In a time when the whetted and arbitrary deficit-reduction knife is cutting bone out of critical U.S. government programs, the image of shopping bags stuffed with CIA cash handed off on a monthly basis to Afghan President Hamid Karzai ”” who reigns over one of the most corrupt governments on the planet ”” has outraged many Americans.

The New York Times, which revealed the years of payoffs this week, noted that “there is little evidence the payments bought the influence the CIA sought.”

In fact, regular cash handouts of this type may do the opposite. They may well have enabled Karzai’s frequent and theatrical outbursts against U.S. officials and policies, not to mention his collusion with some of his country’s most corrupt and abusive officials. Such payoffs signal to Karzai ”” or other leaders like him ”” that he enjoys the unwavering support of the CIA, no matter what he does or says, and embolden him to thumb his nose at the United States whenever he feels like it.

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….as the Obama administration prepares to pull 34,000 U.S. troops out of the country by next February and most of the remaining troops by the end of 2014, estimates of the size of the Afghan force trained to take over this lead security role suddenly have grown fuzzy and possibly unreliable.

A new report made public this week by the government’s top watchdog over U.S. spending in Afghanistan casts doubt on whether the U.S.-led coalition and the Afghan government met a goal set in 2011 of enlisting and training a total of 352,000 Afghan security personnel by October 2012. Pentagon officials have said that target was meant to strike a balance between what was needed and what America and its allies could deliver in concert with the Afghan government. Earlier this year, in conjunction with President Barack Obama’s State of the Union address, the White House declared that the goal had been met.

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Employers kept hiring at a steady pace in April and the government revised up job tallies for February and March, easing fears that the economy is tumbling into a spring slump and propelling blue-chip stocks to record highs.

Nonfarm payrolls rose by 165,000 last month and the jobless rate ticked down to 7.5%, the lowest level since December 2008. The Labor Department also significantly raised hiring estimates for the two prior months, by a combined 114,000 jobs.

But the job gains in April, which were tilted toward the retail and business-services sectors, come alongside mixed signals for the economy almost four years into the recovery. While the housing and auto sectors are accelerating after years of industry turmoil, other major sectors are showing signs of trouble. In short: The Federal Reserve is looking for more broad-based and sustained job growth before easing up on its easy-money policies.

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The economy lurched this spring into an even lower gear, from manufacturing to services to construction, leaving the Federal Reserve poised to prolong or expand its bond-buying stimulus.

Central bankers Wednesday kept benchmark rates near zero and quantitative easing purchases at $85 billion a month. But changes in their statement highlighted shifting emphasis.

“The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes,” it said.

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The CIA pushed to have one of the suspected Boston Marathon bombers placed on a U.S. counterterrorism watch list more than a year before the attacks, U.S. officials said Wednesday.

Russian authorities contacted the CIA in the fall of 2011 and raised concerns that Tamerlan Tsarnaev, who was killed last week in a confrontation with police, was seen as an increasingly radical Islamist who could be planning to travel overseas.

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[…An] important strand of the British effort is what the UK government calls the “Prevent” strategy. This involves the police and local authorities working with Muslim organisations and communities to ensure that British nationals who become radicalised are identified and encouraged to channel their anger before they resort to violence.

Professor Michael Clarke, an expert on counter-terrorism at the Royal United Services Institute, a think-tank, says the strategy has had some success. “It is about getting the Muslim community to accept responsibility for people in their midst, helping to identify those who are radicalised and working with the police and local authorities to stop them before they plan attacks,” he says….like a number of UK experts, he argues that the US has been slow to tackle “homegrown” jihadism pre-emptively. “The Americans find it hard to accept that jihadism can arise from within their own society. They still feel the phenomenon is pushed into the US by outside forces or foreign actors.”

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My read of the evidence is that the Affordable Care Act will have a much tougher first year than was initially anticipated but it won’t be the catastrophe that Republicans hope. The exceptions will be a handful of states where Republican governors have purposefully made it a catastrophe, but that’s likely to make the Republican governors look bad, particularly if the law is working smoothly in states that have tried to make it a success.

Conservative commentary on the law, with its continuous predictions of explosive premium hikes (and continuous omissions of the offsetting subsidies) and gleeful celebration anytime anything looks to be going wrong, is risking the mistake that the Obama administration made early on with the sequester. When the predictions of pain and chaos didn’t instantly come true, the whole narrative shifted in an instant.

Republicans have done a very good job prepping the country for the pain of Obamacare. They’ve not done a good job prepping the country for the people who will be helped by Obamacare.

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At this time of year, when most Americans have just filed their returns, exasperation with the income tax system reaches a peak. Hardly anyone denies it’s a complex mess. In 2010, calculating their taxes cost Americans $168 billion, estimates the Taxpayer Advocate Service of the Internal Revenue Service. That’s about 15 percent of taxes collected ”” a heavy overhead. Almost 60 percent of taxpayers pay accountants or other tax preparers. Public esteem for the tax system is low; in a 2011 Pew poll, 55 percent judged it unfair. Disaffection was fairly even politically: 47 percent among Republicans, 58 percent among Democrats and 56 percent among independents.

So “tax reform” ought to be a cinch, right? Well, no.

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A lingering fog of uncertainty at the Boeing Co. campus in North Charleston lifted Friday when the Federal Aviation Administration agreed to clear the company’s 787 Dreamliners to fly again.

The revolutionary jet has been grounded since January because of batteries that overheated on two of the planes.

Flights could resume within a week, the Associated Press reported.

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Whatever struck you, provoked you, moved you; whatever part of it which you believe is most significant or worthy of further consideration. Remember the more specific you are, the more other blog reads can participate in what you say–KSH.

In the waning moments of daylight, police descended Friday on a shrouded boat in a Watertown backyard to capture the suspected terrorist who had eluded their enormous dragnet for a tumultuous day, ending a dark week in Boston that began with the bombing of the world’s most prestigious road race.

The arrest of 19-year-old Dzhokhar Tsarnaev of Cambridge ended an unprecedented daylong siege of Greater Boston, after a frantic night of violence that left one MIT police officer dead, an MBTA Transit Police officer wounded, and an embattled public ”” rattled again by the touch of terrorism ”” huddled inside homes….

“It’s a proud day to be a Boston police officer,” Police Commissioner Edward F. Davis told his force over the radio moments after the arrest. “Thank you all.”

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The search for one of the Boston Marathon bombing suspects — the man seen wearing a white baseball cap — this morning led to the sudden shutdown of the MBTA’s entire network of commuter rail, bus, and subway services.

State authorities also asked people who live in Watertown, Waltham, Newton, Belmont, Cambridge, and Allston-Brighton to stay home and for businesses in those cities and towns to stay closed.

“We are asking you to stay indoors, to stay in your homes for the time being,’’ Kurt Schwartz, who leads the state’s homeland security department, said at a 6 a.m. press conference today. “We are asking business in those areas to cooperate and not open today until we can provide further guidance.’’

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The FBI today released photos and video of two suspects in the deadly Boston Marathon terror bombings case, appealing to the public to help law enforcement officials find them.

“Somebody out there knows these individuals,” said Richard DesLauriers, special agent in charge of the Boston FBI office. He said the two men are considered “armed and dangerous.”

DesLauriers described the two men as Suspect No. 1 and Suspect No. 2. Suspect No. 1 was wearing a dark hat. Suspect No. 2 was wearing a white hat.

DesLauriers said Suspect No. 2 was observed planting a bomb, leaving it in place shortly before it went off.

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Commodity prices have been falling since September, culminating in a rout over the past two weeks. That is a classic warning for the global economy.

It is becoming ever clearer that the roaring boom in global equities since last summer has priced in an economic recovery that does not in fact exist. The International Monetary Fund has had to nurse down its global growth forecasts yet again. We are still stuck in an old-fashioned trade depression, with pervasive over-capacity in manufacturing plant and a record global savings rate of 25pc of GDP.

German car sales fell 17pc in March. That should puncture the last illusions that Germany is about to pull Europe out of a self-inflicted slump.

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Senate Finance Committee Chairman Max Baucus, one of the health reform law’s chief authors, says he’s worried about a “huge train wreck coming down” if the Obama administration doesn’t improve its public outreach about the legislation.

Baucus, a Montana Democrat who is up for reelection in 2014, sharply criticized the administration’s outreach efforts in a budget hearing on Wednesday. He told Health and Human Services Secretary Kathleen Sebelius that people and businesses “have no idea what to do, what to expect” from the law.

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There is a great graphic here and some comment there.

The powerful blasts at the Boston Marathon finish line Monday underscore why the Federal Bureau of Investigation has spent years refining its “tripwire” system for catching would-be bomb makers before they can build a deadly device.

For years, federal agents have asked businesses that sell materials useful in making bombs to alert authorities to any suspicious orders. The types of tripwires in place have shifted over the years. In the 1990s, law enforcement worried mostly about fertilizer-based bombs after such devices were used in the Oklahoma City attacks of April 1995. In the past decade, chemical-based bombs have come into focus as authorities adapt to the changing threat.

“The tripwires have certainly been successful in the past,” said Don Borelli, a former counterterrorism official at the FBI who now works for Soufan Group.

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To tax reform advocates, the federal tax code is a shambling behemoth, its immense girth weighing down corporations and Jane and Joe Taxpayer alike. The code is more than 4 million words long and has been tweaked 4,680 times since 2001, or more than once a day, according to the Internal Revenue Service’s National Taxpayer Advocate, whose job is to champion the poor schlubs who have to contend with the US tax system. Compliance takes more than 6 billion person-hours a year and costs $168 billion, the advocate’s office reports.

Tax expenditures ”“ the sober name for myriad loopholes, carve-outs, and incentives in the code ”“ shield almost as much in revenue, at just over $1 trillion, as the $1.4 trillion collected each year.

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The unexpectedly large number of American workers who piled into the Social Security Administration’s disability program during the recession and its aftermath threatens to cost the economy tens of billions a year in lost wages and diminished tax revenues.

Signs of the problem surfaced Friday, in a dismal jobs report that showed U.S. labor force participation rates falling last month to the lowest levels since 1979, the wrong direction for an economy that instead needs new legions of working men and women to drive growth and sustain a baby boomer generation headed to retirement.

Michael Feroli, chief U.S. economist for J.P. Morgan, estimates that since the recession, the worker flight to the Social Security Disability Insurance program accounts for as much as a quarter of the puzzling drop in participation rates, a labor exodus with far-reaching economic consequences.

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Opponents of same-sex marriage resist it because it amounts to redefining marriage, but also because it will invite future redefinitions. If we embrace same-sex marriage, they argue, society will have surrendered any reasonable grounds on which to continue forbidding polygamy, for example.

In truth, proponents of same-sex marriage have never offered a very good response to this concern. This problem was highlighted at the Supreme Court last week in oral argument over California’s Proposition 8, the state constitutional amendment that defines marriage as a union of a man and a woman.

Surprisingly, the polygamy problem that same-sex marriage presents was raised by an Obama appointee, the liberal Justice Sonia Sotomayor. Sotomayor interrupted the presentation of anti-Prop 8 litigator Theodore Olson to pose the following question: If marriage is a fundamental right in the way proponents of same-sex marriage contend, “what state restrictions could ever exist,” for example, “with respect to the number of people . . . that could get married?”

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American employers hired at the slowest pace in nine months in March, a sign that Washington’s austerity drive could be stealing momentum from the economy.

The economy added just 88,000 jobs last month and the jobless rate ticked a tenth of a point lower to 7.6 percent largely due to people dropping out of the work force, Labor Department data showed on Friday.

Analysts polled by Reuters had expected a gain of 200,000.

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MarketWatch: Since Nixon’s “abomination” as you call it, we have had some periods where government spending to GDP actually went down, like during the Clinton era. Doesn’t that show it’s just the choices made by Congress rather than the Fed to blame [for the problem of rising national debt as a % of GDP]?

Stockman: There is the issue that Congress ultimately is the fiscal authority. But my argument is, when the Fed becomes a massive buyer of bonds and debt and artificially suppresses interest rate below market-clearing levels, it’s a terrible signal to the Congress that debt is cheap, that running deficits is a viable strategy. So therefore they are induced to kick the can, to let it drift and avoid hard choices. Who wants to tell the public you are going to take your broccoli of higher taxes and lower benefits and spending if you can issue debt on a three-year basis for 40 basis points. That’s free. I was in Congress, they don’t do decimal math, OK? And they think the money is free, it’s a bad problem philosophically, we shouldn’t be doing this for the great long run, but it’s no harm today.

Then they have professors like Krugman who give them the disingenuous advice that the bond vigilantes don’t care. The market is saying, “fine with us, we don’t care, keep piling the debt on, we love it.” That is so much baloney. The reason the interest rate on the 10-year bond 10_YEAR -0.33% today is 1.8% or whatever it happened to settle today, is the market knows the Fed is buying half of the debt and is front running the Fed. And it is renting the bond on repo, 98 cents on the dollar, based on overnight money that’s free thanks to Bubbles Ben as well.

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The vast majority of U.S. businesses expanded at a slower pace, and private-sector firms hired less, adding to earlier warnings the economy is losing momentum.

The Institute for Supply Management said Wednesday its nonmanufacturing index fell to a seven-month low of 54.4 in March from 56 in February, indicating activity cooled off. Analysts expected it to remain steady. The report saw sharp decelerations in jobs, orders and exports.

ISM’s factory gauge out Monday also showed slowing growth .

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Thanks largely to the U.S. Federal Reserve, Jeffrey Nelson was able to put up a shotgun as down payment on a car.

Money was tight last year for the school-bus driver and neighborhood constable in Jasper, Alabama, a beaten-down town of 14,000 people. One car had already been repossessed. Medical bills were piling up.

And still, though Nelson’s credit history was an unhappy one, local car dealer Maloy Chrysler Dodge Jeep had no problem arranging a $10,294 loan from Wall Street-backed subprime lender Exeter Finance Corp so Nelson and his wife could buy a charcoal gray 2007 Suzuki Grand Vitara.

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The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.

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A new fight is brewing over health insurance companies letting millions of Americans renew their current coverage for another year ”” and thereby avoid changes under the federal healthcare law.

That may offer a short-term benefit for certain consumers and shield some of those individual policyholders from potentially steep rate increases. But critics say this maneuver could undermine government efforts to remake the insurance market next year and keep premiums affordable overall.

At issue is a little-known loophole in President Obama’s landmark legislation that enables health insurers to extend existing policies for nearly all of 2014. This runs contrary to the widespread belief that all health insurance must immediately comply with new federal rules starting Jan. 1, when most provisions of the law take effect.

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Richard Bejtlich was a cyber-specialist for the U.S. Air Force in the 1990s, a time when the U.S. military was going on the offense in the cyberwar. He remembers the day he realized how important a software vulnerability can be to a cyberweapons designer.

“Myself and a couple other guys, we found a zero day vulnerability in Cisco routing equipment,” Bejtlich recalls. “And we looked at it, and we said, ‘Did we really find this? Can we really get into these Cisco routers?'”

They could, and so Bejtlich and his colleagues reported it to Cisco. They thanked him and said they’d fix it. Days later, he was talking to some friends who worked on the offensive side of the unit, and they had quite a different reaction to them reporting the bug to Cisco.

“They said, ‘You did what? Why didn’t you tell us? We could have used this to get into all these various hard targets,'” he says.

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On Jan. 30, the Obama administration unveiled a long list of exemptions from the ObamaCare insurance mandate. Flaws and contradictions in the law will cause millions of people to be uninsured. The administration also estimated that the cheapest family plan will cost $20,000 by 2016. This new information indicates that the Affordable Care Act is failing in both goals: making insurance affordable and covering the uninsured.

Children are the biggest victims. The hastily drafted law, passed before it was read, overlooked them.

The law says that beginning in 2014, employers with 50 or more full-time employees must offer coverage or pay a penalty. The law’s sloppy drafting left it unclear whether that meant worker’s coverage or family coverage.

Read it all from IBD.

Budget constraints are prompting the U.S. Navy to cut back the number of aircraft carriers in the Persian Gulf region from two to one, the latest example of how contentious fiscal battles in Washington are impacting the U.S. military.

According to Defense Department officials, the USS Harry S. Truman, which was set to leave for the Persian Gulf region on Friday, will now remain stateside, based in Norfolk, Virginia.

Defense Secretary Leon Panetta ordered the change to the department’s “two-carrier policy” in the Persian Gulf region early Wednesday.

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