The Week In News: Balloon Boy, Wall Street, Congress

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News analyst, James Fallows of The Atlantic magazine, discusses the week's news from Pakistan to Congress, from Wall Street's ballooning bonuses to the saga of 'balloon boy.'

GUY RAZ, host:

We're back with ALL THINGS CONSIDERED from NPR News. I'm Guy Raz.

And I'm joined by James Fallows, national correspondent for The Atlantic, for a look at this past week's news.

Jim, welcome on this miserable, rainy Washington afternoon.

Mr. JAMES FALLOWS (National Correspondent, The Atlantic): Well, we didn't come to Washington for the weather.

RAZ: Jim, first to Afghanistan and Pakistan. As we just heard, a lot happening there, the August 20 election still up in the air, military offensive by the Pakistani army to dislodge militants and, of course, the Obama administration still trying to figure out its military strategy in the region.

Mr. FALLOWS: Potentially, the most important development of this past week are the indications that there may need to be a runoff election in Afghanistan, that the incumbent, Mr. Karzai, did not - apparently did not get a majority of the vote.

The reason this matters is that so much of the General Petraeus strategy of counterinsurgency, these developed in Iraq and Afghanistan, rest on the idea that, with a very large presence across the country, he'll make people's lives better in all sorts of ways and eventually win their hearts and minds, as we used to say. That depends on governmental legitimacy from top to bottom, from the national level to the regional level and the local police. And so, problems with legitimacy at the national level make this even harder for the U.S. to deal with.

RAZ: Jim, turning to matters here in Washington, a victory for Democrats on the Senate Finance Committee this past week. They managed to win the support of Maine Republican Olympia Snowe for their health care bill. But the industry -the health insurance industry - is now pushing back with a study that shows health care cost will actually rise.

And, Jim, I want to play a clip from President Obama's weekly address from today, where he goes after those critics.

President BARACK OBAMA: Every time we get close to passing reform, the insurance companies produce these phony studies as a prescription and say, take one of these, and call us in a decade. Well, not this time.

RAZ: Jim, the Democrats have avoided a confrontation with the insurance industry so far, even getting the industry on board for a time. But that seems to be changing.

Mr. FALLOWS: Yes. This week marked a very dramatic shift in the administration's strategy on this issue. And you could even say in general the Obama approach, you know, in large has been to try to get people under the tent and working together, including with the insurance industry, which the Clinton - which Bill and Hillary Clinton attacked head on 15 years ago.

When the insurance companies came out with a study saying that the plan essentially wouldn't work and would raise cost for most consumers, the administration, the Obama administration, is going at them more directly with the president's address today. It's possible that the result could be a more liberal, quote, unquote, "plan" in the long run with the kind of public option as an alternative to insurance plans if the administration has decided that it just can't work with the insurers at all anymore.

RAZ: Mm-hmm. This week, the stock market passed 10,000 for the first time since March. A new round of Wall Street bonuses also announced. But clearly, Jim, that doesn't look good for an administration that promised to be tough on Wall Street excesses.

Mr. FALLOWS: You know, certainly, it's better overall to have a Dow average at 10,000 than 6,000, as it was a couple of months ago. But there are a couple of both real and political problems. I think the real problem is that it's a known factor of economics that the financial recovery precedes the real recovery of jobs across the country, which are expected to be in trouble for quite some time.

The political problem is when you have large financial companies giving out the kinds of bonuses that they were doing two and three years ago just starting to occur again, it becomes difficult for the president to say this really is a change regime and the companies we bailed out with such a cost a year ago now are profiteering again.

RAZ: Mm-hmm. Finally, Jim, to the story that just keeps giving, this bizarre tale of a boy who was thought to be floating in a runaway balloon over Colorado, and it captivated cable television for hours.

Unidentified Woman #1: We got reports that a 6-year-old boy got his way into this, what the parents call a homemade flying saucer. It's…

Unidentified Man #1: Now, gentlemen, we should also point out, I mean, a great credit to the authorities in Colorado. The FAA was able to essentially indentify the position of this helium balloon.

Unidentified Woman #2: Well, this type of balloon is certainly no gas balloon I've ever seen.

Unidentified Man #2: And again, not knowing how the basket was attached, if it was attached when it launched…

Unidentified Man #3: For those of you joining us now, many of you just now getting home and looking at these images. It's certainly a haunting situation, as we've been following it now for about one hour…

RAZ: And, Jim, on and on it went.

Mr. FALLOWS: I feel saying I'm not like a real American because I was in a car during this entire period and didn't see the balloon in real time. But what this episode actually made me think of, to be mildly serious for a second, is there's all these tech world studies now showing that you actually become a little bit stupider when you're subject to constant distraction by pop-up messages or whatever.

I think you could make a somewhat serious case about our national intelligence, too, when you have sort of a system, a perpetual distraction machine, where any spectacle on cable TV from the OJ era on blocks out anything else. So that's my view.

RAZ: Well, I watched it. Certainly, it may have…

(Soundbite of laughter)

RAZ: …affected some of my brain cells.

That's our news analyst and Atlantic correspondent James Fallows.

Jim, thanks so much.

Mr. FALLOWS: My pleasure. Thank you, Guy.

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