Nations brainstorm coordinated response to financial panic

Nations brainstorm coordinated response to financial panic

Nations brainstorm coordinated response to financial panic

A summary of what's in the major U.S. newspapers.
Oct. 12 2008 3:35 AM

New World Order

All the papers lead with financial features. The New York Times leads with another look at the Bush administration's new plan to sidestep the economic bailout package passed last week by Congress and, instead, emphasize an intervention that would directly invest government capital in American banks. The Washington Post leads news that while leaders from more than 20 countries have endorsed a coordinated response to the global financial slump, they have refrained from offering any specifics on what such a response might entail. The Los Angeles Times leads with a think piece on what the government's response to the financial crisis says about the future of capitalism in America. The striking first line: "Are we witnessing the erosion of capitalism, or its salvation?"

As all the papers reported yesterday, the administration's new economic rescue plan is tantamount to a partial nationalization of the banking industry. Treasure Secretary Henry Paulson had initially resisted the idea, but last week's market turmoil helped change his mind. The U.S. is not the only nation to resort to drastic measures—Iceland assumed control of its major banks last week, while Great Britain plans a capital infusion scheme similar to the Bush plan. As the Post notes, however, the markets may well require a much more forceful show of international solidarity before they rebound. "You need specific, concrete steps, not a list of principles that are obvious and everyone can easily agree to," said one IMF economist.

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Unsurprisingly, the front pages are plastered with various other financial stories. The WP reports on how many small local banks are enjoying increased business in the wake of many large competitors' collapses. The NYT fronts an article polling various contrarians on whether now is the time to buy stocks. "This is the opportunity of a lifetime," maintained one fund manager. The LAT fronts articles on America's troubled credit unions and on how some Russian spendthrifts are willfully ignoring the bad economic news: "There's something unique about Russian life," said one man. "You enjoy today as much as you can and don't think about tomorrow." A Russian reversal for the post-capitalist age, I guess.

Everybody reports that the U.S. will remove North Korea from its list of nations that sponsor terrorism. The decision came after North Korea agreed to shutter a disputed plutonium plant and allow inspectors to return to work. In return for allowing inspectors back into its main nuclear facility at Yongbyon, North Korea reserves the right to veto inspections of other sites across the country. Presidential candidate John McCain slammed the deal, as did former Ambassador John Bolton and others. Still, as one nonproliferation expert noted, "Every agreement you ever have with the North Koreans always contains certain ambiguities, and that ends up being the basis for which you have the next round of talks."

In a somewhat melodramatic letter ("Senator McCain and Governor Palin are playing with fire, and if they are not careful, that fire will consume us all…"), Rep. John Lewis excoriated the McCain campaign yesterday for "sowing the seeds of hatred and division." The Post goes below the fold with a story about how, despite the proclaimed wishes of both candidates, race has become an issue in the presidential campaign. But will it be an issue on Nov. 5?  "If we don't win this election, I don't think it's going to be because of race. We spend a lot of time talking about a lot of things. That's not one we spend a lot of time talking about," said Obama campaign manager David Axelrod.

A NYT Week in Review story examines the so-called "Bradley effect" (named for former L.A. mayor Tom Bradley, who underperformed his polling in an unsuccessful gubernatorial race, an outcome that some attributed to latent racism among voters) before concluding that it is impossible to know whether this will impact Barack Obama's vote totals. The Post runs a similar story, although a bit more skeptical about whether the Bradley effect is at work in this election. All of the papers continue to remain silent on the Shawn Bradley effect, however.

The NYT  fronts a no-kidding story saying that the events of the past week have some Republican leaders feeling concerned about John McCain's chances. The LAT, for its part, writes that the financial crisis has convinced many longtime Republicans to support Obama.

The Post offleads a feature on the perils of childbirth in Sierra Leone, slugged with an arresting photograph of a newborn child and his mother, who will soon be dead. One out of eight Sierra Leonean mothers die in childbirth—an outcome, the article claims, that is fundamentally due to "life in poor countries: Governments don't provide enough decent hospitals or doctors; families can't afford medications."

The NYT fronts a long article about corruption in America's missile defense program, wherein about $350 million was wasted on unnecessary and doomed projects promoted by unscrupulous employees. "[D]efense procurement has disintegrated into an incestuous relationship between the military, politicians and contractors," says the lawyer for one of the Defense Department employees charged with corruption.

"The creeping rot": The LAT fronts an excellent feature about Darrel J. Vandeveld, a former prosecutor at Guantanamo Bay and "self-described conformist" who went from "true believer to someone who felt truly deceived" regarding the fairness of the trials being held there. Vandeveld resigned last month, charging that detainees were systemically being denied due process; his claims, if they could up, could concievably affect all pending cases at Gitmo. '"I don't know how else the creeping rot of the commissions and the politics that fostered and continued to surround them could be exposed to the curative powers of the sunlight,'" said Vandeveld.