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Doug, I must say I'm not entirely surprised Michael Palmer received such an 
award, though I bet as deliberately-styled businessmen poets both Dana 
Gioia and Ted Kooser feel they would have been a more appropriate choice 
for the Wallace Stevens Award.  It really comes down to who the judges were 
and even on the AAP site I can't find a listing of those presiding in 
2006.  But take a look at previous panels and you'll find that the choices 
for certain years become understandable in terms of personal taste and 
whether a majority might agree to share the taste of the initiator:  
http://www.poets.org/page.php/prmID/107

I was stunned when Jackson MacLow won this award in 1999, but now I'd bet 
that Marjorie Perloff, Robert Creeley, and John Yau simply outnumbered 
Frank Bidart & Sharon Olds, then one of the three brought up JML's name, 
and the other two agreed that he was neglected and deserving.

I wonder what would happen to the virtually unquestioned prestige of 
literary awards within the "school of quietude" if every aspect of the 
decision-making process were transparent (i.e., recorded)?  Barry