Kindle Edition, 2013 © Time Inc.

The Myth Of Financial Reform.
Five years after the crisis, growth is back, but risks remain. What's needed to finish the job and keep your money safe

CHRISTOPHER ANDERSON--MAGNUM

Rana Foroohar | 2479 words

Five years on from the financial crisis, the disaster that was Lehman Brothers and its brutal, economy-shredding aftermath can seem a distant memory. We're out of the Great Recession, and growth is finally back. America's biggest banks are making record profits. The government is even earning money from its bailouts of institutions like AIG, Fannie Mae and Freddie Mac. The Obama Administration, which is pushing hard to complete the new financial rules mandated by the Dodd-Frank reform act deserves credit for making our financial system safe--or that's the line being tossed around by current and past members of the crisis team.

But amid all the backslapping, a larger truth is being lost. The financialization of the American economy, a process by which we've become inexorably embedded in Wall Street, just keeps rolling on. The biggest banks in the country are larger and more powerful than they were before the crisis, and finance is a greater percentage of our economy than ever. For a measure of this, look no further than the Dow Jones industrial average, which just ditched Alcoa, Hewlett-Packard and retail lender Bank of America in favor of the most high-flying investment bank of all, Goldman Sachs.

Given all this, is your money really any safer over the long haul than it was five years ago? And have we restructured our financial industry in a way that will truly limit the chances of another crisis? The answer is still not an unequivocal yes, because banking is as complex and globally intertwined as ever. U.S. financial institutions remain free to gamble billions on risky derivatives around the world. A crisis in Europe, for instance, could still potentially devastate a U.S. institution that made a bad bet--and send shock waves through other key sectors, like the $2.7 trillion held in U.S. money-market funds, much of which is owned by Main Street investors who believe these funds are just as safe as cash.

Although this scenario isn't necessarily probable--many U.S. banks have reduced risk and increased capital--it is possible. We're relying on the banks' good intentions and self-interest, a strategy that didn't work out so well before. The truth is, Washington did a great job saving the banking system in '08 and '09 with swift bailouts that averted even worse damage to the economy. But swayed too much by aggressive bank lobbying, it has done a terrible job of reregulating the financial industry and reconnecting it to the real economy. Here are five things that are still badly needed to reduce the risks for everyone.

No. 1

Fix the Too-Big-To-Fail Problem

When the meltdown struck, everyone was forced to confront the concept of "too big to fail"--the idea that some banks are so large and so integral to the economy that they must be bailed out at any cost to avert systemic catastrophe. Crisis after crisis over the past year or so--from JPMorgan Chase's $7 billion in losses from wagers by the trader nicknamed the London Whale to the revelations about how some banks rigged the critical LIBOR interest rate--has proved that trouble at big institutions can still affect the broader economy and that Wall Street is as unconcerned with the fortunes of Main Street as ever.

A simpler bank is a safer bank. Yet the banking lobby has spent hundreds of millions of dollars beating back regulatory efforts to scale down the size and complexity of banking operations. Thanks in part to heavy lobbying by the financial industry, only 40% of the new rules called for by Dodd-Frank have been written. No wonder banks have bucked the regulation; it might require them to focus more on lower-profit lending to businesses that create jobs rather than risky but potentially far more profitable proprietary trading. "The too-big-to-fail problem hasn't ended," says economist and MIT professor Simon Johnson. "Banks are just as complex and global and even bigger than they were before the crisis."

It's a statement that even many bankers, including former Merrill Lynch CEO John Thain and former Citigroup head Sandy Weill, agree with. Dodd-Frank creates something of a road map for winding down failing U.S. banks, but a lack of international standards (a void that also reflects bank lobbying) means there's still no easy way to wind down global financial institutions.

Worse, some may now be too big to manage, meaning internal and regulatory safeguards are overwhelmed by the complexity of trading operations. Experts including The Black Swan author Nassim Nicholas Taleb and Stanford finance professor Anat Admati have written that banks can twist data to make predictions ungrounded in the real world yet sufficient to pass government-mandated stress tests.

One solution: the Volcker rule, proposed by former Fed chairman Paul Volcker, which would separate government-insured commercial lending from risky trading operations. "We need firewalls between risky trading and federally backed commercial lending, period," says former FDIC chairwoman Sheila Bair. "Banks need the markets to fund risky trading--not individuals' deposits." It's an obvious move to limit taxpayer liability, but so far, the rule remains unwritten and may not be implemented for years.

No. 2

Limit the Leverage

Banks can't function without leverage, or the ability to borrow more money than they can immediately repay. So when sizing up a bank, one critical measure is its leverage ratio, which reflects the amount of high-quality, loss-absorbing, bank-owned capital available to repay those loans when needed. Too little leverage can constrict operations; too much means a high risk that the bank won't be able to meet its obligations if they are called in.

Since the crisis, some of the largest U.S. banks have raised the amount of capital they have to offset risk. Leverage ratios are down slightly from their precrisis peak. But many experts say we haven't come nearly far enough. When banks do business with higher ratios of debt, it can multiply the negative effect on the economy when trades go bad. "It's crazily irresponsible not to do more to limit leverage," says Princeton professor and former Federal Reserve vice chairman Alan Blinder, whose new book After the Music Stopped looks at the causes of the crisis and the risks that remain. FDIC vice chairman and bank-reform advocate Thomas Hoenig agrees and says the common Wall Street argument that limiting leverage will keep banks from lending more money to real businesses is bunk. If higher leverage boosts lending, he wrote in a recent Financial Times op-ed, "it does so at the taxpayer's expense ... by making large banks--and the real economy--more vulnerable to shocks." Indeed, there's evidence that banks with more capital are better able to maintain lending throughout cycles of boom and bust.

Leverage is "the elephant in the room," says Stanford's Admati, whose book The Bankers' New Clothes makes a powerful case for why banks should stop borrowing so much. Banks complain about proposed rules from the FDIC and the Federal Reserve that would require them to use a mere 5% of their own money on risky deals, when most of the rest of corporate America wouldn't dream of borrowing even 50% relative to assets, never mind 95%. "Banks have managed to convince us that they deserve special treatment," says Admati, often by invoking complicated arguments and using insider lingo. Indeed, it's worth remembering that what bankers refer to as cash is very often debt: the deposits they hold for other people. Admati would like to see regulators require that banks use more like 20% or 30% of their own money to do their daily business. "If banks want to trade," he says, "they should be forced to gamble with their own money."

No. 3

Expose Weapons Of Mass Financial Destruction

Warren Buffett once dubbed derivatives--the complex spliced-and-diced securities that blew up the financial system back in 2008--weapons of mass financial destruction because of the way they allowed small risks to multiply and spread around the global financial system. Remember those credit-default swaps that allowed subprime-mortgage risk to ricochet from Arizona to Iceland and back?

Commodity Futures Trading Commission (CTFC) chairman Gary Gensler has fought the good fight for stricter regulation of derivatives, bringing roughly half the interest-rate-swaps market (which was central to the crisis) out of the darkness and through central clearinghouses in the U.S. The CFTC has also made big progress on real-time reporting and registration of brokers. But it's been a long, hard slog, and thanks to its relentless lobbying of Congress and the Administration as well as regulators in the U.S. and overseas, Wall Street succeeded in carving out important loopholes in the Dodd-Frank derivatives rules. The loopholes make it possible, for example, for banks and hedge funds to continue their opaque, risky trading of complex securities like foreign-exchange derivatives in international markets--which means that fish as big as or bigger than the London Whale can keep diving, unseen, into the deepest and riskiest financial waters.

Gensler is a former Goldman Sachs derivatives expert who was working for then Treasury Secretary Robert Rubin in 1998 when the implosion of hedge fund Long-Term Capital Management (LTCM) threatened to bring down the U.S. financial system. The culprit: a $1.25 trillion swaps portfolio gone bad. Gensler remembers going out to LTCM's headquarters on a Sunday to investigate. "It quickly became clear to me that we had no idea what the ramifications would be in our financial system, and where, because these trades were booked in the Cayman Islands," he says. "It was a terrible feeling."

Gensler has made it a lot harder for U.S. financial institutions to hang their dirty laundry in the Caribbean. But weapons of mass financial destruction are still very much with us. "The banks got exactly what they wanted," says MIT's Johnson.

No. 4

Bring Shadow Banking Into the Light

One of the ways in which banks successfully lobbied to keep themselves more loosely regulated was by claiming that if they didn't do the risky trading, somebody else--like an even more loosely regulated hedge fund--would. Better to keep these trades out of the shadows and in the mainstream of Wall Street, or so the financiers' argument goes. But the idea that if banks were more tightly regulated, risk would migrate into the shadow banking world is nonsensical, since it's already there--evidenced not only by debacles like the one at Long-Term Capital Management but also by the trouble brewing today in areas as seemingly vanilla as money-market funds. Though they aren't FDIC-insured, many people think of them as the next best thing to cash.

Yet they are hardly risk-free. Indeed, as MIT's Johnson points out, the Lehman Brothers crisis resulted in at least one fund "breaking the buck," or returning less than 100% of investors' money, though in this case the losses were mostly absorbed by large institutions rather than individuals. That could change the next time around, which is why the SEC has proposed new rules for money-market funds in order to make them safer. But again, the financial industry has opposed them, citing higher costs that would reduce returns. The result is a glacial pace of reform. Proposed rules may well die or get watered down to nothing. "Shadow banking, including areas as seemingly innocuous as money-market funds, is spreading risk and volatility in the system," says Rob Johnson, head of the Institute for New Economic Thinking. Regulating Wall Street and shadow banking shouldn't be an either-or proposition--both need better oversight.

No. 5

Reboot the Culture Of Finance

Banking was created to serve the real economy, not the other way around. But the U.S. economy has gone so far down the path of financialization, becoming so deeply embedded in and beholden to Wall Street, it's hard to remember that the original business of banks was very simple: lending to real people and businesses. The biggest banks make up a larger share of GDP than before the crisis. Yet access to credit for individuals and the small businesses that create the majority of new jobs remains tight, and economic growth remains below its long-term trend level.

During the financial crisis we were told we had to grease the wheels of banking in order to keep the rest of the economy on track. That has proved wrong. Academic studies show that as finance has grown to be a larger percentage of the economy over the past 30 years, new-business creation has actually stagnated. Banks got bailed out; the real economy is still waiting. Many core problems of the crisis remain: for example, government-sponsored enterprises like Fannie Mae still back 90% of home mortgages, and it's not clear that the structures to support a healthy private system are yet in place.

Academics like University of Texas professor and financial-crisis expert James Galbraith worry that in the age of high-frequency trading and global banking, lending to the real economy has become a relatively less attractive business model. "As the economist Hyman Minsky once put it, 'If you want small business, you need smaller banks,'" says Galbraith.

We may not get those anytime soon. But there are still some things that we can do to bring finance back in line with the rest of America. For starters, we could devise a better system for conducting the credit ratings of banks, one that doesn't involve credit agencies being paid by the very banks that they rate. (Unbelievably, this is still the case, five years on from the crisis.) We could get rid of the revolving door between Wall Street and Washington by compensating regulators appropriately rather than asking people earning five figures to police those making seven. "We should drastically increase the pay of our senior financial regulators so that they don't want--or need--to go back and forth from Wall Street to the public sector," says INET's Rob Johnson. Indeed, the money you'd likely save in preventing financial blow-ups via better regulation would be worth the expenditure.

We could also hold financiers more personally accountable for their actions. Columbia professor and Nobel laureate Joseph Stiglitz believes, along with a number of other academics, that CEOs of major banks should be legally culpable for bad deals. (Rules from 2002's Sarbanes-Oxley Act require the same for much of the rest of corporate America.) "If we had been able to put some people in prison, many fewer would have wanted to join in the bad behavior the next time around," says Stiglitz.

It's a sad fact that some of the most cynical things that went on in the lead-up to the financial crisis, like banks making derivative bets against their own clients, were in fact perfectly legal. But other actions--including bankers' writing mortgages that they realized would go bad or risk managers' looking the other way during compromising deals--could have been prosecuted more vigorously. Higher abuse penalties and more vigorous prosecution may not make up for the fact that the structure of our banking system still isn't what it should be, five years on from the worst crisis in 70 years. But it would start to change the economics of malfeasance. If the past five years have taught us anything, surely they have showed that small losses can easily result in something much, much bigger.

10 Questions.
Singing, dancing, weight-lifting actor Hugh Jackman on coffee, his biggest fears and wearing skirts to school

JACKMAN: LARRY BUSACCA--GETTY IMAGES

Belinda Luscombe | 643 words

The upcoming Prisoners is darker than your usual films. Are you risking your Mr. Nice Guy reputation?

The risk for me is constantly being considered Mr. Nice Guy, Mr. Wholesome. Labels are the enemy. I'm particularly drawn to this character, maybe as a parent. I love looking at how people react under almost melodramatically extreme situations. As an actor, that's the ultimate stretch.

Your character tortures a guy to try to find his kidnapped daughter. Does a similar instinct kick in, say, when photographers follow your family?

With paparazzi, I'm constantly trying to see my kids' view of the situation--that if I start flipping the bird or throwing punches, how frightening it would be for them. So I'm constantly sitting on it. But am I angry? Yeah. Would I like to handle it differently? Yes.

You play a survivalist. Do you have that mind-set at all? Stockpile anything?

I'm the opposite. I don't know if it's being the youngest of five kids, but I'm famously trusting. And I'm a typical actor: someone picks me up in the morning, they give me something to wear, tell me what to say, feed me and send me home.

No jars of Vegemite?

I do have some Vegemite, and some Tim Tams. But does that classify me as a survivalist or just an aesthete?

As this decent, religious guy who tries to do the right thing but when pushed to the edge does the unthinkable, is your character like the U.S.?

I'm not sure if that ever crossed my mind. But when something traumatic happens, that thing which holds you prisoner, that inner fear, comes out. And that fear dictates your behavior. I suppose what exists in the psyche of the human probably exists in the psyche of communities and nations.

What were you afraid of as a kid?

I was afraid of heights. I was afraid of the dark. If I was the first one home, I would not go into the house till someone else was home. I remember we were in New Zealand and I must have been 10, but I was nervous to go down this slide. That's when I started to realize that fear holds you back. So I went to the school diving board every lunchtime and jumped off the 1-m [3 ft.] board, the 3-m [10 ft.] board and the 5-m [16 ft.] board to get over it. Now I have no fear, which is probably a bad thing.

Recently you tweeted a picture of yourself lifting what looked like 405 lb. Were you showing off?

It was probably a moment of hubris. It just made me laugh when I saw it--I'm going red as we speak. It's a dead lift--and for my ego, a little heavier than 405.

The school you went to in Sydney was famous for its bagpipes and kilts. Were you a bagpipes-and-kilts guy?

I wasn't a bagpipe guy, but I was a kilt guy--and had to endure endless ribbing on the train. Every Friday, if you were in the cadets--the school army--you had to wear the kilt. It wasn't traditional kilt wearing; there was underwear involved. Just to clear that up for everybody.

What made you think you could be both a badass superhero type and a theater darling?

There's no luxury of genre in Australia--you have to be versatile, or you don't pay your rent. But I just overheard Oscar, my son who's 13, telling a friend, "Enough about my dad, all right? The truth is he's nothing like Wolverine. He's not cool, he's not tough, he's nothing like that."

You have a coffee company, Laughing Man. Do you ever go to the café and steam milk?

No, I'm bad at it. I'm allowed to take photos with people. I'm allowed to stand behind [the baristas]. But I'm not allowed to touch the machine.

FOR VIDEO OF THIS INTERVIEW (WITH SINGING!), GO TO time.com/10questions

Briefing

KERRY: AP

260 words

THE WEEK

SYRIA CONFIRMED IT HAS CHEMICAL WEAPONS

'He isn't about to do it, and it can't be done.'

JOHN KERRY, U.S. Secretary of State, alleging that Syria's President would never turn over his chemical weapons; Kerry was expected to meet with his Russian counterpart to discuss the issue

60%

Increase in ice-covered ocean water since last year, leading some scientists to believe that the planet is actually undergoing "global cooling"

29.4 in 1,000

Record-low birthrate among U.S. teens, down from 31.3 in 1,000 two years ago

'We remember who caused nine-one-one in America.'

MICHELE BACHMANN, in Egypt, suggesting--without new evidence--that the Muslim Brotherhood may have been responsible for the Sept. 11 terrorist attacks

Mercedes-Benz

Teamed up with Nokia to make 3-D maps for self-driving cars

GOOD WEEK

BAD WEEK

Toyota

Had to recall 780,000 vehicles after failing to fix a suspension problem

'THE IPHONE 5C IS BEAUTIFULLY, UNAPOLOGETICALLY PLASTIC.'

PHIL SCHILLER, Apple senior VP, announcing the company's cheapest model ever; it will sell for as low as $99 (16 GB) with a two-year contract

4,000

Number of marijuana cigarettes expected to be handed out at a Denver rally in protest over proposed high taxes on legal pot

'The Nazis did have flaws, but, you know, they did look ...fantastic.'

RUSSELL BRAND, at GQ's Hugo Boss--sponsored Men of the Year Awards, lampooning the clothier for manufacturing Nazi uniforms during World War II; he was promptly asked to leave

'The word solidarity frightens people in the developed world.'

POPE FRANCIS, saying poor people and refugees should be embraced by all church members--and even housed in unused churches--as opposed to being feared and looked down upon

Sources: Washington Post; ITN News; Chicago Tribune; YouTube; Reuters (2)

LightBox

Photograph by Mark Lennihan--AP

43 words

To the Fallen

A test of Tribute in Light sends beams high into the sky against the backdrop of lower Manhattan on Sept. 10. The annual display commemorates the victims of the Sept. 11, 2001, terrorist attacks.

FOR PICTURES OF THE WEEK, GO TO lightbox.time.com

World

SYRIA: BALKIS PRESS/ABACA

Assad is interviewed by a reporter for Le Figaro in Damascus on Sept. 1

Cleo Brock-Abraham, Andrew Katz, Aryn Baker/Beirut | 775 words

Assad Starts to Lose Grip on His Militias

BY ARYN BAKER/BEIRUT

As the threat of an imminent U.S. attack dims, supporters and officials of Syrian President Bashar Assad's regime quietly worry that his feared shabiha (ghost) fighters may spin out of control. "Assad is saying, 'Let me win first, then I will deal with them,'" one regime official told Time on the condition of anonymity. "But I don't see how. They could last for decades."

The West rightly fears the rising power of antiregime militias--some of which have ties to al-Qaeda--but less attention has been paid to those mustered by Assad. The longer the war rages, the more difficult it will be to control them. Most are funded by local businessmen or religious leaders vying for government favor. They originated in the organized-crime networks of Latakia province, where Assad's Alawite sect dominates. But now they're just as likely to be Sunni, Kurdish or Eastern Orthodox Christian. And if their leaders refuse to comply with a future political resolution--distant, at this point--Syria could be further shredded by factional fighting, like Afghanistan in the early 1990s before a widespread backlash against the warlords there led to the rise of the Taliban.

Assad recently claimed that the rebels fighting his regime are mostly from al-Qaeda and warned of catastrophe should the fractious opposition militias have their way with Syria. But if his shabiha similarly splinter, the next Syrian crisis could be one of his own making.

NORTH KOREA

'He's my friend for life--I don't care what you guys think.'

DENNIS RODMAN, former NBA star, on North Korean leader Kim Jong Un; he plans to train the country's 2016 Olympic basketball team

DATA

WORLD'S HIGHEST 'VANITY' SKYSCRAPERS

The Council on Tall Buildings and Urban Habitat found that many landmarks have lots of unoccupiable space thanks in part to spires.

Burj Khalifa Dubai 29% unoccupiable

Zifeng Tower Nanjing, China 30%

Emirates Tower One Dubai 32%

Bank of America Tower New York City 36%

The Explainer

How Japan Plans to Profit From the 2020 Olympics

Tokyo kept its bid under $8 billion--less than half of Istanbul's--in the hopes of a $30 billion economic boost from its hosting duties. This would be a crucial boon as the world's third largest economy grapples with tepid growth and massive debt. Its mission: spend the rest of the decade leveraging the facilities and intel amassed during its last Summer Games--in 1964.

RETROFITTED STADIUMS

THEN: In 1964, venues like Yoyogi National and Tokyo Metropolitan gymnasiums hosted tournaments for swimming, basketball and gymnastics, among other sports.

NOW: They'll be refurbished for table tennis and handball.

COST-FRIENDLY OLYMPIC VILLAGE

THEN: Renovating a former U.S. military housing compound for 6,600 athletes reportedly cost more than housing for the first nine modern Olympics combined.

NOW: The $955 million, 17,000-bed complex planned for Tokyo Harbor will later be converted to a residential community.

STREAMLINED TRANSPORTATION

THEN: Tokyo introduced the world's first high-speed bullet train to shuttle visitors and athletes between competitions.

NOW: It'll continue to update that technology--some wait times are as low as two minutes during rush hour--and renovate stations to be accessible to the elderly, disabled and children.

Not So Fast

INDIA

Policemen run past colored-water cannons as they chase Kashmirian government employees before detaining dozens of them at a protest in northern Srinagar on Sept. 9. Answering the call of a coalition of trade unions, hundreds of workers tried to march toward the Civil Secretariat--and were blocked--as they demanded a higher retirement age, regularization of temporary jobs and a pay boost.

SWITZERLAND

18 Minimum legal age expected to be adopted for prostitution, up from 16 (the age of consent)

Three Challenges Facing

Australia's New Prime Minister

After six years of Labor Party rule, Tony Abbott and his conservative Liberal-National coalition triumphed in the federal election on Sept. 7. Here's a look at the issues the new Prime Minister--elect and his government will have to tackle:

Immigration

With record numbers of people attempting to seek asylum in Australia, Abbott has proposed a new policy that will turn away boats of would-be residents from countries like Indonesia.

China Tangle

Abbott will have to juggle Australia's lucrative economic relationship with China and its loyalty to the U.S., whose new Asia-Pacific policy seeks to counter China's regional influence.

Legislating

Despite a majority for Abbott's party in the House, single-issue parties like the Australian Sports Party will dominate the Senate, meaning he could have a tough time pushing through his legislative agenda.

Trending In

+

JOBS

Most of the 80,000 South African gold miners who picketed for better pay went back to work with an 8% raise

FILM

The Italian-made Sacro GRA became the first documentary to win the Golden Lion at the Venice Film Festival

GEOLOGY

Scientists discovered the world's largest underwater volcano (119,000 sq. mi.) some 4 miles below sea level east of Japan

ANIMALS

Romania plans to capture and kill thousands of stray dogs after a young boy was mauled

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Photo-Bombing for Peace
How an antiwar protest group learned to hack Congress

CODE PINK: GETTY IMAGES (4), AP (2)

Colorful protest The theatrics of protesters like Benjamin, holding signs at center, have helped promote the activist group's message

Alex Altman | 811 words

Medea Benjamin's capitol Hill townhome is like a life-size version of Barbie's Dreamhouse: pink door, pink cabinets, pink bedspread, pink chairs. It is festooned with peace slogans and painted in hues of salmon and coral. Benjamin, 61, is the co-founder and chief provocateur of the antiwar group Code Pink. At 7 a.m. on Sept. 9, she was preparing for a day of protest against U.S. military intervention in Syria when three women trickled downstairs for breakfast. "Even if we don't win," she says, "we change the game."

Since its inception in 2002, Code Pink has added a colorful page to the protest playbook. Its members have demonstrated topless, hurled shoes at an effigy of George W. Bush, organized dancing flash mobs and donned vagina costumes. But these zany theatrics mask the group's real contribution to the protest canon: Code Pink has figured out a hack for Congress.

For all its flaws, the Legislative Branch is the only arm of government that allows ordinary citizens to show up and watch as the nation's business unfolds, ever so slowly. Opening its doors to even the best-known troublemakers is not a bug in the system but rather a philosophical pillar.

"It's an amazing feature" of Congress, says Benjamin, who has crashed more than 100 hearings. "It's getting harder to reach our government. Maybe Congress is the one exception."

Publicity is the lifeblood of an activist movement, and Congress has proved an ideal spot to generate it. Code Pink's tactic is simple: it shows up at hearings to confront the powerful whenever it can find a camera to document the clash. All the formula requires is a protester with the time to stand in line and the will to make a scene.

When John Kerry went to the House Foreign Affairs Committee on Sept. 4 to present the case for military action in Syria, Code Pink was ready. "The world is watching," Kerry said. If so, it saw more than just the Secretary of State. Behind Kerry's head were the red-stained palms of Code Pink protesters, carefully positioned to catch the cameras carrying the shot around the globe.

Congressional security has long been wise to Code Pink's antics. But it "respects and protects the First Amendment and supports groups" that wish to peacefully assemble, says Capitol police spokesman Shennell Antrobus. Even when it is obvious that a disruption is coming, members of Congress never prevent the group from grabbing seats in a hearing room.

As Congress weighs whether to authorize military force against Bashar Assad's government, Code Pink has launched a frenetic campaign to piggyback on the publicity. That means lobbying wavering Representatives with phone calls. It means leafleting outside House buildings and inside its cafeterias. And it means promoting peace with its typically outré approach.

"You can't work inside the box," explains Diane Wilson, a shrimper from Seadrift, Texas, who recently escaped with probation and a paltry fine after punctuating a 57-day hunger strike over Guantánamo Bay policies by scaling a White House fence. Says Benjamin: "You can get away with a lot as an older woman."

When Benjamin moved to Washington five years ago, the antiwar movement was surfing a wave of momentum built from Bush's military adventures. Code Pink had a mailing list of 200,000 members and a rented clubhouse on Capitol Hill where peaceniks could gather.

But many interpreted the election of an antiwar President in 2008 as a cue to pack up their signs. Most failed to notice when Barack Obama adopted large swaths of his predecessor's foreign policy. Not Benjamin, who heckled Obama when he gave a speech on drone policy in May.

When the debate over U.S. military intervention in Syria erupted, "we put everything else on hold," says Benjamin, a petite woman with blond bangs. Her daughter had just arrived in Washington from overseas, along with her new husband. Benjamin doesn't expect to see them much during the visit. "Maybe dinner," she says with a shrug.

If Bush was good for business, running a liberal protest movement under a Democratic President has been an uphill battle. Code Pink has few full-time activists now, and its members pay their own way on protest trips. "We often take a minority position," Benjamin concedes. "But we feel very deeply about these issues."

This time, however, the American public is on her side. A recent Pew survey found that just 28% of respondents supported launching missiles into Syria to punish Assad. As Code Pink rallied between the Capitol and the Longworth House Office Building, cars speeding down Independence Avenue honked their horns at banners preaching peace. A small group of protesters hoisted signs and chanted slogans. Benjamin wore a DON'T BOMB SYRIA belt and cradled a laptop. At 8:30 a.m., under gray skies, she stepped to a microphone. "Good morning, Congress!" she began. "What a beautiful day to stop a war!"

The Ad That Bit The Big Apple

DE BLASIO FAMILY: REUTERS

Eliza Gray | 346 words

Twelve years, evidently, was enough. After three terms under Mayor Michael Bloomberg, New Yorkers took the first steps toward electing his successor on Sept. 10. Bill de Blasio, the city's public advocate, handily took first in the Democratic primary. Joe Lhota, a former city-transit boss and top aide to Rudy Giuliani, won the Republican race.

A long shot at the outset, de Blasio portrayed himself as the populist antidote to a billionaire mayor, with a plan for taxing the wealthy to aid the middle class. A well-timed sexting scandal that torpedoed Anthony Weiner's candidacy helped. But nothing may have boosted him more than a 30-second TV ad featuring his biracial son Dante. The ad humanized de Blasio's message and made a viral star out of his teenage son--and his son's hairstyle. "Everybody is talking about Dante's Afro," says former Bloomberg aide William Cunningham. "After 20 years of Bloomberg and Giuliani, [New Yorkers] were ready for a change, and de Blasio gave them a very distinct picture of what his change would look like."

Mile-High Mutiny
Voters deliver a blow to gun control and Colorado's liberal shift

ILLUSTRATION BY SAM ISLAND FOR TIME

David Von Drehle | 393 words

Any wind still left in the sails of gun-control advocates likely died--at least for now--when Colorado voters successfully recalled two state senators on Sept. 10. This stern punishment came after state lawmakers toughened regulations on background checks and limited the size of ammunition magazines.

The vote was a rout. New York City Mayor Michael Bloomberg led a team of deep-pocketed out-of-towners in trying to rescue state senate president John Morse and his colleague Angela Giron, both Democrats. But the grassroots rebellion, fanned and funded by the National Rifle Association and other conservative groups, was more motivated. Said Bernie Herpin, the Republican who unseated Morse: "We don't need some New York billionaire telling us what size soft drinks we can have, how much salt to put on our food or the size of the ammunition magazines on our guns."

The day before, Colorado became the first state to adopt the regulations necessary to set up a market for legal marijuana sales, which speaks to the rise of libertarians demanding less government of all kinds.

Colorado has been a success story for liberals in recent years as migration and immigration have swelled Front Range cities like Denver and Boulder. Shaken by the Columbine rampage and the Aurora movie-theater massacre, statehouse Democrats answered President Obama's State of the Union call for new gun-control measures early this year.

That's when they discovered that the West still has a wild streak. Applications to buy firearms jumped by more than 80,000 from the same period a year earlier as citizens rushed to beat the July 1 deadline of the new law. Sheriffs in 54 of Colorado's 64 counties joined a lawsuit challenging the measures as unworkable and unconstitutional. And the recall caught fire in blue collar Pueblo and conservative Colorado Springs, where the liberal tide was never very strong.

No matter how the results are interpreted, though, the uprising will send a message to lawmakers across the country--and not just about gun control. Recall elections are much easier to organize in the Internet age. In Colorado's 137-year history, no lawmaker had been successfully recalled until Morse and Giron made it two in one night.

Which is why the GOP never got very enthusiastic about ousting the two Democrats. As Tim Knight, a leader of the uprising, told one interviewer, "The Republicans don't want anything to do with us because they think, Next they'll recall us."

Wrist Wars

SONY SMARTWATCH 2: SONY

Harry Mccracken | 318 words

For months, there have been rumors that Apple is hard at work on some sort of smart watch. If true, it's not done yet. Although the company introduced two new phones during its Sept. 10 product launch--the souped-up iPhone 5s and the plastic iPhone 5c--it didn't say a word about newfangled timepieces.

Meanwhile, competitors like Samsung and Sony--both of which debuted smart watches this summer--are eager to establish dominance in what some say is the next frontier in digital gadgetry. Wearable electronics are expected to be a $10 billion industry by 2016, according to Gartner, a research firm.

But although these watches are evolving rapidly (see right), they're not all that smart yet. They're satellites for smartphones as opposed to stand-alone devices, using Bluetooth connections to let you place calls, get alerts and more without removing the handset from your pocket. And they're bulky, with user interfaces that still need refinement. Your move, Apple.

SAMSUNG GALAXY GEAR

$300; available in October

The Good

Sports two microphones, a speaker and a camera; will offer 70 third-party apps, such as Evernote, Pocket and RunKeeper

The Bad

Will initially require Samsung's upcoming Galaxy Note 3 smartphone or Galaxy Note 10.1 tablet; is bulky and runs for only a day on a charge

QUALCOMM TOQ

About $300; available in October

The Good

Mirasol screen technology delivers legible color indoors and outdoors; the battery lasts about five days; charges wirelessly

The Bad

Requires an Android phone; component maker Qualcomm plans to sell it in limited quantities to help cultivate the smart-watch market

PEBBLE

$150; available now at Best Buy

The Good

The monochrome E Ink screen lets the watch run for up to a week on a charge; 200-plus apps and watch faces are available

The Bad

Some features don't work with the iPhone, including instant e-mail notifications

SONY SMARTWATCH 2

Available in Asia and Europe; U.S. price and sale date TBA

The Good

Sleek by smart-watch standards; water-resistant; runs more than 200 third-party apps

The Bad

Requires an Android phone; lacks the Galaxy Gear's mike, speaker and camera

Serena Williams and Rafael Nadal
U.S. Open champions

WILLIAMS: MIKE STOBE--USTA/GETTY IMAGES

Eric Dodds | 228 words

Sports rarely adhere to a predictable narrative. Favorites falter, underdogs upset, and by the end of the day you're left with fewer certainties than when it began. That was not the case at the 2013 U.S. Open.

This time, Serena Williams and Rafael Nadal--the two best tennis players in the world--did what they were supposed to do: they won.

The pair triumphed in such a convincing fashion that it's hard to believe that only two months ago some people wondered whether their best days were behind them. In late June, both fell in the early rounds of Wimbledon, but for each it was a rare stumble in the midst of an otherwise terrific season.

Williams is now 67-4 in 2013, with nine titles and two Grand Slam championships. Nadal is 60-3, with 10 titles and two Slams. But they share more than just remarkable 2013 campaigns. To capture the championship, each defeated a world-class nemesis--Victoria Azarenka for Williams, and Novak Djokovic for Nadal. And they earned those wins in Flushing, N.Y., by physically and mentally dominating their opponents.

Williams, with 17, and Nadal, with 13, now have 30 Grand Slam titles between them, including five U.S. Open championships for Williams and two for Nadal. Neither shows any sign of slowing down soon, which is great news for anyone in search of a convenient tennis narrative. For their opponents? Not quite so much.

Milestones

VAN GOGH: OLAF KRAAK--AFP/GETTY IMAGES

164 words

DIED

Judith Daniels, 74, former managing editor of LIFE and founding editor of Savvy. One of the first magazines aimed at high-earning professional women, Savvy folded in 1991.

AUTHENTICATED

Sunset at Montmajour, an 1888 Van Gogh landscape, by Amsterdam's Van Gogh Museum. Long thought to be a fake, the painting is now considered a major discovery.

DIED

David S. Landes, 89, Harvard historian whose influential book The Wealth and Poverty of Nations stressed the importance of the Protestant work ethic and the embrace of science in the success of the West.

SWAPPED

Listings in the Dow Jones industrial average, which will replace Bank of America, Hewlett-Packard and Alcoa with Nike, Visa and Goldman Sachs.

REINSTATED

Wrestling, as an event at the 2020 Summer Olympics, to be held in Tokyo. It had been removed in February by a vote of the International Olympic Committee.

DIED

Martin L. Gross, 88, whose 1992 best seller The Government Racket: Washington Waste From A to Z chronicled corruption and bureaucratic inefficiency and later became a favorite of the Tea Party.

Stumbling Toward Damascus
The President's uneven Syria response has damaged his office and weakened the nation. It's time for one more pivot

KRISTOFFER TRIPPLAAR--SIPA PRESS

The lonely walk President Barack Obama makes his way to the Oval Office on Sept. 10, before a speech arguing for action in Syria

Joe Klein | 1744 words

On the eve of the 12th anniversary of the 9/11 terrorist attacks, Barack Obama made the strongest possible case for the use of force against Bashar Assad's Syrian regime. But it wasn't a very strong case. Indeed, it was built on a false premise: "We can stop children from being gassed to death," he said, after he summoned grisly images of kids writhing and foaming at the mouth and then dying on hospital floors. Does he really think we can do that with a limited military strike--or the rather tenuous course of diplomacy now being pursued? We might not be able to do it even if we sent in 250,000 troops and got rid of Assad. The gas could be transferred to terrorists, most likely Hizballah, before we would find all or even most of it. And that is the essence of the policy problem Obama has been wrestling with on Syria: when you explore the possibilities for intervention, any vaguely plausible action quickly reaches a dead end.

The President knows this, which makes his words and gestures during the weeks leading up to his Syria speech all the more perplexing. He willingly jumped into a bear trap of his own creation. In the process, he has damaged his presidency and weakened the nation's standing in the world. It has been one of the more stunning and inexplicable displays of presidential incompetence that I've ever witnessed. The failure cuts straight to the heart of a perpetual criticism of the Obama White House: that the President thinks he can do foreign policy all by his lonesome. This has been the most closely held American foreign-policy-making process since Nixon and Kissinger, only there's no Kissinger. There is no éminence grise--think of someone like Brent Scowcroft--who can say to Obama with real power and credibility, Mr. President, you're doing the wrong thing here. Let's consider the consequences if you call the use of chemical weapons a "red line." Or, Mr. President, how can you talk about this being "the world's red line" if the world isn't willing to take action? Perhaps those questions, and many others, fell through the cracks as Obama's first-term national-security staff departed and a new team came in. But he has shown a desire to have national-security advisers who were "honest brokers"--people who relayed information to him--rather than global strategists. In this case, his new staff apparently raised the important questions about going to Congress for a vote: Do you really want to do this for a limited strike? What if they say no? But the President ignored them, which probably means that the staff isn't strong enough.

The public presentation of his policies has been left to the likes of Secretary of State John Kerry, whose statements had to be refuted twice by the President in the Syria speech. Kerry had said there might be a need for "boots on the ground" in Syria. (Obama: No boots.) Kerry had said the military strikes would be "unbelievably small." (Obama: We don't do pinpricks.) Worst of all, Kerry bumbled into prematurely mentioning a not-very-convincing Russian "plan" to get rid of the Syrian chemical weapons. This had been under private discussion for months, apparently, the sort of dither that bad guys--Saddam, the Iranians, Assad--always use as a delaying tactic. Kerry, in bellicose mode, seemed to be making fun of the idea--and the Russians called him on it. Kerry's staff tried to walk back this megagaffe, calling it a "rhetorical exercise." As it stands, no one will be surprised if the offer is a ruse, but the Administration is now trapped into seeing it through and gambling that it will be easier to get a congressional vote if it fails.

Which gets close to the Obama Administration's problem: there have been too many "rhetorical exercises," too many loose pronouncements of American intent without having game-planned the consequences. This persistent problem--remember the President's needless and dangerous assertion that his policy wasn't the "containment" of the Iranian nuclear program--has metastasized into a flurry of malarkey about Syria. It's been two years since he said, "Assad must step aside." He announced the "red line" and "the world's red line." And now, "We can stop children from being gassed." The Chinese believe that the strongest person in the room says the least. The President is the strongest person, militarily, in the world. He does not have to broadcast his intentions. He should convey them privately, wait for a response, then take action, or not. He should do what the Israelis did when they took out the Syrian nuclear reactor: they did it, without advance bluster, and didn't even claim credit for it afterward. The wolf doesn't have to cry wolf, nor should the American eagle. We must stand for restrained moral power, power that is absolutely lethal and purposeful when it is unleashed, but never unleashed wantonly, without a precise plan or purpose.

Creating a precise plan in the Middle East is utterly impossible, which is something the American people have clearly come to realize. The region is at a hinge of history: those straight-line borders, drawn by the Europeans nearly 100 years ago, seem to have passed their sell-by date. The next decades may see the formation of new countries, like Kurdistan, along ethnic and sectarian lines, and the process will undoubtedly be bloody. Some version of Syria will probably emerge--there's always been a Syria--but perhaps not within the current borders. The West will have to stand aside as this is worked out. We have slashed our way into these places, under the neocolonial assumption that they are somehow in need of our wisdom and power, and left too much chaos and too many dead bodies in our wake to have any moral credibility left in the region except, perhaps, in Israel. And you have to wonder if, after the past few weeks, the Israelis would trust us to provide the security for the peace that Kerry is trying to negotiate with the Palestinians.

Once again, the President understands all this. The subtext of his presidency has been that it is no longer possible for the U.S. to go it alone--even if he continues to do so himself--unless we face a direct and immediate threat to our national security, and that we must build multilateral coalitions to enforce the world's red lines. And so, the question must be asked: Why has he persisted in pursuing a limited military option in Syria? These things almost never work. Often, they make the situation worse. Ryan Crocker, the retired American diplomat with the most experience in the region, has speculated that Assad's diabolical response to an American military strike might be to launch "another chemical attack just as a stick in our eye." And then, our next move? Could the President let another gas attack stand?

The President isn't crass or stupid enough to say it, but I would guess that he is persisting in his public threats of military action because American credibility--and, more precisely, his credibility--really is at stake. But playing the "American credibility" card is a foolish and extremely dangerous game. In my lifetime, more lives, including American lives, have been lost in the pursuit of American credibility than by any legitimate military factor. It was what led Lyndon Johnson to double down in Vietnam. It was what helped propel George W. Bush to pull the trigger in Iraq, even after it was clear that most of the world and, quietly, the American military thought it would be a disastrous exercise. It was what led Obama deeper into Afghanistan. Make no mistake, Obama has already lost credibility in the world, given his performance of the past few weeks. But American credibility is easily resurrected, given our overwhelming strength, by prudent action the next time a crisis erupts, a clear strategic vision and a rock-steady hand on the wheel. It was resurrected by Ronald Reagan in the 1980s. The sad thing is that Obama had been rebuilding our international stature after George W. Bush's unilateral thrashing about. Obama has now damaged his ability to get his way with the Chinese, the Iranians and even the Israelis.

That may never come back--and there were real opportunities to make some progress, especially with Iran, where the ascension of a nonprovocative President, Hassan Rouhani, and a reform-minded Foreign Minister in Mohammed Javad Zarif had opened the possibility of progress in the nuclear talks and maybe even in other areas, like Afghanistan. The question now is whether Obama's inability to make his military threat in Syria credible--and the American people's clear distaste for more military action--will empower the hard-liners in the Revolutionary Guards Corps to give no quarter in the negotiations. The Chinese, who have been covetous of the South China Sea oil fields, may not be as restrained as they have been in the past. The Japanese may feel the need to revive their military, or even go nuclear, now that the promise of American protection seems less reliable. The consequences of Obama's amateur display ripple out across the world.

There are domestic consequences as well. This was supposed to be the month when the nation's serious fiscal and budgetary problems were hashed out, or not, with the Republicans. There was a chance that a coalition could be built to back a compromise to solve the debt-ceiling problem and the quiet horrors caused by sequestration and to finally achieve a long-term budget compromise. But any deal would have required intense, single-minded negotiation, including political protection, or sweeteners, for those Republicans who crossed the line. Precious time has been wasted. And, after Syria, it will be difficult for any member of Congress to believe that this President will stick to his guns or provide protection.

There are those who say Obama has destroyed his presidency. It may be true, but I doubt it. All sorts of things could happen to turn the tide back in his favor. The snap polls after the Syria speech indicate that he still has the ability to sell an argument, however briefly. He has been lucky in his opponents: the Republicans will doubtless continue to take positions that most Americans find foolish or extreme. Obamacare may prove a success. He may make crisp decisions in the next overseas crisis; one would hope he's learned something from this one. But he has done himself, and the nation, great and unnecessary harm. The road back to credibility and respect will be extremely difficult.

TO READ JOE'S BLOG POSTS, GO TO time.com/swampland

Birmingham Resurrected
Fifty years after that fateful bombing, an Alabama city shows just how far it has come

VICTIMS: AP

CIVIL RIGHTS CATALYST RECOGNITION This year the four girls who lost their lives in the bombing at the 16th Street Baptist Church were posthumously awarded a Congressional Gold Medal. From top, McNair, Robertson, Collins and Wesley

Jon Meacham | 753 words

It was 10:22 on the morning of Sunday, Sept. 15, 1963, and the sound of the dynamite exploding at the 16th Street Baptist Church roared across Birmingham. Fourteen-year-old William Bell was getting ready for church when he heard the blast--from three miles away. Bell's father rushed his wife and children into the family car and drove to the church, where they found chaos and tragedy.

Four young girls had been massacred by a white supremacist's bomb: Denise McNair, 11; Carol Robertson, 14; Addie Mae Collins, 14; and Cynthia Wesley, 14. "Every individual in this town knew at least one of the girls or knew their families," Bell says. "Carol Robertson is a cousin of mine ... Denise McNair went to school with my brother. Her mother taught my brother. You felt it, the pain of it."

This September, William Bell, now the mayor of Birmingham (and the fourth African American to hold the office) will preside over the commemoration of the 50th anniversary of the bombing. The attack on the 16th Street Baptist Church was an act of terrorism that stands as one of the great turning points in American history. Together with the March on Washington in August, the September murder of the four little girls opened the way for Lyndon Johnson's successful push for civil rights legislation in 1964, in the aftermath of the November assassination of President Kennedy.

The mechanics of memory are particularly fraught in the American South, where so much history unfolded the day before yesterday. There is a natural human tendency to want to shut the door on a painful past. When we're being totally honest with ourselves, however, we know that William Faulkner was right when he observed, in Requiem for a Nun, that the past is never dead; it isn't even past.

Birmingham is marking the 50th anniversary of 1963 forthrightly, acknowledging the city's sins but asking for the nation and the world to see the city in full--not just for what it was then but also for what it is now. "My thought all along is be exactly who you are," says Bell. "The images are always about the dogs and the hoses. And yes, that's who we were, but we've come out of that."

What Birmingham is now is a striving and surprisingly resilient Southern city trying to make its way economically and culturally. The Jackie Robinson movie 42 was filmed in Birmingham, which boasts a new minor-league ballpark for the Southern League's Birmingham Barons. Mercedes and Honda have opened plants in Alabama. Mayor Bell spends more time talking up investments in the University of Alabama at Birmingham's medical-research center than he does speaking on racial issues.

That would have been largely unimaginable in the early 1960s. "There is a great deal of frustration and despair and confusion in the Negro community," King told President Kennedy shortly after the bombing. "And there is a feeling of being alone and not being protected. If you walk the street, you aren't safe. If you stay at home, you aren't safe--there's a danger of a bomb. If you're in church now, it isn't safe. So the Negro feels that everywhere he goes, or if he remains stationary, he's in danger of some physical violence."

For Mayor Bell--and for Birmingham, and for the country--the movement and its martyrs changed everything. "Their sacrifice made my life possible, made my being the mayor of Birmingham possible," Bell says. Out of terror came hope.

King preached at the funeral for three of the four victims in September 1963. "God still has a way of wringing good out of evil," he said. "And history has proven over and over again that unmerited suffering is redemptive. The innocent blood of these little girls may well serve as a redemptive force that will bring new light to this dark city." And so it has.

The face of Jesus was blown out of one of the 16th Street Baptist Church's windows during the attack, an eerie and enduring symbol of a world where hate--at least in the moment of the bombing--overshadowed love. Today, a memorial window from the people of Wales depicts a crucified Jesus and a quotation from Matthew 25: "Inasmuch as ye have done it unto the least of these my brethren, ye have done it unto me."

The Jesus in the window is a black man, arms outstretched, reaching, it seems, to a future beyond the blood and the bombs--a future that is far closer to reality now than appeared possible 50 Septembers ago.

SEE A GALLERY OF BIRMINGHAM PHOTOS AT time.com/birmingham

What You Said About ...

616 words

PAYING COLLEGE ATHLETES

"How to pay them hasn't been resolved, but there should be a way to tie this in to graduation," said MSNBC's Brian Schactman in a discussion of Sean Gregory's widely shared Sept. 16 cover story advocating salaries for university moneymakers like Texas A&M quarterback Johnny Manziel. On ESPN, panelists praised Time for bringing the story to national attention, while readers like George Newman of Verona, N.J., wrote, "The crux of the matter is that it's a full-time job with a $0 paycheck." At Forbes, Tom Van Riper objected to our focus on the injustice to tuition-free athletes: "If they can get organized and get more for what they do, good for them. But really, enough with the free-labor morality play." Others suggested alternative solutions, including the creation of a minor league for the NFL. "Do not pay the athletes while they are in school," commented W. Calvin Dickinson of Cookeville, Tenn. "Establish an interest-bearing fund. Pay from this fund when they graduate." "If college athletes receive salaries, they can pay for their tuition and housing [and] provide more scholarship funds for struggling families," countered Tim McGlynn of Palatine, Ill. And even though many Twitter users commended Time for highlighting the controversy, some took issue with our choice of Manziel for the cover. "TIME is using a rich, white college player to make the case that college athletes should be paid. Seem odd to you?" tweeted reader Leonis Word.

RAND PAUL'S OPPOSITION TO SYRIA STRIKES

The Kentucky Senator's polarizing Time.com essay prompted thousands of comments. "This man is no isolationist, he's a Constitutionalist," tweeted CBS Radio host Rich Zeoli. "I can't believe I find myself in agreement with a right wing Republican,"wrote briteleaf on TIME.com. "NO WAR." "If we do not strike," answered hgurian1, "we are sending the wrong message to both N. Korea and Iran."

BEHIND THE PHOTO

On Sept. 11, 2001, photographer Patrick Witty captured the stunned reactions of New Yorkers as they watched the south tower of the World Trade Center begin to collapse. Twelve years later, Witty, now TIME's international picture editor, has turned to social media for help in identifying the subjects in his haunting photograph. Recognize anyone? Let us know via comment at time.com/911photo.

NOW ON LIGHTBOX

Not many realize that Pop artist Andy Warhol was also a photographer whose Polaroids and snapshots captured the glamour of the stars he socialized with as well as the quieter side of friends and lovers. We've gathered highlights from the show "I'll Be Your Mirror," on view at the New York Design Center through Oct. 7.

Liberace out of costume

Bianca Jagger in 1979

NOW ON TIME.COM

Secretary of State John Kerry has emerged as the Obama Administration's most confidently hawkish official on Syria. We analyzed the language he used in 12 recent statements to reveal his most relied-on phrases. The top three:

1 Chemical weapons (122 times)

2 Civil war (22)

3 National security (18)

For more, go to time.com/swampland

Please recycle this magazine and remove inserts or samples before recycling

Five Years After, 10 to Remember.
Catching up with some of the actors in the meltdown drama
Emily Maltby | 535 words

The Innovators

Lew Ranieri

THEN: In the '70s he devised mortgage-backed securities to shift bank risk to investors, making mortgages more widely available.

NOW: He didn't foresee that investment banks would create riskier iterations like collateralized debt obligations (CDOs). "Being one of the founders, it's my problem," he said of the meltdown in 2011. "I bear the burden."

Phil Gramm

THEN: As chair of the Senate Banking Committee from 1999 to 2001, he steered the deregulation bill that allowed investment and commercial banks to merge.

NOW: The Dodd-Frank Act undid some of the Gramm-Leach-Bliley Act's bank deregulation, which undid the Glass-Steagall Act's bank regulation. Gramm is a visiting scholar at the American Enterprise Institute.

Alan Greenspan

THEN: The Fed chairman kept interest rates too low, his critics say, feeding the real estate bubble. Greenspan believed that markets are self-correcting.

NOW: His new book on the future of economic forecasting is called The Map and the Territory. In 2008 he told a congressional committee that he had put too much faith in self-regulating free markets.

Legislators and Regulators

Chris Cox

THEN: As chief of the Securities and Exchange Commission until 2009, Cox was cited as a symbol of the agency's lax enforcement and failure to hold Wall Street accountable.

NOW: Cox is a partner at law firm Bingham McCutchen and heads the firm's Bingham Consulting unit, a government-contracting adviser.

Hank Paulson

THEN: George W. Bush's Treasury Secretary made the call to let Lehman fail. He pushed for TARP to restore market liquidity.

NOW: A senior fellow at the University of Chicago's Harris School of Public Policy, Paulson founded an academic center there focused on economic and environmental issues facing the U.S. and China.

The Wall Street Players

Jimmy Cayne

THEN: The card-playing, leverage-loving Cayne ran Bear Stearns from 1993 until 2008 when, unable to find financing, the firm croaked-- the canary in Wall Street's coal mine. He lost nearly $1 billion.

NOW: A star bridge player, he won the American Contract Bridge League's North American Championships in 2010 and 2011.

Dick Fuld

THEN: Under CEO Fuld, Lehman Brothers became highly leveraged and vastly overexposed to subprime mortgages. Lehman's staggering collapse in September 2008 triggered a global economic crisis.

NOW: After Lehman's bankruptcy, Fuld established Matrix Advisors in New York City to provide advice to corporations on raising capital and on mergers and acquisitions.

Joe Cassano

THEN: Cassano led a group at AIG that sold credit-default swaps--insurance--for mortgage-backed bonds held by Goldman Sachs and others. When housing crashed, so did the bonds' value, requiring a $182.3 billion federal bailout.

NOW: Treasury sold the last of the AIG stock it held as collateral in December. The government realized a net return of $22.7 billion.

Kathleen Corbet

THEN: Corbet ran Standard & Poor's until 2007. The ratings agency was excoriated for conflicts of interest and lavishing AAA ratings on CDOs that later tanked in value.

NOW: In February the U.S. sued S&P for fraud tied to the faulty ratings. S&P says the suit is payback for lowering the U.S.'s credit rating. Corbet is a principal at Cross Ridge Capital, a venture-capital firm.

Angelo Mozilo

THEN: Mozilo co-founded Countrywide, the largest housing lender in the U.S., whose subprime and no-documentation loans financed high-risk borrowers.

NOW: Mozilo admitted no wrongdoing but agreed to pay a $67.5 million settlement with the SEC. He is banned from serving as an officer of a public company.

The Art of Living
It may be no coincidence that so many creative types have long lives. New findings show how doing what you love can add years

Illustration by Serge Bloch for TIME

Jeffrey kluger | 2963 words

One of the greatest buildings in New York City was created by a very old man. You won't find it on the skyline--it's far too small for that. You have to get up close, at street level. It's on Fifth Avenue, which for block after block obeys the old New York building rule of big and tall and flat--until all at once, at 88th Street, it doesn't. There stands the stout, round drinking cup that is the Guggenheim Museum, with its natural light and spiraling floor and snow white exterior, parting the neat scrim of the streetscape and filling it with a bit of stylish defiance. The human genius behind that structural genius was Frank Lloyd Wright, who started designing the building in 1943, when he was 76, kept at it until ground was broken in 1956 and lived until 1959--just shy of both his 92nd birthday and the museum's official opening.

"If you walk into any of Wright's buildings, you see he didn't think like us," says neuropsychologist Donald Davidoff of Harvard Medical School. "His rooms can have seven different heights to them depending on where you're standing. He thought in three dimensions, which is something we can appreciate when we see it but can't do ourselves."

Wright may have been unique in the style and quality and iconoclasm of his work, but he was not unique in how old he was when he did it--and that's true in a lot of fields. You can keep your boy geniuses in Silicon Valley, your young guns tearing up the fashion world, your celebrated wunderkinder in music and art and finance and government. Spare a moment--spare more than a moment--for the superannuated creators: Goya, who produced some of his most haunting paintings when he was in his late 70s; Goethe, who finished writing his masterpiece, Faust, when he was 81; Galileo, who published his last paper when he was 74, just a few years before his death--at a time when average human life expectancy was 35.

And it's not just the long-ago names: props to Maggie Smith, still starring in movies and TV series at age 78; to Warren Buffett, the 83-year-old financial genius who's not called the Oracle of Omaha because he loses money; to Picasso, who died at 91 and had paint under his nails till the very end; to Herman Wouk, 98, who published his 18th and most recent novel just last year; to comedian George Burns, who died in 1996 at age 100 and celebrated his 95th birthday by signing a two-year contract to perform in Las Vegas. After he inked the deal he told the hotel manager who'd negotiated it, "If you're still around at the end of the two years, we'll talk again."

It's in our nature to love stories like this--and there can be a soft condescension to them. Aged celebrities get trundled out at award shows and public ceremonies and are described as "sharp as a tack" or "spunky as ever" when too often they're not sharp and they're terribly frail and what we're really applauding is that they're alive at all.

Still, there's something very real about the way creativity endures in the face of age--and maybe even pushes back age. By now it's a gerontological given that the active, busy brain is also the brain that stays lucid longer, that resists dementia and other cognitive problems better. And it's a biological given that sedentary, bored or depressed people are far likelier than happy and occupied ones to come down with physical ailments. Increasingly, brain research is showing that in the case of creative people, this mortal cause-and-effect pays powerful dividends--that it's not just the luck of living a long life that allows some people to leave behind such robust bodies of work but that the act of doing creative work is what helps add those extra years. And that's something that can be available to everybody.

"Doctors have to think creatively, lawyers have to think creatively, hedge-fund guys who come up with ways of making us not know what we're buying have to think creatively," says Dr. George Bartzokis, a neurobiologist and professor of psychiatry at UCLA. "Their work may not get hung in museums, but being able to do what you love makes you more satisfied, less depressed, and you'll probably do better with your body as a result." The key is finding work that calls on you to remain nimble, adaptive, even visionary, to invent ideas and solve problems on the fly rather than just responding to the same questions with the same answers again and again. As people facing deadlines often lament, work tends to expand to fill the time you have to do it. Now, science suggests, time just might expand to contain the work with which you choose to fill it.

This Is Your Brain on Age

If it comes as a surprise that human beings have the power to be so creative for so long, it's only because we've tended to underestimate the regenerative power of our brains. Like all other parts of the body, the brain wears out with age, but the thinking had always been that unlike those other parts, it had no ability to repair itself, meaning it couldn't stay ahead of at least some of the damage. That suggests a steady loss of intellectual altitude from middle age to our early senior years, culminating in a terminal plunge at the end.

It turns out, however, that that's not true. One process that starts early, in babyhood, is myelination--the growth of fatty insulation on neurons, which keeps brain circuits running smoothly. In recent years, researchers were surprised to discover that myelination isn't completed until young adulthood, when the full suite of executive functions in the prefrontal cortex comes online. Still more recent studies, conducted with magnetic resonance imaging (MRI) and postmortem exams, have pushed the myelination limit even further. In some parts of the brain, including the temporal--which is involved with processing visual memories, language, meaning and emotions--insulating fat layers are still being laid down when we're in our 50s and even 60s.

"We're like a jumbo jet that's always getting repairs and new parts," says Bartzokis. The key to qualifying for that servicing, however, is remaining mentally active. Just as you can't build muscle mass without working your body, you can't grow new myelin--or at least enough of it--without working your brain. "When you use your brain a lot as opposed to sitting around looking at the wall, you're repairing things centrally," Bartzokis says.

Not all intellectual functions are preserved in older people. Age can be murder on what's known as fluid intelligence--which involves working memory, computing speed, the ability to hold multiple ideas in the mind at once. That hits certain skills harder than others. Mathematicians, physicists and chess players tend to do their greatest work when they're in their 20s and 30s since all of those disciplines require just the kind of agile, fast-clicking brain that's characteristic of those ages. It's the same reason too that kids acquire languages, master computers and video games and work puzzles like Rubik's Cubes so much better than older people.

Still, to the extent that the brain's processing power does decline, it compensates in other ways--ones that actually enhance creativity. In a younger brain, work is fairly well lateralized--with certain functions, like language, taking place in the left hemisphere and other functions, like spatial reasoning, playing out in the right. Studies with functional magnetic resonance imaging (fMRI), however, show that in the older brain, one hemisphere is not shy about calling on the other for help if it's having trouble with a task. "There may be a decline in function, but it's partly compensated for by a reorganization in function," says cognitive neuroscientist Roberto Cabeza of Duke University. "The brain shows these changes into the 80s."

That can pay particular dividends for the artist, Cabeza says. Take the metaphor--one of the writer's prettier devices and one of the brain's niftier tricks. Language conveys meaning, but if you want to give it particular resonance, it helps to attach a picture to the words. So the left brain has to reach into the right for help--the poet borrowing one of the painter's brushes. That's not easy to do--which is why not everyone can be a poet--but when the walls between the hemispheres get lower, the job gets easier.

Other kinds of insights and inspiration benefit from getting the hemispheres talking to each other. Neuroscientist Lisa Aziz-Zadeh of USC, who studies the brain and creativity, has conducted experiments in which subjects are slid into an fMRI machine while they solve scrambled-word puzzles. As anyone who has tried to unjumble a string of letters like LREFWO knows, sometimes the answer just jumps out at you (flower!) and other times you have to reason your way through it--try the L as the first letter, then the F, then the O, until you figure it out. And it's also clear which way feels better: it's the sudden insight, by a lot. "These moments feel really good. They feel amazing," says Aziz-Zadeh.

Such aha experiences, also called insight solutions or pop-out solutions, are big parts of creativity--the sudden idea for an opera, the sudden solution to a knotty part of a novel. When Aziz-Zadeh's subjects solved a word in that quick and satisfying way, they would push one button in the fMRI. When they used the more deliberate search method, they would push another. "With the search method," she says, "we saw activity only in the left hemisphere, but with the aha moments it was in both." What's more, in those latter cases there was additional activity in the insula and the brain stem, which also process emotion--helping explain the delicious thrill a sudden insight gives us. The more cross talk you get between the hemispheres--something older people are very good at--the more of those happy pop-outs you get, leading to a self-reinforcing loop in which creating a little gives you a taste for creating a lot.

A similar loosening of the brain's reins helps explain the way all of us--young and old--can sometimes go to bed at night trying to solve a problem and wake up in the morning with an answer or a burst of inspiration. When we go to sleep, the prefrontal cortex--which consolidates and integrates knowledge and acts as a sort of beat cop, keeping the other, unruly regions of the brain in line--powers down. At the same time, the occipital lobe, which processes information visually and symbolically, goes into high drive. Over the course of the night, the occipital is free to come up with novel, unlikely solutions to whatever problem is on our mind and slip them to us either in a dream or just as we wake up, before the more literal prefrontal region goes back to work. For the aging, less rigidly structured brain, the same kind of thinking takes place all the time. "Your inhibitions get taken away a little bit," says Bartzokis. "That process of losing things may actually make you more creative."

Breathing Room in the Brain

For the older person, simple life circumstances may help liberate the mind too. Even if you're explosively creative, when you're in young adulthood and middle age there are a lot of things making demands on your time and your mind--raising kids, paying off a mortgage, holding down a job. That kind of activity does not come free, and at some point you may simply tap out the energy reserves that could otherwise go to making you creative. But, says psychologist Robert Levenson of the University of California, Berkeley, who studies emotion and aging, "when you're older, you're off that treadmill, so you can free up some horsepower in the service of creativity."

That certainly describes the experience of Irene Morey, 97, who lives in Boston and worked as a nurse until her retirement at 65. Her husband was a professional artist, and when she left nursing, she decided to enroll in college and study painting. After she graduated, she joined him in the studio he built in their home, where they spent their days working together until his death. She continues to paint, now living independently, though a daughter who lives nearby looks in on her regularly.

"As a nurse I wasn't very creative," she says, "but my brain is freer now. When I went to art school I learned all of the disciplines, and one professor then said, 'Now go home and forget everything I taught you.'" She took him at his word and has been a painter ever since. The only real concession she makes to age is that she limits her work to watercolors and charcoal since the fumes from oil paints bother her. And she doesn't show her finished pieces at exhibitions quite as much as she used to. "It's getting harder to lug all that stuff down there," she says.

Morey may not think much about mortality--she certainly doesn't sound as if she does--but one thing that also motivates a lot of older artists is the dark but bracing sense that even if you have more free time than ever to create, the mortal clock is running down fast. In one oft-cited study of what's come to be called the swan-song phenomenon, psychologist Dean Keith Simonton of the University of California at Davis collected a massive sample group of 1,919 compositions written by 172 classical composers and compared how highly the works were rated by musicologists with how close the creation of those works came to the composers' deaths. On the whole, he found, compositions that were written later in the artists' lives--when, as Simonton wrote, "death was raising a fist to knock on the door"--tended to be briefer, with cleaner, simpler melody lines, and yet scored higher in aesthetic significance, according to the experts.

"In the past, the thinking was that the swan song was all about terror management," says Levenson, "trying to stay busy and deny death. But it's also about leaving a legacy, generating something lasting to mark your time here."

Buying Time

It's easier to explain how aging and creativity are linked in the brain than it is to prove that any of that can actually translate into extra years. There are no fMRIs that can deconstruct longevity the way they can deconstruct brain function. But tales of how the will--or lack of will--to live can lengthen or shorten life are everywhere: in the healthy elderly husband who dies just weeks after he loses his wife of 50 years, in the sickly person who hangs on long enough to attend the wedding of a child or be present for the birth of a grandchild and then peacefully dies.

Some of the links between physical and mental health are obvious. When Morey picks herself up in the morning and sets up her easel--and certainly when she lugs her work to a gallery--she's moving, getting her lungs, muscles and cardiovascular system working. Exercise--even very moderate exercise--is a proven way to reduce the risk of a whole range of ills. What's more, her work makes her happy. "I just love it," she says. "I just feel free to do whatever I want."

Multiple studies over the decades have shown that happiness contributes to longer life. As recently as last year, the British Medical Journal reported a survey of 68,000 subjects in England and found that people with even relatively mild depression have a 29% increased risk of dying from cardiovascular disease and a 29% increased risk of dying from other noncancerous disorders. "People who are depressed suffer from hypertension, diabetes, obesity," says Bartzokis. "How well your brain does affects how well your body does."

Just last month, a research review published in BMC Public Health found that doing volunteer work--in such places as hospitals and soup kitchens that allow direct contact with the people you're helping--may lower mortality rates by as much as 22% compared with those of nonvolunteers. Making such social connections, according to results from that review and others, increases life satisfaction and reduces depression and loneliness and in turn lowers the risk of hypertension, stroke, dementia and more.

All of that is a lot of existential and scientific baggage to pile on the satisfying work of the centenarian who merely likes to paint, the aged novelist who feels he still has one good book in him, the nonagenarian architect who wants to be around to see one more masterpiece rise on Fifth Avenue. And the same idea of simple pleasure from a job you like is also true if your work is teaching school or practicing law or keeping shop. But it's still nice to know that when you spend your working years happily and well, you just might get a handful of extra ones slipped in before the lights go off.

Merkel's Miracle
She steered Germany past Europe's economic crisis. What the Chancellor has left to prove

Photograph by Anatol Kotte LAIF/REDUX

Catherine Mayer/Recklinghausen | 2134 words

Angela Merkel has a face she makes when things don't go according to plan. She has arrived in Recklinghausen, a city in Germany's industrial Ruhr district, to deliver a stump speech at a rally of her Christian Democratic Union (CDU) party ahead of elections on Sept. 22. As protesters whistle and heckle, she narrows her eyes and stares into the distance. This isn't an angry expression. Merkel is doggedness personified.

Germany's first female Chancellor and the first raised behind the Iron Curtain has already gone down in history as a trailblazer. Now, after nearly eight years in charge of Europe's richest nation, with her policies affecting the entire euro zone and rippling outward around the globe, she is pushing for a third four-year term. She may succeed.

That alone makes her remarkable. The euro-zone crisis has derailed or damaged most leaders in its vortex. Merkel has thrived. A poll published on Aug. 23, the day of the rally, reveals that 63% of voters favor her return to office. Her nearest rival, Peer Steinbrück of the Social Democrats (SPD), lags at 29%. The CDU and its Bavarian sister party, the Christian Social Union, enjoy an advantage of around 15 percentage points. But the quirks of the German electoral system, designed amid the rubble of Adolf Hitler's dictatorship to dissipate rather than concentrate power, mean Merkel has a real battle on her hands. And so she fights, rally by rally, town by town.

Ralf Möller greets her at the Recklinghausen podium. The 6-ft. 5-in. former champion bodybuilder and Gladiator actor (he played a Germanic barbarian in the Oscar-winning epic) has flown from Los Angeles to his hometown to lend his considerable muscle to Merkel's cause. "This is what I admire," he says, watching his petite heroine plow on with her speech. "She overcomes."

Nothing showcases the steady, fuss-free Merkel brand better than adversity--and this campaign season is serving up plenty. Greece is ripe for another bailout. The Syrian crisis has raised uncomfortable questions about Germany's willingness to match its economic heft to its responsibilities as a global citizen. And allegations about the U.S. National Security Agency's scooping up of German data are roiling public opinion. Protesters at the rally blow whistles and brandish a banner emblazoned with NIE WIEDER ÜBERWACHUNGSSTAAT--never again a surveillance state.

None of the protesters appear much older than 30; for younger Germans, any debate about freedom--and its curtailment--is primarily intellectual. For Merkel, who spent the first 36 of her 59 years navigating a society that embroiled hundreds of thousands of her compatriots in spying on the others, there is no such abstraction. Communist East Germany (GDR) shaped the reflexes of caution and concealment that originally helped Merkel swerve and maneuver her way to high office and put the iron in her soul that keeps her fighting to stay there.

The German economy is giving her a helping hand. The latest data show a narrow budget surplus, moderate growth and unemployment at 6.8%, close to its lowest ebb in two decades. To enjoy similar prosperity--and in return for German largesse--the weaker euro-zone nations must reform. That is Merkel's mantra. "Solidarity makes sense if we all work to become better, fitter," she tells the Recklinghausen crowds. "Otherwise we'll become weaker together."

Her critics say that is happening already on Merkel's watch. Greece isn't the only country that has been slow to make structural reforms. Merkel has governed in what she calls "small steps," avoiding the sort of big, transformative initiatives that might, for example, bolster Germany against challenges like its rapidly aging population.

Merkel's opponents hope her record of incrementalism will lose her the election. She seeks to counter their attacks with something rarely seen in postwar Germany--a campaign based on personality. That's startling because Merkel, under close scrutiny since she took the CDU's helm in 2000, remains an enigma. More than any other Chancellor of modern times, Merkel is Germany, personifying the nation's seemingly contradictory impulses--to be a world power and, at the same time, keep a low profile.

A Star in the East

Templin sits encircled by Medieval city walls and bounded by something less tangible: a sense of small-town reserve. Curtains twitch. Strangers are immediately conspicuous. The focus on the Kasner family when they settled in this corner of East Germany with their baby daughter in 1954 was intense. They were anomalies: Westerners choosing to live in the East. Not only that, but Horst Kasner was a Protestant pastor who saw it as his mission to work in the GDR and so lived under constant suspicion of sedition.

His daughter Angela learned to blend in to the point of near invisibility. In school, apart from one pivotal, traumatic moment, she stood out only for her scholarship. She took gold at a regional mathematics Olympiad, an annual competition pitting schoolkids against one another in academic subjects. She also twice won the top prize for Russian at the Olympiad. Erika Benn, the teacher who coached her to victory, says her star pupil easily mastered the language but struggled to acquire the interpersonal skills to sell a Russian poem. "She wouldn't even look up," says Benn. "I said to her, 'Can't you smile a bit?'"

It may seem counterintuitive that a girl without natural social skills should grow up to beguile so many, but you only have to see Merkel's fans gathered in Recklinghausen to appreciate the affection she inspires. "I find her wonderful, not just as a politician but a strong woman," says Jil Schulden, 19, a recent high school graduate. Such sentiments are commonplace in Germany and across a wide demographic.

There are criticisms, certainly. She's acquired several nicknames: "Merkiavelli" and "the Black Widow," for her ability to sidle up unnoticed before delivering a deadly bite. To her supporters, she's Angie. But everyone in Germany knows her as "Mutti," mommy.

For many Germans, it's an endearment and a reflection of their lingering surprise that they put Merkel in charge in the first place. When she ran for the chancellorship in 2005, "the main question in the campaign was 'Kann die das?' Is she able to do this? With a negative touch. Nobody is asking that anymore," says Ursula von der Leyen, who has served as a minister in both Merkel governments.

If Merkel is a unifier more than a polarizer, that may be because her life intertwines the strands of a country that was formed as recently as 1871, torn by two world wars and stitched back together less than 23 years ago. At 18, Merkel nearly became a victim of that political turbulence. At the end of each school term, GDR pupils performed cultural programs. In a "snap decision" that Carola Moock, her contemporary at school and now a pediatrician, says arose from boredom rather than a desire to shock, Merkel's class opted to sing "The Internationale," the hymn of the workers' struggle, not in German or Russian but English. The pupils compounded this sign of nascent dissidence by reading a poem containing the phrase "the wall." It wasn't in reference to the fortifications that at the time divided Germany, but it was still enough to trigger a weeklong interrogation of the whole class by the Stasi, the feared secret police. The authorities initially withdrew Merkel's permission to take a degree in physical chemistry. Her father had to work every possible contact to enable his daughter to study.

Slow and Steady

Merkel prefers to avoid speedy decisions, and not just because of her formative tangle with the Stasi. She remains haunted by the Deauville debacle. At a summit at the French seaside resort in 2010, she and France's then President Nicolas Sarkozy made a pact to make investors holding bonds in any country requesting a bailout accept a share of the losses. This was meant to mitigate the burden on the taxpayers funding the bailouts--top of the list, Germans--but instead raised the specter that euro-zone countries might default. The euro plunged into a new spiral of pain.

Deauville marked a rare deviation from the usual Merkel style of decision making. "She goes at it like a physicist," says Dirk Kurbjuweit, a journalist with the weekly Der Spiegel and the author of a Merkel biography. "She wants to solve problems. The bigger the problem, the bigger the chance of a Nobel Prize."

The biggest problem on Merkel's plate is Europe's debt crisis. Amid signs of a recovery in some hard-hit European countries, Merkel continues to resist pressure to mutualize euro-zone debt to reduce borrowing costs for weaker countries and stands by the doctrine of austerity that has seen unemployment spiraling upward in those same countries. "She [has driven] Europe into greater divisions and damaged the European project," says Andrea Nahles, the general secretary of the SPD.

But by waiting until the abyss yawns before taking action, Merkel has succeeded in carrying most of Germany with her when she makes a move. The European policies of the mainstream parties are closely aligned. In Parliament and among voters, there is broad recognition that Germany's export-driven economy is dependent on the survival of the euro zone--never mind that German liabilities to the bailout mechanisms have the country on the hook for as much as $280 billion if the single currency implodes. Any German government will inch toward greater European integration to prevent the disintegration of the euro. And any German government will also find it hard to speed the process or take any significant steps toward surrendering sovereign powers to the E.U.

That's because the German political system already spreads those powers thinly between state and national government and parties. The SPD is campaigning for a coalition with the Greens; Merkel aims to continue her cùrrent liaison with the Free Democrats. Polls point to a grand coalition of Merkel's CDU/CSU with the SPD, the same constellation she led successfully during her first term as Chancellor, but any final constellation will almost certainly be decided not just by voters but also in detailed coalition negotiations after the elections.

Putting Trust in Mutti

In the final months of East Germany, Lothar de Maizière, who served as the only elected leader of the GDR before its absorption into reunited Germany, appointed Merkel his deputy spokeswoman. She shone. "Her briefings were half as long [as her colleagues'] but twice as information-rich," says her former boss. He did ask his office manager to have a quiet word with Merkel on the eve of a diplomatic trip to Russia. "Please tell her to lose the Jesus sandals and buy some clothes better suited to public office," he begged. Merkel turned up to work the next day in a new outfit but blushed when de Maizière complimented her on it.

Merkel's stolidity is now being showcased as an asset in a campaign devised by the Berlin-based agency Blumberry. The campaign's must-have collectible is a booklet of photos of the Chancellor, including a few private shots from family albums, garnished with modest biographical details. Here is Merkel with her husband, distinguished scientist Joachim Sauer, who is even more publicity-averse than his wife. And here's a much younger Angela pushing a doll in a buggy, playing mother, as the childless politician now plays mother to her entire country.

Ordinary citizens feel safer in Mutti's care. The election could be seen as a rite of passage, giving voters a choice between the comforts of the government they know or striking out into the unknown. The SPD's Nahles hopes to convince them that they need to cut loose from the apron strings in order to preserve their comforts. "This government will go into the German history books as the one that has made the fewest laws," she says. "Staying still for a country means, in the end, going backward."

Merkel agrees. In Recklinghausen, she speaks of the need to modernize Germany's economy to meet the trials of globalization. But she also repeats her campaign slogan "erfolgreich zusammen"--successful together. Her message is that Germany is already on the right path. Small steps, not big ideas, are the way forward. "She's so admired because the way she does things is close to the German soul," says a campaign insider. Win or lose, Merkel represents contemporary Germany in all its complexity, a huge country that prefers to behave like a small one.

Oversight for Hire
The rise, and downsides, of private bank examiners

MANUEL BALCE CENETA--AP

Inside man Ludwig founded Promontory to advise financial institutions after a stint heading the Office of the Comptroller of the Currency

Massimo Calabresi | 1855 words

In early 2011, the federal government's top watchdogs found themselves with yet another crisis on their hands. The nation's biggest banks had been accused of wrongly foreclosing on vast numbers of Americans. Investigating every complaint would require an enormous amount of money and manpower; some 4.4 million borrowers were potentially affected. Billions in payouts from titans Bank of America, Wells Fargo and Citibank were at stake, not to mention up to $125,000 for each affected homeowner--as well as the credibility of federal regulators.

So the regulators punted. Julie Williams, chief counsel for the Office of the Comptroller of the Currency (OCC), the primary regulator for many big banks, argued that private contractors could review the foreclosures, sampling paperwork for errors rather than investigating every claim, according to regulators familiar with the discussions. Banks would then compensate victims. Despite opposition from Sheila Bair, chair of the Federal Deposit Insurance Corporation charged with maintaining public confidence in the U.S. financial system, the plan went into effect in April 2011. Twenty months later, it collapsed in failure. By January of this year, the OCC canceled the program as complaints from borrowers mounted. The banks reached a $9.3 billion settlement to provide a blanket distribution of cash to homeowners with little regard to the specifics of each case. Regulators found themselves atoning for the plan in front of Congress. Williams was forced out of the OCC.

The episode ended well for some: private consultants made huge profits. Half of the fees the banks paid them--nearly $1 billion--went to a single company: Promontory Financial, a Washington-based firm that has emerged as something of a shadow regulator. And in early 2013, Williams was hired as a managing director at Promontory, a position that has previously paid more than $1 million in salary and bonuses.

Congress passed President Obama's sweeping financial-reform bill, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, in the wake of near total economic collapse. The motivation behind the landmark legislation was simple: Never again. But three years on, the reform bill's shortcomings are many, and one of them is its growing reliance on private regulators to oversee the nation's banking system. In place of publicly accountable examiners working for the government, private bank oversight has become the norm, along with some of the same hallmarks of the pre-crash era: byzantine regulations that few but the experts can understand, outsize influence by a handful of firms with deep links to both banks and the government and a revolving door between Washington and Wall Street still spinning like a top.

It has long been true that America's financial system could hardly function without Promontory and other private accounting firms such as Deloitte, PricewaterhouseCoopers and Ernst & Young. Regulators and banks alike hire them to investigate suspicious activity, act as intermediaries between government and private companies and advise financial institutions on how to comply with complex regulatory rules. At the OCC alone, one-third of legal actions taken against banks since 2008 have required the aid of outside consultants. Most are staffed with former regulators, who now implement the rules they helped write. Consultants have become so indispensable to the system, they have started to shape it.

Promontory is arguably the most powerful of these regulators-for-hire. The expertise of former watchdogs, including founder and CEO Eugene Ludwig, is at the heart of the company's business model. The 450-person firm boasts two former SEC heads, two former top Federal Reserve enforcers and a former leading official from the newly formed Consumer Financial Protection Bureau. Government has also hired from Promontory's ranks. Amy Friend, Williams' eventual replacement at the OCC and a key author of Dodd-Frank when she worked on Capitol Hill, worked at the firm from 2011 to early 2013.

Born in Brooklyn and educated at Haverford, Oxford and Yale, Ludwig had been a successful banker and Washington lawyer when President Bill Clinton tapped him to head the OCC in 1993. (Clinton and Ludwig's connection goes back to Oxford and Yale Law School.) By the time he left government in 1998, Ludwig realized that the growing size and complexity of financial institutions would lead to ever-more-labyrinthine regulation. Federal officials found it just as difficult to enforce rules as banks did to comply with them. Promontory stepped into the breach, advising both sides. In recent years, Promontory reportedly charged up to $1,500 an hour for its services.

The company grew as regulators and banks increasingly relied on it. By the time of the crash, Promontory was already the first among equals. The month after the September 2008 global run on U.S. money markets nearly brought low the world economy, Senate Banking Committee chairman Chris Dodd empaneled his first hearing of outside experts on the crisis and on potential responses by lawmakers to ensure it never happened again. Two of the five panelists were from Promontory--former SEC chair Arthur Levitt, a board member, and Ludwig.

But it was Dodd-Frank regulatory overhaul in the wake of the crash that solidified an important line of business for the firm: shaping the rules themselves. The bill laid out broad goals but left crucial rulemaking to regulators. Promontory registered as a lobbying firm from 2004 to 2009 on behalf of TD Ameritrade, General Motors and failed mortgage lender Countrywide Financial. Promontory officials arranged and attended meetings between regulators and clients in which the firm explained the potential effects of Dodd-Frank rulemaking on financial institutions. Promontory now says it is no longer in the lobbying business and has not tried to influence Dodd-Frank on behalf of its clients.

Last year, Ludwig was among the highest-paid executives in the financial world, reportedly making more than $30 million--more than JPMorgan Chase CEO Jamie Dimon or Goldman Sachs chief Lloyd Blankfein. Ludwig oversees the enterprise from a 13,000-sq.-ft. mansion in northwest D.C., the 19th most expensive home in the city according to Washingtonian magazine. Promontory occupies the top floor of a new steel-and-glass office building two blocks from the White House.

Outsourcing Regulations

The rise of private regulation in the banking industry is not without its shortcomings. In January 2010, London-based Standard Chartered bank reported to U.S. officials that its New York office might have problems with its anti-money-laundering procedures. As part of an agreement with the Federal Reserve, the Treasury Department and New York State's banking regulator, Standard agreed to hire Promontory to determine if bankers had violated Treasury Department and other rules in routing money to and from accounts in Iran through American banks and then back overseas.

Promontory found that Standard Chartered had violated the rules in millions of dollars' worth of transactions. That turned out to be a fraction of the $250 billion the bank ultimately conceded it had moved for Iran during the period. Promontory has been subpoenaed for records in a separate investigation by New York State bank regulators regarding the firm's conduct during its review of Standard Chartered practices, a source familiar with the investigation told TIME. "Promontory from time to time receives document requests in the form of subpoenas related to client activities," a spokesperson explained. "Promontory does not disclose the nature of individual requests or scope of inquiry." Regarding its review of the bank's transactions, the spokesperson says, "We were hired to review a set of transactions, determine what those transactions showed or did not show and submit the results to the client's lawyers, and that is what we did. We were not retained to characterize the transactions or interpret their legal meaning."

Private regulators not only police bank practices; they are often tasked with forcing banks to mend their ways. After a rogue wheat-futures trader lost MF Global $141 million on the night of Feb. 26, 2008, the Commodity Futures Trading Commission ordered the firm to hire a monitor to help fix its risk-management problems. The firm chose Promontory, and on May 26, 2010, Promontory reported to MF Global's board that it had "successfully and effectively" implemented its recommendations. A mere 18 months later, MF Global collapsed, allegedly raiding client accounts for cash in the process. In his report on the firm's demise, the bankruptcy-court-appointed trustee, former FBI director Louis Freeh, found that the new, stricter risk-management policies Promontory had vouched for "were never fully implemented." (Promontory says the policies were mostly implemented.)

And because so much banking regulation has been pushed out of government agencies and into the private sector, even private regulators find themselves stretched to capacity and have outsourced the work to still other contractors. In its review of millions of dollars' worth of foreclosures by Bank of America, for instance, Promontory outsourced the hiring and management of hundreds of reviewers to staffing company SolomonEdwards Group, according to documents in a case brought in Georgia by contractors claiming Promontory owes them overtime pay. When OCC head Tom Curry canceled the review, he said he was doing so because the process was taking too long and wasn't producing discernible results for the affected borrowers. Promontory managing director Konrad Alt says his firm remained in control of the SolomonEdwards review and that problems with the foreclosure program were the result of the OCC's faulty design. Why did Promontory turn around and hire Julie Williams, who says she was "very involved" in crafting the enforcement order requiring the review? "Julie is a highly distinguished former public servant," says Alt. "Any firm in America would have been thrilled to hire her."

Who Watches the Watchers?

At a hearing on the use of consultants in the mortgage-relief case last April, Ohio Senator Sherrod Brown asked an OCC official what it would take for a private consultant to be barred from working for the feds. "If a consulting firm ... has repeatedly been, for lack of a better term, at the scene of a crime, what would it take before they are viewed as not qualified?"

The question could apply to many of the private firms that, in the wake of Dodd-Frank, are serving as the public's cop in the marketplace. "The monitor comes in and often has good intent," says Lawsky, the New York State banking and insurance regulator. "But the bank is paying the monitor, the monitor is living at the bank, coziness develops, and if you don't have a regulator checking in to say, 'What have you found? Where are you looking?,' it's a recipe for disaster." Former FDIC chair Bair describes Williams as a lifelong public servant whose actions at the OCC were motivated by a desire to defend her agency and its prerogatives as a regulator. "This is not about Julie or even about Promontory. It's about a much bigger problem with the public's perception that regulators are not independent of the banks they regulate, and that is undermining their authority as regulators."

The question is how Congress and regulators can set and enforce new standards and accountability for private firms and limit the areas of the system they can influence. Ohio's Brown is developing legislation with other lawmakers to give regulators authority to punish consultants using powers similar to those they can use against banks. Brown's proposal is controversial; it may take months to find enough votes for passage. And it may take even longer before the impact of the private-bank-regulation boom is fully understood.

Legends at Work
This is what it looks like when age produces beauty. TIME sent a photographer to drop in on some of America's greatest--and oldest--living artists

EUGENE RICHARDS FOR TIME

WAYNE THIEBAUD For Thiebaud, 92, the process is much as it's always been. He still paints nearly every day, holidays too. "All along, you just keep hacking away at it," he says. "I didn't go to art school, so I worked my way through. When I started deciding to try and be a painter, I thought I'd better go to work whether I feel it or not, and that's what I've pretty much done."

999 words

Time is rough on a lot of life pursuits. Athletes dwindle. Dancers pull tendons. Politicians? It varies. But artists, if they work it right, they ripen. Here's Hokusai, the great Japanese painter famous for his Thirty-Six Views of Mount Fuji, in the mid-1830s, puffing out his chest: "Nothing I did before the age of 70 was worthy of attention. At 73, I began to grasp the structures of birds and beasts, insects and fish ... At 100, I may well have a positively divine understanding of them, while at 130, 40 or more, I will have reached the stage where every dot and every stroke I paint will be alive."

Hokusai didn't see 140, but he got to about 90 and produced some of his best work in later life. That's not surprising. Art history is full of greats who died early, but the truth is that people who make careers of their creative urges frequently live into a productive old age. For every Raphael or Van Gogh who disappeared in his 30s, there have been dozens like Hopper and O'Keeffe who combed gray hair, working all the while. Artists don't think about retirement. They're already doing what they always wanted to do.

With that in mind, last year TIME commissioned Eugene Richards to visit several prominent American artists who were in their 80s or about to arrive there. Over six months he photographed them in their studios, homes and galleries. What follows are pictures from eight of those encounters, with John Baldessari, Mark di Suvero, Robert Frank, Robert Irwin, Alex Katz, Faith Ringgold, Betye Saar and Wayne Thiebaud.

The work artists do late in life can sometimes rank among their best. Over the last decade of his life Renoir made scores of peachy, plump nudes. They look a bit campy to us now, but they fascinated Picasso and Matisse and helped them to rethink the human body. More than two decades later, when Matisse was in his 70s and largely an invalid, he developed the cut-paper technique that led to some of his most powerful and delightful work. That's the thing about aged artists. Every day, they can just pick up the old tools and take charge.

FAITH RINGGOLD

As a child, Ringgold, 82, struggled with asthma and used art as a refuge. "I thought it was natural to always have art in my life," she says. Ringgold has used her works to express her opinions on racism and gender inequality. She has also taught, hoping to pass the fight for equality on to the next generation. "Struggle inspires me. I was brought up in an atmosphere of struggle in the '60s, and I tried to pass that inspiration on to my students." Young artists still attend her lectures.

MARK DI SUVERO

Di Suvero, considered America's greatest Constructivist sculptor, continues to weld and cut steel at age 80, 45 years into his career, despite nearly being crushed by an elevator door in the 1960s--an accident that left his back injured. "The beauty of the human spirit is what you find in art. I believe art can change society for the better and make the world a much more intense living space," he says. In 2010, President Obama presented him with the National Medal of Arts.

ALEX KATZ

"You're always looking for more. I never in my wildest dreams thought I would end up where I am, you know. At the same time, I'm not satisfied," says Katz, 86, who is best known for the cutout portrait style he developed in the late 1950s. Though he has been called a modernist, he says modern art ended "like 50 years ago" and that his work doesn't really fit that label. "Modern art is predicated toward absolutes. My world is in variables," he explains. "Everything's changing all the time."

JOHN BALDESSARI

Baldessari, 82, a conceptual artist renowned for splicing together images, believes his art is a constant project. "I tend to work in a series," he says. "That is, I don't just do one show. I just start working and then keep working until I've said everything I have to say about that topic." He doesn't expect to run out of things to say anytime soon. "I would go crazy [if I quit]. I think I told somebody that I would slit my wrists if I couldn't do art. It's what I do. It's my life."

BETYE SAAR

"As a young artist I was, like many artists, ambitious," says Saar, 87. "Now I feel more relaxed about it. I want to present things that speak to the authentic me rather than what's popular in the art world or whether it can sell." Saar has often used found objects to address politically charged issues; the need to tell the items' stories has replaced the need to compete. "My studio is still full. That's the only drive I have, to use up what I've got, because behind each thing I've collected is an idea."

ROBERT FRANK

Frank, 88, made his mark providing a stark perspective on American society through photography and film. At a time when other photographers focused on wholesome images of American life, Frank captured subjects rarely shown in magazines--the workingman in Detroit, the transvestite in New York, the segregation on public transportation--in his 1959 book The Americans. Fifty years later the work still shocks, and he continues to help the country see itself in the mirror.

ROBERT IRWIN

Asked if any aspect of his work feels unfinished, Irwin--known, at 84, for installations that rely on the light in the spaces for which they're designed--says he's more concerned with present than future. "Of course you have ambitions, but they're not ambitions that are dictating in any way," Irwin says. "They're ambitions simply that make you get up every morning." It helps that he loves his work as much as ever: "For me it's always been fun. It's a fun game, even when I'm scared. I mean, how blessed can you be? I get to play my game every day."

TO SEE MORE PHOTOGRAPHS OF THE LEGENDS, GO TO time.com/lightbox

I Brake for Teenage Drivers
What's the point of having a car culture if America's youth won't learn how to drive?

ILLUSTRATION BY TOMASZ WALENTA FOR TIME; GETTY IMAGES (3)

Joel Stein | 836 words

I can deal with the fact that they haven't created a new, horrible genre of music or a girl's clothing item that's appallingly revealing. I can even accept that the most shocking thing they've come up with is twerking, which is just a faster version of what Elvis annoyed my grandparents with. But now I've found out that teenagers are choosing not to get their driver's licenses. And I'm worried.

One-third fewer kids are getting driver's licenses than in 1983. There are two conclusions you can draw from this. One is that this is a generation that is environmentally concerned and economically challenged. The other is correct. They are dead inside.

It's one thing to live at home after college, but to have so little desire for freedom that you don't even want the option of driving is a sign of generational depression. I know I sound like my parents telling me to stop playing video games and go outside, but, first of all, they were right. Second, teenagers' raging hormones should be pushing them out of the house no matter how much fun the Internet is. It's not healthy to choose porn over actual sex until you've been married for 10 years. It's as if teenagers took the campaign against texting and driving seriously and decided not to drive.

Brandon Schoettle and Michael Sivak of the University of Michigan released a study last month in which they asked teenagers why they weren't getting licenses. The top excuse for those under 19 was that they were too busy. These are people, remember, who had time to answer a survey from the University of Michigan's Transportation Research Institute. The second most common reason was "able to get transportation from others." These "others" are parents. Maybe kids have lost the good sense to be embarrassed by being dropped off by their parents, but parents should be embarrassed to be seen with kids so dorky they don't want to drive. The environment, by the way, came in ninth. My ninth reason for anything is the environment. I believe I once said, "I'd love to go to your kid's birthday party, but, you know, the environment."

Our culture, clearly, is failing to excite kids about driving, despite putting out The Fast and the Furious movies as quickly as possible. So I decided to try to persuade some teens to get licenses. I talked to friends' children, stepchildren, nieces and nephews and even went so far as to contact kids I didn't know through Facebook and Twitter, despite not knowing if that was legal and being absolutely sure it was creepy.

All the kids I spoke with had stories that were disturbingly similar: their parents wanted them to get their licenses, but they weren't interested. Ashley, a 17-year-old senior in Cupertino, Calif., has a core group of four friends, none of whom have licenses, despite being eligible for over a year. By that point in my life, I had already gotten into three accidents, one of which didn't even involve another car. "Getting a driver's license is akin to becoming a lackey. 'Here's your driver's license, and with it ... responsibility!' No, thank you," Ashley told me. "I would much rather nap in the car while my father shuttles me around." Even Brian Wilson didn't write a car song that depressing.

If Ashley had a car, she'd be able to leave school for lunch instead of sitting in the library reading TIME. But when I pushed the idea of saving up for a used car, she said, "A car is a hassle. You have to feed it gas and maintain it. It's like getting yourself in a relationship." This undercut the next argument I was planning on making, which is that a car would help her get into a relationship.

After a while, I got frustrated with Ashley's excuses and said, "Don't you want your freedom?" To which she paused thoughtfully and said, "I guess I could go to Costco. Costco is a great place to hang out because there is free food and you can play hide-and-seek."

"No," I said, "I meant to get drunk and have sex."

"I guess you could do that at Costco," she said.

I told Ashley I was going to nag her every few days until she got that license and finally experienced the wild freedom of youth, eating microwaved mini hot dogs off toothpicks and purchasing bulk quantities of paper goods. After just a few Facebook messages, she relented. I had the deep, satisfying feeling of a man who throws just one starfish back in the ocean but knows that starfish is almost certainly going to get in an accident that sinks it with waves of debilitating debt.

Yes, I suppose there are worse things than nice, smart, risk-averse, parent-respecting kids like Ashley extending their adolescence. Such as zombies. But I still would rather have reckless teens on the road than kids who cower in fear of the nonvirtual world. Because as I get old and cranky, I'm going to need someone to yell at.

Lord of the Dance.
Avicii weaves new sounds into the DJ scene

AVICII: CIM EK

Avicii's "Wake Me Up!" has sold more than 3 million copies worldwide

Dan Macsai | 621 words

"I'm a DJ," says Avicii. "I get the party started." But six years after he started posting tracks online--back then, most people called him Tim Bergling--Avicii's breed of DJ is more icon than everyman. At 24, he's already performed with Madonna, released back-to-back-to-back hit singles (most recently, the bluegrass-tinged "Wake Me Up!") and played six-figure gigs at clubs all over the planet. He's also, alongside elders like Tiësto and David Guetta, one of the biggest forces behind the rise of electronic dance music (EDM), better known as the soaring--or grating, depending on whom you ask--oontz-oontz beats driving new songs from Lady Gaga, Katy Perry, Ellie Goulding and more. Time recently caught up with Avicii, a Stockholm native, as he revved up a tour to support his first studio album, True, out Sept. 17.

You're famous for traditional EDM singles. But this album has hints of rock, bluegrass, country and more. What drove the change?

I love finding out-of-the-box inspirations and blending them with what I've done in the past. And when I started to experiment with genres, it didn't sound forced. Maybe that's because it's all music that I listened to growing up, and it's all music that I love.

Do you write your own songs?

I'm good at melody--I'll write the top-line melody and ideal words I want to go with it. But I'm not that good at writing lyrics. I bounce those back and forth with songwriters or someone who can sing.

How'd that go with Mac Davis, who co-wrote two songs on True? He's a 71-year-old country star who wrote Elvis Presley's hit "In the Ghetto."

Oh, he was great. We had to go in and change the melodies a bit, because they were really country-sounding. But I loved the potential straightaway.

Would you ever sing on your own track?

No. Maybe some background stuff. You won't hear it's me!

In theory, you could preset an entire Avicii mix before you perform. Do you?

I've never tried to hide the fact that I do a lot of planning beforehand--finding new tracks, making new bootlegs [remixes] for certain areas of the world. I'm a control freak. I need to know that stuff will work. But it's never a preprogrammed set in the sense that I'm forced to play a certain way. I can still jump in and out of a set anytime I want, in case it doesn't work or doesn't go as planned. It's not rocket science. It just takes time.

What happens when things go wrong--a power outage or something?

People start cheering! That's what always happens. Either they think it's part of the show, or they're like, Oh, come on, put the music on.

You're around parties all the time. How much do you actually partake?

I used to party a lot. Everyone does in the beginning when they're getting accustomed to this world. Then I got a pancreatitis attack [at 21], which is very rare. So that forced me to do a 180 and stop drinking.

Does that ever get difficult? EDM culture is notoriously party- and drug-centric.

No, I mean, I can still party. I just--I can be sober and party. It's all a learning experience.

Why the name Avicii?

Avici is the lowest level of Buddhist hell.

And the extra i?

When I started out, I was Avici with one i. But on MySpace, that name was taken. So I added another i, and it worked! n

Double-Edged S.H.I.E.L.D.
This spin-off has no Thor but lots to say about secrets

AGENTS OF S.H.I.E.L.D.: BOB D'AMICO--ABC/GETTY IMAGES

James Poniewozik | 701 words

In a world--to steal a phrase from blockbuster-movie trailers--where superheroes body-slam aliens in Manhattan, do you feel protected or terrified? In a world plagued by dastardly demigods, are you O.K. with giving unlimited power to omniscient, secretive superspies who are--probably, as far as you know--the good guys keeping you safe?

These are a couple of the questions that throb like a radioactive spider bite within the slick entertainment of Marvel's Agents of S.H.I.E.L.D. Co-created by Joss Whedon (Buffy the Vampire Slayer) and spun off from his colossal 2012 movie The Avengers, it's unsurprisingly the most anticipated TV drama this fall. What is surprising is that it's also, unintentionally, fall's most topical drama about surveillance, government secrecy and authoritarian overreach.

S.H.I.E.L.D. (ABC, premieres Sept. 24) picks up after The Avengers' climactic Battle of New York. Captain America and crew don't appear in the series, which focuses on the movie's shadowy Strategic Homeland Intervention Enforcement and Logistics Division, made up of superspies who keep the peace behind the scenes.

Not everyone, it turns out, is jazzed by the discovery of superbeings capable of rezoning chunks of midtown with their fists or that of S.H.I.E.L.D., a near omniscient transglobal group that kept super-phenomena hidden for decades. ("We protect people from news they aren't ready to hear," one agent puts it.) Rising Tide, an anti-S.H.I.E.L.D. hacktivist group, is out to expose its classified secrets and "rise against those who shield us from the truth" (pun clearly intended). The pilot also raises the Occupyesque idea that the existence of superheroes might make the less-than-super rest of us--the 99.999%--feel more marginalized. "The rest of us, what are we?" one civilian rails. "They're giants. We're what they step on."

S.H.I.E.L.D.'s pilot was written and shot well before the revelations from Edward Snowden about National Security Agency surveillance. In light of those, says Whedon, "it's definitely gotten way more topical." But, he adds, "we knew before any of the [NSA] stuff that we were basically dealing with a young, individualistic, ragtag group of"--his voice deepens to become mock-menacing--"faceless bureaucrats who know everything about you." S.H.I.E.L.D. delivers action but also a conversation about the price of security.

Whedon, who revealed high school as a Hellmouth in Buffy, has made the consequences of technology a theme in his series before. His space opera Firefly was about the aftermath of a failed rebellion against a corporate-authoritarian government; his sci-fi drama Dollhouse was set in a dystopian future in which people's minds could be rewritten to make them into subservient, mutable "dolls."

S.H.I.E.L.D. is a lighter story, with a trickier line to walk. It has to create its identity while serving a billion-dollar movie franchise. (Whedon is directing The Avengers: Age of Ultron for 2015, which means that if the series lasts two seasons, it represents "44 chances to make The Avengers less special.") It's trying to complicate its heroes while not alienating the fan base. This is the balance, really, between cult Joss, the quirky TV rebel who subverts pulp conventions, and blockbuster Joss, the hit-movie populist who loves pulp's delicious pulpiness.

Whedon represents this tension in the pilot by contrasting Rising Tide activist Skye (Chloe Bennet) with gee-whiz-enthusiastic S.H.I.E.L.D. honcho Agent Coulson, played by Clark Gregg. (Movie fans may recall that he inconveniently dies in The Avengers; I'll spare them the spoiler of how he's brought back.) Between them, Whedon hopes he can capture the real world's love-hate relationship with tech and secret guardians. "The NSA collecting data on me freaks me out," Whedon says. "And yet I'm from the generation that wants to put a GPS on their kids."

It's a tricky balance to strike, but the idea that not everyone would welcome superheroes and superpowers is bred into Marvel's DNA. Spider-Man was seen as a public enemy by some; The X-Men's mutants were persecuted; the Hulk is both hero and natural disaster.

Of course, comics are also about, well, marveling. Above all, Whedon is making a fun series for fans who are unembarrassed to cheer awesome spies and their flying cars. But somewhere in its comic-book margins is a small, resonant worry: that in a world of real dangers, a shield of protection can become a veil of secrecy.

Pop Chart

UNTITLED (MICKEY), 1995: JOYCE PENSATO, COLLECTION OF CHARLINE VON HEYL AND CHRISTOPHER WOOL, PHOTO BY JASON MANDELLA

Nick Carbone, Kelly Conniff, Andrew Katz, Nate Rawlings, Lily Rothman, Courtney Subramanian | 908 words

TV-HOST EDITION

GOOD WEEK/BAD WEEK

Alec Baldwin

The 30 Rock star (and sometimes loose cannon) will host a weekly MSNBC show

Hoda Kotb

The Today show host accidentally revealed her cell-phone number on air while testing a Samsung smart watch

SNACKS

Trick or Treat (or Both)

You can already drink pumpkin vodka and pop a can of pumpkin Pringles. So why wouldn't Target launch a line of pumpkin-spice M&M's? The new snack will be sold through Halloween--just in time to unload the leftovers on unsuspecting kids.

PSYCHEDELIC

7.74

Height, in feet, of the world's largest lava lamp, which was unveiled at the London Design Festival to celebrate the 50th anniversary of the 1960s bedroom fixture

OUT OF TOON

Imagine your favorite character, reimagined. That's what Joyce Pensato does, rendering American icons like the Simpsons and Mickey Mouse--above, in Untitled (Mickey)--in dramatic enamel paintings and charcoal drawings. "Joyce Pensato: I Killed Kenny" is on view at the Santa Monica Museum of Art through Sept. 28.

VERBATIM

'I can assure you, I won't go soft.'

Simon Cowell, famously acerbic X-Factor judge, insisting he won't lose his rough exterior after his baby is born

QUICK TALK

Andy Samberg

He left Saturday Night Live in 2012 after nearly 150 episodes, but Samberg, 35, will be back on TV screens soon. The actor--also known as part of the comedy-music trio the Lonely Island--stars in the new cop sitcom Brooklyn Nine-Nine, premiering Sept. 17.

--LILY ROTHMAN

I guess the first thing I have to ask is whether you've ever been arrested.

I've never been officially arrested, no.

Officially?

I've been held, like, drinking in a park or something, but I've never been booked. They always go, "All right, get out of here, you knuckleheads."

Does everyone ask you that now that you're playing a cop?

You're the first.

Wow, I thought it'd be obligatory.

No, the obligatory thing I get asked is, "What's it like working with Andre Braugher?"

So what's it like?

It's great!

You play a detective with authority-figure issues. Is that a problem for you in real life?

I wouldn't say I have a complex about authority figures. I more have a problem not goofing off. Pretty much every report card in elementary school had the "needs to display self-control" box checked.

Have you improved in that area?

Mildly. Oh so mildly.

Have you ever had a job where you wore a uniform?

I worked at a movie theater when I was in college. That was a very, very ugly uniform. It was the '90s standard-issue purple and black polo, black pants and the grease of popcorn butter. I never took it home and washed it.

Will anyone ever break into song on Brooklyn Nine-Nine, like in your sketches on SNL?

Not as of yet. I think we'd have to get pretty deep in to jump that shark. Make no mistake--that's a shark I would love to jump.

What's Andy's must-watch show right now?

"Breaking Bad. I'm constantly caught off guard. Every time I think we're going to have to wait for something to happen, it happens sooner. It's insane that it's that good."

TEXT MESSAGES

Robert Indiana is most famous for his signature LOVE--the red one with the tilted letter O--but that's just one part of the pop artist's oeuvre. His works use bold combinations of text and graphics to comment on American culture: he once wrote about how logos and signs were so inescapable that they seeped into his paintings, as seen here in the 1962 piece The American Gas Works, which incorporates a found commercial stencil. His first major museum retrospective, "Robert Indiana: Beyond LOVE," opens at the Whitney Museum of American Art in New York City on Sept. 26.

MOVIES

Don't Judge a Flick by Its Casting

50 Shades of Grey co-stars Charlie Hunnam and Dakota Johnson--now the subjects of a recasting petition--aren't the first screen actors to face angry fans convinced that their fictional heroes should be played by someone else. But do those doubts ever have merit? Here's how five other controversial castings fared in the long run.

RENÉE ZELLWEGER

Bridget Jones's Diary

Fans worried that the svelte American actress couldn't embody the frumpy Brit, and they were ... wrong! Zellweger transformed herself, and the film grossed $282 million worldwide.

RYAN REYNOLDS

The Green Lantern

Fans weren't sure Reynolds would have enough charisma to pull off the superhero, and they were ... right! The film was panned by critics and grossed $220 million worldwide, well below expectations.

DANIEL CRAIG

Casino Royale

Fans felt Craig's hair color--blond--was decidedly un-Bond-like, and they were ... wrong! The movie grossed $599 million worldwide.

TOM CRUISE

Jack Reacher

Fans of the books said Cruise was too short to embody mighty Jack Reacher for the masses, and they were ... right! The film grossed $216 million globally, below expectations.

JENNIFER LAWRENCE

The Hunger Games

Critics said she had too "womanly" a figure to portray gaunt Katniss Everdeen, and they were ... wrong! Lawrence received rave reviews, and the film grossed $691 million worldwide.

TV

Breaking Good

Fans may fret over the end of Breaking Bad, but a rehab center in Albuquerque, N.M.--the setting of AMC's meth-dealer drama--is using the finale for good: it's offering two scholarships to low-income residents who need treatment, under the moniker Breaking Addiction. Jesse Pinkman would be proud.

Rx

3 THINGS YOU DON'T HAVE TO WORRY ABOUT THIS WEEK

1. A dearth of Miley Cyrus talking points.

The pop star's "Wrecking Ball" music video--in which she goes nude--logged a record 19 million plays during its first 24 hours on Vevo.

2. Dated acts at halftime.

The NFL has tapped Bruno Mars to perform in the coveted Super Bowl slot in 2014.

3. Getting your '90s nostalgia fix.

Arsenio Hall's new show debuted to respectable ratings despite his 19-year TV absence.

FOR TIME'S COMPLETE FILM AND TV COVERAGE, VISIT entertainment.time.com

Take Back the Night
The king of insomniac radio is ready to reclaim his crown

Photograph by Ian Allen for TIME

The late shift Bell works solo in his studio, taking calls and mixing audio with only his atomic clock and e-cigarette for company

Jack Dickey/Pahrump | 1556 words

Not much happens in the patch of the Mojave Desert an hour's drive west of Las Vegas' nonstop carnival. It's hot during the day. Most nights the sky fills with stars. Sometimes there's a lightning or dust storm.

But since July, two events have shaken the typically sleepy region. After decades of obfuscation, the CIA acknowledged the existence and location of Area 51, a base for testing secret military aircraft that has long been central to UFO lore. And Art Bell, whose late-night radio show once attracted an audience of millions of loyal insomniacs, announced he was returning to the airwaves full time after more than 10 years away.

For Bell fans, the timing wasn't a coincidence. They are the sort of people inclined to believe the government knows more about mysterious shapes in the sky than it lets on. Bell has been speaking and listening to them since 1984, broadcasting first from Las Vegas and then, after 1988, from a studio in his home in Pahrump, an unincorporated town of 36,441 not far from Area 51.

From 1 a.m. to 6 a.m. E.T., six days a week, Bell held forth on all manner of science, science fiction and science-maybe-fiction in his smoky, spooky voice. He was a one-man band, cuing the bumper music, taking calls and interviewing guests entirely on his own, explaining everything from clairvoyance to the chupacabra in a relaxed but foreboding style. From 1997 to 2002, his Coast to Coast AM was one of the five most-listened-to shows on talk radio, syndicated to as many as 500 North American stations and attracting a peak weekly audience of 15 million. Then Bell walked away.

Bell had taken breaks before, most notably a two-week spell in 1998 after his son was molested by a teacher and a longer one in 2000 to deal with the ongoing fallout. When he retired in 2002, Bell agreed to host weekends, saying the lighter load would ease his back problems. Weeknights were ceded to George Noory, his eventual successor. As Noory took command, Bell's hosting duties gradually tapered off. He last appeared on the show he created in 2010.

Bell says the decision to come out of retirement was entirely his, a response to the direction that Noory has taken the show--closer to talk radio's overcaffeinated political chat (Alex Jones, the conspiracy theorist best known for claiming that the government perpetrated the Boston bombings, is a regular guest) than the open-minded exploration of the supernatural that defined Bell's tenure. Noory, he says, has "ruined" the franchise. Noory declined to speak to Time; a spokesperson for his syndicator, Premiere Networks, said the company is "fortunate" to have him.

"Not a chance in hell," Bell says, when asked if he would ever return to his old show. "It's not personal. It's just an institutional hatred. I really hate them."

But he still loves radio, and listeners still love him. And that's why, at age 68, after a sojourn in the Philippines, Bell is back in Pahrump preparing for his return. From a studio in a double-wide trailer on his property, the onetime king of insomniac radio is working out the kinks of what will debut Sept. 16 on Sirius XM satellite radio as Art Bell's Dark Matter. It will run live from 10 p.m. to 1 a.m. E.T., four nights a week (reruns will air the rest of the week), though Bell says he plans to go an extra hour most nights, putting his new show in competition with the first hour of his old one. Dark Matter will feel familiar to Coast fans: Bell plans to cover the same topics, with many of the same guests, and he's even recruited the old Coast announcer to set the mood.

But more than a decade away can sow doubts, even among the best. "Memories grow fond over time," Bell says, fretting over his return. "My listeners may remember me being better than I was."

Talking Through the Night

America's overnight army--insomniacs, long-haul truckers, emergency-room nurses--need something to keep them company while the rest of the country sleeps. Radio has long been a willing companion. The format favors good listeners and drawn-out discussion, an even keel over daytime's hot temper.

Long John Nebel, a New York City--based disc jockey, dominated the overnight air in the 1960s with a call-in show heavy on tales of ghosts, aliens and witches, according to Michael Keith, an expert in radio and American culture at Boston College. The supernatural gave way to political chat in the 1970s, with Larry King as the standard-bearer. But King's move to daytime in 1993 opened the door for a return of the weird, and Bell burst through it.

He moved away from politics and embraced the solitude of the night and the possibility of the desert. Who better to talk about Area 51, after all, than the man broadcasting from its shadow, who claimed to have seen things out there "that'd make your hair curl"?

Simply listening to Bell, though, could make your hair curl. It wasn't just the creepy topics--aliens, monsters, life after death, parallel universes--but the way he milked the theater of every moment. Callers often sounded impatient, breathless, as if they knew too much and were running out of time to share it. You, almost certainly alone somewhere in the dark, were scared. You had to be.

Bell ministered to the overnight army and added a large contingent of sci-fi junkies to its ranks. In the days before everyone had endless microtargeted media options on demand, Bell pitched a very big tent. And that audience remained during Bell's years away, hungry for his return. Every vague comeback rumor was met with a flurry of online anticipation.

That's what Sirius XM was after. Satellite radio's business model relies on hosts with fans passionate enough to pay for a subscription. The company had been hunting for an "Art Bell type," says Jeremy Coleman, Sirius XM's boss of talk programming. "Then I had one of those 'Duh' moments. What about actual Art Bell?" Coleman got to "stalking" Bell on social media, eventually paying to send him a priority message on Facebook. Coleman's pitch: "I told him that the show would work only if he actually spoke the truth ... We want one thing from Art Bell, and it's Art Bell."

Bell, who had resisted comeback offers from smaller syndicators, was sold. "I'm on extraterrestrial radio now," he says, relishing the turn of phrase.

Though the deal was modest by his standards--Bell says he'll earn $75,000 annually, plus half of the show's profits for three years--he was drawn by the freedom it offered: few commercial breaks, total creative control and the chance to prove that his brand of weird still has a following among America's overworked and underslept.

The audience for conspiracies and antigovernment screeds is vast, but Bell says he doesn't want them. "George can keep them," Bell says with a smile. He's after a different demographic: "The sane fringe."

On a recent August day, bell seems in better shape than he was the last time he was on the air regularly. He traded his Marlboro Lights for electronic cigarettes, and his 29-year-old fourth wife Airyn and their 6-year-old daughter Asia keep him spry. He looks like a droopier version of his 1990s self--not a bad outcome given the hours he keeps. (Bell never goes to bed before 2 a.m.) He says his time abroad rejuvenated him too. He moved to Manila to marry Airyn in 2006, three months after his wife's unexpected death from an asthma attack.

Night has long since fallen over the Kingdom of Nye, as Bell called his home county in the old Coast intro. The sky is pitch black; just a few stars are bright enough to slice through the inky pall. Normally you can see the Milky Way, but the unseasonable humidity, Bell says, has ruined the view.

"You know," he says, "I wish you had come on another night, to see it for yourself. It's really something." But it's not an option. I'll just have to take Art Bell's word for it.

Storm Warning.
A Katrina-ravaged hospital grapples with mercy and death

PHOTOGRAPH BY CAROLYN GRIFFIN FOR TIME

"At last through the broken windows, the pulse of helicopter rotors and airboat propellers set the summer morning air throbbing with the promise of rescue."

Radhika Jones | 576 words

In 1967, New Orleans' Southern Baptist Hospital became one of the first facilities in the Southeast to purchase a collection of a miraculous technology known as the crash cart. Its gadgets--respirator, aspirator and defibrillator, among others--could breathe life into a body given up for lost. For doctors who used the crash cart, it meant nothing less than redefining death. And it raised major ethical questions about who would do that redefining and how.

Thirty-eight years later, Southern Baptist Hospital, renamed Memorial Medical Center, lay in the flood zone of Hurricane Katrina. Stranded in a city given over to chaos, with neither a clear path to safety nor a clear internal chain of command, a small group of staffers classified patients according to triage conventions. Those least likely to survive would be evacuated last. As Sheri Fink writes in Five Days at Memorial: Life and Death in a Storm-Ravaged Hospital (Crown; 558 pages), conditions deteriorated to the point at which a handful of doctors and nurses became convinced that certain patients with do-not-resuscitate orders were not going to make it.

Even in the best circumstances, medical professionals are charged not only with protecting life but also with easing the passage to death. So when a few began quietly administering high doses of morphine and other sedatives to the 20 most critical patients, were their actions criminal or humane--or both?

The story of what happened at Memorial unfolds with creeping doom. Fink interviewed hundreds of sources, creating detailed portraits of the staff and patients and a terrifying sense of atmosphere. The rains came on Sunday; by Wednesday conditions inside resembled less a 21st century medical facility than a refugee camp: "The hospital was stifling, its walls sweating. Water had stopped flowing from the taps, toilets were backed up, and the stench of sewage mixed with the odor of hundreds of unwashed bodies."

The danger shape-shifted from the winds to the heat to the floodwaters to the apathy of the hospital's Texas-based administrators. (Sample e-mail: "If you are beginning your plans to evacuate it is our understanding the National Guard is coordinating. Good luck.") Darkness brought the menace of looters and desperation on the part of those marooned inside. Each new threat exposed yet another flaw in Memorial's arrangements:

The hospital's preparedness plan for hurricanes did not anticipate flooding. The flooding plan did not anticipate the need to evacuate. The evacuation plan did not anticipate a potential loss of power or communications.

Those plans were written shortly after 9/11; water wasn't the paramount fear. Memorial's bioterrorism plan, Fink writes, "ran 101 pages, as opposed to the 11 pages devoted to hurricanes."

Katrina was an American tragedy--you can't read this book and think otherwise--but its aftermath holds valuable lessons. Fink, a Pulitzer Prize--winning journalist who trained as a physician, writes powerfully of the investigation into the Memorial deaths and, in her epilogue, of subsequent disasters: the earthquake in Haiti, Hurricane Sandy in the Northeast, an influenza pandemic in India. Her findings are troublingly murky. Detailed protocols help, but better results often come from improvisation. Extra supplies help too, but when devices like ventilators must be rationed, all the time in the world can't provide easy answers to the question of who should be first in line. But in chronicling the devastating events at Memorial, Fink shows how important these discussions are, in a time of crisis or not. For the need to draw a line between life and death doesn't always announce itself with storms and floods.