So argues Roger Altman, the Clinton administration’s deputy secretary of the treasury, in a New York Times’ editorial. Altman makes two main points:  the fed’s power– to set interest rates and control inflation– is undermined by the alphabet soup of federal financial regulators. And the federal reserve is also weakened by the fact that entire financial institutions– investment banks, hedge funds, and mortgage companies– are now basically unregulated. Altman wants the Fed to supervise both the unregulated investment banks (like Bear Stearns), while also patrolling the work of federal agencies like the Securities and Exchange Commission and Federal Deposit Insurance Corporation.

This all seems to make sense…but is reorganizing the bureaucracy getting to the root problems of poor federal oversight? Altman’s wonky piece mentions not one single person. But it seems that executive branch leaders can choose to  either get worked up about subprime loans before the foreclosure crisis or wait until the crisis hits. If the Fed stays as reactionnary as it was during the Bush administration, Altman’s prescriptions will amount to chair rearranging.-MB

This seems really, really important. Candace Rondeaux and Javed Hamdard of the Washington Post’s Foreign Service report that U.S. military officials have once again stated that five civilians– and 30-35 Taliban insurgents– died in a Aug. 22 U.S. airstrike in western Afghanistan. Yet the Afghanistan government and the United Nations still contend that not five but 90 civilians died in the airstrike. The Post interviews a local shopkeeper who claims 13 members of his family were lost in the raid.

While the airstrike has still not made front-page headlines, its changed the dynamic in Afghanistan. President Hamid Karzai is now demanding a code of conduct for the U.S. military. Yet instead of negotiating with Karzai, the U.S. military is declaring he’s 85 deaths off-base in his assessment of the airstrike’s collateral damage.

Last night at the Republican National Convention neither Fred Thompson nor Joseph Lieberman once mentioned Afghanistan. It’s becoming increasingly clear, though, that Afghanistan will define the first year of the next president as much, if not more, than Iraq.-MB

The Washington Post’s Carrie Johnson gives needed context to yesterday’s news that Alberto Gonzales broke the law by mishandling classified documents. A Justice Dept. Inspector General report finds that in March 2004, when Gonzales was sitll White House counsel, he took notes at a meeting where the administration and Congressional leaders were scrambling to re-authorize the then-secret warrantless wiretapping program.

The White House classified the notes as top-secret, meaning they needed to be locked up in a certain kind of safe. But Gonzales not only didn’t do this, he actually took the notes to his Vienna, Virginia home. Gonzales had a safe at home– but he forgot its combination. As Attorney General, he then put the notes in a Justice Dept. safe that Justice employees could, illegally, access.

Nothing is surprising anymore about Gonzales’s behavior. While he’s not the first person in the world to be careless with classified documents, the other examples Johnson provides don’t equate with Gonzales’s years of disregard. The Justice Dept.– their credibility already called into question– will now have to wear a rueful grin in their next classified document prosecution.-MB