Sunday, October 22, 2006

Sunday morning updates

Bob Woodward's book, which I discussed two weeks ago, helps explain the conflicting headlines in today's New York Times and Washington Post about Iraq. The Times quotes an anonymous Pentagon official to the effect that we are going to impose a timetable for cracking down on militias on the Iraqi government; the Post reports a White House denial that any such change is contemplated. This reflects a dispute that has been going on for a long time. Rumsfeld has been complaining for years that he have to take the training wheels off the Iraqi government's bicycle, while the White House, reflecting the President's views, wants to stay as long as necessary. Since the President appears more determined than ever not to withdraw it does not seem very likely that any deadlines will have consequences.

Meanwhile, in a story that might well lead to a House committee investigation come January, the Times reports that an SEC investigator named Gary Aguirre was fired in September 2005 after his superiors refused to investigate a possible insider trading case involving the Pequot hedge fund and John J. Mack, the head of Morgan Stanley and a leading Bush fundraiser. The story strongly implies that contributors can buy immunity from such investigations. (Michael Milliken must truly be green with envy; the Reagan era was nothig like this.) John Kenneth Galbraith is now dead, but I feel sure he would point out (as indeed he may well have done before his death) that hedge funds are an attempt to get around the whole regulatory structure that served his generation so well after the 1929 crash. If we allow financial abuse to flourish unchecked, it will--and in the end we shall all pay a big price.

See the longer post from yesterday, below.

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