Bernanke: We're Bouncing Back
All the papers lead with news that the battered global economy could finally be on the mend. The Washington Post and the New York Times both top their front page with yesterday's declaration from Federal Reserve Chairman Ben Bernanke that the economy appears to be "leveling off," his most upbeat assessment since the global meltdown began. "Prospects for a return to growth in the near term appear good," he told a gathering of economists and central bankers, adding that aggressive action by governments and central bankers around the world appeared to have successfully staved off the worst of the downturn.
The Wall Street Journal leads with news that sales of existing homes expanded by more than 7 percent last month, the fastest rate in more than 10 years, driving up global stock prices and prompting hopes that the U.S. housing market could be stabilizing after years of decline. The Los Angeles Times puts a glass-half-empty spin on the news, noting that California's jobless rate reached a post-World War II high last month, climbing to almost 12 percent; even if the national recovery pans out as expected, the Golden State could be hurting for years to come.
The world's central bankers struck a positive and slightly self-congratulatory tone yesterday at a retreat in Grand Tetons, on the back of strong reports from major European and Asian economies and signs that the U.S. housing market could finally be recovering from its lengthy swoon. Adding to the sense of optimism, the WSJ reports, stocks and oil prices rallied to their highest levels of the year, while European stocks posted their biggest gain for a month; the Post notes that even credit-card charge-off rates—a measure of hopelessly delinquent balances—fell last month for the first time since September, providing a glimmer of hope for the struggling industry.
Still, it's not all good news. Banks will continue to take credit-card hits until employment rates improve, and the Post notes that while things are looking up in Washington, D.C. and Virginia, unemployment rates are continuing to rise in 26 states. That means many banks will remain on the ropes; another bank collapsed yesterday, bringing the year's total failures to 81, and analysts predict that hundreds more institutions will fail in coming months. To make matters worse, the bust banks have flooded the market: With few domestic buyers available, the federal government is now selling off defunct banks to foreign investors.
The Post fronts word, via a late-breaking Newsweek scoop, of a long-concealed CIA report that found that agency interrogators staged mock executions using a handgun and an electric drill in an attempt to frighten a captured al-Qaida commander into giving up information. A redacted version of the report is due to be published Monday, following a lawsuit brought by the ACLU. The report is also believed to list a number of other incidents in which CIA and contracted interrogators overstepped their authority, in some cases violating international bans on cruel and inhumane treatment.
The CIA also remained under scrutiny yesterday for its reliance on private contractors, following the disclosure that the agency had used hirelings from Blackwater USA for elements of an assassination program; the Post notes that lawmakers this week criticized the use of private companies for "inherently governmental" activities like intelligence work. The NYT reports that despite publicly breaking with Blackwater, the State Department continues to pay the company more than $400 million to transport and guard diplomats in war zones and to train security forces at its base in North Carolina; the WSJ focuses on Afghanistan, where contractors now significantly outnumber military personnel despite the Obama administration's efforts to reduce the Pentagon's reliance on hired help.
In Kabul, meanwhile, the WSJ reports that President Hamid Karzai and former foreign minister Abdullah Abdullah both claimed significant leads as the vote count continued after Thursday's election. Each candidate claimed to have garnered more than 50 percent of the total vote, the threshold for avoiding a run-off contest, raising concerns that their supporters' impossibly high expectations might undermine the final result or even lead to ethnic clashes, potentially impeding international efforts to stabilize the country.
Members of America's largest Lutheran denomination yesterday voted to allow the appointment of noncelibate gays to the clergy, reports the NYT, in what religious scholars called a watershed moment in American Christianity. "Today I am proud to be a Lutheran," said one gay-rights leader after the vote; still, many conservative members of the Evangelical Lutheran Church in America were dismayed by the result, with some calling for "faithful" ministries to break away from the national church.
The WSJ reports on the Scottish government's attempts to contain the fallout from its decision to release terminally ill Lockerbie bomber Abdel Basset Ali al-Megrahi after TV images of the terrorist receiving a hero's welcome in Tripoli sparked outrage on both sides of the Atlantic. The NYT notes that questions remain over the extent to which the decision to release al-Megrahi was influenced by efforts to clear the way for British companies to pursue lucrative oil contracts in Libya. In an editorial, the Post calls for the U.S. to impose sanctions against Libya unless al-Megrahi is placed under house arrest until his death. "To bestow freedom and the comforts of home on a man serving a life sentence for one of the most horrific acts of terrorism in modern times is a breathtaking abuse of power," the Post declares. "There was only one appropriate way for Mr. Megrahi to have returned home: in a box."
With Obama's health care reforms teetering, the LAT runs a pre-emptive autopsy of his strategic blunders: Democratic strategists say he wheeled out too many messages, and failed to give the public a clear sense of why reforms were necessary. Perhaps it's just as well that the president is about to take a breather, notes the WSJ,leaving surrogates to continue the debate while he spends the week at Martha's Vineyard. The Post reports that former Senate Majority Leader Tom Daschle visited the White House yesterday and reportedly asked Obama to "get off the airwaves" while lawmakers attempted to reach a deal. The paper also eyes Senate negotiators' efforts to build consensus behind a slimmed-down compromise bill but notes that it's not clear that a smaller bill would be any easier to write or to pass.
And finally, the NYT reports from state fairs across the country, where officials are grappling with a new health threat: bug-ridden sightseers are infecting pigs with swine flu. "The whole idea of the animals getting sick from people is a foreign concept," says one state veterinarian. "But that's what we're looking at here." It's no laughing matter: Officials say that if the H1N1 flu strain is allowed to recirculate in pig populations, it could mutate into more virulent and deadly forms. In an attempt to insulate the prize porkers, officials at many fairs now bar visitors from petting the animals and are asking people to wash their hands before approaching the pig pens.
Ben Whitford writes for the Guardian, Mother Jones and Newsweek.