Recovery won't mean more jobs; Iranian opposition leaders make it clear they're not giving up.

A summary of what's in the major U.S. newspapers.
July 2 2009 6:52 AM

Coming Soon: A Jobless Recovery

The Los Angeles Timesleads with a look at the growing signs that the economy could recover without a significant decrease in unemployment. The concept of a "jobless recovery" is hardly new, but many economists say the situation now could be far worse than what we saw after the last two downturns in 1990-91 and 2001, and could even threaten the recovery itself. The Wall Street Journalleads its world-wide newsbox with Iranian opposition leaders accusing the government of carrying out a virtual coup and urging supporters to continue protesting. A student wing of the pro-government Basij militia called for an investigation into the role that leading opposition candidate Mir Hossein Mousavi played in "destabilizing national security," which could send him to prison for 10 years. But Mousavi, along with another opposition candidate, Mehdi Karroubi, and a former president, Mohammad Khatami, decided to up the ante and said Iran's leaders are turning the country into a dictatorship.

The New York Timesleads with a look at how thousands of school districts across the country have made cuts to summer school programs. Education Secretary Arne Duncan has urged school districts to use some of the stimulus cash for summer schools, but faced with decreasing revenues, many have decided to ignore his pleas. The Washington Postleads with news that five days before last week's deadly subway train accident, a key part of the system that is designed to prevent crashes was replaced and malfunctioned. No one noticed the problem at the time, and it's not clear whether the equipment was faulty or poorly installed. USA Todayuses the reopening of the Statue of Liberty as a jumping-off to look into how Americans' attitudes toward terrorism and security have evolved since Sept. 11. On Saturday, a small group of visitors will be allowed to climb to the crown of the Statue of Liberty for the first time since the 2001 attacks.

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The expectation that unemployment will continue to increase well into next year "may exert a powerful drag on the recovery," notes the LAT. Many of the layoffs in this recession have been permanent rather than temporary as companies often shut down units and pursued structural changes rather than simply cut back. Also, as has been widely reported, many employees who managed to keep their jobs are working fewer hours, meaning that employers are likely to increase the hours of current workers rather than hire new ones. All this instability in the job market means people are likely to want to save their money rather than spend it, which, in turn, means it could take longer for businesses to recover and hire new employees. Even those who do want to spend are likely to find it difficult to get credit.

Khatami, an influential cleric who served as president for eight years, had remained largely silent after the Iranian regime warned against more protests after the election. But yesterday, he posted a statement accusing Iran's leaders of carrying out a "velvet coup against the people and democracy" and also criticized them for creating "a poisonous security situation." A moderate reform party called the election a "coup d'etat." Meanwhile, Mousavi announced he will be forming a political party that will make public all the allegations of fraud during the election.

The LAT says these most recent statements suggest the reformers are shifting tactics and will focus on "trying to tarnish the government's reputation and credibility, weakening its ability to govern, and to sabotage its agenda." The WP points out that a pro-government member of parliament said a group of lawmakers will be filing a court case against Mousavi. The WSJ says that while the government has so far avoided moving strongly against the opposition leaders, "there are signs that their dissent won't be tolerated for long."

European Union officials were in discussions yesterday about whether to withdraw the ambassadors of its member nations from Iran to protest the detention of the British Embassy employees. Iran says it has released all but one of the employees. European officials emphasized they haven't made a decision, and the NYT talks to diplomats who say the EU would rather avoid taking such a strong action. Facing the possibility of diplomatic isolation from its biggest trading partner, Iran decided to go on the offensive. The government threatened to cut off relations with EU countries unless they apologized for even considering removing their diplomats. A military official said that unless European countries apologize for their "interference," they could forget about any further negotiations on Iran's nuclear program.

The WP off-leads word that a Securities and Exchange Commission investigator realized that there was something fishy going on with Bernard Madoff's firm in 2004. But she wasn't able to pursue her suspicions because she had to turn her attention to the mutual fund industry, a particularly hot topic at the time. One of her supervisors was Eric Swanson, who married Madoff's niece in 2007. Over 20 years, the SEC investigated Madoff at least five times, but it seems Genevievette Walker-Lightfoot actually came close to unraveling the whole mess. Or, at the very least, she was asking the right questions. She had previously worked at the American Stock Exchange, and specialized trading strategies were her forte. While reviewing Madoff's documents, Walker-Lightfoot saw they were filled with inconsistencies and didn't seem to follow the financier's stated trading strategy. When the SEC's New York office took over the case, it never consulted Walker-Lightfoot and ended up finding only three minor violations.

The NYT and WP front news that almost 4,000 U.S. Marines are taking part in a push into the volatile Helmand River valley in southwestern Afghanistan, which is being billed as the first test of the administration's new counterinsurgency strategy. Operation Khanjar will send the troops into villages into one of the deadliest provinces in Afghanistan, a major opium-producing region of the country that is a Taliban stronghold. As part of the mission, troops will build and live in small outposts among the local population in order to protect civilians from the Taliban. "A key to establishing security is getting the local population to understand that we're going to be staying here to help them—that we're not driving in and driving out," one officer said.

The WP fronts a look at the newly declassified accounts of the FBI interrogations of Saddam Hussein in 2004. The documents summarize 20 formal interviews and five "casual conversations." Although all the documents were released with few deletions, the account of the last formal interview was completely redacted for some reason. In the conversations, Hussein said he wanted the world to believe he had weapons of mass destruction because he was afraid of Iran. "Hussein stated he was more concerned about Iran discovering Iraq's weaknesses and vulnerabilities than the repercussions of the United States for his refusal to allow UN inspectors back into Iraq," the FBI agent wrote. Hussein also said he never met Osama Bin Laden and didn't share his beliefs.

Michael Jackson's 2002 will was filed in court yesterday, and while much of the details had already been revealed, it did contain one big surprise. In the will, Jackson appointed Diana Ross, who helped Jackson start his career in the 1970s, as the second choice to be the guardian of his children if his mother could not fulfill that role. After much speculation, Jackson's family said the King of Pop won't be buried in Neverland. Although they are supposedly planning a public memorial service, no details have been released. Meanwhile, the LAT takes a front-page look at Debbie Rowe, the mother of Jackson's children, who still hasn't said whether she intends to try to obtain custody. Even though she previously renounced her parental rights, legal experts say she could still make a strong case for custody.

The NYT reports that Michael Jackson continued to break records even after his death. Jackson had the three best-selling albums in the United States last week, and in total sold more than 40 times the albums he did in the previous week. In addition, 2.3 million downloads of single tracks were sold, marking the first time an artist broke the 1-million mark in one week. In all of last year, Jackson had sold a total of 2.8 million tracks. "The level of dominance by Michael Jackson on the top pop catalog albums chart is unlike anything we've ever seen on any Billboard chart, regardless if it occurred pre- or post-death," said Billboard's director of charts.

Daniel Politi has been contributing to Slate since 2004 and wrote the "Today's Papers" column from 2006 to 2009. You can follow him on Twitter @dpoliti.

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