Earlier this month, Newsweek reported that U.S. interrogators at Guantanamo Bay flushed a Koran down a toilet. The news sparked riots from Afghanistan to Indonesia, prompting White House spokesman Scott McClellan to say, “The report has had serious consequences. People have lost their lives.” McClellan’s indignation, however, seemed out of proportion to the carnage: A paltry 16 deaths and 100 injuries won’t even take you through lunch in Baghdad. Besides, even Abu Musab al-Zarquai thinks “killing innocent Muslims” is no big deal. In a recent speech he decreed, “Protecting religion is more important than protecting lives. The shedding of Muslim blood … is allowed in order to avoid the greater evil of disrupting jihad.”

To make matters worse, the magazine subsequently retracted the story. The administration quickly pounced, calling the dispatch both inaccurate and irresponsible while at the same time blaming it for damaging the image of the United States. Condi Rice lamented, “It’s done a lot of harm.” But remember, Newsweek’s lone source, code named “forkball,” still insists he read the account in an investigative memo. The only question is whether it appeared within official military records. In other words, it probably did happen, and as for our tarnished image, I think the photos from Abu Ghraib already took care of that.

For two solid months President Bush plied the nation’s byways pimping the privatization of Social Security. He was, throughout, struggling against the headwinds emanating from Eliot Spitzer’s ass. The New York A.G. repeatedly exposed the financial malfeasance practiced by America’s investment banks, brokerage houses, mutual funds and insurance companies. Which doesn’t, frankly, leave a lot of other places to invest. Even those citizens unable to distinguish a 401(k) from a 10-Q are smart enough to know this: if Morgan Stanley loses all your money, you’ll be living in a cardboard box. Unless, of course, your name is Ron Perelman, in which case you get $1.5 billion for your idiocy.

The fatal blow to the President’s plan, however, was delivered by U.S. Bankruptcy Judge Eugene Wedoff. Wedoff ruled that United Airlines could, as part of its Chapter 11 reorganization, dump $9.8 billion of pension obligations onto a federal agency. Due to payout limits, the Pension Benefit Guaranty Corp. will assume only two thirds of that liability. But because the PBGC is already $23 billion in the hole, United retirees may well end up with nothing. In order to raise money for these pensioners, five current and former United Airlines flight attendants are selling $14.95 calendars showing themselves in various states of undress. Unfortunately the stews range in age from 55 to 64, and with their tits heading south faster than United’s profitability, sales should prove anything but brisk.

The real fear, of course, is that while Congress has severely curtailed personal bankruptcy relief, corporations will line up for this (somewhat watery) gravy train of cost abatement. Delta Airlines, carrying $5.8 billion of unfunded charges, is expected to go next. Not that bankruptcy necessarily spells a carrier’s demise. US Airways, currently in Chapter 11, is on the cusp of a merger with America West, with Airbus investing $250 million into the deal as a means of securing orders for 20 new A350 jets. With any luck, this kind of vendor financing will do for Airbus what it did for JDS Uniphase.

While General Motors’ credits have been downgraded to junk status, their pension funds are actually above water. The problem comes in the form of “other post-retirement benefits,” namely premiums for medical and life insurance policies. These OPEBs are now upside down to the tune of $58 billion, which is a HUGE inducement for GM (currently supporting 2.3 pensioners with each employee) to terminate their benefits package via bankruptcy or any other means.

That pilots and the government are at odds is now self-evident. Perhaps that is why a single engine Cessna violated the restricted airspace over Washington, D.C. last week. The plane actually flew over the vice president’s residence and was within minutes of reaching Pennsylvania Avenue when the White House alert level was raised from yellow to orange and then to red. Laura Bush and a visiting Nancy Regan were ushered into an underground bunker, while Dick Cheney returned to his infamous “undisclosed location.” Sirens blared, the Capitol and Supreme Court building were evacuated, and thousands of people suddenly found themselves in the streets. Overhead, two F-16s, who’s pilots were apparently unaware of the recent cuts in veteran’s benefits, fired warning shots and eventually directed the light plane to land at the Frederick airfield. The whole mess turned out to be nothing more than a navigational blunder yet the President, biking in rural Maryland, remained uninformed until well after the “all-clear” signal was given. Why it took 36 minutes to inform Mr. Bush of a possible terrorist attack was a matter of some consternation until Secret Service Agent Marv Bleeney sheepishly explained: “It took us that long to locate a copy of ‘My Pet Goat.’”