That’s what New York Times columnist Paul Krugman argues—that the so-called major announcement today by Treasury Secretary Henry Paulson is a ruse to keep financial institutions from being regulated. Krugman is less than impressed with the administration’s plan of re-arranging the regulatory bureaucracy. “To hide their lack of any actual ideas about what to do,” Krugman writes, “Managers sometimes make a big show of rearranging the boxes and lines that say who reports to whom.”

In the world of mainstream punditry, Krugman is a notably harsh critic of the Bush administration’s economic policies. But it will be interesting to see if anyone on the political spectrum doesn’t react to Paulson’s address with skepticism.  Read Krugman here.  MB

Glenn Kessler of the Washington Post—and author of Confidante, an insider’s account of the relationship between Condoleeza Rice and President Bush—reports on the Secretary of State globetrotting in the twilight of the Bush administration. Kessler goes a bit heavy on the trivia for the morning reader – for example about how Rice is the most traveled Secretary of State of all-time (did you know that if Rice flew commercial she would have racked up 800,000 frequent flier miles?).

Between Israel and Palestine, North Korea, Russia, India and—oh, yeah—Iraq and Afghanistan, Rice has a lot of places to go. But with the bridges the Bush administration has burned, she hasn’t much to accomplish once she gets there.  Read Kessler here.  MB

The latest consequence of the growing economic morass: 28 million Americans are expected to be on food stamps this year. The news, though, is not all bad. The New York Times’s Erick Eckholm reports that states have been successfully promoting the availability of the Department of Agriculture administered entitlement program to their low-income citizens. What hurts is that the benefits have not been indexed for inflation since 1996.  Read Eckholm here.  MB

The Wall Street’s Journal’s Damian Paletta and Michael M. Phillips report that Housing and Urban Development Secretary Alphonso Jackson announced his resignation at 10:00 this morning. Jackson’s four-year tenure has not won him praise in many houses beside the White House.

Congress and local housing authorities have criticized him for his response to Hurricane Katrina and suspicions he rewards housing contracts to friends. His resignation could signal the seriousness of such allegations. Also, the subprime mortgage crisis has increased HUD’s responsibilities, but beyond expanding the lending ability of FHA, Fannie Mae, and Freddie Mac, it doesn’t look like Jackson has made major substantive changes.  Read Paletta and Phillips here.  MB

The Atlanta Journal-Constitution’s Alison Young reports that the Centers for Disease Control and Prevention have started a process to fire agency toxicologist Christopher De Rosa. Dr. De Rosa has recently tried to publicize environmental dangers in the Great Lakes region.

And DeRosa says CDC demoted him for speaking out against agency scientists who approved FEMA trailers laced with formaldehyde. Now, CDC is scheduled to terminate him in 90 days. They have not said why, and House energy and commerce committee chair John Dingell (D-Mi.) has responded by demanding CDC Julie Gerberding stop the process.  Read Young here.  MB

When Congress returns to Washington next week, a top priority will be agreeing upon a Consumer Product Safety Modernization Act they can send to the President. Consumer safety advocates are crossing their fingers that the bill will essentially replicate the Senate version that passed 79-13.

A Congressional re-authorization of an independent federal regulatory agency is not the first place to turn for exciting sociopolitical changes. But implementation of the Senate’s CPSMA would both transform the Consumer Product Safety Commission and signal a clarion call for a government that is both bigger and stronger. (more…)

I must be a slow learner.  In fact it’s pretty obvious, given my surprise at seeing our government push us over the brink into unlimited war once again.  But the reality of Iraq has forced me – and quicker learners than me – to wake up once again to the nightmare still enfolding in Iraq. 

Emerging from the fog of war are the outlines of the fantasy world which our president and other leaders continue to inhabit whenever they think about Iraq.  I had thought that what the President called a “surge” was accompanied by an increase in wisdom – that as violence reduced around Iraq, the Bush administration had started to understand the futility of inserting American forces in ways that would only increase sectarian conflict in the country.

But then today, we started bombing again. (more…)

Defense Secretary Robert M. Gates called yesterday for a complete inventory of the nation’s nuclear weapons parts. It follows what Pentagon officials described as the “extremely embarrassing” shipment of nuclear fuses to Taiwan. The Washington Post’s Josh White reports that the Taiwanese government discovered the shipment a year ago and that both countries didn’t know exactly how best to proceed.

White describes it as a soul-searching time for the Pentagon.  It’s not hard to see why, as the incident merely involves really ticking off China and raising further doubts about America’s ability to handle nuclear weapons.  Read White here.   MB

In a follow-up to yesterday’s investigative blockbuster, the New York Times’s C.J.Chivers reports that Efraim E. Diveroli, the 22 year-old head of AEY Inc., could face criminal fraud charges. The charges stem from selling 28 pallets of ammo manufactured in China to the Afghanistan government, after the claiming the ammo actually came from a Hungarian company. That Diveroli sold Chinese ammo is what led to the Pentagon canceling AEY’s $300 million government contract.

The real culprit, though, may be the Pentagon itself — for not overseeing Afghanistan’s top munitions supplier. Chivers writes that even as AEY sold tons of munitions that were more than 40 years old, they were still in compliance with their contract.  Read Chivers here.  MB

The Federal Aviation Agency’s “airworthiness directive” for commercial airliners to inspect their planes has caused more than 700 flight cancellations in the past two days. USA Today’s Thomas Frank reports that the cancellations, the majority of which were made by American and Delta airlines, affected about 46,000 passengers.

Why did the FAA issue this directive last week? Well, probably in part because FAA officials are testifying before the House transportation committee next week. The aviation agency has been in inspection mode ever since it was caught not inspecting faulty Southwest Airlines planes. So are these inspections window dressing or a shift in agency priorities?  Read Frank here.   MB