Friday, January 28, 2011

Hedge Fund Manager Takes Home Record $5 Billion

Hedge Fund Manager John Paulson Takes Home Record
$5 Billion in Profits in 2010

A huge Wall Street payday is raising questions as to whether the nation's top earners should benefit from tax breaks while so many unemployed Americans continue to struggle.

Industry experts say it could be the largest yearly haul ever for a financial trader, but the stunning income is hardly new for Paulson. He set the previous record of $4 billion in earnings in 2007 by betting against the risky mortgages that brought down the housing market.

Giant paydays may be back for Wall Street's top earners, but across the country the jobs aren't. The newest income record comes as the nation's unemployment remains stuck at more than 9 percent.

Capital Gains Taxed at Lower Rate
On top of that, a good portion of Paulson's profits are considered long-term capital gains, income that is taxed by the federal government at a rate of 15 percent. Meanwhile, most Americans pay an income tax rate up to 35 percent.

The seeming disparity has some lawmakers angrily asking the question, why are hedge fund managers benefitting from tax breaks that the average American family does not receive?

"I think it's outrageous," said Rep. Sander Levin, D-Mich. "He should pay like everybody else does, ordinary income taxes. He's simply managing other peoples' money, not his own."

Closing Loophole Could Generate $25 Billion, Lawmaker Says
Levin argued that closing the loophole could bring in $25 billion in taxes over the next decade alone, but the lawmakers will have a tough time changing regulations with a White House focused on strengthening ties to the business community.

The Obama administration has sought a fresh start with big business, reaching out to Wall Street and the U.S. Chamber of Commerce.

"The government has tried repeatedly to tax these guys more, and they tend to back away because of lobbying, so I expect they'll continue to make these astronomical sums," said Sebastian Mallaby, the author of "More Money Than God."

John Paulson Defends Tax Rate for Top Earners as 'Fair'
There are signs that the Obama administration is at least aware of the outrage. Just today, Commerce Secretary Gary Locke acknowledged to ABC News that Paulson's hedge fund payday is enormous.

"It's really part of the bizarre tax code that we have," Locke said.

Paulson has defended the smaller taxes for elite top earners. At the height of the recession in November 2008, he spoke before the House Committee on Oversight and Government Reform.

"We certainly appreciate your concern for fairness in tax code, but I will say I believe our tax situation is fair," Paulson said.

Thomas Edison's Predictions: Spot On

This Edison guy - it turns out that he knew a few things.

As if we needed any proof, the Wizard of Menlo Park had a keen insight into how technology would go on to shape our lives. In an interview with the Miami Metropolis in 1911, Thomas Alva Edison sketched out a future in which:

Electricity supplants steam as the power source for trains
Air travel is a regular feature of our daily lives
Steel becomes cheap and plentiful as a construction material
An e-reader of sorts where "a book two inches thick will contain forty thousand pages, the equivalent of a hundred volumes."

Truth be told, Edison wasn't 100% clairvoyant (who is?) He predicted that mankind would have discovered how to turn iron into gold so that by today we would be able to tool around in golden taxicabs. OK, he blew that one, but still a darned good reading of the tea leaves.

Mubarak Vows Cabinet Shift but Defends Deploying Army as Revolt Sweeps Egypt

CAIRO — With police stations and the governing party’s headquarters in flames, and much of this crucial Middle Eastern nation in open revolt, President Hosni Mubarak of Egypt deployed the nation’s military and imposed a near-total blackout on communications to save his authoritarian government of nearly 30 years.

Protesters continued to defy a nationwide curfew in the early hours of Saturday, as Mr. Mubarak, 82, breaking days of silence, appeared on national television, promising to replace the ministers in his government, but calling popular protests “part of bigger plot to shake the stability” of Egypt. He refused calls, shouted by huge, angry crowds in the central squares of Cairo, the northern port of Alexandria and the canal city of Suez, for him to resign.

“I will not shy away from taking any decision that maintains the security of every Egyptian,” he vowed, as gunfire rang out around Cairo.

Whether his infamously efficient security apparatus and well-financed but politicized military could enforce that order — and whether it would stay loyal to him even if it came to shedding blood — was the main question for many Egyptians.

It was also a pressing concern for the White House, where President Obama called Mr. Mubarak and then, in his own Friday television appearance, urged him to take “concrete steps” toward the political and economic reform that the stalwart American ally had repeatedly failed to deliver.

Whatever the fallout from the protests — be it change that comes suddenly or unfolds over years — the upheaval at the heart of the Arab world has vast repercussions for the status quo in the region, including tolerance for secular dictators by a new generation of frustrated youth, the viability of opposition that had been kept mute or locked up for years and the orientation of regional governments toward the United States and Israel, which had long counted Egypt as its most important friend in the region.

Many regional experts were still predicting that the wily Mr. Mubarak, who has outmaneuvered domestic political rivals and Egypt’s Islamic movement, the Muslim Brotherhood, for decades, would find a way to suppress dissent and restore control. But the apparently spontaneous, nonideological and youthful protesters also posed a new kind of challenge to a state security system focused on more traditional threats from organized religious groups and terrorists.

Friday’s protests were the largest and most diverse yet, including young and old, women with Louis Vuitton bags and men in galabeyas, factory workers and film stars. All came surging out of mosques after midday prayers headed for Tahrir Square, and their clashes with the police left clouds of tear gas wafting through empty streets.

For the first time since the 1980s, Mr. Mubarak felt compelled to call the military into the streets of the major cities to restore order and enforce a national 6 p.m. curfew. He also ordered that Egypt be essentially severed from the global Internet and telecommunications systems. Even so, videos from Cairo and other major cities showed protesters openly defying the curfew and few efforts being made to enforce it.

Street battles unfolded throughout the day Friday, as hundreds of thousands of people streamed out of mosques after noon prayers on Friday in Cairo, Alexandria, Suez and other cities around the country.

By nightfall, the protesters had burned down the ruling party’s headquarters in Cairo, and looters marched away with computers, briefcases and other equipment emblazoned with the party’s logo. Other groups assaulted the Interior Ministry and the state television headquarters, until after dark when the military occupied both buildings and regained control. At one point, the American Embassy came under attack.

Six Cairo police stations and several police cars were in flames, and stations in Suez and other cities were burning as well. Office equipment and police vehicles burned, and the police seemed to have retreated from Cairo’s main streets. Brigades of riot police officers deployed at mosques, bridges and intersections, and they battered the protesters with tear gas, water, rubber-coated bullets and, by day’s end, live ammunition.

With the help of five armored trucks and at least two fire trucks, more than a thousand riot police officers fought most of the day to hold the central Kasr al-Nil bridge. But, after hours of advances and retreats, by nightfall a crowd of at least twice as many protesters broke through. The Interior Ministry said nearly 900 were injured there and in the neighboring Giza area, with more than 400 hospitalized with critical injuries. State television said 13 were killed in Suez and 75 injured; a total of at least six were dead in Cairo and Giza.

The uprising here was also the biggest outbreak yet in a wave of youth-led revolts around the region since the Jan. 14 ouster of President Zine el-Abidine Ben Ali of Tunisia — a country with just half Cairo’s population of 20 million. “Tunis, Tunis, Tunis,” protesters chanted outside the Tunisian Embassy here.

“Egyptians right now are not afraid at all,” said Walid Rachid, a student taking refuge from tear gas inside a Giza mosque. “It may take time, but our goal will come, an end to this regime. I want to say to this regime: 30 years is more than enough. Our country is going down and down because of your policies.”

Mr. Mubarak, in his televised address, said he was working to open up democracy and to fight “corruption,” and he said he understood the hardships facing the Egyptian people. But, he said, “a very thin line separates freedom from chaos.”

His offer to replace his cabinet is unlikely to be viewed as a major concession; Mr. Mubarak often changes ministers without undertaking fundamental reforms.

A crowd of young men who had gathered around car radios on a bridge in downtown Cairo to listen to the speech said they were enraged by it, saying that they had heard it before and wanted him to go. “Leave, leave,” they chanted, vowing to return to the streets the next day. “Down, down with Mubarak.”

A bonfire of office furniture from the ruling party headquarters was burning nearby, and the carcasses of police vehicles were still smoldering. The police appeared to have retreated from large parts of the city.

Protesters throughout the day spoke of the military’s eventual deployment as a foregone conclusion, given the scale of the uprising and Egyptian history. The military remains one of Egypt’s most esteemed institutions, a source of nationalist pride.

It was military officers who led the coup that toppled the British-backed monarch here in 1952, and all three Egypt’s presidents, including Mr. Mubarak, a former air force commander, have risen to power through the ranks of the military. It has historically been a decisive factor in Egyptian politics and has become a major player — a business owner — in the economy as well.

Some protesters seemed to welcome the soldiers, even expressing hopes that the military would somehow take over and potentially oust Mr. Mubarak. Others said they despaired that, unlike the relatively small and apolitical army in Tunisia, the Egyptian military was loyal first of all to its own institutions and alumni, including Mr. Mubarak.

“Will they stage a coup?” asked Hosam Sowilan, a retired general and a former director of a military research center here. “This will never happen.” He added: “The army in Tunisia put pressure on Ben Ali to leave. We are not going to do that here. The army here is loyal to this country and to the regime.”

One of the protesters leaving a mosque near Cairo was Mohamed ElBaradei, an Egyptian who won the Nobel Peace Prize for his work with the International Atomic Energy Agency and has since emerged as a leading critic of the government.

“This is the work of a barbaric regime that is in my view doomed,” he said after being sprayed by a water cannon.

Now, he said, “it is the people versus the thugs.”

The Muslim Brotherhood, for decades Egypt’s only viable opposition movement, had taken a backseat to the youth protest on Tuesday. But, perhaps stunned at the scale of that uprising, it called its supporters to the streets in full force on Friday.

Many protesters shouted religious slogans that were absent on Tuesday, though not the Brotherhood’s trademark “Islam is the solution.” Instead, the crowds seemed so large and diverse that it was impossible to gauge what proportion might have subscribed to the Brotherhood’s Islamist ideology.

“We decided to participate in full force today because we felt that the people were starting to respond,” said Gamal Tag Eddin, a middle-aged lawyer and a member of the Brotherhood. “We could not participate alone because the government uses us to scare people here and abroad. Now that the people have moved, the Brotherhood are in with all their members in order to bring down this oppressive regime.”

Several others said they felt shame that their homeland — the cradle of civilization and a onetime leader of the Arab world — had slipped toward backwardness and irrelevance, eclipsed by the rise of the Persian Gulf states. Some said they felt outdone by tiny Tunisia.

Mohamed Fouad, sitting near the Ramses Hilton nursing a wound from a rubber-coated bullet in the middle of his forehead, wondered how long it would take to dislodge Mr. Mubarak. “In Tunis, they protested for a month,” he said. “But they have 11 million people. We have 85 million.”

Reporting was contributed by Kareem Fahim, Mona El-Naggar, Liam Stack and Dawlat Magdy from Cairo, Anthony Shadid from Beirut, Lebanon, Alan Cowell from Paris, and Maria Newman and Christine Hauser from New York.

Sarah Palin Elaborates on "Sputnik" Criticism

Sarah Palin posted to Facebook on Friday elaborating on her criticism of President Obama's State of the Union call for the United States to have a new "Sputnik moment" grounded in investing to unleash innovation.

Palin said in an interview on Fox News that Mr. Obama had offered a "WTF" moment (a derogatory play on his call for America to "win the future") in his speech and said the president "needs to remember that what happened back then with the former communist USSR and their victory in that race to space, yeah, they won, but they also incurred so much debt at the time that it led to the inevitable collapse of the Soviet Union."

The response caused confusion because Mr. Obama was using "Sputnik moment" to describe the American response to the launch of the Soviet satellite, not celebrating the Soviet Union's ability to launch the satellite in the first place.

On Facebook Friday afternoon, Palin quoted a piece by Hoover Institution's Research Fellow Peter Schweizer defending her and criticizing a Washington Post writer, with a focus on whether the Soviet Union had a debt problem at the time of Sputnik.

She then wrote that "in a recent interview I mentioned analogies that could relate to solutions to our economic challenges, including the difference between a communist government's 'Sputnik' and the private sector's 'Spudnut.'"

Continued Palin: "The analogies I mentioned obviously aren't comparable in size, but highlight a clear difference in economic focus: big government command and control economies vs. America's small businesses."

She pointed readers to a Washington coffeeshop called The Spudnet Shop, writing, "Businesses like this coffee shop don't receive big government bailouts." Palin first mentioned The Spudnet Shop in her Fox News interview Wednesday.

"They produce something with their own ingenuity and hard work," she addsed "And here we see the former communist Soviet Union's advancement (before its government debt-ridden demise) vs. America's small businesses that are the backbone of our economy."

Palin went on to call for a "greater appreciation for the free market ingenuity of ordinary American entrepreneurs."

"Don't stifle their growth with burdensome regulations like Obamacare and cap-and-tax," writes the former Alaska governor. "Government should be on their side, not in their way."

An employee at The Spudnet Shop told Hotsheet Friday that Palin's aunt lives in the area, which may have been the reason it garnered Palin's attention.

The employee, who wanted to be identified only as Karen, said there has been an increase in customers since Palin first mentioned the shop Wednesday night, and that local newspaper and television stations have shown up as well.

Karen said there had not been much positive or negative feedback because of the Palin connection. "People are pretty civil," she said.

Egyptian Army Called In as Protests Rage

CAIRO — After a day of increasingly violent protests throughout Egypt, state media reported that President Hosni Mubarak ordered the military into the streets to reinforce police struggling to contain one of the most serious challenges to his long and autocratic rule.

The president also imposed an overnight curfew nationwide, but fighting continued on the streets of Cairo, the capital, and smoke from fires blanketed one of the city’s main streets along the Nile. The ruling party’s building was in flames at nightfall, and dramatic video footage on Al Jazeera showed a crowd pushing what they identified as a burning police car off a bridge.

CNN said that Mr. Mubarak was expected to deliver a televised address, though it was unclear when that would happen.

Demonstrations began earlier in the day as thousands poured from mosques after noon prayers, growing increasingly violent as protesters clashed with police who fired tear gas, rubber bullets and water cannons. The demonstrations, on what protesters called a “day of wrath,” were on a scale far beyond anything in the memory of most residents.

The unrest in Egypt came after weeks of turmoil across the Arab world that toppled one leader in Tunisia and encouraged protesters to overcome deep-rooted fears of their autocratic leaders and take to the streets. But Egypt is a special case — a heavyweight in Middle East diplomacy, in part because of its peace treaty with Israel, and a key ally of the United States. The country, often the fulcrum on which currents in the region turn, also has one of the largest and most sophisticated security forces in the Middle East.

Calling out the military is a signal of how dramatically the situation had spiraled out of control. The army, one of the country’s most powerful and respected institutions, prefers to remain behind the scenes and has not been sent into the streets to quell unrest in many years. But the police, a much reviled force prone to violent retribution against anyone who publicly defies the state, appeared unable to quell the unrest. In several cases in the capital and elsewhere, the police were forced to back down by throngs of protesters.

In one of the most dramatic scenes of the day, in Alexandria, protesters snatched batons, shields and helmets from the police. Honking cars drove up and down a main street, holding police riot shields and truncheons out the windows as trophies.

In both Cairo and Alexandria, some army patrols were greeted with applause and waves from the crowds — a seemingly incongruous response from demonstrators who say they want to bring down the president. But many people support the army for its success in shocking the Israeli Army with a surprise attack in 1973 and for its perceived reluctance, at least in the past, to get involved in politics.

Secretary of State Hillary Rodham Clinton, reading a prepared statement, called Friday on Egypt’s government to “restrain the security forces” and said that “reform is absolutely critical to the well-being of Egypt.” “We urge the Egyptian authorities to allow peaceful protest and to reverse the unprecedented steps it has take to cut off communications,” she said. She also urged that protesters “refrain from violence and express themselves peacefully.”

The unrest is Egypt, a close ally, poses unique challenges for the Obama Administration, which has publicly supported Mr. Mubarak but privately pushed him to reform after decades in power.

At least one person appeared to have been killed during rioting in Suez, east of Cairo and the site of some of the most violent clashes. Reuters reported that protesters were carrying a man’s body through the streets as one demonstrator shouted, “They have killed my brother." Details of his death were not immediately clear. According to the Associated Press, Egyptian security officials said they had placed the most prominent opposition figures, Mohamed ElBaradei, under house arrest, but that could not be independently confirmed and reports throughout the day had been contradictory.

Shortly before, police doused Mr. ElBaradei with a water cannon and beat supporters who tried to shield him. “This is an indication of a barbaric regime," said Mr. ElBaradei, the former head of the International Atomic Energy Agency, as he took refuge in a nearby mosque. “By doing this they are ensuring their destruction is at hand.”

Early in the day in Cairo, protesters set fire to a police truck as police lobbed tear gas to try to block access to a key bridge across the River Nile from the island of Zamalek. Some demonstrators stamped on photographs of the president and others chanted “Down, down with Mubarak.” The acrid stench of tear gas spread across the capital reaching up to the windows of high-rise buildings. Television images showed plainclothes security policemen beating protesters.

At Al Azhar in old Cairo, thousands of people poured from one of the most iconic mosques of Sunni Islam, chanting “The people want to bring down the regime.” The police fired tear gas and protesters hurled rocks as they sought to break though police lines. From balconies above the street, residents threw water and lemons to protesters whose eyes were streaming from tear gas.

Although the police beat back protesters in many places, they appeared to be struggling in parts of Cairo and Alexandria.

In a stunning turn of events in Alexandria, one pitched battle ended with protesters and police shaking hands and sharing water bottles on the same street corner where minutes before they were exchanging hails of stones and tear-gas canisters were arcing through the sky. Thousands stood on the six-lane coastal road then sank to their knees and prayed.

Internet and cellphone connections have been disrupted or restricted in Cairo, Alexandria and other places, cutting off social-media Web sites that had been used to organize protests and complicating efforts by the news media to report on events on the ground. Some reports said journalists had been singled out by police who used batons to beat and charge protesters.

One cellphone operator, Vodafone, said on Friday that Egypt had told all mobile operators to suspend services in selected areas of the country. Vodafone, a British company, said it would comply with the order, Reuters reported.

In Alexandria, as soon as Friday prayers ended, a crowd of protesters streamed out of one mosque, chanting “Wake up, wake up son of my country. Come down Egyptians.”

Police there closed on the crowd, firing tear gas as the demonstrators pelted them with stones. A stone struck the officer firing the gas from the top of the truck and the truck pulled back, but reinforcements quickly arrived and officers marshaled a new offensive.

The protest in Alexandria turned into a block-by-block battle. The riot police managed to push the demonstrators one block back from the mosque, sealing it off from both sides and slowly advancing behind the tear-gas truck.

Several women shouted “dirty government,” leaning from the balconies of their high-rise apartments to hurl bottles down on the police. Officers pounded their clear shields with their billy clubs and chanted in unison.

“We wanted this to be a peaceful demonstration, but we are all Egyptians," said Ahmed Mohammed Saleh, 26, a protester in Alexandria who had been struck by a rubber bullet.

In Cairo, too, an eerie silence fell in one section of the city at midafternoon, as hundreds of protesters began a prayer session in the middle of the street, according to live images from Al Jazeera, the Qatar-based satellite channel. Protesters bowed their heads as smoke billowed into the air behind them from the skirmishes between demonstrators and riot police.

Despite predictions otherwise, there were only sporadic protests elsewhere in the region. The Yemeni capital of Sana, where thousands had gathered a day before, was quiet Friday. Across the Middle East, attention seemed focused on Egypt, the Arab world’s most populous country. Al Jazeera and Al Arabiya, the most influential Arab satellite channels, broadcast nonstop coverage of the demonstrations in Cairo.

“It has blown up in Egypt,” read the front page of Al Akhbar, an influential leftist daily newspaper in Beirut. “Today all eyes are focused on the mosques in the land of Egypt, where the protests are expected to reach their peak.”

The protests across Egypt have underscored the blistering pace of events that have transformed the Arab world, particularly among regimes that have traditionally enjoyed the support of successive administrations in Washington.

Earlier this month, entrenched autocracies seemed confident of their ability to ride out the protests. But, just two weeks ago, on Jan. 14, President Zine el-Abidine Ben Ali of Tunisia fled abruptly into exile after weeks of protest, and his departure emboldened demonstrators to take to the streets in other countries.

Images of the lowly challenging the mighty have been relayed from one capital to the next, partly through the aggressive coverage of Al Jazeera. Social networking sites like Facebook and Twitter have given the protesters a potent weapon, enabling them to elude the traditional police measures to monitor and curb dissent. But various regimes have fallen back on a more traditional playbook, relying on security forces to face angry demonstrators on the streets.

On Thursday, the Muslim Brotherhood, which had remained formally aloof from the earlier protests, seemed to be seeking to align itself with the youthful and apparently secular demonstrators, saying it would support Friday’s protests. But it was unclear what role the Brotherhood had played in Friday’s protests, which seemed to be spearheaded by angry young people and to include a cross-section of Egyptians. Even some of the capital’s wealthiest neighborhoods such as Zamalek and Maddi were caught up in the turmoil.

Terrified of tea

When Minnesota Rep. Michele Bachmann was named to the House Intelligence Committee earlier this year, one of her Republican colleagues responded this way: “Is that a punchline?” Another simply said, “Jumbo shrimp. Oxymoron.”

Neither dared to attach his name to his comment.

Bachmann’s Republican critics may be sick of her grandstanding, but they’re more terrified of her tea party following.

In just her third term, she has developed a fan base like 2008 Republican vice presidential nominee Sarah Palin’s: Energized, fiercely loyal and capable of making a critic’s life miserable with threats of political retribution. She’s also a huge media draw — whether it’s MSNBC, which lampoons her, Fox News, which promotes her, or CNN, which aired her entire State of the Union rebuttal Tuesday night. All that’s missing is a Saturday Night Live spoof. (See: Bachmann poses challenge for GOP)

It’s enough to make most Republicans think twice before crossing her — or at least wish they had.

Take Rep. Jason Chaffetz. Hours after POLITICO published his comment knocking Bachmann’s rebuttal to the State of the Union address, the second-term Utah Republican issued a statement, through Bachmann’s office no less, walking back his criticism. (See: Chaffetz apologizes to Bachmann for criticism)

“My primary concern with Congresswoman Bachmann’s speech was the timing of it relative to Chairman Paul Ryan’s (R-WI) official response to the President’s State of the Union address. I felt at the time the proximity of her speech was too near Chairman Ryan’s official response,” Chaffetz said. “I have since learned that the timing of Congresswoman Bachmann’s address was not simultaneous to Chairman Ryan’s official response. … Now understanding the true order of events, I would not have made the same comments to the media.” (See: Bachmann's turn)

That’s a far cry from his original assessment: “To try to upend Paul Ryan was just wrong.” (See: Ryan's rebuttal: Cut and shrink)

Chaffetz knows well the power of conservative grassroots movements, as he won his seat with a right-flank challenge to then-Rep. Chris Cannon in 2008 and is now looking at a primary challenge to Sen. Orrin Hatch. Though he didn’t mention Chaffetz or Bachmann, the top strategist for the Tea Party Express said in a Thursday National Review Online story that Hatch won’t be targeted by the group in 2012.

Not everyone in the GOP is jittery about crossing the line into criticism when it comes to Bachmann or Palin.

Freshman Rep. Joe Walsh, a tea party favorite in Illinois, isn’t backing down from his judgment that Bachmann miscalculated, even though he’s gotten some angry calls from her backers.

“She was out of line. She had no business stepping on the official Republican response to the State of the Union,” Walsh said in an interview with POLITICO. “I can say that to you saying I’m a fan of Michele Bachmann’s. She and I think the same on virtually probably every darn issue.”

But he said he understands why some other lawmakers may be less willing to go on the record with their gripes.

“She’s got a huge movement. She’s got a huge following,” he said. “I am sure that many politicians and elected officials do not what to upset that huge movement and that huge following.

Rep. Jack Kingston (R-Ga.) — who has a long conservative voting record — said he learned the power of Palin’s following the hard way after suggesting she stay out of Georgia’s Republican gubernatorial primary on a radio show.

“There was a firestorm in the office for about 24 hours,” he said, with people “questioning my Republican conservative credentials” in phone calls. “To Sarah Palin’s credit, you have a national network of very energized fans.”

Friends and critics alike say Bachmann’s trending toward Palinesque status in terms of her ability to generate attention and build a following. She raised more than $13 million for her last re-election campaign, roughly tripling an opponent whose $4.2 million haul would typically be considered prolific.

For any Republican who fears a primary challenge — or would like help for a general election — there’s no percentage in getting on the wrong side of Palin or Bachmann.

“The base loves them and if you want the base to love you, you have to love them,” said Republican strategist John Feehery, a former House GOP leadership aide. “If you don’t care about the base, then you can say whatever you want.”

But the reality is most Republicans do care about the base — and fear the consequences of crossing their stars.

© 2011 Capitol News

Blind Driver to Debut New Technologies at Daytona

DAYTONA BEACH, Fla. (AP) — It's a cloudy morning at Daytona International Speedway, but Mark Riccobono can't tell, nor does it really matter to him.

He walks up to the driver's side of a black, Ford Escape Hybrid parked on the start-finish line, opens the door, sits down and adjusts his seat. After a few minutes the car revs up and takes off.

None of that's unusual at one of the meccas of motorsports racing, except for one thing: Riccobono is blind.

Saturday, Riccobono will take part in a public demonstration, driving independently with the help of new nonvisual technology and a specially modified car. The event, spearheaded by the the National Federation of the Blind, is part of the pre-race activities of Saturday's Rolex 24 event at Daytona. Riccobono will drive a portion of the same course as the drivers in the race.

"I pretty much shut out the idea that driving was possible, because I didn't want to focus on that aspect of something I couldn't do," said Riccobono, 34, who has been legally blind since age 5 and was selected from a group of test drivers to be behind the wheel Saturday. "But I think this project is a clear example that when you dream big and put your heart and resources into it, you get to unimagined places."

The NFB, an advocacy group of more than 50,000 members, hatched the idea a decade ago.

In 2004 it began the Blind Driver Challenge through its Jernigan Institute. The challenge encouraged partnerships with universities and manufacturers to create technology that would enable a blind driver to safely operate a vehicle.

Saturday's event has been in the developmental phase for the past three years thanks to the NFB's partnership with Virginia Tech University's College of Engineering and TORC Technologies. The students developed the equipment Riccobono will use. TORC integrated those into a working vehicle.

Several Virginia Tech students teamed with TORC and won $500,000 when they placed third in a 2007 competition put on by the U.S. Defense Department to build a fully robotic vehicle. So when Dr. Dennis Hong, director of Tech's Robotics and Mechanics Laboratory (RoMeLa), heard about NFB's challenge, he thought it was a no-brainer to get involved.

"We said, 'Hey, we already have a fully-autonomous vehicle, how difficult would it be to put a person inside?'" Hong said. "We couldn't have been more wrong. They did not want a vehicle to drive a blind person around. They wanted a vehicle that a blind person could make active decisions in and actually drive the vehicle. So we had to start from scratch."

Hong said the biggest challenge was figuring out a way to convey real-time information to a driver who can't see. They came up with a combination of mounted laser and camera sensors around the vehicle, which scan the environment and feed information to sensors worn by the driver.

Working with just $5,000 in initial funding, the first vehicle they built in 2008 converted a dune buggy they bought on eBay for $2,000. That car featured vibrating chairs and vests and was debuted in the summer of 2009 during a program the NFB held for 175 high school-age blind students. The BDC is now funded through grants.

The Ford Escape Hybrid that will be used Saturday is fitted with more elaborate lasers and a camera system designed by TORC that will react with the new DriveGrip and SpeedStrip devices the Virginia Tech students designed.

DriveGrip consists of two gloves that send vibrations over the knuckles to tell the driver how much to turn the wheel. SpeedStrip is a cushion down the back and legs of the driver which tell them how much to accelerate.

"One of the main things I want to do is build technology that helps society," said Paul D'Angio, 23, the lead Virginia Tech grad student on the project. "You can work with the military and make plenty of awesome technology, but it won't help people until years later ...This is something happening now."

Anil Lewis, the NFB's director of strategic communications, trained alongside Riccobono to drive the Escape. He didn't lose his sight until age 25 when he developed an incurable form of blindness called retinitis pigmentosa. Having learned to drive as a sighted person, he said relearning to drive blind wasn't a big difference.

"It's very close to the same kind of learning curve as a sighted person learning to drive," said Lewis, 46. "You learn different techniques, but as you drive you get more comfortable. ... After a while it gets kind of second-nature."

Riccobono, now the director of the Jernigan Institute, was born with aniridia, a congenital disease in which a person is born without an iris in one or both eyes.

With only 10 percent of normal vision at age 5, he continued to lose vision throughout his childhood. He lost all of the vision in his left eye in the eighth grade. Now 34, he's also lost most of the vision in his right eye, having only light perception of colors and shapes.

Now, Riccobono will be helping break new technological ground. Though, he admits, preparing society for a true blind driver will be a bigger hurdle.

"Hardly anybody in the world believes a blind person will ever drive," he said. "It's going to be a lot of work to convince them that we can actually pilot a vehicle that is much more complex and has much more risk. Now we have to convince society that this demonstration is not just a stunt. It's real. It's dynamic research that's doing great things."