Normally, when the unemployment rate falls, it's a good thing. But not when it happens "for the wrong reason," says Sung Won Sohn, chief economist for Wells Fargo Banks.

This morning, the Labor Department reported a noticeable drop in the unemployment rate, from 6.4 percent in June to 6.2 percent in July. But instead of jumping for joy, the markets sold off as investors read the fine print of the report and discovered that the jobless rate fell not because more jobs were being created, but instead because the civilian labor force shrank by 556,000, as many Americans have simply given up looking for work. In fact, nonfarm payrolls fell by 44,000 jobs, marking the sixth straight month of declines and bringing to 486,000 the total number of jobs lost since January.

The disappointing news took some of the wind out of the sails of yesterday's exceedingly positive data, showing the economy had grown much faster than most had thought in the second quarter, at an annualized rate of 2.4 percent. But even that pickup came largely as a result of the largest increase in defense spending since the Korean War.

The unemployment data also overshadowed some good news on the manufacturing front today. The Institute for Supply Management's manufacturing index rose from a reading of 49.8 in June to 51.8 in July, the highest levels since the start of the year. Any reading over 50 is considered evidence of expansion. Yet, driving home the point that this is in fact a jobless recovery, the Labor Department reported that despite its growth, the manufacturing sector shed 71,000 jobs last month, led by losses in the transportation sector.

Despite continued consumer spending and a pickup in business spending on things like equipment and software, the fact of the matter is companies remain cautious when it comes to hiring. "Today's ISM data supports this view," says Sohn. "The bulk of the ISM data is positive except employment. It is truly discouraging."

Copyright © 2003 U.S. News & World Report, L.P.

Commentary:
The only real bright spot in the labor and growth numbers is government continues to grow at record or near record rates. Without government expansion our economy would be dead in the water. Add to that the massive debt Bush and the republican congress is creating and it's not hard to see why the economy can't get going. Greenspan says the deficits are hampering any drop in unemployment. Too bad Bush thinks bankrupting us will give us a better tomorrow. I suppose it's more of that fancy math these boys are using--I think it's called fuzzy math.

NEW YORK (CNN/Money) - The pace of U.S. economic growth improved in the second quarter of 2003, the government said Thursday, coming in much stronger than economists expected.

Gross domestic product (GDP), the broadest measure of economic activity, grew at a 2.4 percent annual rate in the quarter after growing at a sluggish 1.4 percent rate in the first quarter, the Commerce Department reported. Economists, on average, expected GDP growth of 1.5 percent, according to a Reuters poll. It was the strongest showing for GDP since a 4 percent growth rate in the third quarter of 2002.

"The economy truly does look to be on the mend," said Joel Naroff, president and chief economist at Naroff Economic Advisors in Holland, Pa. "While the 2.4 percent rise in GDP during the second quarter wasn't spectacular, the details were heartening."

The report will be revised at least twice in the coming months.

The news, together with a Labor Department report showing another week of falling claims for unemployment benefits, helped boost U.S. stock prices in midday trading. Treasury bond prices reversed earlier gains.

Most of the second-quarter increase in GDP was due to a 3.3 percent pace in the growth of consumer spending, which makes up more than two-thirds of the total economy.

Also supporting GDP growth was a 25.1 percent annualized pace in the growth of federal government spending, the fastest rate since 30.3 percent in the first quarter of 1967. That growth rate was mostly due to a 44.1 percent annualized pace of defense spending growth, the fastest pace since a 110 percent rate in the third quarter of 1951. The defense spending was concentrated on prosecuting the U.S.-led war with Iraq. According to most economists, the buildup to that war sank consumer confidence and spending and caused businesses to delay plans for investment and hiring.

Most economists thought the effects of the war, along with an expanding trade gap, would sink the GDP growth rate well below 2 percent in the quarter, but stronger consumer and business spending helped dash those expectations.

Consumers have continued to spend money relentlessly the past few years, despite a recession and terror attacks in 2001, corporate accounting scandals in 2002, a war in 2003 and a bear market in stocks that began in 2000.

Businesses, contrary to popular belief, have been spending money in the past year or so, but much of that spending has been dedicated to replacing worn-out equipment; there have been few signs of the kind of robust business expansion that might lead to greater hiring.

As a result, the "recovery" from the recession of 2001 has been notable for being the longest job-market slump since World War II. But the second-quarter GDP report showed the strongest business spending in more than three years, raising hopes that a labor-market turnaround could be next.

Nonresidential fixed investment, a proxy for business spending, rose at a 6.6 percent rate in the quarter, the strongest pace since the second quarter of 2000.

Investment in equipment and software rose at a 7.5 percent pace, the strongest pace since 10.9 percent in the second quarter of 2000.

And business investment in structures rose at a 4.8 percent rate, the first gain since a 3.6 percent rise in the fourth quarter of 2000.

But not all was rosy with the report -- though the change in business inventories was decidedly negative in the quarter, raising the prospect of increased production in the future, the inventory number is volatile, and many companies have learned in recent years to work with "just-in-time" practices, meaning there's no guarantee these inventories will need to be replenished.

What's more, a big motivating factor for the jump in consumer spending was a surge in the pace of automobile sales, driven by dealer incentives. Those incentives can't be extended forever without bankrupting automakers, and growth in sales of non-durable goods and services -- the biggest components of consumer spending -- was tepid.

"This is a better-than-expected report, but not one that gives you full confidence that this is an economy ready to spring ahead," said Josh Bivens, economist at the Economic Policy Institute, a Washington research group.

© 2003 Cable News Network LP, LLLP. An AOL Time Warner Company ALL RIGHTS RESERVED.

Commentary:
Don't hold your breath. The GDP numbers will be revised two more times. Wait until the last revision before we see what's really going on. What we know for sure is government is growing like a bat out of hell as it always does during republican administration.

Despite vigorous efforts, the U.S. government has been unsuccessful so far in finding key senior Iraqi scientists to support its prewar claims that former president Saddam Hussein was pursuing an aggressive program to develop nuclear, biological and chemical weapons, according to senior administration officials and members of Congress who have been briefed recently on the subject.

The sources said four senior scientists and more than a dozen at lower levels who worked for the Iraqi government have been interviewed by U.S. officials under the direction of the CIA. Some scientists have been arrested and held for months, others have made deals in return for information and at least one has agreed to be interviewed outside Iraq .

No matter the circumstances, all of the scientists interviewed have denied that Hussein had reconstituted his nuclear weapons program or developed and hidden chemical or biological weapons since United Nations inspectors left in 1998. Several key Iraqi officials questioned the significance of evidence cited by the Bush administration to suggest that Hussein was stepping up efforts to develop new weapons of mass destruction programs.

The White House, for instance, has cited the case of nuclear scientist Mahdi Obeidi, who recently dug up plans and components for a gas centrifuge that he said he buried in 1991 at the end of the Persian Gulf War. The White House has pointed to the discovery as a sign of Hussein's continuing nuclear ambitions, but Obeidi told his interrogators that Iraq's nuclear program was dormant in the years before war began in March.

The sources said Obeidi also disputed evidence cited by the administration -- namely Iraq's purchase of aluminum tubes that various officials said were for a new centrifuge program to enrich uranium for nuclear bombs. Obeidi said the tubes were for rockets, as Iraq had said before the war.

CIA analysts do not believe he has told the whole truth, said one Bush administration official. Obeidi has left Iraq under CIA auspices after being arrested briefly by U.S. Army troops.

Jaffar Dhai Jaffar, who once was jailed by Hussein for not working on the nuclear program and later came back to head it in the 1980s, was also interviewed recently by CIA personnel outside Iraq, and he, too, denied the nuclear program had been restarted.

Bush administration officials have hoped that extensive debriefings of former top officials of Hussein's government would provide some of the backing for its prewar assertion that Iraq posed an imminent threat to the United States. So far, the United States has discovered no undisputed physical evidence that Hussein had stocks of chemical or biological weapons or was reconstituting his nuclear weapons program.

David Kay, the CIA's representative in Iraq to coordinate the search for weapons of mass destruction, returned to Washington this week and met with President Bush on Tuesday. Kay is scheduled to appear today before the Senate Armed Services Committee and the Senate Select Committee on Intelligence.

Administration officials said they expect Kay to tell the senators there have been no breakthroughs but that progress is being made in understanding Hussein's weapons programs and research that could be associated with them. The United States is still interviewing lower-level Iraqi security and intelligence officials associated with the programs, but the searching of alleged weapons sites has all but halted, officials said.

Bush indicated yesterday that he still expects evidence of weapons of mass destruction to surface in Iraq. He said Kay described a complex process that includes the need to "analyze the mounds of evidence, literally the miles of documents that we have uncovered."

"It's going to take awhile, and I'm confident the truth will come out," Bush said.

As described by government officials and their families, the United States has used aggressive tactics to find and question key Iraqi scientists. Amir Saadi, Iraq's 65-year-old chief liaison with United Nations weapons inspectors since last year, has been held incommunicado since his voluntary surrender in Baghdad to U.S. military police more than three months ago, according to his wife, Helma.

The night before he gave himself up, Saadi saw himself listed on BBC satellite television as one of the men being sought by U.S. forces. In a recent interview at her home in Baghdad, Helma Saadi said that he told her, "I want to surrender. I want to cooperate. It will be just a matter of a few hours, and I'll be back."

Just hours before his April 12 surrender, Saadi gave a television interview to a German television reporter during which he said, "There were no weapons of mass destruction, and time will bear me out." It is the same sentiment he sent to U.N. chief weapons inspector Hans Blix in a message that arrived at U.N. headquarters on March 19.

Saadi's surrender encouraged the wife and daughter of Gen. Hossam Amin, head of Iraq's National Monitoring Directorate, to get him to surrender, and he, too, has not been heard from since, Helma Saadi said.

Helma Saadi said her husband was a chemical engineer who worked on Iraq's rocket programs, not chemical weapons. He served in the military during his career and reached the rank of general, though after the Gulf War he was acting minister of oil and later minister of industry. After his retirement in 1994, when she said his position went to a Baath Party member, he was given the honorific title of science adviser to Hussein. She described that as a "way of keeping him and others on the payroll even after retirement and using them when needed."

Since her husband's arrest, Saadi said she has had no official notification of where he is being held, although she believes it is somewhere near Baghdad International Airport. She has had one communication with him, a June 15 letter delivered by the Red Cross that stated: "Today the Red Cross visited me and I was happy just to talk to someone. I am in good health and being treated correctly . . . love and kisses, Amer."

Helma Saadi believes he is being kept in solitary confinement, because he said in his letter he was glad to have someone with whom to talk. U.S. sources familiar with the process say Saadi may have knowledge of Hussein's chemical weapons program, and perhaps is being held to give testimony about that. His wife said she suspects her husband is being held out of sight because "he is telling the truth. . . . They have realized there are no weapons of mass destruction and the quagmire they have created. They want to hold someone as a scapegoat."

After hiring a lawyer, Helma Saadi sent a written request to L. Paul Bremer, the U.S. administrator for Iraq. She did not receive an answer from Bremer to that letter or to one sent more recently. She did receive a response to a letter she sent asking whether her husband could be represented by a lawyer. On June 27, Col. Marc L. Warren of the U.S. Army Judge Advocate General's Corps, assigned to Bremer's office, said her husband's status "is being investigated" under the Geneva Conventions to see whether he is entitled to prisoner of war status or some other category.

Meanwhile, former government officials, scientists and professionals are still being arrested.

Family members of Abdel Ilah Hameed, the former Iraqi minister of agriculture, were interviewed in Beiji and described his arrest. Hameed, a native of Hussein's home town, Tikrit, tried twice to surrender after he saw how U.S. troops were searching all homes, according to his son, Usama. On April 15 and 16, he was turned back by U.S. officers at checkpoints, although one took his name after the second attempt.

On April 22 at 3 a.m., soldiers backed by helicopters overhead knocked down the door, searched the house and took Hameed away, leaving his two older sons in plastic handcuffs that had to be cut away by a younger brother, Usama said. They have had no direct contact with their father since.

Two weeks ago, a professor whose expertise is satellite communications and who is the father of an Iraqi interpreter employed by Bremer's office was seized, according to another employee. "Coalition snatch-and-grab guys busted their door in at 2 AM and turned the house upside down for an hour, then hauled him off in handcuffs," this employee wrote in a message home. The wife told a friend that the troops did not say the reason for the arrest, and it took a day for other U.S. officials to find that the man was being held at the airport and being interrogated.

Sullivan reported from Baghdad.

Copyright © 2003 The Washington Post Company.

Commentary:
Bush sits back and say's he's confident the truth will come out. Why exactly is that lie put in articles like this and why is he allowed to get away with that kind of nonsense--to be fair?

The modern media lets Bush lie his butt off, then try to muddy the water by talking about truth. The media should print the facts, not the opinions of Bush who has consistently lied to us about his reasons for war. This "being fair" crap has got to go. How about a media that tells us the truth instead?

It wasn't long ago that Bush said the capture of these scientists would lead to finding the evidence he said he had, but didn't (otherwise called a lie), now we wait and wait and wait. What baffles me is that anyone still believes Bush on any issue. When you lie to us about a threat to our national security, when you attack the UN and our allies for not believing your lies, you forgo the right to lead and be trusted.

As the search for illegal weapons in Iraq continues without success, the Bush administration has moved to emphasize a different rationale for the war against Saddam Hussein : using Iraq as the "linchpin" to transform the Middle East and thereby reduce the terrorist threat to the United States.

President Bush , who has mostly stopped talking about Iraq's weapons, said at a news conference Wednesday that "the rise of a free and peaceful Iraq is critical to the stability of the Middle East, and a stable Middle East is critical to the security of the American people."

Deputy Defense Secretary Paul D. Wolfowitz said on NBC's "Meet the Press" Sunday that "the battle to secure the peace in Iraq is now the central battle in the global war on terror, and those sacrifices are going to make not just the Middle East more stable, but our country safer."

And Vice President Cheney, in a speech last week, said Iraq "will stand as an example to the entire Middle East" and thus "contribute directly to the security of America and our friends."

In an interview yesterday, a senior administration official expanded on that theme, saying the United States has embarked on a "generational commitment" to Iraq similar to its efforts to transform Germany in the decades after World War II.

The Bush aide, who spoke on condition of anonymity, outlined a long-term strategy in which the United States would spread its values through Iraq and the Middle East much as it transformed Europe in the second half of the 20th century. As outlined, the U.S. commitment to Iraq and the Middle East would be far more expansive than the administration had described to the public and the world before the Iraq war.

"The great goal for the United States after 9/11 is worthy of a country of the importance and the power of the United States," the adviser said. "That goal is to see the spread of our values and to understand that our values and our security are inextricably linked, much as they were in Europe, but they are also linked in the Middle East."

The vision described by the official represents a change in the administration's emphasis in describing the U.S. purpose in Iraq. Before the war, Bush at times stressed the limits of the mission, promising to "remain in Iraq as long as necessary and not a day more." At that time, Bush justified the conflict largely by asserting the need to strip Hussein of chemical and biological weapons and disrupt his nuclear ambitions.

The notion of a free Iraq as a catalyst for change in the region is not new. In a Feb. 26 speech at the American Enterprise Institute, Bush said: "A liberated Iraq can show the power of freedom to transform that vital region by bringing hope and progress into the lives of millions."

More recently, in a speech in London a month ago, national security adviser Condoleezza Rice compared the attacks on the World Trade Center and Pentagon to Pearl Harbor. Rice urged Europeans to expand on the defeat of Hussein's government by turning "to the Middle East with the same vision, determination and patience that we exhibited in building a united transatlantic community after 1945."

While that notion was low on the original list of reasons for war, it has largely replaced the "weapons of mass destruction" as justification.

The newly emphasized rationale is not as clear as the emphasis on the threat Hussein represented. Though the United States seeks to transform the Middle East, some key allies in the region, such as Saudi Arabia and Egypt, have resisted democracy.

The Bush adviser spoke of an open-ended commitment to Iraq as the United States helps to build its economy and its infrastructure. "When we're talking about resources, this is something that isn't going to be firm for years out into the future," the aide said.

The official drew an extended analogy, comparing the attacks of Sept. 11, 2001, to Pearl Harbor, and the difficulties in Iraq to the occupation of West Germany between 1945 and 1947. "That was a generational commitment to Europe, because the only way the United States believed that we could actually make certain that Americans were not going to fight in European wars again was to make certain that Europe was democratized and prospered," the adviser said. "In a sense, what 9/11 did was to give the United States the same kind of impulse toward the Middle East. . . . You really have to have a transformation of that region if we're not to have terrorists stalking the American people for generations to come."

In a crucial departure from the analogy, the official did not envision a decades-long military presence in Iraq such as the half-century presence in Germany necessitated by the Cold War.

The official said Europeans understand that "if we're ever to make the Middle East a different place than it is, you're going to have to see a transformation of the Middle East and an addressing of the freedom deficit. It's a long-term project, but I think it would be a mistake to think that it's going to be the U.S. military that's going to do it or the United States alone that's going to do it."

The official said that in the short term, the administration expects the number of nations contributing troops to the Iraq occupation to grow from the current 16 to 30 or more over the next "couple of months."

"Much as a different Germany becomes a kind of linchpin for a Europe in which you will not have war, a different Iraq becomes a kind of linchpin for a different Middle East out of which these ideologies of hatred would not come," the official said yesterday.

"The reason I make the historical analogy is, it means it has to be a generational commitment. You can't say after a year, 'Well, this is hard.' You have to stay with it."

Copyright © 2003 The Washington Post Company.

Commentary:
And who exactly is going to pay for transforming Iraq? The US taxpayer. The Bush government can't find the resources to give prescription drugs to the elderly and the needy, but we have plenty of borrowed money to give away in tax cut and to Iraq. With record deficits and debt, we can't afford to do anything. What these moron's forget is that after WW2 the majority of the industrialized world lay in ruin. That is not the case today. We can't compete with the rest of the world and build a new Iraq and create massive debt for the next generation to pay off.

WASHINGTON - The nation's unemployment rate dipped to 6.2 percent in July, but businesses cut jobs for a sixth month in a row, still wary despite signs the economy is on the mend. With jobs scarce, close to half a million people gave up looking.

The Labor Department 's report Friday suggested that the job market remains stubbornly sluggish, frustrating jobseekers on Main Street, discouraging investors on Wall Street and polarizing lawmakers in Washington as they look for a way to get the economy back to full throttle.

Employers chopped 44,000 jobs in July, which brought losses since January to 486,000. Economists had been saying the statistics might show positions had been added, perhaps as many as 10,000.

"Employers remain skeptical. While there are clearly some hopeful signs that the economy is improving, they want to be ... sure that it is not just a flash in the pan," said Ken Mayland, president of ClearView Economics. "Corporate hiring managers want to see a track record of growth before they make permanent new hires."

The jobless rate declined to a two-month low of 6.2 percent from a nine-year high of 6.4 percent in June. The drop, however, reflected people leaving the work force, not a burst in hiring. The civilian labor force declined by 556,000 during the month as people left for any number of reasons.

The report also identified 470,000 people in July who were not currently looking for work because they were discouraged over job prospects. That was up from 405,000 in July 2002 but down slightly from the 478,000 discouraged people reported for June.

The lackluster job market, however, hasn't stopped shoppers, the main force keeping the economy afloat, from ringing up retailers' cash registers. Consumer spending and Americans' incomes each rose by a modest 0.3 percent in June, the Commerce Department reported.

Another report offered a fresh sign of healing in the economy: Manufacturing expanded in July for the first time in five months. The Institute for Supply Management's manufacturing index rose to 51.8 in July, up from 49.8 in June. A reading below 50 indicates that manufacturing activity is slowing, and a reading above 50 indicates it is growing.

With some scattered signs of an economic revival, analysts believe the Federal Reserve probably will hold a vital short-term interest rate at a 45-year low of 1 percent at its next meeting on Aug. 12.

President Bush , mindful of the political defeat his father suffered in 1992 owing to a weak economy, pushed for a third round of tax cuts, passed by Congress in May, to bolster the economy. The administration insists the fresh $330 billion package along with previous tax cuts will help the economy grow and eventually create jobs.

"There's still too many people looking for work, so we keep working on the economy until people can find a job," Bush said Friday. Noting that people have additional money from earlier tax cuts and the child tax credit, Bush said: "This will enhance demand for goods and services, which will make it more likely someone will find work."

Democrats say the tax cuts have not energized the job market, have benefited mainly the wealthy and are helping to plunge the federal budget deficit into a record amount of red ink this year and next.

"President Bush's misguided economic policies have failed to create jobs," said House Democratic leader Nancy Pelosi of California. "Since President Bush took office, the country has lost 3.2 million jobs, the worst record since President Hoover," she said.

Manufacturers, hardest hit by the 2001 recession, continued to hemorrhage jobs. The sector lost 71,000 positions in July, marking the 36th month in a row of job losses. Retailers, normally the engine of job growth, cut 14,000 positions in July, and education and health services lost 1,000.

In a glimmer of hope, though, temporary help firms saw employment go up by nearly 42,000 in July from the previous month. Economists said companies often are more inclined to use temporary workers to meet their needs before making a commitment to hire full-time workers.

Federal Reserve Chairman Alan Greenspan and private economists believe the economy will stage a material rebound in the second half of this year. Some economists are predicting a growth rate in the second half in the range of 3.5 percent to 4 percent or more.

Even if that should turn out to be the case, it would take time for the job market to show real improvement, economists said. Some economist believe the jobless rate could move higher in the months ahead because job growth probably won't be strong enough to handle an expected influx of people looking for jobs amid an improved economic climate.

Risks remain. "If the job market continues to struggle, consumers will pull back," said Mark Zandi, chief economist at Economy.com. "The economy is fragile."

Copyright © 2003 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.

Commentary:
In order to get back to pre-Bush we need to create over 2.5 million jobs and the Dow has to increase by over 3000. Then we need to restore the integrity of the US government and have the world trust us again. After that we have to fix the record deficits Bush and the republican congress gave us. Then we have to.... Boy, the next president and democrat congres will have their hands full.

Dr. John M. Poindexter, director of the Dept. of Defense's Information Awareness Office (IAO), is expected to resign within the next few weeks according to senior Pentagon officials. Since joining the IAO in January of 2002, Poindexter has been an ongoing source of controversy.

The IAO is an agency of the Defense Advanced Research Projects Agency (DARPA) created in the aftermath of the September 2001 terrorist attacks on New York City and Washington. The goal of the agency is to gather intelligence on possible terrorist activities through electronic sources such as the Internet, telephone and fax lines.

Under Poindexter's leadership the IAO has created a firestorm of controversy with its Total Information Awareness (TIA) program, which seeks to capture the "information signature" of people in order to track potential terrorists and criminals. Now renamed as the Terrorist Information Awareness program, critics have called it a domestic spy program and the Senate has temporarily blocked funding for the project.

Earlier this week, Poindexter again came under fire for the IAO's latest proposal to predict terrorist events through the online selling of "futures" in terrorist attacks. The Senate again intervened to block the program.

The Policy Analysis Market (PAM), the first phase of the project, was already online with funding from a federal grant and was scheduled to begin a beta testing on today. The Defense Department had also requested $8 million for its "Futures Markets Applied to Prediction" (FutureMAP) initiative, which would expand on the Policy Analysis Market's terror-wagering scheme.

But late on Monday afternoon, Senators Ron Wyden (D.-Ore.) and Byron Dorgan (D-N.D.) held a press conference to denounce the program. By Tuesday, Sen. John Warner (R.-Va.), the powerful chairman of the Senate Armed Forces Committee, announced he had contacted the IAO and had been assured the program would be discontinued. By Tuesday afternoon, the site had been pulled off the Internet.

PAM was a joint venture between DARPA; the Economist Intelligence Unit, the business information arm of The Economist Group, publisher of The Economist; and Net Exchange, which was responsible for design, development and operation of the PAM trading system.

PAM was designed to much like other financial markets, with investors buying "futures" in events they think are likely to happen, and selling off futures as they believe events become less likely to happen. Some of the possibilities the PAM website offered for sale were the overthrow of the King of Jordan, the assassination of Yasser Arafat, and a missile attack by North Korea.

Bidders would profit if the events for which they hold futures -- including government coups, assassinations and missile attacks -- occur.

"Spending taxpayer dollars to create terrorism betting parlors is as wasteful as it is repugnant. The American people want the Federal government to use its resources enhancing our security, not gambling on it," Wyden and Dorgan wrote in a letter to Poindexter.

Poindexter is a retired Navy admiral and former National Security Advisor to Ronald Reagan. In 1990, Poindexter was convicted on five counts of deceiving Congress in the Iran-Contra affair and sentenced to six months in prison. The convictions were eventually overturned on the grounds that his immunized congressional testimony had been unfairly used against them.

After leaving the government, Poindexter joined Syntek Technologies, which worked with DARPA to develop an "information harvesting" search engine known as Genoa. Poindexter brought the Genoa concept with him to the IAO.

"As Congress contemplates the future of the Terrorism Information Awareness Program after the resignation of Dr. Poindexter, we want to make one point clear: even with today's announcement, the proposed TIA program would still be the biggest spying and surveillance overreach in America's history, and it should be shut down," Wyden said Thursday night. "Congress will have the opportunity to do just that in the conference for the defense appropriations bill in the fall and we hope to see this program de-funded once and for all. We have always believed that it is possible to fight terrorism vigorously without gutting civil liberties. The TIA program skews that balance and needs to go."

Copyright 2003 Jupitermedia Corporation All Rights Reserved.

Commentary:
Investors can't make money in the Bush war economy so they tried to help out a little by making it possible to make money on war and terrorism by investing (or betting) on when the next attack will take place. God Bless America.

LONDON—A visibly shaken Prime Minister Tony Blair has pleaded for restraint while facing tough questions about "blood on his hands" in the apparent suicide of a leading British government scientist.

Already reeling under the biggest political crisis of his premiership, the pressure on Blair increased significantly yesterday when a respected member of his own Labour party, former cabinet minister Glenda Jackson, called for his resignation.

But perhaps the biggest blow came from the grieving family of David Kelly, a scientist caught up in charges that Blair's office doctored intelligence about Iraq's weapons. They made clear that Blair and his government should consider the role they played in making his life "intolerable."

Police confirmed yesterday that Kelly, a 59-year microbiologist, bled to death from a slash on his left wrist.

A knife and a packet of painkillers were found next to his body, discovered Friday morning in a wooded patch near his Oxfordshire home in central England.

Police have not officially confirmed it was suicide, but British newspapers are either stating it as a fact, or citing unnamed sources that confirm it.

In a statement read by police yesterday, Kelly's family described the internationally renowned weapons expert as the victim of a political war between the government and the British Broadcasting Corporation (BBC) over Iraq's alleged weapons of mass destruction.

"Events over recent weeks have made David's life intolerable, and all of those involved should reflect long and hard on this fact," the family said.

The government had suspected Kelly of being the unnamed source in a BBC story alleging that Blair's office "sexed up" intelligence on Iraq to strengthen the case for war. Kelly admitted he had spoken to the radio reporter involved, but denied he gave the explosive information.

The widespread charges against key members of Blair's government is that they were so determined to win their "vendetta" against the BBC that they "outed" Kelly as the source for the story, triggering a chain of events that led to his suicide.

The Sunday Times today published an interview it said Kelly gave them days before his death. They say he complained of being betrayed when the ministry of defence, his employer, told him he would be identified.

In an e-mail Kelly sent to a New York Times reporter just hours before his death, he wrote of being haunted by "many dark actors playing games."

Blair, Defence Secretary Geoff Hoon and Blair's powerful director of communications, Alastair Campbell, are being bombarded with questions about whether they will resign.

In interviews published in today's British papers, Jackson is scathing in her criticism of how the government managed the row with the BBC. She called on Blair, Hoon and Campbell to "bite the bullet" and resign.

"I cannot, for the life of me, see what benefit they are bringing either to our country or my party by remaining in office after this shameful and disgraceful episode," she told the Mail on Sunday.

She said the episode would paralyze the Blair government if he clings to power.

The news of Kelly's death reached Blair as he was flying to Tokyo from Washington, where he had delivered a triumphant address before a joint session of the U.S. Congress.

At a press conference with Japanese Prime Minister Junichiro Koizumi, a shattered-looking Blair answered questions in a voice quivering with emotion.

Asked by a British reporter if Kelly's death was on his conscience, Blair called on politicians and the media to await the outcome of a judicial inquiry he has ordered before drawing conclusions.

"I think in the meantime we should show respect and restraint, and let me express once again my deep sorrow for the tragedy that has come about."

Asked if he or any of his ministers should resign, Blair said: "I don't think it's right for anyone, ourselves or anybody else, to make a judgment until we have the facts."

Finally, one British reporter shouted out: "Have you got blood on your hands, Prime Minister? Are you going to resign over this?"

Blair froze. He stood uncomfortable and silent at the lectern for what must have seemed like the longest 30 seconds of his political career, until Koizumi called a merciful end to the press conference.

In London, Hoon faced a similar grilling.

Asked on BBC television if he would resign if it turns out his actions precipitated Kelly's suicide, Hoon said: "All of us have been looking very carefully at our involvement in these events and certainly I will look carefully at the results of the (judicial) inquiry."

One of the key questions the judicial inquiry will investigate is who "outed" Kelly as the possible source for a BBC radio story May 29. The story quoted an unnamed British official saying that a government intelligence dossier on Iraq's weapons was "sexed up" to make a more convincing case for war.

Some fingers are pointing at Hoon, who was Kelly's boss.

Defence officials made public on July 8 that a ministry official had come forward to say he had spoken to the BBC reporter who broadcast the story. Kelly wasn't named, but the Guardian newspaper reported yesterday that ministry officials "effectively outed" Kelly by giving out such precise clues about his identity that journalists easily narrowed in on him as the source.

The Mail on Sunday today quotes Pam Teare, director of news at the defence ministry, saying she confirmed to journalists that Kelly was the source if his name was put to her.

On July 9, Hoon named Kelly in a letter to the BBC, and asked if he was the source for the story. Shortly thereafter, his name was published in the Times.

It's believed that Campbell, Blair's right-hand man, approved the strategy to challenge the BBC with Kelly. If so, it raises questions about whether Blair was involved in that decision.

"I'm not aware that his name was leaked," Hoon said when asked if his officials gave Kelly's name to journalists. "It was certainly not leaked by me, and I assure you that we made great efforts to ensure Dr. Kelly's anonymity."

Kelly was then called to testify before an all-party legislative committee, where he said he did not believe he was the source for the BBC story.

Committee members described him as "the fall guy" used by the government to divert attention from the real question — whether it had exaggerated intelligence information.

The British press coverage made clear yesterday how impossible it might be for Blair to wait for the results of the inquiry, expected to take several weeks, before someone in his government pays the price.

"Never since parliamentary democracy emerged in this country has the machinery of government been so corrupted by the rule of fear," the Daily Telegraph said in an editorial.

The Daily Mail accused the government of using Kelly as bait in its bid to pressure the BBC into naming its source, and called for Campbell and Hoon's resignations.

Commentary:
Does this line sound familiar? "Never since parliamentary democracy emerged in this country has the machinery of government been so corrupted by the rule of fear."

Throughout his political career, George Bush has been famous for sticking to a few issues, and repeating a few well-burnished talking points over and over. Wide-ranging news conferences do not play to his considerable strengths, and as president, he has generally avoided them. But having decided to make a rare exception yesterday, Mr. Bush should have been able to come up with better responses to two big and obvious questions: why he ordered the invasion of Iraq and why he pushed for tax cuts that have left the nation sinking into a hopeless quagmire of debt.

Mr. Bush's vague and sometimes nearly incoherent answers suggested that he was either bedazzled by his administration's own mythmaking or had decided that doubts about his foreign and domestic policies could best be parried by ignoring them.

Mr. Bush will simply not engage the issue of whether his administration exaggerated the Iraqi threat in the months leading up to the American invasion. When asked whether the United States had lost credibility with the rest of the world since neither weapons of mass destruction nor a strong Al Qaeda connection had been uncovered in Iraq, the president veered off into a tour through American history and the difficulty of coming up with an Iraqi version of Thomas Jefferson. He then skidded to a halt with the announcement that "I'm confident history will prove the decision we made to be the right decision."

Mr. Bush still hung onto his most well-worn buzzwords, however. Iraq was a "threat" — just as the tax cuts were "a job-creation program." The president and his advisers obviously still believe that the constant repetition of several simplistic points will hypnotize the American people into forgetting the original question.

Saddam Hussein was certainly a threat to his own people, and there is still an enormous amount to be gained if the United States can foster a prosperous, open society in Iraq. But that does not cancel out the fact that the primary reasons Washington gave for the invasion look increasingly suspect. That is a serious problem, both in terms of the nation's credibility and the reliability of American intelligence. Mr. Bush owes the nation more than a brushoff on these matters.

In the case of the economy, the president was stuck defending an indefensible strategy of piling up one unnecessary tax cut after another. Having helped to turn the promise of budget surpluses into the disappointment of rising deficits, Mr. Bush mimics his father's out-of-touch performance in the 1992 campaign by acting as if the country is in fine fiscal shape. It is hard to buy his assertion that his first concern is Americans who are out of work.

Given the rambling non-answers the president gave to questions about Iraq and the economy, it was interesting to hear how focused he was when someone asked how, with no opponent, he planned to spend $170 million or more on the primary. "Just watch me," Mr. Bush said concisely. There is one area in which the president's thinking is crystal clear.

Copyright 2003 The New York Times Company

Commentary:
According to this report Bush has "considerable strengths." Where? On budget matters where he's bankrupted us like he's bankrupted his own companies. In war? Where he lied to the US Congress, the American people, the UN and the world? Or is Bush strong because he has cute little catch phrases like "no one connected the dots" (translation: no one drew him a picture) and "we have good intelligence" (translation: every word was a lie or wrong but damn-it, it's good).

July 12 —  Forty-five percent of Americans say the Bush Administration misinterpreted intelligence reports that proved Iraq was hiding banned chemical or biological weapons before the war, says a new Newsweek poll. And while a significantly smaller number—38 percent—believe the administration purposely misled the public, President Bush's approval ratings have declined significantly in recent months, the poll shows.

WHILE 55 PERCENT of those polled say they approve of the way Bush is handling his job as president, his ratings have fallen 6 points from the end of May, 16 points from mid-April when Baghdad first fell to American soldiers, and nearly 30 points from the weeks immediately following the September 11 attacks.

Americans are increasingly skeptical about the military operations in Iraq, as well. The number who say they are very confident that the United States can create a stable democratic Iraqi government is now just 15 percent; 39 percent are somewhat confident. Those numbers were 21 percent and 42 percent, respectively, at the beginning of May. In that same time frame, Bush's approval ratings with respect to Iraq have fallen to 53 percent from 69 percent.

In response to the attacks on U.S. military personnel in Iraq, 49 percent say they would support more aggressive action by U.S. forces to prevent the violence, even if it means great risk for Iraqi civilians. Forty-five percent say they would support a withdrawal of U.S. troops in response to the attacks; 40 percent would support increasing the number of troops in Iraq.

Meanwhile, 57 percent say they want the majority of U.S. troops to leave Iraq within two years; 74 percent want them out within five.

This week, a bipartisan panel investigating the September 11 terrorist attacks complained that federal agencies were not cooperating fully or quickly. Forty-two percent of those polled say that lack of cooperation is motivated by a desire to cover up embarrassing or politically damaging information.

The NEWSWEEK poll was conducted by Princeton Survey Research Associates, which interviewed by telephone 1,017 adults aged 18 and older on July 10 and 11. The margin of error is plus or minus 3 percentage points.

As politicians gear up for the 2004 election, Bush is facing competition from a broad range of Democratic opponents. In January 2003, when registered Democrats-and those whose beliefs fall more along Democratic party lines-were asked who they would like to see nominated as the Democratic presidential candidate, 22 percent opted for Connecticut Sen. Joe Lieberman, 14 percent for North Carolina Sen. John Edwards, and 13 percent each for former House Democratic leader Dick Gephardt and Massachusetts Sen. John Kerry. Florida Sen. Bob Graham, Vermont Gov. Howard Dean and Reverend Al Sharpton, who were also on the list, each received 6 percent or less. Numbers for former Illinois Sen. Carol Mosely Braun and Ohio Congressman Dennis Kucinich—who have also entered the 2004 presidential race—were not available in January. In the current poll, Lieberman's ratings have fallen to 13 percent and he now lags behind Gephardt by 1 point. Vermont Gov. Howard Dean, who barely made a blip on the poll in January, is now in third place, with 12 percent of those polled backing his nomination.

The economy and jobs rated highest on American's list of the issues that will determine who they vote for in the 2004 election, with 50 percent saying the economy was the most important issue and 22 percent ranking terrorism and homeland security first. However, the number Americans who believe that both the economy and homeland security are equally important issues has risen 13 points since the beginning of May, to 25 percent.

When registered voters were asked who they would vote for in a general presidential election between Bush and a Democratic opponent, Bush won every race—against Dean (53 percent vs. 38 percent), Edwards (51 percent vs. 39 percent), Gephardt (51 percent vs. 42 percent), Kerry (50 percent vs. 42 percent) and Lieberman (52 percent vs. 39 percent).

© 2003 Newsweek, Inc.

Commentary:
The real question for this generation is, will we reward someone who gambled and lost. Bush gambled his tax cut would give us surpluses. He lost. Bush gambled that Iraq had a massive arsenal of WMD ready to hit the US in 45 minutes. He lost. In the real world we call men like Bush losers. But in politics, especially republican politics, the more he fails, the more they love him.

BAGHDAD, Iraq -- Some Muslims are outraged by U.S. treatment of the bodies of Saddam's sons. On Friday the U.S. military allowed journalists to view and videotape the bodies of Odai and Qusay Hussein, who were killed in a raid Tuesday

U.S. military morticians and forensic pathologists displayed the bodies and discussed how they determined the identity of Saddam's sons. They said each corpse contains more than 20 bullet wounds.

The military says Odai is believed to have died from a blow to the head. It says Qusai had two bullet wounds to his head. Officials don't think the wounds were self-inflicted. U.S. officials have said the bodies will be kept refrigerated at Baghdad's airport.

One Baghdad man said it's not acceptable to show dead bodies on TV. He said Iraq got rid of one tyrant and ended up with a bigger one.

A theologian at Egypt's Al-Azhar University, the highest seat of Sunni Muslim learning, said the Americans mutilated the bodies by reconstructing them for viewing. But as infidels, he said, Americans aren't guided by Islam's rules.

A Saudi lawyer said the handling of the bodies contravened Islamic law and the rules of war because it's not appropriate to display the bodies of the fallen to influence enemy morale.

When Iraq's government broadcast pictures of dead U.S. soldiers during the war, the United States accused Saddam Hussein of violating international conventions.

White House Defends Decision

The White House defended the decision to display the bodies for reporters and a TV camera.

Press Secretary Scott McClellan said it was necessary to assure Iraqis that a brutal regime is gone, and won't return. And he denied it's a violation of the Geneva Conventions.

Military officials said they arranged the viewing after Iraqis voiced skepticism about still photographs published a day earlier. McClellan insisted there was a "huge difference" between this and the display of soldiers' bodies for propaganda purposes, which is barred by the rules of war.

He said U.S. officials want Iraqis to know "the days of fear and repression are being replaced by the days of hope and opportunity."

The trip was also intended to help dispel rumors that photographs released Thursday showing two bloodied and bruised corpses were fabricated -- as some Iraqis believe.

Most papers in the capital didn't publish Friday, which is a day of Muslim prayer. One paper ran a story about the pictures, but didn't show them -- choosing instead to show an older photo of Odai with his face crossed out with a red "X."

One Iraqi called the photos a "U.S. ploy" to break the Iraqi resistance.

Faces Of Corpses Partially Reconstructed

U.S. officials who handled the bodies said they were made to look as lifelike as possible.

On the body identified as Odai, the beard was trimmed to the length he had normally worn it.

On the corpse identified as Qusai, the beard was shaved off and he had only his trademark mustache.

Both faces looked waxy and heavily made up. Military morticians removed a large gash that cut across the middle of one corpse's face.

Doctors also removed an 8-inch bar that had been inserted into Odai's leg after a 1996 assassination attempt.

The reconstruction is significant because of the doubts over still photos of the bodies that were released Thursday. In those photos, the faces had heavy beards, bruises and gashes.

Officials Mull Reward For Informant

Someone in Iraq may be getting $30 million in reward money for providing information that led to the Hussein brothers.

State Department spokesman Richard Boucher said the investigation is under way with military officials in Iraq. The State Department money could be issued with the next few weeks.

Boucher says the reward was set at $15 million for each son.

Commander In North Worries Sons' Deaths Could Undo Relative Calm

The U.S. commander in northern Iraq says he hopes the killing of Odai and Qusai Hussein will not shatter the region's relative calm and spirit of cooperation with American occupiers.

Since the raid, four U.S. soldiers have died in ambush attacks in and around Mosul.

Mosul -- a city with a mixed population of Kurds and Arabs -- lies well north of the so-called "Sunni Triangle," the region of central Iraq dominated by Arab Sunni Muslims that has seen most of the attacks on U.S. forces. Kurds in Mosul and other parts of the north particularly welcomed the U.S.-led invasion that toppled Saddam.

But one Shiite Muslim cleric said he's forming a religious army to drive American troops from Iraq.

Sheik Muqtada al-Sadr's radical movement was left out of the Iraqi Governing Council set up by the United States.

Among the wrongs the sheik hopes to right is what he calls the social decay and immorality brought by coalition troops. He also wants to counter what he calls "alien ideologies."

He said residents are coming to realize that Saddam's sons are gone -- and that the deaths of Odai and Qusai Hussein "have been hugely celebrated."

Copyright 2003 by The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Commentary:
From various news sources it says the military needed massive artillery and manpower to take out two men and two guards. Good grief. I don't know how we can ever prove these were actually the bodies of Saddam's sons. We didn't have their DNA and their medical records (how did they survive) could be forged (the US is incapable of telling forged documents from the real thing these days).

If Saddam's sons are alive, the best thing for them to do is make it look like their dead and lay low--then after the US stops looking for them, enjoy life a little. Since the US government lied to us about killing Saddam dozen's of times and lied to us dozens more times about Saddam having connections to terrorism and lied to us hundreds of times about Saddam having WMD, excuse me if I don't believe anything this regime says.