http://www.slate.com/ Have you ever finished reading a complex news story and realized there's some fundamental fact you just don't get? The Explainer team at Slate.com is here to answer those basic questions that somehow slip through the cracks of daily news coverage. ©2005 Washingtonpost.Newsweek Interactive Co. LLC en-us Fri, 10 Oct 2008 00:00:01 EST Fri, 10 Oct 2008 09:24:05 EST 120 No A daily podcast of Slate.com's popular column, The Explainer. Slate is the Internet's leading online-only magazine. Founded in 1996, we offer a daily selection of articles about politics, popular culture, the arts and science. Our Explainer podcasts feature answers to those little questions you have about the news (but were afraid to ask). For example: "Are concession speeches binding?" Slate Magazine Slate Podmaster podmaster@slate.com http://img.slate.com/media/1/123125/2121330/2127745/2142930/explainer.png http://www.slate.com/ slate news politics arts culture science 4:49 http://www.slate.com/id/2201950/ http://www.slate.com/id/2201950/ Is the European Credit Crisis Our Fault? Not really—they were dumb enough to buy the mortgages. By Christopher Beam As the European credit crisis deepens, several foreign leaders are blaming the crisis on the United States. German finance minister Peer Steinbrück says, "The origin and the center of gravity of the problem is clearly in the U.S.," whose system is less "robust" than its German counterpart. Russian Prime Minister Vladimir Putin says, "Everything happening now in the economic and financial sphere began in the United States." Is the European credit crisis America's fault? No. The current financial crisis began with the collapse of the subprime mortgage market, which was certainly largest in the United States. But that market depended on a vast network of international investors, all of whom bear some responsibility for what's happened. Assigning blame—an essential part of any grieving process—requires some history. During the Great Depression, the U.S. government decided it should be easier for people with low incomes to buy houses. Fannie Mae was created to buy mortgages from banks so that smaller banks didn't have to carry the entire debt burden on their own. Eventually, two things happened: Fannie Mae started buying riskier "subprime" mortgages, which were still rated AAA or "safe" by ratings agencies. It also started packaging these mortgages as securities, chopping them up, and selling them to other investors, who resold them to other investors, and so on—a process called securitization. Many of these investors were foreign companies, banks, and governments. (The United States' current account deficit is about 6 percent of the GDP, which means the country gets about $1 trillion in foreign loans every year.) Risky practices like credit default swaps, in which investors promise to support each other in case someone goes bankrupt, started in the United States but soon became the norm across the world. Mortgage-backed securities were dangerous and people knew it, but American housing prices continued to climb, so investors bought them, anyway. The result was an international, interdependent system in which all markets leaned on other markets for stability. So when the U.S. mortgage market collapsed, everyone else's followed. That doesn't mean Europe would have survived had it not been for us irresponsible Yanks. Several European countries, particularly England, Ireland, and Spain, had their own housing bubbles that burst around the same time as ours. (Others, such as Germany, had stable housing markets.) These bubbles were exacerbated by Europe-specific factors. For example, even as housing prices increased by as much as 10 percent a year in Spain, the European Central Bank set interest rates appropriate for the entire European Union, where prices were increasing much more slowly. As a result, local bubbles expanded faster than usual. Another example: A state-owned German bank held billions in mortgage-backed securities, even though they weren't safe. The risk was therefore endorsed at home—not the result of an American knife held to European throats. Other structural problems have led to recent collapses: The failure of several Icelandic banks can be traced in part to their size—their assets were 10 times the country's GDP. Total U.S.-bank assets, by comparison, are far less than our GDP. So why did the bubble burst here first? For one thing, we've got the biggest subprime housing market in the world. Also, the riskiest mortgages were always bought and sold in the United States; high-wire investment tactics like "toggle bonds" and "covenant light" loans have been common in recent years. So you might blame American investors for taking bigger risks than their foreign counterparts. But the difference is comparable to playing Russian roulette with a six-chamber versus a seven-chamber revolver. Other scapegoats include ratings agencies, which knowingly gave subprime mortgages AAA ratings. The biggest ones—Moody's, Standard and Poor's, and Fitch—are all based in the United States. The problem with blaming them is that most investors knew their ratings were bunk but bought the securities, anyway. You could blame Congress, too, for insufficient regulation. But, in fact, many European housing markets are just as loosely governed as the U.S. market. Explainer http://fray.slate.com/id/3936/fr/podcast Fri, 10 Oct 2008 09:23:34 EST slate news politics arts culture science 3:26 http://www.slate.com/id/2201853/ http://www.slate.com/id/2201853/ Can Paulson Fire Naughty Executives? How much control does the Treasury have over personnel at AIG? By Juliet Lapidos A week after the American International Group received an $85 billion bailout, personnel from its life insurance subsidiary, AIG General, held a weeklong retreat in Monarch Beach, Calif., that cost more than $400,000. At the town-hall debate on Tuesday, Barack Obama railed against the company's excesses, suggesting that "the Treasury should demand that money back and those executives should be fired." The Treasury can demand whatever it wants, but can it give company execs the boot? Not in theory. It was widely reported that the Federal Reserve, with backing from the Treasury, loaned AIG $85 billion in exchange for an 80 percent stake in the company. If that were true, the government would be able to hire or fire at will, since it would control the board. But as the Explainer has noted previously, the Fed didn't hand over any cash upfront—just the assurance of cash should it be needed during the next two years. In exchange for this line of credit, AIG granted the government the right to buy stock equal to 80 percent of the company. At this point, the government has veto power over certain company actions, like the sale of major assets or the payment of dividends to shareholders. But as long as the Treasury hasn't yet purchased the stock, it's not an owner with full authority over AIG's managers (and junkets). In practice, the situation is a little different. As a condition of the $85 billion line of credit, Treasury Secretary Henry Paulson insisted that AIG chief executive Robert Willumstad stand down. Now that the deal has come to pass, it's likely that AIG will acquiesce to additional human-resources advice coming from the Treasury. Whether the executives who authorized a fancy retreat (including $23,000 on spa treatments) should really lose their jobs is another question. The trip was planned long before the bailout, as a reward for top-performing life-insurance agents—not the top dogs responsible for AIG's collapse. As part of the $700 billion bailout authorized last week, Congress moved to rein in corporate excess by lowering the cap on federal corporate deductions for executives' pay to $500,000 from $1 million, allowing "clawbacks" (recovering pay if an executive is found to have engaged in fraud), and banning "golden parachutes" (bonuses for underperforming executives upon termination). These measures do not have retroactive influence over the AIG deal. The financial products manager whose complex investment strategy is at least partly to blame for AIG's collapse, Joseph Cassano, is receiving $1 million a month in consulting fees, and former chief executive Martin J. Sullivan received a $5 million performance bonus. Explainer http://fray.slate.com/id/3936/fr/podcast Thu, 9 Oct 2008 09:14:34 EST slate news politics arts culture science 3:45 http://www.slate.com/id/2201761/ http://www.slate.com/id/2201761/ What a Boy Wants How do you know whether an adolescent really wants a circumcision? By Brian Palmer The U.S. Supreme Court announced Monday that it would not hear the case of a 13-year-old Oregon boy whose parents disagree over whether he should be circumcised. The father claims the boy wants to have the operation, but the mother contends that he is merely bending to his father's will. Now a trial judge will attempt to ascertain the boy's wishes. How can the court determine what the boy really wants? By asking him in private. Because 13-year-old children are generally considered capable of developing meaningful preferences, the judge will invite the boy into chambers (and away from his parents) for a private conversation. The separation removes the immediate influence of the parents and protects the child from having to publicly wound one of them. If the judge does not find his answers obviously genuine and meaningful, the court will turn to a forensic child psychologist. The psychologist's methods are highly individualized and depend on the child's intellectual capacity. The first step would be a lengthy interview to determine the boy's emotional condition and attitudes about his family. A direct question about circumcision would be asked late in the interview, if at all. The psychologist would then interview each parent alone and with the child, then the child with both parents. The goal is to observe changes in the child's answers, mannerisms, body language, or syntax when the parents are present. If he answers the same questions differently depending on whether his parents are in the room, this suggests a lack of independence. In addition, the psychologist would be on the lookout for wooden movements or language that sounds scripted or inappropriately adult—possible signs that the child is "enmeshed" with one or both parents and unable to make his own decisions. In the Oregon case, a psychologist might probe the boy's knowledge of Judaism—his father converted to the religion—to determine whether his interest in circumcision is a result of a genuine religious conviction or if he doesn't want to disobey his father. Based on these interviews, the psychologist would develop a hypothesis about the child's competency, preferences, and independence. The hypothesis must then be tested through interviews with teachers, neighbors, or other people who have had regular interactions with the child. A psychologist might also check school records for signs of extreme reticence, which might confirm a hypothesis of enmeshment, or self-confidence, which would undermine it. Some psychologists also use projective tests, such as drawing pictures, playing with dolls, or Rorschach inkblots—though the validity of these methods is hotly debated among those in the field. Following this battery of interviews and tests, the psychologist issues a report and recommendation to the judge. In the Oregon case, the psychologist could adopt any of three conclusions: first, that the boy genuinely wants the circumcision; second, that he genuinely does not; or third, that he is so profoundly influenced by one of the parents that his true wishes cannot be determined or should not be considered. In any event, the conclusion would normally be accompanied by a custody recommendation, and the parties would have the opportunity to examine the psychologist in open court and challenge his or her views. While the judge is not bound to accept the psychologist's recommendation, most judges do. Explainer http://fray.slate.com/id/3936/fr/podcast Wed, 8 Oct 2008 09:30:04 EST slate news politics arts culture science 3:53 http://www.slate.com/id/2201659/ http://www.slate.com/id/2201659/ Flight of the Penguins How do you airlift hundreds of stranded birds? By Nina Shen Rastogi More than a thousand juvenile Patagonian penguins have washed up on the northern shores of Brazil this year for reasons scientists have yet to comprehend fully. Over the weekend, hundreds of the stranded birds were airlifted to the southernmost tip of the country and released into the South Atlantic Ocean, close to their native territory. How exactly do you get that many penguins on a plane? You put them in crates, 23 birds to a box. On Friday, the Brazilian government's environmental authority loaded 399 Magellanic penguins onto a C-130 Hercules transport plane on loan from the Air Force. The penguins left from a marine-life treatment center in Salvador, in the northern state of Bahia, where most of them had been living for the past two months. (Some 70 birds joined them from a treatment center in Vitoria; they were transported in the cargo hold of a commercial flight.) Before boarding the military plane, the penguins were fed, watered, given antifungal medication, and tagged with bands for future identification. Then they were flown down to another rehabilitation center in the southern city of Pelotas. Accompanying them on the 5.5 hour flight were a handful of military personnel and approximately 10 veterinarians and biologists from various environmental organizations. On Saturday, after an overnight stay in the Pelotas center—where they were fed and watered once again—the penguins were placed back in the crates, lifted onto large trucks, and driven down to the beach, where a movable pen had been set up. Most of the penguins were then transferred into the pen and herded into the sea. (A few dozen were kept back due to medical concerns, though all the birds survived the flight.) You can watch a video of the beach release here. Many of the penguins that washed ashore up north perished before they could be returned home. Representatives for the International Fund for Animal Welfare, one of the primary NGOs involved in the airlifting, estimate that half of the 1,600 penguins found in the Bahia region since July were already dead by the time they washed ashore; another 300 died in rehabilitation. The remaining birds were treated for emaciation, anemia, and worm infestations over the course of several months. Before they were allowed to board the Hercules plane this weekend, birds had to be given a clean bill of health by IFAW veterinarians—this involved checking their weight and the condition of their lungs, mouth, feet, and eyes as well as making sure their feather covers were still waterproof. Roughly 100 birds that didn't pass inspection remain at the Salvador center, where they will continue to be cared for until they can be released. This weekend's flight was the largest penguin airlift in Brazilian history, but the largest penguin airlift ever took place in 2000, when 10,000 to 15,000 birds were transported to clean water after a massive oil spill near Cape Town, South Africa. Other, more pedestrian animals have also been rescued in large numbers by plane: After Hurricane Katrina, Texas oil tycoon T. Boone Pickens and his wife, Madeleine, paid $50,000 to charter a Continental Airlines flight to take 100 cats and dogs to safety in California. In 2006, 300 cats and dogs orphaned by the Israel-Hezbollah conflict were flown from Lebanon to Las Vegas in a special Emirates cargo plane. Explainer http://fray.slate.com/id/3936/fr/podcast Tue, 7 Oct 2008 09:24:01 EST slate news politics arts culture science 3:32 http://www.slate.com/id/2201530/ http://www.slate.com/id/2201530/ Do Children Commit Suicide? Yes, but sometimes it seems like an accident. By Christopher Beam A 7-year-old Texas boy who was found earlier this year hanging from a hook in his school bathroom did not commit suicide, according to a police report released Thursday. Instead, his shirt had apparently caught on the hook, perhaps during a game of "run and jump." Do kids that young ever kill themselves? Yes, but rarely. About four children out of every 500,000 below the age of 12 commit suicide annually, according to the Centers for Disease Control and Prevention. The number has doubled since 1979, but in recent years it's been only the 14th leading cause of death for kids in that age group, just after meningitis and anemia. The numbers are low for several reasons. For one thing, the factors that correlate with suicide—depression, drug use, peer pressure—don't usually hit until puberty. In fact, autopsies of children who kill themselves show that a higher-than-usual proportion are tall for their age—a good proxy for pubertal status. As you'd expect, the suicide rate climbs among adolescents aged 10 to 14 (1.3 per 100,000) and spikes among teenagers 15 to 19 (7.67 per 100,000). Another reason for the low suicide rate among children is parental supervision. The younger the child, the more likely a parent will be nearby to intervene. There's also a labeling problem—what's a suicide? Child suicides aren't like teen or adult suicides, which usually start with an idea, proceed with a plan, and end with action. Suicide among children is more likely to be spontaneous and less connected to psychiatric disorder or aggression. This is often reflected in the method: Instead of hanging or cutting or using a gun, "suicidal" kids tend to kill themselves by doing things their parents have warned them against, such as running into traffic or jumping out of a window. As a result, it's often hard to tell the difference between a suicide and an accident. (Official definition of suicide: "Fatal self-inflicted destructive act with explicit or inferred intent to die.") For example, a medical examiner might be presented with the case of an autistic child who jumped off his bunk bed in a hospital, hit his head on the floor, and died. Or a little girl might jump out the window in the course of a fight with her older brother. The factors that cause children to commit suicide differ slightly from their older counterparts. Depression can play a role, but among the youngest suicides, a predisposition to impulsiveness is just as important. Children who kill themselves often have a mood disorder, ADHD, or a "conduct disorder," which basically means antisocial behavior. Living an in abusive household can lay the groundwork for suicidal behavior, and an incident like getting kicked out of school or a dying relative can trigger it. Explainer http://fray.slate.com/id/3936/fr/podcast Mon, 6 Oct 2008 10:28:20 EST slate news politics arts culture science 4:27 http://www.slate.com/id/2201433/ http://www.slate.com/id/2201433/ Who Moderates the Moderators? Does Gwen Ifill get to pick the questions for the Biden-Palin debate? By Jacob Leibenluft On the eve of Thursday's vice-presidential debate between Joe Biden and Sarah Palin, conservative commentators questioned the impartiality of moderator Gwen Ifill, whose forthcoming book is subtitled Politics and Race in the Age of Obama. Does a moderator like Ifill get to decide which questions to ask during the debate? Yes. The moderators have near-absolute control over the script. The official rules for the debate are set out by the Commission on Presidential Debates in the form of a memorandum of understanding between the two campaigns. That memo isn't released to the public, but a leaked copy of the rules from 2004 can be found here (PDF). While the document touched on how tall the podium would be ("fifty … inches from the stage floor to the outside top of the podium facing the audience"); where the thermostat should be set ("an appropriate temperature according to industry standards"); and whether the candidates could use their own makeup people (yes, they could), it didn't say all that much about the questions. The document simply stipulated that the moderator should "use his or her best efforts to ensure that the questions are reasonably well balanced in all debates ... in terms of addressing a wide range of issues of major public interest facing the United States and the world." Moderators typically go about this process by identifying the top headlines in the news and examining polling to determine the most pressing issues of the day. According to an interview she gave to historian Alan Schroeder for his book The Presidential Debates: 50 Years of High Risk TV, Ifill came up with her questions in isolation prior to moderating the veep debate in 2004, receiving only some assistance with research from a NewsHour staffer. (A few weeks ago, she added that colleagues, passers-by on the street, and people at her gym have all offered their unsolicited advice as to what she should ask.) Bob Schieffer, who will host the final debate this year, claims to be a bit more solicitous in his process, seeking out the advice of his CBS colleagues, outside journalists, and "people who follow things in Washington" before coming up with his own list of questions three days before the event. There are exceptions to the moderators' freedom. Some of the debates may have specific areas of focus, like foreign or domestic policy. But even those constraints end up subject to the discretion of the moderator: At last Friday's debate, Jim Lehrer asked the candidates several questions about the financial bailout despite the fact that a spokesman for the debates commission told The Hill that the focus would remain on foreign policy. The process of coming up with debate questions has changed with the advent of the single moderator. Up until 1996, candidates were typically questioned by a panel of journalists. The panelists would often compare notes ahead of time to ensure they weren't covering the same ground; in the 1976 vice-presidential debate, they went so far as to establish a set order for their queries. Perhaps the most famous moment in a vice-presidential debate was partially the product of planning: The panelists in 1988 agreed beforehand to ensure that one another's questions were answered completely. As a result, they pressed Dan Quayle about his preparation for the vice presidency—prompting him to compare himself to John F. Kennedy and inspiring Lloyd Bentsen's famous retort. For the town-hall debate, which will be moderated next Tuesday by Tom Brokaw, members of the audience will be supplying the questions. In all likelihood, these questions will be screened ahead of time: At the town-hall debate in 2004, about 150 voters were selected by the Gallup organization—with equal numbers of "soft" Bush supporters and Kerry supporters—and asked to write down questions once they arrived at the venue. After screening to ensure that all questions were "appropriate," then-moderator Charlie Gibson was supposed to select questions at random while ensuring they touched on a wide range of issues. Questioners didn't know ahead of time if they would be selected to read their questions; if they strayed from what they had submitted beforehand, their microphones were supposed to be cut off. This year, however, the process of screening questions may be a little more complicated since Brokaw will also use questions submitted through MySpace. Explainer http://fray.slate.com/id/3936/fr/podcast Fri, 3 Oct 2008 09:35:47 EST slate news politics arts culture science 3:54 http://www.slate.com/id/2201249/ http://www.slate.com/id/2201249/ You Say Depression, I Say Recession Are we talking about the same thing? By Juliet Lapidos After the House rejected a $700 billion bailout of the financial sector on Monday, Lyle Gramley, a former Federal Reserve governor, warned that "we're in a recession now, and the numbers show the recession deepening." According to a USA Today/Gallup poll conducted over the weekend, one-third of adults believe the economy is in a depression. What's the difference between a recession and a depression? Severity. One widespread definition of a recession—the one used by newspapers—is a decline in the gross domestic product for two or more consecutive quarters. The term depression, by contrast, commonly refers to a grave, prolonged recession during which the GDP declines by more than 10 percentage points. Most economists, however, quibble with these lay characterizations since they don't take into account the unemployment rate or consumer confidence. The National Bureau of Economic Research, for example, defines the term recession as a "significant decline" distributed across the economy lasting more than a few months, usually visible in the numbers for GDP, employment, industrial production, and wholesale-retail sales. Understood as a natural part of the business cycle, a recession is the period between when activity has reached its peak and when it reaches its low point or "trough." There is no corresponding NBER definition of a depression, nor can economists agree on an official dividing line between a depression and a bad recession. The last time the U.S. economy experienced a depression as measured by the 10-point standard was in the 1930s. Although the Great Depression is often studied as one long event, it actually comprised two separate downturns: The GDP declined by more than 30 percent from 1929-33, then by about 18 percent from 1937-38. At one point, a quarter of the U.S. population was unemployed. The Finnish economy tumbled into depression more recently. After the collapse of the Soviet Union, Finland lost a significant portion of its export markets. Its GDP slumped by about 11 points in the early 1990s, and unemployment reached the 20 percent mark. Recessions are actually rather common. According to the NBER, the U.S. economy experienced an eight-month recession from March 2001 to November 2001 and another one from July 1990 until March 1991. During the early 1980s, the economy slumped twice—in the first half of 1980 and from July 1981 until November 1982. During the 1980 presidential election season, Ronald Reagan described the economic downturn as a "depression," and Jimmy Carter attacked him for using the term inaccurately. Reagan countered with this quip: "Let it show on the record that when the American people cried out for economic help, Jimmy Carter took refuge behind a dictionary. Well, if it's a definition he wants, I'll give him one. A recession is when your neighbor loses his job. A depression is when you lose yours. And recovery is when Jimmy Carter loses his." Explainer http://fray.slate.com/id/3936/fr/podcast Thu, 2 Oct 2008 08:51:02 EST slate news politics arts culture science 2:32 http://www.slate.com/id/2201250/ http://www.slate.com/id/2201250/ Does Congress Always Take Off for Rosh Hashanah? Yes, but members do have to work on Sukkot. By Abby Callard The House of Representatives is taking two days off this week for Rosh Hashanah in the midst of an unresolved financial crisis. Meanwhile, the Senate is still in session. Do members of the House take off for every religious holiday? No. Representatives get a break for Easter, Passover, Rosh Hashanah, Yom Kippur, and Christmas Day. The Senate operates according to a very similar schedule, except it remains in session for Yom Kippur and, at least in 2008, for Rosh Hashanah. The holiday schedule can vary from year to year. Leaders from both parties set up a tentative list of days off every January, before Congress convenes. Lawmakers can adjust the schedule as needed and suspend holidays in case of an emergency. The tentative 2008 schedule for the Senate, for example, listed two days off for Rosh Hashanah. The chamber remained in session anyway, although no votes were scheduled to take place between Monday morning and Wednesday afternoon. In the early days of Congress, when it was more difficult to travel long distances home, sessions lasted only from December to early spring—so the Jewish High Holidays were de facto days off. Members often met on religious holidays that fell within the session, including Christmas Day. (Religious services for members and their staffs were sometimes held inside the Capitol building.) Congress typically recessed for Easter, but on some occasions, such as during World War II, the holiday break was delayed or canceled. It wasn't until 1958 that members began traveling home on the weekends and a yearlong session evolved. Since then, the party leaders have regularly scheduled days off for Christian and Jewish holidays, although there is no official law that requires them. Bonus Explainer: How many members of Congress are Jewish? Twenty-nine in the House and 13 in the Senate. There are also two Muslim and two Buddhist lawmakers, all serving in the House, and 16 Mormons. Explainer http://fray.slate.com/id/3936/fr/podcast Wed, 1 Oct 2008 09:16:16 EST slate news politics arts culture science 4:08 http://www.slate.com/id/2201173/ http://www.slate.com/id/2201173/ Dead by Election Day What happens if a presidential candidate passes away at the last second? By Nina Shen Rastogi Vice-presidential candidates Sarah Palin and Joe Biden will face off in their first and only debate this Thursday in St. Louis, Mo. Quite a few Explainer readers have asked what would happen if one of the presidential candidates were to die or become otherwise incapacitated before Election Day: Would Palin or Biden assume the nomination? Not necessarily. Each party has its own protocol for this scenario, but in neither case does the running mate automatically take over the ticket. If John McCain were to die before the election, the rules of the Republican Party authorize the Republican National Committee to fill the vacancy, either by reconvening a national convention or by having RNC state representatives vote. The new nominee must receive a majority vote to officially become the party candidate. If Barack Obama were to die before the election, the Democratic Party's charter and bylaws state that responsibility for filling that vacancy would fall to the Democratic National Committee, but the rules do not specify how exactly the DNC would go about doing that. (Congress could also pass a special statute and push back Election Day, giving the dead candidate's party time to regroup.) What happens if the party doesn't have time to select and endorse a new candidate? In 2000, Akhil Reed Amar outlined for Slate some of the head-scratching scenarios that might occur if a candidate died just before the election, without enough time to prep new ballots or to decide how votes should be counted. The outcome would be a little more straightforward—though not necessarily more politically satisfying—if the candidate dies between the general election on Nov. 4 but before the Electoral College votes on Dec. 15. There's no federal law that mandates how electors must cast their votes; theoretically, if the candidate to whom they were pledged dies and their party has not made a preferred successor clear, electors can vote for their party's VP candidate, a third-party candidate, or a leading preconvention contender within their own party. Under this scenario, however, individual state laws have the potential to make things murky, given that each state has the power to determine exactly how its electoral votes are to be cast and distributed. Bonus Explainer: What if the candidate dies after the election but before the inauguration on Jan. 20? The 20th Amendment states that if the president-elect dies before beginning his term, then the vice president-elect assumes his or her spot. However, the point at which a candidate officially becomes "president-elect" is debatable. He or she definitely assumes the title after Jan. 6, when a joint session of Congress officially counts the Electoral College votes and declares a winner. But the shift could be said to occur immediately after the Electoral College vote. (See Pages 2 and 3 of this PDF article from the Arkansas Law Review.) If a candidate dies after Dec. 15 but before Jan. 6, Congress, when it convenes, has to decide whether to count the votes cast for him. (In 1872, three electoral votes cast for the late Horace Greeley were discounted by Congress, but it's unclear whether votes cast for a living candidate who subsequently dies would be treated the same way.) If Congress decides the votes are valid, then the laws of presidential succession kick in, and that candidate's running mate moves up the ladder. If Congress decides to throw out the votes, then the question becomes whether the living candidate can be said to have a majority of the overall electoral votes—if not, then, according to the 12th Amendment, the House of Representatives must elect the president from among the three candidates with the most votes. Explainer http://fray.slate.com/id/3936/fr/podcast Tue, 30 Sep 2008 09:24:56 EST slate news politics arts culture science 3:10 http://www.slate.com/id/2200816/ http://www.slate.com/id/2200816/ What's the Exchange Stabilization Fund? A pile of cash that can be used for whatever. By Jennifer Huang The U.S. Treasury announced last week that it would provide insurance for money market fund holders using $50 billion from the Exchange Stabilization Fund. What's the "Exchange Stabilization Fund," and what will happen now if we need it to, um, stabilize exchanges? It's an emergency reserve fund rarely used for its original purpose. Congress created the ESF with profits from the nationalization of gold—and adjustment of the gold standard for the dollar—in the early 1930s. With the passage of the Gold Reserve Act, the government stash increased in value by $2.8 billion; most of that money was then diverted into a new fund to help the Treasury manage the exchange value of the U.S. dollar in times of crisis by buying and selling foreign currencies without congressional approval. Since then, the government has used the ESF to give stabilizing loans or credit lines to troubled foreign governments. The intent is to counter disorderly conditions in the foreign exchange market by propping up foreign currencies. Past administrations have extended loans or lines of credit to China, Brazil, Ecuador, Iceland, and Liberia. In 1995, the Clinton administration Treasury used the fund to extend a $20 billion line of credit to Mexico in order to stabilize the peso. But the Treasury doesn't have to use ESF funds solely for foreign exchange. The statute as amended in 1970 states that the secretary can, with the approval of the president, use the money to "deal in gold, foreign exchange, and other instruments of credit and securities." The use of the Exchange Stabilization Fund to insure money market accounts fits under that expanded definition. Don't we need that ESF money in case we need to stabilize the dollar exchange rate? Ideally, the government will still have the $50 billion, as it's serving only as a guarantee to depositors in case of default. In any case, the Treasury hasn't used the ESF since the late 1990s, as empirical evidence suggests that interventions have had little effect in influencing exchange rates, anyway. Although legislators and other detractors grumble that the ESF serves as a "slush fund" for the Treasury, few have been particularly committed to get rid of it. In the unlikely event that the Treasury needed the ESF for foreign exchange and lacked sufficient funds, it could always borrow some more from the Federal Reserve. Explainer http://fray.slate.com/id/3936/fr/podcast Mon, 29 Sep 2008 09:53:03 EST