Faced with dramatically lower tax revenues because of the ailing economy, 22 states are trying to balance widening budget gaps. Decreases in payroll, property, and sales taxes have left state governments struggling to come up with a combined total of $11.2 billion to meet their budgets, prompting them to cut jobs and services. The belt tightening is just beginning, according to the Los Angeles Times, but even as states are cutting corners, the federal government is relying on their assistance. In the wake of the dismantling and nationalizing of some of Wall Street's major players, the federal government lacks the resources to investigate all the instances of mortgage fraud and other white-collar crimes behind the current economic crisis. The New York Times' lede details a decrease in the FBI's criminal investigators that has forced state and local governments and the private sector "to pick up the slack."
In a step toward regaining control of the economy, President George W. Bush announced last night in a joint statement with French President Nicolas Sarkozy and the president of the European Commission that the U.S. will host an international economic summit after the U.S. election to overhaul global finance regulations. The Washington Post, which compares the summit to that held in 1944 in Bretton Woods, N.H., offers the most comprehensive preview of the summit's goals to revamp the earlier regulations by "increasing the transparency of markets, revising the rules that govern the flow of investment around the world and improving oversight of big banks, ratings agencies and hedge funds." The American president-elect will be invited to offer his input, and the summit will include industrialized countries as well as developing nations such as India and China. The LATand NYT both stuff the story, but all three papers suggest that Bush will buck attempts by other nations to rein in American capitalism.
As Bush prepares to deal with the economic crisis on an international scale, states find themselves trying to make ends meet at the local level as they encounter budgeting challenges that "may signal the onset of a historic fiscal crisis for state governments," says the LAT. The Center on Budget and Policy Properties points out "that as the economy declines, residents require more services from their state government, not fewer." The resulting trickle-down effect forces local governments to foot the bill for services cut by the state. Every state in the nation except Vermont legally mandates a balanced budget, but Washington may step in to smooth the cut corners for some states as part of a $150-billion economic stimulus package proposed by House Democrats last week.
Even as budgets are drying up at all levels, the FBI is looking for more resources to support its criminal investigation units. The FBI currently has 177 agents investigating Fannie Mae, Freddie Mac, American International Group, Lehman Bros., and more than 1,500 other mortgage-related cases, "but the staffing level is still hundreds of agents below the levels seen in the 1980s during the savings and loan crisis," the NYT reports. As a result, private investigators and accounting firms have stepped in to assist in preparing evidence and courtroom testimonies for prosecution. Some FBI officials suspect that delayed government action in dealing with the mortgage crisis may have allowed more "schemes" to unfold, while others are concerned that the recently enacted bailout itself lacks "controls to deter fraud."
In the run-up to the election, the LAT examines African-American voters' attitudes toward having a black president in a front-page story. While black voters "overwhelmingly support Barack Obama in the presidential race," many are trying not to get their hopes up. The article canvasses a mix of ordinary folks around Atlanta, Ga., and academics from other states to investigate the roots of their skepticism, including concerns that voters' "racial fears" will govern electoral decisions and worries that Obama will be assassinated.
Meanwhile, the NYT fronts a profile of the "Sarah Dude" population, the "burly" men who make up a large part of Sarah Palin's fan base. Since her nomination, Palin has had more male supporters than female, but as her ratings have dropped in subsequent weeks, men have also expressed their disenchantment with the governor at a higher rate than women. The article points out the obvious by noting that Palin has been criticized for "being essentially unserious and uncurious," but the A section of the NYT joins the LATin reviewing the candidate's cameo last night on Saturday Night Live. (The WP stuffs an AP piece on Palin's appearance but gives the topic a longer look on one of its blogs.)
In her NYT column, Maureen Dowd channels a "vengeful and bloodthirsty … Madame Defarge sharpening her knitting needles at the guillotine" as she calls for the heads of former AIG financiers who embarked on a lavish partridge hunt in England after their taxpayer-funded bailout.
In "Polly Wants Her Freedom," the WP reviews two recent books that demonstrate why parrots and people are an ill-suited match despite the birds' immense popularity as pets. The impossibly aptly named author Mira Tweti tails the birds from Brazil to Wisconsin as she details the mistreatment they face in the parrot pet market, while Nancy Ellis-Bell's book about life with her parrot leaves TP wondering whether pet or owner rules the roost.