Cuts to Achieve Goal for Deficit, but Toll Is High

WASHINGTON — The latest budget impasse ushered in a new round of austerity on Saturday, with the nation facing reduced federal services, canceled contracts, job furloughs and layoffs.

But lost in the talk of Washington’s dysfunction is this fact: on paper at least, President Obama and Congress have reduced projected deficits by nearly $4 trillion over a decade — the widely embraced goal for stabilizing the national debt.

The spending cuts that began to take effect Friday, known as sequestration and totaling about $1 trillion through 2023, come on top of $1.5 trillion in reductions that Mr. Obama and Congress committed to in 2011, mainly from the accord that averted the nation’s first debt default.

Nearly $700 billion more will come from tax increases on wealthy Americans, the product of the brawl in December over Bush-era tax cuts, and another $700 billion is expected to be saved in projected interest on the reduced debt.

If the latest cuts stick, the two parties will have achieved nearly the full amount of deficit reduction over the next decade that economists and market analysts have promoted. Yet the mix comes with substantial downsides.

It does not add up to the “grand bargain” that the two parties had been seeking, because it leaves virtually untouched the entitlement programs — Medicare, Medicaid and Social Security — that are responsible for projections of an unsustainably rising federal debt in coming decades.

“This is not a result that deals with our long-term debt problem,” said Vin Weber, a Republican former congressman. “The fact we’ve gotten to a $4 trillion deficit-reduction deal without tackling entitlements is almost a bad thing,” he added, if it lulls the public and the politicians into thinking the problem is solved.

The progress on deficit reduction over the past two years will also probably hamper job creation and the economic recovery. Private and government forecasters project that sequestration alone will cost about 700,000 jobs this year and will shave at least a half percentage point from economic growth. The Congressional Budget Office now forecasts a falling deficit but stubbornly high unemployment in coming years.

For Democrats, at least, the mix of spending cuts and tax increases in the package is another reason for disappointment. The deficit deals to date would yield $4 in spending cuts for every dollar of new revenue. Mr. Obama, as well as several bipartisan groups, including the commission led by Erskine B. Bowles and Alan K. Simpson, call for one dollar of tax increases for every $2 to $3 in spending cuts.

It remains unclear how long sequestration will last: it was designed to be onerous to force a compromise on an alternative. But Mr. Obama and Republicans indicated on Friday that the cuts would probably remain in place at least until the end of the fiscal year, Sept. 30.

Democrats, led by the president, express confidence that in coming months public pressure will force Republicans to relent on revenue, especially as cuts to the military begin to be felt. But Republican leaders have said they will stand firm against tax increases, suggesting that they have won at least a temporary victory on reducing the size of the government.

In his weekly address on Saturday, Mr. Obama said the Republicans had “decided that protecting special-interest tax breaks for the well off and well connected is more important than protecting our military and middle-class families from these cuts.”

“I still believe we can and must replace these cuts with a balanced approach — one that combines smart spending cuts with entitlement reform and changes to our tax code that make it more fair for families and businesses without raising anyone’s tax rates,” Mr. Obama said.

In the Republican response, Representative Cathy McMorris Rodgers of Washington State, said: “The problem here isn’t a lack of taxes. This year alone, the federal government will take in more revenue than ever before. Spending is the problem, which means cutting spending is the solution. It’s that simple.”

According to the nonpartisan Congressional Budget Office, total government spending is falling compared with the size of the economy but will rise again in the next decade. That growth will be driven by the entitlement programs as more baby boomers retire, not by discretionary spending.

And revenues, while reaching a high in dollar terms, remain below the average of the past 40 years as measured against gross domestic product.

Read More..

Bits Blog: Judge Slashes Jury Award in Apple-Samsung Case

7:30 p.m. | Updated

A federal judge on Friday weakened the blow from Apple’s legal victory in a patent case against Samsung, lopping more than 40 percent off the damages a jury awarded last year.

It was a mostly symbolic setback for Apple, one that did not shift the case — one of the most closely watched in the technology industry — in Samsung’s favor. While Apple has lost other skirmishes against Samsung in courts around the world, the jury award in the United States case has been the biggest victory for either side so far. Even at a reduced level, it would be among the highest damage awards in a patent dispute.

The judge ordered a new trial to recalculate a portion of those damages, leaving open the possibility that some of them could be restored. She also indicated that Apple is entitled to additional damages for sales of Samsung products that have occurred since the jury’s decision last summer, which could further swell the amount Apple is owed by Samsung.

In her review of the jury’s decisions, which originally awarded Apple more than $1 billion for patent violations by Samsung in its mobile products, Judge Lucy Koh of the United States District Court in San Jose, Calif., knocked those damages down by $450 million, to $599 million. The new trial will determine how much of the $450 million, if any, should be restored.

“It will be years before the parties exhaust all of their litigation avenues and options,” said Alan Fisch, an intellectual property lawyer with Fisch Hoffman Sigler in Washington, DC. “Still, some form of patent cross-license between the two would not be an unsurprising final result.”

None of Judge Koh’s opinion changed the jury’s finding that Samsung violated a series of Apple patents in its smartphone and tablet products. But the judge took issue with the way the jury calculated the damages from the Samsung devices named in the case, more than two dozen in all. In her 27-page opinion, Judge Koh said the jury failed to follow her instructions in calculating damages for a certain class of patents, known as utility patents.

She also decided in Samsung’s favor in a dispute between the two parties over when Apple notified Samsung that it was infringing Apple’s intellectual property. Evidence of such notice dates are important because they help determine how hefty the damages are in a court case, once the party being notified is found guilty of infringement. Judge Koh chided Apple for using an expert in the case who used an “aggressive notice date” — meaning, an early one — to calculate damages.

“The need for a new trial could have been avoided had Apple chosen a more circumspect strategy or provided more evidence to allow the jury or the court to determine the appropriate award for a shorter notice period,” she said in her ruling.

Steve Dowling, a spokesman for Apple, declined to comment. Representatives of Samsung didn’t respond to requests for comment.

Apple and Samsung, meanwhile, continue to fight ferociously in the smartphone market, where Samsung has steadily worked its way to the No. 1 position over the last few years. In the fourth quarter, Samsung accounted for 29 percent of global smartphone shipments, while Apple accounted for 21.8 percent, according to IDC.

Mark A. Lemley, a professor at Stanford Law School, called the judge’s decision “an extremely careful and thorough opinion on a very difficult and interrelated set of issues.” (Mr. Lemley has done past legal work for Google, which makes the Android operating system used by Samsung in most of its mobile products.)

Mr. Lemley predicted that Samsung would wind up with some reduction in the original $1 billion award, but “almost certainly” less than the $450 million that Judge Koh reduced it by on Friday.

“We’ll need a new trial to figure that out,” he said. “Judge Koh has encouraged both sides to appeal first. That may clarify some questions, but it is unlikely to prevent a new trial, just delay it some.”

Read More..

Army Private Admits Giving Military Files to WikiLeaks

Alex Wong/Getty Images

Private Manning pleaded guilty to 10 criminal counts in connection with the leak to WikiLeaks.

FORT MEADE, Md. — Pfc. Bradley Manning on Thursday confessed in open court to providing vast archives of military and diplomatic files to the antisecrecy group WikiLeaks, saying that he wanted the information to become public because more openness could “spark a debate about foreign policy” that he hoped would “make the world a better place.”

Appearing before a military judge for more than an hour, Private Manning read a statement recounting how he joined the military, became an intelligence analyst in Iraq, decided that certain files should become known to the American public to prompt a wider debate about foreign policy, downloaded them from a secure computer network and then ultimately uploaded them to WikiLeaks.

“No one associated with WLO” — an abbreviation he used to refer to the WikiLeaks organization — “pressured me into sending any more information,” Private Manning said. “I take full responsibility.”

Before reading the statement, Private Manning pleaded guilty to 10 criminal counts in connection with the huge amount of material he leaked, which included videos of airstrikes in Iraq and Afghanistan in which civilians were killed, logs of military incident reports, assessment files of detainees held at Guantánamo Bay, Cuba, and a quarter-million cables from American diplomats stationed around the world.

The guilty pleas exposed him to up to 20 years in prison. But the case against the slightly built 25-year-old, who has become a folk hero among antiwar and whistle-blower advocacy groups, is not over. The military has charged him with a far more serious set of offenses, including aiding the enemy and multiple counts of violating federal statutes, including the Espionage Act. Prosecutors now have the option of pressing forward with proving the remaining elements of the more serious charges.

That would involve focusing only on questions like whether the information he provided counted as the sort covered by the Espionage Act — that is, whether it was not just confidential but also could be used to injure the United States or aid a foreign nation.

Private Manning described himself as thinking carefully about the kind of information he was releasing, and taking care to make sure that none of it could cause harm if disclosed.

The only material that initially gave him pause, he said, were the diplomatic cables, which he portrayed as documenting “back-room deals and seemingly criminal activity.”

But he decided to go forward after discovering that the most sensitive cables were not in the database. He was also motivated, he said, by a book about “open diplomacy” after World War I and “how the world would be a better place if states would not make secret deals with each other.”

“I believed the public release of these cables would not damage the United States,” he said. “However, I did believe the release of the cables might be embarrassing.”

Private Manning said that the first set of documents he decided to release consisted of hundreds of thousands of military incident reports from Afghanistan and Iraq. He had downloaded them onto a disk because the network connection at his base in Iraq kept failing, and he and his colleagues needed regular access to them.

Those reports added up to a history of the “day-to-day reality” in both war zones that he believed showed the flaws in the counterinsurgency policy the United States was then pursuing. The military, he said, was “obsessed with capturing or killing” people on a list, while ignoring the impact of its operations on ordinary people.

Private Manning said he put the files on a digital storage card for his camera and took it home with him on a leave in early 2010. He then decided to give the files to a newspaper.

“I believed if the public — in particular the American public — had access to the information” in the reports, “this could spark a debate about foreign policy in relation to Iraq and Afghanistan,” he said.

Scott Shane contributed reporting.

Read More..

Senate, in a More Affable Mode, Backs Treasury Nominee

WASHINGTON – The Senate on Wednesday easily and, for the most part, affably confirmed President Obama’s pick for Treasury secretary, Jacob J. Lew, just one day after the president’s nominee for defense secretary narrowly survived a highly politicized confirmation vote.

Little of the acrimony that held up the nomination of Chuck Hagel, the former Nebraska senator who began his first day as defense secretary on Wednesday, was present in the debate over Mr. Lew.

The final vote was 71 to 26, with 20 Republicans joining the Democratic majority in support of the nomination.

Mr. Obama expressed gratitude for the decision to confirm his former chief of staff and top budget adviser.

“Jack was by my side as we confronted our nation’s toughest challenges,” the president said in a statement. “His reputation as a master of fiscal issues who can work with leaders on both sides of the aisle has already helped him succeed in some of the toughest jobs in Washington.” 

The vote meant that for the moment at least, the Senate returned to its traditional role of affording the president deference in selecting his cabinet. Historically, the Treasury secretary position has been an easy one for presidents to fill, with nominees typically receiving unanimous support from the Senate.

Mr. Obama’s previous Treasury secretary, Timothy F. Geithner, was a notable exception. After disclosures that Mr. Geithner was delinquent in paying some taxes, many Republicans objected. He was confirmed by a 60-to-34 vote.

Some Republicans who voted for Mr. Lew spoke of the need to give the president flexibility to name his own cabinet even if they ultimately disagreed with a nominee’s politics.

“My vote in favor of Mr. Lew comes with no small amount of reservation, and I don’t fault any of my colleagues for choosing to vote against him,” said Senator Orrin Hatch of Utah, the senior Republican on the Finance Committee. “I hope he and the president take note that I am bending over backwards to display deference.”

Though Mr. Hagel’s nomination was stymied as he faced criticism over past statements on Israel and Iran and stumbled over questions in his confirmation hearing, Mr. Lew faced few objections. Other than questions that arose from an unusual $685,000 severance payment he received after he left New York University for a job at Citigroup, the confirmation process was relatively smooth.

One particularly vocal objection on Wednesday came from one of the Senate’s most liberal members, Bernie Sanders, an independent from Vermont.

“We need a secretary of the Treasury who does not come from Wall Street but is prepared to stand up to the enormous power of Wall Street,” Mr. Sanders said from the Senate floor. “Do I believe that Jack Lew is that person? No, I do not.”

Still, even though the Senate approved Mr. Lew, he received far fewer votes than other Treasury secretary nominees. With the exception of Mr. Geithner, Senate records show that the last nominee to receive fewer than 92 “yes” votes was George P. Schultz, Richard Nixon’s pick in 1972.

Mr. Obama faces another possible battle over a high-level nominee in the coming days as the Senate is set to start considering John Brennan, the White House’s choice as director of central intelligence.

Read More..

DealBook: Wall Street Pay Rises, for Those Who Still Have a Job

7:39 p.m. | Updated

Wall Street may be shrinking — cutting thousands of jobs over the last year — but for those who remain, the pay is still very lucrative.

The average cash bonus for those employed in the financial industry in New York last year rose roughly 9 percent, to $121,900, Thomas P. DiNapoli, New York State’s comptroller, said on Tuesday.

Cash bonuses in total are forecast to increase by roughly 8 percent, to $20 billion this year.

The total, however, is down from 2010, when it was $22.8 billion. Wall Street’s peak came in 2006, before the financial crisis, with a total $34.3 billion in bonuses. The year-end bonus can account for the bulk of a finance professional’s annual compensation.

The report from the state comptroller’s office gives estimates on the bonuses, based on tax withholding data, data from banks and conversations with industry experts. It came the same day that JPMorgan Chase, one of the country’s biggest banks, announced it was eliminating 17,000 jobs over the next two years through layoffs and attrition, adding its name to a string of large banks that continue to cut jobs to reduce expenses.

Wall Street has regained 30 percent of the 28,300 jobs lost during the financial crisis, Mr. DiNapoli said. And firms are continuing to streamline as they cope with a sluggish economic recovery, difficult markets and a heavier regulatory burden. While financial industry employment in New York City was steady in the first half of 2012, it was down slightly in the second half of the year, the comptroller’s office said.

“Wall Street is still in transition, but it is very slowly adjusting to changes in its economic and regulatory environment,” he said.

In an effort to hold down — albeit temporarily — compensation costs, a number of financial firms have deferred cash payments to employees in recent years. Mr. DiNapoli said on Tuesday that part of the increase in 2012 was cash promised in recent years but actually paid out last year. He said that it was difficult to break out what percentage of the total was deferrals, but he believed that it was still a small part of the total.

The ebbs and flows of Wall Street pay have a major impact on the economy of New York City, where 169,700 are employed in finance. Local businesses like restaurants, luxury goods retailers and the upper end of the real estate market pin their fortunes to the flood of cash from year-end bonuses.

Before the start of the financial crisis, business and personal income tax collections from finance-related activities accounted for up to 20 percent of New York State tax revenue. In 2012, that contribution fell to 14 percent.

Yet finance remains the best paying sector in New York City, Mr. DiNapoli told reporters during a conference call.

All told, the average pay package for securities industry employees in New York was $362,900 in 2011, the last year for which data is available, almost unchanged from 2010.

“Profits and bonuses rebounded in 2012, but the industry is still restructuring,” Mr. DiNapoli said. Despite its smaller size, the securities industry is still a very important part of the New York City and New York State economies.”

Read More..

The Caucus: Michelle Obama Makes a Star Turn at the Oscars (via Satellite)

6:21 p.m. | Updated
She may not have walked the red carpet, but Michelle Obama — all bangs and biceps and bling — had her own star turn during Sunday night’s Academy Awards ceremony, when she announced the winner for best picture via satellite from the White House.

Barely moments after Mrs. Obama’s late night revelation  of the fate of the nominated best films, the question of whether it was proper or dignified or awesome for the first lady of the United States to dirty her hands with a motion picture envelope disintegrated into a predictably-partisan rhubarb.

But this seemed to matter little to the White House, where both President Obama and the first lady seem untethered from the safety net of a political campaign, and free to pursue their respective agendas.

“The Academy Awards approached the first lady about being a part of the ceremony,” said Kristina Schake, a spokeswoman for Mrs. Obama. “As a movie lover, she was honored to present the award and celebrate the artists who inspire us all, especially our young people, with their passion, skill and imagination.”

The idea to have Mrs. Obama participate in the ceremony was hatched by the producers of the show, with a big hand from the film executive Harvey Weinstein. Mrs. Obama agreed right away, but secret negotiations, including a final one involving a stealth flight from Los Angeles to Washington a few weeks ago to finalize details, ensued.

“Literally from the first day we were hired we thought, ‘How can we make this special?’” said Neil Meron, who was hired last fall to produce the Oscar event with Craig Zadan. “We were hoping Obama would win so we could have our plan executed.”

After the election, they decided the plan would need a fast track, lest it get stuck in the bureaucratic maw maw of the East Wing, so the two approached Mr. Weinstein. “We were very aware that Harvey was close to the Obama family,” Mr. Zadan said, “and if we went through normal channels the odds were small it would happen.”

Mr. Weinstein reached out to the White House, originally with the idea of having Mrs. Obama be a guest at the awards show. The plan was for her to sneak backstage to morph into a secret Oscar presenter. But because the first lady had a conflict that night – the governors would be in town for a White House gala – the idea of a remote play was born.

(Others involved with the process insist that the idea was actually that of Mr. Weinstein’s daughter, Lily, but like most Hollywood stories, one picks their own ending.)

Only two top executives at ABC knew of the plan, along with the actor Jack Nicholson, who was charged with presenting Mrs. Obama from the stage in Hollywood. Mr. Meron and Mr. Zadan were given a private jet for the flight to Washington, although they told people they were going to New York to avoid suspicion.

Mrs. Obama, wearing a shimmering gown designed by Naeem Khan, was hand-delivered the shiny classified envelope opening containing the winner, “Argo,” the Ben Affleck-directed film about a C.I.A. plan to rescue Americans from Iran during the hostage crisis, by Bob Moritz, the chief executive for PricewaterhouseCoopers from New York, which certifies the awards. White-gloved White House military social aides stood in the background.

But Washington was as absorbed  about the propriety of a first lady having such a central role in the  Oscars, suggesting it was less proper than, say, a president throwing out a baseball pitch or flipping pancakes in Iowa in the courting of voters. “Now the first lady feels entitled,” said Jennifer Rubin, a conservative blogger for the Washington Post, “with military personnel as props, to intrude on other forms of entertaining, this time for the benefit of the Hollywood glitterati who so lavishly paid for her husband’s election.”

Others were more charitable. The Web site Slate pointed out that Laura Bush taped a “What Do the Movies Mean to You?” segment for the Academy Awards while she was first lady in 2002 and that President Franklin D. Roosevelt opened the 13th Academy Awards ceremony by  addressing the nation and the crowd at the Biltmore Hotel.

The first lady’s Oscar turn followed her appearance last week on NBC’s “Late Night with Jimmy Fallon,” where, to kick off the third year of her “Let’s Move” exercise campaign, she presented a comedy sketch, the “Evolution of Mom Dancing.”

The sketch was an instant hit. Though only posted last Friday, it had racked up almost five million views on YouTube as of Monday.

Bill Carter contributed reporting.

Read More..

Last-Lap Crash in Nationwide Race Injures Fans

Chris Graythen/Getty Images

Kyle Larson, No. 32, was thrown into the fence after a crash with Brad Keselowski, driver of the No. 22 car, at Daytona International Speedway on Saturday.

DAYTONA BEACH, Fla. — As many as 28 spectators at Daytona International Speedway were injured Saturday when debris from a crash at the end of a Nascar Nationwide Series race flew into the stands.

The exact number of injuries was not immediately known, but multiple stretchers were seen removing injured spectators from the stands. Joie Chitwood, the president of Daytona International Speedway, said in a news conference that 14 spectators were treated on site and 14 were taken to area hospitals.

Earlier, the Volusia County Fire Department said in a statement that at least 15 people were injured. A spokesman at Halifax Medical Center, where 11 of the injured were being treated, said that one person had sustained life-threatening injuries. A spokeswoman at Florida Hospital Oceanside, where the other patients were being treated, would give no information on the extent of the injuries.

The crash occurred in the Nationwide race, a prelude to Sunday’s Daytona 500, Nascar’s season opener and traditionally among the sport’s most prestigious races.

Steve O’Donnell, the Nascar senior vice president of racing operations, said the 500 would continue as scheduled. 

“We’re very confident we’ll be ready for tomorrow’s event,” he said. 

The injuries occurred after a 12-car crash as racecars approached the checkered flag at the end of the race won by Tony Stewart. The No. 32 car driven by the rookie Kyle Larson went airborne during the wreck. His racecar hit the catch fence that surrounds the track and is designed to protect fans. Debris from the car, including two tires and the engine, went into the stands.

“What we know right now is there obviously was some intrusion into the fence,” Nascar’s president, Mike Helton, said, “and fortunately with the way the event’s equipped up, there were plenty of emergency workers ready to go. They all jumped in on it pretty quickly.

“Right now, it’s just a function of determining what all damage is done. They’re moving folks, as we’ve seen, to care centers and taking some folks over to Halifax Medical.”There were no injuries among the 12 drivers involved in the crash, including Dale Earnhardt Jr. and the 2012 Sprint Cup champion Brad Keselowski. All were examined at the infield care center and released.

The accident occurred at the front of the pack of cars as they rounded Turn 4 and headed toward the finish line. Regan Smith was leading the race and was being pushed by Keselowski, who tried to pass Smith. But Smith blocked him from getting to the outside. That led to the crash at the front of the pack that collected 12 racecars in all.

“We made a move to try and win the race,” Keselowski said. “I kind of had the run and the move to win the race, and Regan obviously tried to block it and that’s understandable. He wants to win, too, and at the end it just caused chaos. There was obviously a big wreck with a lot of debris and cars torn up. I really hope everyone in the grandstands is O.K. I think that’s the most important thing right now.”

There was a brief, muted celebration in victory lane as emergency workers continued to tend to the injured.

Michael Schwirtz and Ravi Somaiya contributed reporting.

Read More..

In Niger, U.S. Troops Set Up Drone Base

WASHINGTON — Opening a new front in the drone wars against Al Qaeda and its affiliates, President Obama announced on Friday that about 100 American troops had been sent to Niger in West Africa to help set up a new base from which unarmed Predator aircraft would conduct surveillance in the region.

The new drone base, located for now in the capital, Niamey, is an indication of the priority Africa has become in American antiterrorism efforts. The United States military has a limited presence in Africa, with only one permanent base, in Djibouti, more than 3,000 miles from Mali, where insurgents had taken over half the country until repelled by a French-led force.

In a letter to Congress, Mr. Obama said about 40 United States military service members arrived in Niger on Wednesday, bringing the total number of those deployed in the country to about 100 people. A military official said the troops were largely Air Force logistics specialists, intelligence analysts and security officers.

Mr. Obama said the troops, who are armed for self-protection, would support the French-led operation that last month drove the Qaeda and affiliated fighters out of a desert refuge the size of Texas in neighboring Mali.

Niger, one of the poorest countries in the world, signed a status-of-forces agreement last month with the United States that has cleared the way for greater American military involvement in the country and provides legal protection to American troops there.

In an interview last month in Niamey, President Mahamadou Issoufou voiced concern about the spillover of violence and refugees from Mali, as well as growing threats from Boko Haram, an Islamist extremist group to the south, in neighboring Nigeria.

French and African troops have retaken Mali’s northern cities, including Timbuktu, Gao and Kidal, but about 2,000 militants have melted back into desert and mountain hideaways and have begun a small campaign of harassment and terror, dispatching suicide bombers, attacking guard posts, infiltrating liberated cities or ordering attacks by militants hidden among civilians.

“Africa Command has positioned unarmed remotely piloted aircraft in Niger to support a range of regional security missions and engagements with partner nations,” Benjamin Benson, a command spokesman in Stuttgart, Germany, said in an e-mail message on Friday.

Mr. Benson did not say how many aircraft or troops ultimately would be deployed, but other American officials have said the base could eventually have as many as 300 United States military service members and contractors.

For now, American officials said Predator drones would at first fly only unarmed surveillance drones, although they have not ruled out conducting missile strikes at some point if the threat worsens.

American officials would like to move the aircraft eventually to Agadez, a city in northern Niger that is closer to parts of northern Mali where cells of Al Qaeda in the Islamic Maghreb and other militants groups are operating. Gen. Carter F. Ham, the leader of the Pentagon’s Africa Command, visited the base last month as part of discussions with Niger’s leaders on closer counterterrorism cooperation.

The new drone base will join a constellation of small airstrips in recent years on the continent, including one in Ethiopia, for surveillance missions flown by drones or turboprop planes designed to look like civilian aircraft.

A handful of unarmed Predator drones will fill a desperate need for more detailed information on regional threats, including the militants in Mali and the unabated flow of fighters and weapons from Libya. General Ham and intelligence analysts have complained that such information has been sorely lacking.

As the United States increased its presence in Niger, Russia sent a planeload of food, blankets and other aid to Mali on Friday, a day after Foreign Minister Sergey V. Lavrov warned about the spread of terrorism in North Africa, which the Russian government has linked to Western intervention in Libya.

Mr. Lavrov met on Thursday with the United Nations special envoy for the region, Romano Prodi, to discuss the situation in Mali, where Russia has supported the French-led effort to oust Islamist militants. But Russia has also blamed the West for the unrest and singled out the French in particular for arming the rebels who ousted the Libyan leader, Col. Muammar el-Qaddafi.

“Particular concern was expressed about the activity of terrorist organizations in the north, a threat to regional peace and security,” the Russian Foreign Ministry said in a statement after the meeting. “The parties agreed that the uncontrolled proliferation of arms in the region in the wake of the conflict in Libya sets the stage for an escalation of tension throughout the Sahel.” The Sahel is a vast region stretching more than 3,000 miles across Africa, from the Atlantic in the west through Sudan in the east.

In a television interview this month, Mr. Lavrov said, “France is fighting against those in Mali whom it had once armed in Libya against Qaddafi.”

Eric Schmitt reported from Washington, and Scott Sayare from Paris. David M. Herszenhorn contributed reporting from Moscow.

Read More..

15 G.O.P. Senators Urge Hagel’s Withdrawal as Democrats Push Toward Vote

WASHINGTON — A group of 15 Republican senators insisted on Thursday that President Obama withdraw the nomination of Chuck Hagel to be defense secretary, the latest move in a contentious battle to block the confirmation of their former colleague.

But even as Republican senators tried to throw up another obstacle, Senate Democrats said they were pushing ahead with plans to hold a final up-or-down vote on the nomination no later than Wednesday.

Should that vote proceed as planned, Mr. Hagel’s confirmation appears assured. Several Republicans have said that they intend to drop their attempts to filibuster the nomination.

But given how deeply divided Mr. Hagel’s nomination has left the Senate, the outlook in the immediate term is murky.

Many Republicans, like the 15 who wrote to the president on Thursday, signaled that they would not let the issue die quietly. And those who have said that they would ultimately not support a filibuster, like Deb Fischer of Nebraska and Richard Shelby of Alabama, were leaving the door open to further delay.

Saying that Mr. Hagel’s confirmation would be “unprecedented” because of near-unanimous opposition from Republicans, the group of 15 senators urged Mr. Obama to pick another candidate.

“Over the last half-century, no secretary of defense has been confirmed and taken office with more than three senators voting against him,” they wrote. “The occupant of this critical office should be someone whose candidacy is neither controversial or divisive.”

Signing the letter were John Cornyn of Texas, the No. 2 Senate Republican; Lindsey Graham and Tim Scott of South Carolina; Roger Wicker of Mississippi; David Vitter of Louisiana; Ted Cruz of Texas; Mike Lee of Utah; Patrick J. Toomey of Pennsylvania; Marco Rubio of Florida; Dan Coats of Indiana; Ron Johnson of Wisconsin; James E. Risch of Idaho; John Barrasso of Wyoming; and Tom Coburn and James Inhofe of Oklahoma.

Members of the group cited a litany of objections, including Mr. Hagel’s unimpressive showing at his confirmation hearing, which drew criticism from members of both parties, and what they said was his “dangerous” posture toward dealing with Iran.

The level of derision directed at Mr. Hagel from Republicans has been striking not just because defense secretaries are usually confirmed on a simple up-or-down vote, but also because Mr. Hagel, a Republican, served with many of them in the Senate until 2008.

“Senator Hagel’s performance at his confirmation hearing was deeply concerning, leading to serious doubts about his basic competence to meet the substantial demands of the office,” they said.

Senate Republicans narrowly blocked a vote on Mr. Hagel’s confirmation last week in a filibuster, forcing Democrats to put the matter off until senators return from recess next week.

Republicans have been using the filibuster to prevent final consideration of the nomination by refusing to end debate on it, a procedural step that requires 60 senators to vote in the affirmative.

But some Republicans, including Senator John McCain of Arizona, have since said that they will drop their objections. Mr. McCain was firm, saying on Sunday, “I don’t believe that we should hold up his nomination any further.”

Others, like Mr. Graham, Mr. Shelby and Ms. Fischer, have said that while they do not support a filibuster, they believe that the senators should have ample time to consider their votes, leaving themselves open to voting not to end debate next week.

Only one more Republican “yes” vote would be needed to cut off debate and carry through with a final vote if all the Republicans who voted to end the filibuster last week voted to do so again.

Because Mr. Hagel has the support of Senate Democrats, who control 55 seats, he is likely to clear a final vote, which requires a simple majority of 51.

If Senate Democrats move ahead with a vote and get the 60 votes necessary to end debate, Mr. Hagel could be confirmed as early as Tuesday. But because of procedural rules, any Republican could still delay the vote until Wednesday.

A new voice chimed in on the debate on Thursday. Bob Dole, the former Senate majority leader and, like Mr. Hagel, a decorated veteran, urged his fellow Republicans to put aside their objections.

“Hagel’s wisdom and courage make him uniquely qualified to be secretary of defense and lead the men and women of our armed forces,” Mr. Dole said, adding that he would be “an exceptional leader at an important time.”

Read More..

Sony Unveils PlayStation 4, Aiming for Return to Glory

For the Sony Corporation, a tech industry also-ran, the moment of reckoning is here.

The first three generations of PlayStation sold more than 300 million units, pioneered a new style of serious gaming and produced hefty profits. PlayStation 4, introduced by Sony on Wednesday evening, is a bold bid to recapture those glory days of innovation and success.

The first new PlayStation in seven years was touted by Sony as being like a “supercharged PC.” It has a souped-up eight-core processor to juggle more complex tasks simultaneously, enhanced graphics, the ability to play games even as they are being downloaded, and a new controller designed in tandem with a “stereo camera” that can sense the depth of the environment in front of it.All of that should make for more compelling play for the hard-core gamers at the heart of the PlayStation market. The blood in “Killzone: Shadow Fall,” shown to an audience of 1,200 at the Hammerstein Ballroom in New York, looked chillingly real.

The device, whose price was not immediately announced, will go on sale before the end of the year.

With PlayStation 4, serious gaming is about to become much more social. A player can broadcast his gameplay in real time, and his friend can peek into his game and hop in to help. Also, they will now be able to upload recordings of themselves playing and send them to their hardcore friends, who will possibly want to watch when they are not playing themselves.

The new features, however, cannot hide the fact that PlayStation 4 is still a console, a way of playing games on compact discs that was cool when cellphones were the size of toasters and browsers were people in libraries. It was a couple of lifetimes ago, or so it seems.

Much of the excitement in gaming has shifted to the Web and mobile devices, which is cheap, easy and fast. Nintendo’s new Wii, introduced in November, has been a disappointment. Microsoft’s Xbox, the third major console, is racing to turn into a home entertainment center as fast as it can.

“Today marks a moment of truth and a bold step forward for PlayStation,” Andrew House, chief executive of Sony Computer Entertainment, told the crowd. He said the new device “represents a significant shift of thinking of PlayStation as merely a box or console to thinking as a leading authority on play.”Fine words, but the new PlayStation will have an uphill battle. Sales of consoles from all makers peaked in 2008, when about 55 million units were sold according to the research firm I.D.C. By last year, that was down to 34 million.

For 2014, Lewis Ward, I.D.C.’s research manager for gaming, forecasts a recovery to about 44.5 million.

“From peak to peak, we’ll be down about 10 million,” he said. “There was attrition to alternative gaming platforms like tablets, but the trough was exacerbated by the 2008-2009 recession. It did not permit as many people to buy who under normal economic conditions would have bought a console.”

That was reflected in Sony’s miserable financial results. The company has lost money for the last four years, hampered not only by slower console sales but also by a range of unexciting electronic products, a strong yen and the 2011 tsunami in Japan. Analysts have made dire comments about the one-time powerhouse’s viability. But Sony seems to have bottomed out, helped by a yen that has now weakened. Sony executives said earlier this month that they expected a profit in 2013.

Sony’s new chief executive, Kazuo Hirai, has a longtime personal connection to the PlayStation franchise and is making it one of the core elements of a more tightly focused company. Mr. Hirai became well-known for some of his more confident statements about the PlayStation, particularly a 2006 swipe at Microsoft: “The next generation doesn’t start until we say it does.”

Sony has teamed up with Gaikai, the online gaming company it bought last year, to store PlayStation content in the cloud. PlayStation 4 games can be streamed to the PlayStation Vita, Sony’s portable gaming device, among other features.

“The architecture is like a PC in many ways, but super-charged to bring out its full potential as a gaming platform,” said Mark Cerny, Sony’s lead system architect.

James L. McQuivey, a Forrester analyst, said that in order for the PlayStation 4 to succeed, Sony needed to think beyond gaming. The console will have to provide other types of digital content and services, like video conferencing, third-party apps and a TV service to create a deeper, long-term relationship with the customer.

By comparison, Apple, the world’s leading consumer electronics maker, does not just sell hardware. It also has an ecosystem of digital content including apps, music, movies and e-books to make people coming back for more Apple gear every year. Apple generally takes an enviable 30 percent cut of all media it sells. Microsoft, Google and Amazon are making similar moves to create ecosystems.

“Then and only then can Sony hope to learn enough about its users to overcome its own bias toward preferring to design products in response to engineering principles rather than customer needs,” Mr. McQuivey said.

Sony shares, which have risen by nearly a third this year, were little changed Wednesday before the event.

Read More..

Pistorius Denies Murdering Girlfriend

PRETORIA, South Africa — Early on Feb. 14, Oscar Pistorius says, he heard a strange noise coming from inside his bathroom, climbed out of bed, grabbed his 9-millimeter pistol, hobbled on his stumps to the door and fired four shots.

“I fail to understand how I could be charged with murder, let alone premeditated,” Mr. Pistorius said in an affidavit read Tuesday to a packed courtroom by his defense lawyer, Barry Roux. “I had no intention to kill my girlfriend.”

Prosecutors painted a far different picture, one of a calculated killer, a world-renowned athlete who had the presence of mind and calm to strap on his prosthetic legs, walk 20 feet to the bathroom door and open fire as his girlfriend, Reeva Steenkamp, cowered inside, behind a locked door.

“The applicant shot and killed an unarmed, innocent women,” Gerrie Nel, the chief prosecutor, said in court on Tuesday. That, Mr. Nel argued, amounted to premeditated murder, a charge that could send Mr. Pistorius to prison for life.

In court, Mr. Pistorius, a Paralympic track star who competed against able-bodied athletes at the London Olympics despite having lost both his lower legs as an infant, wept uncontrollably as Mr. Roux gave the runner’s account of the fateful early morning. At one point, Magistrate Desmond Nair called a recess to allow Mr. Pistorius, who was sobbing loudly, his face contorted, to regain his composure.

“My compassion as a human being does not allow me to just sit here,” Magistrate Nair said.

As the defense and prosecution laid out their competing versions of the shooting, some details were beyond dispute.

Mr. Pistorius and Ms. Steenkamp were alone in the house, having spent the evening there. Around 3 a.m., Mr. Pistorius shot Ms. Steenkamp through the bathroom door, fatally wounding her. He broke down the door and carried her down the stairs, where she died in the foyer of his upscale home in a highly secured compound.

The young woman, a model, was cremated Tuesday on the other side of the country in her hometown, Port Elizabeth. Her family and friends mourned her and called for the authorities to deal harshly with Mr. Pistorius.

“There’s a space missing inside all the people that she knew that can’t be filled again,” her brother, Adam Steenkamp, told reporters after the memorial service.

In court, Mr. Pistorius is seeking bail on the charge of premeditated murder, but he faces an uphill battle. Magistrate Nair ruled Tuesday that the case would be treated as the most serious kind of offense, which means bail will be granted only if the defense can prove extraordinary circumstances requiring it.

The court proceedings, though they concerned only whether Mr. Pistorius would receive bail, offered the first real glimpse into what unfolded at his home on the day of the shooting.

In his affidavit, Mr. Pistorius said that he and Ms. Steenkamp had decided to stay in for the night. He canceled plans with his friends for a night on the town in Johannesburg, while she opted against movies with one of her friends. They had a quiet evening, he said. She did yoga. He watched television. About 10 p.m., they went to sleep.

In the early morning hours, he said, he woke up to move a fan from the balcony and to close the sliding doors in the bedroom.

“I heard a noise in the bathroom and realized that someone was in the bathroom,” he said. “I felt a sense of terror rushing over me.”

He had already said in the affidavit that he feared South Africa’s rampant violent crime, and later added that he was worried because there were no bars on the window to the bathroom. Construction workers had left ladders in his garden, he said.

“I believed someone had entered my house,” he said in the affidavit. “I grabbed my 9-millimeter pistol from underneath my bed. On my way to the bathroom I screamed words to the effect for him/them to get out of my house and for Reeva to phone the police. It was pitch dark in the bedroom, and I thought Reeva was in bed.”

Walking on his stumps, he heard the sound of movement inside the toilet, a small room within the bathroom.

Alan Cowell contributed reporting from London.

Read More..

Sidebar: Bucking Trend, Supreme Court Still Rejects Video Coverage

WASHINGTON — Justice Sonia Sotomayor, populist, revealed a paternalistic streak this month, announcing that she had rethought her enthusiasm for video coverage of Supreme Court arguments.

At her confirmation hearings in 2009, she said she was in favor of letting citizens see their government at work. “I have had positive experiences with cameras,” she said. “When I have been asked to join experiments of using cameras in the courtroom, I have participated. I have volunteered.”

She was singing a different tune a couple of weeks ago, telling Charlie Rose that most Americans would not understand what goes on at Supreme Court arguments and that there was little point in letting them try.

“I don’t think most viewers take the time to actually delve into either the briefs or the legal arguments to appreciate what the court is doing,” she said. “They speculate about, oh, the judge favors this point rather than that point. Very few of them understand what the process is, which is to play devil’s advocate.”

As a descriptive matter, she was right: making sense of a Supreme Court argument without substantial preparation is hard. But Justice Sotomayor’s approach also sounds like an intellectual poll tax that could just as well justify limiting attendance in the courtroom to people smart enough and diligent enough to know what is going on.

The court’s newest member, Justice Elena Kagan, has also done an about-face. At her confirmation hearings in 2010, she said video coverage “would be a great thing for the institution, and more important, I think it would be a great thing for the American people.” Two years later, she said she now had “a few worries, including that people might play to the camera” and that the coverage could be misused.

Even as the Supreme Court is digging in its heels, nations with legal systems similar to the one in the United States are moving in the other direction.

The Supreme Court of the United Kingdom, which was formed in 2009, allows camera coverage. Last month, Lord Chief Justice Igor Judge, the head of the judiciary for England and Wales, announced that cameras would be allowed in appeal courts starting in October, after judges receive media training.

Lord Judge agreed with Justice Sotomayor, to a point. “I suspect John and Jane Citizen will find it incredibly dull,” he told a committee of the House of Lords. But that did not seem to him a reason to prevent them from trying to make sense of the proceedings.

Arguments in the Supreme Court of Canada have been broadcast since the mid-1990s, and more recently they have been streamed live on the Internet.

Owen M. Rees, the court’s executive legal officer, said the experience had been positive.

“The filming of the Supreme Court of Canada’s hearings has increased the public’s access to the court and its understanding of the court’s work,” he said. “Of course, each court must make its own evaluation of whether introducing cameras in the courtroom would be appropriate.”

In a speech last year, Chief Justice Beverley McLachlin of Canada suggested that the American court system might have things backward.

In the United States, cameras are commonplace in state trial and appeals courts, and the lower federal courts have experimented with them. Only in the Supreme Court is there categorical resistance.

“The general practice in Canada is precisely the opposite,” Chief Justice McLachlin said. “Canadian trial courts have generally not permitted their hearings to be broadcast on television, where witnesses are involved.”

Lord Judge made a similar point, saying he would draw the line at criminal trials before juries, for fear that witnesses might be intimidated.

A pair of new law review articles tries to make sense of the gaps between the American and international approaches.

In one of them, in The Arizona State Law Journal, Nancy S. Marder, who teaches at the Chicago-Kent College of Law at the Illinois Institute of Technology, noted correctly that “most countries do not allow cameras in their courtrooms” and concluded that “cameras in federal courtrooms will do more harm than good at this time.” In an interview, she said she worried about a culture in which “everything becomes entertainment, focusing on the gaffe.”

But Kyu Ho Youm, a First Amendment scholar at the University of Oregon’s journalism school, said the United States Supreme Court was betraying a distinctively American commitment to free expression and access to information.

“The U.K. and Canadian justices had their own worries and concerns when they opened up their doors to cameras,” he wrote in The Brigham Young University Law Review. “However, these justices now concede they were wrong.”

“Many people outside the U.S. are wondering,” Dr. Youm said in an interview, “why the U.S. is so calcified in its thinking about cameras in the Supreme Court.”

Tony Mauro, a reporter with The National Law Journal and a student of the arguments for and against cameras, proposed an answer in an article in 2011. “The root of almost every objection the justices have expressed about camera access,” he wrote, “is the justices’ deeply held feeling that their court is exceptional — unlike any other public institution.”

Mr. Mauro was onto something. At a judicial conference in 2011, Judge J. Harvie Wilkinson III of the federal appeals court in Richmond, Va., asked Chief Justice John G. Roberts Jr. for his position on cameras and got a telling response. The chief justice had been considering the international context.

“The Supreme Court is different,” he said, “not only domestically, but in terms of its impact worldwide.”

Chief Justice Roberts said he worried about the effect that cameras would have on lawyers and, perhaps more important, on the justices, who may have less self-control than their counterparts abroad.

“We unfortunately fall into grandstanding with a couple of hundred people in the room,” the chief justice said.

This article has been revised to reflect the following correction:

Correction: February 18, 2013

An earlier version of this article reported incorrectly that an article by Nancy S. Marder would be published in The Brigham Young University Law Review next month.  The article will be published in The Arizona State Law Journal later this month.

Read More..

Protests at Egypt Port Close Offices, but Not Suez Canal

CAIRO — Thousands of demonstrators shut down the administrative buildings of the Suez Canal terminal in the city of Port Said on Sunday, as part of a general strike protesting the death sentences handed down three weeks ago to 21 local soccer fans for their roles in a deadly riot last year.

The protests marked the closest that the chaos in Egypt over the last two years has come to threatening the operations of the Suez Canal, an artery of shipping critical to both international commerce and the battered Egyptian economy.

The administrative facilities were emptied as the protesters approached, residents said, but a military guard protected the port from disruption. President Mohamed Morsi, of the Muslim Brotherhood’s political arm, had deployed the military to protect the city when the protests there started three weeks ago.

The success of the strike, as life had begun to return to the streets, was a vivid reminder that the government in Cairo has not yet restored full control over Port Said, a major city at the Mediterranean head of the Suez Canal with a population of about 600,000. The government essentially backed down from its attempt to impose a curfew, and nothing has diminished the underlying anger behind the riots, first over the initial death sentences and then over the deaths of dozens of protesters in clashes with the police.

The possibility of a threat to the flow of traffic through the canal remains remote, but the Sunday protest raised the specter of such disruption at a critical time. Political turbulence has cut deeply into tourism and economic growth in the two years since the ouster of Hosni Mubarak. And now the political instability keeps delaying a proposed $4.8 billion loan from the International Monetary Fund, whose seal of approval is essential to obtaining the further billions in loans needed to close the country’s deficit.

The Egyptian pound is falling sharply against the dollar. Unemployment is high and prices are rising. The Suez Canal is one of Egypt’s main sources of hard currency, along with tourism, foreign aid, and remittances from Egyptians abroad.

The protest was also a rare example of major civil disobedience in Egypt since the revolution that overthrew Mr. Mubarak in early 2011. It was the first day of the work week here, and Egyptian state media and residents of Port Said said that demonstrators had gathered outside the provincial headquarters at 7 a.m., blocking access to the building.

The protesters urged employees of the provincial government, the court house, the telephone and natural gas utilities, customs offices and other government institutions to quit work and join their strike. Many did, the Web site of the state newspaper Al Ahram reported. Protesters blocked railways. Photographs that circulated on the Internet showed women sitting on desks they had dragged outside in a shutdown of a school, although residents said some schools and courts remained opened.

Al Ahram reported that the demonstrators were demanding legal action against police officers who had killed protesters during last month’s clashes. They also sought a review by a “neutral court” of the death sentences against the local soccer fans delivered in Cairo. The soccer brawl in the case took place at a match between bitter rivals, El Masry of Port Said and Al Ahly of Cairo, both of which have large followings of violent hard-core fans. Many residents of Port Said say they believe the sentencing judge succumbed to pressure from violent Cairo soccer fans who demanded retribution.

Mayy El Sheikh contributed reporting.

Read More..

N.B.A. Players Dismiss Union Leader

HOUSTON — Billy Hunter was fired as executive director of the N.B.A. players union Saturday, with a bold, decisive vote and a public rebuke.

Twenty-four player representatives voted unanimously to terminate Hunter, ending his 16 ½-year tenure. The move was announced by the union president, Derek Fisher, who led the drive to oust Hunter over questionable business practices that have drawn the scrutiny of three government agencies.

“Going forward, we will no longer be divided, misled, misinformed,” Fisher said in a news conference. “This is our union, and we have taken it back.”

The decision to terminate Hunter was made during a lively two-hour meeting that involved elected player representatives and others, including the All-Stars LeBron James and Tyson Chandler.

James and Jerry Stackhouse were the two most forceful voices in the room, according to two people at the meeting. James, the league’s biggest star, and Stackhouse, a respected veteran, “literally drove the discussion” and rallied the players to make the change, the witnesses said. About 40 players participated in the meeting, although several left early to attend to other commitments.

Hunter, 70, was charged with nepotism, poor management and abuse of union resources in an independent audit released last month. He remains the subject of a criminal probe by the United States attorney’s office. He is also being investigated by the Labor Department and the New York State attorney general.

Although the outside audit, conducted by the law firm Paul, Weiss, Rifkind, Wharton & Garrison, found no criminal wrongdoing, it concluded that Hunter had put his own interests ahead of the union and it recommended that the players reconsider his employment.

Hunter was fired with three years and approximately $10.5 million remaining on his contract, and it is expected that he will pursue legal action to claim that sum. The audit concluded that Hunter’s contract was not properly approved in 2010 and was therefore unenforceable, a position that Hunter’s lawyers will challenge.

Hunter was not invited to Saturday’s meeting, to the dismay of his legal team, which maintains that he has been denied due process.

“I have yet to receive any notification, other than published news reports, that the N.B.P.A. has terminated my employment,” Hunter said in a statement. “If accurate, it is indicative of the extremely troubling process followed by the N.B.P.A. during the past few weeks. During the days and weeks ahead, my legal team and I will begin carefully reviewing the actions taken and statements made against me in the meeting room in my absence. I look forward to gathering the evidence showing how certain individuals made sure the outcome was pre-ordained.”

The statement continued: “After 17 years of representing N.B.A. players during C.B.A. negotiations and defending their rights in other proceedings, not once was there an occasion where one side was denied an opportunity to be heard. The current interim regime in control of the N.B.P.A. has set a terrible precedent for the union. It violates every tenet of fairness upon which the union was founded. Now that this has occurred, I will continue to examine all of my options, including whether the fairness that was absent from the N.B.P.A. process might be available in a different forum. In addition, given the legitimate legal and governance questions surrounding the eligibility of the members who voted and the adherence, or lack thereof, to the constitution and bylaws, I do not consider today's vote the end, only a different beginning. My legal representatives and I will resume communication with the N.B.P.A. to determine how to best move forward in the best interests of all parties.”

Because of the pending government investigations, and the likelihood of a lawsuit, Fisher kept his remarks brief. He spoke for just three minutes and declined to take questions. But his comments were often pointed as he alluded to Hunter’s attempts to fight the dismissal.

Hunter initially opposed Fisher’s move to hire an outside firm to audit the union. Amid the power struggle last spring, the union’s executive committee voted to ask Fisher to step down. Several of those players later changed their stance, joining Fisher to oust Hunter.

“We want to make it clear that we are here to serve only the best interests of the players,” Fisher said. “No threats, no lies, no distractions will stop us from serving our membership. We do not doubt that this process will possibly continue in an ugly way. But we want to remind everyone that there are three ongoing government investigations pending. And so we’d like to continue to respect that process and will continue to handle ourselves accordingly in that regard.”

Hunter had served as executive director since July 1996. He replaced Simon Gourdine, who was fired earlier that year.

The players also elected seven new players to the executive committee: James Jones, Roger Mason Jr., Chris Paul, Andre Iguodala, Stephen Curry and Willie Green. All will serve three-year terms. Fisher remains as president, although his term ends in June, and Matt Bonner remains as vice president.

Read More..

Incomes Flat in Recovery, but Not for the 1%

WASHINGTON — Incomes rose more than 11 percent for the top 1 percent of earners during the economic recovery, but barely at all for everybody else, according to new data.

The numbers, produced by Emmanuel Saez, an economist at the University of California, Berkeley, show overall income growing by just 1.7 percent over the period. But there was a wide gap between the top 1 percent, whose earnings rose by 11.2 percent, and the other 99 percent, whose earnings rose by just 0.4 percent.

Mr. Saez, a winner of the John Bates Clark Medal, an economic laurel considered second only to the Nobel, concluded that “the Great Recession has only depressed top income shares temporarily and will not undo any of the dramatic increase in top income shares that has taken place since the 1970s.”

The disparity between top earners and everybody else can be attributed, in part, to differences in how the two groups make their money. The wealthy have benefited from a four-year boom in the stock market, while high rates of unemployment have continued to hold down the income of wage earners.

“We have in the middle basically three decades of problems compounded by high unemployment,” said Lawrence Mishel of the Economic Policy Institute, a left-of-center research group in Washington. “That high unemployment we know depresses wage growth throughout the wage scale, but more so for the bottom than the middle and the middle than the top.”

In his analysis, Mr. Saez said he saw no reason that the trend would reverse for 2012, which has not yet been analyzed. For that year, the “top 1 percent income will likely surge, due to booming stock prices, as well as retiming of income to avoid the higher 2013 top tax rates,” Mr. Saez wrote, referring to income tax increases for the wealthy that were passed by Congress in January. The incomes of the other “99 percent will likely grow much more modestly,” he said.

Excluding earnings from investment gains, the top 10 percent of earners took 46.5 percent of all income in 2011, the highest proportion since 1917, Mr. Saez said, citing a large body of work on earnings distribution over the last century that he has produced with the economist Thomas Piketty of the Paris School of Economics.

Concern for the declining wages of working Americans and persistent high levels of inequality featured heavily in President Obama’s State of the Union address this week. He proposed raising the federal minimum wage to $9 from $7.25 as one way to ameliorate the trend, a proposal that might lift the earnings of 15 million low-income workers by the end of 2015.

“Let’s declare that in the wealthiest nation on Earth, no one who works full time should have to live in poverty,” Mr. Obama said in his address to Congress.

Mr. Obama’s economic advisers say that he has been animated by the country’s yawning levels of inequality, and the administration has put forward several proposals to address the gap. Those include higher taxes on a small group of the wealthiest families and an expansion of aid to lower- and middle-income families through programs like the Affordable Care Act.

The data analyzed by Mr. Piketty and Mr. Saez shows that income inequality — as measured by the proportion of income taken by the top 1 percent of earners — reached a modern high just before the recession hit in 2009. The financial crisis and its aftermath hit wealthy families hard. But since then, their earnings have snapped back, if not to their 2007 peak.

That is not true for average working families. After accounting for inflation, median family income has declined over the last two years. In 2011, it stagnated for the poorest and dropped for those in the middle of the income distribution, census data show. Median household income, which was $50,054 in 2011, is about 9 percent lower than it was in 1999, after accounting for inflation.

Measures of inequality differ depending on whether they are measured after or before taxes, and whether or not they include government transfers like Social Security payments, food stamps and other credits.

Research led by the Cornell economist Richard V. Burkhauser, for instance, sought to measure the economic health of middle-class households including income, taxes, transfer programs and benefits like health insurance. It found that from 1979 to 2007, median income grew by about 18.2 percent over all rather than by 3.2 percent counting income alone.

In an interview, Mr. Burkhauser said his numbers measured “how are the resources that person has to live on changing over time,” whereas Mr. Piketty and Mr. Saez’s numbers measure “how are different people being rewarded in the marketplace.”

“That’s a fair question to ask, but it’s a very different question to ask than, ‘What resources do Americans have?’ ” Mr. Burkhauser said. Notably, many of the Obama administration’s progressive policies have been aimed at blunting the effects of income inequality, rather than tackling income inequality itself.

Mr. Saez has advocated much more aggressive policies aimed at income inequality. “Falls in income concentration due to economic downturns are temporary unless drastic regulation and tax policy changes are implemented,” Mr. Saez said in his analysis.

The recent policy changes, including tax increases and financial regulatory reform, he wrote, “are not negligible but they are modest relative to the policy changes that took place coming out of the Great Depression. Therefore, it seems unlikely that U.S. income concentration will fall much in the coming years.”

Read More..

DealBook: Buffett in $23 Billion Deal for Heinz, as Big Mergers Revive

10:12 a.m. | Updated

Warren E. Buffett has found another American icon worth buying: H. J. Heinz.

Berkshire Hathaway, the giant conglomerate that Mr. Buffett runs, said on Thursday that it would buy the food giant for about $23 billion, adding Heinz ketchup to its stable of prominent brands.

The proposed acquisition, coming fast on the heels of a planned $24 billion buyout of the computer maker Dell and a number of smaller deals, heralds a possible reemergence in merger activity.  The number of deals and the prices being paid for companies are still a far cry from the lofty heights of the boom before the financial crisis.  But an improving stock market, growing confidence among business executives and mounting piles of cash held by corporations and private equity funds all favor a return to deal-making. 

Mr. Buffett is teaming up with 3G Capital Management, a Brazilian-backed investment firm that owns a majority stake in a company whose business is complementary to Heinz’s: Burger King.

Under the terms of the deal, Berkshire and 3G will pay $72.50 a share, about 20 percent above Heinz’s closing price on Wednesday. Including debt, the transaction is valued at $28 billion.

“This is my kind of deal and my kind of partner,” Mr. Buffett told CNBC on Thursday. “Heinz is our kind of company with fantastic brands.”

In many ways, Heinz fits Mr. Buffett’s deal criteria almost to a T. It has broad brand recognition – besides ketchup, it owns Ore-Ida and Lea & Perrins Worcestershire sauce – and has performed well. Over the last 12 months, its stock has risen nearly 17 percent.

Mr. Buffett told CNBC that he had a file on Heinz dating back to 1980. But the genesis of Thursday’s deal actually lies with 3G, an investment firm backed by several wealthy Brazilian families, according to a person with direct knowledge of the matter.

One of the firm’s principal backers, Jorge Paulo Lemann, brought the idea of buying Heinz to Berkshire about two months ago, this person said. Mr. Buffett agreed, and the two sides approached Heinz’s chief executive, William R. Johnson, about buying the company.

“We look forward to partnering with Berkshire Hathaway and 3G Capital, both greatly respected investors, in what will be an exciting new chapter in the history of Heinz,” Mr. Johnson said in a statement.

Berkshire and 3G will each contribute about $4 billion in cash to pay for the deal, with Berkshire also paying $8 billion for preferred shares. The rest of the cost will be covered by debt financing raised by JPMorgan Chase and Wells Fargo.

Mr. Buffett told CNBC that 3G would be the primary supervisor of Heinz’s operations, saying, “Heinz will be 3G’s baby.”

The food company’s headquarters will remain in Pittsburgh, Heinz’s home for over 120 years.

Heinz’s stock was up nearly 20 percent in morning trading, at $72.51, closely mirroring the offered price. Berkshire’s class A stock was also up slightly, rising 0.64 percent to $148,691 a share.

Heinz was advised by Centerview Partners, Bank of America Merrill Lynch and the law firm Davis Polk & Wardwell. A transaction committee of the company’s board was advised by Moelis & Company and Wachtell, Lipton, Rosen & Katz.

Berkshire’s and 3G’s lead adviser was Lazard, with JPMorgan and Wells Fargo providing additional advice. Kirkland & Ellis provided legal advice to 3G, while Berkshire relied on its usual law firm, Munger, Tolles & Olson.

Read More..

Media Decoder Blog: Time Warner in Talks to Spin Off Majority of Magazines

3:53 p.m. | Updated Time Warner is in early talks to shed much of Time Inc., the country’s largest magazine publisher and the foundation on which the $49 billion media conglomerate was founded, according to people involved in the negotiations.

The company is currently in talks with the Meredith Corporation to put most of its magazines, including People, InStyle and Real Simple into a separate, publicly-traded company that would also include Meredith titles like Better Homes and Gardens and Ladies’ Home Journal.

The deal being discussed is one of several options Time Warner is exploring in order to reduce its troubled publishing unit, said these people who could not discuss private conversations publicly.

As part of the agreement, existing shareholders in Time Warner and Meredith would receive stakes in the new company, which would essentially amount to a women’s magazine company, led by People, the popular celebrity magazine and crown jewel of Time Inc.’s slate of 21 publications.

Time Warner would continue to control news-based magazines, Time, Fortune, Sports Illustrated and Money. Meredith did not express interest in including those titles and Time Warner believed those magazines can fit into its journalistic efforts at CNN and CNNMoney.com, said a person briefed on the discussions.

A Time Warner spokesman declined to comment. News of the talks was first reported by Fortune, a magazine owned by Time Inc.

The talks come weeks after Time Inc. announced it would lay off 6 percent of its global work force of more than 8,000 employees during an industrywide decline in subscription and advertising revenue. Overall revenue at Time Inc. has declined roughly 30 percent in the last five years.

Time Warner’s history is rooted in Time, the weekly news  magazine founded by Henry Luce in 1923 on which the giant media conglomerate got its start. But lately the publishing company’s sluggish performance has stood in sharp contrast to the strong performance at Time Warner’s cable channels like HBO, TBS and TNT.

In the last several years, the company has tried to trim some assets unrelated to the television and movie production business. That included shedding AOL, Time Warner Cable, the Warner Music Group and the Time Warner Book Group.

Jeffrey L. Bewkes, chief executive of Time Warner, has denied reports that he would sell Time Inc. He frequently talks about the division’s strongest brands essentially as cable television channels and has aggressively mandated that Time Inc. make its magazines available on digital devices.

“They’re printing pages right now, but they’re also on electronic screens with moving pictures,” Mr. Bewkes said in a previous interview. He added that “a cable channel like TNT or TBS” is “pretty much the same as what People or Time or InStyle should do.”

The company’s exploration of a deal that would allow it to keep male-oriented titles like Sports Illustrated, Time and Fortune would let it maintain its name and historical roots.

“Time’s name is on the door. I think Jeff feels it would be better to hang onto it and not sell it for what would be a low price,” said a person briefed on Mr. Bewkes’s thinking who could not discuss private conversations on the record.

Jack Griffin, a former chief executive at Meredith, served a brief and stormy reign as chief of Time Inc. before Laura Lang took over in January. Ms. Lang, previously the chief executive of the digital advertising company Digitas, stepped in at a tumultuous time after Mr. Griffin was forced out after less than six months on the job. She hired Bain & Company, a consultancy based in Boston, to assess the business.

Many of  Time Inc.’s magazine titles have been struggling as more readers have been reading material online, and newsstand sales have dropped. Even titles like People, which long helped financially bolster Time Inc.’s less lucrative titles, has suffered. People’s newsstand sales declined 12.2 percent in the second half of 2012 compared to the year before, according to figures released last week by the Alliance for Audited Media. Its advertising pages dropped by 6 percent in 2012 compared to the year before, according to the Publishers Information Bureau.

Last month, Ms. Lang said she was cutting staff 6 percent, or about 480 people. Magazines like Time and People asked employees to take buyouts and said they would lay people off if they did not meet those numbers. Wednesday is the last day for employees to raise their hands for buyouts.

On a conference call with analysts last week, John K. Martin, chief financial and administration officer at Time Warner, said that “very challenging industry conditions weighed” on the company’s results.

The talks come as News Corporation prepares to sever its publishing assets, including newspapers like The Wall Street Journal and The New York Post, from its more lucrative entertainment division, which includes the cable channels FX and Fox News. The separation is expected to be complete this summer.

Christine Haughney and David Carr contributed reporting.

Read More..

Ex-Officer Locked in Mountain Standoff With Police

LOS ANGELES — Law enforcement officials were locked in a standoff after a shootout outside a forest cabin on Tuesday afternoon with Christopher J. Dorner, the former Los Angeles police officer who is the target of the largest manhunt in Los Angeles Police Department history, officials said.

Stan Lim/The Press-Enterprise, via Associated Press

Police officers manned a road block near Big Bear, Calif., on Tuesday as a gunfight took place nearby with Christopher Dorner, a former Los Angeles officer accused of three killings.

The shootings happened in the San Bernardino Mountains after Mr. Dorner apparently burglarized a couple’s home, tied them up and stole their car, officials said.

Mr. Dorner was pinned down in a cabin after the shootout in which two officers were shot. They were airlifted to a nearby hospital. One of the deputies died from his injuries, The Los Angeles Times reported.

The standoff drew scores of police officers and sheriff’s deputies, from surrounding jurisdictions and led by the San Bernardino Sheriff-Coroner Department. The tension heightened as the day passed. Law enforcement agencies ordered news helicopters to keep their distance from the standoff for the protection of the officers involved. The sheriff’s online feed to its radio scanner was shut down for the same reason.

The police believe Mr. Dorner is probably monitoring the news, and Cmdr. Andrew Smith, a spokesman for the Los Angeles Police Department, addressed him directly at a news briefing.

“Enough is enough,” he said. “It’s time to stop the bloodshed and let this incident be over.”

Read More..

Tests of Some Deadly Diseases on Mice Mislead, Report Says

Evan McGlinn for The New York Times

Dr. H. Shaw Warren is one of the authors of a new study that questions the use of laboratory mice as models for all human diseases.

For decades, mice have been the species of choice in the study of human diseases. But now, researchers report evidence that the mouse model has been totally misleading for at least three major killers — sepsis, burns and trauma. As a result, years and billions of dollars have been wasted following false leads, they say.

The study’s findings do not mean that mice are useless models for all human diseases. But, its authors said, they do raise troubling questions about diseases like the ones in the study that involve the immune system, including cancer and heart disease.

“Our article raises at least the possibility that a parallel situation may be present,” said Dr. H. Shaw Warren, a sepsis researcher at Massachusetts General Hospital and a lead author of the new study.

The paper, published Monday in Proceedings of the National Academy of Sciences, helps explain why every one of nearly 150 drugs tested at a huge expense in patients with sepsis has failed. The drug tests all were based on studies in mice. And mice, it turns out, can have something that looks like sepsis in humans, but is very different from the condition in humans.

Medical experts not associated with the study said that the findings should change the course of research worldwide for a deadly and frustrating condition. Sepsis, a potentially deadly reaction that occurs as the body tries to fight an infection, afflicts 750,000 patients a year in the United States, kills one-fourth to one-half of them, and costs the nation $17 billion a year. It is the leading cause of death in intensive-care units.

“This is a game changer,” said Dr. Mitchell Fink, a sepsis expert at the University of California, Los Angeles, of the new study.

“It’s amazing,” said Dr. Richard Wenzel, a former chairman at the department of internal medicine at Virginia Commonwealth University and a former editor of The New England Journal of Medicine. “They are absolutely right on.”

Potentially deadly immune responses occur when a person’s immune system overreacts to what it perceives as danger signals, including toxic molecules from bacteria, viruses, fungi, or proteins released from cells damaged by trauma or burns, said Dr. Clifford S. Deutschman, who directs sepsis research at the University of Pennsylvania and was not part of the study.

The ramped-up immune system releases its own proteins in such overwhelming amounts that capillaries begin to leak. The leak becomes excessive, and serum seeps out of the tiny blood vessels. Blood pressure falls, and vital organs do not get enough blood. Despite efforts, doctors and nurses in an intensive-care unit or an emergency room may be unable to keep up with the leaks, stop the infection or halt the tissue damage. Vital organs eventually fail.

The new study, which took 10 years and involved 39 researchers from across the country, began by studying white blood cells from hundreds of patients with severe burns, trauma or sepsis to see what genes were being used by white blood cells when responding to these danger signals.

The researchers found some interesting patterns and accumulated a large, rigorously collected data set that should help move the field forward, said Ronald W. Davis, a genomics expert at Stanford University and a lead author of the new paper. Some patterns seemed to predict who would survive and who would end up in intensive care, clinging to life and, often, dying.

The group had tried to publish its findings in several papers. One objection, Dr. Davis said, was that the researchers had not shown the same gene response had happened in mice.

“They were so used to doing mouse studies that they thought that was how you validate things,” he said. “They are so ingrained in trying to cure mice that they forget we are trying to cure humans.”

“That started us thinking,” he continued. “Is it the same in the mouse or not?”

The group decided to look, expecting to find some similarities. But when the data were analyzed, there were none at all.

“We were kind of blown away,” Dr. Davis said.

The drug failures became clear. For example, often in mice, a gene would be used, while in humans, the comparable gene would be suppressed. A drug that worked in mice by disabling that gene could make the response even more deadly in humans.

Even more surprising, Dr. Warren said, was that different conditions in mice — burns, trauma, sepsis — did not fit the same pattern. Each condition used different groups of genes. In humans, though, similar genes were used in all three conditions. That means, Dr. Warren said, that if researchers can find a drug that works for one of those conditions in people, it might work for all three.

This article has been revised to reflect the following correction:

Correction: February 11, 2013

An earlier version of this article misstated the position of Dr. Richard Wenzel. He is a former chairman of the department of internal medicine at Virginia Commonwealth University. He is not currently the chairman.

Read More..