not come to America. TROPICANA does an about-face on new OJ packaging

Third TWILIGHT film to be released in 2010, exactly six weeks after eventual death of vampire craze NICOLE RICHIE realizes that getting pregnant is the only way she can gain weight JENNA JAMESON'S perfume line: lilac, orange blossom and crippling regret KIM KARDASHIAN regrets renting that chimp after all SLUMDOG kids live it up at Disneyland SHOCKINGLY PREDICTABLE

Thursday, Feb. 26, 2009

Milestones DIED A stray cat adopted by Chelsea Clinton when her father was governor of Arkansas, Socks, approximately 19, became the nation's First Feline in 1993. He had been cared for by Betty Currie, Bill Clinton's secretary, since 2001. • Oxygen deprivation rendered him mute and quadriplegic at birth, forcing him to write with a "unicorn stick" strapped to his forehead. Yet Christopher Nolan, 43, became a literary sensation, besting authors like Ian McEwan and Seamus Heaney to capture the 1988 Whitbread Award for his autobiography, Under the Eye of the Clock. • A successful entrepreneur who owned the NBA's Utah Jazz, Larry Miller, 64, was a larger-than-life figure in the Beehive State. After a long battle, he died of complications from diabetes. • She faced her first bull at 13 and notched more than 750 kills during a storied career. Conchita Cintrón, 86, one of the first famous female bullfighters, is still considered among the best. REOPENED Five years after the atrocities committed within its walls shocked the world, Abu Ghraib now touts modern amenities and humane treatment of its inmates. The renovated jail, rechristened Baghdad Central Prison, formally reopened on Feb. 21. APPOINTED Milwaukee Archbishop Timothy Dolan, 59, was tapped by Pope Benedict XVI to be the 10th Archbishop of New York City. Known as a genial but steadfast defender of church orthodoxy, Dolan will assume the post, perhaps the most prestigious in American Catholicism, on April 15.

Thursday, Feb. 26, 2009

J. Max Bond Jr. By David Adjaye

The most accomplished and influential African-American architect of his generation, Max Bond died on Feb. 18 at 73. In a profession with few role models of color, his career became a reference point for others to emulate. From his office in New York City, Max was the architect of choice for many of the city's prominent public projects, including the National September 11 Memorial and Museum, and worked with the Architects Renewal Committee of Harlem. I first discovered Max in the early '90s at the beginning of my career and was instantly a fan. He was a tireless campaigner for the inclusion and recognition of architects from the African diaspora. He was a great collaborator, able to hear and work with other voices and to push them toward realizing their goals. Since meeting him, I had always had the goal of working with Max on a public commission. I was lucky to get that chance during his last few months, when we teamed up in a competition to design a new museum of African-American history and culture. The more I got to know him, the more my admiration and love for this architect, humanist and wonderful counselor increased. Max left an incredible legacy that will continue to inspire our profession and open opportunities for future generations. Adjaye is an acclaimed London-based architect

Thursday, Feb. 26, 2009

Tayeb Salih By Laila Lalami

When I was in college, a friend of mine pressed with great urgency a copy of a slim little novel into my hands, as if he were aware it would satiate a hunger I didn't know I had. That book was Season of Migration to the North, by the Sudanese writer Tayeb Salih, who passed away in London on Feb. 18 at 80. I had been writing for some time by then, but Salih's perceptive assessment of the relationship between East and West, his complex weaving of personal and political lives, and the beauty of his prose redefined fiction for me. Season of Migration to the North is about one man's journey from Sudan to England and his return seven years later to find that everything and everyone, including him, has changed. To make matters worse, someone else in his village has undertaken the same voyage before him--with tragic consequences. Salih's other novels include The Wedding of Zein and the Bandarshah stories, although none of them inspired the kind of devotion that Season evokes in its readers. Like my college friend, I have over the years recommended the novel to dozens of people, who in turn have done the same. Long before the era of globalization, before the supposed clash of civilizations, Salih came to represent what is best about cross-cultural encounters. Born and raised in a small village on the bank of the Nile, he was educated at universities in London and Khartoum. For most of his life, he worked for cultural organizations in the Middle East and Europe. He wrote in his native Arabic and found great success in English translation. Salih was a treasure. His death is a loss not just for his readers but for everything that binds us together. Lalami's new novel, Secret Son, will be published in April

LETTERS

Inbox By DEPARTMENT Thursday, Feb. 26, 2009

A Spiritual Solution? I find it ironic that anyone in medicine would question whether faith and belief can heal when a good part of medicine's effectiveness can actually be traced to the power of belief: the placebo effect [Feb. 23]. Scientifically, we can see that creating a positive belief in the possibility of being healed can actually facilitate healing. Alfred A. Barrios, CULVER CITY, CALIF. How can you publish an entire feature on faith and healing and never once mention Christian Science? Christian Scientists have been healing reliably through prayer for more than 100 years. Many of these healings are documented and well known to the medical community. Carole Jackson, OXFORD, N.C. As a cancer survivor who has been through chemo-radiation therapy and surgery, I can attest to the myriad difficult psychological and social issues cancer patients have to grapple with. In my opinion, health professionals who are able to recognize that physical illness is often accompanied by complex emotional and spiritual challenges, and who can competently and sensitively address these concerns in order to take care of the whole person, are the most likely to achieve the desired clinical response with better patient satisfaction. Yang K. Chen, ENGLEWOOD, COLO. Readers looking for a link between spirituality and health might also take a look at Alcoholics Anonymous. The organization has accumulated about 2 million members since 1935, who have, among other actions, taken the step and "come to believe that a Power greater than ourselves could restore us to sanity." Gary K., ST. JOSEPH, MO. Rounding Up the Bad Guys

Thank you for the list of 25 people to blame for the economic mess [Feb. 23]. It is nice to see who is responsible for this implosion. I do think you should have put the American Consumer at No. 1, though. No matter how nicely packaged the subprime mortgages were or how pretty those overpriced houses looked, if it were not for the consumer's utter gullibility, we wouldn't be in this mess to begin with. Does no one remember the housing bust of the 1990s? How about the adage, If it sounds too good to be true, it probably is? Annalisa Michielli, MEDWAY, MASS. I'm surprised that Senator Chris Dodd and Congressman Barney Frank were left off the list of 25 people to blame for the economic meltdown. Each of them chairs a committee with oversight of banking and housing, the two sectors that got us into this mess. Each of them blocked attempts at tighter controls over Freddie Mac and Fannie Mae. Even more outrageous was Dodd's acceptance of a VIP loan from Countrywide. These two characters ought to be No. 1 and No. 2 in the lineup. Tim Grosscup, VILLA PARK, ILL. I can think of 25 reasons for the economic mess we are in, but none of them relate to specific people. The culture into which we have evolved includes no moral compass and is based on greed; instant gratification; selfish disregard for others, present and future; an expectation that the government will handle all our needs-you get the idea. We can all take blame. Joe Gordon, DALLAS Though the article "25 People to Blame" was insightful, I cannot help but wonder why we are wasting time trying to place blame when we have so many problems to solve. The economy continues to suffer while we point fingers. Jennifer Payne, MOUNTAIN VIEW, CALIF. Teaching Us How to Cut Back Re your story on slashing education budgets [Feb. 23]: Why isn't anyone cutting the excessive salaries, bonuses and perks being paid to California's school superintendents and administrators? These measures should have been taken long before anyone thought about eliminating librarians and nurses, cutting school hours

or increasing the number of pupils per teacher. It isn't too late to do the right thing. Peggy Hadaway MORENO VALLEY, CALIF. Get real! There are no crises in our schools that can be solved by throwing more money at them. Our children can learn very well by going back to the basics of education, family support and discipline that in themselves do not cost much money. Paul Schmidt, LINDENHURST, ILL. Celebrating Segregation? After reading Laura Fitzpatrick's article on Savannah State University, I was struck by a familiar pattern [Feb. 23]. When African Americans talk about African-American segregated institutions, it's with a degree of pride. Yet when there is a segregated all-white institution, there is usually an undertone of racism. Since separate but equal is not to be tolerated, I am confused. Which is pride, and which is racism? Stephen E. Johnson, MADISON, WIS. Out of Tune Re your story "Singer's Little Helper" [Feb. 16]: As an R&D engineer, I've designed many digital special effects, and I agree that Auto-Tune works well. But when artists use it to make their voices sound artificial, it sounds as if something went wrong. In fact, back in the '80s, when we were developing electronic-speech synthesis, that same artificiality was considered unpleasant and an indicator that we needed to improve our algorithms or our hardware. So when I hear it today, it sounds sickening. I hope it is just a phase and will disappear from music soon. John Vogt, NASHVILLE Mavericks in Maine I was so pleased to read your article "The Power of Two" [Feb. 23]. For years, I have been upset that we as Americans put so much emphasis on "party" voting rather than issue voting. Three cheers for Susan Collins and Olympia Snowe for voting their conscience! Uta M. Behrens, PHOENIX

How ironic and reprehensible that the Republican minority in the House and all but three of the Republican members in the Senate refused to vote for President Obama's economic-stimulus plan. They voted to help the banks and money institutions in TARP, but when it came to voting for assistance to middle- and lowincome citizens, they refused to respond. Ron Reich, FREEHOLD, N.J. Wow. Could we get an exemption on human cloning long enough to copy Collins and Snowe enough times to replace the rest of the Republicans and Democrats in the Senate and perhaps the House as well? Fiscally conservative, socially moderate-what's not to like? It sounds like the "Maine-iacs" have cornered the market on common sense. Scott Fowler, GRAND HAVEN, MICH. A-Wrong David Von Drehle's piece on a-rod was right on the money [The Moment, Feb. 23]. Baseball culture has deteriorated into nothing more than a strongman competition. The love of the "crowd-pleasing homers" has outshined the love of the game. I can understand why players like Rodriguez feel the need to use steroids to keep up, but we shouldn't forget all the dope-free players in the major leagues who still manage to awe cynical fans like me with their natural athleticism and passion for the sport. I still believe! Mason Wood, RAYMOND, MAINE Words can't express how disappointed I am by Alex Rodriguez's steroid use. I have followed his career through the years, and he has always been a favorite of mine. I used to take my son to Yankees games, hoping that Rodriguez's talent, agility and strength would inspire him. Now I'm crossing my fingers and hoping that A-Rod's lying and cheating skills don't rub off on him instead. Will Markham, WESTCHESTER, N.Y. Don't Interfere with Iran Re "Talking and Listening to Iran" [Feb. 23]: I can fully agree with those who believe the U.S. has no justified reason to interfere with domestic policies and practices in

Iran. Obviously, people there resent our objective of imposing our desires on them. Doing so just creates more enemies of the U.S. David Bartholomew, DUNDEE, ILL.