By Justin Tucker,2014-04-11 21:53
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Obama Selects Kagan for Supreme Court


    WASHINGTON President Obama will nominate Solicitor General Elena Kagan

    as the nation’s 112th justice, choosing his own chief advocate before the Supreme

    Court to join it in ruling on cases critical to his view of the country’s future, Democrats close to the White House said on Sunday.

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    Chip Somodevilla/Getty Images

    Solicitor General Elena Kagan in 2009.

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    After a monthlong search, Mr. Obama informed Ms. Kagan and his advisers on Sunday of his choice to succeed the retiring Justice John Paul Stevens. He plans

    to announce the nomination at 10 a.m. Monday in the East Room of the White House with Ms. Kagan by his side, said the Democrats, who insisted on anonymity to discuss the decision before it was formally made public. In settling on Ms. Kagan, the president chose a well-regarded 50-year-old lawyer who served as a staff member in all three branches of government and was the first woman to be dean of Harvard Law School. If confirmed, she would be the

    youngest member and the third woman on the current court, as well as the first justice in nearly four decades without any prior judicial experience. That lack of time on the bench may both help and hurt her confirmation prospects, allowing critics to question whether she is truly qualified while denying them a lengthy judicial paper trail filled with ammunition for attacks. As solicitor general, Ms. Kagan has represented the government before the Supreme Court for the past year, but her own views are to a large extent a matter of supposition. Perhaps as a result, some on both sides of the ideological aisle are suspicious of her. Liberals dislike her support for strong executive power and her outreach to conservatives while running the law school. Activists on the right have attacked

    her for briefly barring military recruiters from a campus facility because the ban on openly gay men and lesbians serving in the military violated the school’s anti-discrimination policy.

    Replacing Justice Stevens with Ms. Kagan presumably would not alter the broad ideological balance on the court, but her relative youth means that she could have an influence on the court for decades to come, underscoring the stakes involved. In making his second nomination in as many years, Mr. Obama was not looking for a liberal firebrand as much as a persuasive leader who could attract the swing vote of Justice Anthony M. Kennedy and counter what the president sees as the

    rightward direction of the court under Chief Justice John G. Roberts Jr.

    Particularly since the Citizens United decision invalidating on free speech grounds the restrictions on corporate spending in elections, Mr. Obama has publicly criticized the court, even during his State of the Union address with

    justices in the audience.

    As he presses an ambitious agenda expanding the reach of government, Mr. Obama has come to worry that a conservative Supreme Court could become an obstacle down the road, aides said. It is conceivable that the Roberts court could eventually hear challenges to aspects of Mr. Obama’s health care program or to other policies like restrictions on carbon emissions and counterterrorism practices.

    With all signs pointing to a Kagan nomination, critics have been pre-emptively attacking her in the days leading up to the president’s announcement. Paul Campos, a law professor at the University of Colorado, Boulder, writing on The

    Daily Beast, compared her to Harriet E. Miers, whose nomination by President

    George W. Bush collapsed amid an uprising among conservatives who considered her unqualified and not demonstrably committed to their judicial philosophy. M. Edward Whelan III, president of the Ethics and Public Policy Center in Washington, wrote on National Review’s Web site that even Ms. Kagan’s

    nonjudicial experience was inadequate. “Kagan may well have less experience relevant to the work of being a justice than any entering justice in decades,” Mr. Whelan wrote.

    Ms. Kagan defended her experience during confirmation hearings as solicitor general last year. “I bring up a lifetime of learning and study of the law, and particularly of the constitutional and administrative law issues that form the core of the court’s docket,” she testified. “I think I bring up some of the

communications skills that has made me I’m just going to say it — a famously

    excellent teacher.”

    Ms. Kagan was one of Mr. Obama’s runners-up last year when he nominated

    Sonia Sotomayor to the court, and she was always considered the front-runner this year. The president also interviewed three other candidates, all federal appeals court judges: Merrick B. Garland of Washington, Diane P. Wood of

    Chicago and Sidney R. Thomas of Montana.

    Ms. Kagan had several advantages from the beginning that made her the most obvious choice. For one, she works for Mr. Obama, who has been impressed with her intelligence and legal capacity, aides said, and she worked for Vice President Joseph R. Biden Jr. when he was a senator. For another, she is the youngest of the four finalists, meaning she would most likely have the longest tenure as a justice. Ms. Kagan was also confirmed by the Senate just last year, albeit with 31 no votes, making it harder for Republicans who voted for her in 2009 to vote against her in 2010.

    The president can also say he reached beyond the so-called “judicial monastery,”

    although picking a solicitor general and former Harvard law dean hardly reaches outside the Ivy League, East Coast legal elite. And her confirmation would allow Mr. Obama to build on his appointment of Justice Sotomayor by bringing the number of women on the court to its highest ever (three, with Justice Sotomayor and Justice Ruth Bader Ginsburg).

    Moreover, in his selection of finalists, Mr. Obama effectively framed the choice so that he could seemingly take the middle road by picking Ms. Kagan, who correctly or not was viewed as ideologically between Judge Wood on the left and Judge Garland in the center.

    Judge Garland was widely seen as the most likely alternative to Ms. Kagan and the one most likely to win easy confirmation. Well respected on both sides of the aisle, he had a number of conservatives publicly calling him the best they could hope for from a Democratic president. Senator Orrin G. Hatch of Utah, a

    Republican member of the Judiciary Committee, privately made clear to the president that he considered Judge Garland a good choice, according to people briefed on their conversations.

    But Mr. Obama ultimately opted to save Judge Garland for when he faces a more hostile Senate and needs a nominee with more Republican support. Democrats expect to lose seats in this fall’s election, so if another Supreme Court seat comes

    open next year and Mr. Obama has a substantially thinner margin in the Senate than he has today, Judge Garland would be an obvious choice.

    As for Ms. Kagan, strategists on both sides anticipate a fight over her confirmation but not an all-out war. The White House hopes the Senate Judiciary Committee can hold hearings before July 4, but some Congressional aides were skeptical. Either way, Democrats want Ms. Kagan confirmed by the August recess so she can join the court for the start of its new term in October. A New Yorker who grew up in Manhattan, Ms. Kagan earned degrees from Princeton, Oxford and Harvard Law School, worked briefly in private practice, clerked for Justice Thurgood Marshall, served as a Senate staff member and

    worked as a White House lawyer and domestic policy aide under President Bill

    Clinton. She was nominated for an appeals court judgeship in 1999, but the Senate never voted on her nomination.

    She has been a trailblazer along the way, not only as the first woman to run Harvard Law School but also as the first woman to serve as solicitor general. Her inexperience as a judge makes her a rarity in modern times, but until the 1970s many Supreme Court justices came from outside the judiciary, including senators, governors, cabinet secretaries and even a former president.

    If the Senate confirms Ms. Kagan, who is Jewish, the Supreme Court for the first time will have no Protestant members. In that case, the court would be composed of six justices who are Catholic and three who are Jewish.

    Like her former boss, Justice Marshall, who was the last solicitor general to go directly to the Supreme Court, Ms. Kagan may be forced to recuse herself during her early time on the bench because of her participation in a number of cases coming before the justices. Tom Goldstein, publisher of ScotusBlog, a Web site that follows the court, estimated that she would have to sit out on 13 to 15 matters. Mr. Whelan argued that it would be significantly more than that

    E.U. Details $957 Billion Rescue Package BRUSSELS European leaders, pressured by sliding markets and doubts over their ability to act decisively, agreed on Monday to provide a huge rescue package of nearly $1 trillion in a sweeping effort to combat the debt crisis that has engulfed Europe and threatened markets around the world.

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    Virginia Mayo/Associated Press

    Olli Rehn, left, the European commissioner for economic affairs, and Elena Salgado, the Spanish finance minister.

    In an extraordinary session that lasted into the early morning hours, finance ministers from the European Union agreed on a deal that would provide $560

    billion in new loans and $76 billion under an existing lending program. Elena Salgado, the Spanish finance minister, who announced the deal, also said the International Monetary Fund was prepared to give up to $321 billion separately. Officials are hoping the size of the program a total of $957 billion will signal

    a “shock and awe” commitment that will be viewed in the same vein as the $700 billion package the United States government provided to help its own ailing financial institutions in 2008. The package represented an audacious step for a union that had been criticized for acting tentatively, and without consensus, in the face of a mounting crisis.

    Underscoring the urgency of the situation, President Obama spoke to the German

    chancellor, Angela Merkel, and the French president, Nicolas Sarkozy, on Sunday

    about the need for decisive action to restore investor confidence. And in a sign of the spreading anxiety, the United States Federal Reserve, along with the

    European Central Bank and the central banks of Canada, Britain and Switzerland, announced the re-establishment of instruments known as swap lines through January 2011. The swaps are intended to help ease pressure on the euro, whose

    value against the dollar has fallen as fearful investors have bought up dollars.

    Stock markets in the Asia-Pacific region rose early on Monday. The leading stock indexes in Japan and South Korea were both up about 1.3 percent soon after the deal was confirmed, recouping some of the losses they had suffered last week. The markets in Singapore and mainland China also opened higher, with the market gauges there up 0.5 percent soon after the open.

    New political complications in two of Europe’s most important countries added to the challenge. In Germany, voter anger at the effort to save Greece cost Ms.

    Merkel an important regional election Sunday, undermining her leadership, and in Britain, the government remained in a state of suspended animation because of the inconclusive Parliamentary elections last week. [Pages A4 and A8.] The package comes at a time of mounting financial unease. Riots in Greece, ever-tightening terms of credit and the unexplained free fall in the American stock market last Thursday have compounded the sense that the European Union’s inability to address its sovereign debt crisis might lead to the type of systemic collapse that followed the fall of Lehman Brothers.

    Olli Rehn, the European commissioner for monetary policy, described the arrangement as “a consolidation pact” that would be “particularly crucial for

    countries under speculative attacks in recent weeks.” He specifically mentioned Portugal and Spain.

    Mr. Rehn said the I.M.F. would provide “half as much as the European Union” following lengthy talks with fund officials.

    “We shall defend the euro whatever it takes,” Mr. Rehn said.

    What appeared to be emerging from the discussions represented a partial retreat from a system discussed earlier in the day that would have radically expanded the powers of the European Commission to raise funds.

    Instead the ministers came up with a system that would speed up the pace at which states that use the euro currency could lend to one another, but on a bilateral and voluntary basis.

    One of the crucial decisions that ministers made was to create what they called a “special purpose vehicle” to disburse the 440 billion euros in new loans, should

    that support be required by member states in economic difficulties. The use of such a financial instrument reflected the difficulties that individual European governments and Germany’s in particular — have in committing

    huge sums to a central authority like the European Commission to oversee the economic management of the bloc, seen as a clash with national sovereignty.

    In a statement following their meeting, the ministers underlined that the special purpose vehicle would expire after three years and that its use would be strictly dependent on “national constitutional requirements.”

    Ministers said their first line of defense against financial turmoil was to offer loans of 60 billion euros to member states in need, and to use the further loans of up to 440 billion euros as a “complement” as required.

    While the sums being discussed are eye-catching, some bankers questioned whether they would be enough to calm the markets. One banker said that with more and more European economies coping with rising deficits that raising, guaranteeing or backing such a large number would not be an easy task unless

    the European Central Bank stepped in in a more forceful and specific manner. The bank has so far rebuffed calls to inject liquidity into the markets by buying back European bonds.

    There were many complications in trying to forge a consensus on a new package. They included defining the role of Britain, which lies outside the euro zone and had said it would not help in propping up the euro, as well as the European Central Bank. The fractiousness underscores the frailty of a monetary union in which its richest member, Germany, is also the most opposed to a financial rescue.

    “The fact that they are worried is clear,” said David Marsh, the author of “The

    Euro,” a book on the history of monetary union. “But I don’t think that there is enough commitment or economic firepower in Germany to provide the massive loan guarantees to satisfy the markets.”

    Predictably, politicians blamed speculators for the market upheaval. The Swedish finance minister, Anders Borg, said immediate action was needed to tackle “herd behaviors in the markets that are really pack behaviors, wolf pack behaviors.” Mr.

    Borg warned that volatility in markets could “tear the weaker countries apart.”

    Since it became clear that Greece would not be able to meet its financial obligations and fears spread that other indebted nations like Spain, Portugal and Ireland would have similar troubles, Europe, hampered by Germany’s opposition to a bailout, has responded with measures that have been seen as too little too late.

    Even now, despite the lashing rhetoric and the Sunday night meeting, there is still a feeling that Europe should be doing more notably with regard to freeing the

    European Central Bank to go against its charter and print money by buying back distressed European bonds from the secondary market.

    Sunday’s meetings represented an extraordinary convergence of diplomatic

    activity, crammed into a tight time frame. Political leaders including Mr. Sarkozy of France said early Saturday morning, at the end of an earlier summit meeting, that a loan mechanism intended to restore confidence should be ready by Monday morning. That effectively left the European Commission and finance ministers a single weekend to change the way the European Union operates its finances. Ms. Merkel of Germany attended a victory parade on Red Square in Moscow on Sunday, a sign of how seriously Germans consider reconciliation with Russia. Mr. Sarkozy and the Italian prime minister, Silvio Berlusconi, opted not to attend,

    regarding the financial crisis as more urgent.

    Mr. Sarkozy held a strategy meeting with ministers on Sunday.

    “At stake is the euro and the euro zone,” a French official said. “We need to give a clear signal to markets.”

    Sewell Chan contributed reporting from Washington. Bettina Wassener contributed reporting from Hong Kong.

    Computer Trades Are Focus in Wall Street Plunge Investigators seeking an explanation for the brief stock market panic last week said Sunday that they were focusing increasingly on how a controlled slowdown in trading on the New York Stock Exchange, meant to bring about stability,

    instead set off uncontrolled selling on electronic exchanges.

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    Ruth Fremson/The New York Times

    Traders on the floor of the New York Stock Exchange after the plunge last Thursday afternoon. Related

    ; Asian Markets Rebound on European Rescue Package (May 11, 2010)

    It was an unintended consequence of a system built to place a circuit breaker on stocks in sharp decline. In theory, trades slow down so that sellers can find buyers the old-fashioned way, by hand, one by one. The electronic exchanges did not slow down in tandem, causing problems, according to two officials familiar with the investigation.

    That could mean that the computers first flooded the market with sell orders that could not be matched with buyers. Then, just as quickly, many of these networks withdrew from trading. The combined effect might have set off a chain reaction that sent shares of many companies spiraling during the 15-minute frenzy. After a weekend of analysis, many specialists at the major exchanges no longer believe that a single large sell trade in one stock, like that of Procter & Gamble,

    was the trigger, according to the people familiar with the investigation. Instead, they suspect that a mismatch in rules between the older New York Stock Exchange and younger electronic exchanges set off a frightening sequence of events.

    It is not known exactly what caused the initial sell-off in the blue chips, but investigators say the earliest sign of trouble they have found was a sudden drop in the value of a futures contract on the Chicago Mercantile Exchange, based on the

    Standard & Poor’s 500-stock index. That pushed down a broad array of stocks in

    that index, all of them traded on the New York Exchange and other major exchanges, and sent many stocks on the New York Exchange into slow mode. Ever since computerized trading became dominant in the nation’s stock markets in recent years, market experts have been warning that the lack of consistent rules among exchanges and the increasing complexity and speed of computer trading systems could destabilize markets. This appears to have happened last Thursday, when stock prices plunged and the Dow Jones industrial average fell roughly 600 points in a few minutes.

    Officials of the Securities and Exchange Commission and the heads of the four

    main exchanges are to meet Monday in Washington to discuss applying circuit breakers across all exchanges. Today, only the New York Exchange applies circuit breakers on individual stocks. A Congressional hearing on the episode is scheduled for Tuesday.

    Investigators say the rule on halting trading was created for a time when one exchange accounted for the vast proportion of stock trading. But over the last half decade the Big Board’s share of the market has dropped sharply — in part because

    of regulatory changes to encourage new competitors while ever larger volumes

    of stocks are traded on electronic exchanges without circuit breaker rules. Investigators are now focusing on the events of last Thursday, when several hundred stocks on the Big Board, including five major stocks that make up the Dow Accenture, Procter & Gamble, 3M and two others went into slow mode.

    This decision forced a switch to slow-motion trading as traders on the floor tried to arrest the decline by manually seeking out bidders. But that did not work, because trading shifted immediately to broader markets controlled by computers, where the plunge continued.

    Regulators and the exchanges continued over the weekend to review the tapes from the millions of trades made last Thursday. The investigations are looking at what effect the decision to halt trading in these stocks in New York had on broader market confidence and on algorithms used by computerized traders.

    The scale of the shutdown on may have been a new phenomenon for these computer systems. They may also have been programmed to shut down in such a cataclysmic moment of stress, which would have had a further cascading effect in withdrawing bidders from the market and putting further intense downward pressure on prices.

    In Washington on Sunday there were cross-party calls to fix the system and criticism that regulators had still not fully identified the cause of the sell-off, even

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