It’s Day 1 of her first trip to Mexico as secretary of state, and Hillary Clinton has already made a startling admission about America’s war on drugs: “Clearly what we’ve been doing has not worked. It is unfair...to be creating a situation where people are holding the Mexican government and people responsible” for our addiction problems. Clinton’s statement is the “most sweeping yet by a top Obama administration official accepting a US role in the drug havoc in Mexico,” The Washington Post reports, and squares with the general consensus in Latin America over the last 30 years—that it is unfairly blamed for America’s insatiable appetite for drugs. Clinton’s conciliatory tone comes the White House is ramping up its support for Mexico’s efforts to end narco-violence, and follows several highly publicized reports examining whether Mexico is doomed to become a “failed state.”

Has the economy begun to right itself? Bloomberg is reporting that orders for American durable goods “unexpectedly rose in February on a rebound in demand for machinery, computers and defense equipment.” The 3.4 percent increase is the biggest in a year and the first in seven months. It comes on the heels of a 7.3 drop in January. Bloomberg writes, “Combined with reports showing improvements in retail sales, residential construction and home resales, the figures indicate the economy is stabilizing after shrinking last quarter at the fastest pace in a quarter century. Stepped-up efforts by the Obama administration and Federal Reserve to ease the credit crunch may help revive growth later this year.”

Secretary Timothy Geithner has apparently tripped over a stumbling block familiar to his predecessors. The value of the dollar plummeted this morning after Geithner said that China’s call to replace the dollar as a global reserve currency “deserves some consideration.” Later in the day, Geithner said “the dollar remains the world’s dominant reserve currency” and its value recovered. The whole thing could have been avoided, however, if Geithner had learned from his predecessors’ errors: In 2002, former Bush Treasury Secretary Paul O’Neill had to back off comments after his questioning of the strong dollar policy wreaked havoc on its value.

Britons aren’t going to be happy to hear what Australian Prime Minister Kevin Rudd got as a parting gift from Barack Obama at the White House today: an original printing of the sheet music of “The Star-Spangled Banner.” All Gordon Brown got on his way out? A DVD box set of 25 Hollywood classics—set to the wrong region, rendering them unplayable in the UK. And that’s not all: Obama gave the Australian prime minister a shout-out at his prime-time press conference Tuesday night. Even Treasury Secretary Tim Geithner gave Rudd respect, describing him as “incredibly A-plus.” Might we have a new “special relationship” on our hands?

If you had to choose between a Britney Spears concert and yet another night watching President Obama, wouldn’t you opt for a little dancing? That’s what Rep. Eric Cantor evidently decided. Instead of tuning in to Obama’s press conference last night after attending a National Republican Congressional Committee fundraiser, the House Republican whip headed over to Spears’ “Circus” show at the D.C. Verizon Center with a bipartisan group of legislators, Wonkette reports. Cantor’s office said in a statement: “After attending the NRCC dinner, Eric, like President Obama has been known to do, enjoyed a night at the Verizon center. It was a bipartisan night, as Eric was joined by…Democrats.” “Obviously,” snarks Wonkette, “the scandal here is that Eric Cantor is friends with socialists.”

Bad news out of California: An F-22A fighter jet has crashed during a test mission, and the pilot David Cooley, the only person on board, was killed. It’s the first such accident since the newest stealth aircraft became fully operational in 2007, Bloomberg reports. The US Air Force says the plane took off from Edwards Air Force Base and crashed 35 miles east at 10 a.m. PST. Conceived in the early 1980s as a radar-evading, advanced dogfighter to take on Soviet jets and late recast to engage ground targets, the F-22 is the most expensive aircraft in US history, at $354 million each. The Air Force is slated to buy 183 Raptors, and President Obama will decide by next month whether to put in an order for more.

Hot on the heels of his Academy Award for Milk, Sean Penn will tackle an even tougher role—Larry of The Three Stooges. Penn, known as serious actor who plays serious characters in serious movies, will follow in the footsteps of Oscar winners Halle Berry and Hilary Swank, who took “unexpected” roles after accepting the gold statue. The film will be directed by the hit-and-miss Farrelly brothers, who certainly know a thing or two about the art of slapstick. The other stars who will possibly fill out the troupe? Jim Carrey (Curly) and Benicio del Toro (Moe).

Hey, they're not all bad apples: Jake DeSantis, an executive of the financial products unit at AIG (the department responsible for bringing the whole company down), has published his resignation letter in an op-ed piece in The New York Times. DeSantis describes his working-class roots and how he climbed the corporate ladder on his own merits. He even volunteered to get a $1.00 salary—despite having no role in the destructive credit default swaps—as a service to the company and the government. Now, however, he has been "let down by both" and will no longer work in a "dysfunctional environment." DeSantis feels deceived that his guaranteed bonus may be seized by the government, and plans on donating whatever he does get of his bonus—as much as $742,006.40—to charities helping those suffering in the economy.

Iraq may be safer than ever, but cases of sexual assault by the military in combat zones have gone up by 25 percent, according to a report released by the Pentagon. The Director of the department that released the report then caused a stir by recommending that soldiers should "wait until she's sober." Rep. Louise Slaughter, a Democrat who has made sexual assault in war zones one of her signature issues, was appalled at the lack of tact. Officials from the Pentagon have yet to apologize, saying that the whole things is a big misunderstanding. The quote comes from a new military campaign encouraging intervention: "My Strength is for Defending, so when I saw that she was drunk, I told him, 'Ask her when she's sober."

It’s been a while since New York had a good ol’ splashy knockdown, drag out divorce trial. The Countess Divorce, as the Post dubs it, is heating up: Marie Douglas-David, the 36-year-old Swedish countess suing her moneybags mogul husband for $100 million, now claims she played an integral role in his business deals. In Day 4 of the trial, her lawyer stated the countess was involved in “discussions with him on a sophisticated level” regarding mergers and acquisitions. Her 66-year-old husband’s response? She was a “sounding board,” but her advice was negligible—or at least worth the $38 million he already offered.

Tom Herman, The Wall Street Journal’s legendary tax guru, is calling it quits. In a memo to colleagues, Herman—after more than 40 years one of the longest-serving reporters in the paper’s history—writes that he leaves “with enormous respect and affection for the best team in journalism… As a friend once said, it’s not what you do but who you do it with. On that score, I am truly blessed.” Herman’s last column for The Journal after 40 years will be, appriopriately, Tax Day, April 15, though he plans to keep writing occasionally.

Fuel-efficient vehicles are often made out to be the silver bullet for global warming, but a piece in the latest New Yorker serves up a stark reminder that technological advances alone will not solve global warming. The writer, David Owen, points out that hybrid vehicles do not necessarily equal less pollution; if people get more miles to the gallon, they will simply drive more. Also, fuel-efficient cars won't slow down urban sprawl and reckless development. Prosperity breeds pollution, as is the case in Canada, which signed up for the Kyoto Protocol but is not even remotely close to meeting the goals it set for itself. As everyone hopes to get the economy rolling again, the only way to prevent global warming is to keep it from rolling too fast.

Deep in the interior of the Pentagon, officials are still concerned about a rising Red China. So says a report released by the Pentagon today, which cites the development of "disruptive technologies" that are shifting the balance of power. The country is quickly moving away from a "boots on the ground" military towards a quick strike, versatile attack force able to engage in different types of conflicts simultaneously (Rumsfeld would be proud). The stern words come after tense moments off the coast of China when U.S. ships were menaced by smaller, aggressive Chinese boats in international waters. Of course, when you get to be a major player like China, the U.S. has to pay their respects, too. The report adds that China "has used its military muscle for good, such as peacekeeping and disaster relief."

Just as the president is trying to bypass the filter of the mainstream media, it appears viewers are changing the channel. Initial ratings from his press conference last night are off 14% from his previous speech on Feb. 24 and his press conference on Feb 12. There was good news for broadcasters, however, who had been complaining about losing money during Obama's ad-free hour: With Fox preempting American Idol, rival networks gained. Dancing With the Stars, for instance, was up 32 percent in viewership.

The Associated Press that suspended NFL star Michael Vick, the Atlanta Falcons quarterback who has been serving time in prison for running a dog-fighting ring, has left federal prison in Kansas and is apparently bound for bankruptcy court in Virginia. According to the U.S. Bureau of Prisons website, Vick is “in transit,” though it’s not allowed to say exactly where he’s going. Vick will be kept in jail in southeastern Virginia until the hearing. He’s eligible to move into home confinement on May 21.

Five months ago, Lovelle Mixon was released from prison. In a fascinating profile, The New York Times recreates his path to a traffic stop in Oakland over the weekend, where he murdered four police officers before being shot. “In the months leading up to the shooting, Mr. Mixon seemed to mix the elements of both the striving and the sinister, struggling to find legitimate employment—he took a real estate class, for example, a nonstarter in a down economy—but also buying a gun.” He also began pimping, which paid for the 1995 Buick Park Avenue he was d riving when police pulled him over. His parole officer, meanwhile, supervised 70 other parolees, and so probably had a difficult time tracking Mixon’s actions. He was originally imprisoned in 2002 for assault with a deadly weapon during a carjacking. In January 2008, he was suspected of homicide and locked up for another nine months for possessing a drug scale and a stolen lap top. He was released on parole, but “He told me that he was ready to go back to jail just so he could change his parole officer,” says his father.

Has Sarah Palin sold her body … to advertisers? The Anchorage Daily News reports that an ethics complaint has been filed against Palin—the second this week—alleging a conflict of interest when she wore Arctic Cat logo gear during the Tesoro Iron Dog snow machine race. Arctic Cat sponsors her husband Todd in the race. Palin fired back against the complaint in a letter: “Yes, I wore Arctic Cat snow gear at an outdoor event, because it was cold outside, and by the way, today, I am wearing clothes bearing the names of Alaska artists, and a Glennallen Panthers basketball hoodie. I am a walking billboard for the team’s fundraiser! Should I expect to see an ethics charge for wearing these, or the Carhartts I wear to many public events? How much will this blogger’s asinine political grandstanding cost all of us in time and money?” The Palin administration has faced 10 ethics complaints, six of which have been dismissed.

It’s one way to survive the recession: cattle rustling. According to The New York Times, cattle thieving is way up this year. Recently, 53 cows worth some $50,000 disappeared from Cleve, Missouri. In January, 41 cows disappeared from nearby Lawrence County. Earlier in March, 200 cows were stolen in Watertown, South Dakokta and 225 cattle were stolen in Wyoming in 2008, up from 90 in 2006. Says the sheriff in Green County, Missouri, where 93 cows have been stolen since October: “Usually we’ll go a year or two with no thefts, but it’s really picked up. In these economic times people are taking desperate measures, whether it’s stealing, or whether they’re trying to come up with money through insurance fraud.”

Missed your favorite Tennyson-quoting governor? Lucky for you: The Associated Press has discovered that disgraced pol Rod Blagojevich likely boosted the pay of nearly a dozen Department of Transportation officials during his final eccentric weeks in office. The raises from mid-January average $6,000, and were enacted after a cost-of-living boost. “These fat raises for top managers would be out of line in any context,” said a spokesman for the American Federation of State, County and Municipal Employees, adding, “They're especially disgusting given the state's huge budget hole and terrible staff shortage.” Blago’s replacement, Pat Quinn, will review the increases.

Details of the grisly murder of ABC radio newsman George Weber are emerging: The New York Post is reporting that a 16-year-old from Queens, John Katehis, has confessed to the murder of Weber, who was stabbed to death in his Brooklyn apartment on Friday night. According to the Post, Weber and Katehis arranged a sexual encounter online Friday night, and Katehis is alleging that Weber first pulled the knife on him before he took it and stabbed Weber. The self-defense explanation, however, smells fishy in light of this: “The knife sliced through Weber's neck, back and torso so many times that it was difficult to get an accurate count by the time the body was discovered two days ago.”

Move over Andrew Cuomo—Connecticut attorney general Richard Blumenthal is on the case. The London branch of AIG is responsible for what The Times of London calls "a large portion of the insurer's spectacular losses," but London executives are reportedly among those who are holding out against returning their bonuses. Blumenthal appears to be using the risk of public disclosure to out the recalcitrant executives—he's weighing the security risk of disclosing the names of the 14 executives, although his office has told reporters that the executives will testify at a hearing in Hartford tomorrow. A memo sent by an AIG executives and published by The Wall Street Journal last night said that if employees gave back bonuses, they would not be publicly identified.

Nicholas Hughes' tragic suicide was the result of his father Ted Hughes' death, according to Joe Saxton, 47, a close friend of Nicholas for 33 years. In a letter to The Times of London, Saxton describes the close relationship that Nicholas had with his father, the poet, who died in 1998, saying that it was "a bond unlike any other father and son I have seen," adding, "The impact of his father's death was that all the other family relationships in his life were turned upside down. Only then did Nick begin to have mental health problems." Sylvia Plath, Nicholas' mother, gassed herself when Nicholas was one year old, and six years later, his father's mistress killed herself and her four-year-old daughter in the same way.

The AIG scandal refuses to fade away: Talking Points Memo’s Muckraker reports investigators are “hot on the trail” of Joseph Cassano, the former head of the bailed-out insurance giant’s ill-starred financial products division. Cassano, in the words of TPM, “walked away with a multi-million dollar golden parachute after spearheading the credit default swaps that brought down AIG.” Now House Oversight Committee investigators are planning to interview him about his role in the AIG collapse and have already contacted his lawyer, a source tells the site. If he testifies, Cassano—who stepped down from AIG in March but signed a $1 million a month consulting contract with the firm that was canceled in September—will follow former AIG CEO Hank Greenberg, who goes before the committee April 2.

Wall Street’s well isn’t completely dry: The New York Times reports that, last year, the top 25 hedge fund managers made $11.6 billion. Leading the way was James Simons of Renaissance Technologies, who made $2.5 billion. John Paulson of Paulson & Company was next, with a rake of $2 billion. John D. Arnold, who is in his early 30s, made $1.5 billion, while George Soros made $1.1 billion. Wall Street may want to hold the champagne, however: “In a year when losses were recorded at two of every three hedge funds, pay for many of these managers was down by several million, and the overall pool of earnings was about half the $22.5 billion the top 25 earned in 2007.”

Britney Spears may shout “This mama is in control!” at her “Circus” concerts, but off the stage, she’s not the decision maker—and her handlers are proving expensive. “At least 17 lawyers and firms have had a hand in Spears’ personal or business matters in the 14 months since a judge determined she was not competent to manage her life and multimillion-dollar music empire herself,” the Los Angeles Times notes, and “the legal work has not come cheap.” The singer’s estate paid at least $2.7 million in lawyers’ fees and costs during the first 11 months of her conservatorship, and many of the lawyers continue to work on the case. Her divorce from ex-backup dancer Kevin Federline alone cost her $417,000. “Miss Britney Spears is being bled dry by these proceedings,” snipes an opponent.

Descriptions of Israel’s “hawkish” government under prime minister-designate Benjamin Netanyahu will now require a caveat: According to The Wall Street Journal, the left-leaning Labor Party has agreed to join the governing coalition. The agreement includes a commitment to pursue peace in the region and five cabinet positions for Labor. It also tips Netanyahu’s coalition into a majority of the Knesset, but six of Labor’s thirteen parliamentarians opposed the move. In his speech last night, President Obama said the hawkish Netanyahu’s ascendancy makes peace "not easier than it was," though "just as necessary."

President Obama must be feeling brave: He plans to take on the tax code. Bloomberg reports that “President Barack Obama is putting former Federal Reserve Chairman Paul Volcker in charge of a tax-code review aimed at closing loopholes, streamlining the law and generating revenue.” The review will take some time—its deadline is December 4—and is intended to find ways to simplify the code in order to reduce tax evasion and corporate welfare. The tax gap—the difference between the amount owed by taxpayers and the amount collected—is estimated to be $300 billion.

The early reviews are in—and it looks like Louisiana Gov. Bobby Jindal did better against Obama the second time around. (You may recall his disastrous rebuttal to the president’s address to Congress and the ensuing Mister Rogers jokes.) On Tuesday night Jindal got an opportunity for redemption, addressing a House GOP fundraiser in Washington before Obama’s press conference. “Let’s agree on this tonight, the time for talking about the past is now over,” Jindal told the 1,200 attendees at the $2,500-a-plate event, which raised $6 million. “It has been healthy for Republicans to look in the mirror. It has been healthy for us to realize and admit the mistakes of the past…It’s time to declare our time of introspection and navel gazing officially over.”

HBO subscribers may now find out how many F-bombs a president would drop. Southern drawler Dennis Quaid is attached to play President Bill Clinton in an HBO film titled The Special Relationship, revolving around Clinton and British Prime Minister Tony Blair. Julianne Moore is rumored to be playing Hillary, and Frost/Nixon wonder Michael Sheen is in the running to act as Blair (which would make this his third turn dallying in the Brit’s shoes). Frost/Nixon writer Peter Morgan is writing the script, which is waiting to be greenlit by the network.

President Obama was on television again last night, in his second primetime news conference. How'd it go? The New York Times observes that he was in lecture mode—“an effort, aides said, to lower the temperature after a supercharged week and nudge the country toward what Mr. Obama considers the more pressing issues of fixing the banking system and reviving the economy.” But is this really such a bad thing? The speech may have been boring, but Jon Cohn at The New Republic notes Obama's remarkable consistency: "when it comes to his agenda, he has said the  exact same thing every time he's been asked. ... And while that hardly guarantees he'll be a successful executive—sometimes, a little ambiguity and deception come in handy—it does suggest you can feel confident that his public words are indicative of what he actually believes. "

Even in the age of 24-hour news, some stories don't get the publicity they deserve. Marvin E. Schur, a 93-year-old veteran of WWII, froze to death in his Michigan home in January after his electricity was cut due to unpaid bills. Schur was found wrapped in multiple layers of clothes in his bed, the temperature in his house a fatal 32 degrees. Money clipped to a stack of bills was reportedly found in the kitchen. Now, John Deppen, who writes a regular column on veterans' issues for a central Pennsylvania paper, has taken up the cause, distributing bumper stickers that say "Marvin E. Schur NEVER AGAIN."

What’s on Hillary Clinton’s agenda in Mexico today? The American appetite for drugs may be fueling the drug war in Mexico, but then Attorney General Eric Holder's refusal to reinstitute a ban on the sale of assault rifles isn’t making things any better. Also, Congress has reneged on a Nafta promise to allow Mexican trucks into the U.S., and in retaliation Mexico instituted tariffs on 89 American products, targeting those that are produced in the districts of well-connected congressmembers. Finally, many American communities fear that Mexicans will cross the border to take already scarce jobs even as the U.S. recession spreads across the border.