Sadr wants to turn militia into a social-services organization; Freddie Mac ignored warnings.

A summary of what's in the major U.S. newspapers.
Aug. 5 2008 5:18 AM

A Farewell to Arms

The Wall Street Journal leads its world-wide newsbox with word that Iraqi cleric Muqtada Sadr plans to order members of his Mahdi Army militia to drop their weapons so it can be transformed into a civic and political organization. If the move is successful, it would mean that what was once one of the main groups fighting against American forces in Iraq and was seen as an instigator for civil war would effectively disappear. The New York Timesleads with word that Freddie Mac's chief executive was warned repeatedly over the last few years that steps had to be taken to protect the mortgage giant's financial health. Of course, the warnings were ignored. The company's former chief risk officer tells the NYT that he wrote a memo to CEO Richard Syron in 2004, in which he warned that the company was buying too many risky loans that could quickly turn into huge losses.

The Washington Postleads an Air Force One interview with President Bush, who defended his decision to attend the Olympic Games and emphasized that it is "important to engage the Chinese." Bush said that it is "really hard to tell" whether the human rights situation in China has improved during his administration. And while he praised China's participation in discussions with North Korea and Iran, Bush also said President Hu Jintao's administration needs to do more to pressure repressive governments in Burma and Sudan to change their ways. USA Todayleads with a look at how the Pentagon will spend $300 million this summer to fund research on post-traumatic stress disorder and traumatic brain injury, which marks a record for a one-year expenditure on military medical research. While the program is certainly designed to help veterans, the research could also benefit the more than 1 million Americans who suffer traumatic brain injury each year. The Los Angeles Timesleads locally but goes high with a federal task force recommending that doctors stop screening men who are 75 and older for prostate cancer. Most already argue against treating the majority of men in that age group for a disease that usually progresses very slowly, but some experts questioned the recommendation and said it could lead to insurance companies refusing to pay for the test. One described it as "a form of ageism."

The WSJ suggests that Sadr's move to transform the Mahdi Army has more to do with his desire to remain politically relevant than a feeling that his Shiite militia is no longer needed. Sadr was once an extremely popular figure but now that violence has declined many Iraqis who once supported the Mahdi Army are turning their backs on the militia that has often been acting more like a criminal gang than a modern-day band of Robin Hoods. A brochure highlights how Sadr wants the Mahdi Army to focus on "education, religion and social justice," says the WSJ. But just because Sadr wants militia members to put down their weapons doesn't mean that they will, and there's no reason to think that extremists who have refused to abide by the cleric's cease-fire order will listen to him now. The question is whether moderate Mahdi Army members will be willing to risk their lives to support the transformation. If he's successful, transforming the Mahdi Army would almost certainly increase Sadr's influence in Iraqi politics.

It's clear that even if Richard Syron would have listened to all the internal warnings, Freddie Mac would have still faced financial difficulties during the current housing crisis. But the warnings make it clear that people inside the company were aware of potential problems that could befall the company, yet calls for caution were quickly ignored. And frequently Syron decided to do the opposite of what the cautionary voices advised. He was told the company needed to raise more capital, so he allowed it to drop further, and when he was told that Freddie Mac needed to buy fewer mortgages, he bought more. The moves helped Syron financially, but some now say it came at the company's expense. Although some executives defend themselves by saying they were constantly under pressure from the government to buy more mortgages, others respond by saying that dealing with demanding lawmakers is simply part of the job.

The WP's lead takes a look back at the Bush administration's relationship with China and notes that the president's emphasis on engagement shows how much things have changed since 2001, when many in the White House viewed the Communist government with suspicion. But even as some say that Bush "has emerged as an unexpected diplomat with China," many human rights activists contend the strategy has done little to promote democracy. "In terms of effectiveness, the so-called quiet, behind-the-scenes diplomacy so far is a failure," the founder of the China Aid Association said.

The WP fronts word that all foreign officials who visited their citizens being held at Guantanamo Bay had to agree to a set of rules that informed them that their interrogations with the detainees would be recorded. It's not clear whether the video and audio recordings were always made, but if they were it would mean that the U.S. government could be sitting on "hundreds or thousands of hours" of recordings that could shed light on some detainees' claims that they were abused and threatened during these sessions. Attorneys for the detainees have long been requesting such records, but so far the administration hasn't released anything or acknowledged their existance. Meanwhile, the Post talked to some officials from governments who visited detainees, and they all said that they thought the interrogations were being recorded.

Everyone notes that Barack Obama shifted positions yesterday and said he would favor tapping the strategic petroleum reserve to lower gasoline prices. The WP is the most harsh on Obama by stating in its lead sentence that it amounted to "the second time in less than a week that he has modified a position on energy issues." Obama had said last week that he would support expanding offshore drilling as part of a compromise package with Republicans. Yesterday, Obama's campaign tried to argue the announcement didn't really amount to a reversal because he would replace the light crude currently in the reserves with less expensive heavy crude, which would be more appropriate to the country's energy needs anyway. Regardless, everyone notes that the shifts in policy illustrate how both candidates are under a lot of pressure to come up with specific proposals to lower energy costs quickly even if "there are few ways to dramatically reduce gas prices," as the Post helpfully summarizes.

Ain't that the truth … When the NYT questioned Freddie Mac's chief executive about his failure to listen to internal warnings, the man who has collected more than $38 million in compensation since 2003 answered with a bit of refreshing candor. "If I had better foresight, maybe I could have improved things a little bit," Richard Syron said. "But frankly, if I had perfect foresight, I would never have taken this job in the first place."

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