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Former Virginia Gov. Bob McDonnell Convicted on Corruption Charges

| Thu Sep. 4, 2014 4:04 PM EDT

A jury found former Republican Virginia Gov. Bob McDonnell guilty on 11 counts of corruption on Thursday, ending a bizarre trial that featured bad shrimp, a broken marriage, and non-FDA approved dietary supplements. McDonnell's wife, Maureen, was found guilty on eight charges.

The charges stemmed from the couple's relationship with Johnnie Williams, the former CEO of Star Scientific, Inc., a pharmaceutical company. Williams, dubbed the "tic-tac man" by the governor's staff, was pushing two new drugs, Antabloc and CigRx, and needed help getting the pills into doctors' offices. He lavished gifts on the McDonnells, paying for their daughter's wedding, taking Maureen on shopping sprees, and letting the couple borrow his "James Bond car"—an Aston Martin—for vacations. At one point, he bid against himself at a charity auction to win a free weekend with Maureen. In turn, the McDonnells became Star Scientific boosters. Maureen went so far as to pitch Antabloc to prospective first lady Ann Romney, telling her it could help her MS.

What's there to say about the trial? BuzzFeed's Katherine Miller has the fullest summation of what happened, but let's just call it a mess, a soap opera, the world's worst "Modern Love" column in legalese. It was also a useful corrective to the facade politicians sometimes present when they trot their families in front of the cameras before trying to legislate yours. McDonnell, whose master's thesis at Pat Robertson's Regent University made the case for covenant marriage and subservient roles for wives, built his defense on the theory that his own union was too much of a failure for him and his wife to mount a conspiracy. According to the governor, his wife was a paranoid loon who had a crush on the businessman who bought her nice dresses.

At one point, a former aide to Maureen McDonnell—who called the former first lady a "nutbag"—testified that she had received a text message from the governor's wife alleging that the couple's chef was attempting to ruin Christmas by serving them bad shrimp. Fed up with the McDonnells (who had accused him of stealing food), the chef, Todd Schneider, handed a trove of documents to federal investigators in 2012 that led to the probe. The lesson, as always, is to be nice to the people who prepare your food.

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RIP Joan Rivers

| Thu Sep. 4, 2014 3:32 PM EDT
A photo of Joan Rivers in 1967. Wikimedia Commons

Joan Rivers has died at 81.

This video of her performance on the The Ed Sullivan Show in 1967 is one of our favorites.

RIP.

BP Lashes Out at Journalists and "Opportunistic" Environmentalists

| Thu Sep. 4, 2014 1:36 PM EDT
An oiled bird on Louisiana's East Grand Terre Island after the BP Deepwater Horizon oil spill.

News of this morning's federal court decision against BP broke as I was aboard a 40-foot oyster boat in the Louisiana delta, just off the coast of Empire, a suburb of New Orleans.

The reaction: stunned silence. Then a bit of optimism.

"This is huge," said John Tesvich, chair of the Louisiana Oyster Task Force, his industry's main lobby group in the state. "They are going to have to pay a lot more." Standing on his boat, the "Croatian Pride," en route to survey oyster farms, he added: "We want to see justice. We hope that this money goes to helping cure some of the environmental issues in this state."

On Thursday, a federal judge in New Orleans found that the 2010 Gulf of Mexico disaster—in which the Deepwater Horizon oil rig exploded, killing 11 people and spilling millions of barrels of oil into the Gulf—was caused by BP's "willful misconduct" and "gross negligence."

Tesvich says he's seen a drastic decline in his company's oyster production since then—company profits down 15 to 20 percent and oyster yields slashed by 30 percent. He says he's suspicious that this new decision will force the kind of action from local politicians needed to clean up the Gulf once-and-for-all. The politicians in Louisiana, he says, "haven't been the best environmental stewards."

BP's own reaction to the news has been fast and pointed. "BP strongly disagrees with the decision​," the company said in a statement on Thursday, published to its website. "BP believes that an impartial view of the record does not support the erroneous conclusion reached by the District Court."

The company said it would immediately appeal the decision.

"It's clear that the apocalypse forecast did not come to pass," said a BP official.

With the fourth anniversary of the busted well's final sealing coming up in a couple weeks, BP has been pushing back aggressively against the company's critics. On Wednesday night—just hours before the court's ruling—Geoff Morrell, the company's vice president of US communications, spoke in New Orleans at the Society of Environmental Journalists conference, and blamed the media and activists for BP's rough ride.

The company's efforts to clean up the spill have been obscured, he said, by the ill-intentioned efforts of "opportunistic" environmentalists, shoddy science, and the sloppy work of environmental journalists (much to the chagrin of his audience, hundreds of environmental journalists).

"It's clear that the apocalypse forecast did not come to pass," he said. "The environmental impacts of the spill were not as far-reaching or long-lasting as many predicted."

Back in 2010, BP's then-CEO Tony Hayward lamented—a month after the explosion—that he wanted his "life back." He didn't find much sympathy at the time. Within a couple months, he resigned out of the spotlight (with a $930,000 petroleum parachute). But his flub didn't retire so easily, and it became emblematic of BP's astonishing capacity for tone-deafness, something Morrell seemed intent on continuing Wednesday.

Morrell said that while "impolitic" remarks had been made by BP officials in the past, the spill's aftermath has been "tough on all of us."

I can only imagine.

I can faithfully report that no rotten tomatoes were hurled during Morrell's talk, and grumbles and cynical chuckles were kept to a polite murmur. But the response on Twitter was more free-flowing:

Yup, that last one is true. 

ISIS Is a Test of Leadership. Real Leadership.

| Thu Sep. 4, 2014 12:39 PM EDT

From Ron Fournier, writing about President Obama and the threat of ISIS:

A columnist should never admit uncertainty, but here's mine: I'm not ready to side with the hawks or the doves.

It's conventional wisdom that columnists should always be self-assured. But can someone explain why? I know that sounds naive, but seriously. Why? Why should opinion mongers be expected to have firm, considered, immediate views on every possible subject? I get that nobody wants to read someone who dithers about everything, but shouldn't we be equally suspicious of those who somehow manage to cobble together unflinching insta-opinions about everything under the sun?

In any case, Fournier is making the—obvious?—point that there's nothing wrong with Obama taking time to figure out what to do about ISIS. That's doubly true since he's working in the shadow of the lies and incompetence that brought us the Iraq war:

President Obama is a living reflection of this psychological context. Uncertain and contradictory, Obama is grasping for the right mix of hawk and dove to rally Americans, unite the world, and confront ISIS without locking the United States into another unholy mess.

God bless him. It's a hellish task. Obama's lack of clarity so far has drawn criticism from the across the political spectrum, including from me (here and here). Two loyal readers remind me by email, and for different reasons, that Obama needs time to get this right.

Yes indeed. Sometimes you have to make a fast decision, even if you have limited knowledge. That's life. But other times you don't, and you'd be foolish to lock yourself into a decision when you have time to collect more intelligence. This is the true lesson of leadership: Make decisions as fast as possible, but no faster. That's what Obama is doing.

BP Was Just Found Grossly Negligent in the Gulf Oil Spill Disaster. Read the Full Ruling.

| Thu Sep. 4, 2014 11:49 AM EDT

In a blunt ruling handed down on Thursday, a federal judge in New Orleans found that the biggest oil spill in US history, the 2010 Gulf of Mexico disaster, was caused by BP's "willful misconduct" and "gross negligence."

On April 20, 2010, the Deepwater Horizon oil rig exploded, killing 11 people and spilling millions of barrels of oil into the Gulf over the next several months. According to Bloomberg, the plaintiffs in the lawsuit include "the federal government, five Gulf of Mexico states, banks, restaurants, fishermen and a host of others."

The case also includes two other companies that were involved in aspects of the design and function of the Deepwater Horizon—Transocean and Halliburton—though the bulk of the blame was reserved for BP.

"BP's conduct was reckless," wrote District Judge Carl Barbier, in a 153-page ruling. "Transocean's conduct was negligent. Halliburton's conduct was negligent."

The judge ruled that BP was responsible for 67 percent of the blowout, explosion and subsequent oil spill, while Transocean was at fault for 30 percent, and Halliburton for the remaining 3 percent.

According to Bloomberg, BP could face fines of as much as $18 billion.

Here's the full ruling.

 

Fast-Food Workers Arrested In Fight For $15 Minimum Wage

| Thu Sep. 4, 2014 11:45 AM EDT
Police officers arrest a protester in front of a McDonald's restaurant in New York's Times Square on Thursday.

On Thursday, nearly two years after fast-food employees first walked off the job in New York City, workers in dozens of cities around the country are staging a new round of strikes aimed at winning workers a $15 minimum wage and the right to form a union. This spate of walk-outs will see a significant escalation in tactics: home healthcare workers will join the day of action, and some workers will engage in civil disobedience. Several have already been arrested.

"On Thursday, we are prepared to take arrests to show our commitment to the growing fight for $15," Terrence Wise, a Kansas City Burger King employee and a member of the fast-food workers’ national organizing committee, said in a statement earlier this week.

Employees at restaurant chains including McDonalds, Pizza Hut, and Burger King are walking off the job and staging sit-ins in 150 cities nationwide, from Chicago to Oakland, Pittsburg to Seattle. During the last one-day strike in May, workers protested in 150 US cities and 80 foreign cities, forcing several franchises to close for part of the day.

So far, the massive chains have been resistant to bumping up workers’ wages. Nevertheless, the movement has dealt some serious setbacks to one of the biggest fast-food employers: McDonald's. The company's public image was tarnished significantly between 2013 and 2014, according to a recent study quantifying companies’ reputations. McDonald's sales have fallen over the past year amid ramped up scrutiny from Congress over its poverty wages. And in July, the National Labor Relations Board ruled that McDonald’s corporate can be held liable in worker lawsuits over wage-theft and working conditions. (The company had been arguing that it does not exert significant control over its franchises’ employment practices.)

The Service Employees Industrial Union, which has backed the workers from the start, hopes the addition of some of the nation’s 2 million home healthcare aides to the growing movement will put additional pressure on states and localities to raise their minimum wage.

On Labor Day, President Barack Obama gave the fast-food worker movement a morale boost. "All across the country right now there’s a national movement going on made up of fast-food workers organizing to lift wages so they can provide for their families with pride and dignity," the president said. "There is no denying a simple truth. America deserves a raise."

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Colleges Don't Teach Much, but College Students Don't Know It

| Thu Sep. 4, 2014 11:32 AM EDT

The Collegiate Learning Assessment is just what it sounds like: a test that measures critical thinking, analytic reasoning, and communications skills in college students. Several years ago, Richard Arum and Josipa Roksa reported that most students didn't improve much on this test after four years of college, and a full third didn't improve at all. Now they've written a follow-up, which concludes, unsurprisingly, that students with high CLA scores do better in the job market than students with low scores. Kevin Carey provides the highlights of the rest of the study:

Remarkably, the students had almost no awareness of this dynamic. When asked during their senior year in 2009, three-quarters reported gaining high levels of critical thinking skills in college, despite strong C.L.A. evidence to the contrary. When asked again two years later, nearly half reported even higher levels of learning in college. This was true across the spectrum of students, including those who had struggled to find and keep good jobs.

Through diplomas, increasingly inflated grades and the drumbeat of college self-promotion, these students had been told they had received a great education. The fact that the typical student spent three times as much time socializing and recreating in college as studying and going to class didn’t change that belief. Nor did unsteady employment outcomes and, for the large majority of those surveyed, continued financial dependence on their parents.

....Mr. Arum and Ms. Roksa’s latest research suggests that within the large population of college graduates, those who were poorly taught are paying an economic price....Yet those same students continue to believe they got a great education, even after two years of struggle. This suggests a fundamental failure in the higher education market — while employers can tell the difference between those who learned in college and those who were left academically adrift, the students themselves cannot.

I suppose this is a specialized case of the Dunning-Kruger effect: incompetent people don't realize they're incompetent. There's probably not much universities can do about that, but it's disheartening that they're motivated to actively encourage it.

On the other hand, I suppose you can argue that it doesn't matter. After all, employers seem to figure out pretty quickly who's good and who isn't, so it doesn't do them much harm. And the kids themselves are better off for having a degree, even if they didn't learn much. So perhaps this is a Pareto-efficient situation after all.

ECB Finally Shows Signs of Taking Lousy Economic Growth Seriously

| Thu Sep. 4, 2014 10:20 AM EDT

In a surprise move, the European Central Bank cut interest rates nearly to zero today And there's more:

The central bank said that in October it would begin buying asset-backed securities, bundles of loans issued by banks to businesses and households....Perhaps more significantly, Mr. Draghi said that the central bank’s governing council was ready to take further measures if needed — a clear reference to quantitative easing, or broad-based purchases of government bonds or other assets.

“The governing council is unanimous in its commitment to using additional unconventional instruments,” Mr. Draghi said at a news conference....“Q.E. was discussed,” Mr. Draghi said. “A broad asset purchase program was discussed.” He said some members of the governing council favored starting such purchases, but others did not.

More from the Wall Street Journal:

While the ECB had in recent months indicated it was considering an ABS purchase program, the addition of a covered bond program and rate cuts was a surprise, and an indication that officials have grown increasingly concerned that the recent period of very low inflation could persist longer than first thought and may threaten the currency area's economic recovery.

"In August, we see a worsening of the medium-term inflation outlook, a downward movement in all indicators of inflation expectations," Mr. Draghi said. "Most, if not all, the data we got in August on GDP (gross domestic product) and inflation showed that the recovery was losing momentum."

It's still too little, too late—as usual with the ECB—but at least it suggests that European leaders are finally taking seriously the combination of low inflation and lousy economic growth in the eurozone. More please.

Reminder: Facebook Going Down Is Not A Good Reason To Call the Police

| Wed Sep. 3, 2014 4:13 PM EDT

Facebook suffered a brief outage today. When these kinds of things happen—and these kinds of things tend to happen—the key is to not lose your head. Don't panic. Stretch your legs. Go for a walk. Check out Twitter. Check out Tumblr. Check out the real world. Whatever you do, don't call the police.

Just remember: You're going to get through this.

No, Obama's Ukraine Policy Isn't "Muddled"

| Wed Sep. 3, 2014 2:44 PM EDT

Time's Michael Scherer writes today about President Obama's foreign policy:

“NATO must send an unmistakable message in support of Ukraine,” Obama said. “Ukraine needs more than words.”

The rhetoric hit its marks. The message, however, was muddled.

As he finished his speaking engagements, several questions remained about how he intends to deal with the multiple foreign policy crises facing his administration. He again condemned Russian incursions into Ukraine, and promised new U.S. and European help to train, modernize and strengthen the Ukrainian military. But his “unmistakable message” of support stopped short of defining or ruling out any additional U.S. military role should Russian aggression continue.

While he pointedly promised to defend those countries in the region who are signatories to the North Atlantic Treaty Organization (NATO), Obama offered no similar assurances to Ukraine, even as he highlighted that country’s voluntary contributions to NATO military efforts. Instead, Obama asked for a focus on a peace process that seems, for the moment, elusive.

“Since ultimately there’s no military solution to this crisis, we will continue to support [Ukrainian] President [Petro] Poroshenko’s efforts to achieve peace because, like all independent nations, Ukraine must be free to decide its own destiny,” he said, minutes after the Kremlin denied reports it had reached a ceasefire with Ukraine. As NATO leaders gather to consider imposing additional economic sanctions on Russia, Obama hailed the success of the U.S.-led sanctions regime, which has hurt the Russian economy but without stopping additional Russian military aggression in Ukraine.

This was not the only issue on which he left gray areas.

For excellent reasons, foreign policy statements nearly always include gray areas, so it would hardly be news if that were the case here. But it's not. In fact Obama's statement was unusually straightforward. He said the same thing he's been saying for months about Ukraine, and it's really pretty clear:

  • We are committed to the defense of NATO signatories.
  • Ukraine is not part of NATO, which means we will not defend them militarily.
  • However, we will continue to seek a peaceful settlement; we will continue to provide military aid to Ukraine; and we will continue to ratchet up sanctions on Russia if they continue their aggression in eastern Ukraine.

You might not like this policy. And maybe it will change in the future. But for now it's pretty straightforward and easy to understand. The closest Obama came to a gray area is the precise composition of the sanctions Russia faces, but obviously that depends on negotiations with European leaders. You're not going to get a unilateral laundry list from Obama at a press conference.

The rest of Scherer's piece is about ISIS, and it's at least a little fairer to say that policy in this area is still fuzzy. But Obama has been pretty forthright about that, and also pretty clear that a lot depends on negotiations with allies and commitments from the Iraqi government. That's going to take some time, and there's nothing wrong with that.

I should add that nobody on the planet—not even John McCain!—knows how to destroy ISIS. Everybody wants some kind of magic bullet that will put them out of business without committing any ground troops, but nobody knows what that is. So until one of the blowhard hawks comes up with an actual plan that might actually work, I'll stick with Obama's more cautious approach. I figure he'll do something, but only when politics and military strategy align to provide a plausible chance of success. In the meantime, mindlessly demanding more bombs—the only action that most of Washington's A-list apparently considers worthy of a commander-in-chief—is just stupid.