General Motors sold out of G.M.A.C., its financing arm in, in 2005, borrowed $17.2 billion from the Treasury at the height of the financial crisis, changed its name to Ally Financial (and yes, sponsored Adam Davidson's Marketplace). Now Ally is spinning off Residential Capital, its mortgage lender, through bankruptcy proceedings, and Steven M. Davidoff sees Ally's debt to the government as hindering risk-taking.

The Wall Street Journal sees the Obama administration's involvement in Carlyle Group's deal to buy a Pennsylvania refinery at odds with the Obama campaign's attacks on the private equity industry.

Regions Financial, the Alabama-based lender that repaid $3.5 billion in bailout funds to the U.S. Treasury in April, is the subject of a grand jury investigation, The Journal reports. The rub: the lender's relationship with a recruiting firm that wined and dined Regions' execs and borrowed money from the bank.

The Journal also sees some buy-out firms struggling to raise funds, Wilbur Ross among them.

A Vietnamese banker was arrested, and markets swooned.

The first recipient of the Security and Exchange Commission's whistle-blower program received $50,000, or one-third of the funds recovered due to the individual's case. The payee stands to gain more as the SEC continues to recover funds.

The Justice Department and Federal Reserve are probing Royal Bank of Scotland for possibly violating sanctions against Iran, sources told Bloomberg. Long-arm-of-the-Lawsky and the New York State Department of Financial Services are staying out of this one, apparently.

With a lull in the Libor action, Iran sanctions becoming old hat, Reuters digs into the other, other British banking scandal: interest rate swaps. Lenders such as RBS and HSBC have provisioned funds against lawsuits charging banks mis-sold swaps to small businesses in the run-up to the financial crisis.

Chairman Gary Parr and Gala Co-Chairmen Lady Linda Wong Davies (Linsley Lindekins)

In traditional Chinese culture, the dragon is an auspicious creature, venerated as a symbol of wealth, imperial power and social prowess. Since 2012 marks the year of the dragon, according to the Chinese zodiac calendar New York society dutifully fêted the felicitous occasion with a grand party.

Lincoln Center (as ever) was aflutter with people as we approached. It was one of those non-winter winter nights the city is accustomed to of late, when gloves are jettisoned and coats left unbuttoned. Throngs of people were sitting around the circular fountain, likely exceeding the maximum weight anticipated by its designers. Loathe to be present for an impromptu mass baptism, The Observer headed inside to collect our tickets.

By the time we fully arrived at the New York Philharmonic’s Chinese New Year concert, guests were already on their second flute of preshow Champagne. Red, a propitious color in the Chinese tradition, was the prevailing hue of the evening. Indeed, the room was a vision of black, white and red, between the tuxedoed gentlemen and their crimson-clad wives.

Jamee Gregory, Noreen Buckfire, Corinne and Maurice Greenberg, Gillian Miniter, Wendy Deng and Gary Parr were greeting their friends. By our estimation, about half the women in attendance wore customary cocktail regalia, while the other half donned dresses inspired by Chinese vestments—admittedly with varying degrees of aesthetic accuracy. From Szechuan cheongsams to abstractly oriental kaftans and saris, the ladies’ livery was a sight to behold.

“I’ll be your little concubine!” Deborah Norville squawked with delight, as she greeted Wilbur Ross, who seemed a bit taken aback, in his own set of Asian duds.

“Oh! You did it! You did it! You did it! Isn’t this fun?” enthused Karen LeFrak as she embraced Mr. Ross, one of the few men audacious enough to wear traditional Chinese robes, those lordly silken habits of the ultimate leisure class. The black-and-red ensemble was purchased on a recent trip to Shanghai, Mr. Ross told The Observer. Looking down, we noticed Mr. Ross’s slippers, each adorned with a single Chinese character. “They say happiness and love,” Mr. Ross offered as his wife, Hilary, approached.

Donning an elegant red dress of decidedly Western extraction, Ms. Geary Ross proudly brandished a bejeweled Panda clutch purse. “The pandas secretly want to be dragons,” Mr. Ross said with a slightly downturned grin. Unable to divorce our Anglo sensibilities, we bemoaned our own Chinese zodiac sign, the snake, wishing that we too had been born a dragon. “Oh, every year is auspicious,” Mr. Ross offered said with Confucian prudence.

Soon, attendants were ringing bells with latent insistence, ushering people inside the concert hall with their sonorous chimes. What followed was an innovative series of scores, played with largely Western instruments but capturing those lithe melodies of Chinese music. A league of Mongolian youth choristers took the stage in traditional dress, performing a series of folk songs with musical accompaniment from the Philharmonic orchestra. The children, some barely old enough to stand still, sung with poignant clarity, earning massive applause from the audience. Finally, piano virtuoso Lang Lang appeared onstage, effortlessly executing a complex Liszt concerto. The program ended as the Mongolian youth chorus reappeared on stage, singing “America the Beautiful” with Lang Lang’s accompaniment.

After the performance, crowds meandered out of the amphitheater. Guests seated at the gala dinner found their tables. We found our seat, and, noticed we were sitting next to China’s deputy representative to the United Nations, Ambassador Wang Min. We asked Ambassador Min his thoughts on the performance, and, after a few gruff answers he inquired whether or not we were a journalist.

We noticed Sandy Weill appear in the dining area, and taking momentary leave of the ambassador, asked him about the performance. “Oh, it’s phenomenal, it’s uplifting, it’s just great,” he gushed. After chronicling the Chinese cities that he has visited over the years, Mr. Weill explained that he has high hopes for the year of the dragon, specifically “the world getting along and cooperating and working together.” We’ll gladly raise a glass to that, Mr. Weill.

Returning to our seat, we noticed that Ambassador Min had switched places with his wife, Madame Ren Hui. Despite the initial sangfroid, we convinced the ambassador that we had little interest in communism or free speech, ultimately achieving détente over a discussion of college admissions. Before the evening was through, The Observer had made an ally in Ambassador Min, who offered us traveling tips should we venture to China ourself.

To be sure, conversation in the room largely focused on Mr. Lang, a certified piano prodigy widely regarded as one of the great musicians of our time. Finding philanthropist Oscar Tang across the room, we asked what he thought of Mr. Lang. Mr. Tang, as it were, knows him intimately. “We have a dinner for the New York Philharmonic every summer, so he’s had dinner at our house and so forth,” he said in a serenely soft tone. “It’s a great pleasure to have him.”

Lady Linda Wong Davies similarly praised Mr. Lang, explaining that he has become an important figure in both the cultural and musical realms. “He’s a great ambassador for classical music, number one, because he’s young he’s fun and he’s cool, and number two for China,” she said from her perch at the table, with becrystaled Jimmy Choos cast aside and evening gown tickling the floor. “He’s beyond being Chinese I think.” The entire evening, she said, was an exercise in globalized understanding. “I think it’s a great display of cultural diplomacy.”

Moments later, we saw the piano man himself, sporting a sparkling gold sport coat. Despite his florid finery, Mr. Lang was humble and insouciant when we asked him if he considered himself a cultural ambassador. “That sounds good! That sounds very good!” he said with a laugh. He was less interested in his own performance, however, than the children’s chorus. “They were so cute!” he cooed. While Mr. Lang may not have been the stiff-necked classical pianist we anticipated, his hands unquestionably belonged to a master of the ivories.

With his baby-soft grip in our own, we realized we were holding, quite literally, a multimillion-dollar appendage. The year of the dragon, we decided, would be a good one. Auspicious, indeed.

eknutsen@observer.com

Mr. Fielden and Mr. Benson

“This isn’t my real work,” photojournalist Harry Benson told Off the Record, gesturing at a wall of his photographs.

He was surrounded by intimate candids of bold-face names, taken over the course of his 40-year career at magazines like Life and Vanity Fair. All together they tell a colorful history of New York society, but he’d rather be known for his photographs of U.S. presidents.

“Every one since Eisenhower,” he said.

Even his lesser work was enough to draw a crowd to Hearst Tower Thursday, where, despite freezing rain and about a hundred other holiday parties occurring across the city, Mr. Benson was toasted by former subjects, like Muffie Potter Aston, members of the Hearst family, such as Gillian Hearst-Shaw and Anne Hearst, and Jay McInerney, who qualifies as both. (He also wrote the book’s introduction.)

The tower’s mezzanine had been converted into a private exhibition of photographs from Mr. Benson’s forthcoming tome, New York, New York, hosted by Town & Country editor in chief Jay Fielden. The book’s text was written by Quest and Q magazine society writer Hilary Geary Ross, who said deciding which photographs to include had been a highly daunting process.

“There are too many good characters in New York,” she said. (She and her husband, the leveraged buyout billionaire Wilbur Ross, did end up making the cut.)

Mr. Ross added that her decision process had been to lay out all the large prints in contention across their penthouse floor.

“All across multiple rooms,” he said.

Mario Buatta, the “Prince of Chintz” who designed the Ross’s Upper East Side abode, approached us, eager to share one of his own snapshots. In his wallet he had a blurry, black and white ink-jet printout of a young boy, no older than 10, smoking a cigarette.

“I was a precocious child,” Mr. Buatta said.

Host Mr. Fielden’s Town & Country editor’s portrait was taken by Mr. Benson, and  featured prominently  in the exhibit, just above a photo of Mayor Bloomberg riding the subway.

We found the former Men’s Vogue editor by the bar, dressed in a tidy checked suit a shade not far off from his coppery hair. He was mired in polite conversation with a former freelancer, Warren Kolbacker, who explained that he moonlights as an oyster farmer.

“The gentleman farmer,” Mr. Fielden remarked, “that’s very T&C.”

Another self-styled man of the land, the British rancher/hotelier Nicholas Gold, lurked nearby, with a Stetson on his head and a publicist on his arm.

Off the Record extricated Mr. Fielden from his supplicants long enough to ask what it was like to be photographed by Mr. Benson.

“I felt a little sheepish about it,” he admitted, adding that he had been put at ease by Mr. Benson and his low-maintenance process.

“He didn’t like it at first, he didn’t even want to use it,” Mr. Benson told Off the Record of Mr. Fielden’s portrait. “But then his wife tells him that it’s his best photograph, he looks natural.”

Mr. Benson said the feeling commonly afflicts the subjects of photographs, including him.

“You look stupid until a year later, when you think, ‘Not bad. What was I complaining about?’”

Sorry, did we say investigate? We meant  "snapped some photos as he was walking by" before speculating on a trend story about a new "fashion" (wrong word but right idea) among some young people—including college students well housed in dorms and apartments here in downtown Manhattan—who did this panhandling/begging as a kind of lark."  (The logic here is that this lady is a hipster in disguise, and not, as one might assume, just a pregnant, homeless person who hasn't gotten around to updating their sign yet.)

Evidence of this prince/pauper trend Columbia asserts in his post—which then seamlessly (not seamlessly) transitions into party coverage of Hilary and Wilbur Ross' penthouse event to address real poverty and honor Citigroup's Vikram Pandit—includes readers sending in photos of young panhandlers with "new" looking sneakers and expensive glasses frames. Also, the guys are way too clean-shaven to actually be homeless. Hipsters are the worst, right??

The issue is that Columbia and the rest of the upper crust just care too much, allowing these young con artists to make marks of  "us who empathize" with the plight of the actual poor-poor. (Empathy now defined not by how much money you give, but how many photos  you can snap at the homeless with your iPhone before heading to penthouse events honoring bank CEOs).

Maybe David should go back down to Bergdorf's and confront the faux-pregnant woman, Michael Moore-style, demanding that she expose herself as the NYU student she actually is. Then he could make her donate all her panhandling proceedings to Accion International, c/o Pandit and the Ross family.

God, the nerve of the nouveau-riche poor.

After lovable billionaire philanthropist and rapacious capitalist warrior Warren Buffett exited the muni-bond insurance game in 2009, fellow billionaire Wilbur Ross has become the sole major investor in insurance of the $2.8 trillion market for American municipal debt. Holding 16 million shares Assured Guaranty, Ross has an exclusive shot at domination in this business. If a town wants to insure the debt it raised to pave a new parking lot, it's going to have to talk to Ross. Nevertheless, the 72-year-old investor is far from sitting pretty, Bloomberg reports.

The problem is that municipal bonds have been a chief area of concern since the first groundswells of the credit crisis. Falling tax revenue and investment losses in pension funds have left local governments scrambling to cover their debt. Defaults have abounded this year; 46 municipalities have defaulted, leaving creditors holding the bag for $1.7 billion in bonds so far in 2010.

It's probably not comforting to Ross that he's been left alone in this risky market thanks not only to the exit by Buffett, one of the greatest investors of all time, but also by the struggles of other bond insurers Ambac and MBIA. The two enfeebled insurers have lost their AAA-credit status on losses from mortgage-backed securities.

It just goes to show how far we've fallen that sole dominion over one of the biggest pre-crisis moneymaking machines these days draws more raised eyebrows than envious stares. After all, if you can't trust a monopoly, what can you trust?

The biggest intraday drop in the history of the Dow, nearly 1,000 points, didn't happen because of a calamity: No monuments had been burned and not a single colossal European country had defaulted. It just came. And then it went. The Dow was up above 10,500 by the end of the afternoon, and then back to 10,800 on Monday, after a trillion-dollar bailout package for Greece was announced. "We're on to the next freaky thing," a banking executive said this week, less than seven days after the Great Fall.

Is a terrifying and bizarrely opaque 1,000-point free fall another thing that is just going to happen on Wall Street every now and then? If so, will we know why? More pointedly, have we learned anything from the terrifying and bizarrely opaque events of the past year and a half? "We hope to be able to provide investors and the public with more information soon on the events that may have contributed to this volatility," the S.E.C. chairman, Mary Schapiro, told a Congressional subcommittee Tuesday, "but we should recognize that it will take time to fully analyze the data."

The night before, in a corner of the joint book party he threw for the scholars Ian Bremmer and Nouriel Roubini, the hedge fund manager Kenneth Griffin did not want to bother parsing the stock market's Thursday collapse. "Why did it fall on Wednesday? Why did it fall on Friday?" said Mr. Griffin, who is 68 slots ahead of Mr. Ross on this year's Forbes billionaires list. "People make up stories after the fact."

JAMES GORMAN, MORGAN Stanley's new chief executive, was alone in his 40th-floor office after a Thursday lunch when he saw the market wobbling. He called Suzanne Charnas, his head of investor relations. "Oh, God, what's happening?" they said. Mr. Gorman thought it must have been some kind of mistake.

Vikram Pandit was in a meeting at Citi headquarters. Another executive interrupted with the news. The chief executive stayed to finish the meeting, and then he collected staff in his office to talk. Steve Schwarzman was at Blackstone's annual conference with limited partners at the Waldorf Astoria. A senior executive at AIG had all-day meetings. "I was in a cocoon all day," the executive said. "Sometimes it's good to be in cocoon."

At 2:30, just before the crash, a former principal at Long Term Capital Management was walking out of a lunch with a hedge fund manager when he saw that the Dow was down a couple of hundred of points. "Not your best," he said. He went to another meeting, which lasted until 3:15, after the fall and rise. On his iPhone, he checked a couple of his stocks. One that normally trades for around $3.50 was down 20 cents. "And I took a look at the low, and the low was down 75 cents. And I said, 'No, that's a misprint. Then I looked at other stocks.'" He realized what had happened while standing in the street.

It was not particularly loud or chaotic at the suburban Kansas City headquarters of BATS, the third-largest exchange in the country, right behind New York's and Nasdaq. "Is it Greece? What's going on?" Joe Ratterman, the CEO, asked aloud.

At Goldman Sachs, gossip was floating around the investment management division that Citigroup had caused the fall with some sort of mammoth trading error. Silly Citigroup! An executive at another bank heard the same thing and told a newspaper reporter. CNBC heard it, too, and put up a story saying that a Citi trader may have inadvertently pressed a "b" for billion, not a "m" for million, in a trade that may or may not have involved Procter & Gamble. This was given a name: It was called the fat-finger theory. And the fat-fingered investigation had a focus: CNBC said there was a strange sale of 16 billion E-mini S&P 500 futures, traded on the Chicago Mercantile Exchange.

In Chicago, alongside the S&P 500 futures pit, a 38-year-old squawk-box broadcaster named Ben Lichtenstein, a man with a stadium-size voice of gravel and amphetamines, narrated the dive as it happened. "Guys this is probably the craziest I've seen it down here!" he shrieked. On a recording that was immediately passed around on Web sites like Zero Hedge, he narrated the fall number by number. It was pandemonium. "This will blow people out in a big way that you won't even believe!" he screamed in between a stream of numbers. After work, he went to his daughter's soccer practice, then his son's baseball practice, and then went out with a client.

THE NEXT MORNING, the Chicago Mercantile Exchange confirmed that Citigroup's activity did not appear to be irregular or unusual. And by late Friday, the Obama administration had sent out word that a fat finger did not, in fact, start the biggest collapse in Dow history.

So what did? Traders had been itchy about the Greek debt crisis and the British election-but nothing astounding had happened that afternoon with either. Was it hackers or terrorists? Ms. Schapiro said Tuesday that it didn't look like it.

The New York Stock Exchange blamed Nasdaq. Nasdaq blamed the New York Stock Exchange. Then Nasdaq blamed the Chicago Mercantile Exchange.

Was it the machines? On Friday, both The Journal and The Times had articles about high-frequency trading, the gargantuan but relatively new industry that uses algorithms to buy and sell. When the market falls to a certain level, both articles said, high-speed firms' computers are programmed to sell automatically to protect against more and more losses. The firm Tradebot Systems, another enormous Kansas City-based firm, even said that its computers shut down entirely. A "computer glitch at even just one firm could trigger a wave of selling that sets off huge losses across financial markets," a Journal story about the New York Stock Exchange's upcoming 400,000-square-foot high-speed hub in suburban New Jersey said last year. The new hub was nicknamed Project Alpha.

By Sunday, Senator Chris Dodd was on Face the Nation, complaining about "very fancy computers that can move in microseconds." At the book party the next night, Mr. Griffin, the hedge fund manager, held up a glass of Champagne with Maria Bartiromo to toast the Bremmer and Roubini books. "I think that it's much easier," he said in a conversation afterward, "to try and blame faceless computers."

The next day, another Journal article said that a $7.5 million trade for 50,000 options contracts from a hedge fund advised by Nassim Taleb, famous for the book Black Swan: The Impact of the Highly Improbable, "may have played a key role in the stock-market collapse." It did not mention that the paperback version of Mr. Taleb's book was released that morning.

mabelson@observer.com

The answers were painfully obvious back when we watched the last episode of this traditional drama in the summer of 2002. Yet the happy conclusion of the Quecreek accident also ended the brief media preoccupation with the lives and deaths of miners, and almost nobody continued to ask the pertinent questions.

Now a dozen men are dead and another remains seriously injured. Nobody knows yet whether their tragic demise could have been averted, but everyone should know that the Sago mine had incurred dozens of serious safety violations, that the Mine Safety and Health Administration has consistently failed to crack down on the operators of unsafe mines, and that the Sago miners lacked the protection of a strong, vigilant union, as did the Quecreek miners before them.

Unfortunately the hard truth is that under this government, the scant measures we undertake as a nation to protect miners and other workers in dangerous industries are growing smaller. The budgets of federal regulatory agencies are cut. The officials appointed to run those agencies tend to be former industry executives who display no enthusiasm for enforcing safety regulations. They prefer “voluntary compliance.”

Under this government, the legal right of workers to organize—so vital in dangerous extraction and manufacturing jobs—is more myth than reality. And in the absence of union pressure, impartial federal regulation is more important than ever.

But since the Quecreek incident, which should have served as a warning, the Bush administration has continued to indulge the mining companies by abandoning prior efforts to improve regulation, fining the operators less and less for safety violations, and often failing to collect even those nominal fines. Those are the findings of a recent Knight-Ridder newspapers investigation, which sharply contradicts the “happy news” pronouncements emanating from Washington.

Since 2001, the penalties imposed on mine operators have declined precipitously, and less than half of the fines imposed between 2001 and 2003 have been paid. Meanwhile, the number of coal-mine enforcement personnel at MSHA has been cut by almost 10 percent and the President’s budget calls for another cut of 6 percent. The number of mine fatalities has remained relatively low during the past few years, but if enforcement continues to decline, then the disaster at Sago may be only the beginning of an ominous trend.

The owner of the Sago mine is the International Coal Group (ICG), a new corporation founded by New York businessman Wilbur Ross Jr., to take over distressed and undervalued coal properties. It is now the fifth-largest coal company in the nation. Last year, after ICG bought Sago, the MSHA inspectors found more than 200 safety violations at the mine, including roof support, ventilation and escape-way problems. The agency collected only $24,000 in fines, or about $115 per violation.

During the last three months of 2005, including an inspection that took place less than two weeks before the explosion, federal inspectors found 46 safety violations at Sago, including 18 deemed “significant and substantial.” The proposed fines for those infractions came to $2,286. When a 62-year-old miner died at another mine owned by ICG last year due to the company’s failure to fix a safety violation, the resulting fine was only $400.

No wonder Mr. Ross believes he can make a killing in coal.

As the billionaire investor boasts, “Coal is the cheapest source of energy for generating electric power.” Among the reasons that coal remains so cheap, of course, is that the operators who work for Mr. Ross discourage unionization, don’t spend too much on health and safety or environmental protection, and enjoy immunity from the kind of federal enforcement that involves sticks as well as carrots.

In the aftermath of the Sago tragedy, Mr. Ross grimly promised to find out what had happened and to prevent such a terrible event from happening again. Whatever his intentions may be, the chances that he will fulfill that pledge are small indeed, unless he and his company are kept under public scrutiny—and unless the government agencies charged with enforcing mine safety are watched closely, too.

Print journalists will do the job, but their impact is minimal compared with television, which must prod us when we begin to forget. Are CNN’s Anderson Cooper and the other correspondents who hovered around Sago merely empathetic voyeurs? Quite literally, we shall see.

It's a crude question, of course, but standing in the hot afternoon sun on Aug. 3, trying to divine the politics of the Bronx Puerto Rican Day parade, politicians agreed it's the only question that counts.

"Vallone!" shouted one man with a megaphone, heralding City Council Speaker and would-be governor Peter Vallone.

" ¡Gobernador! " shouted another.

If Mr. Ross spends a tremendous amount of money-$3 million, say-between now and Sept. 15, the date of the primary, these men probably will have shouted in vain. They represent the famously fading forces of traditional party politicking … as does the young woman on Rollerblades, weaving through the line of march so as to toss campaign literature on both sides of the street … and the Vallone posters wrapped around light poles … and, needless to say, the Tammany-redolent troika of Mr. Vallone; the chairman of the Democratic Party in Bronx County, Assemblyman Roberto Ramirez, and Bronx Borough President Fernando Ferrer, who are waving Puerto Rican flags and marching, arm in arm, down the Grand Concourse.

It's the sort of political picture we have seen many times before, but, because the bloodshed stage of the campaign has yet to arrive, it's hard to know how we will look upon it later. Is this a snapshot of a slow but steady standard-bearer; the grown son of clubhouse Queens poised to plod, on a firm footing of cash, old-fashioned fieldwork, political chits, Yankee Stadium press hits and the die-hard-Democratic mindset of the electorate, to victory in September? Or could this be our last sighting of Mr. Vallone before he is swept away in a bright tide of television starring Lieut. Gov. Betsy McCaughey Ross?

In other words, how much money will Wilbur Ross Jr. spend to buy his wife the Democratic Party's nomination for governor? Not that his wife isn't working hard to get it for herself.

"This is not a typical campaign position where I have to criticize somebody else," Ms. McCaughey Ross, earnest as ever, told The Observer . Standing on Park Row, outside the Weinstein & Holtzman hardware store, the Lieutenant Governor was holding a child's bicycle helmet full of trigger locks, whose mandated use she advocated in several press conferences throughout the state on Aug. 3. Mr. Vallone's City Council already had passed a requirement for trigger locks, albeit without making them free or rendering adults legally liable for children's access to guns, but never mind. "I'm out to save the lives and health of children," Ms. McCaughey Ross said.

Between the slogan simplicity of the line and the fact that Ms. McCaughey Ross looked The Observer straight in the eye as she said it, it was very like watching her, in full-face close-up, on television. No question, she's quite a commercial: 30 seconds' worth of glamour, brains and scorned-woman pique-and, better yet, 30 seconds' worth of contradictions, which is to say, none. It is, of course, the contradictions that hurt Ms. McCaughey Ross. They give hope to her enemies, headaches to her friends, and endless fodder to the Fourth Estate. Not that they seem to bother her a bit. Recently, addressing the National Organization for Women, Ms. McCaughey Ross pronounced herself "really pissed!" at having been obliged, as a 1970 Vassar post-graduate, to hunt for jobs less lucrative than those offered to men. But she offered not even a narrative nod to the problem of reconciling this capital-f feminism with the vivid memory of her happily telling 1994 audiences, "George Pataki is the touchdown; I'm the extra point!"

Honor the Sabbeth

But why go back four years? In this very campaign, Ms. McCaughey Ross presents herself as the avatar of "a lot less politicking and a lot more problem-solving," but she apparently solved one problem-that of getting Brooklyn District Attorney Joe Hynes, who will drag votes from Mr. Vallone, on the primary ballot-with the rather political approach of sending at least $87,000 in the direction of Stephen Sabbeth, the chairman of the Democratic Party in Nassau County: $25,000 of it to the Nassau Democratic Committee and $62,000 to Mr. Sabbeth's club account.

"When people get involved with politics for the first time, they look at what they shouldn't have spent money on, and this will be one of them," said Assemblyman Scott Stringer of Manhattan's West Side, who has endorsed Ms. McCaughey Ross but does not, apparently, share her faith that embattled county leaders can deliver a fortune in votes. For the Lieutenant Governor, though, the Sabbeth problem is not merely one of overpayment, but one of message-muddling: It undercuts the central, if dubious, theme of her candidacy, which is that she's a sandbar of principle in a sea of political hacks.

Amid a Betsy blitz on television, that observation, and every observation like it, would shrink and fade and be drowned out. Absent such a blitz, however, and it all lives on, and gets louder. The less she puts herself in political advertising, the more Ms. McCaughey Ross throws herself at the mercy of political journalism, and therefore to the wolves. Not long ago, reporters on the Betsy beat contented themselves with combing through her record for, um, inconsistencies. Now, it's time to search for reasons why the rocket ship Betsy, for all the hype that has been fueling it for months, has yet to take off. Like her or lump her, Ms. McCaughey Ross is the best-known, best-spoken, best-looking and supposedly best-financed candidate in the Democratic field. Hence, the mild jolt of the July 16 Quinnipiac College Poll, which showed her 11 points behind Mr. Vallone. Other, private polls have the two front-runners neck-and-neck, but the gist is clear: Mr. Vallone is just getting started, and Ms. McCaughey Ross has lost her early lead.

"I've done some extraordinary things," said Mr. Vallone. The Observer was taking a Sunday ride with the Speaker in his two-detective, two-telephone, one-press-aide city car. He had made a stop in Queens, where he received the endorsement of the Rev. Floyd Flake; made a stop in Manhattan, where a Harlem congregation gave him a nice round of applause over Yankee Stadium; attempted to stop off in Brooklyn to mourn the death of Rabbi Leibish Lefkowitz of the Satmar Hasidic sect and, thwarted by traffic, turned Bronxward for the Puerto Rican Day parade. "Just because I didn't ballyhoo myself about it and let others take the credit doesn't mean I didn't do it."

Mr. Vallone mentions campaign finance reform and the Mayor David Dinkins-era "Safe Streets, Safe City" initiative. But even casting his record in the most flattering light, it's hard to believe that the traction he is starting to feel can be explained by a growing sense that his achievements are extraordinary. The recent fights with Mayor Rudolph Giuliani over Yankee Stadium and the city budget have informed people that he exists, and that he is someone they could warm up to. This is the sort of progress politicians often make as they become better known, although that does not automatically follow in the case of Ms. McCaughey Ross.

"To know her is not to like her," said political consultant Jeff Plaut, whose firm, Global Strategy Group, is retained by the Vallone campaign, but whose underlying point is not in dispute: In her first independent run for office, Ms. McCaughey Ross has the naïveté of a novice, but the enemies of a veteran. If she is to have a chance, she must either pray that those enemies stay home, or minimize them as a proportion of the primary vote.

Then There's Larocca

It's still to be seen whether Ms. McCaughey Ross has been effective in courting the hard-core, primary-voting liberals who have never liked Mr. Vallone, but may warm up to James Larocca, the underdog candidate from Long Island. But given that it is fervently loyal partisans who tend to (a) distrust, if not despise, Ms. McCaughey Ross; (b) know, if not owe, Mr. Vallone; and (c) vote in primaries, the primary pool cannot be presumed friendly to Ms. McCaughey Ross. "She has to change the makeup of the electorate," said a Democratic consultant familiar with the situation. "She has to get some people excited. This is still a winnable race for her, but she needs to get on the air."

"I'm the only gubernatorial candidate who's advertising on radio or television," Ms. McCaughey Ross told The Observer , though her recent television buy was so minuscule as to be missed by all who blinked, and served to mystify all who didn't. "And I'm quite confident that the media experts and political consultants who are handling those questions will make the right decisions."

But it's not the media experts or the political consultants who are handling the only question that counts.

How much money will Wilbur Ross Jr. spend to buy his wife the Democratic Party's nomination for governor?

Stay tuned. Literally.