With Economy, Day Laborer Jobs Dwindle

Abstract: HEMPSTEAD, N.Y. — More than 50 day laborers stood, bored, anxious and mostly silent, in the sun-blasted parking lot of a Home Depot here last week, tracking the ebb and flow of customers and hoping for work. The hours crawled by. Six, maybe seven men scored jobs. The rest just waited. “To stand here doesn’t make a lot of sense to a lot of people,” Jairo Mancillas, 29, a day laborer from El Salvador, said glumly as he waited on a grassy median in the parking lot. “But to us, it’s a very important thing. It means a lot.” This bleak scene is playing out at scores of day laborer sites across the region. Here on Long Island; under the elevated No. 7 line on Roosevelt Avenue in Jackson Heights, Queens; at the intersection of Port Richmond Avenue and Castleton Avenue on Staten Island; along Bay Parkway in Brooklyn; near highway on-ramps in Westchester County; and into New Jersey and Connecticut, clusters of day laborers, their numbers swelled by people laid off from full-time jobs, wait for work that, more often than not, never comes. Two years ago, when the economy was booming and home-building was thriving, many of these same laborers were working every day. Now, they are lucky if they work twice a week, many of them say. Their lives have become a test of wits, patience and hope. Simple lives have become simpler. The laborers, most of them illegal immigrants, said they had stopped eating in restaurants, buying new clothes and sending money home to their families. In interviews with more than a dozen laborers in New York City and its suburbs, many said they were thinking about returning to their homelands. Carmelo Peña Garcia, 59, an illegal immigrant from Mexico who waits for work every day at Roosevelt Avenue and 69th Street in Queens, said he was trying to make just enough money to buy a plane ticket home. “Sometimes you don’t sleep because you are thinking about work and nothing else,” he said on a recent morning. Here in Hempstead, Mr. Mancillas said, “The American dream isn’t an American dream.” The amount of money sent by immigrants in the United States to Latin America and the Caribbean is expected to increase this year over last year, according to the Inter-American Development Bank, which has been tracking remittances since 2000. But when adjusted for inflation, the value of the remittances is actually expected to decline. The bank attributed the drop to several factors, including the economic downturn in the United States, inflation and a weaker dollar. Like other day laborers, Mr. Mancillas came to the United States with the intention of making money to help his family. In his village of Ahuachapán, El Salvador, he was a tailor and worked from home, making trousers for adults and children. But he was barely scraping by and decided to try his luck in the United States. He left his wife and two young daughters behind, and with the help of a smuggler, whom he paid $2,500, traveled through Guatemala and Mexico, sneaked across the border into California, then made his way to Hempstead in 2005. Work came quickly at first, he said. Every morning just after dawn he and many other day laborers would gather outside a Home Depot, and most days, he was hired. In flush times, he made as much as $800 a week. He would send $600 home and use the balance for food, clothes and his half of the $500 monthly rent for a tiny room he shared with another laborer in a rooming house in Hempstead. He and his friends made enough to be able to eat meals in restaurants and buy clothes — for themselves and their families — at the mall. Mr. Mancillas would fill boxes with toys and other goods and ship them to his daughters in El Salvador. But work slowed last year and now has nearly dried up: In the past several months, like many other laborers, he has been working once or twice a week, making between $80 and $200. The drop in wages for Mr. Mancillas has resulted in sacrifices, large and small. Mr. Mancillas said he now shops for clothes at the Salvation Army. He no longer eats out and instead subsists on basic home-cooked food or rice and beans from Latino delicatessens. He has also stopped buying clothes and toys for his family. Most significantly, he said, the remittances home are much smaller and less frequent. Some weeks he does not send any money at all. As the economy has worsened, the number of laborers gathering at the Home Depot here has grown, making the competition for fewer jobs that much fiercer. The newcomers have arrived from other cities, thinking things would be better in New York. Or they have been laid off from longer-term jobs in manufacturing and construction, either as a result of the economy or because of tougher crackdowns on illegal immigrants. As demand for day labor has plunged, some employers have taken advantage of the glut of workers by paying them less or not paying them at all, several workers said. One of Mr. Mancillas’s friends, David, an illegal immigrant from Mexico, said a contractor did not pay him for several days of work soon after he arrived last year in Hempstead. But he did not seek help from the authorities because he was afraid of being deported. “He owed me $1,000,” said David, who refused to give his last name. “But fear kept my mouth shut.” The crowd thinned throughout the day as workers gave up and went home, most to shared rooms in houses full of other laborers with little to do but watch television. By midafternoon, fewer than 20 remained. Some sat alone on the curbs of the medians, seemingly lost in their thoughts, but still keeping an eye out for potential employers. “When you return to the house and you haven’t worked and you can’t provide for your family, you feel really bad,” Mr. Mancillas said. Another of Mr. Mancillas’s friends, a 23-year-old Salvadoran named Junior Garcia, spotted a Home Depot customer trying to wrestle some lumber into the back of a van and sprinted over to help him. (Mr. Garcia would get a $10 tip out of it, a small windfall.) A few minutes passed. The men watched cars drive by. Wilfredo Hernandez, 38, who was also from El Salvador, broke the silence. “I used to go to restaurants all the time, drink beers,” he said. “One night I went to the restaurant Hooters. You know Hooters?” He itemized his meal from that night: a hamburger ($10) and four beers ($20). “I gave the waitress $36,” he said wistfully. The men said they did not know much about the turmoil in the financial markets. “The investment in the war in Iraq is the reason, right?” Mr. Mancillas asked. But while the details might have been obscure to them, the realities of the country’s economic malaise were plainly, and painfully, evident. “The situation in the United States has gotten bad,” Mr. Garcia said, fiddling with a paint-splattered tape measure he carried on his belt. “I didn’t think it was going to come to this.” “Let’s see what sort of changes a new president brings,” Mr. Hernandez said. “If it continues the same, I’ll go back.” The men grew silent again and continued to scan the lot. The idea of returning home was not a popular topic. And anyway, the day was not over yet, and there was still a chance, however slight, of work.


For Pilot in Stevens Crash, Flying Ran in the Family

Abstract: Whatever problem the plane carrying former Senator Ted Stevens encountered before it crashed on Monday night, it was not pilot inexperience. The pilot, Theron A. Smith, known as Terry, was a second-generation bush aviator and a 28-year veteran of Alaska Airlines, where fellow workers voted him a “Legend of Alaska” in 2001. He belonged to a flying family with a history of pioneering and of tragedy. His father began flying in Alaska in the early 1940s. His wife, Terri Ellis Smith, a bush pilot herself, frequently co-piloted with him in their vintage Grumman. She is related to a founder of Ellis Air Lines, one of the carriers that merged to become Alaska Airlines. And the Smiths’ son-in-law, Maj. Aaron Malone, a pilot in the Alaska Air National Guard, was killed on July 28 in the crash of a C-17 cargo plane at Elmendorf Air Force Base in Anchorage. Three other airmen were also killed in the crash. Major Malone was married to the Smiths’ daughter, Melanie. Another child, Brian M. Smith, is a private pilot. The plane that Terry Smith was flying Monday, a single-engine DeHavilland DHC-3T, owned by GCI, an Alaska telecommunications provider, was not nearly big enough to need a cockpit voice recorder or a flight data recorder, so investigators will have to work without “black boxes” to piece together what happened. It was also flying in an area without radar coverage. Typically in such crashes, the investigators begin by trying to map out the four corners of the wreckage, to rule out in-flight break-up and look at the wreckage to determine if the links between the pilot’s controls and parts like the rudder, the elevators and the flight control surfaces, like ailerons, were intact; they will also look to see if the engine was producing power at the time of impact. Another possible suspect is “controlled flight into terrain,” meaning that a pilot, often trying to stay below clouds in an area of poor visibility, flies into the ground. General aviation — that is, noncommercial, nonmilitary flights, especially in propeller-driven single-engine planes at low altitude — are notoriously prone to this hazard. The extent of Mr. Smith’s experience flying in the area where the crash occurred was not immediately clear. Mr. Smith, 62, was familiar, though, with many kinds of flying. In October, he and his wife were flying a Piper Cub in New Zealand, where they liked to vacation, when they were forced to land in a dry riverbed after something leaking from the engine, probably oil, spread over the windshield so they could not see, according to a news report in New Zealand. They were rescued while hiking to safety. “That walk was worse than ditching the plane,” Mr. Smith was quoted as saying. In a travel article last year on Alaska’s Iditarod dog sled race, ForbesLife magazine listed the Smiths as “a very good resource for finding capable pilots and airplanes.” Mr. Smith also spoke at a conference last year on seaplane safety run by the Alaskan Aviation Safety Foundation . Before he retired from Alaska Airlines in 2007, Mr. Smith was the chief pilot in the airline’s Anchorage base. Kevin Finan, who was vice president of flight operations at the airlines when Mr. Smith was a captain there, said he used to fly into Dutch Harbor, in the Aleutians, with him. The flight is particularly challenging because the island is often obscured in bad weather. Mr. Finan called Mr. Smith “one of the best pilots I’ve ever known.” “There wasn’t anybody who was a better pilot than he was, particularly in Alaska,” Mr. Finan said in a telephone interview. Mr. Finan said he did not know anything about the particulars of the crash in Alaska on Monday, but as far as the plane involved, “he would be plenty qualified to fly that, for sure.” The Smiths flew a Grumman Albatross, a 60-foot-long plane capable of landing on water. In December 2001, they took it on the inaugural flight of a route for private planes from Nome, Alaska, to the Siberian village of Provideniya, Russia. Six planes made the trip; the Albatross carried extra fuel so the others could refuel on the Russian side. In the 1980s, in the era of glasnost and perestroika, Mr. Smith was captain of an Alaska Airlines jet that made two historic flights across the Bering Sea to lay the groundwork for scheduled service between Alaska and the Russian Far East in 1991, according to the airline. The plane, an early model Boeing 737, with Terry Smith’s name painted on it, is now in the Alaska Aviation Heritage Museum in Anchorage, said Bobbie Egan, a spokeswoman for the airline.

Accidents and Safety
Pilots
Stevens Ted
Alaska


Senators Criticize Bailout Oversight

Abstract: WASHINGTON (Reuters) — Watchdogs monitoring the government’s bank bailout called for an overhaul Thursday, with one accusing those running it of misleading the public, while senators slammed the program as chaotic and poorly managed. Under the $700 billion program meant to stabilize the financial system, the Treasury Department has so far spent nearly $300 billion to bolster financial institutions and automakers in exchange for preferred shares and warrants. But in buying those securities, Henry M. Paulson Jr., then the Treasury secretary, misled the public about how it was going to price them, said Elizabeth Warren, a Harvard law professor and head of an oversight panel for the bailout, known as the Troubled Asset Relief Program , or TARP. “Treasury simply did not do what it said it was doing,” Ms. Warren said at a hearing before the Senate banking committee. Many members of the panel condemned management of the program, which is barely four months old. The program proceeded “in a chaotic, unorganized and ad hoc manner,” said Daniel K. Akaka, Democrat of Hawaii. Neil M. Barofsky, another watchdog for the program, told the Senate committee his office was turning to criminal investigations. “That’s going to be a large focus of my office,” he said. On projections by some analysts that TARP may need more money soon, Senator Evan Bayh, Democrat of Indiana, said, “There will be no additional funding for this program without airtight assurances that it will be better managed.” The Obama administration plans to unveil a strategy on Monday aimed at reviving the credit markets, helping struggling homeowners and lifting the economy out of recession. Tighter TARP management is expected to be a part of that package. A preview of that came Wednesday when the White House announced a $500,000 annual cap on executive pay at companies receiving TARP money. The Bush administration began TARP in response to an alarming slowdown in global capital markets set off by a housing slump that undermined mortgage-backed bonds carried on the books of major financial institutions. Congress approved the $700 billion program after Mr. Paulson said it would be used to buy broken bonds and clean off banks’ balance sheets. But days after that approval, Mr. Paulson changed the focus to buying preferred shares in banks. Ms. Warren, head of TARP’s Congressional oversight panel, told the banking committee that after three months on the job, her panel was still not getting enough answers from Treasury. She described the bailout as “an opaque process at best.” Ms. Warren said she plans to release a report on Friday that calculates Treasury put about $254 billion into financial institutions in 2008, but got only $176 billion in value. “That’s a shortfall of about $78 billion,” she said, adding that Mr. Paulson “was not entirely candid” in his description of TARP’s bank capital injection program. Mr. Barofsky, the independent TARP inspector general at Treasury, raised concerns about potential fraud in one of several programs financed by bailout money, the Federal Reserve’s Term Asset-Backed Loan Facility. “Treasury should consider requiring that some baseline fraud prevention standards be imposed,” Mr. Barofsky said in his first report to Congress. He told the committee the government had collected more than $271 million in dividends from its TARP-financed bank shares and said the department needed a strategy for administering its holdings. A Treasury spokesman said the department would adopt many of Mr. Barofsky’s recommendations. Treasury holds $279.2 billion in preferred shares from 319 financial institutions, paying dividends of 5 to 10 percent, according to Mr. Barofsky’s report. The government also received common stock warrants from 230 institutions, most of which are now out of the money. The largest positions in warrants include the American International Group, Bank of America, Citigroup and General Motors.

Emergency Economic Stabilization Act (2008)


Ford Makes Comeback From the Brink to Billion-Dollar Profit

Abstract: DETROIT — While its crosstown rivals stumbled through bankruptcy this summer, the Ford Motor Company pressed its advantage, and delivered surprising news on Monday that its cost-cutting efforts and improving sales helped it earn nearly $1 billion in the third quarter. But now it faces new challenges in maintaining that lead. Both General Motors and Chrysler, with the stigma of their bankruptcies receding, are moving ahead with their own comeback plans. Under prodding from a new board, G.M. is aggressively marketing a 60-day money-back guarantee on its vehicles that most likely will result in market share gains to be announced on Tuesday. And Chrysler and its new partner, Fiat, on Wednesday will disclose an ambitious five-year plan to streamline its product lineup and introduce more fuel-efficient models. Ford is also running into resistance from its unionized work force as it tries to cut costs further. Its improving fortunes were the main reason cited by the United Automobile Workers on Monday for rejecting another round of labor concessions that would have roughly matched concessions that workers at Chrysler and General Motors approved in the spring. The U.A.W.’s president, Ron Gettelfinger, and its vice president in charge of the Ford unit, Bob King, said in a statement that the carmaker’s third-quarter profit was “evidence of the contributions that Ford workers have made.” Ford, which earned $997 million in the third quarter and made money in North America for the first time since 2005, has turned itself around largely by cutting costs and introducing cars that consumers want to buy, rather than resorting to deep discounts to lure shoppers into showrooms. But Ford also took advantage of the unfavorable perception that many consumers had of G.M. and Chrysler, which have needed huge infusions of federal aid to survive. Even Toyota has been losing money and, after significant recalls, been forced to defend its quality. Toyota, like G.M. and Chrysler, is plotting its own turnaround effort, with a new president, Akio Toyoda, focused on restoring its once-pristine reputation. “These difficult times have caused us to do some important soul-searching and approach the business in new and better ways,” Bob Carter, head of the Toyota division in the United States, told reporters in Detroit on Monday. Ford is hardly sitting still under its chief executive, Alan R. Mulally, who joined the automaker three years ago from Boeing and, so far, has been the rare outsider to achieve success in Detroit. “This is not so much a turning point as it is a proof point of the value of the plan and the strategy we’ve been following for three years,” Mr. Mulally said in an interview. Ford did not offer a forecast for next year, and said only that it expected “solid profitability” no later than 2011, after previously saying it expected to break even that year. It is also more wary of making such predictions, after being forced to reverse rosy forecasts in the past. Moody’s Investors Service on Monday raised Ford’s credit ratings based on the “substantial progress” it has seen in the automaker’s performance and financial health. “The evidence we see indicates that Ford is on track in its plans to re-establish a sustainable and competitive business model,” Bruce Clark, a senior vice president at Moody’s, said in a note to investors. Ford is also taking more steps to improve its balance sheet and increase the amount of available cash it has on hand. The company ended the third quarter with $23.8 billion in cash, and reported positive cash flow of $2.8 billion during the three month period. Ford’s chief financial officer, Lewis Booth, said on Monday that the company also would seek to raise about $3 billion by issuing new stock and equity-linked securities. The route that Ford has taken thus far to profitability is one that, by all accounts, G.M. and Chrysler need to follow themselves. When Ford chose not to ask for government loans, the company was freed to continue spending on new products like its Fusion and Taurus sedans. G.M. and Chrysler, by comparison, had to rein in much of their product development programs to conserve cash while they awaited federal aid. A report by the Government Accountability Office released on Monday said that the federal government was unlikely to recover much of the $81 billion that was invested in G.M. and Chrysler, their suppliers and related financing companies. But with cleaner balance sheets and taxpayer cash to spend, G.M. and Chrysler are hoping their own turnaround efforts will take hold. Ford proved during the third quarter that it can increase revenue and turn a profit even as the overall market slumps. In its core North American market, the company increased revenue by 26 percent, to $13.7 billion. It also reported a pre-tax profit of $357 million, compared to a loss of $2.6 billion in the third quarter of 2008. “This improvement was primarily explained by favorable net pricing, lower materials costs, structural cost reductions, and improved market share,” the company said. Ford had the lowest average incentive costs of the three Detroit-based automakers during October, according to the car research Web site Edmunds.com . As the automaker continues to bring out new products, like the coming Fiesta and Focus small cars, its incentive spending could fall even more, as consumers tend to be willing to pay closer to sticker price for new models. The company also said that it had reduced its costs by $4.6 billion in the first nine months of the year, already exceeding its full-year goal of $4 billion.

Automobiles
Ford Motor Co
Company Reports


Housing Subsidy Has a Big Foe: the Mayor

Abstract: The mayor’s office is urging Gov. David A. Paterson to veto a bill that would offer greater rent relief to 11,000 New York City residents with H.I.V. or AIDS, saying the measure would tax the city’s strained budget. The bill, which was passed by the State Senate on Tuesday and the Assembly in January, would mean that low-income people receiving housing assistance from the city’s H.I.V./AIDS Services Administration would be required to spend no more than 30 percent of their income on rent. Despite the city’s current subsidy, many beneficiaries of the program still spend more than half of their income on rent. The office of Mayor Michael R. Bloomberg, which sent a memo to senators in January opposing the bill, said that the city would spend $150 million on the program this fiscal year, and that the new measure would cost it an additional 10 percent. Yet paying more toward low-income tenants’ rent would result in fewer evictions and fewer placements in emergency housing, both of which are expensive, according to Senator Tom Duane, the Democrat from Manhattan who sponsored the bill. The state sets the policy for the H.I.V./AIDS housing assistance program, the city administers it, and they share funds for it. Under current regulations, people who are enrolled in the program and who receive income from Social Security, federal disability payments or wages must pay all but $344 of their income in rent. Sean Barry, director of the NYC AIDS Housing Network, a community organizing group that represents many of the program’s clients, said beneficiaries often pay upward of 60 percent of their income in rent. Among them is Wanda Hernandez, of the Bronx, who is on the board of Mr. Barry’s organization. Ms. Hernandez, 48, learned she was H.I.V.-positive 15 years ago, and was later hobbled by chronic pain and carpal tunnel syndrome. She spends about $750, the bulk of her federal disability income, on her $1,085-a-month, one-bedroom apartment. Under the bill, the program would cover about $750 of her rent. Living on the roughly $350 a month left over required scrimping on subway and bus travel, visiting food pantries and cutting out toiletries, she said. Sometimes, sympathetic neighbors leave bags of used clothing at her door. “I’ve been getting by on pennies,” she said. Mr. Barry said the vast majority of the program’s housing assistance recipients live on some form of public assistance. But Jessica Scaperotti, a spokeswoman for the mayor, said the bill set an “expensive precedent” by basing the rental income contribution on medical diagnoses rather than solely on income. “As sympathetic as we are to the people who this would help, this nevertheless is yet another unfunded mandate from Albany, and one that will have significant immediate and long-term costs,” she said in a statement. Yet Ginny Shubert, of Shubert Botein Policy Associates, an analysis and advocacy group based in New York, calculated that the new law would cost the city and state an extra $19 million a year but result in $20 million in annual savings. Ms. Shubert, who supports the bill, said the savings would come from evicting fewer tenants, covering fewer rental arrears, and paying for less emergency housing. Keeping a subsidized tenant in an apartment costs $24 a day, she said, but paying for emergency housing costs about $55 daily. Mr. Duane, who delivered an impassioned speech on the Senate floor in support of the bill last summer, said those figures made supporting the bill a no-brainer. But Matt Brune, deputy commissioner of the H.I.V./AIDS Services Administration, said that Ms. Shubert vastly overestimated the number of evictions that would be prevented, and also understated the program’s per-person cost. The bill passed the Senate by 42 to 19, and the Assembly by 84 to 54, and is expected to be considered by Mr. Paterson in the coming days. While it is still unclear whether Mr. Paterson will sign it, he has vetoed dozens of bills that carried hefty prices in the last two years because of the state deficit. To override a veto, two-thirds of the Senate and the Assembly would have to vote again in support of the bill.

Rent Control and Stabilization
Acquired Immune Deficiency Syndrome
New York City
Budgets and Budgeting


Mortgages Made Simpler

Abstract: THIS column is in praise of warning labels. So let’s begin with one: I am not your usual sort of economist. I practice what has come to be called behavioral economics. We behavioralists differ from our more traditional brethren in the way we characterize agents in the economy. Traditional economics is based on imaginary creatures sometimes referred to as “Homo economicus.” I call them Econs for short. Econs are amazingly smart and are free of emotion, distraction or self-control problems. Think Mr. Spock from “Star Trek.” Real people are not Econs. Real people have trouble balancing their checkbooks, much less calculating how much they need to save for retirement; they sometimes binge on food, drink or high-definition televisions. They are more like Homer Simpson than Mr. Spock. Call them Homer economicus if you like, or just Humans. Behavioral economics is the study of Humans in markets. Designing policies for Econs is pretty straightforward. Because they are smart consumers and make good choices, the best policies give them as many choices as possible and simply assure that they have access to all the relevant information. Humans, however, can use a bit more help, especially when the options are hard to understand. Often, it is possible to help people make better choices without restricting their options at all. So shouldn’t it be a no-brainer to try? Some of the financial regulations recently proposed by the Obama administration provide a good example. Consider mortgages, the source of so many problems in the financial crisis . Once upon a time, choosing a mortgage was easy. Nearly all mortgages were of the 30-year, fixed-rate variety, required a 20-percent down payment and were devoid of tricky features like balloon payments, teaser rates and prepayment penalties. Sensible regulation was easy in this environment. Congress passed what’s known as the Truth in Lending Act, which required lenders to report interest rates in a uniform way, using the now-ubiquitous annual percentage rate. Picking the best mortgage was no more complicated that finding the lowest A.P.R. Fast forward to 2008, and the world of mortgage shopping had become a much more complicated place. Borrowers were quoted low initial “teaser” rates that would jump later to some higher level, depending on market interest rates at the time, and there were prepayment penalties for paying off the loans early. For such mortgages, an A.P.R. was no longer an adequate measure of the loan’s cost. How can we help people make sense of all this? One extreme approach would be to ban complex mortgages entirely: we could just go back to the world of uniform fixed-rate mortgages. But the cost of simplicity is an end to innovation. Shopping for televisions was easier in the 1970s, when we did not have to decide between plasma and L.C.D. technology — but who wants to go back to those hulking old TV sets? A better approach is to strive for maintaining diverse options but helping consumers make smart choices and avoid the most common pitfalls. For mortgages, the specific plan proposed by the administration appears to be strongly influenced by Michael S. Barr, an assistant Treasury secretary. Mr. Barr is a former law professor at the University of Michigan who wrote an important article sketching out these ideas with Sendhil Mullainathan, an economist at Harvard, and Eldar Shafir, a professor of psychology and public affairs at Princeton. As the administration plan describes it, lenders could be required to offer some mortgages they call “plain vanilla,” with uniform terms. There might be one vanilla 30-year, fixed-rate mortgage and one five-year, adjustable-rate mortgage. The features of these plain mortgages would be uniform, much as in a standard lease used in most rental agreements. Lenders would also be free to offer other exotic mortgages — perhaps called “rocky road” mortgages? — along with the vanilla variety, but these offerings would receive more intense scrutiny from regulators. Although the details of this dual ice-cream approach have not been fully specified, the concept has two main selling points. First, inexperienced borrowers are steered toward the vanilla mortgages, the terms of which are chosen to be easy to understand. Vanilla mortgages would be the equivalent to the green runs at ski resorts that are intended for novices. The rocky-road mortgages would at least come with warning labels (“Don’t even think about going down this run unless you are an expert skier, or have a trusted professional instructor by your side”), and it is possible that for very exotic mortgages, borrowers might have to demonstrate that they understand the risks or have been aided by a certified mortgage planner. Second, because the terms of the vanilla mortgages are all the same, they are more easily comparable; just as in the good old days, the A.P.R. will be a good basis for assessing the cost of the mortgage. Some critics contend that behavioral economists have neglected the obvious fact that bureaucrats make errors, too. But this misses the point. After all, wouldn’t you prefer to have a qualified, albeit human, technician inspect your aircraft’s engines rather than do it yourself? The owners of ski resorts hire experts who have previously skied the runs, under various conditions, to decide which trails should be designated for advanced skiers. These experts know more than a newcomer to the mountain. Bureaucrats are human, too, but they can also hire experts and conduct research. In the past year, we have learned the hard way that when people take out mortgages they cannot repay, the entire economy can be disrupted. Fixing the problem is complicated. But a good first step is to make the mortgage lending process Homer-proof.

Mortgages
Law and Legislation
Economic Conditions and Trends
Subprime Mortgage Crisis
Regulation and Deregulation of Industry
Obama Barack


For Jeb Bush, Life Defending the Family Name

Abstract: CORAL GABLES, Fla. — For months now, Jeb Bush has been listening as President Obama blasts his older brother’s administration for the battered economy, budget deficits and even the lax oversight of oil wells. “It’s kind of like a kid coming to school saying, ‘The dog ate my homework,’ ” Mr. Bush, this state’s former governor, said over lunch last week at the Biltmore Hotel. “It’s childish. This is what children do until they mature. They don’t accept responsibility.” In fact, instead of constantly bashing the 43rd president, Mr. Bush offered, perhaps Mr. Obama could learn something from him, especially when it comes to ignoring the Washington chatter. “This would break his heart, to get advice that applies some of the lessons of leadership my brother learned, because he apparently likes to act like he’s still campaigning, and he likes to blame George’s administration for everything,” Mr. Bush said, dangling a ketchup-soaked French fry. “But he really seems like he’s getting caught up in what people are writing about him.” “I mean, good God, man, read a book!” Mr. Bush said with a laugh. “Go watch ESPN!” At 57, Jeb Bush remains an intriguing figure inside his fractious party. At a moment when Republicans are groping for an agenda beyond opposition, Mr. Bush has long been considered one of the party’s true idea guys, someone a lot of party insiders think could still be a serious presidential contender. But Mr. Bush, the son and brother of presidents, occupies just as intriguing a place within his own family. American presidents have traditionally felt themselves duty-bound not to criticize their successors (no matter what their successors may say about them), which means that Jeb is the only Bush in public life who can defend the family name. “George isn’t going to break that,” Mr. Bush said, meaning the ex-presidents’ code, “and if he was asked to serve in some way, he would do it, in spite of all the ‘it’s Bush’s fault.’ That’s just the kind of guy he is.” Often depicted as the most mercurial and bookish of the Bushes, Jeb, who now runs his own consulting firm, seems at ease out of public office. He wore a loose-fitting guayabera, rather than a suit, and responded to questions amiably, with little hint of the prickliness that has sometime marked his interactions with reporters. Mr. Bush said he met Mr. Obama in 2009 when he accompanied his father, George Bush, to the White House a few weeks after the inauguration. “He was extraordinarily kind and gentle to my dad, which I love,” Mr. Bush said. He gives Mr. Obama credit for trying to spur innovation in public schools, a policy area about which Mr. Bush is passionate, but his admiration ends there. “By and large, I think the president, instead of being a 21st-century leader, is Hubert Humphrey on steroids,” Mr. Bush said. “I don’t think there’s much newness in spending more money as the solution to every problem.” Though he headlines the occasional fund-raiser around the country, Mr. Bush has exercized his political influence this year largely out of the public view. He has been deeply involved as an informal adviser to the party’s candidates for governor, whom he sees as the most likely sources of new Republican policy ideas. “It doesn’t seem like it’s going to be happening in Washington anytime soon,” Mr. Bush dryly observed. No matter what happens in November’s midterm elections, Republicans will have to make a difficult calibration as they head into the presidential season. The party needs a messenger who can keep its Tea Party-type activists energized behind an agenda and a nominee. But Republicans will also be looking for someone who can reposition the party nationally and make its more strident ideology palatable to the wider American electorate. This explains why some influential Republicans persist in believing that Mr. Bush might still make a strong candidate in 2012. He is a favorite of the anti-establishment crowd (he is said to have mentored Marco Rubio, the Senate challenger in Florida who gave the Tea Partiers a national lift), but he is also a political celebrity with a pronounced independent streak. As governor, for instance, Mr. Bush strongly opposed drilling in the shallow waters off Florida, and he favors increasing legal immigration , rather than restricting it. Mr. Bush says he has no interest in running, because he wants to make money for his family, but his political allies seem to read a “for now” into such statements. “Every presidential wanna-be and every member of the House and Senate I talk to, if you ask them who is a difference-maker in our party, they will tell you Jeb Bush,” said Al Cardenas, the former party chairman in Florida. Washington wisdom — such as it is — holds that the real impediment to Mr. Bush’s political future would be the Bush brand, which has taken a pounding both inside the party and out. Neither George W. Bush nor his father ranks among the more successful presidents of our time, to put it politely. Jeb Bush’s admirers insist, however, that whatever cloud existed over the name is lifting, as memories of the last Bush era recede, replaced by a hardened conservative opposition to Mr. Obama’s policies. And those who know Mr. Bush say he has never concerned himself with it. “He’s the guy who cares about that the least,” said Nicholas Ayers, executive director of the Republican Governors Association. In fact, talking to Mr. Bush, one senses that the problem for him as a future candidate might not be the efficacy of the Bush brand, but rather what he might need to do in order to transcend it. George W. Bush ran successfully for president in part by putting some distance between himself and his father, signaling to the Republican base that he was more a Reagan conservative than he was a “read my lips” pragmatist. It is harder to imagine Jeb Bush, the fierce defender of his family, ever publicly acknowledging his brother’s failures in a way that would enable him to come across as a different, more capable kind of Bush. When I asked him whether Mr. Obama had a legitimate point — whether his brother’s administration did, in fact, bear responsibility for the country’s economic collapse — Mr. Bush paused and, for the only time in our interview, appeared to carefully assemble his words. “Look, I think there was a whole series of decisions made over a long period of time, the cumulative effect of which created the financial meltdown that has created the hardship that we’re facing,” he said slowly. “Congress, the administration, everyone can accept some responsibility.” “The issue to me is what we do now,” Jeb Bush said. “Who cares who’s to blame?”

Bush Jeb
Obama Barack
Republican Party
United States Politics and Government


A Rainy June Left New York City Green and Puddly

Abstract: I like New York in June ... - “Babes on Broadway” Oh yeah? The city was a soggy mess in June, drenched with rains. There was even a touch on Tuesday, leaving the city close to setting a record before the month floated into history at midnight. Ball fields had flooded and lonely lifeguards had shivered from Coney Island to Orchard Beach. Even a relentless booster like Mayor Michael R. Bloomberg had to joke: “It only rained twice this week — once for three days and once for four days.” Worse, you couldn’t even call it Seattle-like weather. Seattle was gorgeous. For that, Seattle almost had to apologize. “We’re having to explain to people they really are in Seattle,” said Tom Norwalk, a spokesman for that city’s Convention and Visitors Bureau , speaking by telephone. And — ignominy! — a Seattle umbrella shop did its best business by shipping east. Central Park was pelted with 10.06 inches of rain for the month through Tuesday afternoon, according to preliminary figures from the National Weather Service, more than twice the average for the month, and close to the record 10.27 inches set in 2003. In contrast, Seattle, known for its precipitation and “June gloom,” recorded an almost imperceptible 0.18 inch of rain, one-seventh of the average. And before a sprinkle on June 19 dashed Seattle’s hopes for meteorological immortality, it had gone 29 days without rain, tying a local record set in 1982. “Close, but no cigar,” lamented Cliff Mass, an atmospheric scientist at the University of Washington and a weather blogger who chronicled the “mega-dry” streak. The Seattle-New York weather seesaw was scarcely coincidental, Dr. Mass said. “It’s usual to have opposite weather,” he said. “There’s a wavelike pattern to the atmosphere. We are often 180 degrees different.” So when Seattle turned nice, New Yorkers were almost destined to suffer. And suffer they did. While the rains left the city’s parks greener than ever, “it’s been difficult to mow the outfields,” said Adrian Benepe, the parks commissioner. “The infields hold water — they’re under huge puddles.” Beach use in June was way down, Mr. Benepe said, to 735,000 from the usual 2.6 million, according to crowd counts. “We could get 735,000 on one hot day,” he said. Presiding over the empty beaches was an augmented army of 1,200 lifeguards, ranks swelled by the financial crisis and the lure of a job, even if just for the summer. “They’re spending a lot of time practicing and sitting huddled under umbrellas,” the commissioner said. But there was good news as well. “With rains like this, the parks are especially lush,” he said. “They’ve never been so green. It’s a great season for flowers.” When the sun has peeked through, people have rushed out. “If there’s 15 minutes of sunshine, they get out to the parks,” Mr. Benepe said. For their part, Seattleites showed little concern that their city’s reputation for dampness might be at stake, and they flocked outdoors. Last weekend the main attraction was the city’s first rock ’n’ roll marathon, with bands serenading 25,000 marathon runners along the route. A gay pride march and a game by the city’s soccer club, the Seattle Sounders, drew large crowds. “People were everywhere out and about,” said Christina Donegan, the Chamber of Commerce vice president for communications. Of course, they usually are anyway. “People out here have a lot of Gore-Tex, and they’re ready to use it,” Dr. Mass said of the popular wet-weather fabric. Actually, New York City averages more rainfall annually than Seattle, 49.69 inches to 37.07 inches, according to the National Oceanic and Atmospheric Administration , but Seattle’s climate is damper, with more days of rain and mist. Mayor Bloomberg looked on the bright side. “One of the things any mayor is worried about is if the reservoirs are going to empty out,” he said. “We took care of it early this year.” Also, he said, “There’s more to do indoors in New York City than to do in- or outdoors anywhere else.” The weather was so nice in Seattle that Bella Umbrella , a shop specializing in renting its 800 vintage models for weddings, might have suffered but for an unexpected boon. “I’ve had the best two months I ever had, and a lot of it was because of last-minute orders from the East Coast,” said Jodell Egbert, the owner. For brides and grooms, she said, she represented “Plan B.” And I wonder, still I wonder, who’ll stop the rain. - Creedence Clearwater Revival

Rain
New York City
Seattle (Wash)
Weather


Red Storm Tops Ranked Team for First Time in Almost Two Years

Abstract: Pushing and shoving erupted on the Madison Square Garden court after the final horn of St. John’s Big East home opener Saturday afternoon. Recent years have been frustrating for the Red Storm, so a minor altercation might not have been surprising. What was shocking was the origin of the shoves. They were jousts of celebration — chest bumps and high-fives between teammates — as well as pushes from Garden security trying to clear the couple of dozen fans in red who had stormed the court. It was a welcome scene in a building that has recently had overwhelming numbers of opposing fans. St. John’s rewarded a crowd of 9,807 by picking up perhaps the biggest victory in Coach Norm Roberts’s five seasons, beating No. 7 Notre Dame , 71-65. The Irish, despite a strong performance from the all-American Luke Harangody, became the highest-ranked opponent to fall to the Red Storm in Roberts’s tenure and the first ranked team St. John’s had beaten in almost two years. St. John’s beat No. 22 Notre Dame on Jan. 23, 2007, and now has six wins over ranked foes in the Roberts era. “It’s been a long time coming,” said forward Justin Burrell, who asserted himself against the 6-foot-8, 255-pound Harangody with a toughness that had been absent of late. Burrell plays with a mask to protect fractures he sustained last month. He fiddles with the mask during games, taking it off whenever possible. He tried to sneak onto the court without the mask to shoot free throws after a timeout during the second half, but Roberts caught him and made him put it back on. Burrell obliged, and sank both free throws for 2 of his season-high 18 points. His strong performance came after he had withered in the Red Storm’s previous game, a 21-point loss at Providence in which he had 3 points and 3 rebounds in 25 minutes. “I don’t want you to ever shoot five shots,” Roberts said he told Burrell after the Providence game. “I want you to be aggressive. Shoot the ball.” Burrell had the tough assignment of guarding the high-energy Harangody, the Big East player of the year last season, who scored 28 points and had 14 rebounds and 4 steals. But he still had the energy to pick his spots on offense. Midway through the second half, Burrell took over for a key stretch, scoring 6 points and grabbing three rebounds in less than three minutes to help St. John’s (10-4, 1-1 Big East) turn a tie game into an 8-point advantage. When Burrell made two free throws to make it a two-possession game with 39.3 seconds remaining, he marched backward to midcourt, his fists pointed at the rafters, then knelt down and twice smacked the St. John’s logo. Roberts said the victory ranked high on his list not only because of where Notre Dame (10-3, 1-1) is in the national polls, but also because of how his team has been plagued by injuries. Burrell is donning the mask, and Anthony Mason Jr. is out for the year. The starting point guard Malik Boothe has missed the last three games after having thumb surgery. But Mason and Boothe made sure to get in on the celebrating. Mason sent a flurry of text messages to the team manager from his home in Tennessee, and Boothe yelled encouragement to his teammates from the bench. D. J. Kennedy had 20 points and 10 rebounds, and Paris Horne (14) and Rob Thomas (10) also scored in double figures. The Red Storm outrebounded the Irish, 41-30. “This is the first game in a long time we played 40 minutes hard and everybody came in and contributed,” Kennedy said. Notre Dame Coach Mike Brey noticed the difference, too. “They played great, they played hard,” he said of St. John’s. “They had great toughness today.” Roberts insisted that what happened — a long-awaited victory against a talented team in a league full of them — was not an anomaly. “There was no miracle stuff that happened out there today,” said Roberts, whose voice was a touch shaky as he began his postgame news conference. “We had 18 turnovers and 10 assists. There was no us making 12 3s out of nowhere. It wasn’t that. It was just playing hard, hard, hard. Not giving up, staying with every loose ball, all those things that you have to do to win.” As Burrell stepped from the podium a victor, his maskless head held a bit higher, he spread his good cheer, perhaps hoping the pleasant tidings would linger into the rest of the season. “Happy New Year, everybody,” he said.

College Athletics
Basketball
St John's University
University of Notre Dame


Flinging Emojis, Twitch Chatters Revel as Julia Child Cooks

Abstract: When I was a teenager, my friends and I had a blast watching television together — often really bad television — and mocking it ceaselessly. We became the entertainment, not whatever clumsy dialogue or plot twist we derided. Last week, I felt as if I were 16 again as I watched hours of a four-day, nonstop showing of “The French Chef,” Julia Child’s groundbreaking cooking show, with several thousand complete strangers online. It was a surreal experience and, at times, hysterical. The Julia Child marathon took place on Twitch, a service owned by Amazon that has developed a gigantic online audience by letting gamers broadcast themselves playing Counter-Strike, League of Legends and other games over the Internet. While there are plenty of other video streaming sites — notably, the much larger YouTube — a big part of Twitch’s magic is how audiences interact with each other and broadcasters in real time through a chat room adjacent to whatever video is streaming. With the Julia Child marathon on Twitch, the peanut gallery was everything. If you want to carefully study Mrs. Child’s technique for making roast duck à l’orange, there are much better places to find episodes of “The French Chef” online, including iTunes and YouTube. Nowhere else but Twitch could you see Mrs. Child lionized for her knife skills as though she had disemboweled an enemy in Mortal Kombat. Image A moment during the Twitch streaming of a Julia Child episode on Tuesday. “This stage is difficult, but Julia is executing this perfectly, top level player,” one Twitch viewer wrote. Part of the charm of watching “The French Chef” on Twitch was the fish-out-of-water nature of the event. Twitch’s audience skews heavily toward men ages 18 to 34. Not only were most Twitch viewers not alive when the show began showing in 1963, but some of their parents were not alive either. It didn’t hurt that Mrs. Child had an idiosyncratic television presence that has long made her a source of endearment and parody, most famously by Dan Aykroyd on “Saturday Night Live” in 1978. This was the second time Twitch has turned to a dead public television icon to branch out from its usual game-heavy content. Last year, it surprised a lot of people — Twitch executives included — when a weeklong stream of more than 400 episodes of “The Joy of Painting,” featuring the landscape artist Bob Ross, attracted 5.6 million viewers. After “The French Chef” marathon concluded Saturday evening, Twitch began showing a batch of other cooking programs on a new food channel, including “Julia and Jacques — Cooking at Home” featuring Mrs. Child and the chef Jacques Pépin, and “A Taste of History” with the chef Walter Staib. The Twitch chat rooms around “The French Chef” and “Joy of Painting” events were a thicket of gamer in-jokes, jargon and emojis (they’re called “emotes” on Twitch). The community generates memes — popular online jokes and catchphrases — at a head-spinning pace, a lot of it indecipherable to people who aren’t fluent in the native tongue of Twitch and game culture. At first, I felt as if I was Neo in “The Matrix,” watching incomprehensible lines of code cascading down the screen in front of me. I caught on with some Googling and consulting with insiders at Twitch. A lot of the chat was sophomoric, some of it was offensive, but enough was so funny and well-timed that I kept coming back for more. In one early episode, Mrs. Child used a wooden mallet to whack a carving knife through the spine of a roasted chicken. It was an amusingly violent scene, one that the Twitch chat room ran with, turning her into a Hannibal Lecter with an apron. “HAMMER TIME ... SAVAGE ... THE HORROR ... THE BUTCHERER,” the messages flew by. The chat room roared with Mrs. Child’s copious use of butter and different forms of alcohol in her recipes. Whenever she dumped salt onto a dish, a flood of salt can emojis followed. When Mrs. Child employed some deft knife work, the Twitch chat room filled with the letters VAC. I later learned that the expression stands for Valve Anti-Cheat, software that detects whether players are cheating in games made by the publisher Valve, such as Counter-Strike. The suggestion seemed to be that Mrs. Child's kitchen skills were so expert as to be suspicious. Conversely, whenever Mrs. Child dropped a bit of food or made another mistake, which she did often, the Twitch chatters pecked out “Ruined” — a meme that became a favorite during the Bob Ross marathon when the painter seemed to make a clumsy brush stroke. “Roux-end” was another variation during the Mrs. Child event. Ultimately, Mrs. Child did not attract as many viewers as Mr. Ross did on Twitch. At the peak, about 8,000 viewers were watching her at the same time, compared with about 183,000 for Mr. Ross, according to Twitch. Whenever I checked, the size of her audience was sufficient to place her in the top 25 broadcasters on Twitch at those moments. About 1 million viewers total tuned into the show at some point during the marathon — not bad for a television show that started more than half a century ago. In this case, Mrs. Child’s show was the appetizer. The Twitch community was the main course.

Julia Child
Twitch
Video Recordings
Downloads and Streaming
TV
Cooking
Bob Ross


More U.S. Legal Troubles for Figure in Israeli Case

Abstract: Morris Talansky, the Long Island man at the heart of a corruption investigation in Israel that may topple Prime Minister Ehud Olmert, faces more legal problems when he finishes testifying and returns to New York. Kool-Tech, a privately owned minibar company that he helped finance three years ago, and with whom he has been feuding, sued him in State Supreme Court in Manhattan on Thursday, accusing him of breaching his fiduciary duty by seeking to help a competitor steal a multiyear contract with a New York hotel. Mr. Talansky also faces the possibility that United States authorities have begun their own investigation into his business dealings with foreign officials because of antibribery statutes. As far removed as it may seem from affairs of government, the minibar business has already figured into the Israeli investigation because of allegations that Mr. Olmert had received thousands of dollars in cash and gifts over the years from Mr. Talansky, and that Mr. Olmert may at one point have urged a wealthy casino mogul — unsuccessfully — to install Kool-Tech’s systems at his hotels. Mr. Olmert and Mr. Talansky have both denied any wrongdoing to the Israeli press. In another pending lawsuit, filed in 2007 in Nassau County, the minibar company accused Mr. Talansky of arranging improperly to have the company reimburse him for a $4,717.49 hotel bill he incurred at the Ritz-Carlton in Washington in October 2005, when he treated “a senior Israeli cabinet member that had no relation to the business” to a night’s stay. Though the official was not named in the lawsuit, William J. Davis, a lawyer for Kool-Tech, disclosed two weeks ago in an interview that it was Mr. Olmert, and that the hotel reservation had been made by Shula Zaken, Mr. Olmert’s longtime aide. He said the company broke off ties with Mr. Talansky upon learning of the expenditure, largely out of a desire to steer clear of doing anything illegal or running afoul of laws like the Foreign Corrupt Practices Act, which prohibits bribes to foreign officials. Mr. Davis said that he was told that the F.B.I. had opened an investigation that included Mr. Talansky’s activities, but he said that neither he nor his client had yet been contacted by the authorities. He would not disclose his source. Selva Ozelli, a New York lawyer who has written extensively about the antibribery statute, agreed that paying the hotel bill for a foreign politician could violate the law if the American benefactor received something in return. To be illegal, the payment or gift “has to be in furtherance of their business purpose,” she said. No one responded to a message left at the Talansky home in Woodsburgh, N.Y., and lawyers who have previously represented Mr. Talansky in commercial disputes either failed to return phone calls or said they had no information on the new lawsuit or the possibility of an F.B.I. investigation. A New York spokesman for the F.B.I. said it was the agency’s policy not to confirm or deny investigations. Mr. Talansky had proved helpful to Mr. Olmert when he was the mayor of Jerusalem by helping start and run the New Jerusalem Foundation, a charity meant to raise money for civic projects in Israel. Its United States office was at the same address as Mr. Talansky’s home. He was listed on tax returns as its treasurer, and his wife, Helene, was listed for a time as the organization’s secretary. Mr. Talansky is also well known in both the United States and Israel for his work as a key fund-raiser in the United States for Shaare Zedek Hospital in Jerusalem. Tax returns show that he and his wife, a fellow employee of the hospital’s American charitable organization at the time, received more than $1 million in consulting fees and other payments from the organization in the seven years after they left the charity in 1997. When Mr. Talansky joined Kool-Tech in 2005, his wife also obtained employment there as a bookkeeper. One claim made by the company in the Nassau County lawsuit is that Mr. Talansky improperly withdrew $80,000 in company funds, falsified books to award himself $200,000 in extra capital and urged an employee to work for a competitor. Mr. Talansky, meanwhile, who was the first to sue, accused the company of freezing him out of the business, failing to deliver a prototype for a new minibar, and using company funds to hire a $60,000-a-year personal assistant for the founder’s wife. “As a result, plaintiff’s investment and reputation in the business community have been greatly damaged,” Mr. Talansky argued in the initial complaint. In the latest lawsuit, filed in Manhattan on Thursday, Kool-Tech accused Mr. Talansky of tampering with its 10-year contract at the Excelsior Hotel in New York by aligning himself with a competitor while telling the hotel’s general manager that Kool-Tech was financially shaky and going bankrupt.

Talansky Morris
Suits and Litigation
Hotels and Motels
Israel
Manhattan (NYC)
Frauds and Swindling


In Terrorism Trial, Witness Testifies About Bomb-Making Process

Abstract: The ingredients could be found in supermarkets, beauty shops and hardware stores. They included seemingly innocuous items like flour, butter, batteries, a two-liter soda bottle and Christmas lights. And, the man added, ball bearings. “The ball bearings do the damage,” he said. “They go like bullets.” That matter-of-fact description of bomb-making for beginners was offered by Najibullah Zazi on Wednesday during a federal terrorism trial, in which he gave a detailed explanation of the steps he said that he and two other men had taken to carry out suicide attacks on New York subways on the orders of Al Qaeda . In his second day of testimony, Mr. Zazi continued to explain how he and two former high school classmates from Queens, Zarein Ahmedzay and Adis Medunjanin, became radicalized; traveled to Pakistan, where they trained at a terrorist camp; and came within days of acting upon what federal officials have described as one of the most credible terrorist threats against the United States since Sept. 11. Mr. Zazi even described a video he recorded, which he had expected Al Qaeda to release after the suicide attack. He and Mr. Ahmedzay have pleaded guilty and are testifying against Mr. Medunjanin in the hope of receiving shorter sentences. A lawyer for Mr. Medunjanin, Robert C. Gottlieb, has argued that his client had a falling out with his friends and withdrew from the plot. Mr. Medunjanin is accused of conspiring to use weapons of mass destruction and to commit murder abroad, of providing material support to Al Qaeda and of receiving military training from Al Qaeda. All three men face life in prison. In Federal District Court in Brooklyn on Wednesday, Mr. Zazi, who has been described as the leader of the group, testified that after his training at the Qaeda camp, he went to an Internet cafe in Peshawar, Pakistan, where he scanned and e-mailed to himself handwritten notes and drawings about making bombs. He recited the instructions as the people in the courtroom watched silently. His old friend, Mr. Medunjanin, listened closely to the testimony, taking notes but showing no emotion. Mr. Zazi said that after returning to the United States, he moved to Colorado, where some family members were living, and found a job as an airport shuttle-bus driver. He put his bomb-making knowledge to work, and when a test detonator was successful, he called Mr. Ahmedzay to share the news, using code. “I told him I fixed the virus on the computer and it worked,” Mr. Zazi said. But Mr. Zazi said his efforts were complicated when he realized that he was missing a page of his notes showing the quantities of different ingredients needed to build a large bomb. He contacted his Qaeda instructor in Pakistan repeatedly but received no replies, he said. Then he decided to travel to New York anyway, to build smaller bombs that the three men could strap to themselves and detonate in subway cars, he said. In September 2009, the police stopped him during his two-day trip east. He believed it was a routine traffic stop, so he continued on his way. He was stopped again as he took the George Washington Bridge from New Jersey to New York. He said a police dog had searched his car, but the police did not open the trunk, in which he was keeping the explosives. “They asked me why I was here, where I’m staying, what I’m doing,” he said. Afterward, he said, he went to Mr. Ahmedzay’s home to leave the detonator explosive for safekeeping. Realizing they were under surveillance, he and Mr. Ahmedzay flushed the remaining chemicals down the toilet at a mosque. Mr. Zazi said he later saw Mr. Medunjanin at another mosque. He said he typed a text message on his phone and showed it to Mr. Medunjanin. “The police are after me and we are done,” the message said. He was arrested soon after he returned to Colorado. During cross-examination, Mr. Gottlieb asked Mr. Zazi what he hoped to receive in exchange for his candid testimony. “I hope for a second chance,” Mr. Zazi said. “I believe my crimes are very bad. If God gives me a second chance, I would appreciate it and be a very good human being.”

Zazi Najibullah
Medunjanin Adis
Terrorism
Federal Courts (US)
New York City
Ahmedzay Zarein
Al Qaeda


U.N. Faces Scrutiny Over Unpaid Intern Who Slept in a Tent in Geneva

Abstract: United Nations officials are facing pressure to revisit their unpaid internship policy after an intern who had been living in a tent near Lake Geneva resigned and called for “interns all over the world” to unite in a fight for their rights. The intern turned activist, David Hyde, a 22-year-old from New Zealand, said he could not afford housing in Geneva while working at the United Nations Conference on Trade and Development. He had been stowing most of his belongings in a backpack under his desk at the conference’s offices, The Tribune de Genève reported on Monday , and he was sleeping outside near a beach frequented by United Nations workers. Two days after the news report, Mr. Hyde announced his abrupt resignation and sounded a clarion call: “Interns all over the world need to come together and push for the recognition of our value and our human rights.” In calling for a global crusade against unpaid clerical work, Mr. Hyde, who had worked at the United Nations for only nine days, said he had known the internship offered no remuneration and admitted that he had lied to get the job. He told recruiters that he had the means to pay for his living expenses, he said, only after losing other internships when he told the truth. Even as he took responsibility for his immediate situation, he called on other recent university graduates looking to enter the international work force to stand up and be counted. Citing the Universal Declaration of Human Rights, Mr. Hyde said, “Everyone who works has the right to just and favorable remuneration.” Mr. Hyde is not the first ambitious job seeker to have spoken out against working for free, but he might be the only one to have called to task an organization that declares in one of its founding treatises that, “everyone, without any discrimination, has the right to equal pay for equal work.” Mr. Hyde insisted on Wednesday that the United Nations did not compel him to take the unpaid job nor did it force him to quit. “The U.N. was clear about their internship policy from the start,” he said in a statement to reporters. “No wage or stipend, no transport help, no food allowance, no health assistance. I understood this and in that regard I have to take responsibility for accepting the internship in the first place.” The policy applies to unpaid internships established through the secretariat, said Stéphane Dujarric, a spokesman for United Nations Secretary-General Ban Ki-moon, in a telephone interview on Thursday. Other parts of the United Nations, such as the International Labor Organization and the Food and Agriculture Organization, offer paid internships or stipends. Mr. Dujarric said that it was unlikely that Mr. Hyde’s call for action would result in a quick policy change because of the United Nations’ complex budgetary process, but he said officials were concerned that only affluent candidates are able to accept the unpaid internships. “The problem with this policy that exists is that it does skew the internship toward people that have the means to travel,” Mr. Dujarric said. Ahmad Fawzi, head of the United Nations information service in Geneva, told the BBC that the program offers other perks, such as reduced food prices in the cafeteria. “I feel this young man may not have done his research,” Mr. Fawzi said. Ian Richards, the executive secretary of the United Nations’ Geneva Staff Council, said that the policy also prohibited Mr. Hyde’s managers from providing him with financial assistance. “In the case of David, his colleagues were very concerned with his welfare and were offering to help with accommodations,” Mr. Richards said. He said the internship program, which is limited to graduate students, prevents the United Nations from attracting the top candidates, who choose paid internships from other groups to offset the high cost of living. This leaves some United Nations agencies with students who are overwhelmingly from developed countries. Mr. Richards said that very few of the current United Nations interns in Geneva are from developing nations. Mr.Fawzi, of United Nations information service in Geneva, said that there are a total of 275 unpaid interns working in Geneva for programs administered by the secretariat. Ruchir Ferrero Sharma, who was the chief of social affairs for the Geneva Interns Association in 2012, said Mr. Hyde’s situation highlighted a longstanding problem faced by interns there. Supplying a picture from Facebook, Mr. Sharma said that a 107-square-foot room could rent for about $1,200 a month, and that a lack of online listings for rooms meant that it was not uncommon for new interns to sleep at a railway station on their first nights in town. “In a city well-known to be among the most expensive, not just in Europe, but in the world,” he wrote in an email, “unpaid interns at the U.N. find themselves in an incredibly precarious financial situation.” Activists for paid internships are hoping to start a discussion when the General Assembly meets this fall, Mr. Richards said, but added that the secretary general or a member state would have to introduce a formal proposal for the policy to change. For his part, Mr. Hyde, the former unpaid intern, said he hoped that the United Nations would live up to its own ideals. “I hope to see the United Nations become a role model for all on the issues of internships,” he said.


From 2,500 Miles Away, an Online Gambling Push for New York

Abstract: The postings, with their populist tone, started appearing on Facebook and Twitter a few weeks ago. Their message was simple: If people in New Jersey can play poker online legally, New Yorkers should be able to as well. Less obvious was who was behind the nascent campaign, called Let NY Play. The rallying cry, it turns out, emanated from the Las Vegas headquarters of one of the biggest casino operators in the world, MGM Resorts International . MGM, which reported nearly $10 billion in sales and revenue last year, has no casino in New York and is not among the companies vying for one of the four casino licenses the state is preparing to grant. But MGM has made no secret of its ambition to be a big player in the expanding realm of online gambling. The company has lobbied in Albany, where it supported legislation introduced this year to legalize online poker. The main sponsor of that proposal, State Senator John J. Bonacic , a Republican whose district includes the Catskills, said allowing people to play poker online could be a source of additional revenue for the state. But he said he had warned representatives of MGM, when they met with him earlier this year, that getting the measure approved would take a while. Even then, they told him that the amount of activity and tax revenue would be modest to start, he said. An analysis commissioned by MGM estimated that New York residents bet as much as $110 million in illegal online poker games. The study concluded that the state could reap $50 million to $80 million in annual taxes by converting those players to legalized games, as well as an additional $80 million from selling licenses to operate the sites. All New York officials need do is look at what happened in New Jersey. In November 2013, New Jersey joined Nevada and Delaware in legalizing online gambling when it allowed the operators of casinos in Atlantic City to start taking bets on a variety of games of chance, such as blackjack and roulette, as well as hosting online poker games. Image As of Monday night, the Facebook page for Let NY Play was closing in on 5,000 likes. The rallying cry in support of online gambling in New York emanated from the Las Vegas headquarters of MGM Resorts International. Gov. Chris Christie projected that online gambling in New Jersey in its first year would generate $150 million in additional taxes from the ventures. But the idea has proved much less popular than expected. So far, online gambling revenue has averaged only about $10 million a month, producing a fraction of the taxes the state had hoped to collect. “It’s been a little bit slower to start than some had expected,” said Alan Feldman, an executive vice president of MGM. “But we think over time it’s going to be exactly what they did expect and more.” MGM officials have been among the most vocal proponents of online gambling, even though the company has virtually no presence in that part of the business yet. MGM owns half of the Borgata , a casino in Atlantic City that is one of the most popular with poker players and has an online gambling site. Mr. Feldman said the company was exploring the possibility of putting its brand on an online casino in New Jersey. “There could be a separate site related to MGM in New Jersey,” he said. For now in New York, the company is merely trying to gather support for online poker. Of all the casino games, Mr. Feldman said, “the reality is that poker is the one whose business model is already established and the one that would be the most acceptable and appropriate, certainly from a political point of view.” But not all casino operators agree. Sheldon Adelson , the billionaire chairman of Las Vegas Sands Corporation , has been lobbying in Washington for a federal ban on online gambling, arguing that it is impossible to prevent underage players from participating and that it would undermine the casino industry and the jobs it provides. But Mr. Feldman said that gambling over the Internet “is here, and it’s been here for a very long time.” He said studies of existing websites, both legal and illegal, indicate that millions of Americans gamble online. Still, there is little evidence so far of a groundswell of support for online poker in New York. J. Gary Pretlow , a Democratic assemblyman from Mount Vernon who sponsored a companion bill to Senator Bonacic’s legislation, said he had heard “from one citizen in favor of online poker” and added that he intended “to hold off even looking at this with any kind of seriousness until after” the new casino licenses were sorted out. As of Monday night, the Let NY Play feed on Twitter had 347 followers and the campaign’s Facebook page had 4,948 likes.

Gambling
New York
MGM Resorts International
Computers and the Internet
Tech Industry
Poker
Casino
John J. Bonacic
Sheldon G Adelson
Atlantic City


I.M.F.’s Call for More Cuts Irks Greece

Abstract: ATHENS — As Greece enters a pivotal week in its economic crisis, tensions between the Greek government and the country’s international lenders have reached a boiling point. The government is resisting a push by the International Monetary Fund to impose additional austerity measures that Greek leaders fear could destabilize the shaky coalition government. Although those talks are expected to resume later this week, they have been suspended since an angry exchange last week between the Greek finance minister and the I.M.F.’s top negotiator for Greece. The impasse has elevated tensions here as Greece braces for a nationwide general strike planned on Wednesday that threatens to bring public services to a halt. The Greek people are increasingly angry over the prospect that public salaries and pensions will be cut again in a last-ditch bid to secure a new loan installment of 31.5 billion euros, or $40.7 billion, from Greece’s creditors. The Greek prime minister, Antonis Samaras , plans to address the nation this week to bolster support for the austerity package. He has already publicly warned his center-right party, New Democracy, that he will oust lawmakers of the party failing to back the package once it comes up for a vote, probably in early October. Various European leaders have gone out of their way in recent weeks to voice support for the Greek government, which came to power in June. And they have praised the Samaras government’s renewed commitment to taking difficult steps to revamp the economy despite concern that Greece could be a ward of its euro zone partners for years to come. Chancellor Angela Merkel of Germany has joined France in declaring that Greece must stay in the euro union to avoid even the perception that the union would be vulnerable to a wider breakup. In this political calculus, Ms. Merkel and others see Mr. Samaras as the last best hope for Greece. They worry that if the government teeters, new elections might be called in which his party could lose power to the increasingly popular leftist party Syriza, led by the political maverick Alexis Tsipras. Mr. Tsipras advocates tearing up the loan agreement with Greece’s international creditors. That would raise the risk of default and an eventual exit from the euro. The situation is also being monitored by Chinese officials, who would be reluctant to see a Greek exit from the euro destabilize the European Union, China’s largest trading partner. “We want the euro zone to stay intact,” Du Qiwen, the Chinese ambassador to Greece, said in an interview on Monday. “If something in Europe goes seriously wrong, if there’s a major mishap in the euro zone, it would put pressure on the world economy and it would not be in the interest of the world community or China.” And yet, there remains a concern among a small number of technocrats in Greece that, positive oratory aside, the next round of cuts will be too severe to be viable politically — leaving open the danger of a euro exit, best efforts notwithstanding. Among these thinkers, fear looms that perhaps Europe — with the I.M.F.’s help — is setting Greece up for a fall, especially now that the European Central Bank has set up a fire wall of sorts for the rest of the euro zone with a new bond-buying program intended to keep Spain and Italy from succumbing to the financial contagion that was formerly feared if Greece were to fail. The broader financial markets are largely shrugging off the Greek turmoil, indicating that many investors are convinced that letting Greece go for the greater good of the euro zone would no longer be a European catastrophe. “I hope this is not the case, but my suspicion is that Angela Merkel may want to sacrifice Greece,” said Gikas Hardouvelis, an economist based in Athens who was a top economic adviser during the interim government that presided before Mr. Samaras came to power. “You kick out Greece to show that you are tough on the bad guys and lenient on the good guys.” The Samaras administration has been laboring to show that it is now one of the good guys despite the inability of previous governments to carry out promises to mend the country’s finances. But officials from the troika of Greece’s international lenders — the I.M.F., the European Commission and the European Central Bank — have been burned in the past. And they recently signaled that they did not believe Mr. Samaras could deliver on at least 2 billion euros ($2.6 billion) in cuts proposed in the latest round of austerity measures Greece would have to impose to qualify for additional bailout money. That led to a standoff between the sides that boiled over on Wednesday evening, when the normally even-keeled and optimistic Greek finance minister, Yannis Stournaras, lost his temper, according to two people with knowledge of the incident who were not authorized to speak publicly. At the meeting, Poul Thomsen, the I.M.F.’s lead negotiator for Greece, was pushing hard for additional tax increases and wage and pension cuts, these people say. Mr. Stournaras angrily gestured to a bullet hole in one of the windows of the Finance Ministry. “You see this — this came from a bullet,” Mr. Stournaras said. “Do you want to overthrow the government?” Mr. Stournaras threatened to resign, these people said, rather than approve cuts to public employee pensions and salaries beyond the 5 billion euros ($6.5 billion) to which the government had agreed. When the incident was reported to Mr. Samaras a few minutes later, he called Mr. Thomsen to say that negotiations could not be conducted this way. Soon after, Mr. Thomsen left the meeting to let tensions cool. Other troika officials departed Greece on Saturday with plans to return to resume discussions by the end of this week. The blowup underscores to some extent a widening rift within the troika. I.M.F. officials are under pressure from the fund’s Washington headquarters to reduce its exposure to Greece. But that puts the I.M.F. at odds with the European troika members, whose organizations would need to put up the bulk of the next installment of bailout loans that Greece is counting on. Under its guidelines, the I.M.F. cannot lend additional money to a country if it becomes clear that the government can no longer meet its financial obligations — a line that many contend Greece crossed long ago. “The numbers have to add up, otherwise it would be irresponsible to lend more money,” said an I.M.F. official who was not authorized to speak publicly. “It is clear that the political system is struggling — but we need 13.5 billion euros. The ball is in Greece’s court.” The impasse reveals the extent of the government’s alarm at the worsening mood on the streets. More protests are likely in October, when Parliament is expected to vote on the measure. Many Greeks are now talking about the potential for civil unrest when the weather turns colder and many people may not be able to afford to heat their homes. Fuel prices, including gasoline, have been climbing, and whatever cushion Greeks on the margins had in their savings is gone. Moreover, questions are swirling about the extent to which Greece’s police force will be willing and able to maintain public order, because it is also facing salary cuts. A number of officers were held off with pepper spray by riot police officers last week outside of Mr. Samaras’s residence, where they held a demonstration. Even other members of the troika have been taken aback by the I.M.F.’s persistence in pushing for more spending cuts and tax increases — especially an additional tax on Greece’s traumatized corporations. “It’s a question of emotional intelligence,” said one official involved in the discussions who was not authorized to speak publicly. “This government has some legitimacy, and it has found some support in Europe. And now it is being pushed to make further cuts to the bone that may risk a social explosion.”

International Monetary Fund
Greece
Samaras Antonis
European Sovereign Debt Crisis (2010- )


Decision on Football Playoff Is Delayed

Abstract: NASHVILLE — Top university administrators delayed a decision on whether to start a playoff system for major college football at the National Collegiate Athletic Association ’s annual convention Monday. They agreed to ask college presidents to weigh in on the topic but did not set a timeline for a decision. James F. Barker, the president of Clemson University and the chairman of Division I’s board of directors, which debated the issue Monday, described the discussion as “candid and open and very constructive.” “The board’s sense was that the discussion should continue and it should include the presidents at the conference level,” he added. In addition to asking university presidents to discuss the issue, the board said the topic would be examined by the committee that oversees the current system, the Bowl Championship Series, as well as by a newly created N.C.A.A. task force assigned to study issues of “commercialization and student-athlete welfare.” The current championship system uses polls and computer rankings to determine the two teams that will play for the national title. It has long been panned by critics ranging from college presidents to fans who say it does not pit the best teams against one another and places too much power and money in the hands of conferences and bowl commissioners. The board’s action came a week after Michael F. Adams, the president of Georgia and the chairman of the N.C.A.A.’s Division I executive committee, called for the creation of an N.C.A.A. committee that would select eight teams to compete in four bowls as part of a playoff system. Adams’s timing, however, has been questioned because the proposal came after Georgia finished the season strongly but was not selected to play in the B.C.S. title game. Adams said he was satisfied with the decision, even though the board fell short of creating a study group to examine the topic, as he had requested. “I think we got into some very important issues that we needed to get before the board,” Adams said, adding that there was lengthy discussion about the increasing commercialization of postseason football. “I think the voice that I have given some of these issues resonated with some of my colleagues today, and there are others who are probably a bit more reticent about it.” Some have said that a playoff system run by the N.C.A.A. would be fairer, less confusing and would bring the Football Bowl Subdivision teams more closely in line with the way most other sports, like men’s basketball and even the lower tiers of college football, run their championships. But advocates for the status quo have said that the change will be difficult, costly and could increase the number of games played by college football players, placing more of a strain on their academic responsibilities. For this reason, the Knight Commission on Intercollegiate Athletics, a watchdog group that advocates a shortened playing season for student-athletes, is not backing Adams’s proposal. “Every time the whole issue of football and postseason play comes up, we seem to add more games,” said William E. Kirwan, the co-chair of the Knight Commission and the chancellor of the University System of Maryland. “Lengthening the season definitely has an impact on the students’ ability to perform in the classroom.” The debate over the football championship system came on the final day of the N.C.A.A.’s annual convention, where representatives for the association’s 1,300 member universities voted on rules as diverse as banning text-messaging in recruiting and whether to allow Division III women’s basketball players to practice with men. Division I’s board of directors also approved a rule that would prevent colleges from reducing or canceling the scholarships of athletes who become pregnant. One of the most notable decisions Monday was a vote by Division II programs to allow Canadian universities to join as part of a pilot program. A handful of Canadian colleges had been lobbying for the change because it would allow them to award more scholarship money and encourage Canadian athletes to stay in their home country. The N.C.A.A.’s Canadian counterpart, Canadian Interuniversity Sport, allows scholarships that cover tuition, but not room and board.

Football
College Athletics
National Collegiate Athletic Assn


Battle Lines Drawn Over Medicaid in Texas

Abstract: A week after newly emboldened Republicans in the Texas Legislature floated a radical cost-saving proposal — opting out of the federal Medicaid program — health care experts, economists and think tanks are trying to determine just how serious they are, and if it would even be possible. The answer? It is complicated. But that is not stopping some conservative lawmakers in nearly a dozen other states, frantic over budget shortfalls and anticipating new costs from the federal health care overhaul, from exploring it. “States feel like their backs are against the wall, so this is the nuclear option for them,” said Christie Herrera, director of the health and human services task force for the American Legislative Exchange Council, an association for conservative state lawmakers. “I’m hearing below-the-radar chatter from legislators around the country from states considering this option.” In Texas, some Republicans — bolstered by their expanded majority in the State House — say the strings attached to Medicaid and the Children’s Health Insurance Program (CHIP) are bankrupting the state, which is staring down a budget hole that some have estimated as high as $25 billion. They argue that states could provide more efficient and cost-effective care for children, the disabled and the impoverished by either giving up federal matching money altogether or getting federal officials to grant states waivers to provide health care as they see fit. Jobless parents in Texas only qualify for Medicaid if their income is below 12 percent of poverty ($22,050 for a family of four), and working parents only qualify if their income is below 26 percent of poverty. Gov. Rick Perry “understands the frustrations of legislators as they deal with a program that consumes 20 percent of the state budget,” said Katherine Cesinger, his spokeswoman. “Their options are severely limited by a federal government that continues to tie their hands when it comes to administering Medicaid.” Opponents argue that dropping Medicaid would have such a devastating effect on the state’s economy — not to mention the health of 3.6 million Texans currently enrolled in the program — that the idea is pure anti-Washington grandstanding. The federal government covers 60 percent of Texas’ $45 billion biennial Medicaid budget. Without that money, critics say, any health care the state could provide would be so limited that undercovered patients would flood emergency rooms, and Texans would end up paying the costs through local property taxes or higher insurance premiums. “The real benefit of Medicaid is it’s a shared expense, with the feds taking up a larger portion,” said Regina Rogoff, executive director of the safety-net People’s Community Clinic in Austin. Speaking of a withdrawal from the program, Ms. Rogoff said: “This will raise local property taxes, because hospital emergency rooms can’t turn away patients. And it has the implication of us paying, through federal taxes, to subsidize care in other states, leaving people who live in our state without care.” Such fears notwithstanding, the idea of dropping out of Medicaid is on the table in Texas and roughly a dozen other states, including Alabama, Mississippi, Washington and Wyoming. Options include remaking Medicaid with only state financing to give states broad flexibility in benefit and cost design, and, two, seeking federal waivers to allow states to change parts of their Medicaid programs. “If people are in superbad poverty, that’s one thing,” said State Representative Warren Chisum, Republican of Pampa, the state’s most vocal supporter of dropping out of Medicaid and a candidate for speaker of the House. “It breaks my heart when there’s someone who smokes, and who stays drunk half the time, and we’re supposed to provide their health care.” Starting in 2014, the new health law extends Medicaid to those with incomes up to 133 percent of the federal poverty level, which is $29,327 for a family of four in 2010. Some conservatives believe that if states dropped Medicaid, many low-income people could instead receive federal subsidies to buy private insurance coverage through state exchanges, another piece of federal health care overhaul that takes effect in 2014. States would then become totally responsible for Medicaid beneficiaries who require nursing homes and other long-term care, for premiums and other Medicaid costs for Medicare beneficiaries — but everyone else would go into the exchange. Edmund Haislmaier, senior research fellow at the Heritage Foundation, a conservative research organization, estimates that Texas would save $46.5 billion from 2014 to 2019 under this model. In all, Mr. Haislmaier said, 40 states would come out ahead financially. Others dispute that and note that switching millions of people from Medicaid to subsidized private insurance would be costly to the federal government, and may not be legal. “The subsidies are explicitly not available for those with incomes below the poverty level,” said Jennifer Sullivan, senior health policy analyst at the consumer group Families USA . Judith Solomon, co-director of health policy at the nonprofit Center on Budget and Policy Priorities, said the new health care law explicitly stated that only “applicable taxpayers” were eligible for subsidies, ruling out anyone whose income is less than 100 percent of poverty, except for legal immigrants. Cindy Mann, director of the federal Center for Medicaid and State Operations, said the Department of Health and Human Services was trying to determine whether Medicaid recipients dropped by their home states would qualify for subsidies. Critics say dropping out of Medicaid would be a devastating blow to the state’s medically underserved. Seven of 10 Texas nursing home residents rely on Medicaid, which also pays for more than half of all deliveries of babies in the state. The state’s share of these expenses would not shift to the federal government, said Jose Camacho, executive director of the Texas Association of Community Health Centers, but to counties and local taxpayers. Others fear that cutting off the flow of federal Medicaid dollars could cripple the state’s economy: About a million Texans work in health care, and from 2005 to 2009, a quarter of the new jobs created in the state were in that field. Tom Banning, chief executive of the Texas Academy of Family Physicians, said that without Medicaid, or with a less-extensive replacement program, health care providers would be forced to shift their costs to the private market, driving up insurance premiums and prompting more people to forgo coverage. “From a practical standpoint,” Mr. Banning said, “the downstream economic implications for Texas’ health care infrastructure would be decimating.” Opponents also say that the theory that a Democratic administration would offer Texas a no- or few-strings-attached Medicaid waiver is a pipe dream. “A state’s choice to get out of Medicaid is to get all the way out, not to pick and choose,” said Anne Dunkelberg, associate director of the Center for Public Policy Priorities, a nonprofit group in Austin. In the end, said Robert Reischauer, a former director of the Congressional Budget Office, the debate over Medicaid alternatives may be more about states’ leveraging additional federal financing than dropping the program. “Some states will toy with it, think about it, and reject it from the state perspective,” Mr. Reischauer said. “To the extent they don’t, I would hope Congress and the president work together to create very strong incentives against it.”

Patient Protection and Affordable Care Act (2010)


L.I. Vineyards and Liquor Stores Oppose Plan to Let Supermarkets Sell Wine

Abstract: AQUEBOGUE ON a recent tour of his vineyard, Charles Massoud stepped outside into a cold winter day to gaze lovingly at rows of fat wine barrels lined up on a patio. They are stored here at Paumanok Vineyards to take advantage of nature’s refrigeration and help crystallize the impurities, he explained. Chilly apparently can be good for vineyards. But Mr. Massoud worries about another kind of chill, in the form of a budget proposal from Gov. David A. Paterson that would allow supermarkets to sell wine, a privilege that for years has been the exclusive right of vineyards, wine merchants and liquor stores. Other vineyards might be more imperiled by that change than his boutique operation, Mr. Massoud said, but he is anxious nonetheless. “If this goes under,” he said, nodding as his three grown sons, who have joined the business, worked nearby, “we all go under.” Mr. Paterson’s plan, part of widespread efforts to reduce the state’s projected $15 billion budget shortfall, is threefold. In addition to charging grocery stores franchise fees of varying amounts for the right to sell wine, the plan would nearly triple the excise tax on wine sales and eliminate financing for the New York Wine and Grape Foundation, a trade group. Under the proposal, the excise tax would increase to 51 cents a gallon, from 18.9 cents, and the Wine and Grape Foundation would lose its $2.8 million a year in state aid. Taken together, the changes could add about $150 million to state coffers over three years, according to a spokesman for the governor’s office. Many of Long Island’s wine growers say they would be harmed because allowing the state’s 19,000 grocery stores to sell wine would dilute the vineyards’ sales by adding stiff competition from national and international brands. Probably the hardest hit by the expanded consumer outlets, however, would be liquor store owners, industry analysts said. A coalition known as the Last Store on Main Street, representing 2,742 New York wine sellers and liquor store owners, says the move would force more than 1,000 such stores out of business and lead to a loss of more than 4,000 jobs. Expanded wine sales could also increase alcohol-related car accidents, said Michael McKeon, a spokesman for the coalition. “When you factor in the job losses and social consequences, it’s just not worth it,” he said. Those affected would include people like Ben Mann, owner of Simply Wine and Liquor in Jericho, which sits next to a Waldbaum’s, a potential competitor. “It’s a very, very bad idea,” he said. “All my customers are disgusted by it.” Mr. Mann, who said he believed the proposal would put him out of business if it became law, pointed to a petition posted by his register urging that alcohol be sold only in a “controlled environment” like his. Thirty-five states allow grocery stores to sell wine, but Mr. Mann said competition from the stores would not be fair. He said he and other liquor store owners bought their licenses — fees for the three-year documents vary according to state location, from about $4,000 in New York City to about $1,500 upstate — with the expectation that they would not have to compete with big-box stores or chain operations. “I’m 65 years old,” he said. “I work 60 hours, seven days a week, just to put bread on the table. Do I look like I can compete with a multibillion-dollar industry?” Matthew Schweiger, owner of the East Hills Wine Market in Roslyn Heights, paused from a tirade against the plan to compliment a customer buying a $60 bottle of merlot . “That’s a great bottle of wine there,” he said. His type of personal service would be lost if wine and liquor stores start folding because of competitive pressures, Mr. Schweiger said. “People come in, I ask them how much they want to spend and what they’re looking for in a wine,” he said. “How are you going to get that in a big-box store?” Backers of the proposals see the carafe as half full, not half empty, contending that over all the governor’s plan would be good for the wine industry because opening more markets would generate additional sales and create more wine drinkers. “You have to look at the big picture here,” said Joseph M. Gergela III, executive director of the Long Island Farm Bureau. “We’re competing on a world market these days, I don’t care if it’s produce or wines. We need to expand market opportunity. We think this will help people have access to wine who don’t feel comfortable going into a liquor store.” Grocery chains, including King Kullen and Wegmans, have made commitments to carry New York wines, Mr. Gergela added. The introduction of more retail competition is a tough sell to local wine growers, but the state needs money from somewhere, Mr. Gergela said. “This is an idea whose time has come,” he said. Just how touchy a subject it remains was reflected by Steven L. Bate, executive director of the 40-member Long Island Wine Council. The council has taken a neutral position and is urging restraint on the part of its members, Mr. Bate said. But just talking about the governor’s proposal raises hackles, he said. Mr. Massoud is among those who say they doubt the claim that the plan would increase the sale of Long Island wines . He said he thinks that people in grocery stores would buy popular and lower-priced labels like Kendall-Jackson, of California, or bulk brands like Australia’s Yellow Tail. “And are more people going to drink more wine just because it’s in a grocery store? I don’t think so,” Mr. Massoud said. “I think the demand is finite.” Whether the governor’s plan becomes law is still up in the chilly winter air, as the budget must be approved by the State Assembly and Senate. Legislators could also alter the proposals or drop them entirely before the April 1 budget deadline, a date that is traditionally missed. Michelle Natale, who, with her mother and sister, owns Jazz ’n Grapes in Huntington Village, retains an upbeat attitude. Her store, which sells some Long Island brands along with those from around the globe, holds wine tastings and wine-and-cheese parties featuring live music. On the shelf behind her was an example of her offerings, a $145 Napa Valley cabernet sauvignon , Corra 2005, a bottle from one of only 241 cases produced. “It’s not bulk juice,” she said. Ms. Natale said she did not fear the governor’s plan because those who shopped at her store were more discerning. No self-respecting oenophile would be caught dead making a decision about what to drink in the aisle of a food market, she said. She grimaced at the mere thought. “I wouldn’t buy a bottle of wine in a grocery store,” she said.

Wines
Supermarkets
Long Island (NY)
New York State
Paterson David A
Budgets and Budgeting