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Analysis, background reports and updates from the PBS NewsHour putting today's news in context.

older | 1 | .... | 251 | 252 | (Page 253) | 254 | 255 | .... | 1175 | newer

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    JEFFREY BROWN: And we come back to verdict in the court-martial of Army Private Bradley Manning and get reaction from Jeffrey Smith, former general counsel for the CIA and the Senate Armed Services Committee. He's currently in private practice and serves on the Department of Defense legal advisory board. And Michael Ratner, president emeritus of the Center for Constitutional Rights. His organization represents WikiLeaks and Julian Assange in the U.S., and filed a suit to gain access to documents and court briefs in the Manning trial.

    And let me get a response to the verdict from both of you and then we will walk through some of the issues.

    Mr. Ratner, you first. Was justice served?

    MICHAEL RATNER, Center for Constitutional Rights: I think it's probably one of the greatest injustices of our decade.

    Here you have man who who's revealed very important information about war crimes, whose information actually sparked the Arab spring, and you have him being convicted of 20 charges that can carry 134 years. And you have to people who were engaged in the criminality he revealed not being investigated at all.

    Bradley Manning is a whistle-blower. He shouldn't be prosecuted. The people who committed the crimes ought to be prosecuted.

    JEFFREY BROWN: Jeffrey Smith, your response?

    JEFFREY SMITH, former CIA official: Oh, I see it very differently.

    He betrayed a trust. He had a trust to the United States when he made an oath to serve his country and to not disclose classified information. But more fundamentally he had a trust in his fellow soldiers. The information that he released involved a lot of detail about our activities and Iraq and Afghanistan.

    To be sure, some of it was terrible, the machine gunning of the civilians. That should never have happened. But he betrayed his trust to soldiers and put their lives at risk. And I think it was a fair trial and I believe he deserves to be punished.

    JEFFREY BROWN: Mr. Ratner, pick up on the trial itself. Was it your sense, as much as you could tell, that he received a fair trial?

    MICHAEL RATNER:  Well, I wouldn't really call it a fair trial. We had a year until we could get access to the information. I sat there. It was like Plato's Cave. You couldn't tell what was going on. It took us a year of litigation to get that out.

    I think he was overcharged tremendously, aiding the enemy, which, of course, he was acquitted on, which was the one good part of the trial. But to charge a whistle-blower with espionage, that's nonsensical. It's the Obama administration hitting truth-tellers with a sledgehammer. I don't think that's fair at all.

    As far as the oath issue, when you see something that is a greater crime, whether it's Vietnam in the My Lai massacre or whether it's what Bradley Manning saw, I think you have a higher duty to disclose criminality when you see it, rather than go along with it. Bradley Manning is a hero for doing that.

    JEFFREY BROWN: Well, Mr. Smith, of course, since many of the facts weren't in dispute here, it became exactly how one sees Bradley Manning, right?

    JEFFREY SMITH: I think it -- not quite. I think the judge handled it well. He was a soldier. He had promised not to disclose classified information.

    There were 700,000 documents. Not all of those were crimes. The vast majority of them were routine reports, diplomatic exchanges, details about U.S. operations. I think what he did put American soldiers at risk. It caused great harm. And this is not the My Lai massacre. It's 700,000 documents that caused great harm.

    JEFFREY BROWN: And what is your sense of the aiding the enemy charge, which was much in dispute, of course?

    JEFFREY SMITH: I think -- again, I think judge handled that well. The government may have overreached a little bit in its charge, but she let the evidence be presented at trial and she then found him not guilty. I think she handled it very well.

    JEFFREY BROWN: Mr. Ratner, you're saying not only was that overreaching, but you think the espionage -- using the Espionage Act was as well?

    MICHAEL RATNER:  Two points I want to make.

    One is Mr. Smith said and talked about harm. There was no evidence of harm that came out at the trial. They never proved that. The State Department or others have said that there was no genuine harm here when they were pushed on it, so let's get rid of that.

    Clearly, aiding the enemy was a ridiculous charge. But charging whistle-blowers with espionage is also nonsensical. It's a World War I statute. It makes no sense. I thought -- I don't think he should have been charged at all. But hitting them with six charges of espionage, five of which he was convicted, when he's a whistle-blower, is really overreaching and it's what I call a sledgehammer that the Obama administration seems to be taking to whistle-blowers and journalists as well.

    JEFFREY BROWN: You want to -- there are a number of things to pick up on here, but one was the facts of the impact, I mean.

    JEFFREY SMITH: The impact, I think, was real.

    I began life as an infantry officer. And the idea that details, reports of combat operations that the enemy was able to pick up and change their tactics on, I can only imagine the reaction of young officers out there trying to accomplish their mission and protect their soldiers' lives when this information was out there.

    And the fact that there was no harm, the government did, I think, establish in the course of the trial certainly enough harm to justify a conviction. He is charged with espionage because that's the one statute we have in the federal system that punishes the unauthorized disclosure of classified information, including too the press. It's not classical espionage, in the sense that you're selling secrets to another government for money, but it's the unauthorized disclosure.

    So it's a bit of a misnomer to complain that he was charged with espionage.

    JEFFREY BROWN: Well, Mr. Ratner, where does this leave things, do you think, vis-a-vis impact on future leakers or potential whistle-blowers, impact on journalists investigating stories like this?

    MICHAEL RATNER:  Well, two things.

    One is, in terms of my client Julian Assange and WikiLeaks, that was spread throughout the trial. They were trying to really say that WikiLeaks and Julian Assange were co-conspirators with Bradley Manning, he was taking orders from them. They tried to drag him through the mud on it. None of it was proven.

    What I think it tells us is that not only are whistle-blowers, but journalists are in jeopardy as well, as we saw with the case of Rosen at FOX News, when they charged him with -- or at least had an affidavit and a search warrant saying he was a co-conspirator in an espionage case.

    Similarly, recently, with The New York Times reporter James Risen when the court said the -- he's -- the crime couldn't have happened without him working with the whistle-blower. So I think we're seeing an assault that Bradley Manning's trial represents. When you charge someone who is giving the truth out to us with five counts or six counts of espionage, convict him of five, and keep everything in this government secret that they can and don't actually look at their own criminality.

    A number of cases I have brought to try to get responsibility for torture all dismissed on secrecy -- we need whistle-blowers right now more than ever. I think the government is trying to chill whistle-blowers. That's clear, but it doesn't seem to be working because even after Bradley Manning was indicted, you saw Ed Snowden come out with his revelations.

    JEFFREY BROWN: What do you think, Jeffrey Smith, will be the impact of this verdict?

    JEFFREY SMITH: It's hard to know.

    Mr. Ratner suggests that the government seems to have no legitimate secrets to keep. It clearly does. And I have seen in my own personal life direct harm from leaks of classified information. There are a number of issues that will come out. One is both with respect to Private Manning and Mr. Snowden. The government now is constraining the amount of information that's shared within the government.

    So prior to 9/11 -- or after 9/11, the government was criticized for not being able to connect the dots because we didn't share information within the government. When we share information, we find that irresponsible young men for whatever bizarre purposes disclose it. So now there's going to be some shutdown in the sharing of information, which will also have adverse consequences to our national security.

    JEFFREY BROWN: All right, Jeffrey Smith, Michael Ratner, thank you both very much.

    JEFFREY SMITH: Thank you.

    MICHAEL RATNER:  Thank you for having me.


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    GWEN IFILL: Now we turn to changes in how we think about cancer and how we choose to treat it. It comes from a panel of doctors advising the National Cancer Institute.

    In a paper in "The Journal of the American Medical Association," the doctors recommended changing the very definition of what's often seen as the earliest signs of cancer. For example, a diagnosis of noninvasive abnormal cells in the breast would be renamed so that the words cancer or carcinoma are not part of the description. The idea is to avoid unnecessary treatment.

    The recommendations were published on the same day another medical panel recommended annual CAT scans for people at higher risk of developing lung cancer.

    For more on these findings, we turn to Dr. Barnett Kramer of the National Cancer Institute and Dr. Larry Norton of the Memorial Sloan-Kettering Cancer Center.

    Welcome to you both, gentlemen.

    Why change definitions, Dr. Kramer?

    DR. BARNETT KRAMER, National Cancer Institute: Well, the meeting that you mentioned achieved a strong consensus. I should point out that it wasn't an official advisory panel to the federal government or to the National Cancer Institute.

    But it was one of the workshops that the National Cancer Institute often convenes to gather the opinions of outside experts. At that meeting, there was a consensus that it's time to bring the terminology related to cancer into the 21st century. And that is to identify cancer by how it acts and not to restrict ourselves to how it simply looks like under a microscope to a pathologist.

    GWEN IFILL: Let me follow up on that. How do you know how it acts if it's in the early stages? How can you tell?

    BARNETT KRAMER: In some cases, we have the luxury of following cancers.

    For example, there's a growing recognition that not all prostate cancers need to be treated immediately, and we're able to follow them with periodic X-rays and biopsies and get an idea of the pace of the progression of the disease. In many other cases, we unfortunately don't have that luxury and so we have to rely on molecular studies that identify the underlying behavior of the tumor.

    GWEN IFILL: Dr. Norton, what do you think about this? Do you think it's a good idea to change the way we look at these early cancers?

    DR. LARRY NORTON, Memorial Sloan-Kettering Cancer Center: Well, Dr. Kramer said something very important, which is that there's an expanding knowledge of the molecules that make cancers cancerous.

    And if we really understood that, and if we're all doing research at the National Cancer Institute, Memorial Sloan-Kettering, Breast Cancer Research Foundation -- it's a major topic of research -- to figure out how, by measuring those molecules, we can tell which molecular changes are going to lead to a problem and which are not.

    But we're not quite there yet. And I'm totally in favor of changing terminology once we can be absolutely sure that when we tell a patient that this is an indolent thing that is not going to cause any trouble that we can have great confidence that we're telling them the truth.

    Until that time, we have to be very, very careful that we're not giving people false confidence that what they have let's say in their breast or their prostate is totally benign and is not going to cause trouble, because if we don't treat it and it does cause trouble, well, that's not going to be a good result.

    GWEN IFILL: Well, let me ask you this, Dr. Norton. So, say somebody comes to you and you discover an early -- something -- a lesion that could be cancerous, could be very early. In this case, what would you do about that? How would you treat it?

    LARRY NORTON: Well, mostly, we're talking not about actually things that we would call cancer, but things that may predispose to the development of true cancer.

    And some of these do have the word carcinoma in them, and it is a source of confusion. So you have to explain very carefully that something, let's say ductal carcinoma in situ of the breast, DCIS, is like a criminal before the criminal has done a crime. It hasn't actually done anything bad yet, but it sure has all the signs that it very well might. Now, in some cases we can tell relative odds that it's going to cause trouble, like turn into a real cancer that could spread and threaten life. 

    In some cases, we can really specify that this is very likely to do that or less likely to do it. But in no case yet can we say that it's not going to do that. So then the patient really has to make a choice of what they can do to try to minimize their risks if they wish to minimize their risks. It's a very individual decision. A lot of explanation has to go into it, so that what we really need now is good communication. I'm not so sure just changing terminology is going to accomplish that.

    GWEN IFILL: Dr. Kramer, is this a question of overdiagnosis, overtreatment, or is it that improved technology has told us more than we ever used to know?

    BARNETT KRAMER: Yes, it's a little bit of both.

    Overdiagnosis is the term we apply to the detection of tumors that have low malignant potential or very little chance of actually causing the patient's death. And there are two criteria for overdiagnosis. One, there needs to be a large reservoir of tumors that have a very wide spectrum of behavior, and the more we learn about the biology of cancer, the more we know it's virtually always there.

    And the only other criterion is a sensitive screening test that can dip into that reservoir, and as we focus on more and more sensitive screening tests, we are tapping into that very, very large reservoir, detecting tumors whose natural history we really don't even understand because traditionally we haven't observed it.

    GWEN IFILL: It sounds like both of these cases -- the next one I'm going to ask you about -- are about risks vs. benefits. You have this recommendation now that CAT scans be performed on an annual basis on heavy smokers to detect lung cancer early.

    What's the risk/benefit ratio there, Dr. Kramer?

    BARNETT KRAMER: Well, that's a very important point.

    I want to put the national lung screening trial, which is the trial of low-dose helical C.T., into context. It was the first trial that ever showed that we could decrease the risk of dying of lung cancer in people who are at very high risk of dying of lung cancer by virtue of their smoking.

    On the other hand, stopping smoking has a much, much larger and faster effect. And so no matter what, we need to encourage people who smoke to stop smoking. Nevertheless, about half of all lung cancers in our country are in people who already stopped smoking.

    GWEN IFILL: So, Dr. Norton, is this a matter of mortality, of relative risk of mortality, and which is better, this annual screen that may not be covered by insurance, might not be worth the risk to people?

    LARRY NORTON: Well, you're bringing up a lot of topics, just the insurance, but I just want to concentrate on the biology here.

    GWEN IFILL: OK.

    LARRY NORTON: I think what we're seeing with the lung cancer screening is very much like what we have seen with mammography screening.

    Many, many studies have shown that if you do mammographic screening and you pick up small changes, you can pick up this DCIS that I mentioned and do things to even prevent the development of cancer in the first place or you can pick up very small cancers with a very high cure rate with breast conservation as an option for patient.

    So that's kind of where we are. I mean, I see in the lung cancer screening the very early days of mammographic screening of the breasts. Now, it's possible, of course, that some of these cancers that we're picking up on lung screening are also not going to grow. And if we can understand the biology of that and understand the molecules, we may be able to just do a needle biopsy, for example, and say we found the cancer, but it is not going to cause you trouble. You don't have to do anything about it.

    LARRY NORTON: When that day comes, we can call it indolent. But we're not there yet.

    GWEN IFILL: But when you say we're not there yet, does that mean that both of these things we're talking about are some ways down the road?

    LARRY NORTON: Absolutely.

    There's no definitive test that we can do now to DCIS or lung cancer or anything else that is going to tell us with certainty that this is not getting turn into a dangerous disease that could be life-threatening. We're moving that direction. It's a very, very important area of research. And I would applaud the day when we could actually say this is early changes and it's never going to cause you a problem and you can ignore it.

    That is going to be wonderful.

    GWEN IFILL: Dr. Kramer?

    LARRY NORTON: And I think that day will come, but we're not there yet.

    GWEN IFILL: How far away?

    BARNETT KRAMER: Yes. So how far down the road we are depends very heavily on our understanding of the underlying biology of each tumor.

    And the better we understand it, the better we can make individualized decisions that help patients choose the best therapy. In the case of prostate cancer, there is a very large reservoir, we already know, of tumors that are so slow-growing that at least many of them are best left observed and not treated.

    In the case of lung cancer, on average the tumors grow much faster than with prostate cancer, and so we're not there. We need to learn more about the biology. And in the meantime, I want to emphasize the national lung screening trial showed that the net benefits outweigh the harms in this case.

    GWEN IFILL: OK, Dr. Barnett Kramer of the National Cancer Institute and Dr. Larry Norton of the Memorial Sloan-Kettering Cancer Center, thank you both very much.

    LARRY NORTON: Thank you.

    BARNETT KRAMER: Thank you.


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    JUDY WOODRUFF: The numbers are grim: A female soldier is more likely to be raped by a fellow officer than she is to die in combat. It's one of many statistics that have fixed new attention on the problem of sexual assault in the armed forces.

    Pentagon findings last May estimated 26,000 troops were sexually assaulted last year, but only 3,400 attacks were reported.

    Democratic Senator Kirsten Gillibrand of New York is leading an effort to change the way the military handles these cases.

    SEN. KIRSTEN GILLIBRAND, D-N.Y.: So, today we're standing in a united front to take on these issues with new legislation that will fundamentally remove the decision-making from the chain of command and give that discretion to an experienced military prosecutor, where it belongs.

    JUDY WOODRUFF: Gillibrand points to victims who complain that too often commanders ignore their allegations or their careers suffer. But her proposal was defeated by the Senate Armed Services Committee in June in favor of an alternative by committee Chair Carl Levin, Democrat of Michigan.

    It requires automatic review of any commander's decision not to prosecute a sexual assault case. Last week, Levin released two letters from senior military officials supporting his argument that prosecution should remain within the chain of command.

    Missouri Democratic Senator Claire McCaskill agrees with him.

    SEN. CLAIRE MCCASKILL, D-Mo: We believe there will be more prosecutions, and the numbers support that. We believe that the only way to hold command accountable is to make them responsible, not to completely remove their responsibility. We believe that's a recipe for disaster.

    JUDY WOODRUFF: Still, Gillibrand is undaunted. She says she hopes to take her measure to the full Senate. Already, she has 44 supporters from both parties. The legislation could be brought to the floor as early as September.

    And joining us from Capitol Hill to talk about her proposal and its prospects going forward is New York Senator Kirsten Gillibrand.

    Welcome to the NewsHour Senator.

    First of all, tell us why it's so important to you that the prosecution of sexual assault charges be taken out of the chain of military command.

    KIRSTEN GILLIBRAND: Because it's exactly what the victims have asked for. They have said over and over again that they don't trust the chain of command to deliver justice in their cases.

    For those victims who have been courageous enough to report these cases, 62 percent have said they have been retaliated against for reporting those cases. Of the tens of thousands who didn't report incidents of sexual assault, rape, and unwanted sexual assault contact, the reason they give us is they don't trust the chain of command, that they think nothing will be done, or that they fear retaliation, or they have seen someone else be retaliated against.

    So what we're looking for is a way to address these cases in a more objective way, where a trained military prosecutor becomes the decision-maker as to whether or not these cases should go to trial. And hopefully with that objectivity and lack of bias, more victims will feel confident in coming forward.

    JUDY WOODRUFF: Senator, as you know, the chairman of the Armed Services Committee, your fellow Democrat, Carl Levin, is arguing something very different. He says it could take responsibility away from the commanders, relieve them of the kind of incentive they should feel.

    He argues that you should leave it with them and, when they don't prosecute a case, it should go to a superior officer.

    KIRSTEN GILLIBRAND: My response is quite simple. They are still responsible for these cases. They're 100 percent responsible to make sure no one is raped or sexually assaulted within the military.

    They are still responsible that no one is retaliated against, and that they can set a command climate that's consistent with victims being able to come forward and report these cases. The chain of command is entirely on the hook for good order and discipline. And, frankly, Judy, if you're having 26,000 sexual assaults, rapes, and unwanted sexual contacts a year, you're not maintaining good order and discipline.

    And if those few victims that do come forward, 62 percent are being retaliated against, you're not setting a command climate that's conducive for victims receiving justice. So I don't believe commanders are off the hook. I think they're entirely on the hook to do a better job than they're doing today and to have that legal decision, which is just a legal decision, where evidence is weighed, being made by someone who is trained to do that.

    Commanders are still 100 percent responsible for making sure these crimes don't happen and making sure that there's no retaliation for a victim when they come forward.

    JUDY WOODRUFF: I was just going to say, Chairman Levin, again, his argument then is that what he wants to do is make it a crime if there's a retaliation against a victim.

    KIRSTEN GILLIBRAND: And I agree. And we have already voted on that. We are 100 percent in agreement, and consensus has already been reached on that. We have passed that measure out of the Armed Services Committee unanimously.

    So now retaliation is going to be a crime, and it is a crime under the jurisdiction of commanders. And they are 100 percent responsible for making sure it doesn't happen and, if it does, that it can be reported and that justice can be done.

    JUDY WOODRUFF: Senator, what do you think it says about this issue that in order to put together a coalition of support, you have had to reach way beyond your own party? You have reached into the Republican Party to people who you would typically disagree with politically, Senator Ted Cruz, Senator Rand Paul? And, meanwhile, you are fighting opposing fellow Democrats like Senator Levin, Senator McCaskill and a number of others?

    KIRSTEN GILLIBRAND: Well, we all agree that we have to do something about sexual assault and rape within the military.

    And victims aren't Democrats or Republicans. They don't have an ideology. Victims' voices have to be heard. And that's why you're hearing from senators across the political spectrum who say the status quo is unacceptable, we have to do something. And they're listening to those victims when they say they don't trust the chain of command to bring justice in these cases and that the current command climate is untenable for them.

    The secretaries of defense since Dick Cheney was secretary of defense some 20-odd years ago have said, Judy, over and over again zero tolerance for sexual assaults and rape. This has been within the chain of command every one of those years since. The commanders have had every bit of authority they need to tackle this problem and solve this problem, but it's not being solved.

    So I think that measure of transparency and accountability and objectivity makes sense. And I don't think, as they say, it will undermine good order and discipline because we have allies that we fight side by side with, the U.K., Israel, Canada, who have done this already and they still have good order and discipline within their ranks.

    JUDY WOODRUFF: Two other quick questions. Of course, Defense Secretary Chuck Hagel has not gone along with your approach. Where does President Obama stand? Have you talked to him about this?

    KIRSTEN GILLIBRAND: I have not been able to speak to him directly, although I have asked for that conversation.

    I'm hopeful that President Obama will support this change, this reform, this commonsense reform that creates that transparency and accountability. I also hope Secretary Hagel will. Secretary Hagel has already made the bold decision that taking the decision of whether or not to overturn a jury verdict out of the chain of command.

    Now, he's already changed and recommended a change to the Uniform Code of Military Justice to say this one legal decision should be taken out of the chain of command. I think we should add a second legal decision, whether or not to go to trial, and also take that out of the chain of command.

    JUDY WOODRUFF: So, just quickly, right now, you have 44 supporters among your fellow senators. Do you think you will get a majority?

    KIRSTEN GILLIBRAND: I do.

    And I think that the more time we have so that I can -- and my allies and colleagues, we have so many senators who support this reform. The more time we have to talk to our colleagues, to explain the facts, what's actually happening, the fact that there's 26,000 cases, but only 3,300 being reported, the fact that only one in 10 go to trial, those statistics are highly concerning.

    And when they hear that and they hear what the victims tell us, it causes them very grave concern. And that's how we have slowly won the support that we have.

    JUDY WOODRUFF: Senator Kirsten Gillibrand, thank you very much.

    KIRSTEN GILLIBRAND: Thank you.

     


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    GWEN IFILL: Next, Outside of a war zone, this is the most dangerous place on earth, San Pedro Sula, the second largest city in Honduras, at the crossroads of drug shipments from South America to the United States.

    More than 1,200 people were killed in the city last year, more than 7,000 in the country. Thanks to those ongoing drug wars, it has the highest per capita murder rate in the world.

    Our story comes from filmmaker Guillermo Galdos, who spent a week in Honduras on assignment for Britain's Channel 4 News.

    A warning: The images and the details in this report are disturbing.

    GUILLERMO GALDOS, filmmaker: Friday night at the main hospital in San Pedro Sula, the casualties would in, this man barely alive shot twice in the head. The hospital is so busy that even a dying man has to wait 24 hours for an operation.

    WOMAN (through translator): I never thought it would happen to me. I used to see it on the news all the time. I never thought it would happen to me because my kids are clean.

    MAN (through translator): In the last two years, violence in this country has increased tremendously.

    GUILLERMO GALDOS: The gang violence even reaches in here. Armed guards are needed to protect patients.

    WOMAN (through translator): I have faith in God that everything will be fine. But he has two bullets in his head. I have to be realistic.

    GUILLERMO GALDOS: Her son David died later that night.

    I wanted to see what it was like out on the streets. Everyone is terrified of the gangs, but this man agreed to tell me how it works if we hid his identity.

    MAN (through translator): All businesses, from the smallest to the biggest, are paying the famous rent to the gangs.

    GUILLERMO GALDOS: He runs a transport company. He says he has to pay $1,000 a month to the gangs.

    MAN (through translator): In my business, since the extortion started, the gangs have killed around 80 of my colleagues. If you want to survive, you need to pay. If you don't pay, you die.

    GUILLERMO GALDOS: Eduardo Vega (ph) was a bus driver. Most likely, it was his boss who refused to pay protection money to the gangs.

    MAN (through translator): Are you the mother?

    WOMAN (through translator): Yes, I'm the mother.

    GUILLERMO GALDOS: He was executed here, at 9:00 in the morning, in front of dozens of witnesses. And even his mother is careful what she says about his killers.

    WOMAN (through translator): God should be the judge of those people who took his life. I will forgive them for what they did to my son.

    GUILLERMO GALDOS: These guys are members of one of the deadliest gangs in the world. They have killed hundreds of people, and here in this barrio, they control everything from the shops to the police. In the '90s, thousands of Honduran gang members were deported from L.A. They found fertile territory back home.

    GUILLERMO GALDOS (through translator): If I come here alone tonight and go inside the barrio alone, what would happen?

    MAN (through translator): I'm more than 100 percent sure they would shoot you. They would kill you. There are so many tombs. They can even bury you alive.

    GUILLERMO GALDOS: Douglas is a veteran gang member. The stars on his arm mean he has killed two police officers.

    GUILLERMO GALDOS (through translator): I have seen many dead people in the streets, but many have also disappeared?

    MAN (through translator): Those that disappear are the ones we bury alive.

    GUILLERMO GALDOS (through translator): You bury them alive?

    MAN (through translator): Yes. You only shoot them once, then bury them. Then they will drown in their own blood in the ground.

    GUILLERMO GALDOS (through translator):Why do you do that? 

    MAN (through translator): Because we need to respect the territories.

    GUILLERMO GALDOS: The gangs are run from here. It's a jail, but not as we know it, pizza deliveries to the prisoners, inmates in charge of security. It looks easy to get out. In fact, it's like a fortified headquarters for the gang bosses.

    Marcus is head of the Salvatrucha gang.

    MAN (through translator): This is where we sleep.

    GUILLERMO GALDOS: He's been in jail for 13 years for murder.

    MAN (through translator): My organization is my family. The people who live in our barrios know how it is. They know what we do. They know we take care of people at night. That's normal. It's as if you put private security in your neighborhood.

    GUILLERMO GALDOS: The gangs are trying to rehabilitate their image, and the authorities seem keen to help them. They allow Marcus out of jail for the day. He's come to an old people's home to deliver a gift of 50 beds.

    MAN (through translator): In the past, they have hurt society. Now they know they need to change.

    GUILLERMO GALDOS: The media treats the convicted murderer like a politician.

    MAN (through translator): We have the will. We have changed, and we have taken the first step. That's what we want to show to society.

    GUILLERMO GALDOS: They may be talking about peace, but there is no sign of it out on the streets. They arrest a man on suspicion of being a gang member.

    MAN (through translator): We are fighting an asymmetric war. They know who we are, but we don't know who they are.

    GUILLERMO GALDOS: And this means that accidents happen. This video was taken immediately after the military shot almost an entire family by mistake.

    Even the president doesn't hold out much hope that the violence will stop.

    PRESIDENT PORFIRIO LOBO SOSA, Honduras (through translator): We know that 70 percent of the violence is related to drugs. If there was less consumption, there would be less demand, because what we can't change is our geographic location. We could never change that.

    GUILLERMO GALDOS: At the city morgue in San Pedro Sula, families wait for the bodies of their loved ones. People here are trapped in a society where the gangs do whatever they want, and no one believes things will change. It felt like the most dangerous city on earth was resigned to its fate.

    GWEN IFILL: And one more detail: According to the U.S. State Department, Honduras is the first stop for 79 percent of all cocaine arriving here from South America. 


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    JEFFREY BROWN: Finally tonight, troubling cases of elderly care, or lack of it, at some assisted living centers.

    Nearly three-quarters-of-a-million Americans reside in more than 30,000 facilities.They're the subject of an investigation on tonight's Frontline, done in partnership with ProPublica.

    A.C. Thompson is co-author of a series of reports for ProPublica and correspondent on tonight's program.He joins us now.

    Well, welcome to you.

    And first, for purposes of definition, tell us what you were looking into.How are you defining assisted living?

    A.C. THOMPSON, Frontline/ProPublica:So, assisted living is the niche of senior housing that's between living at home on your own and living in a nursing home.

    So these are people who need some help, they can't live independently anymore, but they don't necessarily need full-on around-the-clock medical care.So in an assisted living facility, it's more like a home, it's more like an apartment, and what you're getting typically is help with your medication, help with your meals, help to get to the bathroom or dressing if you need it.

    JEFFREY BROWN: So what did your reporting show you about the general problems in many institutions?

    A.C. THOMPSON: You know, first off, a lot of these facilities are great.

    But what we also found was that there was a pattern of problems that spanned the country.And what we kept seeing were allegations and citations for a lack of staffing, not enough workers, a lack of training, workers who weren't trained enough, medication errors, people getting the wrong drugs over and over again.

    These were the kind of things that we saw, and these were the things that worried us about the industry as it evolves.

    JEFFREY BROWN: You focused on one leading company, Emeritus, and you report on a number of very horrific-type stories.

    I want to show a clip that focuses on one issue.It's called memory care centers.Just tell us briefly what those are and what you were looking at.

    A.C. THOMPSON: The memory care units or memory care facilities are places that are specially designed for people with Alzheimer's, other forms of dementia.

    The problem that we found was they weren't always keeping those seniors safe.

    JEFFREY BROWN: All right, let's look at -- let's look at that clip.

    KELLY SCOTT, Emeritus Senior Living:This is our program.We call it our Join Their Journey program.And this is where we're caring for folks with dementia.

    And it's really a specialized program to meet their needs.We find out a lot about who they are as individuals.And then the day is set up around what is purposeful and meaningful to them as individuals.

    WOMAN: It's ready, 350.

    A.C. THOMPSON: But some question whether memory care units like this one provides enough care.

    WOMAN: Has anyone got a shovel?

    WOMAN: You're going to have a memory care unit.That's a good marketing tool for families.A., there's demand and you're trying to keep occupancy up.And, B., you can charge more for memory care.

    I mean, all you have really done is created rooms around a courtyard, but, still, that's nice.And it's much safer.But then they say they have got staff who are trained to do memory care.And that's where it starts to kind of fall apart, because the staff are generally not well-trained to do dementia care.

    A.C. THOMPSON: And lay out for me.If we're here in Carmel Valley, we're at your facility, what would the typical training consist of for somebody in this facility?

    KELLY SCOTT: Who's working particularly in memory care?

    A.C. THOMPSON: In the memory care unit.

    KELLY SCOTT:OK.

    For our staff that works in memory care, they are going to go through what we call general orientation, which everybody in the community would go through.And then we have an eight-hour class that's the Join Their Journey class.And that's really where we cover everything from disease process, to how we serve a meal slightly differently to folks who have differently to folks who have dementia, to how to engage, how to approach, how to communicate, overcoming some communication barriers at time.

    A.C. THOMPSON: So the eight-hour intro is sort of the minimum?

    KELLY SCOTT: That's our company standard is going to be the eight-hour.

    WOMAN:Eight hours?That's nothing.Who's going to explain this is what the disease is, this is the impact that it has on people's physical health and on their behaviors?You have got to know how to interpret nonverbal cues that something's going on with this resident because they can't tell you verbally, you know, in the same way that a 2-year-old can't tell you or a 1-year-old.

    I mean, you have got to do a lot of training for memory care units.You can do great care.You just -- you got to know how.

    JEFFREY BROWN: Well, so, A.C., that goes to one question, training.

    You also documented some cases of very serious neglect, including some deaths.What did -- the company at the focus here, Emeritus, what was their response to your report?

    A.C. THOMPSON: The company's perspective is that what we have highlighted are a series of isolated incidents.And they say these aren't reflective of how the company does business and the care it provides.

    In their opinion, they are providing great care, and what they say is that their violations, their state regulatory violations are declining.

    JEFFREY BROWN: Well, speaking of regulations, one of the issues that you're pointing to here is the regulatory system.Explain how that works or doesn't work.

    A.C. THOMPSON: You know, that was the thing that really surprised us in many ways.So I live in California.

    And in California, if you want to find out what's going on in these facilities -- and we have more than 7,000 of them in this state -- you can't find that out online.The state Web site doesn't have that information.You can't get the inspection reports or any pertinent details.

    You have got to set up an appointment, go to a state office, go through a bunch of paper files to figure out what's going on in these facilities, if they have been cited for neglect, for abuse, for any other problems.Another thing that we saw a lot of -- and it was, frankly, astounding to us -- are cases like the death of George McAfee.

    George McAfee was an NFL Hall of Famer.He developed dementia.He was in an Emeritus facility in Georgia.He drank toxic dish washing liquid.Apparently, he didn't realize what it was.It was supposed to be locked up, but it wasn't, and he died as a result. He had chemical burns.

    The state of Georgia says, OK, we're going to fine Emeritus for this death.The fine is $601 for Mr. McAfee's death and an unrelated medication error -- $601. 

    JEFFREY BROWN: Well, just in our last minute, A.C., to the extent that this is clearly a growing phenomenon as the population ages, having looked into this, what do you think people need to know that they don't know at this point?

    A.C. THOMPSON: You know, I think that they absolutely need to research as much as possible, even if it means going to a state office and digging through files, the history of the facility that they're considering moving into or having a loved one moved into.

    They need to contact the state ombudsman where they live and see if there have been consumer complaints that have been verified at these facilities.And some states actually are technologically savvy and you can do this online and check out these facilities online in some states, but those steps absolutely need to be taken by consumers.

    JEFFREY BROWN: And the stories you heard, the people you talked to, your sense was, they didn't know that?

    A.C. THOMPSON: You know, people are baffled often times.

    The laws vary from state to state.The definitions for assisted living vary from state to state.And people are paying $3,000 or $4,000 or $5,000 or $10,000 a month, so they expect that they're going to get high-quality care.And that doesn't always happen.

    JEFFREY BROWN: All right, A.C. Thompson of ProPublica and "Frontline," thanks so much.

    A.C. THOMPSON: Thanks for having me on.

    JEFFREY BROWN: And you can watch the full story on "Frontline" airing on PBS stations tonight.


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    Updated: August 1 | On the morning of July 29, 1997, while swimming off the shore of Waikiki, a throng of box jellyfish stung Angel Yanagihara along her neck, arms and ankles. She swam back to shore wheezing and gasping, and then collapsed, blacking out, on the sand. She regained consciousness in an ambulance, surprised to find herself covered in vinegar and saran wrap.

    "I was really horrified at this waste of medical expertise on behalf of jellyfish stings," she recalls now. "I remember thinking, this probably wasn't the most sophisticated approach." So Yanagihara, a biochemist, resolved to find out more about the source of the sting.

    After she was somewhat stabilized, the EMT suggested she take a hot shower, which temporarily reduced the pain. But on the drive home, it returned with vengeance: intense, fiery burning on her neck, legs and arms, accompanied by labored breathing, dizziness, nausea. "It was just horrible," she recalls. Hers was among 1,000 ambulance calls in Honolulu responding to jellyfish stings that month alone.

    Box jellyfish are among the most venomous creatures in the world. They are virtually transparent, with a bell that ranges in size from a thimble to a basketball and anywhere from 4 to 60 tentacles, depending on the species. Their tentacles, which can reach as far as 10 feet in the Chirodropids, the largest members of this class, contain as many as 5,000 tiny stinging cells per centimeter, which discharge venom in as little as 700 nanoseconds. That venom contains toxins that can attack cells in human skin, blood, heart and nervous system. And their stings have been known to cause skin lesions, heart failure and occasionally death, not to mention, as Yanagihara can attest, excruciating pain.

    In the 16 years since her injury, Yanagihara, now a research professor of tropical medicine at the University of Hawaii, has devoted her career to biochemically studying these stingers and developing a treatment against jellyfish venom. And she thinks she may have found one in zinc -- specifically, a compound called zinc gluconate. In a study published in December 2012 in the journal PLOS One, she shows that zinc gluconate helped to save mice given a lethal injection of box jellyfish venom.

    Jellyfish, she found, release toxins called porins, which are structurally similar to the blood-destroying, pore-forming molecules released from anthrax and streptococcus, she said. The porins tear holes in blood cells, leaking potassium from the cells as they do so. And it's the sudden spike in potassium in the bloodstream, known as hyperkalemia, that causes cardiovascular collapse in some victims, she shows in her study.

    Yanagihara found that the zinc compound "markedly reduced" potassium leakage from red blood cells and both stabilized heart rates and delayed or prevented death in mice injected with jellyfish venom.

    She's since developed three treatments -- one preventative and two designed to be used immediately following a jellyfish attack. She tested them herself by applying the preventative ointment and then laying an entire box jelly across her arm. ("Essentially, nothing happens," she said.)

    And while the treatments must still go through several rounds of human trials before they're approved for commercial use, she already has a willing participant -- and a very high profile one.

    Long distance swimmer Diana Nyad, 63, is preparing for her fifth attempt at the 103-mile swim from Cuba to Miami. She sent out a "red alert" email to her team today, alerting them to prepare for departure. "My adrenaline has hit overdrive," she wrote in the email.

    It was the jellyfish, along with life-threatening lightning storms that slammed the swim to a halt in August 2012, she told NewsHour correspondent Margaret Warner, immediately following her swim. She had made it about halfway before being pulled from the water with a sunburned face and lips swollen by jellyfish stings.

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    Diana Nyad talks to Margaret Warner about the obstacles that she encountered during her fourth attempt at swimming the distance between Cuba and Florida in order to become the first person to do so without a shark cage.

    "How could it be that a tiny animal that has a tentacle no bigger than a strand of a hair...could be out there in this vast wide ocean, and I'm wearing a suit and creams and repellent, and the only square inch of my entire body that is open and exposed are my lips, because I have got to breathe -- how could that tentacle find those lips?," she said to Warner.

    This time, Nyad's handlers will slather a sticky substance over her body every 80 minutes or so. In this column posted on the Huffington Post, Nyad also describes the gear she'll wear to protect herself from stings: "cumbersome 'armor,'" she calls it.

    "They slow me down, take much more effort per hour, and interrupt the normal breathing process," Nyad writes. "But our team, at least, could not come up with another viable solution. Desperate measures for desperate times."

    This is a sample of one of the stingers that Nyad encountered during her 2012 swim. Photo by Angel Yanagihara.

    Yanagihara was on Nyad's support boat in 2012, and her expertise and treatment -- spreading the gel across the neck and shoulders, along with the "After Sting" substance -- greatly lessened the stings, Nyad wrote in the post:

    "When I would scream out with the pain of a sting, I'd try to get to the side of the boat in a hurry where Angel and my Head Handler Bonnie Stoll would deftly wipe tentacles from the affected area and apply the After Sting substance," she recalled. "I had half a fighting chance."

    Many say that jellyfish populations have been thriving due to overfishing, warmer ocean temperatures, and stormwater runoff that carries floods of nutrients -- that's food source for jellies -- into ocean waters.

    A rare jellyfish called the black sea nettle, or Chrysaora achlyos was spotted in Southern California earlier this month, and swimmers came ashore with stings, and dark membranes sticking to their skins and wetsuits. Wyatt Patry of the Monterey Bay Aquarium says at least once a year, intake screens at the aquarium will get completely clogged with other species of sea nettles. Such events used to occur only once or twice every 30 years, he said.

    "The screen literally gets crushed like a soda can," he said.

    And Paul Bologna, a jellyfish expert, has seen increasingly more sea nettles along the New Jersey's coastline. He attributes the blooms to the growing numbers of docks and bullheads, which have replaced salt marshes and natural shore lines, along with efforts to replace tarlike creosote, which once covered these structures, with less toxic building materials.

    "Now that we went with nontoxic, it opens up a lot of spaces," he said. "It's a perfect storm for jellyfish."

    But a limited data set means it's unclear how much the jellyfish populations are growing.

    "We don't have any historical data to give any definitive examples of whether the sea nettle population has exploded or only increased a little bit," Patry said, adding that this also applies to broader jellyfish populations.

    A recent paper in the Journal of Plankton Research highlights the debate, and offers some suggestions to fill the research gaps, including "international standardization of methods, a discipline-specific journal for jellyfish research and an international science program on the global ecology and oceanography of jellyfish."

    The question sets up the kind of healthy dynamic that one wants in science, and values good data over flashy headlines, Yanagihara said. She does regular offshore sampling in scuba gear during the late-night hours of jellyfish swells by attaching herself with a carabineer, tether line and lead-weighted down line to a boat.

    "We need to identify this as a critical unmet need with regards to scientific research, and we need to have the funds available for folks to do this research," she said. "To have the pendulum swing, what one needs is definitely the data."

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    By William Darity

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    In our Making Sen$e report on youth unemployment earlier this month, we examined obstacles inner-city youth face to finding jobs.

    Compiling our first Making Sen$e report on youth unemployment earlier this month, we were hit with the staggering statistic that 95 percent of black male teen dropouts are jobless. Each month, we calculate our "Solman Scale" -- a more inclusive measurement of unemployment than the official unemployment rate, and we've been well aware of the rise in youth black unemployment. (Look for our latest Solman Scale here on Friday after the Bureau of Labor Statistics releases July unemployment data.)

    To keep the conversation going, we turned to Duke's William Darity for his perspective. Darity has previously appeared on Making Sen$e, talking to us about colorism in the labor market and a government jobs guarantee program.

    Monday on the Business Desk, Boston Private Industry Council head Neil Sullivan explained how America pales in comparison to European countries that set up their young people with jobs through the education system. He warned, "We're going to get back to integrating teen employment, youth employment, as part of the American education experience or we're going to be less productive than our economic competitors." In light of the dire joblessness affecting youth, Darity now passionately renews his case for such a government jobs program.

    William Darity: Ninety-five percent joblessness for teen black male dropouts? That estimate, from Northeastern University's Andrew Sum, borders on the fantastic as an indictment of the American labor market.

    Add to Sum's damning statistic the finding that blacks with some college education or an associate's degree experienced higher unemployment than whites who had dropped out of high school, and you can see this racial gap in unemployment is a profound index of the degree of discrimination in American labor markets.

    Where there's unemployment, there's imprisonment. Male high school drop-outs of all races are nearly 50 times as likely to be imprisoned as their peers of the same age who have a college degree. But in a 2009 study, Sum's Center for Labor Studies at Northeastern found that almost one quarter of all young black men ages 16 to 24 who have dropped out of high school are in jail, prison or juvenile justice institutions. These conditions should be an automatic call to arms for dramatic social change to create substantive work opportunities for all of these young men.

    MORE ABOUT YOUTH UNEMPLOYMENT: Could High Teen Joblessness Trigger an Arab Spring (or Summer) in America?

    While the burden of unemployment weighs heavily on all young people, joblessness continues to afflict black youth more than others. Bureau of Labor Statistics' (BLS) estimates for June 2013 peg the unemployment rate for blacks 16 to 19 years of age, regardless of gender, at a staggering 48.6 percent; the unemployment rate for whites in the same age range is 22.7 percent.

    Moreover, the unemployment rate for adult blacks has remained roughly twice as high as the rate for adult whites continuously since employment statistics by race first were collected 50 years ago.

    At least as disturbing, the black rate is approximately twice as high at each level of educational attainment. For example, among persons 25 years and older in 2011, blacks who had not completed high school had a joblessness rate of 24.6 percent; the rate for whites with a similar educational attainment was 12.7 percent. Black adults who had completed high school had a 15.5 percent unemployment rate; whites who had completed high school had an 8.4 percent unemployment rate. Blacks with some college education or an associate's degree had a 13.1 percent jobless rate; whites had a 7 percent rate. Finally, blacks 25 years and older who had completed college had a 6.9 percent unemployment rate; white adults who had completed college had a 3.9 percent unemployment rate.

    The discriminatory climate is reinforced by Princeton's Devah Pager's field experiments in Milwaukee and New York City. We know that it's harder for ex-convicts to obtain work than it is for non-convicts of similar age and educational attainment. But more surprisingly, Pager found that black male job applicants with no criminal record had a lower likelihood of receiving a call back for an interview than did white applicants who had been convicted of a felony.

    Racial discrimination underlies this country's severe racial employment gap, but blacks are not the only demographic struggling to secure employment. Young veterans, particularly those who served in Afghanistan, Iraq or both, return to civilian life with lower odds of finding work. According to BLS data, these veterans ages 18 to 24 had an unemployment rate of 20 percent in 2012, higher than the rate for non-veterans in the same age group, which was 16.4 percent.

    But those veterans are not alone. Just about everyone is having a tough time finding work in the economy. A 2010 New York Times story from Peter Goodman on "the new poor" indicates that even well-paid white professionals, once accustomed to six-figure salaries, have confronted long-term unemployment so extreme that they've depleted their personal savings, exhausted their eligibility for unemployment benefits and skipped on filling their prescriptions. Jean Eisen, who at the time she was quoted in Goodman's article had been out of work for two years, observed, "There are no bad jobs now. Any job is a good job."

    There's a Solution

    Persistent high unemployment has produced a crisis for virtually all Americans. But we can resolve the crisis by adopting a federal job guarantee for all citizens. A system of job assurance, rather than unemployment insurance, could have been implemented at any point by presidential directive under the mandate of the Full Employment and Balanced Growth Act of 1978 (popularly known as the Humphrey-Hawkins Act).

    Rep. John Conyers, D-Mich., has proposed a new bill: the Humphrey-Hawkins Full Employment and Training Act, which could pave the way for implementation of a federal job guarantee.

    The idea is straightforward: any American 18 years or older would be able to find work through a federally funded public service employment program -- a "National Investment Employment Corps."

    The basic idea has been endorsed by policy analysts as disparate as Kevin Hassett from the American Enterprise Institute and Jared Bernstein from the Center for Budget and Policy Priorities. The Congressional Black Caucus included the proposal in their budget and deficit commission report in 2011.

    Each National Investment Employment Corps job would offer individuals non-poverty wages, a minimum salary of $20,000, plus benefits including federal health insurance. The types of jobs offered could address the maintenance and construction of the nation's physical and human infrastructure, from building roads, bridges, dams and schools, to staffing high quality day care.

    The program would include a training component to equip employees with the skills necessary to fill state and municipal needs.

    The program would be cost effective, too. Suppose that the program put 15 million Americans to work -- the total number of persons out of work at the nadir of the current depression -- at an approximate cost of $50,000 per employee. The bill for the program would be $750 billion.

    In 2011, the total cost of the nation's anti-poverty programs was about $740 billion. But since the National Investment Employment Corps would function simultaneously as an employment assurance and anti-poverty program, the existing anti-poverty budget could be slashed drastically, with those savings going to finance the job guarantee.

    This initiative would remove the threat of unemployment and provide a direct route to sustained full employment, particularly for those groups intensely struggling to find steady work: Young veterans, young people in general, blacks subjected to discrimination in employment, all high school dropouts, and especially black high school dropouts. While providing a particular benefit for those Americans in the most desperate straits, a universal job guarantee would benefit all Americans who could experience joblessness.

    Watch Video

    As reported in this week's Making Sen$e story on youth unemployment, the number of jobs available to 16- to 19-year-olds has decreased by half since the 1990s.

    This entry is cross-posted on the Rundown -- NewsHour's blog of news and insight. Follow @paulsolman


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    Join PBS NewsHour correspondent Gwen Ifill and Washington Post reporter Dan Balz for a special live chat, hosted by PBS's Washington Week and the Washington Post at 1 p.m. EDT Thursday.

    On the table: All things politics and journalism.

    Chat with Gwen Ifill of Washington Week and Dan Balz of the Washington Post

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    PBS NewsHour holds live Twitter chats each Thursday from 1 to 2 p.m. EDT. Join us @NewsHour using the hashtag #NewsHourChats. Photo by Servizio Fotografico L'Osservatore Romano via Getty Images.

    On the way home from his seven-day papal tour of Brazil, Pope Francis took unfiltered, no limits questions from reporters aboard his plane. His responses to the questions, especially about gay priests and women in the church, made headlines and sparked debate about whether his comments suggest a shift within the Catholic Church.

    PBS NewsHour hosted a live Twitter chat on the pope's remarks and changing perspectives within the Catholic Church on Thursday, Aug. 1. During the chat we asked if the pope's comments about gays and women have an impact beyond the Catholic Church and if his remarks signal a change in attitude regarding gays within the Catholic Church.

    You can read a transcript below. We will be hosting live chats regularly on Thursdays. Follow @NewsHour for details and use the hashtag #NewsHourChats.

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    GWEN IFILL: The American public learned a little more today about the sweeping surveillance of telephone communications revealed by Edward Snowden.

    The government released heavily redacted documents that showed, broadly, how the National Security Agency uses the data. And, in London, The Guardian newspaper published images of what analysts see, under a program known as XKeyscore.

    For more, we turn to Charlie Savage, who's covering the story for The New York Times.

    Charlie Savage, because you're covering this story, tell me what new you saw in these documents today.

    CHARLIE SAVAGE, The New York Times: Right.

    Well, as you said, there were two sets of documents. There was an officially released set of documents that the intelligence community and the Obama administration wanted the public to see. And those concerned this program which has been collecting for years every phone call died or received in the United States.

    And then there was an unofficial release of documents they didn't want anyone to see, and that concerns their vast vacuuming -- they being the National Security Agency -- vacuuming up of Internet activity, apparently primarily of foreigners overseas from some 150 different sites scattered around the world.

    That would be browsing habits, search terms on Google and other such Web sites, what's being said in encrypted chat sessions and so forth, two very different programs.

    GWEN IFILL: Yes. That's the XKeyscore one you're talking about.

    Is that something perhaps foreign governments know that we are doing?

    CHARLIE SAVAGE: From the document, we can see that the five countries in the sort of Anglosphere, Canada, Britain, New Zealand, Australia, and the United States, must all be participating in this knowingly, but the number of dots where there are collection site servers scattered around the world, including some countries that are not friendly to the United States, suggest that there are countries that didn't know this was happening, and I suspect we will see some reaction around the world as this starts to get digested.

    GWEN IFILL: The Obama administration has said since the beginning we're gathering metadata, but we're not actually listening in on phone calls, we're not actually gathering information, unless we have some reason.

    Was there anything in either of these two sets of documents today that would undercut that argument?

    CHARLIE SAVAGE: Well, again, you have to separate the two of them, and that also goes to the statement that you cited the administration as saying.

    When it comes to collecting metadata, calling logs, who called whom inside the United States, yes, by definition that doesn't include content, what was said. Of course, they do wiretap all the time. It's just not through that program. And there's extra rules and court approval for wiretapping inside the United States.

    There are essentially no rules for surveillance abroad. The U.S. Constitution doesn't cover non-citizens not on U.S. soil. The domestic wiretapping laws are written to exclude that kind of foreign intelligence collection activity. It's kind of open season. Whatever a country can get away with, it does in the espionage world.

    And what we have seen in the last few weeks with all these leaks from Edward Snowden from the NSA is that the United States really can do quite a lot, more even than was long suspected about their capacity to just vacuum up, process and spy on what the world is doing on its telecommunications networks.

    GWEN IFILL: What these domestic documents that were released today, that were declassified today showed us is -- confirmed some of the things that the Edward Snowden leaks told us about major phone companies like Verizon turning over documents to the government.

    Do we have any idea how widely that -- how much information was gathered and what use the government makes of it?

    CHARLIE SAVAGE: Well, so, this is the key question that senators today at the Senate Judiciary Committee hearing and lawmakers generally have been asking about this domestic phone log collection program involving Americans' communications, which is we can see how on paper it's useful.

    And you already have the data. It's all in one big set. If you want to go look and see you know, this person is a suspect, who have they been in contact with, who have those people in turn been in contact with, you can very quickly do that if you have already collected the data of everybody. If you have the haystack, you can go searching for the needles.

     But the question they keep asking is, has this actually thwarted any plot? We know that the collection overseas appears to have been quite useful. This data that leaked today suggested that 300 terrorists as of 2008 have been identified from this overseas collection, but what about the domestic collection that has these implications for Americans' privacy rights?

    And the intelligence community has really struggled to come up with compelling examples of how this is not merely a theoretically useful tool, but one that has actually stopped something from happening that otherwise would have happened.

    GWEN IFILL: Are they persuading anybody in the House or the Senate that that is so -- what we saw last week, that the House vote came very close to outlawing this kind of activity. Was there still more skepticism today?

    CHARLIE SAVAGE: Certainly, I think most notably today at the Judiciary Committee hearing, the Democratic chairman of that committee, who is a very powerful figure in the Senate, Patrick Leahy, said that he had been looking at a classified list of terrorist events that had been disrupted by various surveillance programs, and that he saw very little on it that suggested that there was utility to this American phone log program.

    He said if it doesn't seem to be effective, then it should be shut down, and so far he's not persuaded. And so despite fact that members of the Intelligence Committee -- at least leaders of them -- have been -- who knew about this all along have been trying to defend it and the intelligence community in the Obama administration, a lot of which are career officials who span administrations, have been trying to defend it, we see skepticism, bipartisan skepticism in both chambers of Congress.

    GWEN IFILL: Sounds like more shoes yet to drop.

    Charlie Savage of The New York Times, thanks for keeping track for us.

    CHARLIE SAVAGE: Thank you.

     


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    KWAME HOLMAN: The Federal Reserve downgraded its assessment of the economy today. The Central Bank reported only modest growth, slightly worse than the moderate reading it gave in June. That suggested there's no early end in sight to the Fed's economic stimulus efforts.

    The reaction on Wall Street was mixed. The Dow Jones industrial average lost 21 points to close at 15,499. The NASDAQ rose nearly 10 points to close at 3,626.

    The U.S. House has given final approval to a student loan deal, just in time for the fall semester. The bipartisan agreement already passed the Senate. It will tie interest rates to the performance of the financial markets. That means undergraduates who take out their own loans will pay 3.9 percent this fall. The interest rates would rise over time as the economy improves.

    President Obama paid a rare call on Congress today. He talked up his economic ideas to fellow Democrats and tried to calm concerns about his health care law.

    KWAME HOLMAN: The president arrived first on the House side of the Capitol, and later, after a closed-door session that lasted nearly an hour, he said his message was simple.

    PRESIDENT BARACK OBAMA: Jobs, middle class, growth.

    KWAME HOLMAN: House Minority leader Nancy Pelosi said her members were enthusiastic.

    REP. NANCY PELOSI, D-Calif.: It was a really masterful presentation that he made on the subject of jobs and the future. And, today, we had the chance to go back and forth on some of the issues that -- so he could hear some of our priorities, and we his.

    KWAME HOLMAN: Other Democrats said those issues included the public's confusion over the new health care law and fears the prospects for immigration reform legislation may be dimming.

    Later, Mr. Obama crossed the Capitol for a similar meeting with Senate Democrats. Maine independent Angus King, who caucuses with the Democrats, said, on health care, the president urged them to remind people that a lot of good things are happening.

    Congress also faces a September 30 deadline to approve new spending bills or risk a government shutdown. Washington State's Patty Murray said the president also warned Republicans must keep budget issues separate from the looming debt limit legislation.

    SEN. PATTY MURRAY, D-Wash.: He made it very clear that he wasn't going to negotiate over the debt ceiling. We have got to stop lurching from crisis to crisis, in his words and in our words.

    KWAME HOLMAN: Lawmakers now are making ready to leave for their five-week summer recess. For his part, Mr. Obama will continue his push on economic policy, next Tuesday, with a speech on homeownership in Phoenix.

    Later, House Republican leaders withdrew a bill that would make sweeping cuts in transportation, housing and community development funding for the coming fiscal year. Conservatives had pushed the measure to meet lower spending levels spelled out in the House Republicans' budget outline.

    In Iraq, a wave of drive-by shootings and bombings across the country has killed at least 26 people. Several blasts targeted Shiite and Sunni mosques overnight in Baghdad. That followed bombings on Monday that killed 58 Iraqis. More than 700 people have died in the violence this month.

    Civilian casualties in Afghanistan have risen sharply this year. The United Nations reported today they were up 23 percent in the first six months of the year. From January to June, the U.N. counted 1,319 civilian deaths and more than 2,500 wounded. It blamed Taliban insurgents for 74 percent of the casualties.

    Secretary of State John Kerry arrived in Pakistan this evening for an unannounced visit. He's to meet with newly elected Prime Minister Nawaz Sharif. The visit came as Pakistani police said they have recaptured more than 40 inmates who escaped from a prison Monday night. Taliban attackers had freed some 250 prisoners in all. The 35 guards on duty at the site were overwhelmed by 150 attackers who carried guns, bombs and grenades. Reports said only 10 of the guards were armed.

    Thousands of people in Zimbabwe headed to the polls today to elect a new president and possibly end an era. Incumbent President Robert Mugabe was trying to keep his 33-year grip on power in the African nation.

    We have a report from Neil Connery of Independent Television News.

    NEIL CONNERY: First light, and in the chill of dawn, there is hope in the air.

    The polls have just opened, and already the queues stretch out. Such is the hunger to make their voice heard, as Zimbabwe votes. Opposition candidate Ian Makone arrives to cast his ballot. He believes this could be the most significant day for this country since independence.

    IAN MAKONE, opposition candidate: 1980 was a watershed election from colonial days, and this is a watershed election for freedom.

    NEIL CONNERY: But as Zimbabwe's only president since independence 33 years ago voted, he said the people had a choice to make and he has promised he will go if he loses. The man challenging him, opposition leader Morgan Tsvangirai is confident he has the support need to win.

    MORGAN TSVANGIRAI, Zimbabwe presidential candidate: Well, I thought that it is not if; it's when.

    NEIL CONNERY: But with the voters register only issued yesterday, and widespread allegations of vote-rigging, critics doubt this can be judged a free and fair election.

    But, despite those fears, across Zimbabwe, wherever we traveled, the determination to vote was clear.

    The large turnout in this election could prove crucial. The opposition fear this ballot is going to be fixed. But they say that their ability to counter that increases with the number of voters who turn out.

    As Zimbabweans consider this country's future, they hope their vote will count.

    MAN: I'm so much -- I'm happy because we have done everything so peacefully and everything is moving so smoothly.

    MAN: I feel happy to vote today. We choose a president.

    NEIL CONNERY: But will that choice be respected? If not, then the consequences for this nation could be devastating.

    KWAME HOLMAN: Zimbabwe was rocked by violence in 2008, amid charges Mugabe had stolen that election. He and Tsvangirai eventually agreed to share power in a unity government.

    Those are some of the day's major stories.


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    JEFFREY BROWN: As new revelations of data gathering continue to come out, the role of the Foreign Intelligence Surveillance, or FISA, court has come under increasing scrutiny. We take a closer look now.

    The story of the court goes back to 1978. The Senate's Church Committee, among others, had chronicled surveillance abuses by the government brought to light in the Watergate scandal. One response, Congress created the FISA court to review warrants for national security investigations.

    Many years and several amendments later, the Snowden disclosures of surveillance by the NSA have raised new questions.

    On Sunday, for example, the Senate's Democratic majority whip, Dick Durbin, argued that the court is hardly impartial.

    SEN. RICHARD DURBIN, D-Ill.: It's fixed in a way. It's loaded. There's only one case coming before the FISA court, the government's case. Let's have an advocate for someone standing up for civil liberties to speak up about the privacy of Americans when they make each of these decisions.

    JEFFREY BROWN: But at today's Senate hearing, Deputy Attorney General James Cole said there's no clear precedent for changing the way warrants are approved.

    JAMES COLE, Deputy U.S. Attorney General: Traditionally, when you issue search warrants, when you issue wiretaps and things like that, in the criminal law, you don't have an adversary process that takes place if there isn't somebody on the other side. So there's a legal tradition that the way we have been doing it is certainly one that we have done in other contexts.

    JEFFREY BROWN: Another issue, the FISA court's 11 judges are chosen by the chief justice of the U.S. Supreme Court and all of the current members have been selected by Chief Justice John Roberts.

    Republican Senator Jeff Flake of Arizona raised that issue at today's hearing.

    SEN. JEFF FLAKE, R- Ariz.: There's been some criticism that the process that we have for the selection of these judges may lead to more Republican judges being appointed than Democratic. Is that an issue that somebody ought to be concerned about, or have you seen any difference in decisions rendered?

    JAMES COLE: I haven't seen any decisions. The judges are judges. And they're being guided by the law and not necessarily by politics, but that's certainly a topic we would leave to the sound discretion of the Congress.

    JEFFREY BROWN: Already, there are proposals in Congress bring raised to change the way the court operates and how its members are named.

    And we raise these questions and more now with James Bamford, a journalist, lawyer and author of several books on the National Security Agency, and Steven Bradbury, head of the Office of Legal Counsel in the Justice Department during the George W. Bush administration.

    Welcome to both of you.

    JAMES BAMFORD, author: Thank you.

    JEFFREY BROWN: Jim Bamford, we heard earlier this Gwen's discussion about new revelations. What do you think of those and what do they tell us about this role of the FISA court?

    JAMES BAMFORD: Well, these new revelations are really an expansive -- look at a much more expansive eavesdropping capability.

    We looked before at the telephone and the e-mail. Now, this is pretty much the Internet. And it's very worrisome, in the sense that people when they communicate on the Internet are communicating basically their thoughts, their deepest thoughts in their minds a lot of times, their thoughts sometimes that they don't want to share with anybody else.

    So, if you have this mega-collection that's going -- and again, it raises the question of what oversight is there and what checks and balances are there? We didn't see there were very many checks and balances on the other systems. And maybe the same thing applies here.

    JEFFREY BROWN: All right. We will walk through some of those issues,.

    But, first, generally, what's your thought, Steven Bradbury?

    STEVEN BRADBURY, former Department of Justice official: Well, I think it's important to focus on what the government declassified and disclosed about the FISA process.

    And two things I take from that. One, it shows that there was a lot of detail provided to Congress in 2009 and 2011 about the telephone metadata collection, great detail describing the collection, the scope, how it was used, the limitations.

    JEFFREY BROWN: So, you're saying it wasn't just left to the court. Congress had a say as well.

    STEVEN BRADBURY: That's correct.

    And the documents show that every member of Congress was invited to review those descriptions in Congress and so had the opportunity to understand the full scope. They also disclosed the FISA court order, the primary order for the telephone metadata collection. And I think it very clearly shows the degree of oversight, all of the protections and the limitations. It goes into great detail, very consistent with what the government has been describing in its hearings on the Hill.

    JEFFREY BROWN: But you see that and you see not enough oversight?

    JAMES BAMFORD: Well, I...

    JEFFREY BROWN: Some people have used this rubber-stamp term.

    JAMES BAMFORD: Well, I read the documents that the government released today on the -- where they say they briefed every member of Congress on this program, but I saw nowhere in those documents where it described the full extent of it.

    It said, this is a very big program, but it didn't anywhere say that we're targeting every single person in the United States, 300 million people. So that's why you have this reaction from people in Congress that are saying that, well, we had no idea it was this big, that it was every single person, every single day, every single telephone call, the metadata from it.

    JEFFREY BROWN: What's the chief -- the chief problem you have with the FISA court itself? As we said, it was set up in 1978 under some previous times of concern, right?

    JAMES BAMFORD: That's right. It was working very fine up until the Bush administration.

    And that's when the Bush administration decided to violate the law and go around the FISA court.

    JEFFREY BROWN: How?

    JAMES BAMFORD: Well, they decided that they didn't trust the court to -- that they felt the court was going to probably disapprove their plan for this warrantless eavesdropping program, so they decided to violate the Foreign Intelligence Surveillance Act and go around the court and do the warrantless eavesdropping without ever informing the court, although they told the chief justice, the presiding judge in the court, but not -- asked the judge not to tell the other judges.

    So you have this -- after 9/11, you have this effort by the administration not only to bypass the court, but to weaken the court after these revelations were discovered. So that was what happened in the FISA Amendments Act, where they actually weakened the court. And I think that's what's changed a lot of the dynamics of the court since then.

    JEFFREY BROWN: I know you see an alternative history here. Right?

    STEVEN BRADBURY: I do.

    I actually think this is a great story in terms of history for the United States, because I think we faced the challenges of 9/11. There were limitations seen in the system. It wasn't workable for what needed to be done to protect the country. And Congress and the president over the years since have come together.

    And we have new statutes, amendments to FISA, that have made the process more effective, more streamlined, and I think that's been a very good story.

    JEFFREY BROWN: But if the FISA court has approved it sounds like most everything that's been brought to it, does that suggest that it is doing enough to look at all the data, look at the questions, raise the issues, the concerns that people have about privacy?

    STEVEN BRADBURY: Well, in fact, in my experience, the FISA court and the legal advisers who are permanent staff to the court ask a lot of hard questions up front.

    In other words, they get read-ahead copies of applications. There's a lot of back-and-forth, a lot of testing, a lot of additional information provided. So there's a good understanding of the legal basis and factual basis for applications when they're actually signed and submitted so that the court process can move under efficiently and quickly.

    JEFFREY BROWN: What do you think of that? What do you think needs to be done? What would you like to see done to strengthen the court?

    JAMES BAMFORD: Well, there are a couple of things.

    First of all, the court is packed, as somebody just said earlier. And you have got 11 judges -- or you have got 10 out of 11 judges that are appointed by a chief judge who really appoints them as part of his own party. They're all Republican appointees pretty much, conservative people. So you have got them very much packed in one ideological viewpoint.

    And, second of all, it's all ex parte. In other words, there's only one side that argue argues in front of it, and that's the government. So one of the different ways to get around that is you can appoint a sort of professional advocate who is fully cleared and can argue both sides.

    This isn't a normal wiretapping case, where you're talking about one criminal defendant in a bank robbery or something. This is where you're talking about 300 million people being -- having their records taken. There's no real comparison. And you can also have the judge -- or have the judges appointed by the federal appeals court judges.

    JEFFREY BROWN: Is this an area where we could get any agreement, that there are some reforms possible?

    STEVEN BRADBURY: Well, I don't think reforms are needed in the system. But, obviously, Congress will look at options. I don't believe the chief justice has made any appointments based on partisan politics or who appointed which judges.

    And we have a tradition in this country. When a federal judge has been confirmed to the bench for a lifetime appointment, the judge is not a political person at that point, and independent judgment is brought to bear. And I think that's -- I think the chief justice works with the Administrative Office of the Judiciary on these appointments, and it's a question of which judges are interested in serving and have the time to serve.

    There's a lot of questions that go into that, and I have faith that the chief justice has done a good job. In terms of the advocate, difficult practical issues there. You can't create a new office that's not in the executive branch or not working under the court.

    So it's going to be in the system if you're going to have a special advocate like that. And I'm not sure it would really achieve what the advocates of that favor.

    JEFFREY BROWN: All right. Well, I know that and others are on the table now in Congress.

    For now, we will leave it there. James Bamford, Steven Bradbury, thank you very much.

    STEVEN BRADBURY: Thank you.

    JAMES BAMFORD: Thank you, Jeff.


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    JUDY WOODRUFF: Federal Reserve Board Chairman Ben Bernanke will step down at the end of his term next January, but the discussion of who President Obama might tap to replace him is already well under way.

    To update us, we turn to longtime Fed-watcher and Wall Street Journal economics editor David Wessel. He is also author of "In Fed We Trust: Ben Bernanke's War on the Great Panic."

    David Wessel, welcome back to the NewsHour.

    DAVID WESSEL, The Wall Street Journal: Good to be with you, Judy.

    JUDY WOODRUFF: So, before we talk about choosing the next Fed chairman, let me ask you about today's statement from the Fed about the economy, the story that Kwame reported a few minute ago. How did you read that?

    DAVID WESSEL: I read it as the Fed was going out of its way to say nothing. They crafted a statement that reflected some developments in the economy, but they sent no new signal about their plans for winding down their bond-buying or changing interest rates. It was really a no-news event.

    JUDY WOODRUFF: So, let's talk about the position of being the chairman of the Federal Reserve. How important a job is this, not just to monetary policy, but to economic policy?

    DAVID WESSEL: I think it's pretty important. We have seen in the last couple of years how important Ben Bernanke was to managing -- helping to manage the world economy during this devastating financial crisis. We know from history that Paul Volcker, Alan Greenspan, Ben Bernanke, the chairman, even though he's one of 19 people on the committee, has enormous amount of sway, becomes a symbol of confidence in the government.

    And it's more important now than ever because the Dodd-Frank law gave the Fed a whole lot more power and oversight over the financial system, and that will also be the responsibility of the next Fed chairman.

    JUDY WOODRUFF: So the names we're hearing the most who are supposedly the front-runners are the current vice chairman man of the Fed -- and that's Janet Yellen -- and former Treasury Secretary Larry Summers. David, are they the front-runners? Is that who it is believed to be? And if so, why?

    DAVID WESSEL: I think they're the front-runners.

    I think they're both people who are in sync with the president. In some respects, although they have been seen as rivals, they have more in common than they have apart. Larry Summers is a product of Harvard, Janet Yellen of Yale. But both of them believe very strongly, and in contrast to many Republicans, that at this time in our history, our economic history, the government, particularly the fiscal side of government, tax and spending, should be more aggressive.

    Both of them believe that the Fed has a pretty important role to play in getting the economy going again. I think that there may be some differences in nuance about how they would actually manage the job when they got there. Their personalities are very different.

    But I think in terms of the Fed policy we'd expect, I think there's actually not that much difference between them.

    JUDY WOODRUFF: Well, I want to ask you about that, because there are prominent Democrats who are coming out and talking about Larry Summers' position on deregulation before the financial collapse in 2008, and they're questioning whether if Larry Summers were chosen the current Fed policy of bond-buying, stimulating the economy, getting the government involved in the economy would continue.

    DAVID WESSEL: Well, I think what Summers has said is that he doesn't think this quantitative easing, this bond-buying does much good, but he doesn't think it does much harm either.

    And so, on that balance, given how bad the economy is, I think you would expect him to continue the policies of Bernanke, which may involve pulling back. But on the regulatory thing, I think there is a difference.

    Mr. Summers has become a symbol of the Clinton-era deregulation of the financial markets. And I think people who are objecting to him on substance, as opposed to personality, which is a whole 'nother issue, are worried that he is too close to Wall Street. He's actually been working for Citibank in his years since leaving the White House, and more -- not skeptical enough of the banks. And they think Janet Yellen would be more so.

    JUDY WOODRUFF: Well, I wanted to ask you about that. When it comes to the other power centers, the Congress, the political leadership in the in this city and Wall Street, how do they see Janet Yellen?

    DAVID WESSEL: Well, I think a lot of them see Janet Yellen as the not Larry Summers. He seems to have an extraordinary number of detractors among liberal Democrats in both the Senate and the House.

    A bunch of House women signed a petition today calling on the president to appoint Janet Yellen. I think that -- but I think that the question -- some of this is just kind of posturing. The real decision-maker here is the president.

    He knows Larry Summers much better than he knows Janet Yellen. He seems to feel, from what he said to members of the House and Senate caucuses today, that it's important to have someone who is a good crisis manager, and that kind of sounds like -- more like the Summers resume than the Yellen resume.

    But this blowback could actually influence his decision.

    JUDY WOODRUFF: In fact, as you mentioned, that Summers' name came up in that session the president had with Democratic members of Congress, and they were critical.

    DAVID WESSEL: Right.

    And he seemed to have defended Larry Summers, although we're not in the room and we don't know the context. The other thing that is interesting, he mentioned a third player, Don Kohn, another former Fed vice chairman, who would be a surprise pick, a dark horse, but I think it was the president's way of saying, like, let's not boil this down to a Janet-vs.-Larry mudfest.

    JUDY WOODRUFF: And one there thing about Janet Yellen. You mentioned the women members of Congress who signed this petition. How much is gender seen as a factor in that she would be the first woman Fed chair?

    DAVID WESSEL: You know, it's hard to exclude gender as a factor.

    On one hand, you have Larry Summers, who got thrown out of the presidency in Harvard in part because he made some offensive remarks about women in science and engineering. You have the president who has been accused of being -- having -- running an old boy network. You have a very credible female candidate. So there are people who think, if you can't get a female chairman of the Federal Reserve now, if not now, when?

    On the other hand, I suspect that to some extent the president's going to think about that and make a choice on other factors, but outside the White House, that seems to have taken a huge role.

    JUDY WOODRUFF: It was noticed the administration named a woman deputy treasury secretary today, and wondered if there was any connection.

    DAVID WESSEL: Well, it's interesting. It's a woman who comes from the Federal Reserve. So there are two female governors on the Federal Reserve Board now, and -- in addition to Janet Yellen. They're both leaving. One has resigned.

    I suspect it had nothing to do with the Fed chairmanship, but it certainly will be cited by the White House if they appoint Larry Summers or some other man. They will point to the fact we have a woman deputy treasury secretary and a woman who is head of the White House Budget Office, Sylvia Mathews Burwell.

    JUDY WOODRUFF: David Wessel, thank you very much.

    DAVID WESSEL: You're welcome.

     


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    JEFFREY BROWN: And we return once again to the turmoil in Egypt. The country's cabinet announced a further crackdown against the Muslim Brotherhood today, ordering the clear-out of the group's protest sites.

    Margaret Warner reports.

    MARGARET WARNER: The order to police to disband the sit-in protests came from the interim government this afternoon.

    DORREYA SHARAF EL-DIN, Egyptian Information Minister (through translator): Relying on the people's mandate to the state to deal with terrorism and violence, which threaten the fall of the state and destruction of the nation, the cabinet has decided to take all means necessary to face these dangers and put and end to it.

    MARGARET WARNER: As the news spread, supporters of ousted President Mohammed Morsi stood warily at their two campsites in Cairo, scenes of their month-long standoff with the regime. A senior official of Morsi's Muslim Brotherhood issued a bloody forecast.

    ESSAM EL-ERIAN, Muslim Brotherhood (through translator): There are expectations of a massacre taking place in front of the eyes of the whole world. The free people in Egypt and the world must stand against this stupid cabinet mandate for the police to end the sit-in protests.

    MARGARET WARNER: Over the weekend, security forces battled pro-Morsi demonstrators, killing more than 80. It was the worst spasm of violence since Morsi was deposed July 3. Hundreds more were injured and bodies of the dead overwhelmed makeshift morgues.

    In Washington today, U.S. State Department spokeswoman Marie Harf voiced concern about today's announcement.  

    MARIE HARF, State Department: We have urged the interim government officials and security forces to respect the right of peaceful assembly. That obviously includes sit-ins.

    MARGARET WARNER: So far, the Obama White House has refused to label Morsi's ouster a coup. That designation would force a suspension of U.S. aid. The administration has put on hold the sale of four F-16s to Egypt.

    But, today, in the U.S. Senate, Kentucky Republican Rand Paul made a bid to cut off all U.S. military aid entirely.

    SEN. RAND PAUL, R-Ky.: Do you know what the money is spent on? Tanks. Tanks roll over people in protest. I have no love lost for the Muslim Brotherhood, but they have disappeared them. We're going to be giving money to the military to disappearing people.

    MARGARET WARNER: That drew fire even from fellow Republicans. Lindsey Graham of South Carolina said continuing the U.S. military aid is crucial.

    SEN. LINDSEY GRAHAM, R-S.C.: But why are we selling weapons to Egypt? Because, if we don't, someone else will. It's not a question if they're going to buy fighter planes. It's a question of who they're going to buy them from.

    MAN: The ayes are 86. The nays are 13.

    MARGARET WARNER: In the end, Paul's measure was soundly rejected.

     


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    MARGARET WARNER: And for more on today's announcement by Egypt's new government, and how the U.S. is handling the turmoil there, I'm joined by Michele Dunne, director of the Atlantic Council's Center for the Middle East, and Samer Shehata, associate professor of international studies at the University of Oklahoma.

    And welcome back to both of you.

    Samer Shehata, let me start with you. What is behind the new government's decision to make this announcement and make it clear they're not even going to allow peaceful demonstrations?

    SAMER SHEHATA, University of Oklahoma: Well, I think they have come to the conclusion that the continued sit-ins are an obstacle to the transition plan that they have put forward and an obstacle, also, for Egypt regaining some kind of stability.

    So, that means international investment, the wheels of commerce and the economy moving forward, and that they need to end the sit-ins, and I think some believe or hope to eradicate the Muslim Brotherhood from Egyptian politics.

    MARGARET WARNER: Do you think they're trying to crush the Muslim Brotherhood in this, not just quell the demonstrations, let traffic flow again, but actually put them out of business?

    MICHELE DUNNE, Atlantic Council's Rafik Hariri Center for the Middle East: Well, that seems to be the effort.

    Several of the senior leaders of the Brotherhood today were charged with some serious crimes. There's been talk of even outlawing the Brotherhood as a movement. It was outlawed in the past. So that seems to be the case. Now, there may be an effort here to put on enough pressure to get the Brotherhood to just accept the new reality, accept that Morsi was removed and that the political game moves on. However...

    MARGARET WARNER: And it's time for them to get in the game, which is what the government is saying.

    MICHELE DUNNE: Right. Right. But it seems unlikely that the Brotherhood is going to accept that.

    MARGARET WARNER: Now, this new government, though the military general, al-Sisi, is -- clearly has a central role, they did put in -- there is the civilian government. People like Mohamed ElBaradei, who is vice president, are they behind this? Or is the military running the show?

    SAMER SHEHATA: Well, I think clearly General al-Sisi is running the show, and they are behind it to a certain extent.

    But somebody like Mr. ElBaradei is in a difficult position. He's already criticized the excessive use of force used against Muslim Brotherhood protesters last Saturday. And there are -- there's talk that he has threatened to resign. And, again, I think there's another point that needs to be made here, which is a number of ministers in the government are Mubarak era holdovers that have reemerged, so there is a real fear among some that parts of the Mubarak regime are reconstituting themselves.

    MARGARET WARNER: So, is this going to lead to more violence, as the Brotherhood, Essam El-Erian just said today?

    MICHELE DUNNE: Unfortunately, that seems extremely likely.

    This will be -- if they do crack down on the sit-in, this will be the third time. Right? We have had two other sit-ins where they -- the police used a great deal of force, and somewhere between 50 and 80 people were killed the first time, somewhere between 80 and 120 the second time. And, you know, what we're hearing is that these pro-Morsi demonstrators have no intention of leaving.

    MARGARET WARNER: Now, how has the Brotherhood been handling this? There were reports in mid-July, about 10 days after Morsi was ousted, that, privately, there were talks going on between some of the Brotherhood senior leadership and the military about reaching some accommodation. Has that just broken down, or was that for real?

    SAMER SHEHATA: Well, it's not clear what kind of a dialogue is taking place between the Brotherhood current rulers of Egypt.

    But, as you know, Catherine Ashton, the European Union foreign secretary, was there, and she met with both the Brotherhood people as well as people in the government. And there is likely that there is some negotiation. I think Michele is right. Both sides are flexing their muscle and they are trying to reach some kind of a deal.

    I think it's unlikely, but nevertheless, there is something going on there. The Brotherhood doesn't to be banned. They don't want their political leadership imprisoned. They don't want their funds confiscated. They want a role in politics. At the same time, they have to get on board that this is a post-Morsi world.

    MARGARET WARNER: And what I'm being told is that the Brotherhood is saying their non-negotiable demand is, though, that Morsi has to be reinstated or at least there has to be some sort of a fig leaf?

    MICHELE DUNNE: The Brotherhood is trying to hold on to the moral high ground that they feel they have, that they had a democratically elected president who was removed by coup. And they're not going to let that go easily at all.

    Now, there are some initiatives to, for example, allow there to be a referendum or some kind of a vote. The Brotherhood might agree to something like that, but so far, we have had no indication that the military, which is, as Samer said, calling the shots, would be willing to do something like that.

    MARGARET WARNER: So, to both of you, who does this do to the quandary, the fine line the U.S. has been trying to walk now really for nearly a month, since July 3, not calling this a coup, not cutting off aid, a lot of back-channel communications, right, between defense secretary, secretary of state, and their counterparts?

    I mean, is the U.S. having any influence at all? What does today's development do to their ability to keep that balancing act going?

    SAMER SHEHATA: Well, I think that the United States really has to make it clear -- not necessarily publicly, but certainly privately -- that if the U.S.-Egyptian relationship is going to be maintained, human rights have to be recognized, and there can't be an excessive use of force against any protesters, whether it's the Brotherhood or others.

    And I hope that message is being made at the highest level.

    MARGARET WARNER: Do you think that it's getting through?

    MICHELE DUNNE: It doesn't seem that the Egyptian military leadership has taken any of the advice the U.S. has given, you know, as this whole thing has unfolded over the last few weeks.

    Look, Egypt is a big, important country. It's next door to Israel. The United States is very reluctant to kind of cut Egypt loose. That's what they feel we would be doing by suspending assistance. But the United States is going to be facing a whole different question in the coming weeks.

    If there really is this full-on confrontation between the Brotherhood and the military and a real crackdown, the question for the United States is going to become, can we be complicit in this? Can we continue to send aid to a military that is carrying out this kind of repression?

    MARGARET WARNER: Michele Dunne, the Brotherhood is accusing -- is basically saying now this new government, supposedly representing democratic forces, is just reverting to the old repression of the Mubarak era?

    Are they right about that? Is that a fair charge?

    MICHELE DUNNE: The interior minister has made some really troubling statements in the last few days.

    As Samer indicated, this cabinet is a real mix. You have some liberals and so forth, some old Mubarak people, but the interior minister has been saying things about basically we're back and the secret police are back, and we're going to start monitoring politics and religion and so forth, as we did in the Mubarak era.

    MARGARET WARNER: What is your thought on it?

    SAMER SHEHATA: Well, this is the tragedy of the situation, that I think we are further away from the aspirations of the uprising that led to the overthrow of Mubarak now than we ever have been.

    We wanted a society that was based on the rule of law, recognition of political rights, the police to recognize the dignity of citizens, and not to abuse them regularly, as was the case, civilian control of the military and security forces. And we're not seeing that.

    MARGARET WARNER: Samer Shehata, Michele Dunne, thank you.

    SAMER SHEHATA: Thank you.

    MICHELE DUNNE: You're welcome.


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    GWEN IFILL: And now we take a look at illegal child labor in India and the ongoing struggle to end it.

    NewsHour special correspondent Fred de Sam Lazaro.

    FRED DE SAM LAZARO: When Kailash Satyarthi conducts rescue raids of underage workers, he always bring along cameras to document evidence.

    On a hot summer afternoon, Satyarthi group quietly fanned out in Delhi's bakery district, rounding up children into waiting vehicles. A local magistrate and police contingent were along in case there was any trouble.

    KAILASH SATYARTHI, children's rights activist (through translator): You don't have to fear.

    FRED DE SAM LAZARO: At a government processing center, they'd determine if these children were already registered as missing or if they'd been sold to their employers.

    KAILASH SATYARTHI (through translator): These are all government officials. They're all here to help you.

    FRED DE SAM LAZARO: That's what he said to the young men. He told me not all officials are reliable allies and that this day's total of 22 should have been much bigger, he said:

    KAILASH SATYARTHI:  We wanted to rescue at least 50 to 60 children from two areas. Many of them are already hidden, so when we reached there, we could not find most of the children.

    FRED DE SAM LAZARO: Who tips them off?

    KAILASH SATYARTHI:  Sometimes police, sometimes other authorities and sometimes the local people.

    FRED DE SAM LAZARO: He said the combination of official and middle-class indifference and dire poverty drives perhaps 50 million Indian children into the workplace, some as young as 6 or 7. Most are from the minority Muslim, tribal or lower-caste Hindu communities. Many are bonded, sold into virtual slavery, working often in grimy, grossly unhealthy conditions.

    KAILASH SATYARTHI (through translator): Let me see your hands. What we say is that children's hands should have books in them, pens and pencils in them.

    CHILD (through translator): But we are helpless. We have to do what we do.

    KAILASH SATYARTHI (through translator): Helpless, yes, but we will see to your studies and try to get work for your mother and father, God willing.

    FRED DE SAM LAZARO: India actually has laws against child labor. School is mandatory up to age 14. And there are funds to rehabilitate rescued children. Despite all that, Satyarthi says it's mainly up to private activist groups like his to make sure the laws are actually implemented.

    KAILASH SATYARTHI (through translator): I am free.

    This is Mukti Ashram. This is a transitory rehabilitation center for freed bonded children. All the children have been rescued by us over the last one month or so. First of all, we have to assert in them that they are free.

    FRED DE SAM LAZARO: They haven't fully conceptualized it yet?

    KAILASH SATYARTHI:  Not really. They cannot do it so fast.

    FRED DE SAM LAZARO: Frequently, newcomers still stick to instructions they have gotten from employers on how to respond to certain questions, like my first one, how old are you? Fifteen, they said, in boy's choir voices; 15 is a legal working age.

    More accurate are the stories they shared of abuse when they worked in the embroidery business, notorious for its use of children.

    CHILD (through translator): We worked from 8:00 a.m. until midnight.

    CHILD (through translator): If you ever did something wrong, they would beat us. We got beaten every day.

    FRED DE SAM LAZARO: Niaz Ali's story is similar to many others from this group. A trafficker came to his village several hundred miles from here in Eastern India. He gave Niaz's parents money to take the boy to Bombay, where he promised he'd be taught a trade and could earn a good living.

    FRED DE SAM LAZARO: How much money did they give your parents?

    CHILD (through translator): Twenty thousand rupees.

    FRED DE SAM LAZARO: That's about $400, a large sum for parents who were not difficult to convince that this is their child's ticket out of dire poverty.

    KAILASH SATYARTHI:  Almost all the parents are illiterate. I always advocate that poverty, child labor and illiteracy are three interrelated cause-and-consequence factors.

    FRED DE SAM LAZARO: Kailash Satyarthi is an engineer by training, but calls himself a Gandhian by inspiration. He began his advocacy three decades ago in India's rug industry, where child labor was pervasive, taking a message to consumers in Germany and the United States.

    KAILASH SATYARTHI:  I had a strong belief that once a person is sensitized towards child slavery, whether it could be carpet or shoes or apparels, you cannot limit that social concern and social motivation. And that worked.

    FRED DE SAM LAZARO: Today, a group he founded, now called GoodWeave, offers a labeling system that guarantees that no child labor was used in making the rugs. Some 120 carpet merchants and retailers in Europe and the U.S. now carry GoodWeave-certified rugs.

    Some 70 Indian exporters have licensing agreements with GoodWeave. They agree to unannounced inspections of their factories and suppliers, like this one in the northern city of Varanasi, producing rugs bound for Australia.

    After a quick look around, GoodWeave staffers interviewed Weavers and examined employment records. This producer got a clean bill of health. But inspector Jawed Ahmed says its still sometimes a cat-and-mouse game.

    JAWED AHMED, GoodWeave (through translator): Sometimes, we will enter a place and hear people running or scattering, and you have to believe that they're using children. If there are just adults, there'd be no reason for people to run.

    FRED DE SAM LAZARO: GoodWeave India's chief, Manoj Bhatt, says a big challenge for Western importers is to know whether to trust all the layers of subcontractors. At least 500 supply GoodWeave's 70 approved licensees.

    MANOJ BHATT, GoodWeave: The supply chain is very, very decentralized and scattered in different districts, and sometimes in different states in India. They have to believe what their exporters are telling them. And even for exporters, it's really hard to actually keep track of what is happening in their supply chains.

    FRED DE SAM LAZARO: It's villages like this in eastern Uttar Pradesh that are the starting links of the long supply chain that leads to the export houses and the rug markets in the West. From dawn to dusk, you can hear the sound of hundreds of carpet looms.

    They're housed in ramshackle buildings. We popped in unannounced, posing as tourists and at times received as prospective buyers. Using hidden cameras and cell phones in Uttar Pradesh and other areas, it was easy to document clearly underage boys toiling alongside veterans, who themselves may have been here since they were boys.

    The appropriate authorities rarely patrol here and GoodWeave's Bhatt says it's out of their control.

    MANOJ BHATT: That's one of our limitations, that we cannot access looms which are not part of our licensees.

    FRED DE SAM LAZARO: When they are discovered, boys like Zahidul are returned to their families. He was found four years ago, when he was 10. Poverty might have driven him to work, but Zahidul wasn't trafficked into the job. His mother, Faratun Bibi, says he volunteered to go to work in the carpet business after his father, the family breadwinner, suffered a stroke, worsening their already desperate condition.

    FARATUN BIBI, mother (through translator): After his illness, Zahidul himself said, mom, why don't you let me go to work? I could earn some money. In fact, the middleman didn't want to take him. He said he was underage. But I pleaded with him, please do it for me.

    FRED DE SAM LAZARO: Just days after he began working, Zahidul was found hiding in a carpet factory hundreds of miles from home.

    CHILD (through translator): They told me to roll myself into a blanket, that the people were coming to get me and put me in school.

    FRED DE SAM LAZARO: GoodWeave did enroll Zahidul in school. Neither of his parents or two older siblings ever went to school. After showing proof that Zahidul is actually attending, the family receives a monthly stipend to help make ends meet.

    MAN (through translator): How far have you read?

    FRED DE SAM LAZARO: Now 14, Zahidul is in fourth grade and still struggles. He may never thrive in school, but GoodWeave's Bhatt says even basic reading ability can be useful. And basic arithmetic is essential to be able to count one's salary.

    MANOJ BHATT: The idea here is to break that cycle of illiteracy, so that this, you know, literate person can, you know, understand the value of education for their kids.

    FRED DE SAM LAZARO: GoodWeave estimates the number of children working in South Asian rug looms is down to about a fourth of the one million who once did.

    But for Kailash Satyarthi, there are always other industries to tackle. It comes at a cost. He's been beaten up several times and two colleagues were murdered because of their activism, he says.

    Child labor is a critical part of India's largely unorganized economy, and for one simple reason, he says. They're cheap.

    KAILASH SATYARTHI:  You can buy a child for lesser price than an animal. The buffaloes and cows are much more expensive than buying a child to work full-time and for the whole of his life.

    FRED DE SAM LAZARO: He says it's one explanation why India has 50 million children working full-time. And at the same time 50 million adults, many of them parents of those working children, are unemployed.

    GWEN IFILL: Fred's reporting is a partnership with the Under-Told Stories Project at Saint Mary's University in Minnesota.


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    By Arthur Laffer

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    In this 2012 Making Sen$e report, former Reagan White House economic adviser Arthur Laffer drew his famous curve on a napkin -- just the way he did for the Ford administration -- and explained how it works.

    Paul Solman: In the second of his recent economic policy speeches, President Obama laid out a repackaged "grand bargain" on Tuesday, offering to Republicans a cut in corporate tax rates in exchange for more spending on middle class job creation. The idea of cutting tax rates to spur business comes from the economist behind Ronald Reagan's "Reaganomics" tax cuts, Arthur Laffer.

    Laffer is one of those rare economists whose name has become a possessive. His "Laffer Curve" draws a quarter of a million results in a Google search, dwarfing Al Harberger triangles (4,680), the Samuelson-Stolper Theorem (10,700) and even "laws" like Arthur Okun's (114,000) or Jean-Baptiste Say's (94,000).

    The Laffer Curve delivers a simple, seemingly obvious message: When the tax rate is zero percent, government will collect nothing from the earnings it taxes. When the tax rate is 100 percent, the curve also shows the government collecting zero revenue because there will presumably be no earnings: who would work if they kept absolutely none of what they earned? And thus it follows that the government will take in more as it increases the tax rate up until some unknown percentage point at which workers become frustrated with the tax rate and start working less, thus lowering their earnings and, as a result, the government's total take.

    The communist counter would be that even at a 100 percent tax rate, people might work, and work hard, perhaps, if they received sufficient benefits from the state. But the U.S. is not a communist society -- not even Scandinavia is. For market economies, the Laffer Curve depicts a hard-to-reject reality. But how pervasive are the work-discouraging effects of taxes? And at what percentage point do the discouraging effects set in? Fifty percent, as the shape of the Laffer Curve implies? Or, as Nobel Laureate Peter Diamond argued on the NewsHour, when I interviewed both him and Laffer last year, at a much higher percentage, at least for earnings above a certain healthy threshold?

    In February, I encountered a study by the Institute on Taxation and Economic Policy about the effects of state income taxes on state economic growth. It begins:

    "Lawmakers in about a dozen states are giving serious consideration to either cutting or eliminating their state personal income taxes. In each case, these proposals are being touted as a way to boost economic growth.

    "One claim often made during these debates is that the nine states without personal income taxes are outperforming the rest of the country, and that their growth can be easily replicated in any state that dares to abandon its income tax. Some have also claimed that the nine states with the highest top income tax rates are experiencing below-average growth. The governors of Indiana, Oklahoma and South Carolina, as well as high-ranking officials pushing for income tax repeal in Louisiana and North Carolina, are just some of the more influential lawmakers that have attempted to frame the debate in this way.

    "But these talking points, which have been widely disseminated by the American Legislative Exchange Council (ALEC), Americans for Prosperity, and The Wall Street Journal's editorial board, are based on an analysis by supply-side economist Arthur Laffer that is extremely flawed."

    It seemed a convincing piece of work. So I called Art Laffer to interview him about the study and about his work in general, including the inflection point of his curve. Here's an edited version of that interview. Our next post will spotlight a response from the eminent tax economist at the University of Michigan Joel Slemrod.

    Paul Solman: In the study I sent, you there was no discernible evidence that states lowering their tax rates, or raising their tax rates, had any effect on people's behavior, your own move from California to Tennessee notwithstanding. Is that true?

    Arthur Laffer: I went to Tennessee exclusively because of taxes. It took quite a big difference in taxes to dislodge me from California, but I paid for my house in Belle Meade, (Tenn.), with my first year's tax saving. So as soon as my son Justin chose to go to Vanderbilt, that determined to which of the three no-income-tax states we were considering we would move.

    What's the Evidence for Zero-Income-Tax States?

    Paul Solman: Yes, and Gérard Depardieu moved from France, supposedly to Russia, but how many people are you if you don't show up in the data, as the paper suggests?

    Arthur Laffer: That's the issue. It's not correct that there is no evidence to suggest anyone ever has moved for taxes. I gave you a counter-example. Now the question becomes: how big is this effect? Maybe very small, maybe very large, so how will you go about looking at it?

    Paul Solman: And, by the way, isn't it the same question one would ask about the eponymously named Laffer Curve? That is, it's not that at some point there will be a reduction in revenue, given a high enough tax rate. That must be true -- at a 100 percent tax rate, say. The question is: how high is that tax rate before you start taking in less money?

    MORE WITH ARTHUR LAFFER: The Strange, Animal-Killing Side Effects of Tax Policy Changes

    Arthur Laffer: Exactly. The curve does exist. The question is, where do these effects come in and what are the implications?

    The same thing is true for states. So what I've tried to do is look at some of the evidence. In my book, "Eureka! How to Fix California," I've done a lot of work on this.

    The first thing I did was to get the extremes. Let's take the nine states that have no income tax and compare them with the nine states with the highest income tax rates in the nation. If you look at the economic metrics over the last decade for both groups, the zero-income-tax-rate states outperform the highest-income-tax-rate states by a fairly sizable amount.

    Paul Solman: When you say "outperform," what do you mean?

    Arthur Laffer: States that outperform in population, in migration, in labor force growth, in gross state product growth, and it's about 50/50 on tax revenue growth. It's really sort of interesting: The zero-income-tax-rate states have far faster growth in tax revenues than did the states with highest income tax rate over this period.

    In two zero-income-tax-rate states, oil is significant: Alaska and Wyoming. But even taking oil out of the picture, the story is still true -- by a smaller amount, but it's still true. There are lots of other things that affect state growth besides state taxes. However, the reason I look at taxes is because these are policy variables that can be changed by state governments in order to get better results than they otherwise had.

    If you look at the performance of the zero-income-tax-rate states and the highest-income-tax-rate states, I believe a large amount of their difference is due to taxes. Not only is it true of the last decade, but I took these numbers back 50 years. And, you know, there's not one year in the last 50 where the zero-income-tax-rate states have not outperformed the highest-income-tax-rate states.

    Paul Solman: Now, let me ask you two questions. One, you are selecting a sub-sample of the 50 states, and by doing so, you're taking a smaller sample. And, as we all know, smaller samples are more subject to variation than larger ones are.

    Arthur Laffer: Your question is correct: I took the highest and the lowest so I could get the most extreme versions of tax rate differences.

    But that's not all I did. There are 11 states in the United States that in the last 50 years instituted an income tax. So I looked at each of those 11 states over the last 50 years, and I took their current economic metrics and their metrics for the five years before they put in the progressive income tax, although these states all did it in different time periods -- states like Maine, Connecticut, New Jersey, West Virginia, Pennsylvania, Ohio, Illinois, Michigan and Nebraska. Every single state that introduced a progressive income tax has declined as an overall share of the U.S. economy.

    There are several states that move from Karl Marx-like policies to Adam Smith-like policies and back again in a weekend. So for the states with huge volatility in their income tax policies over time, the differences in growth rates in those periods are really amazingly consistent with tax rates really mattering.

    Then I took another measure. Dartmouth economist Colin Campbell did a study in the '70s comparing New Hampshire and Vermont. Vermont had high taxes, lots of regulation -- just the way they are today. New Hampshire back then was just like New Hampshire today.

    Paul Solman: Just to remind people, the license plate of New Hampshire is "Live free or die." On the New Hampshire--Massachusetts border, right in front of a "Welcome to New Hampshire" sign, I once asked a CEO I was interviewing if he thought there was a difference between people on either side of the state line, and he said, "Absolutely."

    Arthur Laffer: You've got it. And there's the Minnesota--South Dakota border and many other examples. The IRS publishes tax data on people moving from one state to another. In the last six years, the number of people filing tax returns who have gone from zero-income-tax-rate states to the highest-income-tax-rate states was 909,000 returns.

    The number of returns that moved from the highest-income-tax-rate states to the lowest-income tax-rate states was 1,350,000 returns. Not only were there 50 percent more returns moving from the highest-income-tax-rate states to the zero-income-tax-rate states, but the average size of the return was about 30 percent larger as well.

    Paul Solman: And so when you put all this together, that's why you called your book "Eureka!" -- because you discovered the answer to how a state gets rich: lower or no income taxes.

    Arthur Laffer: I don't do it just for income taxes. I look at state taxes; I look at corporate taxes; I look at right-to-work laws; I look at unionization of labor force; I look at welfare generosity; I look at the overall tax burden, which is different than the tax rate.

    What's the Matter with California?

    Paul Solman: Let me ask you a question that will be in many people's minds: Which way does the causation run? To some degree, New Hampshire grew and its citizens began to press for expenditures that the state didn't have to make earlier on.

    Arthur Laffer: Yeah, I went from (looking at) tax rates to revenues, and then to expenditures. Let me give you an example on expenditures: Education. California is the highest-tax state in the nation and has been for a long time. It has the highest paid teachers in the nation, by far -- $400 a month more than New Jersey -- and yet California is the third lowest state on test scores for fourth and eighth grade English and math in the nation, and has been at the low level for a long, long time.

    Paul Solman: But isn't California's poor test score performance widely recognized as being because of the enormous in-migration from Mexico, Central and South America?

    Arthur Laffer: Well, the in-migration has probably been part of that, but we've also looked at in-migration in the five super-states: Florida, Texas, California, Illinois and New York. The states that have large in-migrations of Hispanics are Florida, Texas and California. And Florida and Texas are way above average in educational achievement, while California's the lowest, just about. So, I don't think that explains it. When you look at the percentage of the population who is Hispanic, or non-English speaking, it just doesn't match with that explanation, and I also find that explanation quite insensitive, to be honest with you. But I'm willing to look at it very carefully.

    Paul Solman: California students do worse on test scores than Texas students do?

    Arthur Laffer: Much worse. And the cost per student is about half in Texas what it is in California. And if you look at prison expenditures or police and their salaries, California is providing (fewer) public services in spite of the highest tax rates. The linkage between tax rates and public services is, if not non-existent, negative.

    Paul Solman: And you say that's because California is paying their employees so much more than other states pay their employees?

    Arthur Laffer: That's right. The cost per prisoner per day in California is about $129. The cost per prisoner per day in Texas is $59. If you look at prison guards' salaries in California versus in Texas, it's hugely different. If you look at the prevailing wages in building highways, it's enormously different. Even look at the permitting cost of a house in Orange County, California: it's like $50,000 a door. California is being taxed highest and providing very low public services.

    Paul Solman: And that money is going to public employees?

    Arthur Laffer: That's all part of the fees and revenues of state government, yes.

    Paul Solman: But, essentially, so that readers understand, your contention is that the money is going to much higher-than-average, and by implication, higher-than-necessary, remuneration to state or public employees?

    Arthur Laffer: In some cases, that's it. Maybe in some cases it's regulatory fees that don't go directly to people. I don't know where all the money's going, every dollar. Salaries are much higher in California than they are in other states, yes. And performance is much lower in California than in other states.

    Paul Solman: So that's the nub of your response to the study I emailed you?

    Arthur Laffer: Yes.

    Where Does the Laffer Curve Really Bend?

    The Laffer Curve shows a hypothetical relationship between tax rates and government revenue. Image courtesy of Wikimedia Commons.

    Paul Solman: One last question. The way you draw the Laffer Curve is as a parabola that peaks halfway. Now, I understand that it's just for the purposes of illustration, but it looks like past a 50 percent tax rate, total revenues will diminish.

    Arthur Laffer: Yeah.

    Paul Solman: So it was pointed out to me that if, for example, economists Peter Diamond and Emmanuel Saez are correct, and in fact the federal government doesn't start getting less total revenue until the tax rate is up around 70 percent, the curve would look rather different. It would look kind of lopsided. That isn't ridiculous, right?

    Arthur Laffer: No, no, no, far from ridiculous. What you've got is three things going on here that determine the shape independently. Number one is the length of time you're willing to wait with the tax rate. The short-term tax rate is far more like Saez and Diamond see it, but a long-term one would be almost the exact opposite shape.

    Paul Solman: In other words, where it's peaking below 50 percent?

    Arthur Laffer: Right. Then, number two, the size of the tax base is also important. The broader the base, the more it will look like Saez/Diamond. The narrower the base, the more it will look like the converse of Saez/Diamond. (This is because people with higher income will respond more to a higher tax rate than those with a lower income.)

    Then the third factor is that the higher tax rates are, the more likely it is that an increase in tax rates will lower revenues because people work for after-tax income, not pre-tax income. So the time period affects the shape; the size of the tax base affects the shape; and the height of existing taxes affects the shape.

    What I'm saying is, sometimes, tax rate increases create the very problems that the spending is intended to cure. In other words, the tax rate increases reduce economic growth; they shrink the pie; they cause more poverty, more despair, more unemployment, which are all things government is trying to alleviate with spending.

    This entry is cross-posted on the Rundown -- NewsHour's blog of news and insight. Follow @paulsolman


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    A new poll that shows minorities' continued optimism about their economic future comes at a time when President Obama is promoting his economic message. Photo by Jessica McGowan/Getty Images

    WASHINGTON -- Americans' attitudes about their economic future are sharply divided by race, with whites significantly less likely than blacks or Hispanics to think they can improve their own standard of living. Indeed, optimism among minorities now outpaces that of whites by the widest margin since at least 1987, a new analysis shows.

    The Associated Press-NORC Center for Public Affairs Research analysis shows that after years of economic attitudes among whites, blacks and Hispanics following similar patterns, whites' confidence in their economic future has plummeted in the last decade. Blacks and Hispanics, meanwhile, have sustained high levels of optimism despite being hit hard in the recent recession.

    The findings come as President Barack Obama seeks to promote a broader message of economic opportunity amid a rising gap between rich and poor. The AP reported this week that 4 out of 5 U.S. adults have struggled with joblessness, near poverty or reliance on welfare for at least part of their lives, with white pessimism about their economic future at a 25-year high. More than 40 percent of the poor are white.

    The AP-NORC analysis of data from the General Social Survey, a long-running biannual survey conducted by NORC at the University of Chicago, found just 46 percent of whites say their family has a good chance of improving their living standard given the way things are in America, the lowest level in surveys conducted since 1987. In contrast, 71 percent of blacks and 73 percent of Hispanics express optimism of an improved life - the biggest gap with whites since the survey began asking.

    Blacks and Hispanics diverged sharply from whites on this question following Obama's election as the nation's first black president in 2008. Economic optimism among non-whites rose, while whites' optimism declined.

    Blacks' hopefulness isn't limited to the future; they also express a positive outlook on their current financial standing.

    For the first time since 1972, the share of blacks who reported that their financial situation had improved in the last few years surpassed that of whites. The tip occurred in 2010, when the percentage of whites reporting an improvement to their financial situation fell to 24 percent vs. 30 percent for blacks.

    "In the minority community, as perceptions of discrimination lessen a bit with the election of an African-American president, people see a greater ability to succeed," said Mark Mellman, a veteran Democratic consultant who closely tracks voter sentiment. "Many working-class whites, on the other hand, see dwindling opportunities as manufacturing and other jobs that once enabled them to get ahead just aren't available."

    The hopeful include John Harris III, 23, of Washington, D.C., a recent graduate of historically black Howard University who now works to reduce homelessness through the AmeriCorps program. Part of the first generation of college students who saw Obama get elected, Harris says he and many fellow black graduates in their 20s and 30s are now motivated to excel and help people of all races who are in need.

    "It has something to do with the way that African-Americans as a whole think in our country," said Harris, describing the newfound sense of optimism amid an increasing number of people who serve as black role models. "We feel more independent. We feel like we're worth more, because we see it every day on the TV, hear it on the radio and are beginning to see it more in our communities."

    Still, there are limits, he said. "I am hopeful that the economy will improve, but it won't be because of politicians," Harris said, noting the recent gridlock in Washington that has curtailed Obama's agenda. But the racial differences in optimism aren't strictly a partisan divide - they remain even when accounting for partisanship and other demographic and socioeconomic factors.

    The AP-NORC analysis also finds that, based on a separate measure of optimism - one that tracked the percentage of people who believe the country is moving in the right direction - blacks' optimism since Obama's election was on average 39 percentage points higher than whites' assessment of the country's direction. That represents a reversal from earlier in the decade, when white optimism exceeded that of blacks by an average 18 percentage points.

    Hispanic optimism about the country's direction also surpassed that of whites after 2008.

    The increases in minority optimism come despite any real improvement for blacks and Hispanics relative to whites based on economic measures of unemployment, median income and median net worth. For instance, since 2005, whites as a group lost 15 percent of their net worth, compared with 43 percent for blacks.

    William Julius Wilson, a Harvard professor who specializes in race and poverty, noted that in the last decade the impact of the weak economy has tended to affect lower-skilled whites and minorities more equally. But he says while blacks have the "powerful symbolic effect" of Obama's election, non-college whites have no such "positive subjective feelings to offset or blunt their frustrations."

    The economically anxious include Eugene Lester, a 12-year mining employee in the white working-class community of Buchanan County, Va. While jobs were plentiful in the 1970s and 1980s, federal policy has since made it harder for coal-producing areas like Buchanan to stay afloat, he said. The county has a poverty rate of 24 percent.

    "It's scary as hell; I'm afraid every day to go out to work and not have a job," said Lester, 35, a father of two young children. "I remember when I was growing up, my dad, he could quit a job this morning and be working on another by 12:00."

    But now, "the economy around here, if something doesn't happen soon, the economy's over."

    The AP-NORC Center analysis is based on AP polling conducted with GfK Roper Public Affairs and Corporate Communications and with Ipsos Public Affairs, as well as the General Social Survey. The GSS has a margin of error of up to plus or minus 3.1 percentage points; the AP polls have a margin of error of plus or minus 4 percentage points.

    Hope Yen and Jennifer Agiesta reported this story. Agiesta is AP's director of polling. News Survey Specialist Dennis Junius and writer Debra McCown in Buchanan County, Va., contributed to this report.

    Read more

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    Screen image of Edward Snowden at a meeting with Russian lawyers and activists on July 12.

    After 39 days holed up at a Moscow airport, Edward Snowden, the self-professed leaker of National Security Agency top-secret surveillance programs, has officially entered Russia. But it doesn't mean he has his full freedom.

    Stephen Vladeck, a law professor at American University, explained that the one-year asylum granted by the Russian government takes the immediate pressure off of Snowden, but basically freezes the status quo.

    He can't travel outside of Russia, and traveling within the country also might be restricted. He can't work, because the government hasn't issued him a work visa. And there might be other conditions attached to the temporary relief, said Vladeck.

    "All that it really changes is where he's living," he added. "I don't think this will be a year of hanging by the pool."

    The Russian government can revoke the asylum at any time, or conversely, make it permanent. It appears to be a compromise in what is a politically tense situation between Russia and the United States, Vladeck said.

    Since June 23, Snowden had been in a diplomatic limbo in the transit zone of the Sheremetyevo International Airport in Moscow awaiting permission to enter a country that wouldn't send him back to the United States.

    The United States charged Snowden with theft of government property and espionage after he revealed to the Guardian newspaper that the NSA has been collecting telephone and Internet data on American citizens and in other countries.

    The Guardian published an article on Wednesday about another NSA program, called XKeyscore, that purportedly allows analysts to collect users' Internet activities from emailing to online chats.

    Gen. Keith Alexander, head of the NSA, spoke at the Black Hat cybersecurity conference in Las Vegas on Wednesday in defense of the NSA's surveillance program. As he described before Congress, Alexander said the programs have disrupted more than 50 "terrorist-related" plots.

    Watch his full speech at the Black Hat conference:

    Related Resources

    Manning, Snowden and the DOJ's Espionage War Against Leakers

    How Much Diplomatic Persuasion Does U.S. Wield in Snowden Affair?

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    Watch Video | Listen to the Audio

    JEFFREY BROWN: The drama over disclosures of U.S. surveillance programs took a major new turn today in Russia. The man at the center of the story was allowed to go free for the first time since arriving there in June.

    Edward Snowden's lawyer confirmed the news to reporters today at the Moscow airport.

    ANATOLY KUCHERENA, attorney for Edward Snowden (through interpreter): Yes, I have arrived in the airport so that a member of the immigration service could give him a document that grants him temporary asylum in the territory of the Russian Federation. I have just seen him off, and he has left the airport to go to a safe location.

    JEFFREY BROWN: The National Security Agency leaker had been in limbo in the airport's transit zone for more than a month. He managed to flee in a taxi, eluding the media throng that had camped there for weeks. Snowden will now be able to travel freely throughout Russia, but his lawyer said his exact whereabouts are being kept secret for security reasons.

    ANATOLY KUCHERENA (through interpreter): He will choose his place of residence himself. He can live in a hotel or an apartment. As he is one of the most wanted people on earth, he will be making sure his place of residence is absolutely safe.

    JEFFREY BROWN: Snowden released his own statement through the anti-secrecy group WikiLeaks, which has a legal adviser traveling with him.

    The statement read, in part: "We have seen the Obama administration show no respect for international or domestic law, but in the end the law is winning. I thank the Russian Federation for granting me asylum in accordance with its laws and international obligations."

    U.S. officials had demanded Snowden be returned home to face espionage charges for leaking information about the NSA's secret surveillance of phone and Internet communications. But Russian President Vladimir Putin refused to expel him, and one of Putin's aides downplayed today's development, insisting -- quote -- "This issue isn't significant enough to have an impact on political relations."

    But, in Washington, White House spokesman Jay Carney said Snowden's release has U.S. officials weighing whether to cancel President Obama's planned summit with Putin next month.

    JAY CARNEY, White House Press Secretary: We will obviously be in contact with Russian authorities, expressing our extreme disappointment in this decision and making the case clearly that there is absolute legal justification for Mr. Snowden to be returned to the United States, where he is under indictment on three charges, felony charges.

    JEFFREY BROWN: Meanwhile, the president met privately with a bipartisan group of House and Senate lawmakers to address concerns about the NSA's surveillance programs.

    Back in Russia, Snowden now has a grant of asylum for at least a year. That can be extended indefinitely, and he even has the right to seek Russian citizenship.


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