Bowing out on talks with ABC, Letterman basically took pity on Koppel and “Nightline,” telling viewers that he didn’t have the heart to kick the late-night anchor off the air, even if Letterman’s would-be bosses at ABC did. Again, Letterman showcased his trademark ability to articulate well and simply, which is what makes him such a talented broadcaster: “The point is, Ted — what he has done and his contributions to American culture — speak for themselves. He is one of a very small group that represents the highest echelon of broadcast achievement, without question.”

Certainly ABC News chief Dave Westin, not to mention Koppel and his top-notch staff, appreciated the vote of confidence. Letterman will likely be toasted and cheered in coming days for his decision, partly for having the class and tact that Disney chairman Michael Eisner and ABC president Bob Iger so obviously lacked over the last 10 days.

But more important, he’ll be applauded because we love him. Because Dave’s funny and Dave’s not a phony. But Letterman shouldn’t get off so easy this time around. This whole media sideshow was a manufactured one, and seems to have been concocted by Letterman’s camp, the only party that benefited from the March 1 leak to the New York Times. (Question: Did the paper’s original 1,200-word scoop, breaking the Letterman-may-go scenario, establish some sort of New York Times record for a Page 1 news story that didn’t contain a single on-the-record quote?)

Almost certainly executed with the boss’s approval, the maneuver was carried out with the express intent of making lots of other people look bad, while lining Letterman’s pockets with even more cash than he can possibly count.

There’s nothing wrong with playing hardball during contract negotiations. Letterman would have been a fool not to test the waters, and of course he doesn’t personally dirty his hands with the sausage-making process. But by going to the press in such a petty, vengeful and selfish way, his team showed a distinct lack of class. Yet Letterman came out looking like a champ — for now, anyway.

Somehow Letterman wins even when he loses. Fans love him because he bombed at the Oscars, not in spite of it, and because he still can’t crack Hollywood’s phony social code. Because he’s uncomfortable in his own skin and thinks his own show stinks. Because he almost died trying to entertain us. Because he’s not Jay Leno, the town huckster who sold his once-sharp jibes for a chance to be late-night king and now hands out phony high-fives to his fans at the start of every show. Because he can still make you laugh out loud most nights. Because for a generation of college kids in the ’80s who tuned to Letterman when he was truly a late-night entertainer (12:30 to 1:30 a.m.), he will also be our favorite cult figure.

He wasn’t afraid to fail miserably with a half-baked morning show that ran on NBC for just 19 weeks back in 1980. (I’ll never forget attending a taping of the show as a freshman in high school, watching as guest Andy Kaufman wandered the studio aisles while the cameras rolled, begging spooked audience members for spare change while Dave just shook his head.)

There are very few other players on the public stage who could pull off Dave’s act. Think about it, Letterman makes $30 million a year (including 10 weeks of vacation annually), finishes last in the late-night network sweepstakes (Leno’s been beating him like a rented mule for going on seven years now), complains endlessly about his bosses and belittles his CBS colleagues.

Letterman’s obviously stored up a tankful of goodwill, and by most accounts he’s still riding around on full. Fact is, thanks to his post-Sept. 11 return to the air, and his lump-in-the-throat meditation that night about hope, faith and New York City, the gap-toothed host may never have to fill up again. But did Letterman’s handlers really do him any kind of favor over the last week and a half, as Dave drank in the sun, safely out of touch atop his hillside retreat on St. Bart’s?

On one level, of course they did: They landed him a sweet deal at CBS, a deal that one month ago CBS was not offering. But at the same time they may have hurt Letterman, with their heavy-handed tactics and the perpetual, Dave-just-wants-to-be-appreciated whine that filled their anonymous quotes. Frankly, our man Dave sounded like a passive-aggressive prima donna.

We learned from the New York Times that when CBS chief executive Leslie Moonves called Letterman last month to congratulate him on his 20th anniversary as a late-night talk show host, Letterman refused to take the call. One former Letterman associate complained to Time magazine, “Dave’s people used to try to get a company plane to take him to St. Bart’s. He’s their No. 1 guy, but getting the plane was like pulling teeth. You’d think they’d take him down whenever he wanted to go.”

So Letterman makes $750,000 every week he works and he’s still trying to mooch time on the company plane? We’re supposed to roll our eyes at CBS’s uncaring ineptitude? Cheer his dissing the guy who pays him that $30 mil a year?

Letterman’s defenders — led by Robert Burnett, president of Letterman’s World Wide Pants production company and the primary suspect for so many of the anonymous quotes over the drama — suggest the soap opera was never about money. After all, goes the spin, Letterman ended up with just a 5 percent pay hike, to $31.5 million.

Well, yes and no. The Associated Press reported CBS offered Letterman that amount, plus “performance bonuses and additional salary increases in future years.” That certainly sounds like it will add up to much more than $31.5 million. Also, Letterman signed a five-year deal, but with an option to renew during each of the last three years, which will likely lead to more pay raises.

And here’s what a Letterman source (Burnett?) told Reuters during the showdown: “CBS was extremely aggressive in the early rounds of the negotiations, so much so that they wanted to cut back both on Dave’s salary and the money they give the show.”

So in truth, Dave was looking at a pay cut before he turned to ABC for help. But this was never about money, right?

The Letterman camp also routinely belittled CBS execs in the press, suggesting they had only themselves to blame for their heavy-handed negotiating style. And because of it, they were unable to firm up a new contract during an exclusive window of negotiating period, and Letterman was then free to entertain offers from other networks.

But why didn’t CBS sign off on a Letterman deal in January? Partly because he made the preposterous demand that his World Wide Pants company be given rights, for 10 years, to produce CBS’s 11:30 p.m. after the host retired. That borders on megalomania, and there’s not a network executive in the business who would, or could, have signed off on that ludicrous provision. It’s also called a deal-killer, and one Letterman’s camp obviously inserted precisely so CBS’s window of exclusivity would close, and ABC could make an offer. (In the deal Letterman did agree to, CBS still refused to hand over 11:30 p.m. control to his company.)

A sub-spin to the it’s-not-about-money pitch was that the ABC offer appealed to Letterman’s driving, exacting desire to oust Leno and to go out the king of late-night television. In that scenario, teaming up with a new network anxious to promote the show would create enough momentum to return Letterman to his rightful place as the king of late-night television.

Two problems there. ABC’s in a prime-time ratings free fall, so it’s hard to see how Letterman would better his CBS numbers at a dead-man-walking network. (Yes, ABC could tap into Disney-owned ESPN to hype Letterman to younger viewers, but CBS can use Viacom outlets, such as MTV and VH1.) Plus, while Letterman’s camp complained endlessly about CBS’s lack of promotion, they left out the inconvenient fact that the host won’t tape new promos for his own show, according to CBS execs. As San Francisco Chronicle TV writer John Carman noted, “Leno would probably bite the head off a chicken to satisfy some NBC affiliate’s promotional needs. Letterman is notoriously less cooperative.”

Another problem with the notion that ABC could have taken Letterman to the ratings mountaintop was that every Monday night, from September into December, the start of Letterman’s “Late Show” would have been delayed and pushed back well beyond its 11:35 time slot by ABC’s “Monday Night Football.” That would have translated into far fewer viewers on the East Coast those nights, a costly deficit that probably would have made catching Leno impossible. (Adding to the hypocrisy, Burnett told the New York Times that the host, in the end, opted to stay with CBS in part because the network promised to limit the number of preemptions that delay the show’s starting time.)

And finally there’s the Koppel cop-out. Explaining his decision to stay at CBS during Monday night’s telecast, Letterman told viewers, “Ted Koppel, at the very least — because of his contributions and the kind of guy he is and what he has done for this country and the world of broadcasting — he, at the very least, deserves the right to determine his own professional future.”

The truth is, during negotiations Letterman made it clear to ABC that removing “Nightline” was a must if the network wanted the host. And several observers have suggested Letterman’s team leaked the negotiations, knowing it would likely humiliate Koppel, in order to see how ABC executives reacted: Would they would scurry to the late-night news anchor’s defense, or were they serious about replacing “Nightline”?

They proved serious, practically hanging Koppel out to dry, but in the end they have nothing to show for it. Letterman’s staying home. He’s wealthier, still in last place and even more beloved.

David Letterman, the Teflon king of late-night television.

Before party leaders Sunday night announced a debt ceiling deal that is “all spending cuts,” as House Speaker John Boehner described it, Krugman offered a grim analysis. He predicted that unemployment would rise again to nine percent again and that America will experience economic consequences comparable to Japan’s “lost decade,” (when an economic program of frugality hindered recovery from an asset bubble collapse in the 1990s).

Krugman criticized the debt negotiations:

Basically the Republicans said we’ll blow up the world economy unless you give us exactly what we want, and the President said OK. That’s what happened. . . . We’re having a debate in Washington which is all about, “we’re going to make this economy worse, but are we going to make it worse on 90 percent of the Republican’s terms or 10o percent of the Republican’s terms?” And the answer is 100 percent.

Watch Krugman’s appearance below, including a brief spat with conservative columnist, George Will:

“I want him to go to jail. I want him to know there are some places you cannot use your power, you cannot use your money,” Diallo told Newsweek. She repeated a similar sentiment to Roberts.

ABC’s Roberts called Diallo’s media blitz “an unusual and risky move.” But Diallo and her team are trying to regain control over the narrative after several weeks of stories in which her background and credibility have been questioned. “Because of him they call me a prostitute,” Diallo told ABC.

Prosecutors are currently undecided on whether to proceed with the charges against Strauss-Kahn, after raising doubts about Diallo’s credibility, largely based on issues unrelated to the alleged incident in Strauss-Kahn’s New York hotel suite. These include lies found on Diallo’s asylum application and findings that she had ties to petty criminals.

Diallo’s account of events, as she told them to both Newsweek and ABC News, cohere with hospital records detailing minor injuries on her body — including the fact that “doctors observed five hours afterward that there was ‘redness’ in the area of the vagina where she alleges Strauss-Kahn grabbed her.”

However, as Newsweek notes, “If there is one inconsistency for defense lawyers to dwell on in the hospital records, it is a passage that says her attacker got dressed and left the room, and ‘said nothing to her during the incident.’ In her interview with police and her account to Newsweek, Diallo recalled several statements Strauss-Kahn made during the alleged attack.”

Strauss-Kahn’s lawyers have described Diallo’s interviews as “an unseemly circus,” but Diallo says she felt she had “no choice” but to go public after staying silent for almost two months.

Watch the video below of Diallo speaking with ABC News’ Robin Roberts:

We take a look at some of the more egregious examples of stations trying to make this non-story work below.

In 2009, Katie Couric did a short segment on Friggatriskaidekaphobia, a phobia of Friday the 13th, which raises the question: Why do we need a name for something everyone has?

Then this year, Jeff Glor repeated Katie’s segment almost verbatim.

Also in 2009 was the amazing CBS exposé on the Friday the 13th Insane Clown Posse show. One of the most unintentionally funny segments in news history.

Other network news anchors took a different tack, asking if this could mean a bad day for the markets. But first: walking under a ladder!

 ABC  affiliates take a nontraditional route and go out to find some fun stuff to do on this bad luck holiday, because why not?

I’m starting to think the worst part of today is making it through corny TV spots.

Next stop on the Campbells’ tour of horrors would be”Good Morning America,” where Kerry today went on with Britney to discuss the controversy as well as defend her decision to put needles full of poison into her daughter’s face to “get rid of the lines.”

Man, calm down, everyone! What’s the big deal? This all seems totally safe and legitimate: The mom does it to herself (she’s a part-time aesthetician so it’s kosher) and she gets the Botox to inject into her child’s head through an unnamed source who is “behind the doctor scene.” It’s all on the up-and-up. If anything, Kerry Campbell’s only crime is being too good of a mother.