US seizes 2,200 pieces of artwork in NJ


NEWARK, N.J. (AP) — A federal prosecutor in New Jersey says the government has seized more than 2,000 works of art allegedly used to launder money raised fraudulently. They were appraised at nearly $16 million.


The U.S. Attorney's Office in Newark announced Friday a court filing seeking to force the owner to forfeit the works, including an Alfred Stieglitz photograph that sold for $675,000. They were seized from a warehouse in July.


The government says the owner of Green Diesel, based in Houston, was trying to ship the works to Spain.


The complaint alleges company owner Philip Rivkin bought the artwork by selling credits for generating biodiesel fuel, though it did not produce any fuel.


Rivkin attorney Kyle Sampson said he's aware of the filing and is working with officials "to resolve their concerns."


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Well: A Rainbow of Root Vegetables

This week’s Recipes for Health is as much a treat for the eyes as the palate. Colorful root vegetables from bright orange carrots and red scallions to purple and yellow potatoes and pale green leeks will add color and flavor to your table.

Since root vegetables and tubers keep well and can be cooked up into something delicious even after they have begun to go limp in the refrigerator, this week’s Recipes for Health should be useful. Root vegetables, tubers (potatoes and sweet potatoes, which are called yams by most vendors – I mean the ones with dark orange flesh), winter squash and cabbages are the only local vegetables available during the winter months in colder regions, so these recipes will be timely for many readers.

Roasting is a good place to begin with most root vegetables. They sweeten as they caramelize in a hot oven. I roasted baby carrots and thick red scallions (they may have been baby onions; I didn’t get the information from the farmer, I just bought them because they were lush and pretty) together and seasoned them with fresh thyme leaves, then sprinkled them with chopped toasted hazelnuts. I also roasted a medley of potatoes, including sweet potatoes, after tossing them with olive oil and sage, and got a wonderful range of colors, textures and tastes ranging from sweet to savory.

Sweet winter vegetables also pair well with spicy seasonings. I like to combine sweet potatoes and chipotle peppers, and this time in a hearty lentil stew that we enjoyed all week.

Here are five colorful and delicious dishes made with root vegetables.

Spicy Lentil and Sweet Potato Stew With Chipotles: The combination of sweet potatoes and spicy chipotles with savory lentils is a winner.


Roasted Carrots and Scallions With Thyme and Hazelnuts: Toasted hazelnuts add a crunchy texture and nutty finish to this dish.


Carrot Wraps: A vegetarian sandwich that satisfies like a full meal.


Rainbow Potato Roast: A multicolored mix that can be vegan, or not.


Leek Quiche: A lighter version of a Flemish classic.


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Stocks eke out gains as manufacturing improves












An encouraging manufacturing report nudged the stock market higher Friday, giving it a slight gain for the week, even as a deadline for avoiding sweeping government spending cuts loomed.

The Dow Jones industrial average rose 35.17 points, or 0.3 percent, to close at 14,089.66.

It was down as much as 117 points in early trading but recovered following news that U.S. manufacturing expanded in February at the fastest pace since June 2011. The Institute for Supply Management said its manufacturing index reached 54.2, up from January's reading of 53.1. Any reading above 50 signals growth.

President Barack Obama summoned congressional leaders to the White House for a meeting aimed at avoiding the $85 billion in across-the-board spending cuts set to kick in Friday. The cuts are part of a 10-year, $1.5 trillion deficit reduction plan that was designed to be so distasteful to both Democrats and Republicans that they would be forced to drum up a longer-term budget deal.

Any agreement between the White House and Congress on the spending cuts could drive the market up next week, regardless of whether investors consider it a good deal or not, said Stephen Carl, head equity trader at The Williams Capital Group in New York.

“The lack of clarity is the problem,” he said. “I think it will be a positive for the market just as long as there's concrete news.”

In other Friday trading, the Standard & Poor's 500 index rose 3.52 points, or 0.2 percent, to 1,518.20. The Nasdaq composite gained 9.55 points, 0.3 percent, to 3,169.74.

All three indexes ended higher for the week: The Dow rose 0.6 percent, the S&P 500 and Nasdaq each rose about 0.2 percent.

The Dow came within 15 points of its record close of 14,164 on Thursday before sliding back and ending the day lower.

Oil and gas companies fell Friday as the price of crude sank to its lowest level of the year. Halliburton, Peabody Energy and other energy stocks were among the biggest losers in the S&P 500. Benchmark U.S. crude oil dropped below $91 a barrel.

Americans' incomes fell 3.6 percent in January, the worst one-month drop in 20 years, the Commerce Department said Friday. U.S. consumers increased spending modestly in January but cut back on major purchases. The report suggests that the expiration of tax cuts on Jan. 1 may have made Americans more cautious.

Unemployment across the 17 European Union countries that use the euro currency hit a record 11.9 percent during January. That drove money into U.S. Treasurys, pushing their prices up and their yields down.

The yield on the 10-year Treasury note fell to 1.85 percent from 1.88 percent late Thursday.

Among other stocks making big moves:

— Gap added 95 cents to $33.87. The retailer said late Thursday that its quarterly profits jumped 61 percent, topping analysts' estimates, helped by better sales at its Old Navy stores. Gap also raised its quarterly dividend to 15 cents.

— Best Buy Co. rose 75 cents to $17.16 after the retailer said that its fourth-quarter loss narrowed as better sales in the U.S. helped offset weakness abroad, particularly China and Canada.

— Groupon jumped 13 percent following news that CEO Andrew Mason was fired. The online deals company's stock plunged 24 percent Thursday after the company delivered a weak revenue forecast for the current quarter. Its stock gained 57 cents to $5.11

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Jury in Bell corruption trial may be deadlocked









A court spokeswoman said Thursday the jury in the Bell corruption case appears to be deadlocked.

“The jurors may be at an impasse,” said Patricia Kelly, a spokeswoman for L.A. County Superior Court.


Jurors sent a note to the judge Thursday morning, and all the attorneys in the case were called in.








Six former Bell City Council members are accused of stealing public money by paying themselves extraordinary salaries in one of Los Angeles County’s poorest cities.


Luis Artiga, Victor Bello, George Cole, Oscar Hernandez, Teresa Jacobo and George Mirabal are accused of misappropriation of public funds, felony counts that could bring prison terms.


They were arrested in September 2010 and have been free on bail.


The nearly $100,000 salaries drawn by most of the former elected officials are part of a much larger municipal corruption case in the southeast Los Angeles County city in which prosecutors allege that money from the city’s modest general fund flowed freely to top officials.


The three defendants who testified painted a picture of a city as a place led by a controlling, manipulative administrator who handed out enormous salaries, loaned city money and padded future pensions. Robert Rizzo, the former adminstrator, and ex-assistant city manager Angela Spaccia are also awaiting trial.


The four-week trial of the former council members turned on extremes.


Deputy Dist. Atty. Edward Miller said the council members were little more than common thieves who were consumed with fattening their paychecks at the expense of the city’s largely immigrant, working-poor residents.


Miller said the accused represented the “one-percenters" of Bell who had “apparently forgotten who they are and where they live."


Defense attorneys said the former city leaders -- one a pastor, another a mom-and-pop grocery store owner, another a funeral director -- were dedicated public servants who put in long hours and tirelessly responded to the needs of their constituents.


Jacobo testified that Rizzo informed her she could quit her job as a real estate agent and receive a full-time salary as a council member. She said she asked City Attorney Edward Lee if that was possible and he nodded his head.


"I thought I was doing a very good job to be able to earn that, yes," Jacobo said.


Cole said Rizzo was so intimidating that the former councilman voted for a 12% annual pay raise out of fear the city programs he established would be gutted by Rizzo in retaliation if he opposed the pay hikes.


The defense argued that the prosecution failed to prove criminal negligence -- that their clients knew what they were doing was wrong or that a reasonable person would know it was wrong.


The attorney for Hernandez, the city’s mayor at the time of the arrests, said his client had only a grade-school education, was known more for his heart than his intellect and was, perhaps, not overly “scholarly.”


Prosecutors argued that the council members pushed up their salaries by serving on city boards that rarely met and, in one case, existed only as a means for paying them even more money.


Jurors were also left to deal with the question of whether council members were protected by a City Charter that was approved in a special election that drew fewer than 400 voters.


Defense attorneys say the charter allowed council members to be paid for serving on the authorities.


But the prosecutor argued that the charter -- a quasi-constitution for a city -- set salaries at what councils in similar-sized cities were receiving under state law: $8,076 a year. Because council members automatically serve on boards and commissions, the district attorney said the total compensation for all of each council member's work was included in that figure.





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Doctor and Patient: Why Failing Med Students Don’t Get Failing Grades

Tall and dark-haired, the third-year medical student always seemed to be the first to arrive at the hospital and the last to leave, her white coat perpetually weighed down by the books and notes she jammed into the pockets. She appeared totally absorbed by her work, even exhausted at times, and said little to anyone around her.

Except when she got frustrated.

I first noticed her when I overheard her quarreling with a nurse. A few months later I heard her accuse another student of sabotaging her work. And then one morning, I saw her storm off the wards after a senior doctor corrected a presentation she had just given. “The patient never told me that!” she cried. The nurses and I stood agape as we watched her stamp her foot and walk away.

“Why don’t you just fail her?” one of the nurses asked the doctor.

“I can’t,” she sighed, explaining that the student did extremely well on all her tests and worked harder than almost anyone in her class. “The problem,” she said, “is that we have no multiple choice exams when it comes to things like clinical intuition, communication skills and bedside manner.”

Medical educators have long understood that good doctoring, like ducks, elephants and obscenity, is easy to recognize but difficult to quantify. And nowhere is the need to catalog those qualities more explicit, and charged, than in the third year of medical school, when students leave the lecture halls and begin to work with patients and other clinicians in specialty-based courses referred to as “clerkships.” In these clerkships, students are evaluated by senior doctors and ranked on their nascent doctoring skills, with the highest-ranking students going on to the most competitive training programs and jobs.

A student’s performance at this early stage, the traditional thinking went, would be predictive of how good a doctor she or he would eventually become.

But in the mid-1990s, a group of researchers decided to examine grading criteria and asked directors of internal medicine clerkship courses across the country how accurate and consistent they believed their grading to be. Nearly half of the course directors believed that some form of grade inflation existed, even within their own courses. Many said they had increasing difficulty distinguishing students who could not achieve a “minimum standard,” whatever that might be. And over 40 percent admitted they had passed students who should have failed their course.

The study inspired a series of reforms aimed at improving how medical educators evaluated students at this critical juncture in their education. Some schools began instituting nifty mnemonics like RIME, or Reporter-Interpreter-Manager-Educator, for assessing progressive levels of student performance; others began to call regular meetings to discuss grades; still others compiled detailed evaluation forms that left little to the subjective imagination.

Now a new study published last month in the journal Teaching and Learning in Medicine looks at the effects of these many efforts on the grading process. And while the good news is that the rate of grade inflation in medical schools is slower than in colleges and universities, the not-so-good news is that little has changed. A majority of clerkship directors still believe that grade inflation is an issue even within their own courses; and over a third believe that students have passed their course who probably should have failed.

“Grades don’t have a lot of meaning,” said Dr. Sara B. Fazio, lead author of the paper and an associate professor of medicine at Harvard Medical School who leads the internal medicine clerkship at the Beth Israel Deaconess Medical Center in Boston. “‘Satisfactory’ is like the kiss of death.”

About a quarter of the course directors surveyed believed that grade inflation occurred because senior doctors were loath to deal with students who could become angry, upset or even turn litigious over grades. Some confessed to feeling pressure to help students get into more selective internships and training programs.

But for many of these educators, the real issue was not flunking the flagrantly unprofessional student, but rather evaluating and helping the student who only needed a little extra help in transitioning from classroom problem sets to real world patients. Most faculty received little or no training or support in evaluating students, few came from institutions that had remediation programs to which they could direct students, and all worked under grading systems that were subjective and not standardized.

Despite the disheartening findings, Dr. Fazio and her co-investigators believe that several continuing initiatives may address the evaluation issues. For example, residency training programs across the country will soon be assessing all doctors-in-training with a national standards list, a series of defined skills, or “competencies,” in areas like interpersonal communication, professional behavior and specialty-specific procedures. Over the next few years, medical schools will likely be adopting a similar system for medical students, creating a national standard for all institutions.

“There have to be unified, transparent and objective criteria,” Dr. Fazio said. “Everyone should know what it means when we talk about educating and training ‘good doctors.’”

“We will all be patients one day,” she added. “We have to think about what kind of doctors we want to have now and in the future.”

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Moving, slowly, toward a la carte cable








The cable company Cablevision says it's just looking out for consumers in its lawsuit against Viacom, owner of MTV and Nickelodeon, over bundled programming packages that drive monthly bills higher.


And the company is correct — to a point.


Cablevision Systems Corp. alleges that Viacom Inc. is violating federal antitrust laws by requiring cable and satellite companies to carry less popular channels in return for paying a reasonable price for the good stuff. In other words, if a cable company wants Comedy Central at a fair price, it also has to take Teen Nick.






The lawsuit is a direct assault on an industry practice that forces the average cable or satellite subscriber to pay for dozens, possibly hundreds, of channels they may never watch. According to the ratings company Nielsen, the typical cable subscriber watches only about 17 channels on a regular basis.


"The manner in which Viacom sells its programming is illegal, anti-consumer and wrong," Cablevision said. "Viacom effectively forces Cablevision's customers to pay for and receive little-watched channels in order to get the channels they actually want."


Well, well, well. Sure sounds as if the nation's fifth-largest cable company, operating primarily on the East Coast, is saying the same thing I've been saying for years: Cable and satellite subscribers should pay only for the channels they want.


Or is it?


After the lawsuit was announced this week, I spoke with Charlie Schueler, Cablevision's executive vice president of communications. I asked what a legal win for the company would mean for Cablevision subscribers.


Would it mean lower bills? Would it mean so-called a la carte programming — that is, allowing subscribers to pick their own channel lineup from a menu of options?


"Without forced bundling," Schueler said, "cable providers could tailor smaller and lower-priced packages to specific audiences."


OK, but that basically means customers would still have to buy a package of channels, rather than pick the channels they want.


"We would offer more flexibility to customers," Schueler replied. "We would favor anything that offers broader choices and flexibility for customers."


But you're not saying the words. Will you offer a la carte programming?


"Choice and flexibility are the words I'll offer."


Cablevision's lawsuit against Viacom is a step in the right direction. Props to the company for trying to unravel the fat bundles that programmers such as Viacom, Fox and Disney force down the throats of distributors, which then pass them and the higher fees along to us.


If bundles do indeed violate antitrust law, all cable and satellite companies would be able to renegotiate their programming contracts to allow customers to pay for, say, Disney's ESPN and ditch the company's Military History channel.


But here's the thing about Cablevision's plan for smaller packages: You'd still have to pay for channels you may not want.


It's as if Hearst Magazines could make you buy Redbook if all you wanted was Road & Track.


Other cable and satellite companies have voiced support for Cablevision's legal broadside against Viacom.


"We frequently have pointed out that there are serious problems with the current programming environment," Time Warner Cable said. "We think this lawsuit raises important issues, and we look forward to their resolution in the courts."






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Race for L.A. city controller heats up









A previously low-profile race for Los Angeles city controller has begun to heat up as opponents of City Councilman Dennis Zine accuse him of "double dipping" the city's payroll and question why he is considering lucrative tax breaks for a Warner Center developer.


Zine, who for 12 years has represented a district in the southeast San Fernando Valley, is the better known of the major candidates competing to replace outgoing Controller Wendy Greuel.


The others are Cary Brazeman, a marketing executive, and lawyer Ron Galperin. Zine has raised $766,000 for his campaign, more than double that of Galperin, the next-highest fundraiser, and has the backing of several of the city's powerful labor unions.





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He also has been endorsed by Mayor Antonio Villaraigosa and several of his council colleagues. Galperin is backed by the Service Employees International Union, one the city's largest labor groups, and Brazeman is supported by retired Rep. Diane Watson and several neighborhood council representatives.


With the primary ballot less than a week away, Brazeman and Galperin have turned up the heat on Zine, hoping to push the race beyond the March 5 vote. If no one wins more than 50% of the ballots cast, the top two vote-getters will face a runoff in the May general election.


In a recent debate, Zine's opponents criticized him for receiving a $100,000 annual pension for his 33 years with the Los Angeles Police Department and a nearly $180,000 council salary. Brazeman and Galperin called it an example of "double dipping" that should be eliminated.


That brought a forceful response from Zine, who shot back that he gives a big portion of his police pension check to charities.


"I am so tired of hearing 'double dipping,' " he said. "I worked 33 years on the streets of Los Angeles. I have given over $300,000 to nonprofits that need it.... That's what's happened with that pension."


In the same debate, Brazeman accused Zine of cozying up to a Warner Center developer by pushing for tax breaks on a project that already has been approved. The nearly 30-acre Village at Westfield Topanga project would add 1 million square feet of new shops, restaurants, office space and a hotel to a faded commercial district on Topanga Canyon Boulevard.


"The councilman proposed to give developers at Warner Center tens of millions of dollars in tax breaks even though it's a highly successful project," he said. "He wants to give it away."


City records show that less than a month after the development was approved in February 2012, Zine asked the council for a study looking at possible "economic development incentives" that could be given to Westfield in return for speeding up street and landscaping enhancements to the project's exterior.


The motion's language notes that similar tax breaks have been awarded to large projects in the Hollywood and downtown areas, and that "similar public investment in the Valley has been lacking." Westfield is paying for the $200,000 study.


Zine defended his decision before the debate audience, saying if the study finds that the city will not benefit, no tax breaks will be awarded. "If there's nothing there, then they get nothing," Zine said.


The controller serves as a public watchdog over the city's $7.3-billion annual operation, auditing the general fund, 500 special fund accounts and the performance of city departments. Those audits often produce recommendations for reducing waste, fraud and abuse.


But the mayor and the council are not obligated to adopt those recommendations, and as a result the job is part accountant, part scolder in chief. All the candidates say they will use their elective position not only to perform audits but also to turn them into action.


Their challenge during the campaign has been explaining how they will do that.


Zine, 65, says his City Hall experience has taught him how to get things done by working with his colleagues. He won't be afraid to publicly criticize department managers, he said, but thinks collaboration works better than being combative.


"You can rant and rave and people won't work with you," he said. "Or you can sit down and talk it out, and you can accomplish things."


Galperin, 49, considers himself a policy wonk who relishes digging into the details to come up with ways to become more efficient with limited dollars and to find ways to raise revenue using the city's sprawling assets. For instance, the city owns two asphalt plants that could expand production and sell some of its material to raise money to fix potholes, he said.


He's served on two city commissions, including one that found millions of dollars in savings by detailing ways to be more efficient. Zine is positioning himself as a "tough guy for tough times," but the controller should be more than that, Galperin said.


"What we really need is some thoughtfulness and some smarts and some effectiveness," he said. "Just getting up there and saying we need to be tough is not going to accomplish what needs to be done."


Brazeman, 46, started his own marketing and public relations firm in West Los Angeles a decade ago and became active in city politics over his discontent with a development project near his home. He has pushed the council to change several initiatives over the last five years, including changes to the financing of the Farmers Field stadium proposal that will save taxpayer dollars, he said.


As controller, he would pick and choose his battles, and, Brazeman said, be "the right combination of constructive, abrasive and assertive."


catherine.saillant@latimes.com





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Lawyer says Lohan committed to turning life around


LOS ANGELES (AP) — Lindsay Lohan is committed to turning her life around and wants to record public service announcements on the dangers of domestic violence, alcohol abuse and drunken driving, her attorney said Wednesday.


Mark Heller told The Associated Press that the actress' plans are independent of a criminal case that could return her to jail on charges that she lied to police about being a passenger in her car when it slammed into a dump truck in June.


The "Liz & Dick" star has been repeatedly sentenced to jail, rehab, and community service since her first pair of arrests for driving under the influence in 2007. She spent several months in court-ordered psychotherapy until a judge released her from supervised probation in March 2012.


As part of the intense psychotherapy sessions, Lohan is in the beginning stages of trying to become an inspirational speaker to young people, he said.


"I think she suddenly woke up one morning and had an epiphany and she suddenly realized and appreciated the seriousness of the events that led to her being in court," Heller said.


"She's going to try to inspire hope in people," he said. "I think it will be good for her. It certainly won't hurt others."


Heller mentioned Lohan's intent to become an inspirational speaker in a letter to prosecutors and a judge that was obtained Tuesday. He said he will meet with prosecutors on Friday to try to reach a resolution in Lohan's newest case, which includes misdemeanor charges of reckless driving and obstructing officers from performing their duties.


She has pleaded not guilty. Lohan, 26, was on probation at the time of the crash and faces up to 245 days in jail if a judge determines her conduct violated her probation in a 2011 necklace theft case.


Officers suspected alcohol might have been involved in the June accident on Pacific Coast Highway, but the actress passed sobriety tests at a hospital and she was never charged with driving under the influence.


Santa Monica police Sgt. Richard Lewis said officers did not give Lohan a field sobriety test at the accident scene because she and her assistant were injured in the crash and were taken to a nearby hospital. While officers could not rule out that Lohan might have been drinking, he noted that she did not show signs of impairment.


Celebrity web site TMZ, citing anonymous sources, reported Wednesday that a bottle of alcohol was found next to Lohan's sports car after the crash. Lewis said he could not discuss evidence in the case, but noted that the actress was not charged with drunken driving.


Heller wrote in a motion filed last week that officers found a bottle that they initially thought was urine, but might have contained wine. His filing, which seeks a delay or dismissal of charges against the actress, states that "upon information and belief" the bottle's contents were never tested.


Lohan's case returns to court on Friday, although the actress is not required to attend.


Heller is asking a judge to dismiss the case against Lohan because officers ignored the actress' request to talk to her attorney before being interviewed, court records show. He said he is prepared to defend Lohan at trial if necessary, but is hoping a deal can be worked out. He is seeking a delay in the case to have time to prepare and allow Lohan to demonstrate she is improving her life.


Threats from judges and jail sentences that are invariably cut short because of overcrowding haven't helped Lohan, Heller said. "None of it really brought closure to this predicament that led to this most recent event."


___


Anthony McCartney can be reached at http://twitter.com/mccartneyAP


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Global Health: After Measles Success, Rwanda to Get Rubella Vaccine


Rwanda has been so successful at fighting measles that next month it will be the first country to get donor support to move to the next stage — fighting rubella too.


On March 11, it will hold a nationwide three-day vaccination campaign with a combined measles-rubella vaccine, hoping to reach nearly five million children up to age 14. It will then integrate the dual vaccine into its national health service.


Rwanda can do so “because they’ve done such a good job on measles,” said Christine McNab, a spokeswoman for the Measles and Rubella Initiative. M.R.I. helped pay for previous vaccination campaigns in the country and the GAVI Alliance is helping to finance the upcoming one.


Rubella, also called German measles, causes a rash that is very similar to the measles rash, making it hard for health workers to tell the difference.


Rubella is generally mild, even in children, but in pregnant women, it can kill the fetus or cause serious birth defects, including blindness, deafness, mental retardation and chronic heart damage.


Ms. McNab said that Rwanda had proved that it can suppress measles and identify rubella, and it would benefit from the newer, more expensive vaccine.


The dual vaccine costs twice as much — 52 cents a dose at Unicef prices, compared with 24 cents for measles alone. (The MMR vaccine that American children get, which also contains a vaccine against mumps, costs Unicef $1.)


More than 90 percent of Rwandan children now are vaccinated twice against measles, and cases have been near zero since 2007.


The tiny country, which was convulsed by Hutu-Tutsi genocide in 1994, is now leading the way in Africa in delivering medical care to its citizens, Ms. McNab said. Three years ago, it was the first African country to introduce shots against human papilloma virus, or HPV, which causes cervical cancer.


In wealthy countries, measles kills a small number of children — usually those whose parents decline vaccination. But in poor countries, measles is a major killer of malnourished infants. Around the world, the initiative estimates, about 158,000 children die of it each year, or about 430 a day.


Every year, an estimated 112,000 children, mostly in Africa, South Asia and the Pacific islands, are born with handicaps caused by their mothers’ rubella infection.


Thanks in part to the initiative — which until last year was known just as the Measles Initiative — measles deaths among children have declined 71 percent since 2000. The initiative is a partnership of many health agencies, vaccine companies, donors and others, but is led by the American Red Cross, the United Nations Foundation, the Centers for Disease Control and Prevention, Unicef and the World Health Organization.


This article has been revised to reflect the following correction:

Correction: February 27, 2013

An earlier version of this article misstated the source of the vaccine and some financing for the campaign. The vaccine and financing is being provided by the GAVI Alliance, not the Measles and Rubella Initiative.




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Bernanke says Fed's bond purchases are needed to boost economy









Facing criticism from Republican lawmakers, Chairman Ben Bernanke stood behind the Federal Reserve's low-interest-rate policies and sought to reassure members of Congress that the central bank has a handle on the risks.


In his second day of testimony on Capitol Hill, Bernanke told members of the House Financial Services Committee on Wednesday that the Fed's bond purchases are needed to boost a still-weak economy and that they have helped create jobs for average Americans.


The bond purchases are intended to lower long-term interest rates. That encourages more borrowing and spending, which generates growth.





Still, some Republicans warned that by continually pumping more money into the financial system, the bond purchases could eventually ignite inflation.


"We have gone too far in monetary policy and the monetary easing, and it is, in this member's opinion, time to pull back," said Rep. Gary G. Miller (R-Diamond Bar).


Bernanke said the Fed is weighing the costs and benefits of its bond purchases. He noted that the Fed has a dual mandate: to both maximize employment and maintain low inflation.


His remarks during his semiannual monetary report to Congress largely repeated comments he made a day earlier to a Senate panel.


The Fed chairman argued that the Fed's low-interest-rate policies are giving crucial support to an economy still burdened by high unemployment. He also acknowledged the risks of keeping rates low indefinitely. But he expressed confidence that such risks pose little threat now and gave no signal that the Fed might shift away from those policies.


The aggressive program to buy $85 billion a month in Treasurys and mortgage bonds had kept borrowing costs low, he said. And that, in turn, has helped strengthen sectors such as housing and autos, he said. Still, unemployment remains high at 7.9%.


Bernanke rejected a suggestion by Rep. John Campbell (R-Irvine) that the Fed's policies were mainly helping the federal government with its borrowing needs and big banks and foreign governments.


"This is very much focused at the average American citizen," Bernanke said. "Our estimates are that we've helped create many private-sector jobs.… People are able to buy houses at very low mortgage rates, refinancing at low mortgage rates. People are able to get car loans at low rates."


The low borrowing costs have boosted demand, Bernanke said, and that has helped to lift home prices, making homeowners feel more financially secure.


"In a lot of dimensions, we have, I think, benefited Main Street and that's certainly our objective," Bernanke said.





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