WASHINGTON - Step aside Clinton, Obama, and McCain. Make way for Bernanke, Paulson, and Geithner. In an election year in which the public and the news media have been focused on the presidential contenders, the crisis playing out in the financial markets is a reminder that for the time being, the most consequential decision-makers are unelected officials. Despite the hoopla about the November election, the next president’s limited options will be determined largely by three unelected men: Federal Reserve Board chairman Ben Bernanke, Treasury Secretary Henry Paulson, and Timothy Geithner.
PHILADELPHIA - Democrat Barack Obama distanced himself from "stupid statements" by his longtime pastor that have aggravated racial divisions in the contentious Democratic primary battle, addressing what he called "a racial stalemate we've been stuck in for years." The Illinois senator used a speech at a site near the nation's birthplace to present what his campaign called a comprehensive take on "race, politics, and unifying our country." Describing his life as the son of a black man from Kenya and a white woman from Kansas, Obama called it a story that hasn't made him the most conventional candidate, but, "a story that has seared into my genetic makeup the idea that this nation is more than the sum of its parts - that out of many, we are truly one."
WASHINGTON - Senator Hillary Rodham Clinton’s hopes of ending the primaries with game-changing victories from new contests in Florida and Michigan grew dim on Tuesday as Florida officially scuttled plans for a new vote and Michigan lawmakers appeared far from a deal. In a sign of how badly she thinks she needs the Michigan delegates to catch the Democratic front-runner, Senator Barack Obama, Mrs. Clinton made a last-minute schedule change and planned to fly to Detroit on Wednesday to plead with Michigan lawmakers to approve a new primary election in June to replace the January contest that awarded no delegates. “We will go and make the case for a revote,” said Mo Elleithee, a spokesman for Mrs. Clinton.
Perhaps the Maestro composed some discordant notes after all. The record of longtime Federal Reserve chairman Alan Greenspan -- worshipped by business leaders and dubbed "Maestro" in a 2000 biography by The Post's Bob Woodward -- is getting a critical look as his successor Ben S. Bernanke wrestles with problems that began on the Maestro's watch. Many economists blame Greenspan for lax bank supervision and for keeping interest rates too low, too long from mid-2003 to mid-2004. That, the theory goes, fueled the housing bubble and spawned subprime and adjustable-rate mortgages for low-income people, vast numbers of whom can't make their payments now. Banks bought those mortgages in bundles that are worth far less than they originally were. That has led to big write-offs, shaking the entire financial system. In an interview yesterday, Greenspan said the Fed wasn't to blame. He said that global forces beyond the control of the Federal Reserve had kept long-term interest rates low, fueling the housing bubble earlier this decade. "Those who argue that you can incrementally increase interest rates to defuse bubbles ought to try it some time," he said. "I don't know of a single example of when interest rate policy has been successful in suppressing gains in asset prices." Regarding the current turmoil, Greenspan said that a market crisis was inevitable. "If it weren't the subprime crisis it would have been something else," he said. That is because an era was ending that had seen "disinflationary forces" from developing countries such as China and a "protracted period" in which there was an "underpricing of risk." Not all economists are ready to let the former Fed chairman off so easily. Lee Hoskins, former president of the Cleveland Fed and Fed chairman from 1987 to 1991, says that to find "partial causes" of the credit turmoil, "you have to go back to the Fed's decision to push the federal funds rate down to 1 percent and leave it there for over a year." Hoskins says the Fed "made money very cheap, and we began to see the whole leveraging process we see today. The Fed has to take responsibility for some of that excessive growth."
The two-decade search for an AIDS vaccine is in crisis after two field tests of the most promising contender not only did not protect people from the virus but may actually have put them at increased risk of becoming infected. The results of the trials, which enrolled volunteers on four continents, have spurred intense scientific inquiry and unprecedented soul-searching as researchers try to make sense of what happened and assess whether they should have seen it coming. Both field tests were halted last September, and seven other trials of similarly designed AIDS vaccines have either been stopped or put off indefinitely. Some may be modified and others canceled outright.
FENTON, Mo. - Flooding from rainstorms blamed for at least 16 deaths threatened to worsen Friday, with many Midwestern rivers over their banks for more than a day already and the water level climbing. To the north, a fresh snowstorm blew into the Chicago area, prompting authorities to cancel flights. Forecasters said the storm could leave as much as 9 inches of heavy snow in the region. A blizzard warning remained in effect in northern Maine, where fierce winds had already scattered a foot or more of snow. "Even though it was spring yesterday, we still have winter on our doorstep," spokeswoman Ginny Joles of Maine Public Service Co., northern Maine's major electric company, said Friday. Thursday, the first day of spring, brought much-needed sunshine to some flooded communities, but many swelling rivers were not expected to crest until the weekend in Arkansas, Missouri, southern Illinois, southern Indiana and Kentucky. The worst flooding happened in smaller rivers across the nation's midsection. Major channels such as the Mississippi, Missouri and Ohio rivers saw only minor flooding. In Fenton, a St. Louis suburb, Jeff Rogles joined dozens of volunteers to fill sandbags and pile them against downtown businesses near the fast-rising Meramec River, which was expected to reach more than 20 feet above flood stage in some spots. "I think we have enough volunteers out here to stave off disaster," said Rogles, 27, who joined the effort because he remembered the devastating Great Flood of 1993.
VALLEY PARK, Mo. - Residents of small towns along the Meramec River breathed a sigh of relief Saturday as the stream finally crested following days of flooding caused by torrential rainfall across the Midwest. At Valley Park, the river rose to a peak of 37.8 feet Saturday morning, well above the flood stage of 16 feet but still below the record of 39.7 feet, according to the National Weather Service. It was the first trial of the town's $49 million levee, which stands a few feet above Saturday's crest and was designed to withstand the biggest flood that might be expected in a century. "It's a 100-year event, and it's a 100-year levee," said Army Corps of Engineers Col. Lewis Setliff. "It got tested, and it passed." Elsewhere, rivers were still rising in southwest Illinois and parts of Arkansas, chasing people from their homes and into shelters. Rivers had mostly begun receding in Ohio. At least 16 deaths have been linked to the weather over the past week, with two people reported missing in Arkansas. Thousands of people in Missouri fled to Red Cross shelters or to the homes of friends or relatives. The high water pushing against the other side of the Valley Park levee didn't bother customers at Meramec Jack's bar and grill, where owner Tracy Ziegler was pouring cold beer Saturday morning.